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Option Closing
The 1990 stock purchase agreement provided an option for
Burien Nissan to purchase Mr. Johnston’s remaining 61,200 shares
for $215,000.6 Under the terms of the agreement, Burien Nissan
was required to pay Mr. Johnston the full $215,000 in monthly
installments over a 30-month period beginning in June of 1990.
The agreement also provided for an option closing. This was
defined as the moment when Mr. Johnston transferred his remaining
61,200 shares to Burien Nissan. The option closing date was to
occur within 3 days of Burien Nissan’s full payment for the
purchase of Mr. Johnston’s 61,200 shares. However, Burien Nissan
breached its obligation to pay for the 61,200 shares, and the
option closing never occurred.7
1990 Noncompetion Agreement
Pursuant to the terms of the 1990 stock purchase agreement,
Mr. Johnston was required to execute and deliver to Burien Nissan
a noncompetition agreement (1990 noncompetition agreement) at the
option closing.8 The 1990 noncompetition agreement prohibited
6These shares amounted to 51 percent of the outstanding
Burien Nissan shares.
7Mr. Johnston received $53,500 from Burien Nissan in 1990
and 1991. Mr. Johnston never reported receiving the remaining
$161,500 ($161,500 + $53,500 = $215,000) from Burien Nissan
pursuant to the 1990 stock purchase agreement option.
8Exhibit B of the 1990 stock purchase agreement contained
the 1990 noncompetition agreement between Burien Nissan and Mr.
(continued...)
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Last modified: May 25, 2011