Document:

December 23, 2003

Guy Nissenson
President & COO
Xfone, Inc.
London, UK

Dear Guy:

Thank  you for  taking  the  time to help us  understand  Xfone's  business  and
shareholder  dynamics. In this proposal, we describe an action plan for a solid,
integrated IR/PR program.

I.       SITUATION ANALYSIS

Xfone  is  a   telecommunications   service  which  leverages   state-of-the-art
technologies and proprietary systems to provide a variety of services, including
long  distance  voice calls,  calling  cards,  fax  broadcast,  VOIP,  cellular,
cyber-office,  email-to-fail and messaging, efficiently and cost-effectively.  A
US corporation, Xfone's main operations are in the UK, and it services customers
in over 60 countries. Offering a comprehensive, single vendor telecommunications
solution to customers has allowed the company to grow from $2.M in 2000 to S13M+
in 2003, with future growth expected.  More important,  the company has been and
continues  to be  profitable.  Xfone  currently  is trading as a Bulletin  Board
stock.

To raise additional money and make future  acquisitions,  possible in the United
States,  Xfone needs to become  visible  among  potential  investors,  and build
liquidity trading volume. This includes moving to NASDAQ or AMEX,  communicating
its story to the  Street,  and  building a  "following"  among  money  managers,
private  investors,  etc. To do so, it needs to launch an  integrated  strategic
investor relations  campaign,  and PortfolioPR is the right agency to design and
execute it effectively.

II.      PUBLIC & INVESTOR RELATIONS GOALS

Xfone's key public and investor relations goals are to:

1.       Generage interest among the business and financial media to write about
         Xfone by  branding  the  Company as a  "special  value  situation"  - a
         telecom provider that has been able to make a profit during the current
         telecom  recession,  and as a company offering  customers what they now
         want - one stop service  provider (and biller) for all  telecom-related
         services;

2.       Develop and sustain  investor  interest to generate  trading volume and
         liquidity;

3.       Build  an  investor   "following"  to  facilitate  trading  and  future
         financing.

III.     PORTFOLIO PR STRATEGY

STAGE I: Position the Company

PortfolioPR will, within the first 2 months of its engagement.

1.       Develop Xfone's  brading  statement and "story" and incorporate it into
         all presentation material:

2.       Incorporate this message in the following material:

         o    A  Strategic  Corporate  Profile  - a 6 to 7  page  document  that
              communicates  the Company's  investment  opportunity for analysis,
              money managers, investors and financial media

         o    A compelling  PowerPoint  presentation.  We also will coach Guy to
              deliver it effectively.

3.       We will advise management on how to:

         o    Make Xfone's Website more investor-friendly

         o    Produce a marketing-oriented and cost-effective annual report.

STATE II:  Implement the Integrated Investor Relations Program

Parallel with the positioning of Xfone, PortfolioPR will:

1.       Develop a strategic  press release  program (which includes the timing,
         writing,  editing  and  submission  of  releases  to  appropriate  wire
         services for distribution  and posting) that generates  credibility and
         confidence.  More than  report  news,  the goal of such a program is to
         tell where the company is going and show that management delivers.

2.       Build a media campaign  around the Company's  cost-effective  services.
         This  includes  developing  case  studies to show how it saves  clients
         money and, if possible how its  "partnering"  strategy with non-profits
         is making money for them. To do so we develop a database of appropriate
         media  contacts  (print,  digital,  broadcast and Web). The goals is to
         feed the long-term investor relations program.

3.       Work  with  management  to  demonstrate  its  expertise  by  developing
         articles  and  white  papers  for  distribution  to  trade  groups  and
         organizations,  conferences,  and  trade  shows (as well as post on the
         Company Website). This includes identifying conferences and trade shows
         to attend as presenter and/or as exhibitor. We will alert investors and
         media  of  the  Company's   participation   in  order  to   demonstrate
         management's  expertise  and  credibility.  The  goal  is to  feed  the
         long-term investor relations program.

4.       Build  appropriate  investor database by researching and creating lists
         of appropriate retail brokers and money managers, and private investors
         who focus on micro-cap investments and telecom.

5.       Plan,  arrange  and manage  road shows with  targeted  money  managers,
         investors,  retail  brokers,  and  media  in  major  financial  cities,
         including  New York,  Chicago,  Philadelphia,  Boca Raton,  St.  Louis,
         Minneapolis, San Francisco, Boston, Atlanta and Los Angeles.

6.       If appropriate, develop a virtual road show program with targeted money
         managers,  investors,  analysis and retail stockbrokers in other cities
         (as well as in the ones above) in which  management web casts its story
         using PowerPoint sliders.

7.       Update the  Corporate  Profile  and Media Fact  Sheet  quarterly  or as
         needed.

8.       Be available on a special  projects  basis to handle event  programming
         opportunities,  including exhibit design,  hospitality events and staff
         training to maximize trade show ROL.

9.       Serve as investor relations counsel to address a range of issues,  such
         as Reg FD compliance.

IV.      PROTFOLIO PR:  THE RIGHT AGENCY FOR EXFONE

PortfolioPR is an integrated public relations,  investor relations and marketing
communications  firm. We will work closely with you to create a strategy to make
Xfone stand out from the crowd.  Then, we craft  powerful  messages that present
and  reinforce  your  brand and news.  Simultaneously,  we build  both media and
strategic  alliance databases and harness the distribution power of the internet
to gain media  attention.  We then  leverage  the  media's  interest in Xfone to
develop attention by potential clients and strategic partners.

What makes  PortfolioPR  truly  unique,  is that we're a true  "team"  that does
"whatever  it takes"  to  communicate  clients'  value,  brilliantly,  to target
audiences. Our principals personally guide your campaign.

o        Jerry Cahn, Ph.D., J.D. and PPR's  "Quarterback",  is a high tech based
         entrepreneur  who,  after turning around a public  healthcare  company,
         built Brilliant  Image, a leading US 24/7  multimedia  company using PR
         and  promotional  programs.  He  coordinates  both our PR and  database
         programs.

o        Paul  Holm is a  thirteen-year  veteran  of  training,  communications,
         public and investor  relations with extensive  experience  representing
         technology  companies  and has close  relationships,  or "high  touch,"
         across many different investor groups.

PortfolioPR  clients  include  McGraw-Hill  Construction,   Curtis-Wright,   NUR
Macroprinters,  RiT  Technologies  and On-Track  Innovations  (XFONE).  To fully
appreciate      us,      see      www.portfoliopr.com/1MinutePress.html      and
www.portfoliopr.com/PPR10.html

V.       PROPOSAL

For the one-year period starting  January 1, 2004,  PortfolioPR  will provide an
integrated  IR/PR program that entitles Xfone to 50 hours of services per month.
Since we prefer to invest in  companies  we believe  in, our monthly fee will be
$3500 in cash and 1000 shares until Xfone lists on NASDAQ; thereafter it will be
$4500 plus 1200 shares,  with shares payable  quarterly.  In addition,  upon the
signing of this  agreement,  PortfolioPR  will also receive 50,000  warrants for
Xfone common stock at $6 per share, and 5,000 warrants for Xfone common stock at
$10 per  share,  in  effect  for one  year.  Upon  Xfone's  listing  on  NASDAQ,
PortfolioPR will receive an additional 50,000 warrants for Xfone common stock at
$6 per share,  and 100,00  warrants for Xfone common stock at $10 per share,  in
effect for one year from date of listing.

The  retainer  for both the first and last month of this  agreement  are payable
with this signed  agreement.  Future monthly retainer fees will be billed on the
first of each month and are payable within ten (10) days of receipt. Termination
of this  agreement  requires  a 30-day  written  notification  of  cancellation.
Without  such  notification,  client  will  forfeit  the last  month's  payment.
Finally,  if this agreement is no terminated,  in writing,  30 days prior to the
end of this period,  PortfolioPR will continue to provide its service program on
a  month-to-month  basis,  subject to a 30-day advance  written  notification of
cancellation.

As part of our relationship, PortfolioPR may assist Xfone in raising capital, in
which case the client agrees to reward PortfolioPR as follows, within 30 days of
receiving the capital it raised:

o        Indirectly - for referring the client to another  entity,  which raises
         money  for it from  other  sources  within a year of the  introduction,
         PortfolioPR will receive 1% of the funds raised.

o        Directly  - for  referring  the  client to an entity and no one else is
         entitled to commissions, finders fees, etc for raising the capital from
         this entity,  which directly invests in the client within a year of the
         introduction, PortfolioPR will receive 6% of the funds raised.

PortfolioPR  carries over unexpended hours to subsequent  months.  When a client
requests  a special  project  that may  require a  significant  additional  time
commitment,  a written price  estimate will be provided and, once it is approved
by you in writing, it will be implemented.

To further save you money,  out-of-pocket  expenses such as offset,  messengers,
air courier, telephone, Xerox, postage and travel will be billed to you at cost,
rather than being  re-billed  with the standard  additional  agency markup of 20
percent,  in exchange  for having them paid then (10) days after you receive the
invoice.  Also, individual  expenditures above $500 will be expended only client
approval. All out-of-pocket expenses are billed as Special Invoices,  separately
from the  monthly  retainer.  If not paid in time,  Xfone  agrees to pay the 20%
markup.

Xfone agrees to identify and hold harmless  PortfolioPR and our employees,  from
and against all losses,  claims,  damages,  expenses or liabilities  that we may
incur based on information,  representations, reports or data you furnish us, to
the extent that such material is furnished,  prepared, approved and/or just used
by us.

The  PortfolioPR  team looks forward to working with you to effectively  promote
Xfone to each of the appropriate  targeted groups.  Your signature  acknowledges
acceptance of this proposal.

Thank you.                                  Cordially,

AGREED AND ACCEPTED                         PortfolioPR, Inc.

By:  ___________________________       By:  __________________________
Guy Nissenson, Presidenmt   Date       Paul Holm, Principal,      DateSTERN & CO. CONSULTING AGREEMENT

January 09, 2003

__________ xfone, inc. __________. (the "Company")

On behalf of Stern & Co.  ("Stern"),  I look  forward to working  with you as an
outside business consultant.  The purpose of this letter (the "Agreement") is to
set forth the terms and conditions under which Stern agrees to serve the Company
as an outside business consultant.

1.       Services.  Stern shall use its best  efforts to perform  the  following
         services in a timely manner:  (a) become familiar with the business and
         operations of the Company and review and analyze the  Company's  formal
         and informal strategic, marketing, financial and business plans and (b)
         advice the  Company in  strategic  planning  matters  and assist in the
         implementation of short- and long-term  strategic planning  initiatives
         to  enhance  and  accelerate  the  commercialization  of the  Company's
         business objectives.

2.       Term.  This  Agreement  shall be in effect for six (6) months  from the
         date of acceptance by the Company.

3.       Consideration.  For the valuable  advice and services to be provided by
         Stern to the Company  under this  Agreement,  the Company will issue to
         Stern (i) ___ 17,500  _____ shares of the  Company's  common stock (the
         "Shares")  and (ii) 17500  warrants at $3.50 which expire 10 days after
         the  company's  commencement  of trading  on nasadaq  small cap or amex
         (iii) 17,500 warrants at $5.50.  This warrant is a 5 year warrant.  All
         compensation  due to Stern under the terms of this  Agreement  shall be
         deemed earned upon execution  hereof.  The Shares and shares underlying
         the   Warrants   shall  have   anti-dilution   provisions,   piggy-back
         registrations right and cashless exercise rights.

4.       Representations and Warranties.  The Company represents and warrants to
         Stern that the  statements  contained  in  paragraph  4 are correct and
         complete as of the  Effective  Date:  (a) The Company is a  corporation
         duly organized, validly existing and active under the laws of the State
         of New York (b) The Company has full  corporate  power and authority to
         (i)  conduct  its  business  as now  conducted  and as a proposed to be
         conducted and to own, use, license, and lease its assets and properties
         and (ii) enter into this Agreement and to consummate  the  transactions
         contemplated herein.

5.       Expenses.  In addition to the  consideration  set forth in paragraph 3,
         the Company shall reimburse Stern and its affiliates, upon request, for
         all reasonable  out-of-pocket  expenses incurred in connection with the
         performance  by  Stern  of  its   obligations   under  this  Agreement.
         Out-of-pocket  expenses may include necessary out-of-town travel agreed
         to by the Company  (including  meals and lodging),  database  services,
         courier  charges,  and fees and expenses of third parties such as legal
         counsel, etc. The Company shall approve such expenses in advance.

6.       Indemnity.  The Company agrees to indemnify,  defend, and hold harmless
         Stern and its  affiliates,  directors,  officers,  counsel,  employees,
         agents, members, managers,  successors, assigns and controlling persons
         (as defined in the Act) (each, an "Indemnified Party") from and against
         any and all losses, claims damages,  costs,  expenses,  and liabilities
         (including any  investigatory,  legal,  and other expenses  incurred as
         they are incurred by an Indemnified  Party in connection with preparing
         for or  defending  any action,  claim,  or  proceeding,  whether or not
         resulting in any liability)  (collectively,  "Indemnifiable Losses") to
         which any Indemnified Party may become subject or liable relating to or
         a rising out of (a) the Agreement or the services to be performed under
         the  Agreement or any agreement  between the parties to this  Agreement
         (b) any  transactions  referred to in the Agreement or any transactions
         arising out of the transactions  contemplated by the Agreement, (c) any
         inaccuracy in or breach in the  representations  and  warranties of the
         Company contained in this Agreement, and (d) any failure of the Company
         to perform its  obligations  under this  Agreement,  provided  that the
         Company shall not be liable to an Indemnified Party in any such case to
         the  extent  that any  jurisdiction  to have  resulted  as a direct and
         proximate cause from the willful  misconduct or gross  negligence of an
         Indemnified  Party. No Indemnified Party shall be liable,  responsible,
         or accountable in damages and costs and expenses (including  attorneys'
         fees) under this Agreement except fro any liability for losses, claims,
         damages, or liabilities finally judicially  determined to have resulted
         solely and  exclusively  from actions taken or omitted to be taken as a
         direct result of such  Indemnified  Party or insufficient to fully hold
         any Indemnified  Party harmless,  then the Company agrees to contribute
         to the amount paid or payable by such Indemnified  Party as a result of
         such  Indemnifiable  Losses in such  proportion  as is  appropriate  to
         reflect the relative benefits received by and fault of the Company,  on
         the one hand, and the relative benefits received by and fault of Stern,
         on the other hand.

7.       Legal Matters.  This Agreement shall be interpreted  under the governed
         by the laws of the  State of New York.  Any  controversy,  dispute,  or
         claim between the parties  relating to this Agreement shall be resolved
         by binding  arbitration  in accordance  with the rules of this American
         Arbitration Association.

8.       Representation.  The Company acknowledges that it has been given notice
         by        Stern         that        Stern        is        not        a
         ---------------------------------------------------------          ----
         --------- licensed securities  broker-dealer and therefore Stern is not
         required      under      this      Agreement      or      any      side
         -----------------------------------------------------------------------
         agreement, whether verbally or in writing, to sell securities on behalf
         of      the       Company      or      any       issuer       ---------
         ----------------------------------------------------------   affiliated
         with the Company.  Moreover,  the Company  acknowledges that Stern does
         not  intend  to  -----------------------------   negotiate  raising  of
         capital transactions, does not intend to directly solicit purchasers of
         the Company's common stock,  will not hold any funds or securities in a
         capital raising  transaction,  and the compensation due to Stern is not
         based on a specified percentage of any actual or proposed funds raised.
         The Company  acknowledges that Stern has informed it that neither Stern
         nor any of its  members  or  employees  provides  any  legal  advice or
         counsel.  The duties of Stern  shall not include  auditing,  valuation,
         accounting,  computer network design or appraisal services, which shall
         be procured by the Company at its own expense.

9.       Independent  Contractor.  Stern is an  independent  contractor  and may
         engage in other  business  activities.  Since  Stern is an  independent
         contractor,   nothing  in  this  Agreement   shall  be  interrupted  to
         constitute that Stern is an agent, employee, or partner of the Company,
         nor shall either party have any authority to bind the other.

10.      Entire  Agreement.  This  Agreement  constitutes  the entire  agreement
         between  the  parties  pertaining  to the  subject  matter  hereof  and
         supersedes  and  cancels  any  prior  communications,  representations,
         understanding,  and agreements between the parties. No modifications of
         or  changes  to this  Agreement  shall  be  binding,  nor can any of is
         provisions be waived, unless agreed to in writing by the parties. There
         are no side  agreements,  whether  verbally or in writing,  between the
         Company and Stern.

11.      Confidentiality.  The  parties  agreed  that the  terms  and all of the
         encompassing  components of this Agreement shall be kept  confidential,
         unless this  information  is required to be  disclosed  pursuant to any
         inquiries by federal,  state,  or local law  enforcement or pursuant to
         paragraph 9.

         If the foregoing is acceptable to you, please execute this Agreement in
the place provided below.

Very Truly Yours,

By:
    -------------------------------------------------
     Shai Z. Stern

ACCEPTED AND AGREED

Company:
          -------------------------------------------

By:
    --------------------------------------------------

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