Howard Pontiac-GMC, Inc. - Page 6

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          The Sale and the Agreement                                                  
               Petitioner wanted to acquire the Jeep-Eagle franchise held             
          by seller.  Seller's business premises were located approximately           
          2 miles from petitioner's automall.  In late 1989, Mr. Howard (on           
          behalf of petitioner) and Mr. Markley (on behalf of seller) began           
          discussions regarding the possibility of petitioner acquiring               
          certain assets of seller.  By November 1989, Mr. Howard and Mr.             
          Markley agreed that petitioner would acquire the inventories (the           
          new cars, used cars, and parts inventory) of seller.  Petitioner            
          did not purchase or utilize seller's location in any way.                   
          Petitioner was prohibited from using the Markley name.                      
               Mr. Howard and Mr. Markley contacted their attorneys, who              
          had not been involved in the negotiations up to that point, and             
          asked them to draft an agreement (the agreement) which embodied             
          the terms on which they had agreed.  At the time they were                  
          memorializing the agreement, the attorneys suggested to the                 
          parties that they should allocate $10,000 to goodwill.                      
          Accordingly, the parties allocated $490,000 to the covenant and             
          $10,000 to goodwill.                                                        
               The final draft of the agreement provided for the purchase             
          of parts and new vehicle inventories based upon manufacturer's              
          price lists and invoices and the purchase of used car inventories           
          based upon the agreed value of each vehicle at date of closing.             
          Petitioner would not agree to purchase the fixed assets of                  
          seller.  The total consideration paid was approximately $2.5                
          million, allocated by buyer and seller as follows:                          

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