Document:

Unassociated Document

    

      EXHIBIT
        10.64

       

      

       

      MCG
        Capital Corporation

      1100
        Wilson Boulevard, Suite 3000

      Arlington,
        VA 22209

       

      October
        10, 2005

       

      XFone,
        Inc.

      XFone
        USA, Inc.

      c/o
        Guy
        Nissenson

      2506
        Lakeland Drive

      Suite
        405

      Jackson,
        MS 39232

       

      I-55
        Internet Services, Inc.

      c/o
        Hunter McAllister, President

      211
        East
        Thomas Street

      Hammond,
        LA 70401

       

      
        	 	
                Re:

              	
                (i)

              	
                Agreement
                  and Plan of Merger dated August 18, 2005 by and among XFone, Inc.
                  (“XFone”), XFone USA, Inc. (“XFone USA”), I-55 Internet Services, Inc.
                  (the “Company”) and Hunter McAllister and Brian Acosta (the “Merger
                  Agreement”); and 

              

      

       

      
        	 	
                (ii)

              	
                Letter
                  Agreement dated August 18, 2005 (“MCG Letter”) between I-55 Internet
                  Services, Inc. and MCG Capital Corporation (“MCG” or “MCG Capital”)
                  regarding the treatment of MCG’s Equity Rights in connection with the
                  Transaction Under the Merger Agreement
                  

              

      

       

      Ladies
        and Gentlemen:

       

      MCG
        Capital, by execution hereof and in order to induce XFone, Inc. and XFone
        USA,
        Inc. not to terminate the Merger Agreement due to a material adverse effect
        that
        Hurricane Katrina has had on the business and assets of the Company and to
        execute the First Amendment to the Merger Agreement, MCG does hereby agree
        to
        amend and restate the MCG Letter as follows:

       

      1. MCG
        Capital has the full power and authority to execute this Letter Agreement
        and
        make the representations and agreements stated herein. MCG hereby consents
        to
        the execution of the First Amendment to the Merger Agreement by the
        Company.

       

      2. MCG
        Capital represents that as of the date hereof it is the holder of 5,982,307.69
        Warrants (as defined in the Second Amended and Restated Warrant Agreement
        dated
        as of May 31, 2005 (the “Warrant Agreement”) between MCG Capital and I-55), of
        which 2,777,585 are vested as of the date of this Letter Agreement and that
        it
        owns no other capital stock, warrants, options or other equity instruments
        in
        I-55 Internet as of the date of this Letter Agreement. MCG Capital is the
        sole
        beneficial owner of the Warrants and such Warrants are free and clear of
        any
        liens or other encumbrances created by MCG Capital. 

       

      
        
          
          

        

        
          -1-

          
            

          

        

        
          
          

        

      

      3. MCG
        Capital agrees that notwithstanding anything to the contrary contained in
        the
        Merger Agreement or the Warrant Agreement, the vested Warrants shall be deemed
        exercised immediately prior to the effective time of the Merger into 2,697,519
        (as such amount may be increased to the extent additional vesting occurs
        between
        the date of this Letter Agreement and Closing of the Merger) shares of Common
        Stock of I-55 Internet (assuming a cashless exercise) and that MCG Capital
        shall
        be entitled to receive the same consideration per share of Common Stock as
        each
        other Company Stockholder. Upon the deemed exercise of the Warrants, the
        Warrant
        Agreement shall be terminated and any and all obligations thereunder satisfied
        in full and the only rights that MCG Capital shall have thereafter is the
        rights
        as Company Stockholder to have its Company Common Stock converted into XFone
        Stock and Warrants in accordance with the Merger Agreement.

       

      4. This
        Letter Agreement and MCG Capital’s obligations hereunder shall expire on January
        15, 2006 if the transactions contemplated by the Merger Agreement have not
        been
        consummated prior thereto and all rights of MCG Capital under the Warrant
        Agreement shall be reinstated ab initio
        as if
        this Letter Agreement were never executed.

       

      5. Prior
        to
        the consummation of the Merger, MCG Capital will provide I-55 Internet and
        XFone
        with a payoff letter in the form attached hereto as Exhibit A specifying
        the
        Payoff Amount as of the date of the proposed consummation of the Merger.
        In lieu
        of cash for the Payoff Amount (as defined in the Payoff Letter), MCG agrees
        that
        MCG, as Administrative Agent for the Lenders, will accept a number of shares
        of
        restricted common stock of XFone, Inc. with a value equal to the Payoff Amount
        determined using the average of the closing prices for the XFone common stock
        as
        reported on the website of the American Stock Exchange for the ten (10) trading
        days immediately preceding the Payoff Date (which
        average of closing prices shall in no event be less than $2.70 per share
        or
        greater than $3.70 per share)
        (such
        shares are herein referred to as the “XFone Securities for MCG Debt”). If XFone
        registers any shares of its common stock with the Securities and Exchange
        Commission (“SEC”) for sale in a secondary offering at a time when (i) a
        registration statement including the XFone Securities for MCG Debt is not
        otherwise effective and (ii) the holder of the XFone Securities for MCG Debt
        is
        not otherwise able to transfer the shares without restriction under Rule
        144(k),
then
        XFone
        will register the XFone Securities for MCG Debt with the SEC at XFone’s expense
        as part of such registration; provided, however, if XFone has not filed a
        registration statement that includes all of the XFone Securities for MCG
        Debt
        and that has been declared effective by the SEC within ninety (90) calendar
        days
        after the issuance of the XFone Securities for MCG Debt and that thereafter
        remains effective, then
        XFone
        shall file a registration statement at XFone’s expense to register all of the
        XFone Securities for MCG Debt with the SEC within thirty (30) calendar days
        after the end of such 90-day period or any subsequent failure of such
        registration statement to remain effective. Notwithstanding the registration
        rights granted hereinabove, MCG agrees that the total shares of the XFone
        Securities for MCG Debt sold by MCG in market transaction with a broker
        (i.e.,
        excluding block trades, privately negotiated transactions and other non-market
        trades) in any one calendar month period during the 15 calendar months
        commencing with the month of Closing of the Merger shall not exceed the greater
        of the following (a) 10.0% of the average monthly trading volume of the common
        stock of XFone during the immediately preceding calendar month and
        (b)

       

      
        	
                1st
                  Month 

              	
                =>

              	
                6,000
                  shares

              
	
                2nd
                  Month 

              	
                =>

              	
                6,600
                  shares

              
	
                3rd
                  Month 

              	
                =>

              	
                7,260
                  shares

              
	
                4th
                  Month 

              	
                =>

              	
                7,986
                  shares

              
	
                5th
                  Month 

              	
                =>

              	
                8,785
                  shares

              
	
                6th
                  Month 

              	
                =>

              	
                9,663
                  shares

              
	
                7th
                  Month 

              	
                =>

              	
                10,629
                  shares

              
	
                8th
                  Month 

              	
                =>

              	
                11,692
                  shares

              
	
                9th
                  Month 

              	
                =>

              	
                12,862
                  shares

              
	
                10th
                  Month 

              	
                =>

              	
                14,148
                  shares

              
	
                11th
                  Month 

              	
                =>

              	
                15,562
                  shares

              
	
                12th
                  Month 

              	
                =>

              	
                17,119
                  shares

              
	
                13th
                  Month 

              	
                =>

              	
                18,831
                  shares

              
	
                14th
                  Month 

              	
                =>

              	
                20,714
                  shares

              
	
                15th
                  Month 

              	
                =>

              	
                22,785
                  shares

              

      

      
        
          
            
            

          

          
            -2-

            
              

            

          

          
            
            

          

        

      

      In
        consideration for MCG agreeing to the sale restrictions as provided hereinabove,
        XFone hereby waives the sale restrictions in Section 8.11
        of the
        Merger Agreement with respect to (a) any shares of equity securities of XFone
        owned by MCG Capital (including, the XFone Securities for MCG Debt) other than
        the
        shares of common stock of XFone received in the Merger in exchange for the
        Warrants and/or (b) any shares of equity securities of XFone owned by MCG
        Capital that are not sold in market transactions with a broker (i.e.,
        block
        trades, privately negotiated transactions and other non-market trades).

       

      6. MCG
        Capital, as Administrative Agent and a lender, hereby agrees that, as of
        September 30, 2005, the following amounts constitute all of the Obligations
        owed
        and that would have been payable to MCG under the Credit Agreement with I-55
        Internet and subsidiaries dated as of October 29, 1999 (as amended) if a
        complete prepayment would have occurred as of September 30, 2005: (a)
        $1,778,033.44 of outstanding principal balance, (b) $50,378.33 of accrued
        but
        unpaid current interest, (c) $500.00 of LIBOR breakage fees, (d) $2,293.90
        of
        late payment fees in connection with cash flow sweeps, and (e) $6,000 of
        outstanding legal and documentation fees.

       

      This
        Letter Agreement hereby amends, restates and supersedes the MCG Letter. Please
        indicate your agreement to the terms of this Letter Agreement by execution
        below
        and return the duplicate original of this Letter Agreement as attached hereto
        to
        me at your earliest convenience.

       

      
        	 	 	 
	 	
                Sincerely,

                 

                MCG
                  Capital Corporation

              
	 
 	 
 	 
 
	 	By:  	/s/ 
	 	
                
Name
	 	Title 

      

       

       

      By
        execution below, each undersigned does hereby agree to the terms and provisions
        as set forth in this Letter Agreement.

      

      
        
          	 	 	 
	 	I-55
                  INTERNET SERVICES, INC.
	 
 	 
 	 
 
	 	By:  	/s/ Hunter
                  McAllister
	 	
                  
Hunter
                  McAllister
	 	President

        

      
        
          	 	 	 
	 	XFONE,
                  INC.
	 
 	 
 	 
 
	 	By:  	/s/ Guy
                  Nissenson
	 	
                  
Guy
                  Nissenson
	 	President

        

        
          	 	 	 
	 	XFONE
                  USA, INC.
	 
 	 
 	 
 
	 	By:  	/s/ Wade
                  Spooner
	 	
                  
Wade
                  Spooner
	 	President

        

      

      

      
        
          
          

        

        
          -3-

          
            

          

        

        
          
          

        

      

      Exhibit
        A

      

      Form
        of Payoff Letter

      

      MCG
        CAPITAL
        CORPORATION

      1100
        Wilson Boulevard, Suite 3000

      Arlington,
        Virginia 22209

       

      

      _____________,
        200__

      

       

      I-55
        Internet Services, Inc.

      c/o
        Hunter McAllister, President

      211
        East
        Thomas Street

      Hammond,
        LA 70401

       

      XFone,
        Inc.

      c/o
        XFone, USA, Inc.

      2506
        Lakeland Drive Suite 405

      Jackson,
        Mississippi 39232

       

      
        	 	
                Re:

              	
                Payment
                  Acknowledgment and Release (“Letter
                  Agreement”)

              

      

       

      Ladies
        and Gentlemen:

       

      Reference
        is hereby made to that certain Credit Facility Agreement (as amended from
        time
        to time, the “Credit Agreement”) dated as of October 29, 1999 by and among
I-55
        Internet Services, Inc. (“I-55”)
        and each
        of its direct and indirect Subsidiaries
        (each,
        including I-55, a “Borrower”; collectively, including I-55, the “Borrowers”),
and the
        lenders that are parties thereto (each, "Lender"; collectively,
        "Lenders"),
        and MCG
        Capital Corporation
        (as
        assignee of the interest of MCG Finance I, LLC (f/k/a MCG Finance Corporation),
        and including its successors, assigns, participants, pledgees and transferees,
        “Administrative Agent”), as administrative agent for the Lenders. Capitalized
        terms used herein but not defined shall have the meaning given to such terms
        in
        the Credit Agreement.

      
        
          
            
            

          

          
            -4-

            
              

            

          

          
            
            

          

        

      

      Borrowers
        and Administrative Agent hereby agree that, as of __________,
        200__
        (“Anticipated Payment Date”), the amount of Obligations owing to Administrative
        Agent and each Lender under the Loan Documents will be equal to $____________
        (“Anticipated
        Payoff Amount”), which is comprised of the following components:

       

      1. [$1,778,033.44] Outstanding
        principal balance under Term Loan Facility 

       

      2. $__________ Accrued
        but unpaid current interest on the outstanding principal balance of Term
        Loan
        Facility 

       

      3. $500.00 LIBOR
        Breakage Fee for the Term Loan Facility

       

      4. $__________ Outstanding
        Legal Fees

       

      5. $__________ Documentation
        Fee

       

      6. $_________ Late
        Payment Fee in connection with Cash Flow Sweep

       

      In
        lieu
        of receiving immediately available funds for the Payoff Amount as defined
        herein, Lenders agree to accept a number of shares of restricted Common Stock
        of
        XFone, Inc. (without any legends other than as to non-registration thereof)
        with
        a value equal to the Payoff Amount determined using the average of the closing
        prices for XFone common stock as reported on the website of the American
        Stock
        Exchange for the ten (10) trading days immediately preceding the Payoff Date
        (which
        average of closing prices shall in no event be less than $2.70 per share
        or
        greater than $3.70 per share)
        (the
“XFone Securities for MCG Debt”). The XFone Securities for MCG Debt shall be
        subject to the rights, terms, limitations and conditions set forth in that
        certain Letter Agreement dated October 10, 2005 among MCG, XFone, Inc., XFone
        USA, Inc. and I-55 (the “MCG Letter Agreement”).

       

      The
        amount of Obligations set forth in the preceding chart is based upon the
        following assumptions: (a) the certificates evidencing the XFone Securities
        for
        MCG Debt will be delivered to Administrative Agent before 5:00 p.m. (Eastern
        Time) by facsimile on the Anticipated Payment Date (with the original of
        such
        certificate being sent to Administrative Agent by overnight courier on the
        Anticipated Payment Date for next day delivery or by other means acceptable
        to
        the Administrative Agent), and
        (b) no
        further payments or advances are made under the Loan Documents between the
        date
        of this Letter Agreement and the Anticipated Payment Date, and
        (c) no
        further costs or expenses are incurred by Administrative Agent or any Lender
        as
        to which Administrative Agent or any Lender is entitled to indemnification
        or
        reimbursement under the Loan Documents between the date of this Letter Agreement
        and the Anticipated Payment Date.

       

      If
        the
        Anticipated Payoff Amount is not received by Administrative Agent in accordance
        with Clause “(a)” above, then
        additional interest shall be due and payable from and after the Anticipated
        Payment Date at the rate of [$837.65] [Comment:
        Amount will change if associated LIBOR changes before execution of
        letter]
        per
        calendar day (“Per Diem Amount”; and together with the Anticipated Payoff
        Amount, the “Payoff Amount”) until
        the
        Payoff Amount is received by Administrative Agent in accordance with Clause
        “(a)”. Moreover, if the Payoff Amount is not received by Administrative Agent
        in
        accordance with Clause “(a)” above prior to January 15, 2006, then
        Administrative Agent’s agreements hereunder will no longer be
        effective.

      
        
          
          

        

        
          -5-

          
            

          

        

        
          
          

        

      

              The
        XFone Securities
        for MCG Debt shall be issued and delivered as follows: 

       

      MCG
        Capital Corporation

      1100
        Wilson Boulevard, Suite 3000

      Arlington,
        VA 22209

      EIN: 54-1889518

      Attention: Legal
        Affairs Division

       

      Administrative
        Agent hereby agrees that, upon receipt by Administrative Agent of the XFone
        Securities for MCG Debt as described above, except as otherwise provided
        in this
        Letter Agreement or in the MCG Letter Agreement: (1) all of the Obligations
        under the Loan Documents will have been paid, satisfied and discharged in
        full,
and
        (2) all
        right, title and interest of Administrative Agent under the Loan Documents
        in
        the assets of any Obligor (including any security interests, collateral
        assignments and/or pledges in favor of Administrative Agent) automatically
        shall
        be released, discharged and terminated (without representation, warranty,
        recourse or liability of any kind by or to Administrative Agent or any Lender).
        Moreover, each Borrower and Administrative Agent hereby agree that, upon
        receipt
        by Administrative Agent of the XFone Securities for MCG Debt as described
        above,
        each Loan Document (including the Collateral Security Documents), each
        Commitment, each Facility, and any right, claim, counter-claim or cause of
        action under or in connection with any Loan Document by or against any party
        thereto, automatically shall be terminated, canceled and waived and no longer
        of
        any force or effect, subject to
        the
        waivers, reinstatement rights, and reimbursement and indemnification protections
        in favor of Administrative Agent or any Lender under the Loan Documents (which
        waivers, rights, and protections shall survive this Letter Agreement and
        any
        such termination of the Loan Documents).

       

      Administrative
        Agent, from time to time after the receipt of the XFone Securities for MCG
        Debt
        as provided above, (i) agrees to deliver to Borrowers any original stock
        certificates and accompanying stock powers, and
        (ii)
        promptly upon Borrowers’ providing execution copies thereof in form and
        substance satisfactory to Administrative Agent, agrees to deliver (at the
        sole
        expense of Borrowers and/or any successor or assign thereof, but without
        representation, warranty, recourse or liability of any kind by or to
        Administrative Agent or any Lender) to Borrowers (or at the direction thereof)
        mortgage satisfactions, releases of liens, discharges, terminations and other
        release documentation and instruments, and
        (iii)
        authorizes each of Borrower and XFone to file UCC termination statements
        effecting the foregoing releases, discharges and terminations, and
        (iv)
        agrees, upon request of Borrowers, to deliver to Borrowers or such persons
        as
        Borrower shall designate the original Notes that are in the possession of
        Lenders. Administrative Agent hereby agrees, from time to time after receipt
        of
        the XFone Securities for MCG Debt as provided above (at the request and sole
        expense of Borrowers and/or any successor or assign thereof, but without
        representation, warranty, recourse or liability of any kind by or to
        Administrative Agent or any Lender), to execute and deliver to Borrowers
        (or at
        the direction thereof) such further instruments and documents that are provided
        to Administrative Agent and to take such further actions as may be reasonably
        requested to fully effect the foregoing releases, discharges and terminations.
        Each Borrower hereby agrees to promptly pay upon demand by Administrative
        Agent
        all costs and expenses incurred by Lenders (including reasonable fees and
        expenses of counsel thereto) in connection with the releases of Collateral
        and
        the enforcement of this Letter Agreement.

       

      In
        consideration for Administrative Agent executing and performing pursuant
        to this
        Letter Agreement and other good and valuable consideration (the receipt and
        sufficiency of which are hereby acknowledged), each Borrower hereby remises,
        releases, waives and forever discharges Administrative Agent and its present,
        future and/or former officers, directors, employees, agents, attorneys,
        affiliates and/or representatives and all of their predecessors, successors
        and
        assigns (collectively, the “Released Parties”) of and from any and all claims,
        losses, liabilities, demands and causes of action of any kind whatsoever
        (if
        any), whether absolute or contingent, known or unknown, matured or unmatured,
        based in contract or tort, at law or in equity that any Borrower may now have or have ever had
        in
        whatever capacity against any Released Party arising from events or
        circumstances relating to the Loan Documents, any financing or other
        transactions contemplated by such agreements or any enforcement of any such
        agreements. Included within this release and waiver are all claims and defenses
        based on waiver (other than as expressly provided pursuant to a written
        instrument signed by Administrative Agent), fraud, mistake, duress, usury,
        failure or lack of consideration, capacity or authorization, unenforceability
        of
        agreements, suretyship rights and defenses, equitable subordination, conflicts
        of interest, self dealing, breach of duty (fiduciary or otherwise), failure
        to
        act in a commercially reasonable manner or in a manner consistent with good
        faith and fair dealing, and/or any other claim of so-called “lender liability”;
        provided, however, this release shall not prohibit or limit, in any way,
        the
        right of any Borrower to defend any action by Administrative Agent or any
        Lender
        under the waivers, reinstatement rights, and reimbursement and indemnification
        protections in favor of Administrative Agent or any Lender under the Loan
        Documents (which waivers, rights, and protections shall survive this Letter
        Agreement and any such termination of the Loan Documents). 

      
        
          
            
            

          

          
            -6-

            
              

            

          

          
            
            

          

        

      

      This
        Letter Agreement shall be governed by and construed in accordance with the
        internal laws of the Commonwealth of Virginia. This Letter Agreement shall
        not
        be effective or binding upon Administrative Agent until accepted, executed
        and
        delivered by Borrowers. Administrative Agent and each Borrower agree that
        delivery of an executed counterpart version of this Letter Agreement by
        facsimile shall be deemed to be an effective delivery of an enforceable original
        executed counterpart hereof, and
        such
        delivery may be relied upon by the recipient thereof as delivery of an
        effective, executed original counterpart hereof.

       

      Please
        evidence agreement to the terms of this Letter Agreement by signing a copy
        of
        this letter where indicated below and returning it to me by overnight
        courier.

       

      

       

      
        
          	 	 	 
	 	
                  Yours
                    truly,

                   

                  MCG
                    CAPITAL CORPORATION

                
	 
 	 
 	 
 
	 	By:  	/s/ Salman
                  Tajuddin
	 	
                  
Salman
                  Tajuddin
	 	Vice
                  President

        

      
        
          	 	 	 
	 	
                  I-55
                    INTERNET SERVICES, INC. 

                  (on
                    behalf of itself and each other Borrower)

                
	 
 	 
 	 
 
	 	By:  	/s/ 
	 	
                  

                  Name
	 	Title 

        

      
        

      

      
        
          
          

        

        
          -7-360 Global Wine Company Exhibit 10.21

David S. Hall, P.C.

Certified Public Accountant

EXHIBIT 10.21

CONSENT OF CERTIFIED PUBLIC ACCOUNTANTS

We consent to the use of the inclusion of our name under the heading “Experts” in the Form 8K/A filed with the Securities & Exchange Commission for the report dated September 27, 2005 on the financial statements of Viansa Winery as of and for the years ended February 28, 2005 and February 29, 2004.

SIGNATURE

/s/  David S. Hall, P.C.

David S. Hall, P.C.

Dallas, Texas

October 7, 2005

100 Crescent Court, Suite 700  ¦  Dallas, Texas 75201  ¦  Ph: 972)315-1315  ¦  Fax: (972) 420-0032

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