STOCK PLEDGE AGREEMENT
Exhibit
10.54
This
Stock Pledge Agreement (this “Agreement”),
dated
as of September 27, 2005, among Laurus Master Fund, Ltd. (the “Pledgee”),
XFONE, INC., a Nevada corporation (the “Company”),
and
each of the other undersigned parties (other than the Pledgee) (the Company
and
each such other undersigned party, a “Pledgor”
and
collectively, the “Pledgors”).
BACKGROUND
The
Company has entered into a Securities Purchase Agreement, dated as of September
27, 2005 (as amended, modified, restated or supplemented from time to time,
the
“Securities
Purchase Agreement”),
pursuant to which the Pledgee provides or will provide financial accommodations
to the Company in the total amount of US $2,000,000.
In
order
to induce the Pledgee to provide or continue to provide the financial
accommodations described in the Securities Purchase Agreement, each Pledgor
has
agreed to pledge and grant a security interest in the collateral described
herein to the Pledgee on the terms and conditions set forth herein.
NOW,
THEREFORE, in consideration of the premises and for other good and valuable
consideration the receipt of which is hereby acknowledged, the parties hereto
agree as follows:
1. Defined
Terms.
All
capitalized terms used herein which are not defined shall have the meanings
given to them in the Securities Purchase Agreement.
2. Pledge
and Grant of Security Interest.
To
secure the full and punctual payment and performance of (the following clauses
(a) and (b), collectively, the “Obligations”)
(a)
the obligations under the Securities Purchase Agreement and the Related
Agreements referred to in the Securities Purchase Agreement (the Securities
Purchase Agreement and the Related Agreements, as each may be amended, restated,
modified and/or supplemented from time to time, collectively, the “Documents”)
and
(b) all other obligations and liabilities of each Pledgor to the Pledgee
whether
now existing or hereafter arising, direct or indirect, liquidated or
unliquidated, absolute or contingent, due or not due and whether under, pursuant
to or evidenced by a note, agreement, guaranty, instrument or otherwise (in
each
case, irrespective of the genuineness, validity, regularity or enforceability
of
such Obligations, or of any instrument evidencing any of the Obligations
or of
any collateral therefor or of the existence or extent of such collateral,
and
irrespective of the allowability, allowance or disallowance of any or all
of
such in any case commenced by or against any Pledgor under Xxxxx 00, Xxxxxx
Xxxxxx Code, including, without limitation, obligations of each Pledgor for
post-petition interest, fees, costs and charges that would have accrued or
been
added to the Obligations but for the commencement of such case), each Pledgor
hereby pledges, assigns, hypothecates, transfers and grants a security interest
to Pledgee in all of the following (the “Collateral”):
(a) the
shares of stock set forth on Schedule
A
annexed
hereto and expressly made a part hereof (the “Pledged
Stock”),
the
certificates representing the Pledged Stock and all dividends, cash, instruments
and other property or proceeds from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of the
Pledged
Stock;
(b) all
additional shares of stock of any issuer, as listed in the column entitled
"Issuer" on Schedule A (each, an “Issuer”)
of the
Pledged Stock from time to time acquired by any Pledgor in any manner,
including, without limitation, stock dividends or a distribution in connection
with any increase or reduction of capital, reclassification, merger,
consolidation, sale of assets, combination of shares, stock split, spin-off
or
split-off (which shares shall be deemed to be part of the Collateral), and
the
certificates representing such additional shares, and all dividends, cash,
instruments and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any
or all
of such shares; and
(c) all
options and rights, whether as an addition to, in substitution of or in exchange
for any shares of any Pledged Stock and all dividends, cash, instruments
and
other property or proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all such options and
rights.
3. Delivery
of Collateral.
All
certificates representing or evidencing the Pledged Stock shall be delivered
to
and held by or on behalf of Pledgee pursuant hereto and shall be accompanied
by
duly executed instruments of transfer or assignments in blank, all in form
and
substance satisfactory to Pledgee (collectively, "the Stock Certificates
and the
Stock Powers"). Each Pledgor hereby authorizes the Issuer upon demand by
the
Pledgee to deliver any certificates, instruments or other distributions issued
in connection with the Collateral directly to the Pledgee, in each case to
be
held by the Pledgee, subject to the terms hereof and with written notice
to be
sent to the Pledgor. Upon an Event of Default (as defined below) that has
occurred and is continuing beyond any applicable grace period, the Pledgee
shall
have the right, during such time in its discretion and with written notice
to
the Pledgor, to transfer to or to register in the name of the Pledgee or
any of
its nominees any or all of the Pledged Stock. In addition, the Pledgee shall
have the right at such time to exchange certificates or instruments representing
or evidencing Pledged Stock for certificates or instruments of smaller or
larger
denominations.
4. Representations
and Warranties of each Pledgor.
Except
for as stated in Schedule 4, each Pledgor jointly and severally represents
and
warrants to the Pledgee (which representations and warranties shall be deemed
to
continue to be made until all of the Obligations have been paid in full and
each
Document and each agreement and instrument entered into in connection therewith
has been irrevocably terminated) that:
(a) the
execution, delivery and performance by each Pledgor of this Agreement and
the
pledge of the Collateral hereunder do not and will not result in any violation
of any agreement, indenture, instrument, license, judgment, decree, order,
law,
statute, ordinance or other governmental rule or regulation applicable to
any
Pledgor;
(b) this
Agreement constitutes the legal, valid, and binding obligation of each Pledgor
enforceable against each Pledgor in accordance with its terms;
(c) (i)
all
Pledged Stock owned by each Pledgor is set forth on Schedule
A
hereto
and (ii) each Pledgor is the direct and beneficial owner of each share of
the
Pledged Stock;
(d) all
of
the shares of the Pledged Stock have been duly authorized, validly issued
and
are fully paid and nonassessable;
(e) no
consent or approval of any person, corporation, governmental body, regulatory
authority or other entity, is or will be necessary for (i) the execution,
delivery and performance of this Agreement, (ii) the exercise by the Pledgee
of
any rights with respect to the Collateral or (iii) the pledge and assignment
of,
and the grant of a security interest in, the Collateral hereunder;
(f) there
are
no pending or, to the best of Pledgor’s knowledge, threatened actions or
proceedings before any court, judicial body, administrative agency or arbitrator
which may materially adversely affect the Collateral;
(g) each
Pledgor has the requisite power and authority to enter into this Agreement
and
to pledge and assign the Collateral to the Pledgee in accordance with the
terms
of this Agreement;
(h) each
Pledgor owns each item of the Collateral and, except for the pledge and security
interest granted to Pledgee hereunder, the Collateral shall be, immediately
following the closing of the transactions contemplated by the Documents,
free
and clear of any other security interest, mortgage, pledge, claim, lien,
charge,
hypothecation, assignment, offset or encumbrance whatsoever (collectively,
“Liens”);
(i) there
are
no restrictions on transfer of the Pledged Stock contained in the certificate
of
incorporation or by-laws (or equivalent organizational documents) of the
Issuer
or otherwise which have not otherwise been enforceably and legally waived
by the
necessary parties;
(j) none
of
the Pledged Stock has been issued or transferred in violation of the securities
registration, securities disclosure or similar laws of any jurisdiction to
which
such issuance or transfer may be subject;
(k) the
pledge and assignment of the Collateral and the grant of a security interest
under this Agreement vest in the Pledgee all rights of each Pledgor in the
Collateral as contemplated by this Agreement; and
(l) The
Pledged Stock constitutes one hundred percent (100%) of the issued and
outstanding shares of capital stock of each Issuer.
5. Covenants.
Each
Pledgor jointly and severally covenants that, until the Obligations shall
be
indefeasibly satisfied in full and each Document and each agreement and
instrument entered into in connection therewith is irrevocably
terminated:
(a) No
Pledgor will sell, assign, transfer, convey, or otherwise dispose of its
rights
in or to the Collateral or any interest therein; nor will any Pledgor create,
incur or permit to exist any Lien whatsoever with respect to any of the
Collateral or the proceeds thereof other than that created hereby.
(b) Each
Pledgor will, at its expense, defend Pledgee’s right, title and security
interest in and to the Collateral against the claims of any other
party.
(c) Each
Pledgor shall at any time, and from time to time, upon the written request
of
Pledgee, execute and deliver such further documents and do such further acts
and
things as Pledgee may reasonably request in order to effectuate the purposes
of
this Agreement including, but without limitation, delivering to Pledgee,
upon
the occurrence of an Event of Default, irrevocable proxies in respect of
the
Collateral in form satisfactory to Pledgee. Until receipt thereof, upon an
Event
of Default that has occurred and is continuing beyond any applicable grace
period, this Agreement shall constitute Pledgor’s proxy to Pledgee or its
nominee to vote all shares of Collateral then registered in each Pledgor’s
name.
(d) No
Pledgor will consent to or approve the issuance of (i) any additional shares
of
any class of capital stock or other equity interests of the Issuer; or (ii)
any
securities convertible either voluntarily by the holder thereof or automatically
upon the occurrence or nonoccurrence of any event or condition into, or any
securities exchangeable for, any such shares, unless, in either case, such
shares are pledged as Collateral pursuant to this Agreement.
6. Voting
Rights and Dividends.
In
addition to the Pledgee’s rights and remedies set forth in Section 8 hereof, in
case an Event of Default shall have occurred and be continuing, beyond any
applicable cure period, the Pledgee shall (i) be entitled to vote the
Collateral, (ii) be entitled to give consents, waivers and ratifications
in
respect of the Collateral (each Pledgor hereby irrevocably constituting and
appointing the Pledgee, with full power of substitution, the proxy and
attorney-in-fact of each Pledgor for such purposes) and (iii) be entitled
to
collect and receive for its own use cash dividends paid on the Collateral.
No
Pledgor shall be permitted to exercise or refrain from exercising any voting
rights or other powers if, in the reasonable judgment of the Pledgee, such
action would have a material adverse effect on the value of the Collateral
or
any part thereof; and, provided,
further,
that
each Pledgor shall give at least five (5) days’ written notice of the manner in
which such Pledgor intends to exercise, or the reasons for refraining from
exercising, any voting rights or other powers other than with respect to
any
election of directors and voting with respect to any incidental matters.
Following the occurrence of an Event of Default which is continuing beyond
any
applicable grace period, all dividends and all other distributions in respect
of
any of the Collateral, shall be delivered to the Pledgee to hold as Collateral
and shall, if received by any Pledgor, be received in trust for the benefit
of
the Pledgee, be segregated from the other property or funds of any other
Pledgor, and be forthwith delivered to the Pledgee as Collateral in the same
form as so received (with any necessary endorsement).
7. Event
of Default.
An
“Event of Default” under this Agreement shall occur upon the happening of any of
the following events:
(a) An
“Event
of Default” under any Document or any agreement or note related to any Document
shall have occurred and be continuing beyond any applicable cure
period;
(b) Any
Pledgor shall default in the performance of any of its obligations under
any
Document, including without limitation, this Agreement, and such default
shall
not be cured during the cure period applicable thereto;
(c) Any
representation or warranty of any Pledgor made herein, in any Document or
in any
agreement, statement or certificate given in writing pursuant hereto or thereto
or in connection herewith or therewith shall be false or misleading in any
material respect;
(d) Any
portion of the Collateral is subjected to a levy of execution, attachment,
distraint or other judicial process or any portion of the Collateral is the
subject of a claim (other than by the Pledgee) of a Lien or other right or
interest in or to the Collateral and such levy or claim shall not be cured,
disputed or stayed within a period of fifteen (15) business days after the
occurrence thereof; or
(e) Any
Pledgor shall (i) apply for, consent to, or suffer to exist the appointment
of,
or the taking of possession by, a receiver, custodian, trustee, liquidator
or
other fiduciary of itself or of all or a substantial part of its property,
(ii)
make a general assignment for the benefit of creditors, (iii) commence a
voluntary case under any state or federal bankruptcy laws (as now or hereafter
in effect), (iv) be adjudicated a bankrupt or insolvent, (v) file a petition
seeking to take advantage of any other law providing for the relief of debtors,
(vi) acquiesce to, or fail to have dismissed, within thirty (30) days, any
petition filed against it in any involuntary case under such bankruptcy laws,
or
(vii) take any action for the purpose of effecting any of the
foregoing.
8. Remedies.
In case
an Event of Default shall have occurred and is continuing beyond any applicable
grace period, the Pledgee may, subject to a written notice to Pledgors:
(a) Transfer
any or all of the Collateral into its name, or into the name of its nominee
or
nominees;
(b) Exercise
all corporate rights with respect to the Collateral including, without
limitation, all rights of conversion, exchange, subscription or any other
rights, privileges or options pertaining to any shares of the Collateral
as if
it were the absolute owner thereof, including, but without limitation, the
right
to exchange, at its discretion, any or all of the Collateral upon the merger,
consolidation, reorganization, recapitalization or other readjustment of
the
Issuer thereof, or upon the exercise by the Issuer of any right, privilege
or
option pertaining to any of the Collateral, and, in connection therewith,
to
deposit and deliver any and all of the Collateral with any committee,
depository, transfer agent, registrar or other designated agent upon such
terms
and conditions as it may determine, all without liability except to account
for
property actually received by it; and
(c) Subject
to any requirement of applicable law, sell, assign and deliver the whole
or,
from time to time, any part of the Collateral at the time held by the Pledgee,
at any private sale or at public auction, with or without demand, advertisement
or notice of the time or place of sale or adjournment thereof or otherwise
(all
of which are hereby waived, except such notice as is required by applicable
law
and cannot be waived), for cash or credit or for other property for immediate
or
future delivery, and for such price or prices and on such terms as the Pledgee
in its sole discretion may determine, or as may be required by applicable
law.
Each
Pledgor hereby waives and releases any and all right or equity of redemption,
whether before or after sale hereunder. At any such sale, unless prohibited
by
applicable law, the Pledgee may bid for and purchase the whole or any part
of
the Collateral so sold free from any such right or equity of redemption.
All
moneys received by the Pledgee hereunder, whether upon sale of the Collateral
or
any part thereof or otherwise, shall be held by the Pledgee and applied by
it as
provided in Section 10 hereof. No failure or delay on the part of the Pledgee
in
exercising any rights hereunder shall operate as a waiver of any such rights
nor
shall any single or partial exercise of any such rights preclude any other
or
future exercise thereof or the exercise of any other rights hereunder. The
Pledgee shall have no duty as to the collection or protection of the Collateral
or any income thereon nor any duty as to preservation of any rights pertaining
thereto, except to apply the funds in accordance with the requirements of
Section 10 hereof. The Pledgee may exercise its rights with respect to the
Collateral without resort to other security for or sources of reimbursement
for
the Obligations. In addition to the foregoing, Pledgee shall have all of
the
rights, remedies and privileges of a secured party under the Uniform Commercial
Code of New York (the “UCC”) regardless of the jurisdiction in which enforcement
hereof is sought.
9. Private
Sale.
Each
Pledgor recognizes that the Pledgee may be unable to effect (or to do so
only
after delay which would adversely affect the value that might be realized
from
the Collateral) a public sale of all or part of the Collateral by reason
of
certain prohibitions contained in the Securities Act, and may be compelled
to
resort to one or more private sales to a restricted group of purchasers who
will
be obliged to agree, among other things, to acquire such Collateral for their
own account, for investment and not with a view to the distribution or resale
thereof. Each Pledgor agrees that any such private sale may be at prices
and on
terms less favorable to the seller than if sold at public sales. Each Pledgor
agrees that the Pledgee has no obligation to delay sale of any Collateral
for
the period of time necessary to permit the Issuer to register the Collateral
for
public sale under the Securities Act.
10. Proceeds
of Sale.
The
proceeds of any collection, recovery, receipt, appropriation, realization
or
sale of the Collateral shall be applied by the Pledgee as follows:
(a) First,
to
the payment of all costs, reasonable expenses and charges of the Pledgee
and to
the reimbursement of the Pledgee for the prior payment of such costs, reasonable
expenses and charges incurred in connection with the care and safekeeping
of the
Collateral (including, without limitation, the reasonable expenses of any
sale
or any other disposition of any of the Collateral), attorneys’ fees and
reasonable expenses, court costs, any other fees or expenses incurred or
expenditures or advances made by Pledgee in the protection, enforcement or
exercise of its rights, powers or remedies hereunder;
(b) Second,
to the payment of any due Obligations;
(c) Third,
to
such persons, firms, corporations or other entities as required by applicable
law including, without limitation, Section 9-615(a)(3) of the UCC;
and
(d) Fourth,
to the extent of any surplus to the Pledgors or as a court of competent
jurisdiction may direct.
In
the
event that the proceeds of any collection, recovery, receipt, appropriation,
realization or sale are insufficient to satisfy the Obligations, subject
to the
terms and provisions of the Subsidiary Guaranty, each Pledgor shall be jointly
and severally liable for the deficiency plus the costs and fees of any attorneys
employed by Pledgee to collect such deficiency.
11. Waiver
of Marshaling.
Each
Pledgor hereby waives any right to compel any marshaling of any of the
Collateral.
12. No
Waiver.
Any and
all of the Pledgee’s rights with respect to the Liens granted under this
Agreement shall continue unimpaired, and Pledgor shall be and remain obligated
in accordance with the terms hereof, notwithstanding (a) the bankruptcy,
insolvency or reorganization of any Pledgor, (b) the release or substitution
of
any item of the Collateral at any time, or of any rights or interests therein,
or (c) any delay, extension of time, renewal, compromise or other indulgence
granted by the Pledgee in reference to any of the Obligations. Each Pledgor
hereby waives all notice of any such delay, extension, release, substitution,
renewal, compromise or other indulgence, and hereby consents to be bound
hereby
as fully and effectively as if such Pledgor had expressly agreed thereto
in
advance. Each Pledgor hereby waives all notice of any such delay, extension,
release, substitution, renewal, compromise or other indulgence, and hereby
consents to be bound hereby as fully and effectively as if such Pledgor had
expressly agreed thereto in advance. No delay or extension of time by the
Pledgee in exercising any power of sale, option or other right or remedy
hereunder, and no failure by the Pledgee to give notice or make demand, shall
constitute a waiver thereof, or limit, impair or prejudice the Pledgee’s right
to take any action against any Pledgor or to exercise any other power of
sale,
option or any other right or remedy.
13. Expenses.
The
Collateral shall secure, and each Pledgor shall pay to Pledgee on demand,
from
time to time, all reasonable costs and expenses, (including but not limited
to,
reasonable attorneys’ fees and costs, taxes, and all transfer, recording, filing
and other charges) of, or incidental to, or in any way relating to the
enforcement, protection or preservation of the rights or remedies of the
Pledgee
under this Agreement or with respect to any of the Obligations.
14. The
Pledgee Appointed Attorney-In-Fact and Performance by the
Pledgee.
Upon
the occurrence of an Event of Default which is continuing beyond any applicable
grace period, each Pledgor hereby irrevocably constitutes and appoints the
Pledgee as such Pledgor’s true and lawful attorney-in-fact, with full power of
substitution, to execute, acknowledge and deliver any instruments and to
do in
such Pledgor’s name, place and stead, all such acts, things and deeds for and on
behalf of and in the name of such Pledgor, which such Pledgor could or might
do
and which the Pledgee may deem necessary to accomplish the purposes of this
Agreement, including, without limitation, to execute such instruments of
assignment or transfer or orders and to register, convey or otherwise transfer
title to the Collateral into the Pledgee’s name. Each Pledgor hereby ratifies
and confirms all that said attorney-in-fact may so do and hereby declares
this
power of attorney to be coupled with an interest and irrevocable. If any
Pledgor
fails to perform any agreement herein contained, the Pledgee may itself perform
or cause performance thereof, and any costs and reasonable expenses of the
Pledgee incurred in connection therewith shall be paid by the Pledgors as
provided in Section 10 hereof.
15. Waivers.
THE
PARTIES HERETO DESIRES THAT THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING
SUCH
APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS
OF
THE JUDICIAL SYSTEM AND OF ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHTS
TO
TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE,
WHETHER ARISING IN CONTRACT, TORT, OR OTHERWISE BETWEEN THE PARTIES HERETO
ARISING OUT OF, CONNECTED WITH, RELATED OR INCIDENTAL TO THE RELATIONSHIP
ESTABLISHED BETWEEN THE PARTIES HERETO IN CONNECTION WITH THIS AGREEMENT,
ANY
OTHER DOCUMENT OR THE TRANSACTIONS RELATED HERETO OR THERETO.
16. Recapture.
Notwithstanding anything to the contrary in this Agreement, if the Pledgee
receives any payment or payments on account of the Obligations, which payment
or
payments or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside and/or required to be repaid to a trustee,
receiver, or any other party under the United States Bankruptcy Code, as
amended, or any other federal or state bankruptcy, reorganization, moratorium
or
insolvency law relating to or affecting the enforcement of creditors’ rights
generally, common law or equitable doctrine, then to the extent of any sum
not
finally retained by the Pledgee, each Pledgor’s obligations to the Pledgee shall
be reinstated and this Agreement shall remain in full force and effect (or
be
reinstated) until payment shall have been made to Pledgee, which payment
shall
be due on demand.
17. Captions.
All
captions in this Agreement are included herein for convenience of reference
only
and shall not constitute part of this Agreement for any other
purpose.
18. Termination.This
Stock Pledge Agreement shall terminate and be of no further force or effect
upon
the irrevocable repayment in full of the Obligations. Without prejudice to
the
generality of the above, if the all of the Obligations have been satisfied,
including through the conversion of the Note into common stock of the Company
and/or the redemption of the Note prior to its Maturity Date (as defined
therein), then Pledgee shall return to the Pledgors
the
Stock Certificates and the Stock Powers.
19. Miscellaneous.
(a) This
Agreement constitutes the entire and final agreement among the parties with
respect to the subject matter hereof and may not be changed, terminated or
otherwise varied except by a writing duly executed by the parties
hereto.
(b) No
waiver
of any term or condition of this Agreement, whether by delay, omission or
otherwise, shall be effective unless in writing and signed by the party sought
to be charged, and then such waiver shall be effective only in the specific
instance and for the purpose for which given.
(c) In
the
event that any provision of this Agreement or the application thereof to
any
Pledgor or any circumstance in any jurisdiction governing this Agreement
shall,
to any extent, be invalid or unenforceable under any applicable statute,
regulation, or rule of law, such provision shall be deemed inoperative to
the
extent that it may conflict therewith and shall be deemed modified to conform
to
such statute, regulation or rule of law, and the remainder of this Agreement
and
the application of any such invalid or unenforceable provision to parties,
jurisdictions, or circumstances other than to whom or to which it is held
invalid or unenforceable shall not be affected thereby, nor shall same affect
the validity or enforceability of any other provision of this
Agreement.
(d) This
Agreement shall be binding upon each Pledgor, and each Pledgor’s successors and
assigns, and shall inure to the benefit of the Pledgee and its successors
and
assigns.
(e) Any
notice or other communication required or permitted pursuant to this Agreement
shall be given in accordance with the Securities Purchase Agreement.
(f) THIS
AGREEMENT AND THE OTHER DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE
TO
CONTRACTS MADE AND PERFORMED IN SUCH STATE, WITHOUT REGARD TO PRINCIPLES
OF
CONFLICTS OF LAW.
(g) EACH
PLEDGOR HEREBY CONSENTS AND AGREES THAT THE STATE OR FEDERAL COURTS LOCATED
IN
THE COUNTY OF NEW YORK, STATE OF NEW YORK SHALL HAVE EXCLUSIVE JURISDICTION
TO
HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN ANY PLEDGOR, ON THE ONE
HAND,
AND THE PLEDGEE, ON THE OTHER HAND, PERTAINING TO THIS AGREEMENT OR ANY OF
THE
OTHER DOCUMENTS OR TO ANY MATTER ARISING OUT OF OR RELATED TO THIS AGREEMENT
OR
ANY OF THE OTHER DOCUMENTS, PROVIDED,
THAT
EACH PLEDGOR ACKNOWLEDGES THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO
BE
HEARD BY A COURT LOCATED OUTSIDE OF THE COUNTY OF NEW YORK, STATE OF NEW
YORK;
AND FURTHER PROVIDED,
THAT
NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE THE PLEDGEE
FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION
TO
COLLECT THE INDEBTEDNESS, TO REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY
FOR
THE INDEBTEDNESS, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR
OF THE
PLEDGEE. EACH PLEDGOR EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH
JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND EACH
PLEDGOR
HEREBY WAIVES ANY OBJECTION WHICH IT MAY HAVE BASED UPON LACK OF PERSONAL
JURISDICTION, IMPROPER VENUE OR FORUM
NON CONVENIENS.
EACH
PLEDGOR HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER
PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH
SUMMONS, COMPLAINT AND OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED
MAIL
ADDRESSED TO SUCH PLEDGOR AT THE ADDRESS SET FORTH IN THE
SECURITIES PURCHASE AGREEMENT
AND THAT
SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE EARLIER OF THE SUCH PLEDGOR’S
ACTUAL RECEIPT THEREOF OR SEVEN (7) BUSINESS DAYS AFTER DEPOSIT IN THE U.S.
MAILS, PROPER POSTAGE PREPAID.
(h) It
is
understood and agreed that any person or entity that desires to become a
Pledgor
hereunder, or is required to execute a counterpart of this Agreement after
the
date hereof pursuant to the requirements of any Document, shall become a
Pledgor
hereunder by (x) executing a Joinder Agreement in form and substance
satisfactory to the Pledgee, (y) delivering supplements to such exhibits
and annexes to such Documents as the Pledgee shall reasonably request and/or
set
forth in such joinder agreement and (z) taking all actions as specified in
this
Agreement as would have been taken by such Pledgor had it been an original
party
to this Agreement, in each case with all documents required above to be
delivered to the Pledgee and with all documents and actions required above
to be
taken to the reasonable satisfaction of the Pledgee.
(i) This
Agreement may be executed in one or more counterparts, each of which shall
be
deemed an original and all of which when taken together shall constitute
one and
the same agreement. Any signature delivered by a party by facsimile transmission
shall be deemed an original signature hereto.
[Remainder
of Page Intentionally Left Blank]
IN
WITNESS WHEREOF, the parties have duly executed this Agreement as of the
day and
year first written above.
XFONE,
INC.
By:
Name:
Xxx
Xxxxxxxxx
Title:
President & CEO
XFONE
USA, INC.
By:
Name:
Xxxx Xxxxxxx
Title:
President & CEO
LAURUS
MASTER FUND, LTD.
By:
Name:
Title:
SCHEDULE
A to the Stock Pledge Agreement
Pledged
Stock
|
Pledgor
|
Issuer
|
Class
of Stock
|
Stock
Certificate Number
|
Par
Value
|
Number
of
Shares
|
|
XFONE,
INC.
|
XFONE
USA, INC.
|
Common
|
101
|
1,000
|
|
|
XFONE
USA, INC.
|
EXPETEL
COMMUNICATIONS, INC.
|
Common
|
101
|
10,000
|
|
|
XFONE
USA, INC.
|
GULF
COAST UTILITIES, INC.
|
Common
|
101
|
1,000
|
SCHEDULE
4 to the Stock Pledge Agreement
With
respect to Xfone USA, Inc. ("Xfone USA"), the following consents and/or
approvals and/or notifications will be required:
The
State of Mississippi:
The
pledge of Xfone USA stock would not require approval of the Mississippi
Public Service Commission. However, under Mississippi law, if the
triggering conditions arose and the Xfone USA stock were required to be
transferred
to the Pledgee as new owner, such that "control" of Xfone USA
were
placed with the new owner, then the actual transfer would be subject to approval
by the Mississippi Public Service Commission. In light of the above,
the Pledgee understands and agrees that any transfer of control of
Xfone
USA would be subject to approval by the Mississippi Public Service
Commission.
The
State of Alabama: The
Alabama Public Service Commission only requires letter notification when
there
is an actual transfer of control. Based on the submitted letter the
Alabama
PSC may request more information. Alabama PSC recommends submitting
a
letter describing the stock pledge when the stock pledge could result in
a
transfer of control (i.e.: greater than 51% of stock transferred). In light
of
the above, the Pledgee understands and agrees that any transfer of
control
of Xfone USA would be subject to approval by the Alabama Public Service
Commission.
The
State of Louisiana: The
pledge of Xfone USA stock would not require approval of the Louisiana
Public Service Commission. However, transfer of stock valued
in excess
of one percent of gross assets of the utility (Xfone USA) requires letter
notification addressing 18 points outlined by the Louisiana PSC, and
the
transfer must receive approval of the Louisiana PSC. In light of the
above,
the Pledgee understands and agrees that any transfer of control of
Xfone
USA would be subject to approval by the Louisiana Public Service
Commission.
The
State of Florida: The
pledge of Xfone USA stock would not require approval of the Florida
Public
Service Commission. The Florida PSC only requires letter notification
upon
the transfer of control.
The
State of Georgia: The
Georgia Public Service Commission requires letter notification (a general
outline of the pledge transaction). In addition, a transfer of control shall
be
subject to the approval of the Georgia PSC. In light of the above,
the Pledgee understands and agrees that any transfer of control of
Xfone
USA would be subject to approval by the Louisiana Public Service
Commission.
It
is
hereby understood and agreed that the Plegdee shall be responsible for the
obtaining of all above mentioned required consents and/or approvals, including
to provide each applicable Public Service Commission with an appropriate
notification letter.
