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additional line of credit of $400,000.2 The Loan Agreement did
not refer to a covenant not to compete or to any participation in
the loan by Wagner. The Loan Agreement contained a formal
integration clause, as follows:
This written loan agreement represents the final
agreement between the parties and may not be
contradicted by evidence of prior[,] contemporaneous,
or subsequent oral agreements of the parties.
There are no unwritten oral agreements between parties.
Although Wagner had initially sought approximately $2
million for the buyout, all in cash, he ultimately agreed to
accept $1 million in cash, the assignment to him of $300,000 of
petitioner's accounts receivable due from Scientific Drilling
International (SDI), and an agreement by petitioner to renew a
$250,000 whole life insurance policy covering him. Forest and
Wagner handled the negotiations themselves, with some advice from
their accountant. Forest, in consultation with Wagner and
without professional assistance, drafted a written agreement
(Purchase Agreement) setting out the terms of petitioner's
purchase of Wagner's 50-percent interest. (The attorney who had
previously handled petitioner's legal matters had been elected to
2 The Loan Agreement was executed to govern both a
$1 million term loan and an “existing $400,000.00 line of credit
originally dated May 15, 1990". There is no dispute that the
$1 million term loan was provided for petitioner’s purchase of
Wagner’s stock. There is no further evidence in the record
concerning the $400,000 line of credit.
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