Sharewell, Inc. - Page 9




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          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 of               






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Last modified: May 25, 2011