Coastal Telecom Payphone Co., Inc.
0000 Xxxxxxx 00
Xxxxxxxxxxx, XX 00000
(000) 000-0000
Fax (000) 000-0000
November 20, 1996
AMNEX, Inc.
000 xxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx Xxxxxxxx, Esq.
Gentlemen:
The purpose of this letter is to supplement and/or modify that certain
Asset Purchase Agreement dated November 8, 1996 (the "Agreement") by and among
AMNEX, Inc. ("AMNEX") and its subsidiary Crescent Public Communications Inc.
("Buyer") and Coastal Telecom Payphone Company, Inc. ("Coastal"), Garden State
Installation & Service Co., Inc. ("Garden State"), BEK Tel, Inc. ("Bektel") and
Xxxxx Xxxx ("King"). Coastal, Bektel, Garden State and King are hereinafter
collectively referred to as the "Sellers" and individually as a "Seller".
1. Pursuant to P. 2.10(g) of the Agreement, the parties have mutually
determined that the total number of Acquired Phones to be purchased by Buyer
shall be 4,264. Accordingly, the Purchase Price shall be increased by $329,574
representing $2,891 for each of the 114 phones in excess of 4,150. Therefore,
Sellers shall receive an additional $109,861 in cash and $219,713 of stock
representing 67,604 shares. The total cash proceeds to be delivered by Buyer at
closing after deducting $1,000,000 pursuant to P. 3 hereof and $100,000 pursuant
to P. 6.12(e), and crediting $109,861 pursuant to P. 1 hereof, shall be
$3,009,861.
2. The final count of Acquired Phones pursuant to P. 2.10(g) includes
the 35 phones identified in P. 2.3(a) and P. 2.3(a) of the Disclosure Schedule.
Accordingly, the Agreement is hereby modified to reflect that there shall be no
Excluded Phones pursuant to P. 2.3(a) of the Agreement.
AMNEX, Inc.
November 20, 1996
Page 2
3. Liability to Xxxx Atlantic. Notwithstanding anything to the
contrary contained in this Agreement, Buyer and AMNEX shall pay, perform and
discharge all amounts due and outstanding by Sellers to Xxxx Atlantic with
regard to the phone lines associated with the Acquired Phones (the "Xxxx
Atlantic Liability"). The cash portion of the Purchase Price, pursuant to
P. 2.4(a), shall be reduced by One Million Dollars ($1,000,000) and the stock
portion of the Purchase Price, pursuant to P. 2.4(b), shall be reduced in an
amount equivalent to the total amount of the Xxxx Atlantic Liability, less One
Million Dollars ($1,000,000). In addition, Sellers shall pay to Buyer the total
sum of $40,000 in weekly installments of $800.00 commencing December 1, 1996 on
account of interest expenses to be incurred by Buyer. Such weekly installments
shall, at AMNEX's election, be paid on Sellers' behalf through a direct offset
against compensation payable by American Network Exchange, Inc., a wholly owned
subsidiary of AMNEX and an affiliate of Buyer, to National Telecom USA, Inc.
and/or the Keystone Corporation, each an affiliate of Sellers. Notwithstanding
the foregoing Purchase Price reduction to the stock, Sellers shall retain all of
their rights pursuant to P. 5.6. Accordingly, P. 2.14 be and is hereby modified
to add the Xxxx Atlantic Liability as an Assumed Liability.
4. Modification to P. 2.10(d). P. 2.10(d) refers to 420 Acquired
Phones without written contracts. Notwithstanding the foregoing, only those
Acquired Phones reflected on Disclosure Schedule 2.10(d) do not have written
contracts.
5. The Xxxxxx Assignment. Xxxxxx Xxxxxx ("Xxxxxx") has requested that
AMNEX pay over to him all of National Telecom USA, Inc.'s ("National")
commissions up to $250,736 in connection with a debt allegedly owed by King to
Xxxxxx and for which National is a guarantor (the "Xxxxxx Debt"). The Xxxxxx
Debt is the subject of an action pending in the Federal District Court for the
Eastern District of Virginia, captioned Xxxxxx X. Xxxxxx v. Xxxxx X. Xxxx
and the Keystone Corporation, Case No.: 155475 (the "Xxxxxx Action"). King has
disputed the Xxxxxx Debt and asserted counterclaims several times in excess of
the alleged Xxxxxx Debt. None of the other Sellers are parties to the Xxxxxx
Action. No claim has been raised against National in the Xxxxxx Action. As
security for Sellers' indemnification obligations to Buyer and
AMNEX, Inc.
November 20, 1996
Page 3
AMNEX, pursuant to P. 9.4 of the Agreement, AMNEX has the right to offset any
amounts due and owing from ANEI to National from the Available Cash Flow of
National. In consideration of the fact that AMNEX or ANEI may be directed to
satisfy the Xxxxxx Debt from the Available Cash Flow of National pursuant to a
court order, Sellers shall provide Buyer with additional security for the
indemnity obligations contained in P. 9.4 of the Agreement, consisting of 30,769
shares valued at $100,000. The 30,769 shares will be considered additional
Holdback Shares for all purposes under the Agreement. Accordingly P. 2.4(c) of
the Agreement shall be modified to reflect that 184,615 shares representing
$600,000 or 6% of the Purchase Price shall be held back by Buyer and AMNEX.
6. Compliance with P. 3.4. Sellers' accountant, Xxxx Xxxxxx, shall
deliver the unaudited Balance Sheets and Income Statements for BEK Tel, Inc. as
of December 31, 1995 and September 30, 1996 to Buyer no later that the close of
business Monday, November 25, 1996. In the event that Xxxxxx fails to deliver
such financial statements to Buyer by such date, then notwithstanding anything
to the contrary contained in the Agreement, the reference to "Closing Date" in
the first three sentences of Section 5.6 of the Agreement shall be construed to
mean the actual date on which Xxxxxx delivers such financial statements to Buyer
(instead of the Closing Date as defined in the Agreement). The parties agree
that time is of the essence with regard to this obligation. Until such time as
Sellers deliver the foregoing statements, Buyers shall be under no obligation to
issue and deliver to Sellers no more than $1,000,000 in Shares.
7. The effective date of the closing shall be today.
Very truly yours,
/s/ Xxxxx X. Xxxx
-----------------
Xxxxx X. Xxxx
Coastal Telecom Payphone Co., Inc.
By: /s/ Xxxxx X. Xxxx
---------------------
AMNEX, Inc.
November 20, 1996
Page 4
Garden State Installation & Service
Co., Inc.
By: /s/ Xxxxx X. Xxxx
---------------------
BEK Tel, Inc.
By: /s/ Xxxxx X. Xxxx
---------------------
Acknowledged and Agreed:
AMNEX, Inc.
By: /s/Xxxxx X. Xxxx, Xx.
-------------------------
Crescent Public Communications Inc.
By: /s/Xxxxx X. Xxxx, Xx.
-------------------------
K:\WPDOC\CORP\AMNEX\COASTAL\LTRAGR.96
