- 31 -
United States, supra at 430. Because the Court did not apply the
standard applicable in this case, Ansan Tool has no bearing on
our determination.
Unlike the cases cited by BHC, we find the facts in this
case to be substantially similar to the facts in Annabelle Candy
Co. v. Commissioner, supra: (1) The transaction involved a stock
sale and the agreement included a covenant not to compete; (2)
there were no discussions about allocation of the price to the
covenant prior to or at the time the agreement was signed; (3)
the agreement did not allocate any portion of the price to the
covenant; and (4) after the agreement was signed, one party made
a unilateral allocation of a portion of the price to the
covenant. Annabelle Candy Co. v. Commissioner, 314 F.2d at 2-4.
Similar to the holding in that case and for all of the above-
stated reasons, we find that there was no mutual intent to
allocate a portion of the consideration to the covenant not to
compete.
IV. Conclusion
The purchase documents explicitly and unambiguously allocate
the entire $23.9 million of consideration to William Becker’s
stock. See Commissioner v. Danielson, 378 F.2d 771, 779 (3d Cir.
1967). At the time the purchase documents were executed, there
was no mutual intent to allocate a portion of the consideration
to the covenant not to compete. See Better Beverages, Inc. v.
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