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that they had at all times intended to include a covenant not to
compete from Wagner as part of the buyout, and this testimony is
corroborated by a third party, their banker. That the terms of
the Purchase Agreement were the product of mutual mistake is
further supported by circumstantial evidence, such as the
insistence on covenants not to compete by a prospective purchaser
a few months prior to the transaction at issue and the parties’
execution of such a covenant some 12 days after the execution of
the Purchase Agreement. The failure to include the covenant in
the first writing evidencing the agreement between petitioner and
Wagner, i.e., the Purchase Agreement, is consistent with the
informality with which other documentation of the transaction was
executed. For example, the Loan Agreement was executed on
December 12, the Purchase Agreement on December 20, and Wagner’s
Certificate of Participation on December 21. Clearly, the
Certificate of Participation functioned as security for the first
two documents, but was not executed until after they were, and
neither of the first two was made expressly conditional upon
execution of the third. This pattern continued with respect to
the delay in executing the Noncompete Agreement, and we believe
merely reflects that the parties to the buyout, and their banker,
had had extensive prior dealings and trusted each other.
These facts would constitute mutual mistake supporting the
reformation of a written contract under the standards of this
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