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EXHIBIT 10.13
May 29, 1997
Mobitel Communications and Electronics, Inc.
And Its Shareholders
Network Communications, Inc.
And Its Shareholder
c/o 0000 Xxxxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, XX 00000
Gentlemen:
The purpose of this letter agreement (this "Agreement") is to set
forth the terms and conditions agreed to by and among BearCom Operating, L.P.,
a Texas limited partnership ("Purchaser"), Mobitel Communications and
Electronics, Inc., a Texas corporation ("Mobitel"), Network Communications,
Inc., a Texas corporation ("Network" and collectively with Mobitel, "Sellers"),
Xxxxx X. Xxxxx, one of the two shareholders of Mobitel and the sole shareholder
of Network ("Xxxxx"), and Xxxxx X. Xxxx, one of the two shareholders of Mobitel
("Xxxx") (Xxxxx and Xxxx are sometimes collectively referred to herein as the
"Shareholders"), for Purchaser's purchase of certain assets of the Sellers.
For good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto hereby agree as follows:
1. Sale of Assets. At the Closing (hereinafter defined),
Purchaser will purchase and (a) Mobitel will sell, convey and assign to
Purchaser, free and clear of all liens, claims and encumbrances, all of the
business, assets, property and goodwill of Mobitel of every kind and character,
whether real or personal, tangible or intangible, (other than cash and accounts
receivable of Mobitel ("Receivables")) including (without limitation) all of
the fixed assets, inventory, two-way radios, intangible assets, customer data
and related information, permits, insurance proceeds (if any), computers, the
contracts set forth on Exhibit A hereto (the "Assumed Contracts"), records, the
name "Mobitel Communications and Electronics," the phone and fax numbers of
Mobitel, trademarks and trade names, and deposits and prepaid expenses, and (b)
Network will sell, convey and assign to Purchaser, free and clear of all liens,
claims and encumbrances, the rental two-way radios owned by Network that are
described on Exhibit D hereto (the assets listed under clauses (a) and (b) of
this sentence are collectively referred to herein as the "Assets"). Sellers
will be entitled, and Purchaser will not be obligated, to collect the
Receivables after the Closing; Purchaser would, however, remit to Sellers any
payment on the Receivables received by Purchaser. SEE ADDENDUM.
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2. Liabilities Not Assumed; Sales Tax.
(a) Purchaser will not assume or be liable for any
liabilities or obligations of the Sellers and the Sellers and the
Shareholders will, jointly and severally, indemnify Purchaser against
and hold it harmless from all such liabilities and obligations. SEE
ADDENDUM.
(b) The liabilities and obligations of the Sellers that
Purchaser will not assume include, but are not limited to, trade
payables and other accounts payable, bank debt or other debts for
borrowed money, pension, and other employee benefit plan liabilities
(including any accruals relating thereto), breaches or violations of
agreements to which the Sellers or the Assets are subject, violations
of law or applicable statutory regulations, property damage, personal
injury, negligence, sexual abuse or harassment or employee claims
based on events occurring prior to the Closing Date, liabilities or
obligations of the Sellers for employees' accrued vacations,
liabilities or obligations to remediate or cleanup any contamination
or pollution of the air, soil or other environmental conditions
occurring or existing prior to the Closing Date, any contingent
liabilities (whether or not known), any other liabilities or
obligations that relate to the period, or conditions existing, before
the Closing.
(c) The Sellers shall be liable for and shall pay any
sales tax and other similar taxes resulting from consummation of the
transactions contemplated hereby.
3. Price for the Assets. The purchase price for the Assets
(the "Purchase Price") shall be payable by Purchaser to the Sellers as follows:
(a) [Confidential Treatment Requested with SEC] shall be
payable to Sellers by Purchaser check or wire transfer at the Closing.
(b) [Confidential Treatment Requested with SEC] shall be
payable to Sellers by Purchaser check or wire transfer on the date that
is six months after the Closing Date.
(c) [Confidential Treatment Requested with SEC] shall be
payable to Sellers by Purchaser check or wire transfer on the first
anniversary of the Closing Date.
The cash that would be payable to Sellers pursuant to subsections (a), (b) and
(c) of this Section 2 shall be allocated between Mobitel and Network as set
forth on Exhibit B hereto.
4. Representations and Warranties. The Sellers and the
Shareholders jointly and severally represent and warrant to Purchaser that the
following are true and correct as of the date hereof and that the following
will be true and correct as of the Closing Date:
(a) The Shareholders are the sole shareholders of
Mobitel, and Xxxxx is the sole shareholder of Network.
(b) The Assets include all of the assets reflected in the
December 31, 1996 balance sheets of the Sellers previously delivered
by the Sellers to Purchaser (other than inventory sold in the ordinary
course of business since that date on a basis consistent with prior
practices). The inventory amounts on the December 31, 1996 balance
sheets reflect the cost of such inventory. The Sellers holds good and
indefeasible title to the Assets, free and clear of all liens, claims
and encumbrances. At the
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Closing Purchaser will acquire good and indefeasible title to the
Assets, free and clear of all liens, claims and encumbrances.
(c) The Sellers have furnished to Purchaser the balance
sheet and related statements of income, retained earnings, changes in
stockholders' equity, and cash flows of the Sellers including the
notes thereto at and for the period ending December 31, 1996
(collectively, the "Financial Statements"). The Financial Statements
fairly present the financial condition and results of operations of
the Sellers as of the dates and for the periods indicated and have
been prepared in conformity with generally accepted accounting
principles ("GAAP") applied on a consistent basis with prior
practices. There were not any significant items of income or expense
which were unusual or of a nonrecurring nature reflected in the
Financial Statements.
(d) Except for those liabilities and obligations incurred
in the ordinary course of business consistent with prior practices
since the date of the Financial Statements, the Financial Statements
reflect all liabilities and obligations of the Sellers, accrued,
contingent or otherwise (known or unknown and asserted or unasserted),
arising out of transactions effected or events occurring on or prior
to the Closing Date. All allowances and reserves shown in the
Financial Statements are appropriate, reasonable and sufficient to
provide for expenses and losses thereby contemplated. Neither of the
Sellers is liable upon or with respect to, or obligated in any other
way to provide funds in respect of or to guarantee or assume in any
manner, any debt, obligation or dividend of any person, corporation,
association, partnership, joint venture, trust or other entity. The
Sellers and each of the Shareholders knows of no basis for the
assertion of any other claims or liabilities of any nature or in any
amount.
(e) This Agreement has been duly authorized, executed and
delivered by the Sellers and the Shareholders and is a valid and
binding agreement of the Sellers and the Shareholders, enforceable
against each such party in accordance with its terms.
(f) Neither the execution and delivery of this Agreement
nor the consummation of the transactions contemplated herein violates
any law, agreement, mortgage or other instrument or provision of law
to which or under which the Sellers or the Shareholders are a party or
bound.
(g) Except for the consents set forth on Schedule 4(g)
hereto, no consents or approvals are required for execution of this
Agreement by the Sellers and the Shareholders or their consummation of
the transactions contemplated herein.
(h) There is no judicial, administrative or arbitral
action, suit, proceeding (public or private), claim or demand pending
or, to the knowledge of the Sellers and the Shareholders, threatened
against the Sellers or their businesses.
(i) The Sellers and their businesses are, and have been,
in compliance with all applicable laws, rules, regulations,
ordinances, licenses, permits and orders. The Sellers have maintained
all employee benefit plans and arrangements in accordance with all
applicable laws, rules and regulations including the Internal Revenue
Code of 1986, as amended, and the Employee Retirement Income Security
Act of 1974, as amended, and have timely filed with all applicable
regulatory authorities all applicable reports and returns required to
be filed by them with respect to its employee benefit plans and
arrangements.
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(j) The Sellers have no liabilities for federal, state or
local taxes, including but not limited to income, estimated, sales,
use, ad valorem, personal property, franchise, payroll, employment,
social security, unemployment, and disability taxes.
(k) The Sellers have not suffered any adverse change in
its business, operations, financial condition or prospects from that
heretofore represented to Purchaser or its affiliates, officers or
representatives.
(l) The distribution agreements between the Sellers and
Motorola, Inc. ("Motorola Contract") and all other contracts, if any,
being assigned by the Sellers to Purchaser pursuant hereto are in full
force and effect. Neither party to any such contract is in default
under any of such contracts, and no event has occurred that would,
with the passage of time, cause a default under any of such contracts.
The Sellers have paid the other party to each such contract all
amounts it owes them whether or not such amounts are yet due. The
Sellers have provided Purchaser with true, correct, and current copies
of all such contracts. There are no other contracts that are material
to the Sellers' businesses.
(m) Set forth in Schedule 4(m) hereto is a complete and
accurate list of all employees of the Sellers, together with their
dates of hire, positions and their annual salaries and other
compensation. The Sellers have not granted or become obligated to
grant any increases in the wages or salary of, or paid or become
obligated to pay any bonus or made or become obligated to make any
similar payment to or grant any benefit to or on behalf of, any
officer, employee or agent. The Sellers have no direct or indirect,
express or implied, obligation to pay severance or termination pay to
any officer or employee of either of the Sellers or to pay any amounts
to any consultant, agent or similar person or entity. The Sellers and
the Shareholders have no knowledge of any facts which would indicate
that any employee of the Sellers will not accept employment with
Purchaser on a basis no less favorable than that upon which such
employee is currently employed by the Sellers.
(n) All of the fixed assets (including but not limited to
all equipment), owned or leased by the Sellers are in good condition
and repair, fit for their intended use in the ordinary course of
business, and conform in all respects with all applicable ordinances,
regulations and other laws and there are no known latent defects
therein. All regular maintenance or service requirements, and product
recalls, have been followed, installed, or otherwise implemented on
and with respect to the Assets. All inventory of the Sellers is in
good, current, standard, and merchantable condition and is not
obsolete or defective. The inventory of the Sellers is properly
recorded on the Financial Statements at the lower of cost (last
in-first out) or market in accordance with GAAP.
(o) The books of account of the Sellers have been kept
accurately in the ordinary course of its business, the transactions
entered therein represent bona fide transactions and the revenues,
expenses, assets and liabilities of the Sellers have been properly
recorded in such books. The records are in good order, are complete,
and have been maintained in accordance with sound business practices.
(p) Since December 31, 1996, neither of the Sellers has
(i) declared, paid or set aside for payment any dividend or
distribution to its shareholder or shareholders, (ii) made any loan or
advance to any shareholder, officer, director or employee, (iii)
redeemed, purchased or otherwise acquired or sold or issued any of its
capital stock or any right to acquire such capital stock, or (iv)
increased the
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compensation of or paid or accrued any bonus to any employee other
than in accordance with past established practices, and none of such
actions will be taken after the date hereof until the consummation of
the transactions contemplated hereby.
(q) No shareholder, director, or officer of either of the
Sellers, nor any person who is a spouse or descendant of such
shareholder, director or officer, has any direct or indirect
relationship with any customer or supplier of, or other contracting
party with, either of the Sellers.
(r) Neither the Sellers nor any Shareholder knows or has
any reason to believe, or has received notice or information, that any
supplier of the Sellers will cease or refuse to do business with
Purchaser after the consummation of the transactions contemplated
hereby in the same manner, and same amount, as previously conducted
with the Sellers. Neither the Sellers nor any Shareholder has
received any notice of any disruption (including delayed deliveries or
allocations by suppliers or service providers) in the availability of
the products used by the Sellers, nor are the Sellers or any
Shareholder aware of any facts which could lead the Sellers to believe
that the Sellers or Purchaser will be subject to any such material
disruption. Neither the Sellers nor any Shareholder is aware of any
condition (financial or otherwise) affecting any supplier that will,
or could be reasonably expected to, now or in the future, reduce each
such supplier's ability to do business with Purchaser in substantially
the same manner and amount that each such supplier has done business
with the Sellers during the period preceding this Agreement. Set
forth in Schedule 4(r) is a complete and accurate list and description
of all volume discounts and other discounts provided by any supplier
of the Sellers.
(s) All information furnished to Purchaser by the Sellers
or the Shareholders, whether or not herein or in any Exhibit or
Schedule hereto, is true, correct, and complete. Such information
states all material facts required to be stated therein or necessary
to make the statements therein, in light of the circumstances under
which such statements are made, true, correct and complete in all
material respects. The Sellers and the Shareholders have made due
inquiry and investigation concerning the matters to which
representations and warranties of the Sellers and the Shareholders
under this Agreement pertain and the Sellers and the Shareholders, and
each of them, are unaware of any facts, events or circumstances which
have not been disclosed to Purchaser which are material to the Assets,
the businesses of the Sellers, or the Sellers.
The representations, warranties and covenants of the Sellers and the
Shareholders set forth in this Agreement shall survive execution and delivery
of this Agreement and the Closing.
5. Closing. The closing of the transactions contemplated hereby
(the "Closing") will take place concurrently with the execution of this
Agreement at the offices of Mobitel (or such other place as may be mutually
agreed upon by the parties hereto). The day on which the Closing occurs is
herein referred to as the "Closing Date."
6. Deliveries at Closing. At the Closing,
(a) the Sellers shall execute and deliver to Purchaser
bills of sale in the form reasonably requested by Purchaser and shall
deliver a list of the fixed assets, inventory and rental two-way
radios owned by the Sellers as of the Closing;
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(b) Purchaser shall deliver [Confidential Treatment
Requested with SEC] to the Sellers (as so designated on Exhibit B
hereto) by Purchaser check or wire transfer;
(c) counsel to the Sellers shall deliver to Purchaser a
legal opinion dated the Closing Date in form reasonably acceptable to
Purchaser opining to the matters set forth in Exhibit C hereto;
(d) the Sellers shall deliver evidence of receipt of all
required approvals, consents, licenses and permits, including without
limitation the consent of Motorola Inc. to the transactions
contemplated herein in a form acceptable to the Purchaser in its sole
discretion; and
(e) the Sellers shall execute and deliver such other
documents as are reasonably requested by Purchaser to effectuate the
purposes and intent of this Agreement.
7. Purchase Price Allocation. The parties hereto hereby agree
that, for all accounting and foreign, federal, state and local tax reporting
purposes, the Purchase Price shall be allocated in accordance with the relative
fair market values of the Assets and the non-competition covenant set forth in
Section 9 hereof, as determined by Purchaser, as soon as practicable after the
Closing Date. Purchaser shall provide to the Sellers a schedule setting forth
such allocation as soon as practicable after the Closing Date, and shall
thereafter notify the Sellers of any changes thereto. Each of the parties
hereto hereby covenants and agrees that it will not take a position on any tax
return, before any governmental agency charged with the collection of any tax,
or in any judicial proceeding that is in any way inconsistent with the terms of
this Section 7.
8. Confidentiality. The Sellers and the Shareholders agree to
hold in confidence the terms of this Agreement and, except as required by law,
will not make the same available or known to any third party other than their
counsel, accountants and other agents or representatives acting on their
behalf, and then only to the extent necessary, provided each such person is
advised of the confidential nature of the terms hereof and agrees to hold the
same in confidence.
9. Noncompetition and Non-solicitation.
(a) For a period of three years after the Closing, and
except for services performed on behalf of Purchaser, the Sellers and
the Shareholders agree that neither they nor any of their affiliates
will directly or indirectly either as an individual, a partner or a
joint venturer, or in any other capacity, (i) invest (other than
investments in publicly-owned companies which constitute not more than
1% of the voting securities of any such company), or engage in, within
100 miles of Houston, Texas (x) the business of selling, renting, or
servicing any wireless communication products or (y) any other
business that is competitive with that of Purchaser or its affiliates
(the items listed under clauses (x) and (y) hereto are collectively
referred to herein as "Competitive Businesses"), or (ii) accept
employment with or render services to Competitive Businesses that
engages in such Competitive Business within 100 miles of Houston,
Texas as a director, officer, agent, employee, consultant, or any
other capacity. For purposes of this Agreement, a "business that is
competitive with that of Purchaser or its affiliates" specifically
includes persons, firms, sole proprietorships, partnerships,
companies, corporations or other entities that market products and/or
perform services in direct or indirect competition with those marketed
and/or performed by Purchaser or its affiliates within 100 miles of
Houston, Texas. The parties agree that, if such non-competition
agreement is determined by a court of competent jurisdiction to be
unenforceable, such agreement should be reformed by the court to the
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extent necessary to be enforceable and to give effect to the intent of
this Section 9. SEE ADDENDUM.
(b) For a period of three years after the Closing,
neither the Sellers nor the Shareholders will, directly or indirectly,
(i) except on behalf of Purchaser, solicit for any purpose, any
customer of Purchaser (or former customer of Sellers), (ii) solicit
for employment by the Sellers or anyone else, any employee of
Purchaser or its affiliates as a result of the transactions
contemplated hereby or any person who was an employee of the Sellers
or Purchaser or its affiliates within the four-month period
immediately preceding such solicitation or employment, other than such
person whose employment was terminated by Purchaser or its affiliates;
or (iii) induce or attempt to induce, any such employee of Purchaser
or its affiliates to terminate such employee's employment.
(c) The parties hereto acknowledge that the provisions of
this Section 9 are supported by good and valuable consideration and
Purchaser's agreement to consummate the transactions contemplated
hereby are conditioned upon its receipt of the protection provided in
this Section 9. The parties hereto further acknowledge that the scope
and duration of the covenants set forth in this Section 9 are in all
respects reasonable.
(d) The Sellers and the Shareholders acknowledge and
agree that the breach by either of them of the provisions of this
Section 9 could not be adequately compensated with monetary damages
and would irreparably injure Purchaser, and, accordingly, that
injunctive relief and specific performance shall be appropriate
remedies to enforce the provisions of this Section against the Sellers
and the Shareholders, and the Sellers and the Shareholders waive any
claim or defense that there is an adequate remedy at law for such
breach; provided, however, that nothing contained herein shall limit
the remedies, legal or equitable, otherwise available to Purchaser,
and all remedies of Purchaser herein are in addition to any remedies
available to Purchaser at law or otherwise.
(e) The Shareholders acknowledge and recognize that the
enforcement of any of the noncompetition provisions in this Agreement
by Purchaser will not interfere with the Shareholders' ability to
pursue a proper livelihood. The Shareholders further represent that
they are capable of pursuing a career that would not violate the
noncompetition provisions hereof to earn a proper livelihood. The
Shareholders and the Sellers agree that due to the nature of such
business, the noncompetition restrictions set forth in this Agreement
are reasonable as to time and geographic area. At any time during the
non-compete period, Purchaser may require the Shareholders and the
Sellers to supply such information as Purchaser deems necessary to
ascertain whether or not the Shareholders and the Sellers have
complied with, or have violated, the covenants set forth in this
Section 9. Any such request for information will be sent to the
Shareholders and/or the Sellers by certified mail, return receipt
requested, addressed to such person's last known address. The
Shareholders and/or the Sellers shall furnish the requested
information to Purchaser within 10 days following the receipt of such
request.
10. Employment Arrangement. Purchaser would employ Xxxx beginning
immediately after the Closing. That employment relationship would be at-will
and in accordance with Purchaser's employment policies and procedures.
11. Repairs. Purchaser shall have no obligation to repair or
replace any products sold by the Sellers. Nonetheless, if Purchaser, in its
sole discretion, chooses to repair or replace any product sold by the
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Sellers, the Sellers shall promptly reimburse Purchaser for all amounts
expended by Purchaser in connection therewith.
12. Expenses. Purchaser, on the one hand, and the Sellers and the
Shareholders, on the other hand, will bear their own costs and expenses of the
transactions contemplated hereby.
13. Further Assurances. At the Closing and after the Closing,
each party hereto shall take all actions and duly execute and deliver or cause
to be executed and delivered all instruments of sale, conveyance, transfer,
assignment or assumption, and all notices, releases, acquittances and other
documents that may be necessary or advisable to consummate the transactions
contemplated in this Agreement, or more fully to sell, convey, transfer,
assign, and deliver to and vest in Purchaser the Assets sold, conveyed,
transferred, assigned, and delivered by the Sellers pursuant hereto or intended
so to be.
14. Indemnification. The Sellers and the Shareholders shall,
jointly and severally, indemnify and hold Purchaser and its affiliates and the
officers, directors, partners, stockholders, employees and agents of Purchaser
and its affiliates harmless from and against any loss, damage, claim, demand,
cause of action, liability, costs or expense (including without limitation
interest, penalties, and attorneys' fees and disbursements) of any kind or
nature whatsoever asserted against or incurred by Purchaser or the Assets by
reason of, resulting from, or based upon: (a) any misrepresentation, breach of
warranty or breach or nonfulfillment of any covenant or other agreement made by
them herein or in any other agreement executed and delivered by them pursuant
to this Agreement, (b) the ownership, management, operation or use of the
Assets and business of the Sellers prior to the Closing; (c) liabilities or
obligations with respect to the Assets or the business of the Sellers or the
operation thereof with respect to the periods before the Closing including, but
not limited to, claims relating to taxes due for periods prior to the Closing;
(d) occurrences of any nature prior to the Closing relating to the Sellers'
businesses or the Assets, whether such claims are asserted prior to or after
the Closing; (e) any obligation or liability relating to any employee benefit
plan of either Seller or relating to any employee of either Seller who is not
hired by Purchaser, and (f) any obligation or liability for any finders',
brokers' or agents' fee in connection with the transactions contemplated
hereby. SEE ADDENDUM.
NO INVESTIGATION BY OR ON BEHALF OF, AND NO NEGLIGENCE OF, PURCHASER OR ITS
AFFILIATES, NOR ANY INFORMATION THAT THEY MAY HAVE OR OBTAIN WILL AFFECT THE
INDEMNIFICATION OBLIGATIONS OF THE SELLERS AND THE SHAREHOLDERS HEREUNDER.
15. Purchaser's Right Of Offset. Purchaser shall be entitled to
credit or offset against any amount due the Sellers or the Shareholders
pursuant to the Agreement (whether pursuant to Sections 3(b) or 3(c) hereof, or
otherwise), in the manner as the Purchaser may determine, an amount equal to
any or all amounts due to the Purchaser pursuant to this Agreement.
16. Entire Agreement: Counterparts. This Agreement constitutes
the entire agreement among the parties pertaining to the subject matter hereof
and supersedes all other prior or contemporaneous agreements and
understandings, both oral and written, of the parties in connection therewith.
This Agreement may be executed in counterparts.
17. Severability. If any term, provision, covenant or condition
of this Agreement is held by any court of competent jurisdiction to be invalid,
void or unenforceable in any respect, the remainder of such term,
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provision, covenant or condition in every other respect and the remainder of
this Agreement shall continue in full force and effect and shall in no way be
affected, impaired or invalidated.
18. Amendments. This Agreement may be amended or modified only by
a written instrument signed by all the parties hereto.
19. Governing Law; Venue. This Agreement shall be governed and
construed in accordance with the laws of the State of Texas, without regard to
the conflicts of laws principles thereof. Venue for any disputes regarding
this Agreement, the transactions contemplated hereby or the liabilities or
obligations imposed hereunder shall be in federal or state court in Dallas
County, Texas.
20. Notices. Any notices, consents, demands, requests, approvals
and other communications to be given under this Agreement by any party to
another shall be deemed to have been duly given if given in writing and
personally delivered or sent by mail, registered or certified, postage prepaid
with return receipt requested, as follows:
If to the Purchaser: BearCom Operating, L.P.
00000 Xxxxxxxx Xx.
Xxxxxx, XX 00000
Attention: Xxxx X. Xxxxxx
If to the Sellers
or any Shareholder: the applicable address as set forth
on page one
Notices delivered personally shall be deemed communicated as of actual receipt;
mailed notices shall be deemed communicated as of three days after mailing.
Any party may change its, his or her address by written notice given to the
other parties in the manner set forth herein.
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If you agree to the terms of this Agreement, please so indicate by
signing this letter or a counterpart in the spaces provided below and returning
it to the undersigned as soon as practicable.
Very truly yours,
BEARCOM OPERATING, L.P.
By: Page-Com GP, Inc., general partner
By: /s/ XXXXX XXXXXX
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Xxxxx Xxxxxx, President
Duly Executed, Agreed and Accepted:
MOBITEL COMMUNICATIONS AND ELECTRONICS, INC.
By: /s/ XXXXX X. XXXXX
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Xxxxx X. Xxxxx, President
NETWORK COMMUNICATIONS, INC.
By: /s/ XXXXX X. XXXXX
----------------------------------------
Xxxxx X. Xxxxx, Vice President
Shareholders of Mobitel:
/s/ XXXXX X. XXXXX
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Xxxxx X. Xxxxx
/s/ XXXXX X. XXXX
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Xxxxx X. Xxxx
Shareholders of Network:
/S/ XXXXX X. XXXXX
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Xxxxx X. Xxxxx
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