Laurus Master Fund, Ltd. c/o Laurus Capital Management, LLC
Exhibit
10.57
Laurus
Master Fund, Ltd.
c/o
Laurus Capital Management, LLC
000
Xxxxx
Xxxxxx, 00xx
Xxxxx
Xxx
Xxxx,
Xxx Xxxx, 00000
September
27, 2005
Xfone,
Inc.
c/o
Xfone
018 Ltd.
0
Xxxxxx
Xxxxxx, 0xx
Xxxxx
Kiryat
Xxxxxxx,
Petach
Tikva
Israel
Re: Incremental
Funding
Reference
is made to that certain Securities Purchase Agreement, dated as of September
27,
2005 (as amended, modified or supplemented from time to time, the “Purchase
Agreement”), between Xfone, Inc., a Nevada corporation (“Xfone”), and Laurus
Master Fund, Ltd. (“Laurus”), pursuant to which Xfone issued to Laurus a Secured
Convertible Term Note in the aggregate principal amount of Two Million Dollars
($2,000,000) (as amended, modified or supplemented from time to time, the
"Note"). Capitalized terms used but not defined herein shall have the meanings
ascribed to such terms in the Purchase Agreement or the Note, as
applicable.
In
connection with the foregoing and subject to the conditions set forth herein,
Laurus hereby agrees to make available to Xfone on or after March 27, 2006
additional financing in an aggregate principal amount of up to $1,500,000
(One
Million Five Hundred Thousand Dollars) (such amount, the “Incremental Funding
Amount”) in one installment, so long as (i) Xfone has given Laurus no less than
ten (10) business days prior written notice (or such shorter period as is
acceptable to Laurus) of its desire to incur the Incremental Funding Amount
(a
“Funding Request”), (ii) Xfone has paid to Laurus such other fees and expenses
then due and payable to Laurus in connection with either the Purchase Agreement,
any Related Agreement, or the Incremental Funding Amount (it being understood
and agreed that in connection with the Incremental Funding Amount: (a) escrow
fees and management fees due to Laurus will be paid by Xfone; (b) no due
diligence and documentation fees will be paid by Xfone), (iii) no Event of
Default has occurred and is continuing beyond any applicable cure period
under
the Purchase Agreement or any Related Agreement, (iv) the Registration Statement
required to be filed under the Registration Rights Agreement has been declared
effective by the SEC, (v) Xfone has a sufficient number of authorized shares
of
its Common Stock that would be required to be registered to permit the full
conversion by Laurus at the applicable Fixed Conversion Price of the Incremental
Funding Amount and to fully exercise the warrant into freely tradable shares
of
Xfone’s Common Stock, (vi) the Incremental Funding Documents (as defined below)
have been delivered to Laurus in form and substance satisfactory to Laurus,
(vii) Xfone shall have demonstrated to Laurus’ reasonable satisfaction that
Xfone has received all necessary regulatory approvals, and all applicable
waiting periods shall have run, with respect to the consummation of its
acquisition (the “Acquisition”) of I-55 Telecommunications, LLC, a Louisiana
limited liability company (“I-55 Telecommunications”), and Xfone shall have
taken full ownership control of I-55 Telecommunications and (viii) the terms
and
conditions of the Acquisition, and the nature of the assets to be acquired
thereby, shall in each case be satisfactory to Laurus in its sole discretion.
Prior
to
the disbursement of the Incremental Funding Amount, Xfone shall deliver to
Laurus the following documents in substantially the form delivered to Laurus
on
the date hereof in connection with the issuance of the Note and otherwise
in
form and substance satisfactory to Laurus (the following documents collectively
referred to herein as the “Incremental Funding Documents):
| (i) |
a
Securities Purchase Agreement with respect to the Incremental Funding
Amount;
|
| (ii) |
a
Secured Convertible Term Note in the aggregate principal amount
of the
Incremental Funding Amount (it being understood and agreed that
the
initial Fixed Conversion Price with respect to the amounts outstanding
in
connection with the Incremental Funding Amount shall be an amount
equal to
the Fixed Conversion Price as determined on the date hereof and
as set
forth in the Note);
|
| (iii) |
a
Registration Rights Agreement for the shares of Common Stock into
which
the Incremental Funding Amount (together with all interest and
fees that
may be incurred in connection therewith) is convertible into;
|
| (iv) |
a
Warrant to purchase -------118,500 shares of Common Stock;
and
|
| (v) |
such
other documentation (including, without limitation, corporate resolutions
and legal opinions) reasonably requested by
Laurus.
|
This
is
not and shall not be deemed to be a binding agreement by Laurus to honor
any
Funding Request except as set forth herein. Laurus’s obligation to fund the
Incremental Funding Amount shall be subject to the execution and delivery
by
Xfone (and its Subsidiaries, if applicable) of agreements and other
documentation required by Laurus in its sole discretion, exercised reasonably,
in accordance with the terms and conditions set forth herein.
Notwithstanding
Section 2.3 of the Note, if (i) the effective date upon which Company shall
acquire I-55 Telecommunications and receive all necessary and advisable
regulatory and other approvals required under applicable law or otherwise
in
connection therewith occurs on or before March 31, 2006 (the “Acquisition
Date”); (ii) the Holder shall in its sole discretion determine not to fund the
Incremental Funding Amount; and (iii) the Company shall deliver a Notice
of
Redemption to the Holder within ten (10) business days of the Acquisition
Date,
then the Redemption Amount shall not be calculated as set forth in the Note,
but
shall be calculated as a sum equal to one hundred percent (100%) of the
Principal Amount outstanding at such time together with accrued but unpaid
interest thereon and any and all other sums due, accrued or payable to the
Holder arising under the Note, the Purchase Agreement or any other Related
Agreement outstanding on the Redemption Payment Date (the “Alternate Redemption
Amount”),
which
such Alternate Redemption Amount shall be due and payable in full on the
Redemption Payment Date. In the event the Company fails to pay the Alternate
Redemption Amount on the Redemption Payment Date as set forth herein, then
such
Redemption Notice will be null and void.
This
letter agreement shall automatically terminate, unless extended by Laurus
in
writing, if Xfone does not satisfy the conditions to the incurrence of the
Incremental Funding Amount set forth herein by May 5, 2006.
This
letter (and Xfone’s rights and obligations hereunder and thereunder) shall not
be assignable by Xfone to any person or entity without the prior written
consent
of Laurus (and any purported assignment without such consent shall be null
and
void). This letter may not be amended or waived except by an instrument in
writing signed by Xfone and Laurus. This letter may be executed in any number
of
counterparts, each of which shall be an original and all of which, when taken
together, shall constitute one agreement. Delivery of an executed signature
page
of this letter by facsimile transmission shall be effective as delivery of
a
manually executed counterpart hereof or thereof, as the case may be. THIS
LETTER
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF
NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS. This letter
sets
forth the entire agreement between the parties hereto as to the matters set
forth herein and supersede all prior communications, written or oral, with
respect to the matters herein.
EACH
OF
XFONE AND LAURUS HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO
ANY
CLAIM, ACTION, SUIT OR PROCEEDING ARISING OUT OF OR CONTEMPLATED BY THIS
LETTER.
EACH OF XFONE AND LAURUS HEREBY SUBMIT TO THE NON-EXCLUSIVE JURISDICTION
OF THE
FEDERAL AND NEW YORK STATE COURTS LOCATED IN THE COUNTY OF NEW YORK IN
CONNECTION WITH ANY DISPUTE RELATED TO THIS LETTER OR ANY MATTERS CONTEMPLATED
HEREBY OR THEREBY.
* * * *
IN
WITNESS WHEREOF, the parties have executed this letter agreement as of the
first
date written above.
XFONE,
INC.
By:________________________
Name:
Xxx
Xxxxxxxxx
Title:
President & CEO
LAURUS
MASTER FUND, LTD.
By:________________________
Name:
Title:
