Sharewell, Inc. - Page 16




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               Indeed, as we read the decisions of the Court of Appeals for           
          the Fifth Circuit, conflicting written agreements as exist in               
          this case may not even be an appropriate circumstance for                   
          invocation of the Danielson rule.  The instant case is not unlike           
          Dixie Fin. Co. v. United States, 474 F.2d 501 (5th Cir. 1973),              
          affg. Empire Mortgage & Inv. Co. v. Commissioner, T.C. Memo.                
          1971-270, and Stewart v. Commissioner, T.C. Memo. 1971-114, where           
          the Court of Appeals for the Fifth Circuit considered two                   
          distinct buyout transactions involving covenants not to compete.            
          The first transaction provided the first occasion for the Court             
          of Appeals to consider whether it should adopt the Danielson rule           
          over the “strong proof” rule of its then-existing precedents.               
          The Court of Appeals found it unnecessary to make the choice.  In           
          the second transaction, the parties to the buyout had entered               
          into a written agreement on an arm’s-length basis that made a               
          substantial allocation to a covenant not to compete but 8 months            
          later entered into a written modification of the agreement that             
          allocated only $1 to the covenant.  Notwithstanding its earlier             
          consideration of the Danielson rule, the Court of Appeals did not           
          see fit even to mention a parol evidence rule in connection with            
          its consideration of the two conflicting written agreements.  The           
          Court of Appeals disregarded the second agreement, not because of           
          any parol evidence rule, but because the Court concluded, based             
          upon extrinsic evidence, that the second writing did not reflect            





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