Exhibit 10.1
First Amendment to
Asset Sale Agreement
Between
ETS Payphones,
Inc.,
as the
Seller
and
Empire Payphones,
Inc.
as the Buyer
_________________
Entered into and
effective December 31, 2006
First Amendment to
Asset Sale Agreement
This
First Amendment to Asset Sale Agreement (this “
Amendment ”) is entered into and effective on December
31, 2006 (the “ Closing Date ”) between ETS
Payphones, Inc., a Delaware corporation (“ ETS ”
or “ Seller ”), and Empire Payphones, Inc., a
New York corporation (“ Empire ” or “
Buyer ”).
W I T N
E S S E T H:
WHEREAS , Empire and ETS have entered into the Asset Sale
Agreement, dated as of November 1, 2005 (as amended, supplemented
or otherwise modified through (and including) the Closing Date, the
“ Asset Sale Agreement ”; capitalized terms used
herein without definitions shall have the meanings given to such
terms in the Asset Sale Agreement), pursuant to which Empire agreed
to purchase certain assets from ETS and assume certain liabilities
of ETS, in each case subject to the terms and conditions contained
therein;
WHEREAS , a certain portion of the Purchase Price has been
paid prior to the Closing Date pursuant to the terms of the Asset
Purchase Agreement; and
WHEREAS , Buyer and Seller have agreed to amend and modify
the Asset Sale Agreement in certain respects to provide for the
guaranty and payment of the remaining unpaid amount of the Purchase
Price on the terms and subject to the conditions set forth
herein.
NOW, THEREFORE , the parties hereto hereby agree to the
above recitations and as follows:
Section 1. Amendments and Modifications to Asset Sale
Agreement . Effective as of the Closing Date, the Asset Sale
Agreement is amended and modified as follows:
(a) Buyer and Seller hereby
acknowledge and agree that the Buyer shall pay to the Seller
$1,827,966 (the “Remaining Purchase Price”). The
Remaining Purchase Price shall be in full and final satisfaction of
the remaining unpaid amount of (i) the Purchase Price remaining
under the Asset Sale Agreement and (ii) any Shortfall Advances
accrued through the end of December 2006 pursuant to the Management
Services Agreement between the parties, dated November 1, 2005, but
not in satisfaction of (x) the Buyer’s obligation to properly
allocate monies received after December 31, 2006, under the
Management Services Agreement or the Asset Sale Agreement that were
earned prior to November 1, 2005, and are owed to ETS pursuant to
the terms of the Management Services Agreement and the Asset Sale
Agreement, and (y) Seller’s obligation for liabilities
accruing prior to November 1, 2005, which were not Assumed
Liabilities.
(b) The Remaining Purchase Price
shall be paid as follows:
(i) On
the Closing Date, Buyer and Seller shall provide the Escrow Agent
with a joint written direction (or other written instructions
required by the Escrow Agent) to release and distribute to Seller
the amount of $797,910.07 (such amount constituting the total
amount of Installment Payments remaining in the Purchase Price
Escrow Account as of the Closing Date, including all interest or
other amounts earned thereon) by wire transfer of immediately
available funds to an account designated by Seller in such written
direction (or such other written instructions).
(ii)
On the Closing Date, Buyer shall pay to Seller the amount of
$8,513.06 by wire transfer of immediately available funds to an
account designated by Seller on or prior to the Closing Date.
(iii)
On the Closing Date, Buyer shall execute and deliver to Seller a
promissory note issued in favor of Seller and guaranteed by
Manhattan Telecommunications Corporation (“ MetTel
”), in the form of Exhibit A hereto (the “
Note ”), in the aggregate principal amount equal to
$1,025,000 (the “ Principal Amount”). The
Principal Amount and all other Obligations (as hereinafter defined)
shall be paid at the times, in the amounts and otherwise in the
manner set forth in the Note. The term “ Obligations
”, as used herein, means the Principal Amount and all of the
indebtedness, obligations and liabilities of Buyer to Seller,
individually or collectively, whether direct or indirect, joint or
several, absolute or contingent, due or to become due, now existing
or hereafter arising under or in respect of the Note.
Section 2. Representations and Warranties.
(a) Buyer represents and warrants to
Seller on the Closing Date as follows:
(i)
Assumed Liabilities include Buyer’s obligation to pay
employee related benefits, including but not limited to paid time
off (“PTO”), that accrued after November 1, 2005. On or
before February 19, 2007, Buyer shall either obtain consent to
honor the PTO from each employee in the form of Exhibit B
hereto (“Employee Release”) or pay to ETS the amount of
such accrued PTO.
(ii)
Buyer has the absolute and unrestricted right, power, authority and
capacity (x) to execute and deliver this Amendment and th
