Howard Pontiac-GMC, Inc. - Page 13

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               dealership's income (or increase in the dealership's                   
                              *   *   *   *   *   *   *                               
               Mr. Howard projected that the effect of competition by                 
               David Markley would be reduction in sales of at least                  
               twenty-five percent (25 percent).  A twenty-five                       
               percent (25 percent) reduction in sales would equate to                
               a loss of $1,497,000 over the term of the covenant                     
               [$1,996,000 x .25 x 3].                                                
               Petitioner cites the testimony of Stuart Ray,3 who was                 
          allowed to testify under Rule 143(f)(2) as an expert on the                 
          automobile dealership industry's practice of using covenants not            
          to compete:                                                                 
               Mr. Ray indicated that based upon his experience,                      
               practice and industry custom he would estimate lost                    
               profit [lost sales] due to competition from a seller                   
               [not petitioner specifically] in an Oklahoma City                      
               metropolitan dealership such as this one, in the range                 
               of twenty percent (20 percent) to twenty-five percent                  
               (25 percent).                                                          
               b.  Respondent's Arguments                                             
               Respondent, while admitting that the covenant has some value           
          ($125,000), argues that petitioner has overstated the magnitude             
          of potential lost sales from Mr. Markley competing with                     
          petitioner, citing petitioner's strong background in auto sales             
          and established presence in the Oklahoma City market.                       

               3  Mr. Ray is a C.P.A. and was a partner in an accounting              
          and consulting firm whose clientele consisted of about 400                  
          automobile dealers in 30 States.  Mr. Ray has negotiated over 40            
          buy-sell agreements; prepared tax returns and financial                     
          statements for at least 60 automobile dealerships; and has 17               
          years of experience working exclusively with automobile                     
          dealerships.  Mr. Ray, however, had no personal knowledge of                
          petitioner's transactions and did not opine on the value of the             
          seller's covenant not to compete.                                           

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