Charles B. and Teresa A. Thompson, et al. - Page 10

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          Supply.  Both Von Allmen and Olson personally guaranteed $1                 
          million of the acquisition loan of approximately $4,450,000.                
          After making the offer, Von Allmen and Olson concluded that they            
          had to have noncompete agreements from Holliday and Beaurline in            
          order to lower the risk to their investment.  At the time of the            
          acquisition, Von Allmen was "very concerned about what would                
          happen if those two people [Beaurline and Holliday] would ever              
          compete with us, and I felt that I needed strong protection."               
               Von Allmen obtained legal advice on Oklahoma law regarding             
          the enforceability of noncompete agreements.  Von Allmen was                
          advised that under Oklahoma law a company could not prevent                 
          competition under a noncompete agreement, but instead could                 
          recover the moneys paid for the noncompete agreement.  Von Allmen           
          believed that the amounts paid for the noncompete agreements                
          would have to be substantial because that was the only way he               
          could be confident that Beaurline and Holliday would not compete.           
               Von Allmen believed Beaurline and Holliday could compete               
          with State Supply by setting up another business under another              
          name.  Von Allmen had previous experience with a company called             
          Gen-Co Supply Co., where the president and every salesmen quit              
          and set up their own business in competition with their former              
          company.  Von Allmen believed that competition from Beaurline and           
          Holliday after the sale would have put State Supply into                    
          bankruptcy.  Von Allmen determined that "We had absolutely no way           
          to protect ourselves, except to try to put in front of them                 
          [Beaurline and Holliday] a non-compete that had enough money in             

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