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-

--------------------------------------------------------------------------------