STOCK PURCHASE AGREEMENT
Exhibit
10.72
THIS
STOCK PURCHASE AGREEMENT (the "Agreement") is made and entered into as of the
10th
day of
May, 2006, by and among Xfone, Inc., a Nevada corporation ("Xfone"), Swiftnet
Limited a UK corporation, Story Telecom, Inc., a Nevada corporation and its
subsidiaries Story Telecom Limited and Story Telecom (Ireland) Limited
("Story"), Trecastle Holdings Limited, a BVI corporation (“Trecastle”), and Xxx
Xxxxxxx (“Xxxxxxx”). Xfone, Trecastle and Xxxxxxx are sometimes collectively
referred to as “Shareholders” or individually as a “Shareholder.” Story Telecom,
Inc. is sometimes referred to as "Story Inc."
WHEREAS,
the Shareholders have previously entered into an Agreement dated September
30,
2002, as amended and/or supplemented by amendments dated June 30 2003, September
5, 2003, December 31, 2003, February 19, 2004, March 25, 2004 and August 18,
2005 (collectively referred to as the “Founders Agreement”) in which the
Shareholders agreed as to certain operating and governing procedures as to
Story; and
WHEREAS,
the Shareholders desire for Story Inc. to issue additional stock in Story Inc.
to Xfone so that Xfone will own approximately sixty nine point six percent
(69.6%) of all of the issued and outstanding common stock of Story Inc., to
terminate the Founders Agreement, and to agree on revised operating and
management procedures for Story all on the terms and conditions provided
herein.
NOW,
THEREFORE, THE PARTIES HERETO AGREE AS FOLLOWS:
ARTICLE
1
DEFINITIONS
1.1 In
addition to the terms defined elsewhere in this Agreement, the following terms
shall have the meanings set forth below:
"Governmental
Body"--any: (a) nation, state, county, city, town, village, district, or other
jurisdiction of any nature; (b) federal, state, local, municipal, foreign,
or
other government; (c) governmental or quasi-governmental authority of any nature
(including any governmental agency, branch, department, official, or entity
and
any court or other tribunal); (d) multi-national organization or body; or (e)
body exercising, or entitled to exercise, any administrative, executive,
judicial, legislative, police, regulatory, or taxing authority or power of
any
nature.
"Indebtedness"--of
any entity means: (i) all obligations of such entity for borrowed money or
which
has been incurred in connection with the acquisition of property, assets or
services, (ii) obligations secured by any lien or other charge upon property
or
assets owned by such entity, even though such entity has not assumed or become
liable for the payment of such obligations, and (iii) obligations created or
arising under any conditional sale or other title retention agreement with
respect to property acquired by such entity, whether or not the rights and
remedies of the Company, lender or lessor under such agreement in the event
of
default are limited to repossession or sale of the property.
-1-
"Knowledge"--an
individual will be deemed to have "Knowledge" of a particular fact or other
matter if such individual is actually aware of such fact or other matter. A
Person (other than an individual) will be deemed to have "Knowledge" of a
particular fact or other matter if any individual who is serving, or who has
at
any time served, as a director, executive officer, or partner of such Person
(or
in any similar capacity) has, or at any time had, Knowledge of such fact or
other matter.
"Person"--any
individual, corporation (including any non-profit corporation), general or
limited partnership, limited liability company, joint venture, estate, trust,
association, organization, labor union, or other entity or Governmental
Body.
"Proceeding"--any
action, arbitration, audit, hearing, investigation, litigation, or suit (whether
civil, criminal, administrative, investigative, or informal) commenced, brought,
conducted, or heard by or before, or otherwise involving, any Governmental
Body
or arbitrator.
"Security
Interest"--any mortgage, pledge, security interest, encumbrance, charge, or
other lien.
“Shareholder
Distributions” -- all distributions of cash or property made by Story to
Shareholders, except for payments that are in satisfaction of indebtedness
or
are in payment for goods or services pursuant to a contractual
arrangement.
"Threatened"--a
claim, Proceeding, dispute, action, or other matter will be deemed to have
been
"Threatened" if any demand or statement has been made (orally or in writing)
or
any notice has been given (orally or in writing), or if any other event has
occurred or any other circumstances exist, that would lead a prudent Person
to
conclude that such a claim, Proceeding, dispute, action, or other matter is
likely to be asserted, commenced, taken, or otherwise pursued in the
future.
ARTICLE
2
Purchase
of shares
2.1 Purchase
of Story Inc. Common Shares.
At the
Closing, as defined below, Xfone will purchase 102 shares of Story Inc. common
stock (the “Shares”) to be issued by Story Inc. at the Closing, for an aggregate
purchase price of $1,200,000 (the “Stock Purchase”). For the sake of
clarification, upon the consummation of the Stock Purchase, Xfone will own
142
out of a total of the 204 outstanding shares of common stock of Story
Inc.
2.2 Payment
of Founders Loans.
Upon
execution of this Agreement Story Inc. shall pay by wire £ 24,443.91 to
Trecastle and/or Xxxxxxx (to be decided by Xxxxxxx) and shall pay £ 15,960.00 to
Xfone and/or Swiftnet (to be decided by Xfone) in payment of the founder's
loans
owed by Story to the shareholders.
-2-
2.3 Closing.
The
consummation of the Stock Purchase and any other transaction contemplated by
this Agreement (the "Closing") will take place at Story’s offices at 000
Xxxxxxxxx Xxxxx, Xxxx Xxxx, Xxxxxx X00 0XX, XX on the later of (i) the close
of
business on 11 May 2006 or (ii) at such other time and place as the parties
may
agree, provided that the conditions set forth in Section 2.4 have been
satisfied. Failure to consummate the Stock Purchase on the date and time and
at
the place determined pursuant to this Section 2.3 will not result in the
termination of this Agreement and will not relieve any party of any obligation
under this Agreement.
2.4 Closing
Obligations.
At the
Closing and subject to Xfone board prior approval of Story’s business
plan:
(a)
Story
Inc. will deliver to Xfone: (i) certificates representing the Shares, (ii)
a
certificate executed by Story representing and warranting to Xfone that each
of
Story's representations and warranties in this Agreement was accurate in all
respects as of the date of this Agreement and is accurate in all respects as
of
the Closing as if made on the Closing;
(b)
Xfone
will pay the $1,200,000 purchase price to Story Inc., by applying $900,000
against the indebtedness of Story to Xfone and/or its subsidiaries and by wiring
$300,000 to Story Telecom Limited to be used as working capital in a manner
to
be approved by the Board of Directors of Story.
2.5 No
Additional Issuance of Story Shares.
As long
as Xfone remains in control of Story the parties hereby agree that Story shall
not issue any additional stock or make any change in its capitalization, without
the unanimous written consent of all shareholders of Story.
2.6 Possible
Purchase of Xxxxxxx
and
Trecastle Holdings, Ltd. Shares - Nir and Trecastle Holding Ltd.
option.
Twelve
(12) months and thirty (30) days from the date of signing this Agreement or
twenty four (24) months and thirty (30) days from the date of this Agreement
and
provided the following conditions are met, Xxxxxxx and Trecastle Holdings Ltd.
shall have the option to sell to Xfone, and Xfone shall buy (if the option
was
exercised) all of the shares of Story Inc. held by Xxxxxxx and Trecastle
Holdings Ltd. for US $450,000 in cash or equivalent in Xfone's common stock
(to
be decided by Xfone), to be paid in cash within seven (7) working days or in
shares upon regulatory approval. Xfone will do its best to expedite this
approval process. The conditions are (i) for the first twelve (12) months or
for
the second twelve (12) months of this Agreement Story has greater or equivalent
than £2,000,000 in sales and £100,000 of EBITDA. The payment of old debt to
Xfone pursuant to Section 4.2 of this Agreement shall not affect in any way
the
calculation of such profit.
2.7 Possible
Purchase of Xxxxxxx
and
Trecastle Holdings, Ltd. Shares - Xfone option.
Twelve
(12) months and thirty (30) days from the date of signing this Agreement or
twenty four (24) months and thirty (30) days from the date of this Agreement
and
provided the following conditions are met, Xfone shall have the option to buy
from Xxxxxxx and Trecastle, and Xxxxxxx and Trecastle shall sell (if the option
was exercised), all of the shares of Story Inc. held by Xxxxxxx and Trecastle
Holdings Ltd. for US $900,000 or equivalent in Xfone's shares of common stock
(to be decided by Xxxxxxx), to be paid in cash within seven (7) working days
or
in shares upon regulatory approval. The conditions are (i) for the first twelve
(12) months or for the second twelve (12) months of this Agreement Story has
less than or equivalent to £4,000,000 in sales and £200,000 of net profit
(EBIDA). The payment of old debt to Xfone pursuant to Section 4.2 of this
Agreement shall not affect in any way the calculation of such profit.
2.8 First
Right of Refusal. In
addition each party to this Agreement will have a first right of refusal for
thirty (30) days in case the other party wishes to sale his shares in Story
Inc.
-3-
ARTICLE
3
representations
and warranties
Story
represents and warrants to Xfone as follows:
3.1 Organization
And Good Standing.
(a) Story
Inc. is a corporation duly organized, validly existing, and in good standing
under the laws of the State of Nevada. Story has full corporate power and
authority to carry on its business as presently conducted by Story and to own
and use the properties owned and used by Story.
(b) Story
is
qualified to conduct business and is in good standing under the laws of each
other jurisdiction wherein the nature of its business or its ownership of
property requires it to be so qualified.
(c) The
Articles of Incorporation and/or Bylaws and/or Memorandum and/or Articles of
Association (as the case may be) of Story reflect all amendments currently
in
effect made thereto at any time prior to the date of this Agreement and are
correct and complete. The minute books containing the records of meetings of
the
shareholders and directors since the formation of Story, the share certificate
books and the share record books for Story are correct and complete in all
material respects and accurately reflect the record holders of all outstanding
securities issued by Story. All material actions taken by Story since its
formation have been duly authorized to the extent so required.
(d)
Story
Inc. hereby warrants that Story Telecom (Ireland) Limited and Story Telecom
Limited are one hundred percent (100%) subsidiaries of Story Telecom, Inc.
and
as such are fully obliged by this Agreement.
(e)
Xfone
hereby warrants that Swiftnet Limited is one hundred percent (100%) subsidiary
of Xfone, Inc. and as such is fully obliged by this Agreement.
3.2 Authority;
No Conflict.
(a) Story
has
full corporate power and authority to execute and deliver this Agreement and
the
other agreements contemplated hereby to which it is a party and to perform
its
obligations hereunder and thereunder. This Agreement and the other agreements
contemplated hereby to which Story is a party constitute the valid and legally
binding obligations of Story, enforceable against Story in accordance with
their
respective terms, except as enforceability may be limited by bankruptcy, similar
laws of debtor relief and general principles of equity. Story is not required
to
make any declaration to or registration or filing with, or to obtain any permit,
license, consent, accreditation, exemption, approval or authorization from,
any
governmental or regulatory authority (including, without limitation, the FCC
and
all similar state telecommunications regulatory bodies) in connection with
the
execution, delivery or performance of this Agreement or the consummation of
any
of the transactions contemplated hereby.
-4-
(b) Neither
the execution and the delivery of this Agreement and the other agreements
contemplated hereby, nor the consummation of the transactions contemplated
hereby or thereby will violate, conflict with, result in a breach of, constitute
a default under, result in the acceleration of, create in any party the right
to
accelerate, terminate, modify, or cancel, or require any authorization, consent,
approval, execution or other action by or notice to any third party under,
(i)
the Articles of Incorporation and Bylaws or the Memorandum and Articles of
Association (as the case may be) of Story or, (ii) any contract, lease,
sublease, license, sublicense, franchise, permit, indenture, agreement,
instrument of Indebtedness, Security Interest, or other arrangement by which
Story is bound or affected, or (iii) any law, statute, rule, regulation, order,
judgment, decree, stipulation, injunction, charge or other restriction, to
which
Story is subject.
3.3 Capitalization.
(a) The
entire authorized capital stock of Story Inc. consists of 75,000 shares of
Common Stock, Par Share Value $1.00, of which 102 shares are issued and
outstanding and held of record as follows: Xfone 40 shares, Trecastle 50 shares,
and Xxxxxxx 12 shares. All of the issued and outstanding shares of capital
stock
of Story Inc. have been duly authorized, are validly issued, fully paid, and
nonassessable, and are owned and held of record and beneficially by Xfone,
Trecastle and Xxxxxxx, free and clear of any Security Interest.
(b) There
are
no outstanding or authorized options, warrants, rights, contracts, rights of
first refusal or first offer, calls, puts, rights to subscribe, conversion
rights, or other agreements or commitments to which Story is a party or which
are binding upon Story providing for the issuance, disposition, or acquisition
of any of Story's capital stock. There are no outstanding or authorized stock
appreciation, phantom stock, or similar rights with respect to Story and there
are no contractual or statutory preemptive rights or similar restrictions with
respect to the issuance or transfer of any shares of Story's capital stock.
There are no voting trusts, proxies, or any other agreements, restrictions
or
understandings with respect to the voting of the capital stock of
Story.
3.4 Books
and Records.
The
books of account, minute books, stock record books, and other records of Story
since its formation are complete and correct and have been maintained in
accordance with sound business practices, including the maintenance of an
adequate system of internal controls. The minute books of Story contain accurate
and complete records of all meetings held of, and corporate action taken by,
the
stockholders, the Boards of Directors, and committees of the Boards of Directors
of Story, and no meeting of any such stockholders, Board of Directors, or
committee has been held for which minutes have not been prepared and are not
contained in such minute books. At the Closing, all of those books and records
will be in the possession of Story.
3.5 Legal
Proceedings.
(a)
Except as set forth in Schedule 3.5, there is no pending
Proceeding:
(i) that
has
been commenced by or against Story or that otherwise relates to or may affect
the business of, or any of the assets owned or used by, Story; or
(ii) that
challenges, or that may have the effect of preventing, delaying, making illegal,
or otherwise interfering with, any of the transactions contemplated by this
Agreement.
(b)
To
the Knowledge of Story, (1) no such Proceeding has been Threatened, and (2)
no
event has occurred or circumstance exists that may give rise to or serve as
a
basis for the commencement of any such Proceeding.
-5-
3.6 Indebtedness;
Security Interest.
To the
Knowledge of Story, Schedule 3.6 fully and accurately sets forth the
Indebtedness of Story and any other Security Interest on its property or
assets.
3.7 Disclosure.
(a)
No
representation or warranty of Story in this Agreement, including the schedules
hereto, omits to state a material fact necessary to make the statements herein
or therein, in light of the circumstances in which they were made, not
misleading.
(b)
There
is no fact known to Story that has specific application to Story (other than
general economic or industry conditions) and that materially adversely affects
the assets, business, prospects, financial condition, or results of operations
of Story that has not been disclosed to Xfone.
ARTICLE
4
post-closing
matters
4.1 Termination
of Founders Agreement.
Upon
consummation of the Stock Purchase, the Founders Agreement shall terminate,
and
the Shareholders agree that the terms and provisions of this Agreement shall
govern from and after the date of consummation of the Stock
Purchase.
4.2 Payment
of Debt to Xfone and/or its Subsidiaries.
As of
the date
of
this Agreement
Story
owes Xfone and/or its subsidiaries £1,302,817.62. Xfone
will apply $900,000 out of an aggregate purchase price of $1,200,000 to this
indebtedness. Story and Xfone hereby agree on the principles of a payment plan
for the reminder of the debt (excluding the running under-45 days debt which
will continue to be paid as normal) based on the following formula: (i) the
debt
will be frozen, interest free, for a period of one year; (ii) upon the expiry
of
the one-year period and for a further three-year period Story will pay Xfone
its
debt in twelve (12) equal payments on a quarterly basis unless otherwise agreed
in advance, such payment shall also be interest free.
4.3 Shareholder
Loan by Xfone.
Should
Xfone decide to make an additional shareholder loan to Story (for example for
bridge purposes) of up to US $200,000 then Xxxxxxx and/or Trecastle will not
dilute.
4.4 Accounting
and Recordkeeping.
At
Closing, Story Inc. shall become a fully integrated subsidiary under Xfone
subject to all accounting and recordkeeping requirement of the SEC, AMEX (or
other markets), NASD, AIM, FTSE and other regulatory bodies to which Xfone
is or
will be subject. Story will produce all necessary reports to Xfone including
the
daily, weekly, monthly, quarterly and annual reports using GAAP accounting
practices for Balance Sheets, Profit and Loss and Cash flow items. Xfone will
assist Story’s accountant on the exact information it requires and will provide
a detailed list of what needs to be produced. Story’s financial controller /
accountant will report directly to the Xfone CFO and Story Managing Director.
Story’s financial controller / accountant shall be a qualified accounting
professional permanently employed by Story.
-6-
4.5 Directors.
The
current directors of Story are Xxx Xxxxxxxxx, Xxx Xxxxxxx and Xxxx Xxxxxxx.
From
and after consummation of the Stock Purchase, the number of directors of Story
shall be five (5) of which three (3) shall be nominated and appointed by Xfone
(one of which shall be the Chairman of the Board), and two (2) shall be
nominated and appointed by Xxxxxxx. The Shareholders agree to elect the
directors nominated and appointed by Xfone and Xxxxxxx. Only persons with
academic, professional or telecommunications experience shall be nominated
to
serve as directors on the Board of Directors of Story. Persons who have a family
relationship with current members of the Board of Directors of Xfone shall
not
be nominated to serve as directors of Story or its subsidiaries unless Xxxxxxx,
while he is still a shareholder in Story, agrees otherwise in advance. A ‘family
relationship” means a relationship by blood or marriage not more remote than
first cousin. Directors shall serve without compensation for their directorship,
except for reimbursement of expenses as approved by the Board of Directors
of
Story. The Board of Story subsidiaries will mirror Story board.
4.6 Meetings
of the Board.
The
Board of Directors of Story shall meet at least quarterly. Board meetings may
be
called by any member of the Board on 24 hours actual written notice to the
other
members of the Board. Directors may participate in meetings by telephone or
video-conference.
4.7 Chairman
of the Board.
A
director nominated by Xfone shall serve as Chairman of the Board of Story.
4.8 Managing
Director.
As long
as Xxxxxxx holds shares in Story and subject to Section 5.1 below, Xfone and
Xxxxxxx will have to agree on the nomination of the Managing Director. Xxxxxxx
will not unreasonably withhold his consent. The
Managing Director of Story will not have another post or directorship in the
Xfone group.
4.9 Shareholder
Distributions.
For as
long as Xfone controls Story, Shareholder Distributions shall take place after
each accounting year in which Story reported profits, it shall be made on a
pro
rata basis to all Shareholders, shall be made in compliance with all applicable
legal requirements; and must be approved by unanimous vote of the Board of
Directors of Story, such approval shall not be unreasonably
withheld.
4.10 Expenses.
Payments by Story to Xfone or to Xfone directors for expenses incurred by Story
shall be approved by the Managing Director of Story, provided that such approval
shall not be required for normal traffic debt to Xfone which is more than forty
five (45) days old from the date of invoice.
4.11 Cheque/Bank
Signatory
Rights -
Xfone shall obtain cheque/bank signatory rights for all amounts however, it
shall only exercise this right if and when Story Managing Director is either
unavailable to sign or unreasonably withholding his signature on cheques
important for the daily operating of Story. Under normal circumstances, payment
of any amount over £1000 will require the signature of Story's Managing Director
and an Xfone representative. Cheque / bank signatory rights for any payment
up
to £1000 will only require the signature of Xxx Xxxxxxx (provided he is Story's
Managing Director) including any ad-hoc out of pocket non-forecasted reasonable
expenses paid by corporate credit card.
4.12 Access
to Records.
Directors of Story shall have full access to all of Story’s records and
accounts.
4.13 Swiftnet
Cost Schedules.
Xxxxxxx, or another employee of Story as approved by the Board of Directors
of
Story Inc., shall have full access to Swiftnet Limited cost schedules, and
will
be allowed to participate in cost reduction negotiations. Swiftnet Limited
shall
always seek better rates.
-7-
4.14 Xfone
agrees to provide or to cause its subsidiary, Swiftnet Limited, to provide
the
followings services: (a) its technological backbone; (b) technical help services
(24 hours/7 days a week); (c) use of relevant software and hardware, including
switch, billing, IVR, etc.; and d) provide Story with proper office space and
equipment, etc.. Xfone will charge these services at cost plus four percent
(4%)
of cost from the Closing and for as long as Story is under Xfone control. Xfone
will charge cost plus six percent (6%) for these services once Story is not
under Xfone control for twelve (12) months as long as Story pays within forty
five (45) days of invoice for these services.
4.15 Employee
Option Plan in Story Shares.
Xfone
agrees to work together with Story management to create, within sixty (60)
days
from the Closing, an option plan to the employees of Story which
will be identical in its terms to the Option Plan available to Xfone’s
employees. Under said option plan, employees
of Story shall be granted options to purchase shares of Story.
ARTICLE
5
Employment
of Xxxxxxx
5.1 Employment
of Xxxxxxx.
Xxxxxxx
shall continue to be employed as an employee, based at the corporate offices
of
Story, with the title of Managing Director of Story. Xxxxxxx shall have such
responsibilities, obligations and rights as determined by the Board of Directors
of Story. On the day-to-day decisions, Xxxxxxx shall report to the Chairman
of
the Board.
5.2 Salary.
As long
as Xxxxxxx remains Story’s employee in any capacity or unless otherwise agreed
in advance, Xxxxxxx shall receive an annual gross salary and/or consultancy
fee
of £84,000, the partition of which and the account to be paid into shall be in
the sole discretion of Xxxxxxx, and reimbursement of business fuel and insurance
expenses related to Xxxxxxx'x car. In order to remove doubt, Xxxxxxx'x
abovementioned salary is not a compensation for his directorship in Story.
5.3 Monthly
Bonus.
Xxxxxxx
shall receive a monthly cash bonus of one percent (1%) from money collected
above £200,000 and another zero point five percent (0.5%) collected above
£300,000 in each month. However, if the targets above are not fully met Xxxxxxx
shall receive one (1) share per annum as a bonus for his services to Story
in
addition to the option plan specified in Section 4.15.
5.4 Paid
Leave.
Xxxxxxx
will have thirty (30) paid leave days per year. Xxxxxxx will give prior
notification to, and have his proposed leave approved by, the Chairman of the
Board of Story, which approval shall not be unreasonably withheld.
Such
approval will only be required for leave of more than five (5) working
days.
5.5 Termination.
Xxxxxxx
may resign as an employee of Story by giving sixty (60) days written notice
of
termination to the Board of Directors of Story. The Board of Directors of Story
may terminate Xxxxxxx’x employment with Story by giving him sixty (60) days
written notice of termination but only after the expiry of a ten (10) month
period beginning at the date of signing this Agreement.
-8-
5.6 Loan
to Xxxxxxx.
At
Closing, Story shall make available to Xxxxxxx an interest free loan (or, at
Xxxxxxx’x election, to Trecastle Holdings Ltd) of $14,000 US Dollars. The loan
shall be repaid in twelve (12) equal monthly payments, which payments may be
deducted from Xxxxxxx’x salary. In the event that Xxxxxxx’x employment is
terminated, the unpaid balance of the loan shall be immediately due and payable.
5.7 Confidentiality
and Non-Compete Agreement.
By
signing this Agreement Xxxxxxx hereby undertakes that in any case whereby his
employment is terminated and within a following six-month period thereafter
he
will not approach, engages and try in any way to solicit or take over Story’s
current clients or agents.
5.8 The
employment of any employee of Story may be terminated by Story without notice
if
the employee is guilty of any serious fraud or other criminal
offence.
ARTICLE
6
spin-off
of story INC.
6.1 Spin-off
of Story Shares.
Upon
request from Story Inc., Xfone shall provide all consents necessary to make
Story Inc. a publicly traded company through a distribution of Story Inc.'s
shares as a dividend to the shareholders of Xfone, or a similar transaction,
provided the following conditions are met:
(a)
all
outstanding debt of Story to Xfone covered by the abovementioned payment plan
agreement (Section 4.2) is being paid in good order and all accounts payable
by
Story to Xfone are being paid within forty five (45) days of the date of
invoice;
(b)
Story
Inc.’s shares are registered with the SEC under the Securities Exchange Act of
1934 and/or with any equivalent regulatory body and all applicable securities
law requirements are satisfied;
(c)
Story
Inc.’s shares are approved for listing on NASDAQ or for trading on the American
or New York stock exchange and/or any other regulated stock exchange; and
(d)
Story, Xfone and Swiftnet concluded a service provider agreement (to be based
on
Section 4.14 above, the continuation of the debt payment plan and the principles
of costs plus 6% and 45 days credit).
6.2 Alternative
to Spin-off of Story Inc.
Shares.
If
within 30 days after a request from Story Inc. pursuant to Section 6.1 and
after
all conditions set forth in Section 6.1 are satisfied, Xfone does not provide
all consents necessary to make Story Inc. a publicly traded company through
a
distribution of Story Inc.'s shares as a dividend to the shareholders of Xfone,
or a similar transaction, then Xfone shall buy from the other Shareholders
all
their shares of Story Inc. for $1,000,000 paid seventy percent (70%) in Xfone
shares, valued at market price on an average of thirty (30) trading days, and
thirty percent (30%) in cash.
-9-
6.3 Resignation
of Directors.
Twenty
four (24) hours before Story Inc. becomes publicly traded, Xfone directors
in
Story will resign and the new board will take over. The shareholders of Story
will elect the new board with Xxxxxxx Xxxxxx and Xxx Xxxxxxxxx (or their
nominated directors in Story's board) providing Xxxxxxx with a proxy to vote
as
he elects.
6.4 Termination
of Agreement.
When
Story Inc. becomes publicly traded this Agreement shall terminate.
ARTICLE
7
investments
or loans to story
7.1 In
case
Story receives a definitive investment agreement ready for signing from a pre
approved third party within three (3) month of this Agreement being signed
and
both Xfone and Xxxxxxx approve it, such approval shall not be unreasonably
withheld then: Story will pay Xfone a premium for this investment of $1,200,000
in return for a reversal of this Agreement back to the founders agreement (i.e.
back to the 60/40 holding ratio and the return of the $1,200,000 to Xfone).
Such
premium shall equal five percent (5%) of the new investment amount. Xfone will
work together with Story management to try and bring the pre approved third
party investment agreement to a successful finalization.
7.2 Finder’s
Fee.
Story
shall pay finder’s fee to any person who obtains an investor and/or an
investment for Story. This fee shall equals five percent (5%) of the amount
of
the investment, provided that a person who proposes to act as finder shall
enter
into a finder’s agreement (excluding the proposed pre approved third party
investment to which no finder’s fee agreement is required) with Story acceptable
to Xfone, which shall provide, among other things, that the finder will comply
with any applicable federal and state securities laws, and that the decision
whether to accept a proposed investment in Story shall be in the sole discretion
of the Board of Directors of Story however, its decision shall not be
unreasonably delayed or withheld in any way.
ARTICLE
8
miscellaneous
8.1 The
provisions, sections, sub-sections, clauses, sub-clauses or phrases in this
Agreement are severable and if any such provision shall be held invalid or
unenforceable in whole or in part by any court of competent jurisdiction, such
invalidity or unenforceability shall not affect the remaining
provisions.
8.2 Indemnification.
Story
shall indemnify its Board members, Officers and Managing Director
for any legal or otherwise proceedings initiated against them for any action
or
decision taken during and related to their employment and/or in their capacity
as a Director, Officer or Managing Director of Story or while employed by Story
in any other capacity as long as they were acting in good faith.
8.3 Law
and
Jurisdiction. The formation construction, performance, validity and all aspects
of this Agreement are governed by English law and the parties hereby irrevocably
submit to the exclusive jurisdiction of the English Courts.
-10-
IN
WITNESS WHEREOF, the parties have executed this Agreement to be effective as
of
the date first set forth above.
XXX
XXXXXXX
/s/Xxx
Xxxxxxx
XFONE,
INC.
By:
/s/
Xxxxxxx Xxxxxx
STORY
TELCOM, INC.
By:
/s/
Xxx Xxxxxxx
By:
/s/Xxx
Xxxxxxxxx
STORY
TELECOM LIMITED
By:
/s/
Xxx Xxxxxxx
By:
/s/Xxx
Xxxxxxxxx
STORY
TELECOM (IRELAND) LIMITED
By:
/s/
Xxx Xxxxxxx
By:
/s/Xxx
Xxxxxxxxx
TRECASTLE
HOLDINGS LIMITED
By:
/s/ Xxx Xxxxxxx
SWIFTNET
LIMITED
By:
/s/
Xxxxxxx Xxxxxx
-11-
