AMENDMENT NO. 1 TO TRANSACTION DOCUMENTS
EXHIBIT
10.1
AMENDMENT NO. 1 TO
TRANSACTION DOCUMENTS
FTS
Group, Inc., a Nevada corporation (hereinafter called the "Buyer"), and Metro
One Development, Inc., formerly On The Go Healthcare, Inc., (hereinafter called
the "Seller”) or their registered assigns or successors in interest agree to
amend the following documents, dated as of March 18, 2008, between FTS Group,
Inc. and OTG Technologies Group, Inc., a wholly-owned subsidiary of FTS Group,
Inc., on the one side, and On The Go HealthCare, Inc., DBA On The Go
Technologies Group on the other side:
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Binding
Agreement (the “Agreement”);
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Exhibit
A of the Agreement, comprising the list of acquired assets (the
“Assets”);
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Exhibit
B of the Agreement, comprising the list of vendor and other debt acquired
by the Buyer (the Debt List”);
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Exhibit
C of the Agreement, comprising the list of the acquired contracts (the
“Contracts”);
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Exhibit
D of the Agreement, comprising the Confidentiality and Non-Compete
Agreement (the “Non-Compete”); and
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Exhibit
E of the Agreement, comprising the Promissory Note (the “Promissory
Note”);
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(each a
“Transaction
Document” and together the “Transaction
Documents”), dated as of May 19, 2008 (this "Amendment");
WHEREAS,
in connection with the Agreement, the Buyer issued to the Seller a Promissory
Note in the principal amount of $1,100,000; and
WHEREAS,
in connection with the Agreement, the Buyer acquired from the Seller debt in the
amount of $2,861,863.71; and
WHEREAS,
in connection with the Agreement, the Buyer entered into agreements with the
Seller known as Exhibits A, C and D that remain unchanged and are hereby
incorporated into this Amendment; and
WHEREAS,
the parties desire to amend the terms of the Agreement, Exhibit B and the
Promissory Note as set forth in this Amendment, effective May 19,
2008.
NOW,
THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Amendment,
and for other good and valuable consideration the receipt and adequacy of which
are hereby acknowledged, the parties agree as follows:
ARTICLE
I
AMENDMENT
OF TRANSACTION DOCUMENTS
1.1
The terms of the Promissory Note shall be amended and restated as follows: the
principal value of the Promissory Note is reduced from $1,100,000 to
$650,000. Any payments due to Seller on the Promissory Note between March
18, 2008 and May 19, 2008 are no longer due to Seller and are hereby
cancelled. No breach of the Note shall have occurred as a result of failure
to make payments between March 18, 2008 and May 19, 2008. Any and all
payments due under the Note will be directed to Laurus Master Fund (“Laurus”) or
such other entity as directed by Xxxxxx so long as payments are credited against
amounts owed by Seller to Laurus relating to the Seller’s accounts receivable
line (the “Laurus Line”). The Seller agrees to assign outstanding receivables
related to the Laurus Line in the amount of approximately $119,000 to the Buyer
for purposes of paying the Laurus Line. Once the amount of $650,000 has been
paid by the Buyer to Laurus and up to $119,000 has been directed by the Seller
to Laurus, if there are excess funds not necessary to pay the Laurus Line and
Xxxxxx has signed an acknowledgement of payment and release of all liens, excess
funds will be directed back to Seller. The Laurus Line shall be repaid in
full by July 14, 2008 and both Buyer and Seller agree to use commercially
reasonable best efforts to repay the Laurus Line before such date. If the Laurus
Line is not repaid up to $650,000 by the Buyer by July 14, 2008 , unless
extended by Laurus (or its designee), then the default provisions in the Note
shall apply. However, in no event shall such extension be longer than ninety
days. Additionally, Seller will not be able to pursue any default by Buyer
pursuant to the Note if Seller has not paid up to $119,000 but in no event less
than the amount necessary to repay the Laurus Line after deducting the Buyer’s
payments to Xxxxxx as described in this Section 1.1.
1.2 The Seller
agrees take reasonable steps to cause Xxxxxx to add Xxxxx Xxxxxxxxx to the “Lock
Box” bank account associated with the Laurus Line and to remove all other
parties except Laurus representatives from the account.
1.3 Both parties
agree that all funds generated by the Buyer that have been deposited into
Seller’s accounts through the date of this Amendment Number 1 will be applied to
the Assumed Debt further described in Schedule B..
1.4 Buyer will rent
space and equipment from the Seller for a period of 90 days at an aggregate rate
of $10,000 per month. Seller’s employees and representatives will not interfere
with Xxxxx’s acquired business and Buyer’s employees and representatives will
not interfere with Seller’s business. If the Buyer takes longer to relocate the
business it must give the Seller 30 days notice in writing. The Seller agrees to
provide up to two extensions of one month each under essentially the same terms
as currently in place. Any additional delays will be worked out by the
parties.
1.5 Purchase
Price. On the date hereof, the parties believe, based on
information available, the total deal value is described in detail below in US
dollars:
Deal
Value $3,511,864
Assumed Debt as set forth on Exhibit
B
$2,861,864
Assumed
Laurus
Line $650,000
1.6
Once the entire debt is paid to Xxxxxx, the Buyer will concede to a judgment
against its parent company FTS Group, Inc. if any suit is brought against the
Seller for any of the debt included in Exhibit B hereto assumed by the Buyer
that has not been paid. Additionally, Xxxxx represents that FTS Group will
defend any action brought against the Seller for any of those Accounts
Payable.
ARTICLE
II
MISCELLANEOUS
2.1 Entire Agreement; Amendments.
This Amendment contains the entire understanding of the parties with respect to
the subject matter hereof and supersedes all prior agreements and
understandings, oral or written, with respect to such matters, which the parties
acknowledge have been merged into such documents, exhibits and
schedules.
2.2 Governing Law. All questions
concerning the construction, validity, enforcement and interpretation of this
Amendment shall be gonverned by and construed and enforced in accordance with
the internal laws of the State of Florida, without regard to the principles of
conflicts of law thereof. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in Orlando, Florida for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is improper. Each party hereby irrevocably
waives personal service of process and consents to process being served in any
such suit, action or proceeding by mailing a copy thereof via registered or
certified mail or overnight delivery (with evidence of delivery). Nothing
contained herein shall be deemed to limit in any way any right to serve process
in any manner permitted by law. Each party irrevocably waives, to the fullest
extent permitted by applicable law, any and all right to trial by jury in any
legal proceeding arising out of or relating to this Amendment or the
transactions contemplated hereby. If either party shall commence an action or
proceeding to enforce any provisions of the Transaction Documents contemplated
herein, then the prevailing party in such action or proceeding shall be
reimbursed by the other party for its reasonable attorneys' fees and other costs
and expenses incurred with thte investigation, preparation and prosecution of
such action or proceeding.
2.4 Survival. The representations,
warranties, agreements and convenants contained herein shall survive the
Closing.
2.5 Execution. This Amendment may be
executed in two or more counterparts, all of which when taken together shall be
considered one and the same agreement and shall become effective when
counterparts have been signed by each party and delivered to the othe party, it
being understood that both parties need not sign the same counterpart. In the
event that any signature is delivered by facsimile transmission, such signature
shall create a valid and binding obligation of the party executing (or on whose
behalf such signature is executed) the same with the same force and effect as if
such facsimile signature page were an original thereof.
2.6 No Waiver. The waiver by any
party of the breach of any of the terms and conditions of, or any right under,
this Amendment shall not be deemed to constitute the waiver of any other breach
of the same or any other term or condition or of any similar right. No such
waiver shall be binding or effective unless expressed in writing and signed by
the party giving such waiver.
2.7 Counterparts. This Amendment may
be executed in one or more counterparts, each of which shall be deemed an
original and all of which together shall constitute one and the same
instrument.
2.8 Construction. The article and
section headings contained in this Amendment are inserted for reference purposes
only and shall not affect the meaning or interpretation of this
Amendment.
2.10 Further Assurances. Each party
will execute and deliver such further agreements, documents and instruments and
take such further action as may be reasonably requested by the other party to
carry out the provisions and purposes of this Amendment.
IN
WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1 to
Transaction Documents to be duly executed by their respective authorized
signatories as of the date first indicated above.
Buyer: FTS Group, Inc.
/s/ Xxxxx
Xxxxxxxxx
By: Xxxxx Xxxxxxxxx
Its: President and Chief Executive
Officer
Seller: Metro One Development,
Inc,
/s/ Xxxxxx
Xxxx
By: Xxxxxx Xxxx
Its: President and Chief Executive
Officer
Exhibit
B
Debt
List
| 1. | There is approximately $2,861,863.71 outstanding vendor debt as listed on the accounts payable which include all invoices that are dated prior to March 17, 2008. This amount shall be reduced by a payment in the amount of $157,396.49. As of May 7, 2008,vendor debt is approximately $2,704,467. |
| 2. | $650,000 outstanding debt on Laurus Line. |
