- 9 - The Noncompete Agreement further provided that: It is agreed that as consideration for your [Wagner's] agreement for non-competition * * * Sharewell, Inc. will assign to you $300,000 of the installment receivable from Scientific Drilling, Inc. * * * The $300,000 in accounts receivable from SDI referred to in the Noncompete Agreement was the same consideration referred to in the Purchase Agreement. Forest proposed, and Wagner accepted, the allocation of $300,000 to the Noncompete Agreement; they did not negotiate over the dollar amount before agreeing to the allocation. Forest proposed the $300,000 figure for two reasons. First, $300,000 represented the portion of the consideration that had not been borrowed, but instead was accounts receivable already owed to Sharewell. Second, Forest believed that, because the accounts receivable would be received in installments over time, he would be in a position to exercise some practical control over payment to Wagner if the covenant were breached, unlike the case with the remaining $1 million in cash being paid out at the time of the buyout. The parties have stipulated that, in the event the Court determines that any portion of the $1.3 million paid by petitioner to Wagner is allocable to an amortizable covenant not to compete, the value of the Noncompete Agreement is $300,000. The transaction between Sharewell and Wagner was originally recorded on Sharewell's books as a $1.3 million redemption ofPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011