ex10128.htm


    
      [Free Translation from
Hebrew]



     

    Xfone,
Inc.

    (the
"Company")

    


     

    Certificate
Number _______

     

    Due
to _______ registered warrants

    


     

    
      	
               
      

            	
              1.

            	
              This
      certificate evidences that the Company is hereby allotting to ____________
      (the "Holder")
      ________ unlisted registered warrants (the "Warrants") each of which
      (a "Warrant")
      entitles the Holder to purchase, in consideration for an exercise price of
      U.S. $3.5 (the "Exercise
      Price"), one (1) ordinary share of par value U.S. $0.001 of the
      Company (the "Exercise
      Share"), by way of transferring this certificate to the Company
      together with an exercise notice, in the language attached as Annex A to
      the terms and conditions overleaf, lawfully signed by the Holder, during
      the Exercise Period (as defined
below).

            


    

     

    
      	
               
      

            	
              2.

            	
              Each
      Warrant shall be exercisable, subject to and according to the terms of
      this certificate (including the terms and conditions overleaf), for an
      exercise period commencing on the day the Registration Statement submitted
      by the Company to the SEC for the purpose of listing the shares that will
      derive from the exercise of the Warrants (the "Exercise Shares") is
      declared effective, or on the day of receipt of the Tel Aviv Stock
      Exchange Ltd. ("TASE") and the American
      Stock Exchange ("AMEX") approvals to list
      the Exercise Shares (the "Stock Exchange
      Approvals"), whichever is later (the "First Exercise Date"),
      and ending four years after the First Exercise Date (this period – the
      "Exercise
      Period"). During the Exercise Period, the Warrants shall be
      exercisable, in whole or in part, at the Holder's choice, provided that if
      only part thereof are exercised, no less than 5,000 Warrants per day shall
      be exercised.

            


    

     

    
      	
               
      

            	
              3.

            	
              In
      the event that the Company does not meet its undertaking to submit a
      Registration Statement to the SEC for the purpose of listing the Exercise
      Shares and to cause it to be declared effective within 12 months from the
      date of execution of this certificate, or if the Stock Exchange Approvals
      are not received within 12 months from the date of execution of this
      certificate, all of the Warrants shall be terminated and the Company shall
      compensate the Holder, as the sole remedy and without providing the Holder
      with a right of choice in this matter, with the sum of NIS 2 for each
      terminated Warrant, shortly after the Holder has transferred this
      certificate to the Company.

            


    

     

    
      	
               
      

            	
              4.

            	
              The
      exercise ratio between a Warrant and an Exercise Share (1:1) and the
      Exercise Price shall be subject to adjustments according to the terms and
      conditions overleaf.

            


    

     

    
      	
               
      

            	
              5.

            	
              It
      is hereby clarified that the Warrants shall not be listed on any stock
      exchange.

            


    

     

    
      	
               
      

            	
              6.

            	
              This
      certificate is issued according to and subject to the terms and conditions
      overleaf, which are attached hereto and constitute an inseparable part of
      this certificate.

            


    

     

    


     

    Signed
on: February 26, 2008

     

    


     

    ________________________

     

    Xfone,
Inc.

    
      
         

      

      
        -1-

        
          

        

      

      
        [Free
Translation from Hebrew]

      

    

     

    


    THE WARRANTS EVIDENCED HEREBY HAVE BEEN ISSUED
WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
APPLICABLE STATE SECURITY LAWS. THE WARRANTS EVIDENCED HEREBY MAY NOT BE EXERCISED
UNLESS THE UNDERLINE SECURITIES ARE THE SUBJECT OF A CURRENTLY EFFECTIVE
REGISTRATION STATEMENT UNDER SAID ACT AND UNDER APPLICABLE STATE SECURITIES LAWS
AND MAY NOT BE TRANSFERRED WITHOUT THE PRIOR WRITEN CONSENT OF THE COMPANY. THE
WARRANTS EVIDENCED HEREBY AND THE SECURITIES ISSUABLE HEREUNDER HAVE BEEN
ACQUIRED FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO DISTRIBUTION OR
RESALE.

     

     

    
      
         

      

      
        -2-

        
          

        

      

      
        [Free
Translation from Hebrew]

      

    

    


    Xfone,
Inc. (the "Company")

    The Terms and Conditions
Overleaf

     

    
      	
               
      

            	
              1.

            	
              Definitions

               

            


    

    In this
certificate the following terms shall have the following meanings:

     

    
      	
               
      

            	
              "AMEX" -

            	
              The
      American Stock Exchange.

               

            


    

    
      	
               
      

            	
              "SEC" -

            	
              The
      U.S. Securities and Exchange Commission.

               

            
	 	"Securities
    Act"-	
              The
      Securities Act of 1933, as amended.

               

            
	 	"Trading Day" -	
              A
      day on which transactions are carried out on AMEX.

               

            


    

    
    

    
    

    
      	
               
      

            	
              "Register"
    -

            	
              The
      Register described in Section 10 below.

               

            


    

    
      	
               
      

            	
              "TASE" -

            	
              The
      Tel Aviv Stock Exchange Ltd.

               

            


    

    
      	
               
      

            	
              2.

            	
              General

            


    

     

    
      	
               
      

            	
              2.1.

            	
              This
      certificate evidences that the Company is hereby allotting to ____________
      (the "Holder")
      ________ unlisted registered warrants (the "Warrants") each of which
      (the "Warrant")
      entitles the Holder with a right to purchase, in consideration for an
      exercise price of U.S. $3.5 (the "Exercise Price"), one
      (1) ordinary share of par value U.S. $0.001 of the Company (the "Exercise Share"), by way
      of transferring this certificate to the Company together with an exercise
      notice, in the language attached as Annex A to these terms and conditions,
      lawfully signed by the Holder (the "Exercise Notice"),
      during the Exercise Period (as defined
below).

            


    

     

    
      	
               
      

            	
              2.2.

            	
              The
      payment due to the exercise of the Warrants shall be made only by US
      dollars and by a wire transfer to the Company's
  account.

            


    

     

    
      	
               
      

            	
              2.3.

            	
              Each
      Warrant shall be exercisable, subject to and according to the terms and
      conditions described below, for an exercise period commencing on the day
      the Registration Statement that is submitted by the Company to the SEC for
      the purpose of listing the shares that will derive from the exercise of
      the Warrants (the "Exercise Shares") is
      declared effective, or on the day of receipt of the TASE and the AMEX
      approvals to list the Exercise Shares (the "Stock Exchange
      Approvals"), whichever is later (the "First Exercise Date"),
      and ending four years after the First Exercise Date (this period – the
      "Exercise
      Period"). During the Exercise Period, the Warrants shall be
      exercisable, in whole or in part, at the Holder's choice, provided that if
      only part thereto are exercised, no less than 5,000 Warrants per day shall
      be exercised.

            


    

     

    
      	
               
      

            	
              2.4

            	
              The
      exercise ratio between a Warrant and an Exercise Share (1:1) and the
      Exercise Price shall be subject to adjustments according to what is
      described in Section 4 below.

            


    

     

    
      	
               
      

            	
              2.5

            	
              The
      Company shall be entitled to allot, at any time, additional and/or other
      warrants, with no limitation, by whatever terms it deems fit, according to
      its exclusive discretion and without the need to receive any approval from
      the Holder.

            


    

     

    
      	
               
      

            	
              2.6

            	
              The
      Warrants are not listed and shall not be listed on any stock
      exchange.

               

            


    

    
      	
               
      

            	
              2.7

            	
              The Warrants and the Exercise
      Shares are not
      listed in accordance with the Securities Act and the Holder must not offer
      and/or sell the Shares in the USA and/or to a "US Person" unless they are
      listed in accordance with the Securities Act or if a legal opinion is
      given, which shall be acceptable to the Company, according to which there
      is an exemption from the registration requirements according to the
      Securities Act.

            


    

    
      
         

      

      
        -3-

        
          

        

      

      
        [Free
Translation from Hebrew]

      

    

    The
Company hereby confirms that is shall make its best efforts and it intends to
take all the required actions and adopt all the resolutions required by any law,
in order to file a Registration Statement with the SEC for the purpose of
listing the Exercise Shares, and to cause it to be declared effective, within 12
months from the date of execution of this certificate.

     

    A
precondition to the Company's obligation to act for the filing of the
Registration Statement as aforesaid, is that the Holder shall transfer
information to the Company as he shall be required in a reasonable manner for
the purpose of filing of the Registration Statement, with respect to the Holder
and with respect to the Warrants he is holding, as he is required by any law,
including by the Securities Authority in the USA.

     

    
      	
               
      

            	
              2.8

            	
              In
      the event that the Company does not meet its undertaking to file a
      Registration Statement with the SEC for the purpose of registering the
      Exercise Shares and to cause it to be declared effective within 12 months
      from the date of execution of this certificate, as aforesaid in Section
      2.7 above, or if the Stock Exchange Approvals are not received within 12
      months from executing this certificate, all of the Warrants shall be
      terminated and the Company shall compensate the Holder, as the sole remedy
      and without providing the Holder with a right of choice in this matter,
      with the sum of NIS 2 for each terminated Warrant, shortly after the
      Holder has transferred this certificate to the
  Company.

            


    

     

    
      	
               
      

            	
              2.9

            	
              Subject
      to any other provision in this certificate and subject to any law, the
      Company and/or a subsidiary of the Company and/or another corporation
      controlled thereby (hereinafter: the "Acquiring Corporation")
      shall be entitled to purchase Warrants, at any time, according to their
      discretion, at any price that any of them deems
  fit.

            


    

     

    
      	
               
      

            	
              2.10

            	
              The
      Warrants that shall be held as aforesaid by the Acquiring Corporation
      shall be deemed as the Acquiring Corporation's asset (and subject to what
      is provided in this Section, the Acquiring Corporation shall be entitled
      to carry out any action with respect to the Warrants, including a sale of
      the Warrants, from time to time, according to the provisions of any
      law).

            


    

     

    
      	
               
      

            	
              2.11

            	
              The
      Company shall be entitled to carry out changes in the terms of the
      Warrants, as these changes are required by the Securities Authority and/or
      TASE and/or the TASE clearinghouse and/or AMEX and/or the SEC and/or any
      other authorized authority. In such an event, this certificate shall be
      replaced by a certificate that reflects the changes as
      aforesaid.

               

            


    

    
      	
               
      

            	
              3.

            	
              Exercising
      the Warrants

            


    

     

    
      	
               
      

            	
              3.1.

            	
              The
      Company shall send the Holder a notice with respect to the date that
      constitutes the First Exercise Date, at the first opportunity, and in any
      event, no later than two (2) business days from the First Exercise
      Date.

            


    

     

    
      	
               
      

            	
              3.2.

            	
              Subject
      to the receipt of the Stock Exchange Approvals and subject to declaring
      the Registration Statement filed by the Company with the SEC according to
      Section 2.7 above, effective, in the event that the Holder requests to
      exercise his right to purchase the Exercise Shares (in whole or in part)
      by virtue of the Warrants, he shall be entitled to do so during the
      Exercise Period by: (a) Transferring this certificate via registered mail
      to the offices of Xfone 018 Ltd. (1 HaOdem St., Kiryat Matalon, PT – to
      Adv. Alon Reisser); (b) transferring the Exercise Notice to the Company,
      via facsimile 03-9238838 as well as via registered mail to the above
      address; (c) payment of the full Exercise Price due to all the Warrants
      which the Holder is requesting to exercise, according to Section 2.2
      above.

            


    

     

    
      
         

      

      
        -4-

        
          

        

      

      
        [Free
Translation from Hebrew]

      

    

    
      	
               
      

            	
              3.3.

            	
              Once
      the Exercise Notice is delivered to the Company it may not be cancelled or
      changed. The Holder is to sign, at any time required to do so by the
      Company, any document that is required according to the provisions of any
      law, for the purpose of allotting the Exercise
  Shares.

            


    

     

    
      	
               
      

            	
              3.4.

            	
              The
      day of exercise (the "Actual Exercise Date")
      shall be deemed as the day on which the Exercise Notice was received by
      the Company and the remainder of the exercise terms described above have
      been fulfilled.

            


    

     

    
      	
               
      

            	
              3.5.

            	
              In
      the event that the Exercise Period ends on a day that is not a trade day,
      the date shall be postponed to the following trade date immediately after
      that day as aforesaid.

            


    

     

    
      	
               
      

            	
              4.

            	
              Adjustments
      and Participation in Issues of Rights and Stock Dividends and Dividend
      Distributions

            


    

     

    
      	
               
      

            	
              4.1.

            	
              From
      the date of allotment of the Warrants until the end of the Exercise
      Period, the following provisions shall apply to the Warrants in any event
      of an issue of stock dividends by the
Company:

            


    

     

    
      	
               
      

            	
              4.1.1.

            	
              In
      the event that the Company distributes a stock dividend, the effective
      date for the distribution of which occurs before the Actual Exercise Date,
      ordinary shares of the Company due to each Warrant in the quantity he
      would have been entitled to as a stock dividend had he exercised the
      Warrant on the eve of the effective date for the right to receive the
      stock dividend shall be added to the Exercise Shares to which the Holder
      is entitled upon exercising the Warrants in accordance with the provisions
      of this certificate.

            


    

     

    The
Exercise Price shall not change as a result of the addition of shares as
aforesaid. The provisions that address the Exercise Shares shall apply also with
respect to the shares that are added to the Exercise Shares, mutatis mutandis. In the
event of adjustments according to this Sub-section, the Holder shall not be
entitled to receive a fraction of a single whole share.

     

    
      	
               
      

            	
              4.1.2.

            	
              In
      the event that prior to the Actual Exercise Date, the Company's ordinary
      shareholders shall be made a rights offering of rights to purchase any
      securities, the number of shares that shall derive from exercising the
      Warrants shall be adjusted to the bonus component in the aforesaid rights
      as it is reflected in the ratio between the closing rate determined in the
      AMEX with respect to the Company's share on the effective date and between
      the ex-rights base rate. In the event of adjustments according to this
      Sub-section, the applicant shall not be entitled to receive a fraction of
      a single whole share.

            


    

     

    
      	
               
      

            	
              4.1.3.

            	
              The
      number of Exercise Shares which the Holder shall be entitled to shall be
      adjusted only in the event of distribution of stock dividends and an issue
      of rights as aforementioned, but not in the event of any other issues
      (including issues to interested
parties).

            


    

     

    
      	
               
      

            	
              4.1.4.

            	
              In
      the event that prior to the Actual Exercise Date, the Company shall pay
      dividends to its shareholders, then immediately after the effective date
      for the right to receive a dividend in cash, the Exercise Price of the
      Warrants in circulation shall be adjusted by multiplying it by the ratio
      between the ex-dividend base rate and between the closing rate determined
      on AMEX for the Company's share on the effective date for the entitlement
      to receive the dividend.

            


    

     

    
      	
               
      

            	
              5.

            	
              From
      the date of allotting the Warrants and as long as the Warrants are not
      exercised or expired or terminated, but in no event later than the end of
      the Exercise Period, the following provisions shall
  apply:

            


    

     

    
      
         

      

      
        -5-

        
          

        

      

      
        [Free
Translation from Hebrew]

      

    

    
      	
               
      

            	
              [a]

            	
              The
      Company shall maintain a sufficient number of ordinary shares in its
      authorized capital to ensure the performance of the exercise right
      according to this certificate and if necessary, shall cause an increase to
      its authorized capital.

            


    

     

    
      	
               
      

            	
              [b]

            	
              In
      the event that the Company consolidates the ordinary shares in its issued
      capital or distributes these shares through a sub-division, the number of
      Exercise Shares allotted due to exercising the Warrants following an
      action as aforesaid shall be reduced or increased, as the case may
      be.

            


    

     

    
      	
               
      

            	
              [c]

            	
              The
      Company shall not distribute bonus shares to the holders of its ordinary
      shares by means other than ordinary
shares.

            


    

     

    
      	
               
      

            	
              [d]

            	
              Within
      ten (10) days of each adjustment according to the provisions of Section 4
      above, the Company shall inform the Holder of his right to exercise the
      Warrants while mentioning the Exercise Price, the Exercise Period and the
      number of shares to which one Warrant entitles following an adjustment as
      aforesaid, by sending a notice in Hebrew via registered mail according to
      the Holder's last known address registered in the
  Register.

            


    

     

    
      	
               
      

            	
              [e]

            	
              The
      Company shall avoid any action, including distribution of stock dividends
      that may cause the reduction of the Exercise Share Price below its par
      value.

            


    

     

    
      	
               
      

            	
              6.

            	
              Allotment
      of the Exercise Shares

            


    

     

    
      	
               
      

            	
              6.1.

            	
              The
      Company shall act with respect to allotting the Exercise Shares as
      follows: within three (3) business days after the Actual Exercise Date,
      the Company shall allot the Exercise Shares, by a share certificate or as
      an electronic share in the DWAC
system.

            


    

     

    
      	
               
      

            	
              6.2.

            	
              The
      Holder shall sign, at any time required to so by the Company, any
      additional document required according to the provisions of any law and
      the provisions of the Company for validating the allotment of the Exercise
      Shares.

            


    

     

    
      	
               
      

            	
              6.3

            	
              Immediately
      after the date of their allotment, the Exercise Shares shall be equal in
      all respects to the ordinary shares in the Company's capital, and shall
      entitle their holders to the full dividends, in cash or in a stock
      dividend, and to any other distribution, the effective date for the right
      to receive which is the Actual Exercise
Date.

            


    

     

    
      	
               
      

            	
              7.

            	
              Non
      Transferability

            


    

     

    The
Warrants may not be transferred. The Holder is not entitled to assign, sell,
transfer, pledge or encumber, or provide any third party with any right with
respect to the Warrants and/or the rights that derive from the Warrants
according to this certificate, unless the Company has given its prior written
consent. A transfer of the Warrants, without receipt of the Company's approval
as aforesaid shall be null and void, and shall not grant the transferee any
right vis-à-vis the Company
and shall not obligate the Company.

     

    
      	
               
      

            	
              8.

            	
              Division
      of Certificates

            


    

     

    
      	
               
      

            	
              This
      certificate (and any other certificate evidencing the Warrants) may be
      divided into a number of certificates, and the sum of all the Warrants
      that are included in these certificates is equal to the number of Warrants
      included in the certificate for which the division is being requested,
      provided that it will not be possible to enable a division of a
      certificate to units that are smaller than 5,000 Warrants. The division
      shall be carried out according to a division request signed by the Holder
      or his legal representatives, delivered to the Company at Xfone 018 Ltd.'s
      registered office (to Adv. Alon Reiser), attached with the certificate for
      which the division is being requested. All the expenses that are related
      to the division, including stamp tax and other obligatory payments, if
      any, shall apply to the Holder.

            


    

     

    
      	
               
      

            	
              9.

            	
              Notices

            


    

     

    Apart
from the cases for which this certificate instructs otherwise, any notice on
behalf of the Company to the Holder shall be given by sending a notice in Hebrew
via registered mail according to the Holder's last known address registered in
the Register, and any notice that shall be sent as aforesaid shall be deemed as
delivered to the Holder three (3) days from its delivery by registered
mail.

    
      
         

      

      
        -6-

        
          

        

      

      
        [Free
Translation from Hebrew]

      

    

     

    
      	
               
      

            	
              10.

            	
              Register

            


    

     

    The
Holder shall be registered in the Register of the Company's Transfer Agent as
the holder of the Warrants until the Warrants are exercised, expired or
terminated.

     

    
      	
               
      

            	
              11.

            	
              General
      Provisions

            


    

     

    
      	
               
      

            	
              11.1.

            	
              The
      Warrants shall not entitle the Holder to any voting right or any other
      right until they are exercised as ordinary shares of the Company according
      to the terms determined in this
certificate.

            


    

     

    
      	
               
      

            	
              11.2.

            	
              The
      Holder hereby represents that he is aware that in accordance to the
      provisions of the Securities Law 5728-1968 and Section 5 of the Securities
      Regulations (Details with respect to Sections 15A- 15C of the law),
      5760-2000, there are limitations that apply to a resale of the Exercise
      Shares and he undertakes to abide by all those limitations according to
      the provisions of the law.

            


    

     

    
      	
               
      

            	
              11.3.

            	
              This
      Warrant does not constitute as any representation of the Company with
      respect to any tax liability that derived and/or shall derive while
      allotting the Warrants, their holding, their exercise, or sale of the
      Exercise Shares. The Holder represents, confirms and undertakes that he
      had the possibility and was given the opportunity to ask and receive
      clarification from his tax advisors with respect to any tax liability, if
      any, which derived and/or shall derive while allotting the Warrants, their
      holding, their exercise, or sale of the Exercise
  Shares.

            


    

     

    


    
      
         

      

      
        -7-

        
          

        

      

      
        [Free
Translation from Hebrew]

      

    

     

    


     

    
      	
               
      

            	
              Annex
      A

            


    

     

    
      	
               
      

            	
              Date:
      ________________

            


    

     

    
      	
               
      

            	
              To:

            


    

     

    
      	
               
      

            	
              Xfone
      Inc.

            


    

     

     

    
      	
               
      

            	
              Dear
      Sirs,

            


    

     

     

    
      	
               
      

            	
              Re:
      Xfone
      Inc. (the "Company")

            


    

     

    I am
holding __________ Warrants (the "Warrants") that may be
exercised into ordinary shares of par value U.S. $0.001 each of the Company
("Ordinary Shares of the
Company"). Attached hereby is Certificate number ________ that was issued
to me with respect to the allotment of the Warrants.

     

    I shall
request that you exercise ______ Warrants of the Warrants that were allotted to
me, in a manner that ________ Ordinary Shares of the Company shall be issued to
me.

     

    A sum of
$_________, which constitutes the total of the Exercise Price due to all the
Warrants that I am hereby requesting to exercise, has been transferred to your
account through a wire transfer on __________.

     

    Sincerely,

    
      	
              Name:

            	
            
	
              Signature:

            	
            
	
              Stamp:

            	
            
	
              Address:

            	
            


    

     

    


     

    Submitting
this exercise notice to the Company shall be carried out via registered mail to
the offices of Xfone 018 Ltd. (Address: 1 HaOdem St., Kiryat Matalon PT – to
Adv. Alon Reiser) and via facsimile 03-9238838.

    
      
         

      

      
        -8-

        
          

        

      

      
        [Free
Translation from Hebrew]

      

    

     

    


    DWAC INSTRUCTION
FORM

    


    TO
BE COMPLETED BY HOLDER

    SETTLING
VIA DWAC

    


     

    Delivery
by electronic book-entry at The Depository Trust Company (“DTC”), registered in
the Holder's name and address as set forth on the Exercise Notice to which this
form is attached, and released by Transfer Online, Inc. the Company's transfer
agent (the “Transfer Agent”), to the Holder upon exercise of Warrant No.
_____.

     

     

    
      	
               

              Name
      of DTC Participant (broker-dealer at which the account or accounts to be
      credited with the Warrant Shares are maintained)

            	 
      
	
              DTC
      Participant Number

            	 
	
              Name
      of Account at DTC Participant being credited with the
    Shares

            	 
      
	
              Account
      Number at DTC Participant being credited with the Shares

            	 
      


    

    


    


    NO
LATER THAN ONE (1) BUSINESS DAY AFTER THE EXECUTION OF THE EXERCISE NOTICE TO
WHICH THIS FORM IS ATTACHED BY THE HOLDER, THE HOLDER SHALL DIRECT THE
BROKER-DEALER AT WHICH THE ACCOUNT OR ACCOUNTS TO BE CREDITED WITH THE SHARES
ARE MAINTAINED TO SET UP A DEPOSIT/WITHDRAWAL AT CUSTODIAN ("DWAC") INSTRUCTING
THE TRANSFER AGENT TO CREDIT SUCH ACCOUNT OR ACCOUNTS WITH THE
SHARES.

     

     

    
      
         

      

      
        -9-

        
          

        

      

      
        [Free
Translation from Hebrew]