Exhibit 10.72


    Exhibit
      10.72

     

    STOCK
      PURCHASE AGREEMENT

     

    THIS
      STOCK PURCHASE AGREEMENT (the "Agreement") is made and entered into as of the
      10th
      day of
      May, 2006, by and among Xfone, Inc., a Nevada corporation ("Xfone"), Swiftnet
      Limited a UK corporation, Story Telecom, Inc., a Nevada corporation and its
      subsidiaries Story Telecom Limited and Story Telecom (Ireland) Limited
      ("Story"), Trecastle Holdings Limited, a BVI corporation (“Trecastle”), and Nir
      Davison (“Davison”). Xfone, Trecastle and Davison are sometimes collectively
      referred to as “Shareholders” or individually as a “Shareholder.” Story Telecom,
      Inc. is sometimes referred to as "Story Inc."

     

    WHEREAS,
      the Shareholders have previously entered into an Agreement dated September
      30,
      2002, as amended and/or supplemented by amendments dated June 30 2003, September
      5, 2003, December 31, 2003, February 19, 2004, March 25, 2004 and August 18,
      2005 (collectively referred to as the “Founders Agreement”) in which the
      Shareholders agreed as to certain operating and governing procedures as to
      Story; and 

     

    WHEREAS,
      the Shareholders desire for Story Inc. to issue additional stock in Story Inc.
      to Xfone so that Xfone will own approximately sixty nine point six percent
      (69.6%) of all of the issued and outstanding common stock of Story Inc., to
      terminate the Founders Agreement, and to agree on revised operating and
      management procedures for Story all on the terms and conditions provided
      herein.

     

    NOW,
      THEREFORE, THE PARTIES HERETO AGREE AS FOLLOWS:

     

    ARTICLE
      1


     

    DEFINITIONS

     

    1.1 In
      addition to the terms defined elsewhere in this Agreement, the following terms
      shall have the meanings set forth below:

     

    "Governmental
      Body"--any: (a) nation, state, county, city, town, village, district, or other
      jurisdiction of any nature; (b) federal, state, local, municipal, foreign,
      or
      other government; (c) governmental or quasi-governmental authority of any nature
      (including any governmental agency, branch, department, official, or entity
      and
      any court or other tribunal); (d) multi-national organization or body; or (e)
      body exercising, or entitled to exercise, any administrative, executive,
      judicial, legislative, police, regulatory, or taxing authority or power of
      any
      nature.

     

    "Indebtedness"--of
      any entity means: (i) all obligations of such entity for borrowed money or
      which
      has been incurred in connection with the acquisition of property, assets or
      services, (ii) obligations secured by any lien or other charge upon property
      or
      assets owned by such entity, even though such entity has not assumed or become
      liable for the payment of such obligations, and (iii) obligations created or
      arising under any conditional sale or other title retention agreement with
      respect to property acquired by such entity, whether or not the rights and
      remedies of the Company, lender or lessor under such agreement in the event
      of
      default are limited to repossession or sale of the property.

     

    
      
        
        

      

      
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    "Knowledge"--an
      individual will be deemed to have "Knowledge" of a particular fact or other
      matter if such individual is actually aware of such fact or other matter. A
      Person (other than an individual) will be deemed to have "Knowledge" of a
      particular fact or other matter if any individual who is serving, or who has
      at
      any time served, as a director, executive officer, or partner of such Person
      (or
      in any similar capacity) has, or at any time had, Knowledge of such fact or
      other matter.

     

    "Person"--any
      individual, corporation (including any non-profit corporation), general or
      limited partnership, limited liability company, joint venture, estate, trust,
      association, organization, labor union, or other entity or Governmental
      Body.

     

    "Proceeding"--any
      action, arbitration, audit, hearing, investigation, litigation, or suit (whether
      civil, criminal, administrative, investigative, or informal) commenced, brought,
      conducted, or heard by or before, or otherwise involving, any Governmental
      Body
      or arbitrator.

     

    "Security
      Interest"--any mortgage, pledge, security interest, encumbrance, charge, or
      other lien.

     

    “Shareholder
      Distributions” -- all distributions of cash or property made by Story to
      Shareholders, except for payments that are in satisfaction of indebtedness
      or
      are in payment for goods or services pursuant to a contractual
      arrangement.

     

    "Threatened"--a
      claim, Proceeding, dispute, action, or other matter will be deemed to have
      been
      "Threatened" if any demand or statement has been made (orally or in writing)
      or
      any notice has been given (orally or in writing), or if any other event has
      occurred or any other circumstances exist, that would lead a prudent Person
      to
      conclude that such a claim, Proceeding, dispute, action, or other matter is
      likely to be asserted, commenced, taken, or otherwise pursued in the
      future.

     

    ARTICLE
      2


     

    Purchase
      of shares

     

    2.1 Purchase
      of Story Inc. Common Shares.
      At the
      Closing, as defined below, Xfone will purchase 102 shares of Story Inc. common
      stock (the “Shares”) to be issued by Story Inc. at the Closing, for an aggregate
      purchase price of $1,200,000 (the “Stock Purchase”). For the sake of
      clarification, upon the consummation of the Stock Purchase, Xfone will own
      142
      out of a total of the 204 outstanding shares of common stock of Story
      Inc.

     

    2.2 Payment
      of Founders Loans.
      Upon
      execution of this Agreement Story Inc. shall pay by wire £ 24,443.91 to
      Trecastle and/or Davison (to be decided by Davison) and shall pay £ 15,960.00 to
      Xfone and/or Swiftnet (to be decided by Xfone) in payment of the founder's
      loans
      owed by Story to the shareholders.

     

    
      
        
        

      

      
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    2.3 Closing.
      The
      consummation of the Stock Purchase and any other transaction contemplated by
      this Agreement (the "Closing") will take place at Story’s offices at 958
      Britannia House, High Road, London N12 9RY, UK on the later of (i) the close
      of
      business on 11 May 2006 or (ii) at such other time and place as the parties
      may
      agree, provided that the conditions set forth in Section 2.4 have been
      satisfied. Failure to consummate the Stock Purchase on the date and time and
      at
      the place determined pursuant to this Section 2.3 will not result in the
      termination of this Agreement and will not relieve any party of any obligation
      under this Agreement.

     

    2.4 Closing
      Obligations.
      At the
      Closing and subject to Xfone board prior approval of Story’s business
      plan:

     

    (a)
      Story
      Inc. will deliver to Xfone: (i) certificates representing the Shares, (ii)
      a
      certificate executed by Story representing and warranting to Xfone that each
      of
      Story's representations and warranties in this Agreement was accurate in all
      respects as of the date of this Agreement and is accurate in all respects as
      of
      the Closing as if made on the Closing;

     

    (b)
      Xfone
      will pay the $1,200,000 purchase price to Story Inc., by applying $900,000
      against the indebtedness of Story to Xfone and/or its subsidiaries and by wiring
      $300,000 to Story Telecom Limited to be used as working capital in a manner
      to
      be approved by the Board of Directors of Story.

     

    2.5 No
      Additional Issuance of Story Shares.
      As long
      as Xfone remains in control of Story the parties hereby agree that Story shall
      not issue any additional stock or make any change in its capitalization, without
      the unanimous written consent of all shareholders of Story. 

     

    2.6 Possible
      Purchase of Davison
      and
      Trecastle Holdings, Ltd. Shares - Nir and Trecastle Holding Ltd.
      option.
      Twelve
      (12) months and thirty (30) days from the date of signing this Agreement or
      twenty four (24) months and thirty (30) days from the date of this Agreement
      and
      provided the following conditions are met, Davison and Trecastle Holdings Ltd.
      shall have the option to sell to Xfone, and Xfone shall buy (if the option
      was
      exercised) all of the shares of Story Inc. held by Davison and Trecastle
      Holdings Ltd. for US $450,000 in cash or equivalent in Xfone's common stock
      (to
      be decided by Xfone), to be paid in cash within seven (7) working days or in
      shares upon regulatory approval. Xfone will do its best to expedite this
      approval process. The conditions are (i) for the first twelve (12) months or
      for
      the second twelve (12) months of this Agreement Story has greater or equivalent
      than £2,000,000 in sales and £100,000 of EBITDA. The payment of old debt to
      Xfone pursuant to Section 4.2 of this Agreement shall not affect in any way
      the
      calculation of such profit. 

     

    2.7 Possible
      Purchase of Davison
      and
      Trecastle Holdings, Ltd. Shares - Xfone option.
      Twelve
      (12) months and thirty (30) days from the date of signing this Agreement or
      twenty four (24) months and thirty (30) days from the date of this Agreement
      and
      provided the following conditions are met, Xfone shall have the option to buy
      from Davison and Trecastle, and Davison and Trecastle shall sell (if the option
      was exercised), all of the shares of Story Inc. held by Davison and Trecastle
      Holdings Ltd. for US $900,000 or equivalent in Xfone's shares of common stock
      (to be decided by Davison), to be paid in cash within seven (7) working days
      or
      in shares upon regulatory approval. The conditions are (i) for the first twelve
      (12) months or for the second twelve (12) months of this Agreement Story has
      less than or equivalent to £4,000,000 in sales and £200,000 of net profit
      (EBIDA). The payment of old debt to Xfone pursuant to Section 4.2 of this
      Agreement shall not affect in any way the calculation of such profit.


     

    2.8 First
      Right of Refusal. In
      addition each party to this Agreement will have a first right of refusal for
      thirty (30) days in case the other party wishes to sale his shares in Story
      Inc.


     

    
      
        
        

      

      
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    ARTICLE
      3


     

    representations
      and warranties

     

    Story
      represents and warrants to Xfone as follows:

     

    3.1 Organization
      And Good Standing.

     

    (a) Story
      Inc. is a corporation duly organized, validly existing, and in good standing
      under the laws of the State of Nevada. Story has full corporate power and
      authority to carry on its business as presently conducted by Story and to own
      and use the properties owned and used by Story. 

     

    (b) Story
      is
      qualified to conduct business and is in good standing under the laws of each
      other jurisdiction wherein the nature of its business or its ownership of
      property requires it to be so qualified. 

     

    (c) The
      Articles of Incorporation and/or Bylaws and/or Memorandum and/or Articles of
      Association (as the case may be) of Story reflect all amendments currently
      in
      effect made thereto at any time prior to the date of this Agreement and are
      correct and complete. The minute books containing the records of meetings of
      the
      shareholders and directors since the formation of Story, the share certificate
      books and the share record books for Story are correct and complete in all
      material respects and accurately reflect the record holders of all outstanding
      securities issued by Story. All material actions taken by Story since its
      formation have been duly authorized to the extent so required.

     

    (d)
      Story
      Inc. hereby warrants that Story Telecom (Ireland) Limited and Story Telecom
      Limited are one hundred percent (100%) subsidiaries of Story Telecom, Inc.
      and
      as such are fully obliged by this Agreement. 

     

    (e)
      Xfone
      hereby warrants that Swiftnet Limited is one hundred percent (100%) subsidiary
      of Xfone, Inc. and as such is fully obliged by this Agreement.

     

    3.2 Authority;
      No Conflict.

     

    (a) Story
      has
      full corporate power and authority to execute and deliver this Agreement and
      the
      other agreements contemplated hereby to which it is a party and to perform
      its
      obligations hereunder and thereunder. This Agreement and the other agreements
      contemplated hereby to which Story is a party constitute the valid and legally
      binding obligations of Story, enforceable against Story in accordance with
      their
      respective terms, except as enforceability may be limited by bankruptcy, similar
      laws of debtor relief and general principles of equity. Story is not required
      to
      make any declaration to or registration or filing with, or to obtain any permit,
      license, consent, accreditation, exemption, approval or authorization from,
      any
      governmental or regulatory authority (including, without limitation, the FCC
      and
      all similar state telecommunications regulatory bodies) in connection with
      the
      execution, delivery or performance of this Agreement or the consummation of
      any
      of the transactions contemplated hereby. 

     

    
      
        
        

      

      
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    (b) Neither
      the execution and the delivery of this Agreement and the other agreements
      contemplated hereby, nor the consummation of the transactions contemplated
      hereby or thereby will violate, conflict with, result in a breach of, constitute
      a default under, result in the acceleration of, create in any party the right
      to
      accelerate, terminate, modify, or cancel, or require any authorization, consent,
      approval, execution or other action by or notice to any third party under,
      (i)
      the Articles of Incorporation and Bylaws or the Memorandum and Articles of
      Association (as the case may be) of Story or, (ii) any contract, lease,
      sublease, license, sublicense, franchise, permit, indenture, agreement,
      instrument of Indebtedness, Security Interest, or other arrangement by which
      Story is bound or affected, or (iii) any law, statute, rule, regulation, order,
      judgment, decree, stipulation, injunction, charge or other restriction, to
      which
      Story is subject.

     

    3.3 Capitalization.

     

    (a) The
      entire authorized capital stock of Story Inc. consists of 75,000 shares of
      Common Stock, Par Share Value $1.00, of which 102 shares are issued and
      outstanding and held of record as follows: Xfone 40 shares, Trecastle 50 shares,
      and Davison 12 shares. All of the issued and outstanding shares of capital
      stock
      of Story Inc. have been duly authorized, are validly issued, fully paid, and
      nonassessable, and are owned and held of record and beneficially by Xfone,
      Trecastle and Davison, free and clear of any Security Interest. 

     

    (b) There
      are
      no outstanding or authorized options, warrants, rights, contracts, rights of
      first refusal or first offer, calls, puts, rights to subscribe, conversion
      rights, or other agreements or commitments to which Story is a party or which
      are binding upon Story providing for the issuance, disposition, or acquisition
      of any of Story's capital stock. There are no outstanding or authorized stock
      appreciation, phantom stock, or similar rights with respect to Story and there
      are no contractual or statutory preemptive rights or similar restrictions with
      respect to the issuance or transfer of any shares of Story's capital stock.
      There are no voting trusts, proxies, or any other agreements, restrictions
      or
      understandings with respect to the voting of the capital stock of
      Story.

     

    3.4 Books
      and Records.
      The
      books of account, minute books, stock record books, and other records of Story
      since its formation are complete and correct and have been maintained in
      accordance with sound business practices, including the maintenance of an
      adequate system of internal controls. The minute books of Story contain accurate
      and complete records of all meetings held of, and corporate action taken by,
      the
      stockholders, the Boards of Directors, and committees of the Boards of Directors
      of Story, and no meeting of any such stockholders, Board of Directors, or
      committee has been held for which minutes have not been prepared and are not
      contained in such minute books. At the Closing, all of those books and records
      will be in the possession of Story.

     

    3.5 Legal
      Proceedings.
      (a)
      Except as set forth in Schedule 3.5, there is no pending
      Proceeding:

     

    (i) that
      has
      been commenced by or against Story or that otherwise relates to or may affect
      the business of, or any of the assets owned or used by, Story; or

     

    (ii) that
      challenges, or that may have the effect of preventing, delaying, making illegal,
      or otherwise interfering with, any of the transactions contemplated by this
      Agreement.

     

    (b)
      To
      the Knowledge of Story, (1) no such Proceeding has been Threatened, and (2)
      no
      event has occurred or circumstance exists that may give rise to or serve as
      a
      basis for the commencement of any such Proceeding. 

     

    
      
        
        

      

      
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    3.6 Indebtedness;
      Security Interest.
      To the
      Knowledge of Story, Schedule 3.6 fully and accurately sets forth the
      Indebtedness of Story and any other Security Interest on its property or
      assets.

     

    3.7 Disclosure.

     

    (a)
      No
      representation or warranty of Story in this Agreement, including the schedules
      hereto, omits to state a material fact necessary to make the statements herein
      or therein, in light of the circumstances in which they were made, not
      misleading.

     

    (b)
      There
      is no fact known to Story that has specific application to Story (other than
      general economic or industry conditions) and that materially adversely affects
      the assets, business, prospects, financial condition, or results of operations
      of Story that has not been disclosed to Xfone.

     

    ARTICLE
      4


     

    post-closing
      matters

     

    4.1 Termination
      of Founders Agreement.
      Upon
      consummation of the Stock Purchase, the Founders Agreement shall terminate,
      and
      the Shareholders agree that the terms and provisions of this Agreement shall
      govern from and after the date of consummation of the Stock
      Purchase.

     

    4.2 Payment
      of Debt to Xfone and/or its Subsidiaries.
      As of
      the date
      of
      this Agreement
      Story
      owes Xfone and/or its subsidiaries £1,302,817.62. Xfone
      will apply $900,000 out of an aggregate purchase price of $1,200,000 to this
      indebtedness. Story and Xfone hereby agree on the principles of a payment plan
      for the reminder of the debt (excluding the running under-45 days debt which
      will continue to be paid as normal) based on the following formula: (i) the
      debt
      will be frozen, interest free, for a period of one year; (ii) upon the expiry
      of
      the one-year period and for a further three-year period Story will pay Xfone
      its
      debt in twelve (12) equal payments on a quarterly basis unless otherwise agreed
      in advance, such payment shall also be interest free. 

     

    4.3 Shareholder
      Loan by Xfone.
      Should
      Xfone decide to make an additional shareholder loan to Story (for example for
      bridge purposes) of up to US $200,000 then Davison and/or Trecastle will not
      dilute.

     

    4.4 Accounting
      and Recordkeeping.
      At
      Closing, Story Inc. shall become a fully integrated subsidiary under Xfone
      subject to all accounting and recordkeeping requirement of the SEC, AMEX (or
      other markets), NASD, AIM, FTSE and other regulatory bodies to which Xfone
      is or
      will be subject. Story will produce all necessary reports to Xfone including
      the
      daily, weekly, monthly, quarterly and annual reports using GAAP accounting
      practices for Balance Sheets, Profit and Loss and Cash flow items. Xfone will
      assist Story’s accountant on the exact information it requires and will provide
      a detailed list of what needs to be produced. Story’s financial controller /
      accountant will report directly to the Xfone CFO and Story Managing Director.
      Story’s financial controller / accountant shall be a qualified accounting
      professional permanently employed by Story.

     

    
      
        
        

      

      
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    4.5 Directors.
      The
      current directors of Story are Guy Nissenson, Nir Davison and Ilan Garmiza.
      From
      and after consummation of the Stock Purchase, the number of directors of Story
      shall be five (5) of which three (3) shall be nominated and appointed by Xfone
      (one of which shall be the Chairman of the Board), and two (2) shall be
      nominated and appointed by Davison. The Shareholders agree to elect the
      directors nominated and appointed by Xfone and Davison. Only persons with
      academic, professional or telecommunications experience shall be nominated
      to
      serve as directors on the Board of Directors of Story. Persons who have a family
      relationship with current members of the Board of Directors of Xfone shall
      not
      be nominated to serve as directors of Story or its subsidiaries unless Davison,
      while he is still a shareholder in Story, agrees otherwise in advance. A ‘family
      relationship” means a relationship by blood or marriage not more remote than
      first cousin. Directors shall serve without compensation for their directorship,
      except for reimbursement of expenses as approved by the Board of Directors
      of
      Story. The Board of Story subsidiaries will mirror Story board.

     

    4.6 Meetings
      of the Board.
      The
      Board of Directors of Story shall meet at least quarterly. Board meetings may
      be
      called by any member of the Board on 24 hours actual written notice to the
      other
      members of the Board. Directors may participate in meetings by telephone or
      video-conference.

     

    4.7 Chairman
      of the Board.
      A
      director nominated by Xfone shall serve as Chairman of the Board of Story.
      

     

    4.8 Managing
      Director.
      As long
      as Davison holds shares in Story and subject to Section 5.1 below, Xfone and
      Davison will have to agree on the nomination of the Managing Director. Davison
      will not unreasonably withhold his consent. The
      Managing Director of Story will not have another post or directorship in the
      Xfone group.

     

    4.9 Shareholder
      Distributions.
      For as
      long as Xfone controls Story, Shareholder Distributions shall take place after
      each accounting year in which Story reported profits, it shall be made on a
      pro
      rata basis to all Shareholders, shall be made in compliance with all applicable
      legal requirements; and must be approved by unanimous vote of the Board of
      Directors of Story, such approval shall not be unreasonably
      withheld.

     

    4.10 Expenses.
      Payments by Story to Xfone or to Xfone directors for expenses incurred by Story
      shall be approved by the Managing Director of Story, provided that such approval
      shall not be required for normal traffic debt to Xfone which is more than forty
      five (45) days old from the date of invoice.

     

    4.11 Cheque/Bank
      Signatory
      Rights -
      Xfone shall obtain cheque/bank signatory rights for all amounts however, it
      shall only exercise this right if and when Story Managing Director is either
      unavailable to sign or unreasonably withholding his signature on cheques
      important for the daily operating of Story. Under normal circumstances, payment
      of any amount over £1000 will require the signature of Story's Managing Director
      and an Xfone representative. Cheque / bank signatory rights for any payment
      up
      to £1000 will only require the signature of Nir Davison (provided he is Story's
      Managing Director) including any ad-hoc out of pocket non-forecasted reasonable
      expenses paid by corporate credit card. 

     

    4.12 Access
      to Records.
      Directors of Story shall have full access to all of Story’s records and
      accounts.

     

    4.13 Swiftnet
      Cost Schedules.
      Davison, or another employee of Story as approved by the Board of Directors
      of
      Story Inc., shall have full access to Swiftnet Limited cost schedules, and
      will
      be allowed to participate in cost reduction negotiations. Swiftnet Limited
      shall
      always seek better rates.

     

    
      
        
        

      

      
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    4.14 Xfone
      agrees to provide or to cause its subsidiary, Swiftnet Limited, to provide
      the
      followings services: (a) its technological backbone; (b) technical help services
      (24 hours/7 days a week); (c) use of relevant software and hardware, including
      switch, billing, IVR, etc.; and d) provide Story with proper office space and
      equipment, etc.. Xfone will charge these services at cost plus four percent
      (4%)
      of cost from the Closing and for as long as Story is under Xfone control. Xfone
      will charge cost plus six percent (6%) for these services once Story is not
      under Xfone control for twelve (12) months as long as Story pays within forty
      five (45) days of invoice for these services.

     

    4.15 Employee
      Option Plan in Story Shares.
      Xfone
      agrees to work together with Story management to create, within sixty (60)
      days
      from the Closing, an option plan to the employees of Story which
      will be identical in its terms to the Option Plan available to Xfone’s
      employees. Under said option plan, employees
      of Story shall be granted options to purchase shares of Story.

     

    ARTICLE
      5


     

    Employment
      of Davison

     

    5.1 Employment
      of Davison.
      Davison
      shall continue to be employed as an employee, based at the corporate offices
      of
      Story, with the title of Managing Director of Story. Davison shall have such
      responsibilities, obligations and rights as determined by the Board of Directors
      of Story. On the day-to-day decisions, Davison shall report to the Chairman
      of
      the Board.

     

    5.2 Salary.
      As long
      as Davison remains Story’s employee in any capacity or unless otherwise agreed
      in advance, Davison shall receive an annual gross salary and/or consultancy
      fee
      of £84,000, the partition of which and the account to be paid into shall be in
      the sole discretion of Davison, and reimbursement of business fuel and insurance
      expenses related to Davison's car. In order to remove doubt, Davison's
      abovementioned salary is not a compensation for his directorship in Story.
      

     

    5.3 Monthly
      Bonus.
      Davison
      shall receive a monthly cash bonus of one percent (1%) from money collected
      above £200,000 and another zero point five percent (0.5%) collected above
£300,000 in each month. However, if the targets above are not fully met Davison
      shall receive one (1) share per annum as a bonus for his services to Story
      in
      addition to the option plan specified in Section 4.15. 

     

    5.4 Paid
      Leave.
      Davison
      will have thirty (30) paid leave days per year. Davison will give prior
      notification to, and have his proposed leave approved by, the Chairman of the
      Board of Story, which approval shall not be unreasonably withheld.
      Such
      approval will only be required for leave of more than five (5) working
      days.

     

    5.5 Termination.
      Davison
      may resign as an employee of Story by giving sixty (60) days written notice
      of
      termination to the Board of Directors of Story. The Board of Directors of Story
      may terminate Davison’s employment with Story by giving him sixty (60) days
      written notice of termination but only after the expiry of a ten (10) month
      period beginning at the date of signing this Agreement. 

     

    
      
        
        

      

      
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    5.6 Loan
      to Davison.
      At
      Closing, Story shall make available to Davison an interest free loan (or, at
      Davison’s election, to Trecastle Holdings Ltd) of $14,000 US Dollars. The loan
      shall be repaid in twelve (12) equal monthly payments, which payments may be
      deducted from Davison’s salary. In the event that Davison’s employment is
      terminated, the unpaid balance of the loan shall be immediately due and payable.
      

     

    5.7 Confidentiality
      and Non-Compete Agreement.
      By
      signing this Agreement Davison hereby undertakes that in any case whereby his
      employment is terminated and within a following six-month period thereafter
      he
      will not approach, engages and try in any way to solicit or take over Story’s
      current clients or agents.

     

    5.8 The
      employment of any employee of Story may be terminated by Story without notice
      if
      the employee is guilty of any serious fraud or other criminal
      offence.

     

    ARTICLE
      6


     

    spin-off
      of story INC.

     

    6.1 Spin-off
      of Story Shares.
      Upon
      request from Story Inc., Xfone shall provide all consents necessary to make
      Story Inc. a publicly traded company through a distribution of Story Inc.'s
      shares as a dividend to the shareholders of Xfone, or a similar transaction,
      provided the following conditions are met: 

     

    (a)
      all
      outstanding debt of Story to Xfone covered by the abovementioned payment plan
      agreement (Section 4.2) is being paid in good order and all accounts payable
      by
      Story to Xfone are being paid within forty five (45) days of the date of
      invoice; 

     

    (b)
      Story
      Inc.’s shares are registered with the SEC under the Securities Exchange Act of
      1934 and/or with any equivalent regulatory body and all applicable securities
      law requirements are satisfied; 

     

    (c)
      Story
      Inc.’s shares are approved for listing on NASDAQ or for trading on the American
      or New York stock exchange and/or any other regulated stock exchange; and


     

    (d)
      Story, Xfone and Swiftnet concluded a service provider agreement (to be based
      on
      Section 4.14 above, the continuation of the debt payment plan and the principles
      of costs plus 6% and 45 days credit).

     

    6.2 Alternative
      to Spin-off of Story Inc.
      Shares.
      If
      within 30 days after a request from Story Inc. pursuant to Section 6.1 and
      after
      all conditions set forth in Section 6.1 are satisfied, Xfone does not provide
      all consents necessary to make Story Inc. a publicly traded company through
      a
      distribution of Story Inc.'s shares as a dividend to the shareholders of Xfone,
      or a similar transaction, then Xfone shall buy from the other Shareholders
      all
      their shares of Story Inc. for $1,000,000 paid seventy percent (70%) in Xfone
      shares, valued at market price on an average of thirty (30) trading days, and
      thirty percent (30%) in cash. 

    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    

     

    6.3 Resignation
      of Directors.
      Twenty
      four (24) hours before Story Inc. becomes publicly traded, Xfone directors
      in
      Story will resign and the new board will take over. The shareholders of Story
      will elect the new board with Abraham Keinan and Guy Nissenson (or their
      nominated directors in Story's board) providing Davison with a proxy to vote
      as
      he elects. 

     

    6.4 Termination
      of Agreement.
      When
      Story Inc. becomes publicly traded this Agreement shall terminate. 

     

    ARTICLE
      7


     

    investments
      or loans to story

     

    7.1 In
      case
      Story receives a definitive investment agreement ready for signing from a pre
      approved third party within three (3) month of this Agreement being signed
      and
      both Xfone and Davison approve it, such approval shall not be unreasonably
      withheld then: Story will pay Xfone a premium for this investment of $1,200,000
      in return for a reversal of this Agreement back to the founders agreement (i.e.
      back to the 60/40 holding ratio and the return of the $1,200,000 to Xfone).
      Such
      premium shall equal five percent (5%) of the new investment amount. Xfone will
      work together with Story management to try and bring the pre approved third
      party investment agreement to a successful finalization.

     

    7.2 Finder’s
      Fee.
      Story
      shall pay finder’s fee to any person who obtains an investor and/or an
      investment for Story. This fee shall equals five percent (5%) of the amount
      of
      the investment, provided that a person who proposes to act as finder shall
      enter
      into a finder’s agreement (excluding the proposed pre approved third party
      investment to which no finder’s fee agreement is required) with Story acceptable
      to Xfone, which shall provide, among other things, that the finder will comply
      with any applicable federal and state securities laws, and that the decision
      whether to accept a proposed investment in Story shall be in the sole discretion
      of the Board of Directors of Story however, its decision shall not be
      unreasonably delayed or withheld in any way.

     

    ARTICLE
      8


     

    miscellaneous

     

    8.1 The
      provisions, sections, sub-sections, clauses, sub-clauses or phrases in this
      Agreement are severable and if any such provision shall be held invalid or
      unenforceable in whole or in part by any court of competent jurisdiction, such
      invalidity or unenforceability shall not affect the remaining
      provisions.

     

    8.2 Indemnification.
      Story
      shall indemnify its Board members, Officers and Managing Director
      for any legal or otherwise proceedings initiated against them for any action
      or
      decision taken during and related to their employment and/or in their capacity
      as a Director, Officer or Managing Director of Story or while employed by Story
      in any other capacity as long as they were acting in good faith.

     

    8.3 Law
      and
      Jurisdiction. The formation construction, performance, validity and all aspects
      of this Agreement are governed by English law and the parties hereby irrevocably
      submit to the exclusive jurisdiction of the English Courts.

     

    
      
        
        

      

      
        -10-

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the parties have executed this Agreement to be effective as
      of
      the date first set forth above.

     

    


     

    NIR
      DAVISON

    


    /s/Nir
      Davison

    


    XFONE,
      INC.

    


    By:
      /s/
      Abraham Keinan

    


    STORY
      TELCOM, INC.

    


    By:
      /s/
      Nir Davison

    By:
      /s/Guy
      Nissenson

    


    STORY
      TELECOM LIMITED

    


    By:
      /s/
      Nir Davison

    By:
      /s/Guy
      Nissenson

    


    STORY
      TELECOM (IRELAND) LIMITED

    


    By:
      /s/
      Nir Davison

    By:
      /s/Guy
      Nissenson

    


    TRECASTLE
      HOLDINGS LIMITED

    


    By:
      /s/ Nir Davison

    


    SWIFTNET
      LIMITED

    


    By:
      /s/
      Abraham Keinan

    


    


    
      
        
        

      

      
        -11-