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Commissioner v. Danielson, supra at 777-779. BHC does not argue
that the purchase documents are unenforceable due to mistake,
undue influence, fraud, duress, etc. Instead, BHC argues that
the Danielson rule does not apply because the purchase documents
are ambiguous as to an allocation of the consideration between
the stock and the covenant not to compete. Contrary to BHC’s
argument, the purchase documents repeatedly reflect the
unambiguous allocation of the entire $23.9 million of
consideration to William Becker’s stock.
The Redemption Agreement clearly allocates the entire $23.9
million of consideration to William Becker’s stock, stating:
1. PRICE: Seller will sell and Buyer will
purchase Seller’s entire common stock of BECKER HOLDING
CORPORATION consisting of 1,000 shares of $1.00 par at
and for a purchase price of Twenty-three Million Nine
Hundred Fifty-Three Thousand Nine Hundred Thirty-four
Dollars ($23,953,934.00), together with interest at the
rate of 10% per annum on the unpaid balance * * *
[Emphasis added.]
Likewise, the pledge and escrow agreement provides:
WHEREAS, BECKER HOLDING CORPORATION, by agreement dated
March 13, 1991, has agreed to purchase from R. WILLIAM
BECKER at and for a purchase price of $23,953,934.00
all of the Corporation’s common and preferred stock
owned by him. [Emphasis added.]
While the promissory note does not explicitly state that 100
percent of the consideration is being paid for William Becker’s
stock, as do the other purchase documents, it does provide that
“This note is issued pursuant to that certain Agreement dated
March 15, 1991, by and between [BHC] and [William Becker] with
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