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petitioners not to sign the document in the form presented. He
told petitioners that “they would be okay with signing it if the
Shahs’ name [sic] were removed”. Thereafter, in a subsequent
draft, Mr. Shah deleted any reference to himself and his wife.
This latter document provided that instead of not competing with
the Shahs, petitioners would not compete with Little Rascals.
The closing of the sale took place on July 30, 1993, in San
Jose, California. Closing documents signed by the Shahs and the
trustee stated: “Purchase price of stock (pay to Seller):
350,000.00" and “Purchase price of Covenant Not to Compete (pay
to Seller): 300,000.00". Also at the closing, petitioners alone
signed a separate document entitled “COVENANT NOT TO COMPETE” and
reading in its entirety as follows:
This agreement is between John Jorgl and Sharon Illi,
who were officer’s [sic] of Little Rascals Child Care
Centers, Inc. and Little Rascals Child Care Centers,
Inc. regarding the sale of Little Rascals Child Care
Centers signed on the 30th of July, 1993.
The agreement is as follows:
1) John Jorgl and Sharon Illi will not compete with
Little Rascals in the preschool/day care/school age
children business; nor assist anyone else except the
corporation and the buyer of Little Rascals within
limits defined herein; nor have any interest, directly
or indirectly, in such business except as an employee
of the business being sold for a total of 5 consecutive
years within a 100 mile radius of the business (Little
Rascals).
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Last modified: May 25, 2011