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Nissan stock certificates. That endorsement stated:
The shares of stock represented by this certificate are
subject to the terms of a Shareholders’ Agreement dated
as of September 1, 1990, which restricts or limits
their transfer and limits the rights of the share-
holder. A copy of the Agreement is on file at the
office of the registered agent of the Corporation.
Burien Nissan experienced financial difficulties during 1990
and early 1991. On a date during 1991 not disclosed by the
record, Mr. Stanford accepted an offer to manage a large automo-
bile dealership in Hawaii. On September 13, 1991, Mr. Whitehead
and Mr. Stanford entered into a stock purchase agreement (Septem-
ber 13, 1991 Whitehead/Stanford stock purchase agreement),
pursuant to which Mr. Whitehead purchased on that date for
$178,000 all 35,280 shares of Mr. Stanford’s Burien Nissan stock.
That agreement provided that Mr. Whitehead was to pay the pur-
chase price of $178,000 by delivering to Mr. Stanford a nonnego-
tiable promissory note.
In the September 13, 1991 Whitehead/Stanford stock purchase
agreement, Mr. Stanford represented and warranted to Mr. White-
head the following:
a. Stanford is the owner and registered
holder of the Stanford Shares and holds the Stanford
Shares free and clear of all liens, claims or encum-
brances and subject to no options, warrants, contracts
or agreements of any kind other than * * * [the May 25,
1990 stock purchase agreement] and * * * [the September
1, 1990 stockholders’ agreement].
b. Neither the execution and delivery of
the Agreement by Stanford nor the consummation of the
transactions contemplated herein, nor compliance with
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