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conjunction therewith FAMC secured from him a covenant not to
compete.
The $20,000 VALC received from Leste and Moore for the stock
of FAMC was not unduly low, and in our opinion none of the
consulting fees paid to Silbernagel was for the FAMC stock. At the
time Leste and Moore considered purchasing the stock of FAMC, they
were aware of the speculative value of the Imperial loan servicing
agreement assigned by VALC to FAMC. It was not clear at that time
how much loan servicing business would be generated by the Imperial
agreement. Nevertheless, Leste and Moore agreed to pay, and VALC
accepted, $20,000 for all of FAMC's stock. Absent a showing that
this was not an arm's-length agreement or a reasonable price to pay
for the risky business opportunity FAMC provided, we will not
disturb their judgment. We do not find, as respondent contends,
that the consulting and noncompetition agreement between FAMC and
Silbernagel more than 14 months after Leste and Moore purchased
FAMC's stock was intended to provide additional consideration to
Silbernagel in connection with that purchase.
We also consider the amounts paid Silbernagel pursuant to his
consulting and noncompetition agreement with FAMC to be reasonable
in light of his expertise and contacts in the mortgage lending
industry. FAMC paid Shirk a total of $35,542 during the final 5
months of his per diem and expense reimbursement consulting
agreement, or on average approximately $7,000 per month. Shirk's
consulting agreement apparently did not contain a covenant not to
compete with FAMC. Silbernagel's agreement with FAMC, however,
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