SUBSCRIPTION AGREEMENT FOR THE PURCHASE OF SHARES OF COMMON STOCK OF XFONE, INC. November 1, 2007
FOR
THE
PURCHASE
OF SHARES OF COMMON STOCK OF
XFONE,
INC.
November
1, 2007
XFONE,
INC.
SUBSCRIPTION
AGREEMENT FOR THE PURCHASE OF SHARES OF COMMON STOCK
XFONE,
INC., a Nevada corporation (the “Company”) is offering (this
“Offering”) for sale to
the investors identified on Exhibit
A hereto (each an " Investor"
and together, the
" Investors") up to an
aggregate of 1,000,000 shares of its common stock, par value $0.001
per share (the “Common Stock”) at $3.00 per share. This
Offering is made by the Company [, acting without a placement
agent,] pursuant to the Registration Statement File No.: 333-143618
declared effective by the U.S. Securities and Exchange Commission (the
“Commission”) on August 6, 2007 (the “Registration Statement”) and this
subscription agreement (this “Agreement”).
WHEREAS,
the Company filed the Registration Statement to sell up to 2,000,000
shares of Common Stock on a best efforts basis and the Registration Statement
was declared effective by the Commission; and
WHEREAS,
the Company is offering for sale to the Investors an aggregate of 1,000,000
shares of its Common Stock on the terms agreed to herein.
NOW,
THEREFORE, IT IS HEREBY AGREED:
Purchase
of Shares
(a) The
undersigned investors agree to purchase at the Closing (as defined herein)
and
the Company agrees to sell and issue at the Closing up to 1,000,000 Shares
of
Common Stock, at a price of $3.00 per share (the “Shares”), for
a total subscription amount of up to $3,000,000 (the “Subscription
Amount”).
(b) The
Investors and the Company agree that the Subscription Amount shall be paid
by or
on behalf of the Investors by wire transfer to the following account (the
“Escrow Account”) wherein the Subscription Amount will be held
until the approval by the American Stock Exchange (“AMEX”) and
the Tel Aviv Stock Exchange (“TASE”) is obtained and until the
Company’s transfer agent has confirmed that the shares are available for
issuance to the Investors via the DWAC system, at which time the Subscription
Amount will be released to the Company (the
“Closing”).
Name
of Escrow Account: Advocate Xxxx Xxxxxxx in trust for Xfone,
Inc.
Bank:
xxxxxxxxxxxxxxxxx;
Branch:
xxxxxxxxxxxxxxxx;
Account
Number: xxxxxxxx.
Subscription
Procedures
(a) To
subscribe, each Investor must:
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(i)
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complete
and sign this Agreement;
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(ii)
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complete
and sign the accompanying Confidential Prospective Purchaser Questionnaire
(this Agreement and the Registration Statement are collectively referred
to herein as the “Offering
Documents”);
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(iii)
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return
the completed and signed Offering Documents on behalf of the Investor
to
the following address:
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Xfone,
Inc.
x/x
Xxxxx
000 Xxx., 0 Xxxxxx Xxxxxx,
Xxxxxx
Xxxxx, xxxxxx
Attn: Xxxx
Xxxxxxx, Adv.
Prospective
Investors should retain their own professional advisors to review and evaluate
the economic, tax, and other consequences of an investment in the
Company.
THE
COMMISSION HAS NOT PASSED UPON THE ACCURACY OR ADEQUACY OF THE OFFERING
DOCUMENTS. NO STATE SECURITIES LAW ADMINISTRATOR HAS PASSED ON OR ENDORSED
THE
MERITS OF THIS OFFERING OR THE ACCURACY OR THE ADEQUACY OF THE OFFERING
DOCUMENTS. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
IT
IS INTENDED THAT THE SECURITIES OFFERED HEREBY WILL BE MADE AVAILABLE TO
ACCREDITED INVESTORS, AS DEFINED IN REGULATION D AND RULE 501 PROMULGATED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”).
THE
SECURITIES OFFERED HEREBY SHOULD BE CONSIDERED ONLY BY PERSONS WHO CAN AFFORD
TO
SUSTAIN A LOSS OF THEIR ENTIRE INVESTMENT. INVESTORS WILL BE REQUIRED TO
REPRESENT THAT THEY ARE FAMILIAR WITH AND UNDERSTAND THE TERMS OF THIS
OFFERING.
THE
INVESTOR, BY ACCEPTING DELIVERY OF THE OFFERING DOCUMENTS, AGREES TO RETURN
THE
OFFERING DOCUMENTS AND ALL ACCOMPANYING OR RELATED DOCUMENTS TO THE COMPANY
UPON
REQUEST IF THE INVESTOR DOES NOT AGREE TO PURCHASE ANY OF THE SECURITIES OFFERED
HEREBY.
NASAA
UNIFORM LEGEND
IN
MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN EXAMINATION
OF
THE COMPANY AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS
INVOLVED. THESE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE
SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING
AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS
DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
XFONE,
INC.
SUBSCRIPTION
AGREEMENT FOR THE PURCHASE OF
SHARES
OF COMMON STOCK
1. Unless
terminated earlier by the Company, in its sole discretion, this Offering is
scheduled to terminate on or about November 4, 2007, 5:00 p.m., New York time
(the “Offering Period”). The issuances of the Shares
is subject to the approval of the Tel Aviv Stock Exchange and the American
Stock
Exchange where the Company’s common stock is listed.
2. For
additional information regarding the Company, the Investors are encouraged
to
review the Company’s Annual Report on Form 10-KSB for the period ending December
31, 2006, filed with the Commission on March 30, 2007, together with an
amendment thereto on Form 10-KSB/A filed with the Commission on July 30, 2007,
and the Company’s Quarterly Report on Form 10-QSB for the period ending June 30,
2007, filed with the Commission on August 14, 2007, along with the Company’s
periodic reports and other information incorporated by reference therein and
the
Registration Statement (collectively referred to herein as the “Exchange
Filings”) .
3. The
Company hereby makes the following representations, warranties and covenants
to
the Investors:
a. The
Company has the requisite corporate power and authority to enter into and to
consummate the transactions contemplated by this Agreement and otherwise to
carry out its obligations hereunder.
b. The
execution and delivery of this Agreement by the Company and the consummation
by
it of the transactions contemplated hereunder have been duly authorized by
all
necessary corporate action on the part of the Company.
c. This
Agreement has been duly executed by the Company and, when delivered in
accordance with the terms hereof, will constitute the valid and binding
obligation of the Company enforceable against the Company in accordance with
its
terms, except as may be limited by any bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or other similar laws affecting the
enforcement of creditors’ and contracting parties’ rights generally or by
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
4. Each
Investor hereby makes the following representations, warranties and covenants
to
the Company:
a. Each
Investor has carefully read the Offering Documents and the Exchange Filings,
all
of which the Investor acknowledges have been provided to it or have been
available to it. Each Investor has been given the opportunity to ask
questions of, and receive answers from the Company concerning the terms and
conditions of this Offering and the Offering Documents and to obtain such
additional written information, to the extent the Company possesses such
information or can acquire it without unreasonable effort or expense, necessary
to verify the accuracy of the same as the Investor desires in order to evaluate
this investment. Each Investor further acknowledges that the Investor
fully understands the Offering Documents, and the Investor has had the
opportunity to discuss any questions regarding any of the Offering Documents
with the Investor’s counsel or other advisor. Notwithstanding the
foregoing, the only information upon which the Investor has relied is that
set
forth in the Offering Documents and the Exchange Filings, and the Investor’s own
independent investigation. Each Investor acknowledges that the
Investor has received no representations or warranties from the Company or
its
employees, directors, officers, or agents in making this investment decision
other than as set forth in the Offering Documents and the Exchange
Filings.
b. Each
Investor is aware that the purchase of the Shares is a speculative investment
involving a high degree of risk and that there is no guarantee that the Investor
will realize any gain from this investment, and that the Investor could lose
the
total amount of the Investor's investment.
c. Each
Investor understands that no federal or state agency has made any finding or
determination regarding the fairness of this Offering, or any recommendation
or
endorsement of this Offering.
d. The
Investors are purchasing the Shares for their own account, with the intention
of
holding the Shares, with no present intention of dividing or allowing others
to
participate in this investment or of reselling or otherwise participating,
directly or indirectly, in a distribution of the Shares.
e. Each
Investor represents that the Investor, if an individual, has adequate means
of
providing for his or her current needs and personal and family contingencies
and
has no need for liquidity in this investment in the Shares. The
Investor has no reason to anticipate any material change in his or her personal
financial condition for the foreseeable future.
f. Each
Investor is financially able to bear the economic risk of this investment,
including the ability to hold the Shares indefinitely or to afford a complete
loss of the Investor’s investment.
g. Each
Investor represents that each Investor's overall commitment to this investment
is not disproportionate to the Investor's net worth, and the Investor's
investment in the Shares will not cause such overall commitment to become
excessive. The Investor will not pledge, transfer, or assign
this Agreement.
h. Each
Investor represents that the funds provided for this investment are either
separate property of the Investor, community property over which the Investor
has the right of control, or are otherwise funds as to which the Investor has
the sole right of management.
i. FOR
PARTNERSHIPS, CORPORATIONS, TRUSTS, OR OTHER ENTITIES
ONLY: If the Investor is a partnership, corporation, trust,
or other entity, (i), the Investor represents and warrants that it
was not organized or reorganized for the specific purpose of acquiring the
Shares, (ii) the Investor has the full power and authority to execute this
Agreement on behalf of such entity and to make the representations and
warranties made herein on its behalf, and (iii) this investment in the Company
has been affirmatively authorized, if required, by the governing board of such
entity and is not prohibited by the governing documents of the
entity.
j. The
address shown under the Investor's signature at the end of this Agreement is
the
Investor's principal residence if he or she is an individual, or its principal
business address if a corporation or other entity.
k. Each
Investor has such knowledge and experience in financial and business matters
as
to be capable of evaluating the merits and risks of an investment in the
Shares.
l. Each
Investor expressly acknowledges and agrees that the Company is relying upon
the
Investor's representations contained in the Offering Documents.
m. Each
Investor acknowledges that the Investor understands the meaning and legal
consequences of the representations and warranties which are contained in the
Offering Documents and hereby agrees to indemnify, save and hold harmless the
Company and its officers, directors and counsel, from and against any and all
claims or actions arising out of a breach of any representation, warranty or
acknowledgment of the Investor contained in any of the Offering
Documents. Such indemnification shall be deemed to include not only
the specific liabilities or obligations with respect to which such indemnity
is
provided, but also all reasonable costs, expenses, counsel fees and expenses
of
settlement relating thereto, whether or not any such liability or obligation
shall have been reduced to judgment. In addition, the Investor's
representations, warranties, and indemnification contained herein shall survive
the Investor's sale of the Shares hereunder. Each Investor
specifically acknowledges that he has reviewed the Offering Documents, as well
as the financial statements included in the Exchange Filings.
5. Except
as
otherwise specifically provided for hereunder, no party shall be deemed to
have
waived any of his, her, or its rights hereunder or under any other agreement,
instrument, or papers signed by any of them with respect to the subject matter
hereof unless such waiver is in writing and signed by the party waiving said
right. Except as otherwise specifically provided for hereunder, no
delay or omission by any party in exercising any right with respect to the
subject matter hereof shall operate as a waiver of such right or of any such
other right. A waiver on any one occasion with respect to the subject
matter hereof shall not be construed as a bar to, or waiver of, any right or
remedy on any future occasion. All rights and remedies with respect
to the subject matter hereof, whether evidenced hereby or by any other
agreement, instrument, or paper, will be cumulative, and may be exercised
separately or concurrently.
6. The
parties have not made any representations or warranties with respect to the
subject matter hereof not set forth herein, and this Agreement, together with
any instruments executed simultaneously herewith, constitutes the entire
agreement between them with respect to the subject matter hereof. All
understandings and agreements heretofore existing between the parties with
respect to the subject matter hereof are merged in this Agreement and any such
instrument, which alone fully and completely express their
agreement.
7. This
Agreement may not be changed, modified, extended, terminated, or discharged
orally, but only by an agreement in writing, which is signed by the Company
and
the Investor.
8. The
parties agree to execute any and all such other and further instruments and
documents, and to take any and all such further actions reasonably required
to
effectuate this Agreement and the intent and purposes hereof.
9. If
any
provision or any portion of any provision of this Agreement or the application
of any such provision or any portion thereof to any person or circumstance,
shall be held invalid or unenforceable, the remaining portion of such provision
and the remaining portion of such provision as is held invalid or unenforceable
to persons or circumstances other than those as to which it is held invalid
or
unenforceable, shall not be affected thereby.
10. This
Agreement shall be governed by and construed in accordance with the laws of
the
State of New York and the Investor hereby consents to the jurisdiction of the
courts of the State of New York and/or the United States District Court for
the
Southern District of New York.
[Remainder
of page intentionally left blank.]
ALL
SUBSCRIBERS MUST COMPLETE A COPY OF THIS PAGE
__________________________
(Print
Name of Subscriber)
IN
WITNESS WHEREOF, the Investor has executed this Agreement on this 1 day
of November, 2007.
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Number
of Shares:
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Purchase
Price Per Share: $3.00
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Aggregate
Common Stock Subscription Amount:
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Please
indicate the form of ownership that you desire your Shares to be registered
in.
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1.
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Individual
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2.
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Joint
Tenants with Right of Survivorship
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3.
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Community
Property
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4.
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Tenants
in Common
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5.
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Corporation/Partnership
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6.
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XXX
of________________
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7.
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Trust
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Date
Opened ___________
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8.
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As
A Custodian For________________
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Under
the Uniform Transfer to Minors Act of the
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State
of ___________
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9.
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Married
with Separate
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Property | |
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10.
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Xxxxx
Plan ____________
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EXECUTION
BY SUBSCRIBER WHO IS A NATURAL PERSON
| Exact Name in Which Title is to be Held |
| (Signature) |
| Name (Please Print) |
| Title of Person Executing Agreement |
| Address: Number and Street |
| City, State, Zip Code |
| Social Security Number |
Accepted
this 4 day of November, 2007, on behalf of XFONE,
INC.
By:
_____________________________
Name:
Title:
EXECUTION
BY SUBSCRIBER WHICH IS A CORPORATION, PARTNER, TRUST, ETC.
| Exact Name in Which Title is to be Held |
| (Signature) |
| Name (Please Print) |
| Title of Person Executing Agreement |
| Address: Number and Street |
| City, State, Zip Code |
| Tax Identification Number |
Accepted
this 4 day of November, 2007 on behalf of XFONE,
INC.
By:
________________________
Name:
Title:
CONFIDENTIAL
PROSPECTIVE PURCHASER QUESTIONNAIRE
THIS
QUESTIONNAIRE IS TO BE COMPLETED BY EACH PERSON WHO DESIRES TO PURCHASE COMMON
STOCK OF XFONE, INC. (THE” COMPANY”). THIS MATERIAL DOES NOT
CONSTITUTE AN OFFER TO SELL NOR IS IT A SOLICITATION OF AN OFFER TO BUY ANY
SECURITIES. THE TERMS OF THE OFFERING WILL BE MADE SOLELY PURSUANT TO THE TERMS
AND CONDITIONS OF THE SECURITIES PURCHASE AGREEMENT PROVIDED HEREWITH WHICH
CONTAINS MATERIAL INFORMATION TO BE REVIEWED IN CONNECTION WITH ANY INVESTMENT
DECISION.
ACCREDITED
INVESTOR STATUS
Please
check whether one or more of the following definitions of "Accredited Investor,"
if any, applies to you. If none of the following applies to you,
please leave a blank. Please sign in the indicated space below and
indicate the amount of your investment and put you initials after the
amount.
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(a)
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A
Bank as defined in Section 3(a)(2) of the Securities Act of 1933,
as
amended (the "1933 Act"), or any savings and loan association or
other
institution as defined in Section 3(a)(5)(A) of the 1933 Act whether
acting in its individual or fiduciary capacity; any broker or dealer
registered pursuant to Section 15 of the Securities Exchange Act
of 1934,
as amended (the "Exchange Act"); an insurance company as defined
in
Section 2(13) of the 1933 Act; an investment company registered under
the
Investment Company Act of 1940 or a business development company
as
defined in Section 2(a)(48) of that act; a Small Business Investment
Company licensed by the U.S. Small Business Administration under
Section
301(c) or (d) of the Small Business Investment Act of 1958; any plan
established and maintained by a state, or its political subdivisions,
or
any agency or instrumentality of a state or its political subdivisions
for
the benefit of its employees, if such plan has total assets in excess
of
$5,000,000; any employee benefit plan within the meaning of the Employee
Retirement Income Security Act of 1974, if the investment decision
is made
by a plan fiduciary, as defined in Section 3(21) of such act, which
is
either a bank, savings and loan association, insurance company, or
registered investment advisor, or if the employee benefit plan has
total
assets in excess of $5,000,000 or, if a self-directed plan, with
investment decisions made solely by persons that are Accredited
Investors.
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(b)
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A
Private Business Development Company as defined in Section 202(a)(22)
of
the Investment Advisers Act of
1940.
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(c)
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An
organization described in Section 501(c)(3) of the Internal Revenue
Code
or corporation, Massachusetts or similar business trust, or partnership,
not formed for the specific purpose of acquiring the securities offered,
with total assets in excess of
$5,000,000.
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(d)
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A
natural person whose individual net worth, or joint net worth with
that
person's spouse, at the time of purchase exceeds
$1,000,000.
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(e)
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A
natural person who had an individual income in excess of $200,000
in each
of the two most recent years or joint income with that person's spouse
in
excess of $300,000 in each of those years and has a reasonable expectation
of reaching the same income level in the current
year.
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(f)
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Any
trust, with total assets in excess of $5,000,000, not formed for
the
specific purpose of acquiring the common stock, whose purchase is
directed
by a sophisticated person as described in Rule 506(b)(2)(ii) of Regulation
D.
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(g)
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Any
entity in which all of the equity owners are Accredited
Investors.
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