Charles B. and Teresa A. Thompson, et al. - Page 18

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          period of 3 years.  We find that these limits were reasonably               
          drawn to keep them from competing with State Supply.                        
               g.  Enforceability Under State Law                                     
               The buyers were told by their attorney that the covenants              
          would be virtually nonenforceable in equity and that their only             
          recourse would be to obtain a refund of the moneys paid for the             
          covenants.  Respondent admits on brief that State law provided              
          such a remedy.                                                              
               h.  Age and Health of Grantors                                         
               Respondent concedes that Holliday and Beaurline had no                 
          apparent health problems.  Their age is not in the record.                  
               i.  Whether Payments Were Pro Rata to the Grantors' Stock              
               Although Holliday owned approximately 50 percent more stock            
          than Beaurline, she received the same amount under the noncompete           
          agreements as Beaurline.  These non-pro rata payments indicate              
          that something other than stock was purchased.                              
               j.  Whether Payments Cease Upon Breach or Upon the Death of            
          a Grantor                                                                   
               The noncompete agreements called for payments to be made               
          into escrow in the event of the grantors' breach.  However, the             
          payments were to be continued upon the death of a grantor.  This            
          factor supports respondent.                                                 
               k.  Active Negotiations Over Terms and Value                           
               There were active negotiations over the terms of the                   
          covenants; the term was lowered from 5 to 3 years.  The value of            

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