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finally agreed that Cost Less would pay $175,000 for Jasiak's
stock. Jasiak and petitioner did not discuss whether the payment
to Jasiak was for a covenant not to compete.
Jasiak and petitioner went to Raymond Douglas Zirkle
(Zirkle), Cost Less' lawyer. Zirkle prepared a draft agreement
that included a covenant not to compete. Jasiak objected to the
fact that Zirkle included a covenant not to compete in the draft
agreement because he had already promised petitioner that he
would not compete. Jasiak thought petitioner should have been
satisfied with his promise that he would not compete. Jasiak
refused to sign the agreement if it included a covenant not to
compete.
Petitioner and Jasiak told Zirkle to delete the covenant not
to compete from the written agreement. On December 24, 1986,
Cost Less and Jasiak signed a written agreement which stated that
Cost Less agreed to buy all of Jasiak's Cost Less stock for $35
per share for his 5,000 shares, for a total of $175,000. Cost
Less agreed to pay Jasiak $50,000 at closing, and the $125,000
balance at the rate of $3,100 per month beginning January 1,
1987, until paid. The written agreement did not include a
covenant not to compete. The written agreement states that it
supersedes any "pre-existing agreements and understandings
between the parties relating to the subject matter hereof, and
may not be modified except in writing executed by both parties".
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