**Exhibit 10.7.1**

 

**AMENDMENT DATED AS OF MARCH 29, 2006**

**TO THE JANUARY 28, 2005 CHANGE OF CONTROLAGREEMENT**

**BETWEEN**

**ETS PAYPHONES, INC. and DAVID C. JONES**

 

This Amendment to the Change of Control Agreement (the “Amendment”)dated as of January 28, 2005 (the “Agreement”) between ETS Payphones, Inc. (the“Company”) and David C. Jones (the “Employee”), is made effective as of March29, 2006.

 

Whereas at the Annual Meeting of Stockholders, held on February 15,2006, the stockholders of the Company approved, among other things, theconsummation of the Asset Sale Agreement between the Company and EmpirePayphones, Inc., dated as of November 1, 2005 (the “Asset Sale Agreement”) andthe transactions contemplated thereby and the dissolution and the winding downof the Company’s operations following the closing (the “Closing”) of the AssetSale Agreement.

 

Whereas the Board of Directors of the Company has determined that it isin the best interests of the Company that the change of control provisions ofthe Agreement be amended to ensure that Employee continue to serve the Companyafter the Closing, in order that the Closing and the dissolution and windingdown of the Company thereafter are efficiently administered.

 

In consideration of the mutual agreements herein contained, and forother good and valuable consideration the receipt and sufficiency of which arehereby acknowledged, the Company and the Employee hereby agree as follows:

 

1.                                       Section 1(f) ofthe Agreement is deleted and replaced in its entirety by the following:

 

(f)            Reserved

 

2.                                       Section 2 of theAgreement is deleted and replaced in its entirety by the following:

 

The Term of this Agreement shall commence on the Commencement Date andshall continue in effect through the first anniversary of the Commencement Date,provided, however, that if an Incentive Payment is paid to the Employeepursuant to Section 3 of this Agreement, as amended, the Term shall expirethree months beyond the month in which such Incentive Payment is paid to theEmployee.

 

3.                                       Section 3 is deletedand replaced in its entirety by the following:

 

In order to induce the Employee to remain in the employ of the Companyand in consideration of the Employee’s covenants set forth in Section 4 hereof,the Company agrees, under the conditions described herein: (A) that the Companyshall pay to the Employee a lump sum (an “Incentive Payment”) equal to his basesalary for six (6) months based on the Employee’s annual base salary as of thedate of the payment of the Incentive Payment (the “Base Salary”) upon theearlier of (i) May 16, 2006 or (ii) 60 days after the closing of the Asset SaleAgreement between the Company and Empire Payphones, Inc., dated as of November1, 2005 and (B) to continue medical insurance for the Employee and hisdependents on the same terms as exist on the date of termination of theEmployee for six (6) months following the date of termination of the Employeeand after that six (6) month period Employee shall be entitled to electeighteen (18) months of continuation coverage under COBRA, if the Company hasnot terminated its medical insurance coverage plan. If the Company terminatesits medical insurance coverage plan, it shall reimburse the Employee for thecost of obtaining substantially similar coverage as existed for the Employee onthe day prior to such termination for the six months of coverage following thedate of termination. It is understood by both parties hereto that upon paymentof the Incentive Payment, the Base Salary of the Employee shall be reduced toone half of the Base Salary, effective as of the date of the payment of theIncentive Payment. Nothing contained herein shall limit or impinge any otherrights or remedies of the Company or the 

 

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Employee under any other agreement or plan to which the Employee is aparty or of which the Employee is a beneficiary.

 

This Agreement shall not be construed as creating an express or impliedcontract of employment and, except as otherwise agreed in writing between theEmployee and the Company, the Employee shall not have any right to be retainedin the employ of the Company.

 

4.                                       Section 8 of theagreement shall be amended to delete notice to Brian Gannon, Esq. and toprovide notice to the following:

 

Shannon Lowry Nagle, Esq.

Stroock & Stroock & Lavan LLP

180 Maiden Lane

New York, NY 10038

 

5.                                       All otherprovisions of the Agreement not specifically amended by this Amendment shallremain in full force and effect. All capitalized but undefined terms usedherein shall have the meaning ascribed to them in the Agreement. This Agreementmay be executed simultaneously in two or more counterparts each of which shallbe deemed an original and all of which shall be deemed one and the sameagreement. A photocopy or facsimile reproduction of this Amendment and anysignatures shall be deemed as effective as the original.

 

IN WITNESS WHEREOF, the Company and the Employee have each executed anddelivered this Agreement as of the effective date shown above.

 
|   | **COMPANY**        |
|--------|--------------------|
|   |               |
|   | By:                | /s/ GUY A. LONGOBARDO |   |
|   |               |   |
|   | Title:             | Director, President and Chief Executive Officer |   |
|   |               |   |
|   | Date:              | March 29, 2006 |   |
|   |               |   |
|   | By:                | /s/  MICHAEL  H. MCCLELLAN |   |
|   |               |   |
|   | Title:             | Director, Executive Vice President and Chief Financial Officer |   |
|   |               |   |
|   | Date:              | March 29, 2006 |   |
|   |               |   |
|   | **EMPLOYEE**       |
|   |               |
|   | /s/ DAVID C. JONES |   |
|   | David C. Jones     |
|        |                    |  |  |  |  |  |  |  |  |  |

 

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