AGREEMENT TO PURCHASE PROMISSORY NOTE
Exhibit
10.81
This
Agreement is between XFone, Inc. (XFone”) and the undersigned creditor
(“Creditor”) of I-55 Telecommunications, LLC (“Telecom”) and is effective as of
October 31, 2005.
WHEREAS,
XFone, Xfone USA, Inc., a wholly-owned subsidiary of XFone, and Telecom have
entered into an Agreement and Plan of Merger dated as of August 26, 2005 (the
“Merger Agreement”); and
WHEREAS,
the Merger Agreement provides Xfone USA, Inc. and Telcom will enter into a
Management Services Agreement (the “Management Agreement”); and
WHEREAS,
the effective date of the Management Agreement shall be referred to herein
as
the “Management Date”; and
WHEREAS,
Creditor is the holder of a promissory note dated October 31, 2005 from Telecom
in the aggregate principal amount of $60,108.59 (the “Promissory
Note”).
NOW
THEREFORE, the parties hereby agree as follows:
1. Defined
Terms.
Terms
defined in the Merger Agreement shall have the same meaning when used
herein.
2. Purchase
of Promissory Note.
Creditor agrees to sell and assign the Promissory Note to XFone and XFone agrees
to the purchase the Promissory Note on the terms and conditions set forth
herein.
3. Consideration.
As
consideration, XFone shall issue to Creditor a number of shares of restricted
XFone common stock (the “XFone Common Stock”), with a value equal to the
outstanding principal balance of the Promissory Note of the Creditor determined
using the weighted average price of the XFone common stock as reported on the
website of the American Stock Exchange for the ten (10) trading days preceding
the trading date immediately prior to the Management Date, and warrants for
one-half the number of XFone stock issued for the purchase of the Promissory
Note. The warrants shall have a term of five (5) years, a strike price that
is
10% above the weighted average price of the XFone common stock as reported
for
the ten (10) trading days preceding the trading date immediately prior to
Management Date and the XFone common stock into which the warrants are
convertible shall be restricted stock. The XFone Common Stock and the XFone
warrants are referred to together as the “XFone Securities.”
4. Closing
Date.
The
purchase of the Promissory Note shall be consummated on the Closing Date as
defined in the Merger Agreement, unless XFone, in his sole discretion, elects
to
consummate the purchase on an earlier date.
5. Termination.
If the
Merger Agreement terminates without consummation of the Merger prior to the
purchase of the Promissory Note by XFone, this Agreement shall terminate, and
neither party shall have any further obligations hereunder.
6. General
Representations.
Creditor hereby represents and warrants as follows:
(a) Creditor
has full power and authority to enter into this Agreement and to sell and
deliver the Promissory Note on the terms as provided herein.
(b) There
is
no legal impairment which prevents Creditor from selling, conveying, assigning
and transferring the Promissory Note and all rights thereunder to
XFone.
(c) Creditor
has good and marketable title to the Promissory Note subject to no existing
mortgage, pledge, lien, security interest, encumbrance, restriction or any
other
type of charge or lien whatsoever.
(d) Except
for the Promissory Note there are no liabilities, claims or obligations (whether
accrued, absolute, contingent, unliquidated or otherwise, and whether due to
become payable and regardless of when or by whom asserted) owed by Telecom
to
Creditor.
7. Investment
Representations.
Creditor represents that:
(a) Creditor
has received a copies of XFone Annual Report on Form 10-KSB and Quarterly Report
on Form 10QSB for the quarter ending June 30, 2005.
(b) Creditor
has such knowledge and experience in business and financial matters, or
competent professional advice concerning XFone, and Creditor is capable of
evaluating the merits and risks of the prospective investment in XFone and
is
able to bear the substantial economic risks of the investment and can afford
the
complete loss of the investment.
(c) Creditor
has had and continues to have the opportunity to obtain from XFone any
additional information, to the extent possessed or obtainable without
unreasonable effort and expense, necessary to evaluate the merits and risks
of
this proposed investment and Creditor has concluded, based on the information
presented to Creditor, Creditor’s own understanding of investments of this
nature and of this investment in particular, and the advice of such consultants
as Creditor has deemed appropriate, that Creditor wishes to acquire XFone
Securities as indicated above.
(d) Creditor
is an "Accredited Investor" as defined in Securities and Exchange Commission
Rule 501.
(e) Creditor
understands that the XFone Securities being acquired hereby have not been
registered under the Securities Act, or under the Blue Sky or other securities
laws of certain states, and, therefore, that Creditor must bear the economic
risk of the investment for an indefinite period of time as the XFone Securities
cannot be sold or offered for sale unless the XFone Securities are subsequently
so registered or an exemption from registration is available.
(f) Creditor
understands that the certificate evidencing the XFone Securities will bear
a
restrictive legend in substantially the following form:
THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT
OF 1933, AS AMENDED THE "ACT"), OR UNDER ANY APPLICABLE STATE SECURITIES LAWS,
AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, ASSIGNED, PLEDGED OR
HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT AND SUCH LAWS OR IN
COMPLIANCE WITH AN EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS. IN ADDITION,
THE SECURITIES REPRESENTED HEREBY ARE SUBJECT TO CERTAIN SALE RESTRICTIONS
AS
PROVIDED IN THAT CERTAIN AGREEMENT TO PURCHASE PROMISSORY NOTE DATED AS OF
OCTOBER 31, 2005.
(g) Creditor
understands that the records of the transfer agent for XFone common stock will
indicate the restrictions on transferability and sale noted above and stop
transfer instructions have been or will be placed with respect to the stock
so
as to restrict the transfer thereof.
(h) Creditor
is the sole party in interest in Creditor’s participation and in this Agreement
and is acquiring the XFone common stock solely for investment for Creditor’s own
account; Creditor has no present agreement, understanding, intent or arrangement
to subdivide, sell, assign or transfer any part or all of the stock, or any
interest therein, to any other person. Creditor further represents that it
has
sufficient and adequate means to provide for Creditor’s current needs and
personal contingencies and has no need for liquidity with respect to Creditor’s
investment in XFone.
8. No
Further Claims.
Creditor does hereby acknowledge and agree upon consummation of the purchase
of
the Promissory Note, Creditor shall have no further claims relating to or under
the Promissory Note against the maker of the Promissory Note and any such claims
which may have existed or may exist in the future under the Promissory Note
shall be assigned to XFone upon purchase of the Promissory Note.
9. Registration
Rights.
For a
period of one year from the date of insurance of the XFone Common Stock to
Creditor, if XFone registers any shares of its common stock with the Securities
and Exchange Commission (“SEC”) for sale in a secondary offering, then XFone
will register the XFone Common Stock issued to Creditor under this Agreement
with the SEC at XFone’s expense.
10. Shareholder's
Post Closing Sale Restrictions.
The
Creditor agrees that the total shares of common stock of XFone sold by him/her
in any one month period shall not exceed 850 shares. The Creditor agrees that
this XFone common stock sales restriction shall apply to any XFone common stock
owned as a result of this Agreement but not to any other XFone stock owned
by
Creditor.
11. Miscellaneous.
(a) Notices.
All
notices and other communications hereunder shall be in writing and shall be
deemed given if delivered personally or by commercial messenger or courier
service, or mailed by registered or certified mail (return receipt requested)
to
the parties at the following addresses (or at such other address for a party
as
shall be specified by like notice); provided, however, that notices sent by
mail
will not be deemed given until received:
(i) if
to
XFone, Inc., to:
XFone,
Inc.
Xxxxxxxxx
Xxxxx
000
Xxxx
Xxxx
Xxxxxx,
X000XX
Xxxxxx
Xxxxxxx USA
|
Attention:
|
Xxx
Xxxxxxxxx
|
|
Telephone:
|
x00
000-000-0000
|
|
Facsimile:
|
x00
000-000-0000
|
Email: xxx@xxxxx.xxx
and
Xfone
USA, Inc.
0000
Xxxxxxxx Xxxxx
Xxxxx
000
Xxxxxxx,
Xxxxxxxxxxx 00000
|
Attention:
|
Xxxx
Xxxxxxx
|
|
Telephone:
|
000-000-0000
|
|
Facsimile:
|
000-000-0000
|
Email: xxxxxxxx@xxxxxxx.xxx
and
Xxxxxxx
Xxxxxx Winter & Stennis, P.A.
000
Xxxxx
Xxxxx Xxxxxx (39202)
P.
O. Xxx
000
Xxxxxxx,
XX 00000-0000
Attention: Xxxx
X.
Xxxxxx
Telephone: 000-000-0000
Facsimile: 601-949-4804
|
Email:
|
xxxxxxx@xxxxxxxxxxxxx.xxx
|
(ii) if
to the
Creditor, to:
Xxxx
Xxxxxx
Bon
Aire
Estates
00000
X.
Xxxxxxxx Xxxx.
Xxxxxxx,
XX 00000
(b) Counterparts.
This
Agreement may be executed in one or more counterparts, each of which shall
constitute an original and all of which, when taken together, shall be
considered one and the same agreement.
(c) Entire
Agreement.
This
Agreement constitutes the entire agreement between the parties with respect
to
the subject matter hereof and supersedes all prior agreements and understandings
both written and oral, among the parties with respect to the subject matter
hereof.
(d) Governing
Law; Dispute Resolution.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of Mississippi, regardless of the laws that might otherwise govern under
applicable principles of conflicts of laws thereof. EACH PARTY HEREBY
IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY
TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH
OR
ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED
HEREBY.
(e) Rules
of Construction.
The
parties hereto agree that they have been represented by counsel during the
negotiation and execution of this Agreement and, therefor, waive the application
of any law, regulation, holding or rule of construction providing that
ambiguities in an agreement or other document will be construed against the
party drafting such agreement or document.
CREDITOR:
/s/
Xxxx Xxxxxx
Xxxx
Xxxxxx
Bon
Aire
Estates
XFONE:
XFone,
Inc.
By:
/s/
Xxx Xxxxxxxxx
Xxx
Xxxxxxxxx, President
