Document:

Exhibit 10.2

 

EXECUTION COPY

 

FIRST
AMENDMENT TO

CREDIT AGREEMENT

 

THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this “Amendment”)
is made as of May 20, 2009, among CLST Asset Trust II,
a Delaware statutory trust, as a borrower (“Trust II”), SSPE Investment Trust I, a Delaware statutory trust, as a
borrower (“Trust I”), SSPE, LLC, a
Delaware limited liability company, as a borrower (the “LLC Borrower”
and, together with Trust I and Trust II, the “Borrowers”), Summit Consumer Receivables Fund, L.P., a Delaware limited
partnership, as the originator (the “Originator”) and as a guarantor, Summit Alternative Investments, LLC, a Nevada limited
liability company, as the servicer (the “Servicer”), Eric J. Gangloff, as a guarantor, Fortress
Credit Opportunities I L.P., as a lender (the “Lender”) and Fortress Credit Corp., as the administrative agent for the
Lenders (in such capacity, the “Administrative Agent”).  Capitalized terms used but not defined herein
have the meanings provided in the Credit Agreement (defined below).

 

PRELIMINARY
STATEMENTS

 

WHEREAS,
the parties hereto (among others) entered into that certain Second Amended and
Restated Revolving Credit Agreement, dated as of December 10, 2008 (as
further amended, supplemented, modified or restated from time to time, the “Credit
Agreement”);

 

WHEREAS,
pursuant to Section 13.1 of the Credit Agreement, the Borrowers, the
Servicer, the Administrative Agent, and the Required Lenders and, to the extent
affected thereby, the Collateral Custodian and the Backup Servicer, may amend
and supplement the provisions of the Credit Agreement; and

 

WHEREAS,
the parties to the Credit Agreement desire to amend the Credit Agreement in
certain respects as provided herein.

 

NOW
THEREFORE, in consideration of the premises and the agreements contained
herein, the parties to this Amendment hereby agree to amend the Credit
Agreement as follows:

 

ARTICLE
I

 

AMENDMENTS TO THE CREDIT AGREEMENT

 

Section 1.01.  Amendments.

 

(a)           The definition of “Facility Amount”
in Section 1.1 of the Credit Agreement is hereby amended and restated in
its entirety as follows:

 

““Facility
Amount”: On any Measurement Date, an amount equal to (i) $30,000,000
less (ii) the outstanding principal balance of the Term Loan; provided that such amount shall be reduced in amounts equal
to repayments of the Loans Outstanding by the Borrowers per the requirements
set forth in Section 2.3.”

 

 

(b)           The definition of “Maximum Committed
Amount” in Section 1.1 of the Credit Agreement is hereby amended and
restated in its entirety as follows:

 

““Maximum
Committed Amount”:  As of any date of
determination, $30,000,000 (which amount shall be subject to increases pursuant
to Section 2.1(d)); provided that
such amount shall be reduced in amounts equal to repayments of the Loans
Outstanding by the Borrowers per the requirements set forth in Section 2.3.”

 

(c)           Section 2.3 of the Credit
Agreement is hereby amended by adding the following to the end of the
paragraph:

 

“Notwithstanding
anything to the contrary in this Section 2.3, in the event the
Borrowers at any time repay Loans Outstanding in an amount equal to or greater
than $1,000,000 (or any lesser amount, if the Loans Outstanding are being paid
in full), then (x) no Prepayment Premium will be charged by the Lenders
and (y) both the Maximum Committed Amount and the Facility Amount shall be
reduced in a corresponding amount to the amount being prepaid by the Borrowers.”

 

(d)           The table in Annex B of the Credit
Agreement is hereby amended and restated in its entirety as follows:

 

	
  Lender

  	
   

  	
  Commitment

  	
   

  	
  Percentage

  	
   

  
	
  Fortress Credit
  Opportunities I L.P.

  	
   

  	
  $

  	
  30,000,000

  	
   

  	
  100

  	
  %

  
							

 

(e)           The cover page of the Credit
Agreement is hereby amended by replacing the number “50,000,000” with “30,000,000”.

 

ARTICLE II

 

MISCELLANEOUS

 

Section 2.01.  Credit Agreement in Full Force and Effect as Amended.  Except as specifically amended hereby, all of
the terms and conditions of the Credit Agreement shall remain in full force and
effect.  All references to the Credit
Agreement in any other document or instrument shall be deemed to mean the
Credit Agreement, as amended by this Amendment. 
This Amendment shall not constitute a novation of the Credit Agreement,
but shall constitute a amendment thereof. 
The parties hereto agree to be bound by the terms and obligations of the
Credit Agreement, as amended by this Amendment, as though the terms and
obligations of this Amendment were set forth in the Credit Agreement.

 

2

 

Section 2.02.  Prior Understandings. 
This Amendment sets forth the entire understanding of the parties
relating to the subject matter hereof, and supersedes all prior understandings
and agreements, written or oral.

 

Section 2.03.  Counterparts.  This
Amendment may be executed in any number of counterparts and by separate parties
hereto on separate counterparts, each of which when executed shall be deemed an
original, but all such counterparts taken together shall constitute one and the
same instrument.

 

Section 2.04.  Governing Law.  This
Amendment shall be governed by and construed in accordance with the law of the
State of New York.

 

3

 

IN WITNESS WHEREOF, the parties have caused
this Amendment to be executed by their respective officers thereunto duly
authorized, as of the date first above written.

 

 

	
   

  	
  THE BORROWERS:

  
	
   

  	
   

  
	
   

  	
   

  	
  SSPE INVESTMENT TRUST I

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: U.S. Bank Trust National Association, not in its individual
  capacity but solely as statutory trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Diane L. Reynolds

  
	
   

  	
   

  	
  Name: Diane L. Reynolds

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CLST ASSET TRUST II

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: U.S. Bank Trust National Association, not in its individual
  capacity but solely as statutory trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Diane L. Reynolds

  
	
   

  	
   

  	
  Name: Diane L. Reynolds

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SSPE, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Eric Gangloff

  
	
   

  	
   

  	
  Name: Eric Gangloff

  
	
   

  	
   

  	
  Title: Managing Director

  

 

1

 

	
   

  	
   

  	
  SUMMIT ALTERNATIVE INVESTMENTS, LLC, as the
  Servicer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: Gangloff & Associates Inc., it sole member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Eric Gangloff

  
	
   

  	
   

  	
  Name: Eric Gangloff

  
	
   

  	
   

  	
  Title: Managing Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SUMMIT CONSUMER RECEIVABLES FUND, L.P., as the
  Originator and as a Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: Summit Alternative Investments, LLC, its General Partner

  
	
   

  	
   

  	
  By: Gangloff & Associates Inc., its sole member

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Eric Gangloff

  
	
   

  	
   

  	
  Name: Eric Gangloff

  
	
   

  	
   

  	
  Title: Managing Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ERIC J. GANGLOFF, as a Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Eric Gangloff

  
	
   

  	
   

  	
  Name: Eric Gangloff

  
	
   

  	
   

  	
  Title: Managing Director

  

 

2

 

	
   

  	
   

  	
  FORTRESS CREDIT CO LLC, as the
  Administrative Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Constantine M. Dakolias

  
	
   

  	
   

  	
  Name: Constantine M. Dakolias

  
	
   

  	
   

  	
  Title: President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  FORTRESS CREDIT OPPORTUNITIES I L.P., as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: Fortress Credit Opportunities I GP LLC, its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Constantine M. Dakolias

  
	
   

  	
   

  	
  Name: Constantine M. Dakolias

  
	
   

  	
   

  	
  Title: President

  

 

3ex10136.htm

    AGREEMENT

    

    This
agreement is made and entered into as of January 29, 2010, by and between Xfone,
Inc., a Nevada Corporation (entity number C23688-2000) whose principal executive
offices are at 5307 W Loop 289, Lubbock, TX 79414, U.S. (the “Seller”), Abraham
Keinan, whose address is at 4 Wycombe Gardens, London NW11 8AL, U.K.
(“Abraham”), and AMIT K LTD, a company registered in England & Wales
(company number 7134495) whose principal executive offices are at 788/790
Finchley Road, Temple Fortune, London NW11 7TJ, UK (the “Buyer”).

    

    RECITALS

    

    WHEREAS, the Seller owns
(directly and/or indirectly) 100% of the entire issued share capital of Swiftnet
Limited (“Swiftnet”), Auracall Limited (“Auracall”), Equitalk.co.uk Limited
(“Equitalk”), Story Telecom, Inc. (“Story Inc”) and Story Telecom Limited
(“Story UK”) (each, a “UK Subsidiary” and collectively hereinafter called the
“UK Subsidiaries”), as listed in the Appendix attached hereto (the “Sale
Shares”); and

     

    WHEREAS, Abraham directly owns
100% of the entire issued share capital of Buyer and has the sole control of
Buyer; and

     

    WHEREAS, Seller, Abraham and
Buyer wish to enter into a transaction pursuant to which Abraham, through Buyer,
shall purchase from Seller the Sale Shares  (the “Transaction”);
and

     

    WHEREAS, Abraham is a
significant shareholder and chairman of the board of directors of Seller, and
the Transaction is therefore deemed to be a related party transaction;
and

     

    WHEREAS, pursuant to that
certain loan agreement dated December 10, 2009 (the “Loan Agreement”), Iddo
Keinan (“Iddo”), the son of Abraham and an employee of Swiftnet, has extended to
Swiftnet a loan in an amount of £860,044.58 (“Iddo’s Loan”); and

     

    WHEREAS, Seller has obtained a
credit facility from Bank Leumi (UK) Plc of £150,000 (the “Credit Facility”)
which is secured by a bank guarantee given to Bank Leumi (UK) by FIBI London
(the “Bank Guarantee”), and the Bank Guarantee was secured by a deposit in an
equivalent amount lodged by Iddo with FIBI London.

     

    NOW, THEREFORE, in
consideration of the above premises and the respective representations,
warranties, agreements and conditions herein set forth, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties to this Agreement (each, a “Party” and collectively
the “Parties”), intending to be legally bound, hereby agree as
follows:

     

    
      	
              1.  

            	
              Sale
      and Purchase of the Sale
Shares.

            

    

     

    The
Seller, as the beneficial owner and with full title guarantee of the Sale
Shares, shall sell the Sale Shares to the Buyer and the Buyer shall purchase the
Sale Shares, pursuant to the terms of this Agreement.

    

    Unless
otherwise specifically agreed upon in this Agreement, the UK Subsidiaries are to
be purchased “AS IS”.

     

    
      	
              2.  

            	
              Consideration.
      The consideration to be paid by the Buyer and/or Abraham to the Seller for
      the Sale Shares shall be $3,500,000, comprised of the following three (3)
      components (collectively, the
“Consideration”):

            

    

     

    
      	
              a.  

            	
              A
      release by Iddo and the UK Subsidiaries of the Seller and NTS
      Communications, Inc. (“NTS”) from any obligations under the Loan
      Agreement, the Security Documents (as that term is defined in the Loan
      Agreement) and any other ancillary documents thereof, including a release
      from the repayment of Iddo's Loan and the related costs and expenses
      specified in Schedule A of the Loan Agreement (the “Xfone - NTS
      Obligations”);

            

    

     

    
      
        
        

      

      
        -1-

        
          

        

      

      
        
        

      

    

    
      	
              b.  

            	
              A
      full redemption by the Buyer and/or Abraham of the Credit Facility,
      thereby releasing the Seller from its obligation to Bank Leumi (UK)
      Plc;

            

    

     

    2.a. and
2.b. shall be collectively referred to as the “First Payment”;

     

    
      	
              c.  

            	
              Earn-Out
      Consideration.

            

    

     

    
      	
              i.  

            	
              Seller
      shall be entitled to receive an annual earn-out payment, commencing after
      the accumulative EBITDA of the UK Subsidiaries, over the years beginning
      on the consummation of the Transaction (the “Closing”), have reached an
      aggregate amount equal to the First Payment and payable not later than
      March 31 of each successive year, calculated as follows: the product of
      (A) twenty percent (20%) and (B) the accumulative EBITDA of the UK
      Subsidiaries for the applicable year (each, an “Earn-Out Payment” and
      collectively the “Earn-Out
Payments”).

            

    

     

    
      	
              ii.  

            	
              The
      aggregate Earn-Out Payments shall be equal to but shall not exceed
      $1,858,325.34 in the aggregate (the “Earn-Out
    Consideration”).

            

    

     

    
      	
              iii.  

            	
              Upon
      the Closing, and until the Earn-Out Consideration is fully paid, Buyer and
      Abraham agree to allow Seller to review the annual financial statements,
      approved by the UK Subsidiaries’ independent auditors, and results,
      including relevant supporting documents, of each of the UK Subsidiaries,
      and shall provide Seller with a quarterly management report concerning
      each of the UK Subsidiaries.

            

    

     

    
      	
              iv.  

            	
              For
      the purpose of calculation of the accumulative EBITDA of the UK
      Subsidiaries and each Earn-Out Payment, annual remunerations and/or
      withdrawals and/or considerations, paid by the UK Subsidiaries to Buyer
      and/or Abraham and/or their family members and/or affiliated companies
      and/or entities, directly or indirectly, shall not exceed
      £276,000.

            

    

     

    
      	
              v.  

            	
              In
      the event that Buyer and/or Abraham sell the UK Subsidiaries after Closing
      and before the Earn-Out Consideration has been paid to Seller in full and
      therefore Buyer and/or Abraham cannot pay the Earn-Out Payments out of the
      accumulative EBITDA of the UK Subsidiaries, Buyer and/or Abraham shall
      immediately pay to Seller, upon Seller’s demand, in cash, $1,858,325.34,
      less any amounts previously paid to Seller as Earn-Out
      Consideration.

            

    

     

    
      	
              3.  

            	
              Representation
      and Warranties.

            

    

     

    
      	
              a.  

            	
              The
      Seller hereby represents and warrants to Buyer and Abraham
      that:

            

    

     

    
      	
              i.  

            	
              Organization.

            

    

     

    
      	
              1.  

            	
              Each
      of Swiftnet,
      Auracall,                                                      Equitalk
      and Story UK is a company registered, validly existing and in good
      standing under the laws of England & Wales, with full power to own its
      properties and to carry on its business as now conducted;
    and

            

    

     

    
      	
              2.  

            	
              Story
      Inc is an entity organized, validly existing and in good standing under
      the laws of the State of Nevada with full power to own its properties and
      to carry on its business as now
conducted.

            

    

     

    
      	
              ii.  

            	
              Authority and Binding
      Obligation.                                                                The
      Seller has all requisite power and authority to execute, deliver and
      perform this Agreement and the Transaction (subject to Conditions to the
      Closing set forth in Section 8 below). This Agreement constitutes the
      legal, valid and binding obligation of, and is enforceable against, the
      Seller in accordance with its terms, subject to applicable bankruptcy,
      insolvency, reorganization, moratorium and similar laws affecting
      creditors' rights generally and to general equitable
      principles.

            

    

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

    
      	
              iii.  

            	
              Title to the Sale
      Share
      .                                           The
      Seller is the lawful record and beneficial owner of the Sale Shares, and,
      except as set forth on Schedule
      3.a.iii hereof, has good and marketable title to such capital
      stock, free and clear of all pledges, liens, encumbrances, claims and
      other charges thereon of any kind or nature.  The issued share
      capital of each UK Subsidiary has been validly issued in full compliance
      with applicable laws and with such UK Subsidiary’s corporate documents,
      and without any violation of pre-emptive rights, and is fully paid and
      non-assessable.

            

    

     

    
      	
              iv.  

            	
              No
      Proceedings.                                No
      suit, action, or other proceeding is pending or, to the knowledge of the
      Seller, threatened before any governmental authority seeking to restrain
      the Seller or prohibit its entry into this Agreement or prohibit the
      Closing, or seeking damages against the Seller or the UK Subsidiaries as a
      result of the entry into this Agreement or the
  Closing.

            

    

     

    
      	
              v.  

            	
              Absence of Undisclosed
      Liabilities.                                                                To
      the knowledge of the Seller, the UK Subsidiaries have no liabilities or
      obligations, except liabilities or obligations which are reflected,
      disclosed or reserved against on the balance sheet of the applicable UK
      Subsidiary and not heretofore paid or discharged; or liabilities or
      obligations specifically disclosed in this Agreement or any schedule to
      this Agreement.  For purposes of this Agreement, the
      term  “liabilities” or “obligations” shall include, without
      limitation, all direct or indirect indebtedness, guaranties, endorsements,
      claims, losses, damages, judgments, deficiencies, costs, expenses or
      responsibilities fixed or unfixed, choate or inchoate, whether liquidated
      or unliquidated, secured or unsecured or whether accrued, absolute,
      contingent or otherwise.

            

    

     

    
      	
              b.  

            	
              The
      Buyer and Abraham hereby jointly and severally represent and warrant to
      Seller that:

            

    

     

    
      	
              i.  

            	
              Familiarity and Due
      Diligence.                                                      Buyer
      and Abraham are fully familiar with the business and financial condition
      of each of the UK Subsidiaries, have reviewed all relevant books and
      records of the UK Subsidiaries, have made all necessary relevant inquiries
      of the officers, directors, members and management of each of the UK
      Subsidiaries, and performed such other investigations and due diligence
      activities as the Buyer and Abraham deemed necessary in connection with
      their evaluation of this Agreement and the
  Transaction.

            

    

     

    
      	
              ii.  

            	
              Binding
      Obligation.                                This
      Agreement constitutes the legal, valid and binding obligations of the
      Buyer and/or Abraham enforceable against them in accordance with its
      terms, subject to applicable bankruptcy, insolvency, reorganization,
      moratorium and similar laws affecting creditors' rights generally and to
      general equitable principles.

            

    

     

    
      	
              4.  

            	
              Execution. Upon entering into
      this Agreement:

            

    

     

    
      	
              a.  

            	
              Seller
      shall deliver to Adv. Yoram Muszkat of 85 Yehuda Halevi St., Tel Aviv,
      Israel who is an agreed escrow agent for the Seller, Abraham and Buyer
      (the “Escrow Agent”):

            

    

     

    (1)
undated stock transfer forms of the Sale Shares in respect of Swiftnet, Equitalk
and Story Inc executed by the Seller with the identity of Buyer as the
transferee (the “Stock Transfer Forms”); and

     

     (2)
the original share certificates representing 49% of the issued Class A shares of
Swiftnet, 49% of the issued Class B shares of Swiftnet, 49% of the issued share
capital of Equitalk, and 100% of the issued share capital of Story Inc (the
“Certificates”); and

     

    (3) Guy
Nissenson’s letters of resignation from his directorship of all of the UK
Subsidiaries (“Nissenson’s Letters”).

    
       

      
        
          
          

        

        
          -3-

          
            

          

        

        
          
          

        

      

    

    Subject
to and upon the receipt of Shareholders Approval (as defined in Section 8.a.ii.
below), the Escrow Agent shall deliver the Stock Transfer Forms, the
Certificates, the Certificates (as that
term is defined in the Loan Agreement) which are currently held by the Escrow
Agent pursuant to the Loan Agreement (the “Loan Agreement Certificates”) and Nissenson’s Letters
to Abraham. In the event Shareholders Approval is not obtained as set forth in
Section 8.a.ii hereof, for any reason, the Escrow Agent shall deliver the Stock
Transfer Forms, the Certificates and Nissenson’s Letters
to Seller, and shall hold and/or deliver  the Loan Agreement
Certificates pursuant to the provisions of the Loan Agreement.

     

    
      	
              b.  

            	
              Buyer
      and Abraham shall deliver to the Escrow
Agent:

            

    

     

    (1) A
written release, duly executed by Iddo, releasing the Seller and NTS from Xfone
- NTS Obligations (“Iddo’s Release”); and

     

    (2)
Abraham Keinan’s letters of resignation from his directorship of all of the
Seller’s subsidiaries, other than the UK Subsidiaries, (“Keinan’s
Letters”).

     

    Subject
to and upon the receipt of Shareholders Approval, the Escrow Agent shall deliver
Iddo’s Release and Keinan’s Letters to Seller. In the event Shareholders
Approval is not obtained as set forth in Section 8.a.ii hereof, for any reason,
the Escrow Agent shall deliver Iddo’s Release and Keinan’s Letters to
Abraham.

     

    
      	
              c.  

            	
              Each
      Party undertakes to maintain the current course of business of the UK
      Subsidiaries until the Closing. Any transaction which is out of the
      ordinary course of business of any of the UK Subsidiaries shall require
      the agreement of the Parties.

            

    

     

    
      	
              d.  

            	
              Until
      the Closing, Swiftnet shall pay to Seller a monthly amount of £43,000 (the
      “Monthly Amount”). The Monthly Amount shall not be deemed to be loans
      extended by Swiftnet to Seller.

            

    

     

    
      	
              e.  

            	
              The
      Seller and/or Xfone 018 Ltd. (“Xfone 018”) shall not offset down payments
      paid by Xfone 018 to Swiftnet on account of
  traffic.

            

    

     

    
      	
              5.  

            	
              Closing.
      Upon the Closing of the
Transaction:

            

    

     

    
      	
              a.  

            	
              The
      Escrow Agent shall deliver to Abraham the Stock Transfer Forms, the
      Certificates, the Loan Agreement
      Certificates and Nissenson’s
      Letters and the Parties shall take any necessary steps and actions and
      shall execute any necessary documents and forms required to complete the
      transfer of the Sale Shares. For the avoidance of doubt, the Certificates
      and the Loan Agreement Certificates, for the purposes of this Agreement,
      shall mean all the original share certificates in respect of the Sale
      Shares.

            

    

     

    
      	
              b.  

            	
              The
      Escrow Agent shall deliver to the Seller Iddo’s Release and Keinan’s
      Letters and the Parties and Iddo shall take any necessary steps and
      actions and shall execute any necessary documents and forms required to
      completely release Seller and NTS from Xfone - NTS
      Obligations.

            

    

     

    
      	
              c.  

            	
              Buyer
      and/or Abraham shall fully redeem the Credit Facility and thereby shall
      release Seller from his obligation to Bank Leumi (UK)
  Plc.

            

    

     

    
      	
              d.  

            	
              All
      outstanding agreements between Seller, including Seller’s non-UK
      subsidiaries, and any of the UK Subsidiaries shall be terminated,
      excluding that certain agreement by and between Swiftnet and Xfone 018,
      pursuant to which, among others, Swiftnet shall allow Xfone 018 to
      purchase from Swiftnet traffic services at a price of cost + 6% which
      shall be paid End Of Month Plus 14 Days (the “Swiftnet-Xfone 018
      Agreement”). The Swiftnet-Xfone 018 Agreement shall remain in force and
      effect for a period of three years from
Closing.

            

    

     

    
      	
              e.  

            	
              All
      inter-company balances and debts between the UK Subsidiaries and Seller,
      including each of Seller’s non-UK subsidiaries, shall be cancelled,
      excluding balances due by Xfone 018 to the UK Subsidiaries in connection
      with traffic services.

            

    

    
       

      
        
          
          

        

        
          -4-

          
            

          

        

        
          
          

        

      

    

    
      	
              f.  

            	
              Any
      guarantee provided by the UK Subsidiaries in favor of Seller and/or any of
      Seller’s non-UK subsidiaries, including Swiftnet's guarantee to Bank
      Hapoalim BM in favor of Xfone 018, shall be terminated within six months
      of the Closing.

            

    

     

    
      	
              g.  

            	
              Any
      guarantee provided by the Seller and/or any of Seller’s non-UK
      subsidiaries in favor of any of the UK subsidiaries shall be terminated
      within six months of the Closing.

            

    

     

    
      	
              h.  

            	
              Seller
      and Buyer shall bear, in equal parts, the monthly interest payments and
      related costs and expenses which were actually borne by Swiftnet in
      connection with Iddo’s Loan until the
Closing.

            

    

     

    
      	
              i.  

            	
              Any
      trademarks and domain names relating to Seller and/or containing the name
      “Xfone” which are held and/or owned by any of the UK Subsidiaries shall be
      transferred, at no cost, to Seller no later than three months from
      Closing.

            

    

     

    
      	
              j.  

            	
              Swiftnet
      and Xfone 018 will enter into a three years agreement providing for
      technical support by Swiftnet to the IT and communication systems of Xfone
      018. Such agreement will include emergency telephone responses and ten
      hours of free telephone support per month. Additional services will be
      rendered by Swiftnet at a reasonable and agreed
  price.

            

    

     

    
      	
              k.  

            	
              Seller
      shall deliver to Abraham a good standing certificate for each UK
      Subsidiary.

            

    

     

    
      	
              l.  

            	
              The
      Parties and Iddo shall take any further necessary steps and actions and
      shall execute any further necessary documents and forms required to
      complete any transaction contemplated
herein.

            

    

     

    
      	
              6.  

            	
              Release
      and Discharge of Actions and Claims. Unless otherwise agreed upon
      in this Agreement, Seller releases and discharges Buyer and Abraham, and
      each of Abraham and Buyer releases Seller, including its subsidiaries,
      directors, officers, affiliates, employees, attorneys, successors and
      assigns, of and from any and all manner of action and actions, causes and
      causes of action, claims, controversies, contracts, torts, debts, damages
      or demands whatsoever, that it has had, now has, or may in the future
      have, arising out of or related to the UK
  Subsidiaries.

            

    

     

    
      	
              7.  

            	
              Valuation
      and Fairness Opinion.  The Seller may seek the following
      in connection with the Transaction, which would be submitted to the
      Seller’s Audit Committee and Board of Directors for its review and
      consideration:

            

    

     

    
      	
              a.  

            	
              A
      valuation of the UK Subsidiaries;
and

            

    

     

    
      	
              b.  

            	
              A
      fairness opinion.

            

    

     

    The
Buyer, Abraham and the Seller agree to fully cooperate with any requests for
information and/or documents requested by the firm(s) providing the valuation
and fairness opinion.

     

    
      	
              8.  

            	
              Conditions
      to the Closing.

            

    

     

    
      	
              a.  

            	
              The
      Closing shall be subject to receipt of the approval of the Transaction by
      (i) each of the Seller's Audit Committee and Board of Directors, each of
      which shall be obtained not later than the earlier of (a) 60 calendar days
      from the date of execution of this Agreement, and (b) 10 calendar days
      from the date of receipt of the later of the valuation or the fairness
      opinion specified in Section 7 of this Agreement; and (ii) the holders of
      a majority of the Seller’s common stock entitled to vote, which shall be
      obtained not later than July 31, 2010 (the “Shareholders
      Approval”).

            

    

     

    
      	
              b.  

            	
              In
      the event the approval of the Seller’s Audit Committee, Board of Directors
      and/or the Shareholders Approval is not obtained in accordance with
      Section 8.a. hereof, this Agreement shall terminate and shall be of no
      further force and effect.

            

    

     

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

    9.   General
Provisions.

    

    
      	
              a.  

            	
              The
      recitals of this Agreement are incorporated into this Agreement, and each
      Party acknowledges and confirms the truth and accuracy of the
      recitals.

            

    

     

    
      	
              b.  

            	
              A
      variation of this Agreement is valid only if it is in writing and signed
      by or on behalf of each Party.

            

    

     

    
      	
              c.  

            	
              The
      terms and conditions of this Agreement represent the entire agreement
      between the Parties relating to the Transaction and supersede any previous
      agreement between the Parties in relation to the
    Transaction.

            

    

     

    
      	
              d.  

            	
              Except
      to the extent that they have been performed and except where this
      Agreement provides otherwise, obligations contained in this Agreement
      shall remain in force after
Closing.

            

    

     

    

    IN
WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed as
of the date first above written.

    

    

      /s/
Guy
Nissenson             

    Xfone,
Inc.

    

    By: Guy
Nissenson

    

    

    /s/
Abraham Keinan           

    Abraham
Keinan

    

    

    /s/
Abraham Keinan           

    AMIT K
Limited.

    

    By:
Abraham Keinan

    

    

    I hereby
confirm my agreement to the Transaction and my obligations pursuant to Sections
4.b., 5.b. and 5.m. of this Agreement.

    

    

    /s/
Iddo
Keinan                

    Iddo
Keinan

    

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

    
      APPENDIX

      SALE
SHARES

      

      Swiftnet
Limited

      
        	 
      	 
      	 
      
	
                Name
      of Beneficial Shareholder

              	
                Class

              	
                Number
      of Shares Held

              
	 
      	 
      	 
      
	
                Xfone,
      Inc.

              	
                Ordinary
      Class A

              	
                12,825

              
	 
      	 
      	 
      
	
                Xfone,
      Inc.

              	
                Ordinary
      Class B

              	
                13,162

              

      

      

      Auracall
Limited

      

      
        	
                Name
      of Beneficial Shareholder

              	
                Class

              	
                Number
      of Shares Held

              
	 
      	 
      	 
      
	
                 Swiftnet
      Limited

              	
                Ordinary

              	
                1,462

              

      

       

      Equitalk.co.uk
Limited

      

      
        	
                Name
      of Beneficial Shareholder

              	
                Class

              	
                Number
      of Shares Held

              
	 
      	 
      	 
      
	
                Xfone,
      Inc.

              	
                Ordinary

              	
                43,438

              

      

      

      Story
Telecom Limited

      

      
        	
                Name
      of Beneficial Shareholder

              	
                Class

              	
                Number
      of Shares Held

              
	 
      	 
      	 
      
	
                Story
      Telecom, Inc.

              	
                Ordinary

              	
                100

              

      

      

      Story
Telecom, Inc.

      
        	 
      	 
      	 
      
	
                Name
      of Beneficial Shareholder

              	
                Class

              	
                Number
      of Shares Held

              
	 
      	 
      	 
      
	
                Xfone,
      Inc.

              	
                Ordinary

              	
                204

              

      

      

      
        
          
          

        

        
          -7-

          
            

          

        

        
          
          

        

      

SCHEDULE
3.a.iii

    

    

    

    Pursuant
to the Loan Agreement, the following was granted, among others, as security in
favour of Iddo for Swiftnet’s obligations under the Loan Agreement a charge over
51% (Fifty One Per Cent) of the issued Class A shares of Swiftnet and a charge
over 51% (Fifty One Per Cent) of the issued Class B shares of Swiftnet, a charge
over 51% (Fifty One Per Cent) of the issued share capital of Equitalk and a
charge over the entire issued share capital of Story UK and
Auracall.

     

    In order
to grant and perfect the aforementioned security Seller file the appropriate
UCC-1 Forms, together with required supporting documentation, with the Nevada
Secretary of State.

    
      
        
        

      

      
        -8-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00167-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00167-of-00352.parquet"}]]