AMENDMENT TO MERGER AGREEMENT
AMENDMENT made as of June 11, 1996 (the "New Effective Date") by and among
Prime Cellular, Inc., a Delaware corporation ("Prime"), Bern Communications,
Inc., a Delaware corporation and wholly-owned subsidiary of Prime ("Bern
Communications") and the individual or entity executing this agreement below
(each, a "Releasing Stockholder").
W I T N E S S E T H :
WHEREAS, Prime acquired all of the shares of capital stock of Bern
Associates, Inc., a New Jersey corporation ("Bern"), on June 11, 1996 (the
"Merger") pursuant to that certain merger agreement dated May 14, 1996 (the
"Merger Agreement") by and among Prime, Prime Cellular Acquisition Corp. (the
predecessor of Bern Communications), Bern and all of the stockholders of Bern
(the "Bern Stockholders"); and
WHEREAS, the Bern Stockholders received, as consideration under the Merger
Agreement, an aggregate amount of 4,100,000 shares of the common stock, par
value $.01 per share, of Prime (the "Merger Stock"), which consideration was
based, in great part, upon the representations and warranties made by the Bern
Stockholders to Prime and Bern Communications (such representations and
warranties, whether written or oral, express or implied, shall hereinafter be
referred to as the "Merger Representations"); and
WHEREAS, the Bern Stockholders executed an Escrow Agreement and
Indemnification Agreement whereby the Merger Stock was pledged to secure the
obligations of the Bern Stockholders under the Indemnification Agreement; and
WHEREAS, subsequent to the closing of the Merger, Prime has discovered
various breaches of the Merger Representations; and
WHEREAS, the parties desire to avoid the cost and expense of any litigation
that may arise regarding the assessment and calculation of damages and losses
that Prime and/or Bern Communication may have suffered as a result of certain
breaches of the Merger Representations, and, accordingly, have agreed to, among
other things, modify the terms relating to the conversion of Bern Shares to
Prime Stock.
NOW, THEREFORE, in consideration of the foregoing premises, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and
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subject to the conditions set forth herein, the parties hereto agree as follows:
1. Unless otherwise indicated to the contrary, all capitalized terms
contained herein shall have the same meaning as ascribed to such terms in the
Merger Agreement.
2. Subsection 1.7(a) of the Merger Agreement is hereby amended to reduce
the Exchange Ratio of Bern Shares to Prime Stock from 1:10,250 to 1:2,562.50,
reflecting a reduction in the aggregate number of shares of Prime Stock issued
upon conversion of Bern Shares at the Effective Time from 4,100,000 to
1,025,000.
3. As a result, the initial pro rata portion of Merger Stock to be received
by each Releasing Stockholder is as set forth on Exhibit A hereto, and stock
certificates evidencing such pro rata interest shall be delivered to the
Releasing Stockholder within thirty (30) days after the date hereof.
The remaining 3,075,000 Shares of Prime Stock being held in Escrow and not
being distributed to the Bern Stockholders (specifically, the portion thereof
allocable to each Releasing Stockholder and not distributed to such Releasing
Stockholder) shall be distributed to Prime and shall remain authorized but
unissued stock of Prime. Neither Prime nor Prime Acquisition
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Subsidiary shall have any further obligation to the Bern Stockholders with
respect to such Prime Stock.
4. It is hereby agreed and acknowledged that the Releasing Stockholder,
without admitting or denying the extent or amount of any damages and losses that
Prime or Bern Communications may have incurred or suffered as a result of any
breaches of the Merger Representations, has agreed to enter into this Amendment
with Prime and Bern Communications subject to receipt of a complete release and
discharge of any liability to Prime or Bern Communications arising from the
breach of the Merger Representations by any Bern Stockholder. Accordingly, Prime
and Bern Communications hereby forever release and discharge the Releasing
Stockholder of and from any and all actions, claims, causes of action, suits,
controversies, debts, agreements, commitments, offers, damages, obligations,
liabilities, judgments, executions, demands, of any kind whatsoever, now
existing or hereafter arising, whether known, or unknown, foreseen or
unforeseen, which Prime and Bern Communications, their subsidiaries, affiliates,
stockholders, respective successors and assigns, ever had, now have or hereafter
may have in connection with, arising out of, or in any way related to any breach
of the Merger Representations by the Bern Stockholders and/or Bern under
Articles II, IV and VI of the Merger Agreement and Sections 1, 3, 4, 5 and 8 of
the Indemnification Agreement; provided, however,
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that nothing contained in this paragraph 6 shall be deemed to release and
discharge Xxxxx Xxxxxxxxxxxx, Xxxx Xxxxxxx, Xxxxxxx Xxxxxxxxxxxx and Xxxxxx
Xxxxxxxx from any liability or indemnification obligations under the Merger
Agreement and the Indemnification Agreement.
5. Notwithstanding anything to the contrary in the Merger Agreement and
Indemnification Agreement regarding survival, on and after the date hereof, the
Merger Representations, including, without limitation, the representations,
warranties, obligations and covenants of the Bern Stockholders and/or Bern under
Articles II, IV and VI of the Merger Agreement and Sections 1, 3, 4, 5 and 8 of
the Indemnification Agreement shall no longer survive or have any further force
and effect, at law or equity, with respect to the Releasing Stockholder.
6. All of the Prime Stock owned by the Releasing Stockholder shall be
released from Escrow and the Escrow Agreement shall be deemed effectively
terminated, and without any further force and effect, with respect to such
Releasing Stockholder.
7. Notwithstanding the foregoing, the Releasing Stockholder acknowledges
that this Amendment shall have no force and effect and shall be deemed null and
void in the event that less than all of the Bern Stockholders sign this
Amendment; provided,
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however, that it is agreed and acknowledged by Prime and Bern Communications
that the execution of this Amendment will not be required from Xxxxx
Xxxxxxxxxxxx, Xxxx Xxxxxxx, Xxxxxxx Xxxxxxxxxxxx and Xxxxxx Xxxxxxxx.
8. The parties hereby acknowledge their belief that the breaches of the
Merger Representations were made directly or indirectly by Xxxxx Xxxxxxxxxxxx,
Xxxx Xxxxxxx, Xxxxxxx Xxxxxxxxxxxx and Xxxxxx Xxxxxxxx each (except for Xxxx
Xxxxxxx and Xxxxxxx Xxxxxxxxxxxx) a former employee of Bern Communications, and
a Bern Stockholder. Because of the actions of Xxxxx Xxxxxxxxxxxx, Xxxx Xxxxxxx,
Xxxxxxx Xxxxxxxxxxxx and Xxxxxx Xxxxxxxx, each Releasing Stockholder has
suffered a loss as evidenced by the terms of this Amendment. Accordingly, the
parties hereby acknowledge that the shares of Prime Stock belonging to such
individuals shall continue to remain in escrow under the Escrow Agreement, and
agrees to assist each other in bringing the legal action or exercising any
rights to recovery and remedies against Xxxxx Xxxxxxxxxxxx, Xxxx Xxxxxxx,
Xxxxxxx Xxxxxxxxxxxx and Xxxxxx Xxxxxxxx. Any recovery from such individuals
(whether Prime Stock or cash) shall be paid to each Releasing Stockholder (pro
rata).
9. The parties hereby agree and acknowledge that Xxxxxx Xxxxxxx and Xxxxxxx
Xxxxx are deemed the Bern Designees and the Shareholders' Representatives, as
such terms are referred to in the
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Merger Agreement (as amended hereby) and the Registration Rights Agreement,
respectively.
10. The parties hereby agree and acknowledge that the Merger Agreement has
been amended to restructure they payment terms in accordance with the terms
hereof, and such an amendment shall not be deemed the result of any exercise of
rights and remedies by any party under the Indemnification Agreement and Escrow
Agreement.
11. This Amendment to the Merger Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
taken together shall constitute one and the same agreement.
12. Except as set forth herein the Merger Agreement remains in full force
and effect.
IN WITNESS WHEREOF, the parties hereto have signed this Amendment to the
Merger Agreement the day and year first above written.
PRIME CELLULAR, INC.
By: ______________________________________________
BERN COMMUNICATIONS, INC.
By: ______________________________________________
[signature page continued]
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[signature page continued]
______________________________________________
Xxxxxx Xxxxxxx, a Releasing Stockholder
______________________________________________
Xxxxx Xxxxxxxxxxxx, a Releasing
Stockholder
______________________________________________
Xxxxxxx Xxxxxx, a Releasing Stockholder
______________________________________________
Xxxxxxx Xxxxx, a Releasing Stockholder
______________________________________________
Xxxxxx Xxxxx, a Releasing Stockholder
______________________________________________
Xxxx Xxxxxx, a Releasing Stockholder
______________________________________________
Atalanta Fund #6 Limited Partnership, a
Releasing Stockholder
______________________________________________
Xxxxxx Xxxxxxxx, a Releasing Stockholder
______________________________________________
Xxxxxx Xxxx, a Releasing Stockholder
______________________________________________
Xxxxxxx Xxxxxxx, a Releasing Stockholder
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[signature page continued]
______________________________________________
Xxxxxxx Xxxxxxxxxxxx, a Releasing
Stockholder
______________________________________________
Xxxxxx Xxxxxxxxx, a Releasing
Stockholder
______________________________________________
Xxxxx Xxxx, a Releasing Stockholder
______________________________________________
Xxxxxx Xxxxxxx, Xx., a Releasing
Stockholder
______________________________________________
Xxxx Xxxxxxx, a Releasing Stockholder
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EXHIBIT A
Name Percentage Interest
---- -------------------
Xxxxxx Xxxxxxx 13.25%
Xxxxx Xxxxxxxxxxxx 13.5%
Xxxxxxx Xxxxxx 15.5%
Xxxxxxx Xxxxx 15.5%
Xxxxxx Xxxxx 15.5%
Xxxx Xxxxxx 11%
Atalanta Fund #6 Limited Partnership 6%
Xxxxxx Xxxxxxxx 2%
Xxxxxx Xxxx 1%
Xxxxxxx Xxxxxxx 2%
Xxxxxxx Xxxxxxxxxxxx 2.5%
Xxxxxx Xxxxxxxxx 1%
Xxxxx Xxxx 0.5%
Xxxxxx Xxxxxxx, Xx 0.5%
Xxxx Xxxxxxx 0.25%
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