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Exhibit 1.2
FIRST AMENDMENT OF AMENDED AND RESTATED ASSET PURCHASE AGREEMENT
This First Amendment, effective this 26th day of October, 1999, is by and
between PH Group Inc., an Ohio corporation ("PH Group"), and Vertech Systems,
LLC, a Delaware limited liability company ("Vertech"), and hereby amends that
certain Amended and Restated Asset Purchase Agreement between PH Group and
Vertech dated April 1, 1999 (the "Agreement").
1. DEFERRED PAYMENT NOTE. The $350,000 Term Promissory Note dated April 1,
1999, is hereby extinguished in its entirety and shall be replaced with an
additional 5% royalty under Section 3.3 of the Agreement on machines sold
beginning with the Mid Guard machine. The maximum amount payable under this
additional royalty shall be $350,000 plus 10% interest. The interest shall be
retroactive to April 1, 1999. Calculations will be made upon each payment made
as to interest and principal.
2. SECURED ACQUIRED ASSETS PROMISSORY NOTE. The $650,000 Secured Acquired
Assets Promissory Note dated April 1, 1999 is hereby modified to restructure the
note as a 60-month note due in 36 months with a rate of 11.25%. A copy of the
modified amortization schedule is attached. Future payments under the Secured
Acquired Assets Promissory Note shall be made by PH Group to the personal
account of Michael K. Noggle, account #xxxx-xxxxxx. Michael K. Noggle will make
the payments into the Vertech account to enable Vertech to continue to satisfy
Vertech's obligations to Wells Fargo. PH shall use 10% of the net proceeds of
any equity investment in PH to pay down the principal of the Secured Acquired
Assets Promissory Note.
3. STOCK ISSUANCE. PH Group will issue 25,000 shares of the common stock of
PH Group to "The Michael K. Noggle Family Trust, dated February 2, 1990." These
shares will be restricted shares and will have a minimum hold time of 2 years
and a minimum put price of $1.00 and may only be resold in compliance with law.
Except as otherwise provided herein, no interest in the stock may be given,
sold, pledged, assigned, or otherwise transferred, voluntarily or involuntarily.
Vertech and Michael K. Noggle understand that the stock will not be registered
under the Securities Act of 1933 (the "Securities Act") on the ground that such
issuance would be exempt from registration under the Securities Act pursuant to
Section 4(2) thereof and may only be sold pursuant to an effective registration
statement or an exemption therefrom.
4. WARRANTY WORK. Deductions for repairs to field machines produced by
Vertech will come from EBIT first and then Royalty payments due under the
Agreement in the absence of, or insufficient, EBIT.
5. SUBORDINATION. Vertech hereby agrees to subordinate all indebtedness
owed by PH Group to Vertech under the Agreement and to execute such documents as
PH Group's lender feels is necessary to evidence such subordination. Vertech
shall maintain its first lien position on PH Group assets acquired from Vertech
until the Secured Acquired Assets Promissory Note is paid off.
6. PROPERTY TAXES. PH Group agrees to pay 1999 property taxes to be billed
in the year 2000 in an amount totaling $6,375.
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7. GENERAL. Terms not otherwise defined herein shall have the same meanings
as in the Agreement. The parties agree to take such reasonable steps and execute
and deliver promptly such other and further documents as may be necessary,
appropriate or reasonably requested to cause the terms and conditions contained
herein to be further clarified and/or carried into effect.
VERTECH SYSTEMS, LLC PH GROUP INC.
By: /s/ Michael K. Noggle By: /s/ Charles T. Sherman
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10/27/99
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Michael K. Noggle Date Charles T. Sherman
Date
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