Attached files
| file | filename |
|---|---|
| EX-10.134 - NTS, INC. | ex10134.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the
Securities
Exchange Act of 1934
Date of
Report (Date of earliest event reported): December 11, 2009 (December 10,
2009)
XFONE,
INC.
(Exact
name of registrant as specified in its charter)
Nevada
(State or
other jurisdiction of incorporation or organization)
Commission
File No. 001-32521
11-3618510
(I.R.S.
Employer Identification Number)
5307
W. Loop 289
Lubbock,
Texas 79414
(Address
of principal executive offices) (Zip Code)
806-771-5212
(Registrant’s
telephone number, including area code)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
o Written communications
pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material
pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
-1-
Item
1.01 Entry
into a Material Definitive Agreement.
The
information set forth below under Item 2.03 of this Current Report on Form 8-K
relating to the Agreement (as defined therein) is hereby incorporated into this
Item 1.01 by reference.
Item
2.03 Creation
of a Direct Financial Obligation.
On
December 10, 2009, Xfone, Inc. (the “Registrant”) entered into a Loan Agreement
(the “Agreement”) as guarantor, with (i) Swiftnet Limited, the Registrant’s
wholly owned United Kingdom subsidiary, as borrower (the “Borrower”); (ii) Iddo
Keinan, as lender (the “Lender”); and (iii) the Registrant’s other wholly owned
UK Subsidiaries: (a) Auracall Limited (“Auracall”), (b) Equitalk.co.uk Limited
(“Equitalk”), and (c) Story Telecom Limited (“Story Telecom”) (each a UK
Subsidiary and collectively, the “UK Subsidiaries”). Pursuant to the Agreement,
the Lender agreed to extend to the Borrower a loan in the amount of £860,044.58 (the
“Loan”) no later than December 10, 2009 (the “Drawdown Date”).
The Loan
was advanced by the Borrower to the Registrant as bridge funding of the payment
of amounts due by the Registrant on its Series A Bonds.
The Loan
is to be repaid in full no later than May 30, 2010. The Lender obtained the
funds for the Loan from the Lender’s bank, and the Borrower has agreed to
reimburse the Lender for his interest payments (1.3% per month charged on the
total amount of the Lender’s loan) as well as certain costs and expenses related
to the Agreement and the Lender’s loan. The Borrower has the right upon two
business days’ prior written notice to make voluntary prepayments on the Loan,
with no prepayment fee, except that prepayments during the first month following
the Drawdown Date results in an early repayment charge equal to the balance of
the first month’s interest.
In
consideration for the Loan, the following was granted as security in favor of
the Lender for the Borrower’s obligations under the Agreement:
1. The
Loan is secured by a security interest in: (i) 51% of each of the Class A shares
and Class B shares of the Borrower; (ii) 51% of the issued share capital of
Equitalk; (iii) 100% of the issued share capital of Auracall; (iv) 100% of the
issued share capital of Story Telecom;
2. An
intercompany guarantee between the Registrant, the UK Subsidiaries and NTS
Communications, Inc., the Registrant’s wholly owned U.S. subsidiary;
and
3. Debentures
over the entire assets of the Borrower and each UK Subsidiary.
The
Registrant agreed that, for the duration of the Loan, it shall (i) preserve Mr.
Abraham Keinan’s (“Mr. Keinan”) current positions in each of the Borrower and
each UK Subsidiary (together the “Group”), grant Mr. Keinan a veto right on any
resolution in the board of directors of each member of the Group, and appoint
Mr. Keinan as a signatory of each member of the Group; and (ii) provide
sufficient funds to the Lender on a monthly basis to ensure the timely payments
of Borrower’s monthly interest payments on the Loan, in full.
Additionally,
the Registrant has provided the following covenants:
1. The
Registrant covenanted that it will appoint an additional director to its Board
of Directors no later than January 15, 2010 and that such appointee shall be
acceptable to Mr. Keinan. Until such time as such an individual is
appointed or until the Loan is repaid in full, Mr. Keinan shall have a veto
right on any resolution put forth before the Registrant’s Board of Directors.
Mr. Keinan shall recommend an appropriate candidate (an “Appropriate Candidate”)
for such appointment no later than January 2, 2010. In the event Mr.
Keinan fails to recommend an Appropriate Candidate prior to January 2, 2010, Mr.
Keinan’s aforementioned veto right shall terminate and become void on January
15, 2010; and
2. The
Registrant covenanted that it will repay its Credit Facility that it has with
Bank Leumi (UK) Plc of £150,000, no later than May 30, 2010, so that the bank
guarantee securing the Credit Facility, which was issued by FIBI London on the
basis of a deposit in an equivalent amount lodged by the Lender with FIBI
London, may be released to the Lender. A failure to comply with this
provision constitutes an event of default under the Agreement.
-2-
Further,
the Registrant granted to the Lender a security interest in any proceeds of a
sale of its working interest in the capital stock of Xfone 018, Ltd., the
Registrant’s majority-owned (69%) Israel-based subsidiary, in an amount equal to
the amount of the Loan.
In the
event the Lender becomes a shareholder of the Borrower or any UK Subsidiary
(each, an “Exercised Subsidiary”), upon the occurrence of an event of default,
the Registrant shall have, for a period of three months (the “Buy Back Period”)
an irrevocable right to purchase back the shares of such Exercised Subsidiary,
at a purchase price equal to the aggregate amount of the outstanding principal,
interest and any other expenses and costs born by Lender in connection with the
Loan. In addition, the Registrant granted to the Lender an option to
purchase its entire holding of shares or stock in the Exercised Subsidiaries
(the “Option”). The Option is, among other things: (i) exercisable at any time
after the Buy Back Period and for a period of 24 months thereafter, at a
purchase price to be calculated and determined in accordance with the valuation
to be performed, as set forth in the Agreement, (ii) subject to regulatory and
legal requirement under the laws of Nevada, the laws of England & Wales and
any other applicable law; and (iii) may be exercised in respect of some or all
of the Exercised Subsidiaries, at Lender’s sole discretion.
The
Lender is son of Mr. Keinan, the Registrant’s Chairman of the Board and major
shareholder. The Lender has been employed by the Borrower since
1998.
The
Agreement was approved by the Audit Committee of the Registrant’s Board of
Directors, as well as by the Registrant’s Board of Directors, with the necessary
abstentions.
The
foregoing summary of the Loan Agreement is qualified in its entirety by
reference to the definitive transaction document, a copy of which is attached
as Exhibit 10.134 to this Current Report on Form 8-K.
Item
9.01
Financial Statements and Exhibits
(a)
Not applicable.
(b)
Not applicable.
(c)
Not applicable.
(d)
Exhibits.
|
Exhibit
No.
|
Description
|
-3-
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
|
Xfone,
Inc.
|
|||
|
Date: December
11, 2009
|
By:
|
/s/
Guy Nissenson
|
|
|
Guy
Nissenson
|
|||
|
President,
Chief Executive Officer and Director
|
|||
-4-
INDEX
TO EXHIBITS
|
Exhibit
No.
|
Description
|
-5-