First Amendment to Agreement and Plan of Merger
EXHIBIT
10.63
First
Amendment to
This
First Amendment to Agreement and Plan of Merger ("First Amendment") is entered
into as of October 10, 2005 by and among I-55 Internet Services, Inc. (the
"Company"), XFone, Inc. (the "Parent"), XFone USA, Inc. (the "Subsidiary")
and
Xxxxxx XxXxxxxxxx and Xxxxx Xxxxxx (the "Principals").
WHEREAS,
the Company, Parent, Subsidiary and Principals entered into that certain
Agreement and Plan of Merger dated as of August 26, 2005 (the "Merger
Agreement");
WHEREAS,
to induce the Company and Subsidiary not to terminate the Merger Agreement
due
to a material adverse effect that Hurricane Xxxxxxx has had on the assets and
business of Company, the Company and Principals are willing to enter into this
First Amendment to provide for the following: (i) an increase in the Escrow
Fund
from 20% to 50% of the Aggregate Merger Consideration and to have all the
Company Stockholders contribute to establish the Escrow Fund; (ii) to provide
a
mechanism to allow the Company and Subsidiary to make a claim for a loss under
the Escrow Fund if there is a loss of revenues from the customers of the Company
in the future or for the Parent to issue additional consideration if there
is an
increase in revenues from the customers of the Company in the future; and (iii)
to provide that the parties may enter into a Management Agreement pending
closing of the Merger.
NOW,
THEREFORE, in consideration of the foregoing recitals and other good and
valuable value of consideration, the parties do hereby agree as follows
(capitalized terms used herein have the same meaning as defined in the Merger
Agreement, unless otherwise specified herein).
1. Amendments.
| (a) |
The
following sentence is added to Section 1.01 as
follows:
|
The
"Management Date" shall mean a date prior to the Closing Date that the Company
and the Subsidiary enter into a Management Operating Agreement; provided,
however, if the Company and Subsidiary fail to enter into a Management Operating
Agreement, the Management Date shall be the Closing Date.
| (b) |
The
term "Closing Date" shall be replaced with the term "Management Date"
in
the following sections: 1.03(a)(i)(1); 1.03(a)(i)(2); 1.07; 4.05;
and
5.02(h).
|
-1-
| (c) |
There
is added a Section 4.15 as follows:
|
Section
4.15. Customer
Billing Adjustment.
Since
it is impossible to currently determine the impact that Hurricane Xxxxxxx will
have on the business and revenues of the Company, the parties agree as follows:
(i) the Parent and Subsidiary will be entitled to claim as a Loss under Section
6.01 hereof and proceed against the Escrow Fund to recover an amount equal
to
any "Negative Customer Billing Adjustment Amount" (as defined herein) not to
exceed the Escrow Fund or (ii) the Parent shall adjust the Aggregate Merger
Consideration by an amount equal to any “Positive Customer Billing Adjustment
Amount” (as defined herein) not to exceed a maximum of $1,927,083.50. The
parties agree that any Positive Customer Billing Adjustment Amount shall be
satisfied by the issuance of a number of Parent Common Stock and Parent Stock
Warrants in a ratio of 2/3 Parent Common Stock and 1/3 Parent Stock Warrants
and
that the value of the Parent Common Stock shall be determined using the weighted
average price as reported on the website of the American Stock Exchange for
the
Parent Common Stock for the ten (10) trading days immediately preceding March
1,
2006 and the Parent Stock Warrants shall be valued using the value established
for such Parent Stock Warrants as of the Effective Date. Each Company
Stockholder shall be entitled to receive the same proportion of the additional
Purchase Price paid for the Positive Customer Billing Adjustment as each did
of
the original Aggregate Merger Consideration.
The
"Negative Customer Billing Adjustment Amount" shall be calculated as follows:
First, take the percentage obtained by dividing the February 2006 Customer
Xxxxxxxx (as defined herein) for the Company Customer Base (as defined herein)
by the July 2005 Customer Xxxxxxxx for the Company Customer Base, which the
parties agree to be $489,531.65, and (i) if this percentage is less than 85%,
subtract this percentage from 85% and multiply the result by the dollar value
of
the Aggregate Merger Consideration (which is $3,854,167.00) to determine the
Negative Customer Billing Adjustment Amount, or (ii) if this percentage is
greater than 85%, then the Customer Billing Adjustment Amount shall be zero.
For
example, if the February 2006 Customer Billing is $450,000, then the Negative
Customer Billing Adjustment Amount is equal to zero ($0) since
$450,000/489,531.65 is greater than 85%. If the February 2006 Negative Customer
Billing is $400,000, then the Customer Billing Adjustment Amount is equal to
$126,773.18 [.85 - (400,000/489,531.65) x 3,854,167.00].
The
“Positive Customer Billing Adjustment Amount” shall be calculated as follows:
First, take the percentage obtained by dividing the February 2006 Customer
Xxxxxxxx for the Company Customer Base by the July 2005 Customer Billing, for
the Company Customer Base and (i) if the percentage is more than 115%, then
subtract 115% from this percentage and multiply the result by the dollar value
of the Aggregate Merger Consideration (which is $3,854,167.00) to determine
the
Positive Customer Billing Adjustment Amount or if this percentage is less than
115%, then the Positive Customer Billing Adjustment Amount shall be zero. For
example, if the February 2006 Customer Billing is $500,000, then the Positive
Customer Billing Adjustment Amount is equal to zero since $500,000/$489,531.36
is less than 115%. If the February Customer Billing is $600,000, then the
Positive Customer Billing Amount is equal to $291,613.98 ($600,000/$489,531.36)
- 1.15 x $3,854,167.
For
purposes of this Section 4.15, the following shall have the following
meaning:
"Company
Customer Base" - shall mean the customers of the Company as listed on Schedule
4.15 attached hereto.
"February
2006 Customer Xxxxxxxx" shall mean the charges as shown on the February 2006
Billing Report of the Subsidiary for each of the customers in the Company
Customer Base who do not have any receivables which are more than 90 days old
from the invoice date plus 2.78% of the sum of the following amounts (each
of
which amounts shall be determined as of the first anniversary date of the
Effective Date): (i) the amount of insurance payments received as a result
of
claims related to Hurricane Xxxxxxx in excess of the amount expended to replace
the property damaged by Hurricane Xxxxxxx and (ii) government cash grants (not
loans) received as a result of Hurricane Xxxxxxx.
-2-
The
Parent's independent public accountants shall calculate the Negative and/or
Positive Customer Billing Adjustment Amount by no later than 30 days from the
first anniversary date of the Effective Date.
If
there
is a Negative Customer Billing Adjustment Amount, the Parent and Subsidiary
shall be entitled to present a claim for the Negative Customer Billing
Adjustment Amount to the Escrow Agent.
If
there
is a Positive Customer Billing Adjustment Amount, the Parent shall issue the
Parent Common Stock and Parent Stock Parents due each Company Shareholder within
thirty (30) days of the date of determination by the Parent’s independent public
accountants.
| (d) |
Section
5.01 (a) is amended to delete in (iii) thereof the word “shareholders” and
replace it with the words “board of
directors”.
|
| (e) |
Section
5.01 (e) is amended to read as
follows:
|
(e) MCG
Debt and Warrants.
MCG
shall have agreed to accept Parent Common Stock in full payment for the MCG
Debt
on terms acceptable to the Parent and all obligations owed by the Company to
MCG
under the MCG Credit Facility shall have been extinguished, including, but
not
limited to, the MCG Warrants.
| (f) |
Section
5.02 (i) is amended to add the following sentence
thereto:
|
MCG
shall
have entered into an agreement in form satisfactory to the Parent and Subsidiary
agreeing to accept Parent Common Stock in payment in full of the MCG Debt and
agreeing as a Company Stockholder to be bound by the provisions of this Merger
Agreement.
| (g) |
Section
5.02(p) is amended to read as
follows:
|
"(p)
AMEX
Approval.
Approval by the American Stock Exchange of the issuance of the Parent Stock
and
Warrants to be issued in connection with this transaction.”
| (h) |
Section
5.02 is amended to add thereto a subparagraph (r) as
follows:
|
“(r)
Each
Company Stockholder shall have executed an Acknowledgment in form satisfactory
to the Parent agreeing to be bound by the terms of this Merger Agreement,
including Article VI of the Merger Agreement and to the appointment of the
Principals as the Shareholder Representative to act on such Company
Stockholder’s behalf as provided in Article VI of this Merger
Agreement.
-3-
| (i) |
Article
VI is amended in its entirety to read as
follows:
|
ARTICLE
VI
SURVIVAL
OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION;
POST-CLOSING
COVENANTS
6.01 Survival
of Representations, Warranties and Covenants.
(a) The
representations and warranties of the Company and each of the Principals
contained in this Agreement, or in any certificate or other instrument delivered
pursuant to this Agreement, shall remain in effect until, and will expire upon
the second year following the Closing Date (the "Termination
Date"),
except for the representations and warranties set forth in Section 2.10 (Tax
Matters) which shall survive the Termination Date until the expiration of the
applicable statute of limitations. The representations and warranties of the
Parent and the Subsidiary contained in this Agreement, or in any certificate
or
other instrument delivered pursuant to this Agreement will expire upon the
Termination Date, provided that the maximum liability of the Parent and
Subsidiary for any breach of a representation or warranty shall be twenty
percent of the Aggregate Merger Consideration, and any liability shall be
satisfied by the issuance of a number of shares of Parent Common Stock and
Parent Stock Warrants in a ratio of 2/3 Parent Common Stock and 1/3 Parent
Stock
Warrants with a value equal to the amount of such liability as established
at
the time of payment using the same formula as in the definition of such terms
as
provided in Section 1.03 hereof. Notwithstanding the foregoing:
(i) the
Termination Date or limitation or indemnification as set forth in 6.2(e) shall
not apply to claims based upon intentional fraud; and
(ii) the
representation, warranty, covenant or obligation that is the subject matter
of a
timely submitted Claim Notice (as defined in Section 6.01(c)) shall not so
expire with respect to such Claim Notice or any subsequent Claim Notice that
is
reasonably related to the subject matter of such Claim Notice, but rather shall
remain in full force and effect until such time as each and every claim that
is
based upon, or that reasonably relates to, any breach or alleged breach of
such
representation, warranty, covenant or obligation and that is reasonably related
to the subject matter of such Claim Notice or any such subsequent Claim Notice
has been fully and finally resolved, either by means of a written settlement
agreement executed by the Principals, as Shareholder Representative for the
Company Stockholders and the Parent and Subsidiary or by means of a final,
non-appealable judgment issued by a court of competent
jurisdiction.
(b) No
disclosure in any Schedule referred to in Article II will be deemed adequate
to
disclose an exception to a representation or warranty made in this Agreement
unless the applicable disclosure schedule identifies the exception. Without
limiting the generality of the foregoing, the mere listing (or inclusion of
a
copy) of a document or other item will not be deemed adequate to disclose an
exception to a representation or warranty made in this Agreement (unless the
representation or warranty regards the existence of the document or other item
itself).
-4-
(c) For
purposes of this Agreement, a "Claim
Notice"
relating to a particular representation, warranty, covenant or obligation shall
be deemed to have been given if the Parent or Subsidiary, acting in good faith,
delivers within the time periods provided in Section 6.01(a) to the Principals,
as Shareholder Representative for the Company Stockholders and the Escrow Agent
a written notice stating that such Indemnified Party believes that there is
or
has been a possible breach of such representation, warranty, covenant or
obligation and containing (i) a brief description of the circumstances
supporting such Indemnified Party's belief that there is or has been such a
possible breach; and (ii) a non-binding, preliminary estimate of the aggregate
dollar amount of the actual and potential damages that have arisen and may
arise
as a direct or indirect result of such possible breach. For purposes of this
Agreement, "Parent Indemnified Parties" shall mean the following persons and
entities: (a) Parent; (b) Parent's current and future affiliates and Subsidiary;
(c) the respective officers, directors, employees and agents of the persons
and
entities referred to in clauses "(a)" and "(b)" above; and (d) the respective
successors and assigns of the persons and entities referred to in clauses "(a)"
and "(b)" above; provided, however, that none of Xxxxxx XxXxxxxxxx or Xxxxx
Xxxxxx or any of the Company Stockholders shall be deemed to be a Parent
Indemnified Party.
6.02 Indemnification
by the Company Stockholders; Escrow Fund.
(a) The
Company Stockholders, jointly and severally, agree that, subject to the limits
of Sections 6.01 and 6.02(b)-(e), from and after the Effective Date, the Company
Stockholders shall indemnify and hold the Parent Indemnified Parties harmless
against all claims, losses, liabilities, damages, lawsuits, administrative
proceedings, investigations, audits, demands, assessments, adjustments,
judgments, settlement payments, penalties, fines, interest, deficiencies, costs
and expenses, including reasonable attorneys' fees and expenses of investigation
and defense (individually a "Loss"
and
collectively "Losses")
incurred by the Parent Indemnified Parties directly or indirectly as a result
of:
(i) any
inaccuracy or breach of a representation or warranty of the Company or any
Principal contained in: (A) this Agreement both as of the date of this Agreement
and as of the Effective Time as if made on and as of the Effective Time; (B)
any
of the agreements executed in connection with this Agreement; or (C) or in
any
certificate, instrument or other document delivered by the Company or any
Principal pursuant to the terms of this Agreement; or
(ii) any
failure by the Company or any of the Principals to perform or comply with any
covenant contained in this Agreement or in any of the agreements executed in
connection with this Agreement; or
(iii) any
Negative Customer Billing Adjustment Amount as determined in accordance with
Section 4.13 hereof.
(b) (i) As
security for the indemnity provided to the Parent Indemnified Parties in this
Article VI and by virtue of this Agreement and the Articles of Merger, the
Company Stockholders agree that an amount of the Parent Company Stock and Parent
Stock Warrants to which they are entitled at the Effective Date of the Merger
equal to fifty percent (50%) of the Aggregate Merger Consideration (the "Escrow
Shares") shall be deposited with the Escrow Agent and held in the name of the
Escrow Agent pursuant to the Escrow Agreement and each of the Company
Stockholders direct the Parent to deposit the Escrow Shares (plus any additional
shares as may be issued in respect of any stock split, stock dividend or
recapitalization effected by Parent after the Effective Time with respect to
the
Escrow Shares) with the Escrow Agent, without any act of the Company
Stockholders, such deposit to constitute an escrow fund (the "Escrow
Fund").
Each
Company Stockholder shall be required to contribute the Company Stockholder's
Pro Rata Portion (as defined herein) of the Escrow Shares with the escrow to
be
funded in the same proportions of Parent Company Stock to Parent Stock Warrant
that each Company Stockholder received in connection with the Merger. It is
understood and agreed that the portion of the Aggregate Merger Consideration
deposited into the Escrow Fund by each of the Company Stockholders shall be
issued and outstanding on the books of Parent, and the Company Stockholders
shall be the owners thereof, but registered in the Escrow Agent's name until
the
Escrow Agreement is terminated.
-5-
Any
cash
dividends paid on Parent Common Stock in the Escrow Fund shall be deposited
with
the Escrow Agent and become part of the Escrow Fund. Each Company Stockholder
shall have voting rights with respect to the shares of Parent Common Stock
contributed to the Escrow Fund on behalf of such Company Stockholder (and on
any
voting securities added to the Escrow Fund in respect of such shares of Parent
Common Stock) so long as such shares of Parent Common Stock or other voting
securities are held in the Escrow Fund. The Escrow Fund shall be in existence
immediately following the Effective Time and shall terminate at 5:00 p.m.,
Central Time, on the second year from the Effective Date, unless sooner
terminated due to the distribution of the Escrow Fund at an earlier date or
unless the termination date is extended due to pending Claims Notice(s) for
indemnification in accordance with this Section 6.03. For purposes of satisfying
the indemnification obligations of this Section 6.02, the shares of Parent
Common Stock and Parent Stock Warrants in the Escrow Fund shall be valued as
of
(i) the date that the Parent Indemnified Party sends notice to release a portion
of the Escrow Fund in satisfaction of a Loss as determined in accordance with
this Article VI or (ii) the date that the Principals as Shareholder
Representative for the Company Stockholders request a release of a portion
of
the Escrow Fund in accordance with Section 6.02(b); provided if there is a
counter-notice to the requested release from the Escrow given disputing the
requested release from the Escrow, then the date for valuation shall be
suspended until such time as the Escrow Agent is requested to make payment
upon
a joint instruction of the Parent Indemnified Party and the Principals, as
Shareholder Representative for the Company Stockholders or the date of a final
non-appealable order of a court of competent jurisdiction is entered as to
the
disputed release. The Parent Common Stock shall be valued at the closing trading
price for the ten trading days immediately preceding the valuation date and
the
Parent Stock Warrants shall be valued at the price at which they were valued
and
issued on the Effective Date in connection with the Merger. The Escrow Agent
shall satisfy any indemnification obligations first with the Parent Common
Stock
and then with the Parent Stock Warrants. The Escrow Fund shall be governed
by
the terms of this Agreement and the Escrow Agreement. The Parent Indemnified
Parties' right to recover any property held pursuant to the Escrow Agreement
shall be in addition to and not in limitation of any other rights or remedies
of
the Parent Indemnified Parties at law or in equity.
"Company
Stockholder's Pro Rata Portion" shall mean, with respect to each Company
Stockholder, an amount equal to the quotient obtained by dividing (x) the number
of shares of the Parent Common Stock which the Company Stockholder is entitled
to receive in connection with the Merger by (y) the total number of shares
of
the Parent Common Stock that all Company Stockholders are entitled to receive
in
connection with the Merger.
(ii) The
percentage set forth below of each Company Stockholder's Pro Rata Share of
the
Escrow Fund shall be released upon the happening of the following events
provided that at the date of the required release that there remains sufficient
Escrow Funds to cover the maximum amount of any pending Claims Notice(s) as
provided in this Article VI: (1) one-half (1/2) shall be released within 60
days
after the end of the first full 14 month period following the Effective Date;
and (2) one-half (1/2) shall be released within 60 days after the end of the
first full twenty-four month period following the Effective Date. If there
are
any Pending Claims outstanding at the second anniversary of the Effective Date,
the Escrow Agreement shall continue until final resolution of any such Pending
Claims in accordance with this Article VI.
(iii) The
Parent Indemnified Party agrees that each Company Stockholder shall only be
responsible for such Company Stockholder's Pro Rata Portion of such Loss and
each Company Stockholder's Escrowed Shares in an amount equal to the Company
Stockholder's Pro Rata Share of such Loss shall be subject to release to the
Parent Indemnified Party to satisfy such Company Stockholder's Pro Rata Share
of
the Loss.
-5-
(d) For
purposes of this Agreement and without limitation, a breach of the
representations and warranties included in Sections 2.01, 2.02 and 2.03 hereof
will be deemed a "willful misrepresentation."
(e) Limitation
on Indemnification.
Notwithstanding any provision of this Agreement to the contrary, after the
Effective Time, no Parent Indemnified Party shall be entitled to indemnification
until such Parent Indemnified Parties suffer Losses in excess of $60,000 in
the
aggregate (the "Basket
Amount"),
in
which case the Parent Indemnified Parties shall be entitled to recover all
Losses including the Basket Amount; provided, however, any amounts required
to
be paid resulting from any failure by the Company or any of the Principals
to
perform or comply with any covenant contained in this Agreement or any Related
Agreement and any claim for any Negative Customer Billing Adjustment Amount
shall not be subject to such Basket Amount; and provided further, however,
that
any amounts required to be paid by the Parent or the Surviving Corporation
as a
result of the Company's breach of, or any inaccuracy contained in, Section
2.21
herein shall not be subject to such Basket Amount. The total liability of each
Company Stockholder shall be limited to his/her Escrow Shares then remaining
in
the escrow and no Company Stockholder shall have any personal liability beyond
his Escrow Shares; provided that each of the Principals shall have personal
liability if the claim is based upon intentional fraud by such
Principal.
6.03 Indemnification
Procedures.
All
claims for indemnification under Section 6.02 shall be asserted and resolved
as
follows:
(a) Third-Party
Claims.
In the
event any Parent Indemnified Party becomes aware of a third-party claim that
such Parent Indemnified Party believes may result in a demand under Section
6.02, such Parent Indemnified Party shall notify the Principals, as Shareholder
Representative of the Company Stockholders of such claim who agree to notify
the
other the Company Stockholders, and the Company Stockholders shall be entitled,
at their expense, to participate in, but not to determine or conduct, the
defense of such claim. The Parent Indemnified Party shall have the right in
its
sole discretion to conduct the defense of and settle any such claim; provided,
however, that except with the written consent of the Principals, as Shareholder
Representative of the Company Stockholders, no settlement of any such claim
with
third-party claimants shall alone be determinative of the amount of Losses
relating to such matter. In the event that the Principals have consented to
any
such settlement, then the Company Stockholders shall not have the power or
authority to object to the amount of any claim by any Parent Indemnified Party
with respect to such settlement.
(b) Non-Third
Party Claims.
In the
event a Parent Indemnified Party has a claim hereunder that does not involve
a
claim being asserted against or sought to be collected by a third party, the
Parent Indemnified Party shall with reasonable promptness send a Claim Notice
with respect to such claim to the Principals, as Shareholder Representative
of
the Company Stockholders and the Escrow Agent (if applicable). If both the
Principals, as Shareholder Representative for the Company Stockholders do not
notify the Parent Indemnified Party within ten (10) calendar days from the
date
of receipt of such Claim Notice that the indemnifying party disputes such claim,
the amount of such claim shall be conclusively deemed a liability of the
indemnifying party hereunder. In case the Principals, as Shareholder
Representative for the Company Stockholders shall object in writing to any
claim
made in accordance with this Section 6.03(b), the Parent Indemnified Party
shall
have fifteen (15) calendar days to respond in a written statement to the
objection of the Principals, as Shareholder Representative of the Company
Stockholders. If after such fifteen (15) calendar day period there remains
a
dispute as to any claim, the parties shall attempt in good faith for sixty
(60)
calendar days to agree upon the rights of the respective parties with respect
to
each of such claims. If the Parent Indemnified Parties and the Principals,
as
Shareholder Representative of the Company Stockholders should so agree, a
memorandum setting forth such agreement shall be prepared and signed by the
Parent Indemnified Parties and the Principals, as Shareholder Representative
of
the Company Stockholders, which agreement shall be binding on all of the Company
Stockholders and the Company Stockholders agree that the Principals shall have
the power to act for all of them as their respective Shareholder Representative.
If the parties do not so agree, and a claim has been made against the Escrow
Fund, the Escrow Agent shall refrain from disbursing any portion of the Escrow
Fund until resolution of such dispute in the form of (i) a final written
decision of an arbitrator or (ii) a final non-appealable order of a court of
competent jurisdiction.
-7-
(c) The
Parent Indemnified Party's failure to give reasonably prompt notice to the
Principals, as Shareholder Representative of any actual, threatened or possible
claim or demand which may give rise to a right of indemnification hereunder
shall not relieve any indemnifying party of any liability which the indemnifying
party may have to the Parent Indemnified Party unless the failure to give such
notice materially and adversely prejudiced the indemnifying party.
(d) Each
Company Stockholder hereby appoints the Principals as Shareholder Representative
to act on its behalf as provided in this Article VI and the act of the
Principals taken under this Article VI and the Escrow Agreement shall be binding
on the Company Stockholders and the Parent Indemnified Parties shall have the
right to rely on the acts of the Principals as those of the Company Stockholders
for purposes of this Article VI and the Escrow Agreement. The Company
Stockholders agree that the Principals shall have the right to act on behalf
of
all Company Stockholders provided that Company Stockholders who held a majority
in interest of the Company Common Stock as of the Effective Date approve such
action.
6.04 No
Contribution.
Each
Company Stockholder waives, and acknowledges and agrees that it shall not have
and shall not exercise or assert (or attempt to exercise or assert), any right
of contribution, right of indemnity or other right or remedy against the
Subsidiary in connection with any indemnification or other rights any
Indemnified Party may have under or in connection with this
Agreement.
6.05 Benefit
Plans.
Each
former Company employee who is offered and accepts employment with Subsidiary
shall be entitled to credit for time served with the Company for any purpose
relating to the Subsidiary’s or Parent’s plans, including the amount of any
benefits, whether such benefits are available, and the vesting of any benefits.
Nothing in this Section 6.05 obligates Subsidiary to offer employment to any
Company employee.
2. Parent
Waiver.
Upon
receipt of this First Amendment as executed by the Company and Principals,
Parent agrees that Hurricane Xxxxxxx and/or its effects have not caused and
will
not cause a material adverse affect on the Company for the purpose of the
condition to closing set forth in Section 5.02(c) of this Agreement. Further,
in
consideration for this First Amendment, Parent hereby waives and releases any
claim it might otherwise have had that Hurricane Xxxxxxx and/or its effects
have
resulted or will result as of the Effective Time in the breach by the Company
or
the Principals of the following representations, warranties or covenants in
the
Merger Agreement: (i) the representation that there will have been no event
having a material adverse impact on the Company as set forth in Section 2.09(t);
(ii) the representation in Section 2.17 that all accounts receivable will be
collected within 90 days after such accounts arose, and (iii) the
representations with respect to the discontinuance of customer contracts due
to
customer financial difficulties; provided, however, the foregoing waiver shall
not prevent the Parent from seeking recovery for a breach of the foregoing
representations if such were false or incorrect as of the date the Agreement
was
executed or to the extent the representation relates to a specific time prior
to
the date of Hurricane Xxxxxxx. Conversely, Company retains the right to contend
that Hurricane Xxxxxxx had other effects not anticipated at this time and that
such effects, including any breaches of warranties or representations, are
waived and released by this Amendment. Should Parent or Subsidiary contend
that
a breach of the representations specifically enumerated above predated Hurricane
Xxxxxxx or if Company contends that a breach of a representation or warranty
other than those specifically enumerated above was caused by Hurricane Xxxxxxx,
then, if the other party disputes such contention, then the dispute shall be
mediated, and if mediation does not resolved that dispute, then the dispute
shall be resolved via binding arbitration before a single arbitrator pursuant
to
the Commercial Rules of the American Arbitration Association.
3. Ratification.
The
Merger Agreement as amended hereby is ratified and affirmed, and except as
expressly amended hereby, all other terms and provisions of the Merger Agreement
remain unchanged and continue in full force and effect.
4. Execution.
This
First Amendment may be executed simultaneously in multiple counterparts, each
of
which will be deemed an original, but all of which together shall constitute
one
and the same instrument. The parties hereto agree to accept facsimile signatures
as an original signature.
-8-
Executed
as of the day and year first above written.
|
XFONE,
INC
|
I-55 INTERNET SERVICES, INC | ||
| /s/ Xxx Xxxxxxxxx | /s/ Xxxxxx XxXxxxxxxx | ||
|
Xxx Xxxxxxxxx |
Xxxxxx XxXxxxxxxx |
||
| President and CEO | President/CEO |
|
XFONE
USA, INC
|
PRINCIPALS: | ||
| /s/ Xxxx Xxxxxxx | /s/ Xxxxxx XxXxxxxxxx | ||
|
Xxxx Xxxxxxx |
Xxxxxx XxXxxxxxxx |
||
| President |
|
|
|||
| /s/ Xxxxx Xxxxxx | |||
|
Xxxxx Xxxxxx |
|||
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Schedule
4.15
List
of Company Customers
