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purchased Mr. Johnston’s remaining 61,200 shares for $215,000 in
monthly installments over a 30-month period beginning in June of
1990, and Mr. Johnston transferred the shares to Burien Nissan at
the option closing. In this case, the most important event that
fixed the parties’ obligation to enter into the covenant did not
occur. Burien Nissan breached its obligation to make the
required payments. Thus, under the terms of the 1990 stock
purchase agreement, Mr. Johnston was not obligated to transfer
his remaining 61,200 shares at an option closing.22
Consequently, Mr. Johnston was under no obligation to execute the
1990 noncompetition agreement. Indeed, the 1990 stock purchase
agreement was never signed, and Burien Nissan never paid Mr.
Johnston any amounts due pursuant to the 1990 noncompetition
agreement.
Burien Nissan did not acquire a noncompetition agreement
from Mr. Johnston until after the agreement was signed on
December 13, 1993, which prohibited Mr. Johnston from operating
an automobile dealership in a defined area starting on January
15, 1994.
Petitioners argue that the agreements executed in December
1993 and January 1994 merely amended and supplemented the 1990
stock purchase agreement. We disagree. The termination
agreement executed on January 12, 1994, explicitly stated that
the parties agreed that the 1990 stock purchase agreement was
22The option closing date was to occur within 3 days of
Burien Nissan’s full purchase of Mr. Johnston’s 61,200 shares.
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