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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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Last modified: May 25, 2011