Document:

ex10118.htm

Exhibit
    10.118

    Noncompetition,
      Nondisclosure and Nonsolicitation Agreement

     

    This
      Noncompetition, Nondisclosure and Nonsolicitation Agreement (this “Agreement”)
      is made as of the 26th day of February, 2008, by and among Xfone, Inc., a Nevada
      corporation (“Purchaser”), on the one hand, and each of Telephone Electronics
      Corporation, a Mississippi corporation (“TEC”), Joseph D. Fail, Chris Chelette,
      Robert Healea, Joey Garner, and Walter Frank (each a “TEC Affiliate” and
      collectively the “TEC Affiliates”), severally and not jointly, each of such
      individuals being an officer or director of TEC or an affiliate of TEC,
      including NTS (as defined herein), on the other hand.  TEC and the TEC
      Affiliates shall each be referred to herein from time to time as a “TEC Party,”
and collectively as the ‘TEC Parties.”

     

    RECITALS

     

    
      	
               

            	
              A.

            	
              TEC
                owns 799,214 shares of the common stock which constitutes 63.5 percent
                (63.5%) of all the issued and outstanding Equity Interests of NTS
                Communications, Inc. (together with its subsidiaries “NTS”), a Texas
                corporation, and is the single largest shareholder of NTS.
                

            

    

     

    
      	
               

            	
              B.

            	
              Concurrently
                with the execution and delivery of this Agreement, Purchaser is purchasing
                from TEC all of the Equity Interests owned by TEC in NTS pursuant
                to the
                terms and conditions of a stock purchase agreement made as of the
                22nd day
                of August, 2007, as amended (the “Stock Purchase Agreement”), by and among
                Purchaser, NTS and the shareholders of NTS identified as the “Sellers” on
                the signature pages of the Stock Purchase Agreement.
                

            

    

     

    
      	
               

            	
              C.

            	
              Section
                2.5(q) of the Stock Purchase Agreement requires that a noncompetition
                agreement in the form of this Agreement be executed and delivered
                by the
                TEC Parties to Purchaser on or before the Closing.
                

            

    

     

    
      	
               

            	
              D.

            	
              This
                Agreement represents all of the agreements and obligations of any
                of the
                TEC parties arising under Section 2.5 of the Stock Purchase Agreement
                or
                otherwise with regard to the subject matter hereof, including the
                Confidential Information (as subsequently defined) of NTS.
                

            

    

     

    AGREEMENT

     

    The
      parties, intending to be legally bound, agree as follows:

     

    1.           
      DEFINITIONS

     

    “Confidential
      Information,” is defined in Section 2.

     

    Capitalized
      terms not expressly defined in this Agreement shall have the meanings ascribed
      to them in the Stock Purchase Agreement.

     

    2.           
      ACKNOWLEDGMENTS BY THE TEC PARTIES

     

    
      
        
        

      

      
        -1-

        
          

        

      

      
        
        

      

    

    Each
      of
      the TEC Parties acknowledge that he (or it) has occupied a position of trust
      and
      confidence with TEC or NTS prior to the date hereof and has had access to and
      has become familiar with the following, any and all of which constitute
      confidential information of NTS (collectively the “Confidential Information”):
      Except as provided in the final sentence of this paragraph, (a) any and all
      trade secrets concerning the business and affairs of NTS, including product
      specifications, data, compositions, processes, past, current and planned
      research and development, current and planned construction, products and
      distribution methods and processes, customer lists, current and anticipated
      customer requirements, price lists, market studies, business plans, computer
      software and programs (including object code and source code), database
      technologies, systems, structures architectures processes, improvements,
      devices, know-how, discoveries, concepts, methods and information of NTS’s
      business and any other information, however documented, of NTS that is a trade
      secret within the meaning of applicable law as of the date hereof; (b) any
      and
      all information concerning the business and affairs of NTS (which includes
      historical financial statements, financial projections and budgets, historical
      and projected sales, capital spending budgets and plans, personnel training
      and
      techniques and confidential information related to NTS’ customers, however
      documented; and (c) any and all notes, analysis, compilations, studies,
      summaries and other material prepared by or for NTS containing or based, in
      whole or in part, upon any information included in the foregoing which has
      been
      treated as confidential by NTS or the creator thereof, as the case may
      be.  Notwithstanding the foregoing, the Confidential Information shall
      not include: (i) information that has been provided to TEC or any TEC Party
      solely in connection with such person or entity’s (or such person’s status as an
      officer or agent of another business entity) commercial dealings with NTS,
      outside of the TEC Party’s relationship of authority or trust with NTS, if any,
      (ii) information readily ascertainable or compilable from the books and records
      of any other business or governmental entity, other than those provided to
      a TEC
      Party in confidence by NTS, (iii) information that relates to the business
      dealings between TEC and its affiliates and the TEC Parties, on the one hand,
      and NTS on the other, other than any information received in such TEC Party’s
      service as an officer or director of NTS, (iv) information which is also the
      confidential information of TEC or any of the TEC Parties, or their respective
      Affiliates.

     

    Each
      of
      the TEC Parties acknowledge that (a) the business of NTS relating to the use
      and
      operation of all its assets prior to Closing (the “Business”) is interstate in
      scope but relates primarily to that part of the State of Texas west of a line
      drawn from the Grayson County Courthouse to the Jefferson County Court House
      (the “Primary Market”); (b) its products and services related to such Business
      are marketed in several regions of the United States, including the Primary
      Market; (c) NTS’ s Business prior to Closing competes with other businesses that
      are or could be located in any part of the United States; (d) Purchaser has
      required that each of the TEC Parties make the covenants set forth in Sections
      3
      and 4 of this Agreement as a condition to the closing of the Stock Purchase
      Agreement; (e) the provisions of Sections 3 and 4 of this Agreement are
      reasonable and necessary to protect and preserve NTS and its Business and the
      Purchaser’s interests in and right to the use and operation of the Business from
      and after Closing; and (f) Purchaser would be irreparably damaged if any of
      the
      TEC Parties were to breach the covenants set forth in Sections 3 and 4 of this
      Agreement.

     

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

    3.           
CONFIDENTIAL INFORMATION

     

    Each
      of
      the TEC Parties acknowledge and agree that the protection of the Confidential
      Information is necessary to protect and preserve the value of the Business.
      Therefore, each of the TEC Parties hereby agree not to disclose to any
      unauthorized Persons or use for his or its own account or for the benefit of
      any
      third party any Confidential Information, whether or not such information is
      embodied in writing or other physical form or is retained in the memory any
      of
      the TEC Parties, without Purchaser’s written consent, unless and to the extent
      that the Confidential Information is or becomes generally known to by the public
      other than as a result of the TEC Party’s fault, the provisions hereof are
      waived by Purchaser or the disclosure in question is required by applicable
      law
      or process of law.  Notwithstanding the foregoing, however, no
      provision of this agreement shall be deemed to limit the ability of any TEC
      Party to provide truthful testimony or to offer truthful information to any
      agent of the United States Government or any member of the United States
      Congress.

     

    4.           
      NONCOMPETITION AND NONSOLICITATION

     

    As
      an
      inducement for Purchaser to enter into the Stock Purchase Agreement and as
      additional consideration for the consideration to be paid to TEC under the
      Stock
      Purchase Agreement, each of the TEC Parties agree that:

     

    (a)           
      For a period of two (2) years after the Closing:

     

    (i)           
      TEC will not, directly or indirectly, engage or invest in, own, manage, operate,
      finance, control or participate in the ownership, management, operation,
      financing or control of, be employed by, associated with or in any manner
      connected with, or render services or advice or other aid to, or guarantee
      any
      obligation of, any Person, engaged in or planning to become engaged in providing
      to any Primary Market Customer, local or long distance telecommunications
      services or any other products or services which compete with the products
      and
      services provided by NTS prior to the Closing (“Competitive Products”),
      including without limitation, local, long distance, broadband, dial up data
      services, wireless, DSL, Voice-over-Internet Protocol (VoIP).  TEC
      agrees that this covenant is reasonable with respect to its duration,
      geographical area and scope.  For the purposes hereof, a “Primary
      Market Customer” shall be any individual resident in, or any business entity
      whose principal executive offices are located in, the Primary Market
      Area.

     

    (ii)           
      The TEC Parties, severally and not jointly, will not directly or indirectly,
      engage or invest in, own, manage, operate, finance, control or participate
      in
      the ownership, management, operation, financing or control of, be employed
      by,
      associated with or in any manner connected with, or render services or advice
      or
      other aid to, or guarantee any obligation of, any Person, other than a Current
      Competitor, engaged in or planning to become engaged in providing to any Primary
      Market Customer, local or long distance telecommunications services or any
      other
      products or services which compete with the Competitive Products, including
      without limitation, local, long distance, broadband, dial up data services,
      wireless, DSL, Voice-over-Internet Protocol (VoIP). The TEC Parties agree that
      this covenant is reasonable with respect to its duration, geographical area
      and
      scope. For the purposes hereof, the “Current Competitors” shall mean those
      business entities of which a TEC Party is the record or beneficial owner of
      less
      than all of such entity’s debt or equity securities as of the date hereof, and
      which iscurrently
      offering or proposing to offer Competitive Products in the Primary Market,
      including but not limited to Randy White Telecommunications, Inc.

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

     

    (iii)           
      Each of the TEC Parties agree not to, directly or indirectly, (A) induce or
      attempt to induce any employee of NTS or any NTS employee who becomes an
      employee of Purchaser in connection with the purchase of the Business to leave
      the employ of NTS or Purchaser; (B) in any way interfere with the relationship
      between Purchaser and any such employee of NTS or Purchaser; (C) employ or
      otherwise engage as an employee, independent contractor or otherwise any such
      employee of NTS or Purchaser at a time when such employee is an employee of
      NTS
      anywhere or Purchaser within the Primary Market; (D) induce or attempt to induce
      any supplier, licensee or other Person, other than customers, to cease doing
      business with NTS or in any way interfere with the relationship between any
      such
      supplier, licensee or other business entity and NTS, or (E) except that no
      provision hereof shall limit the ability of the Current Competitors to compete
      with NTS (other than through individual efforts of a TEC Party), induce or
      attempt to induce any customer of NTS to cease doing business with NTS or in
      any
      way interfere with the relationship between any such customer and
      NTS.

     

    (iv)           
      Each of the TEC Parties agree that they (or it) will not, directly or
      indirectly, solicit the business of any Person who they know to be a customer
      of
      NTS, whether or not the TEC Party had personal contact with such Person prior
      to
      Closing; provided that such limitation shall not limit the ability of the
      Current Competitors to compete with NTS other than through the personal efforts
      of a TEC Party.

     

    (b)           
      In the event of a breach by any of the TEC Parties of any covenant set forth
      in
      Subsection 4(a) of this Agreement, the term of such covenant will be extended
      by
      the period of the duration of such breach; and

     

    (c)           
      Neither TEC nor any of the TEC Parties will, at any time during or after the
      two
      year period, intentionally disparage Purchaser, NTS, or the business conducted
      by Purchaser or any person known by TEC or such TEC Party, respectively, to
      be a
      director or officer of NTS or Purchaser.

     

    5.           
      REMEDIES

     

    If
      any of
      the TEC Parties breaches the covenants set forth in Sections 3 or 4 of this
      Agreement, Purchaser will be entitled to the following remedies:

     

    (a)           
      Damages from TEC and the TEC Party who breached such covenants;

     

    (b)           
      In addition to its right to damages and any other rights it may have, to obtain
      injunctive or other equitable relief to restrain any breach or threatened breach
      or otherwise to specifically enforce the provisions of Sections 3 and 4 of
      this
      Agreement, it being agreed that money damages alone would be inadequate to
      compensate Purchaser and would be an inadequate remedy for such
      breach.

     

    (c)           
      Notwithstanding any provision hereof to the contrary, the obligations of TEC
      and
      the TEC Parties hereunder are several and not joint; provided that the foregoing
      shall not limitTEC’s
      liability, if any, for the conduct of its directors, officers, employees and
      agents acting in such capacity.

     

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

     

    (d)           
      The rights and remedies of the parties to this Agreement are cumulative and
      not
      alternative.

     

    6.           
      SUCCESSORS AND ASSIGNS

     

    This
      Agreement will be binding upon Purchaser and each TEC Party and will inure
      to
      the benefit of Purchaser and its successors.

     

    7.           
      WAIVER

     

    Neither
      the failure nor any delay by any party in exercising any right, power or
      privilege under this Agreement will operate as a waiver of such right, power
      or
      privilege, and no single or partial exercise of any such right, power or
      privilege will preclude any other or further exercise of such right, power
      or
      privilege or the exercise of any other right, power or privilege. To the maximum
      extent permitted by applicable law, (a) no claim or right arising out of this
      Agreement can be discharged, in whole or in part, by a waiver or renunciation
      of
      the claim or right except in writing; (b) no waiver that may be given by a
      party
      will be applicable except in the specific instance for which it is given; and
      (c) no notice to or demand on one party will be deemed to be a waiver of any
      obligation of such party, or of the right of the party giving such notice or
      demand to require the other party, to take further action without notice or
      demand as provided in this Agreement.

     

    8.           
      GOVERNING LAW

     

    This
      Agreement will be governed by the laws of the State of Mississippi.

     

    9.           
      JURISDICTION; SERVICE OF PROCESS

     

    Any
      action or proceeding seeking to enforce any provision of, or based upon any
      right arising out of, this Agreement may be brought against any of the parties
      in the courts of the State of Mississippi, County of Rankin, and each of the
      parties consents to the jurisdiction of such courts (and of the appropriate
      appellate courts) in any such action or proceeding and waives any objection
      to
      venue laid therein. Process in any action or proceeding referred to in the
      preceding sentence may be served on any party anywhere in the
      world.

     

    10.           
      SEVERABILITY

     

    Whenever
      possible, each provision and term of this Agreement will be interpreted in
      a
      manner to be effective and valid, but if any provision or term of this Agreement
      is held to be prohibited or invalid, then such provision or term will be
      ineffective only to the extent of such prohibition or invalidity, without
      invalidating or affecting in any manner whatsoever the remainder of such
      provision or term or the remaining provisions or terms of this Agreement. If
      any
      of the covenants set forth in Section 4 of this Agreement are held to be
      unreasonable, arbitrary or against public policy, such covenants will be
      considered divisible with respect toscope,
      time and geographic area, and in such lesser scope, time and geographic area,
      will be effective, binding and enforceable against the TEC Parties to the
      greatest extent permissible.

     

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

     

    11.           
      COUNTERPARTS

     

    This
      Agreement may be executed in one or more counterparts, each of which will be
      deemed to be an original copy of this Agreement and all of which, when taken
      together, will be deemed to constitute one and the same agreement.

     

    12.           
      SECTION HEADINGS, CONSTRUCTION

     

    The
      headings of sections in this Agreement are provided for convenience only and
      will not affect its construction or interpretation. All references to “Section”
or “Sections” refer to the corresponding Section or Sections of this Agreement
      unless otherwise specified. All words used in this Agreement will be construed
      to be of such gender or number as the circumstances require. Unless otherwise
      expressly provided, the word “Including” does not limit the preceding words or
      terms.

     

    13.           
      NOTICES

     

    All
      notices, consents, waivers and other communications under this Agreement must
      be
      in writing and will be deemed to have been duly given when (a) delivered by
      hand
      (with written confirmation of receipt); (b) sent by facsimile (with written
      confirmation of receipt), provided that a copy is also promptly mailed by
      registered mail, return receipt requested; or (c) when received by the
      addressee, if sent by a nationally recognized overnight delivery service
      (receipt requested), in each case to the appropriate addresses and facsimile
      numbers set forth below (or to such other addresses and facsimile numbers as
      a
      party may designate by notice to the other parties):

     

    Joseph
      D.
      Fail

    c/o
      Telephone Electronics Corporation

    236
      E.
      Capitol Street

    Jackson,
      MS 39201

    Telephone
      No:   (601) 354-9070

    Facsimile
      No:      (601) 352-1394

    Email:                                                                
      

     

    
      	
              with
                a copy to:

            	
            	
               

            

    

    
      	 	
              Jackson
                Walker L.L.P. 

            
	
               

            	
              901
                Main Street 

            

    

    
      	
               

            	
              Suite
                6000 

            

    

    
      	
               

            	
              Dallas,
                TX 75202-3797 

            

    

    Attention:
      Jeffrey M. Sone

    Telephone
      No:    (601) 354-9070

    Facsimile
      No:       (601) 352-1394

    Email:                     jsone@jw.com

     

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

    Chris
      Chelette

    c/o
      Telephone Electronics Corporation

    236
      E.
      Capitol Street

    Jackson,
      MS 39201

    Telephone
      No:      (601) 354-9070

    Facsimile
      No:         (601) 352-1394

    Email:                      cchelette
      @communigroup.com

    

    
      	
              with
                a copy to:

            	
            	
            

    

    
      	 	
              Jackson
                Walker L.L.P. 

            
	
               

            	
              901
                Main Street 

            

    

    
      	
               

            	
              Suite
                6000 

            

    

    
      	
               

            	
              Dallas,
                TX 75202-3797 

            

    

    Attention:
      Jeffrey M. Sone

    Telephone
      No:       (601) 354-9070

    Facsimile
      No:          (601)
      352-1394

    Email:                      
      jsone@jw.com

     

    Robert
      Healea

    c/o
      Telephone Electronics Corporation

    236
      E.
      Capitol Street

    Jackson,
      MS 39201

    Telephone
      No:      (601) 354-9070

    Facsimile
      No:         (601) 352-1394

    Email:                      bhealea@tec.com

     

    
      	
              with
                a copy to:

            	
            	
            

    

    
      	 	
              Jackson
                Walker L.L.P. 

            
	
               

            	
              901
                Main Street 

            

    

    
      	
               

            	
              Suite
                6000 

            

    

    
      	
               

            	
              Dallas,
                TX 75202-3797 

            

    

    Attention:
      Jeffrey M. Sone

    Telephone
      No:       (601) 354-9070

    Facsimile
      No:          (601)
      352-1394

    Email:                      
      jsone@jw.com

     

    Joey
      Garner

    c/o
      Telephone Electronics Corporation

    236
      E.
      Capitol Street

    Jackson,
      MS 39201

    Telephone
      No:       (601) 354-9070

    Facsimile
      No:          (601)
      352-1394

    Email:                                                                
      

     

    
      	
              with
                a copy to:

            	
            	
               

            

    

    
      	 	
              Jackson
                Walker L.L.P. 

            
	
               

            	
              901
                Main Street 

            

    

    
      	
               

            	
              Suite
                6000 

            

    

    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    

    
      	
               

            	
              Dallas,
                TX 75202-3797 

            

    

    Attention:
      Jeffrey M. Sone

    Telephone
      No:       601) 354-9070

    Facsimile
      No:          (601)
      352-1394

    Email:                      
      jsone@jw.com

     

    Walter
      Frank

    c/o
      Telephone Electronics Corporation

    236
      E.
      Capitol Street

    Jackson,
      MS 39201

    Telephone
      No:        (601) 354-9070

    Facsimile
      No:           (601)
      352-1394

    Email:                                                                
      

     

    
      	
              with
                a copy to:

            	
            	
            

    

    
      	 	
              Jackson
                Walker L.L.P. 

            
	
               

            	
              901
                Main Street 

            

    

    
      	
               

            	
              Suite
                6000 

            

    

    
      	
               

            	
              Dallas,
                TX 75202-3797 

            

    

    Attention:
      Jeffrey M. Sone

    Telephone
      No:        (601) 354-9070

    Facsimile
      No:           (601)
      352-1394

    Email:                      
      jsone@jw.com

     

    
      	
              TEC:

            	
            

    

    
      Telephone
        Electronics Corporation 
Attention: Joseph D. Fail

    c/o
      Telephone Electronics Corporation

    236
      E.
      Capitol Street

    Jackson,
      MS 39201

    Telephone
      No:         (601) 354-9070

    Facsimile
      No:            (601)
      352-1394

    

    
      	
              with
                a copy to:

            	
            	
            

    

    
      	 	
              Jackson
                Walker L.L.P. 

            
	
               

            	
              901
                Main Street 

            

    

    
      	
               

            	
              Suite
                6000 

            

    

    
      	
               

            	
              Dallas,
                TX 75202-3797 

            

    

    Attention:
      Jeffrey M. Sone

    Telephone
      No:         (601) 354-9070

    Facsimile
      No:            (601)
      352-1394

    Email:                         
      jsone@jw.com

     

    Purchaser:                              Xfone,
      Inc.

    Britannia
      House

    960
      High Road

    London,
      N129RY

    United
      Kingdom

    Attention:                  Guy
      Nissenson

    Telephone:                +44
      208-446-9494

    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

    

    Facsimile:                   +44
      208-446-7010

    Email:                          guy@Xfone.com

    

    and

    

    Xfone,
      Inc.

    c/o
Xfone
      USA, Inc.

    2506
      Lakeland Drive, Suite
      100

    Flowood,
      MS  39232

    Attention:                Wade
      Spooner

    Telephone:              (601)
      664-1108

    Facsimile:                 (601)
      664-1190

    Email:                      
      wspooner@expetel.com

     

    with
      a mandatory copy
      to:

    

    Watkins
      Ludlam Winter & Stennis,
      P.A.

    633
      North State Street
      (39202)

    P.
      O. Box 427

    Jackson,
      MS
      39205-0427

    Attention:                   Gina
      M. Jacobs

    Telephone:                  601-949-4705

    Facsimile:                      601-949-4804

    Email:                             gjacobs@watkinsludlam.com

    

    14.           
      ENTIRE AGREEMENT

     

    This
      Agreement and the Stock Purchase Agreement, together with all exhibits and
      schedules attached thereto, constitute the entire agreement between the parties
      with respect to the subject matter of this Agreement and supersede all prior
      written and oral agreements and understandings between the parties with respect
      to the subject matter of this Agreement. This Agreement may not be amended
      except by a written agreement executed by the party to be charged with the
      amendment.

     

    

     

    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK]

     

    [Signature
      Pages Follow]

     

    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the undersigned, Guy Nissenson, has executed this Agreement
      in
      his capacity indicated for and on behalf of Purchaser on this 26th day of
      February, 2008.

     

    

    
      	 	
              PURCHASER:

              
              

              XFONE,
                INC.

              
              

              
              

              By:  /s/
Guy
                Nissenson

              Printed
                Name:  Guy
                Nissenson,

              Title:  President
                and CEO

              
              

              
              

            
	 	 

    

    
      
        
        

      

      
        -10-

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the undersigned, Joseph D. Fail, has executed and
      delivered  this Agreement individually and in his capacity indicated
      for and on behalf of TEC on this 26th day of Febraury, 2008.

     

    

    
      	 	
              TEC
                PARTIES:

              
              

              TELEPHONE
                ELECTRONICS CORPORATION

              
              

              By:  /s/
                Joseph D.
                Fail

              Printed
                Name:  Joseph
                D. Fail,

              Title:  President
                and CEO

              
              

              
              

               

              /s/
                Joseph D. Fail

              Joseph
                D.
                Fail,

              Individually

              
              

            
	 	 

    

    

     

    
      
        
        

      

      
        -11-

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the undersigned, Chris Chelette, has executed and delivered
      this Agreement on this 26th day of February, 2008.

     

    

    
      	 	
              TEC
                PARTY:

              
              

              
              

               

              /s/
                Chris Chelette

              Chris
                Chelette,

              Individually

              
              

            

    

    

    
      
        
        

      

      
        -12-

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the undersigned, Robert Healea, has executed and delivered
      this
      Agreement on this 26th day of Febraury, 2008.

     

    

    
      	 	
              TEC
                PARTY:

              
              

              
              

               

              /s/
                Robert Healea

              Robert
                Healea,

              Individually

              
              

            

    

    

    
      
        
        

      

      
        -13-

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the undersigned, Joey Garner, has executed and delivered this
      Agreement on this 26th day of February, 2008.

     

    

    
      	 	
              TEC
                PARTY:

              
              

              
              

               

              /s/
                Joey Garner

              Joey
                Garner,

              Individually

              
              

            

    

    

    
      
        
        

      

      
        -14-

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the undersigned, Walter Frank, has executed and delivered
      this
      Agreement on this 26th day of February, 2008.

     

    

    
      	 	
              TEC
                PARTY:

              
              

              
              

              /s/
                Walter
                Frank

              Walter
                Frank,

              Individually

              
              

            

    

    

    

     

    
      
        
        

      

      
        -15-ex10119.htm

    Exhibit
      10.119

    Second
      Amendment to

     

    Stock
      Purchase
      Agreement

     

    This
      Second Amendment (“Second
      Amendment”) to the Stock Purchase Agreement, dated as of August 22, 2007,
      as amended (the “SPA”)
      is
      entered into as of February 26, 2008 by and among Chris Chelette, Robert Healea
      and Kevin Buxkemper, in their capacity as Sellers’ Representative and for and on
      behalf of each of the Sellers party to the SPA, NTS Communications, Inc. (the
      “Company”)
      and Xfone, Inc. (“Purchaser”).  Capitalized
      terms used herein have the same meaning as defined in the SPA, unless otherwise
      specified herein.

     

    WHEREAS,
      pursuant to the SPA the Purchaser has agreed to purchase all of the stock in
      the
      Company from the Sellers; and

     

    WHEREAS,
      the Sellers designated the Sellers’ Representative to act on their behalf in
      connection with the SPA;

     

    WHEREAS,
      Section 2.2 of the SPA provides that Performance Targets are to be deducted
      as
      part of the Working Capital and Estimate Working Capital calculations;
      and

     

    WHEREAS,
      Section 3.1 of the AT&T Network Connection Service Terms and Pricing
      Attachment to the Amended and Restated AT&T Master Carrier Agreement between
      the Company  and AT&T Corp., dated January 15, 2008 (“AT&T Carrier
      Agreement”), provides for a Performance Target of up to $380,000 (the
“AT&T
      Contingency”) based upon a 100,000,000 minutes of use commitment within
      months 1-24 of the Full Service Period, as defined in the AT&T Carrier
      Agreement (the “Minutes
      of Use
      Commitment”).

     

    WHEREAS,
      the Parties wish to amend the SPA to provide, among other things, that the
      AT&T Contingency will not be a deduction in the Working Capital and
      Estimated Working Capital calculations and to provide that the Escrow Amount
      will be increased by $380,000 (the “AT&T Escrow
      Amount”).

     

    NOW,
      THEREFORE, in consideration of the foregoing recitals and other good and
      valuable consideration, the parties do hereby agree as follows.

     

    1.           
      Agreement.  The
      Parties hereby agree that the AT&T Contingency shall not be a Performance
      Target as that term is used in the SPA in connection with the calculation of
      Working Capital or Estimate Working Capital and shall not otherwise be a
      deduction in the calculation of Working Capital or Estimated Working Capital
      pursuant to Section 2.2 of the SPA.

     

    2.           
      Amendments.

     

    (a)           
      Section 2.2(b)(ii) of the SPA is amended and restated in its entirety to read
      as
      follows:

     

    “Subject
      to Section 2.2(c), the
      Purchaser shall deliver to the Escrow Agent an amount of cash and shares of
      Xfone Common Stock (the “Escrow
      Amount”) with an aggregate value equal to the sum of (x) fifteen percent
      (15%) of the Purchase Price (which in no event for purposes of
      determiningthe
      Escrow Amount shall result in less than Six Million Three Hundred Thousand
      and
      No/100 Dollars ($6,300,000.00)) and (y) $380,000 (the “AT&T Escrow Amount”) to
      be held under the
      Escrow Agreement to secure Sellers’ obligations under Section 2.2(d) and
(e)
      and Article
      VII.”

     

    
      
        
        

      

      
        -1-

        
          

        

      

      
        
        

      

    

     

    (b)           
      Section 2.4(a) of the SPA is amended and restated in its entirety to read as
      follows:

     

    “
      From time to time after the
      date of this Agreement and on or prior to the Closing, the Company may, in
      its
      sole and absolute discretion, distribute cash in an amount not to exceed the
      excess of Estimated Working Capital over the Working Capital Target and shall
      distribute to its shareholders all of the Company’s membership interest in NTS
      Properties, the general partner of NTS Landlord and that certain promissory
      note, dated as of October 31, 1998, from NTS Landlord to Company (the “Pre-Closing
      Distribution”).”

     

    3.           
      AT&T Escrow
      Amount.  Each Seller shall be entitled to receive its Allocable
      Share of the AT&T Escrow Amount upon the Company’s satisfaction of the
      Minutes of Use Commitment and the Purchaser and the Sellers’ Representative
      shall, within five (5) Business Days of such satisfaction, issue joint written
      instructions to the Escrow Agent to make a distribution in an aggregate amount
      of the AT&T Escrow Amount to the Sellers in accordance with each such
      Seller’s Allocable Share.  In the event that the Company fails to
      satisfy the Minutes of Use Commitment and the Company incurs a Shortfall Charge
      as provided in Section 3.1 of the AT&T Network Connection Service Terms and
      Pricing of the AT&T Carrier Agreement, then within five (5) Business Days of
      the issuance of an invoice from AT&T of a Shortfall Charge that is not then
      being disputed by either the Sellers’ Representative or the Company, the
      Seller’s Representatives and Purchaser shall issue joint written instructions to
      the Escrow Agent to make a distribution in the amount of the Shortfall Charge
      to
      the Purchaser and the balance of the AT&T Escrow Amount to the Sellers in
      accordance with each such Seller’s Allocable Share.

     

    4.           
      AT&T
      Relationship.  After the Closing, Purchaser shall not and shall
      cause the Company not to engage in any practice, take any action or omit to
      take
      any action which would reduce the relative importance of AT&T as a business
      partner of the Company, negatively impact the Company’s relationship with
      AT&T, constitute a default under the AT&T Carrier Agreement or which
      would otherwise negatively affect the Company’s ability to satisfy the Minutes
      of Use Commitment.

     

    5.           
      Ratification.  The
      SPA as amended hereby is ratified and affirmed, and except as expressly amended
      hereby, all other terms and provisions of the SPA remain unchanged and continue
      in full force and effect.

     

    6.           
      Execution.  This
      Second Amendment may be executed 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.

     

    [SIGNATURE
      PAGES FOLLOW]

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

    Executed
      as of the day and year first above written.

     

    
      	
              XFONE,
                INC.

              
              

              
              

              By: /s/
Guy
                Nissenson
                

                    Guy
                Nissenson, President and CEO

               

              
              

              
              

              NTS
                COMMUNICATIONS, INC.

              
              

              
              

              By: /s/
                Barbara
                Baldwin

                    Barbara
                Baldwin, President and CEO

            	
              SELLER’S
                REPRESENTATIVE FOR AND ON BEHALF OF THE SELLERS:

              
              

              
              

              /s/
Chris
                Chelette

              Chris
                Chelette

              
              

              
              

               

              /s/
Robert
                Healea

              Robert
                Healea

              
              

              
              

               

              /s/
Kevin
                Buxkemper

              Kevin
                Buxkemper

            

    

    

    
      
        
        

      

      
        -3-

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