John E. Wall - Page 8




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               The sales price for the media division’s assets was                    
          $1,200,000.  Of this amount, Demco received $120,000 in cash; it            
          also received the purchasing partnership’s note (media note) for            
          the remaining $1,080,000 due.  The media note was collateralized            
          by substantially all of the acquired assets and bore interest at            
          7.64 percent.  Mr. Wall expected Demco to receive full payment of           
          the media note, and the note’s outstanding principal amount had             
          been reduced to approximately $430,000 by the time of trial.                
               Prior Transactions in Demco Stock                                      
               The parties have identified six transactions in Demco stock            
          that occurred between 1978 and the gifts in 1992.  All six                  
          transactions involved the sale or repurchase of stock to or from            
          Demco employees.  Three of the transactions occurred more than 5            
          years before the gifts.  The three others occurred approximately            
          2 years before the gifts, on February 9, 1990, when Demco                   
          redeemed a total of 600 shares of its voting common stock from              
          three of its officers.                                                      
               The redeemed shares were subject to a buy-sell agreement at            
          the time of the redemptions.  The redemptions were not made                 
          pursuant to that agreement, because neither of the events that              
          would have triggered the agreement (the death or termination of             
          employment of any of the officers/shareholders) had occurred.               
          The redemption price paid to each officer was instead determined            
          through individual negotiations.  However, under the terms of the           





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