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fact. Id. at 329. As mentioned above, none of the evidence
adduced by petitioners, including the original offer letters from
the purchasers, persuades us either that the apportionment of the
purchase price is ambiguous or that the intent of the parties to
the stock acquisition and noncompete agreements is other than
that reflected by the terms of the agreements.
Petitioners rely on a number of facts to argue that the
apportionment lacks economic substance and therefore should not
be respected. Specifically, petitioners observe that the
noncompete payments inured to the benefit of Jerry’s heirs and
successors, that postclosing adjustments were made to the
noncompete payments, that the aggregate (unadjusted) amount paid
for the noncompete agreements is twice the amount paid for the
underlying business assets, and, purportedly, that the noncompete
payments bore interest.
None of these arguments taken individually or together
convince us that the apportionment lacked economic substance.
The fact that the benefits of the noncompete agreement enure to
the benefit of Jerry’s heirs and successors is unremarkable given
that the noncompete agreement provided that a set sum would be
paid for Jerry’s noncompetition. That sum was to be paid over
time, and the purchaser could discontinue further payments, if
Jerry breached the agreement.
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