Document:

Unassociated Document

    
      Exhibit
        10.51

       

      THIS
        WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT
        HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
        ANY
        APPLICABLE STATE SECURITIES LAWS. THIS WARRANT AND THE COMMON STOCK ISSUABLE
        UPON EXERCISE OF THIS WARRANT MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED
        OR
        HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO
        THIS
        WARRANT OR THE SHARES OF COMMON STOCK UNDERLYING ITS EXERCISE UNDER SAID
        ACT AND
        ANY APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY
        SATISFACTORY TO XFONE, INC. THAT SUCH REGISTRATION IS NOT REQUIRED.

       

      Right
        to
        Purchase up to 157,500 Shares of Common Stock of

       

      XFONE,
        INC.

       

      (subject
        to adjustment as provided herein)

       

      COMMON
        STOCK PURCHASE WARRANT

      
        	
                 

                No.
                  _________________

              	
                 

                Issue
                  Date: September 27, 2005

              

      

       

      XFONE,
        INC., a corporation organized under the laws of the State of Nevada (the
        “Company”), hereby certifies that, for value received, LAURUS MASTER FUND, LTD.,
        or assigns (the “Holder”), is entitled, subject to the terms set forth below, to
        purchase from the Company (as defined below) from and after the Issue Date
        of
        this Warrant and at any time or from time to time before 5:00 p.m., New York
        time, through the close of business September 27, 2010 (the “Expiration Date”),
        up to 157,500 fully paid and nonassessable shares of Common Stock (as
        hereinafter defined), $0.001 par value per share, at the applicable Exercise
        Price (as defined below) per share. The number of such shares of Common Stock
        and the applicable Exercise Price per share are subject to adjustment as
        provided herein. Reference is made to the Securities Purchase Agreement entered
        into by the Company and Holder dated as of the date hereof (as the same may
        be
        amended, modified and/or supplemented from time to time), (the “Purchase
        Agreement”). Capitalized terms used but not otherwise defined herein shall have
        the meanings given them in the Purchase Agreement.

       

      As
        used
        herein the following terms, unless the context otherwise requires, have the
        following respective meanings:

       

      (a)  The
        term
“Company” shall include XFONE, INC. and any corporation which shall succeed, or
        assume the obligations of, XFONE, INC. hereunder.

       

      (b)  The
        term
“Common Stock” includes (i) the Company’s Common Stock, par value $0.001 per
        share; and (ii) any other securities into which or for which any of the
        securities described in the preceding clause (i) may be converted or exchanged
        pursuant to a plan of recapitalization, reorganization, merger, sale of assets
        or otherwise.

       

      (c)  The
        term
“Other Securities” refers to any stock (other than Common Stock) and other
        securities of the Company or any other person (corporate or otherwise) which
        the
        holder of the Warrant, pursuant to Section 3 and/or 4 hereof, at any time
        shall
        be entitled to receive, or shall have received, on the exercise of the Warrant,
        in lieu of or in addition to Common Stock, or which at any time shall be
        issuable or shall have been issued in exchange for or in replacement of Common
        Stock or Other Securities pursuant to Section 4 or otherwise.

       

      (i)  The
        “Exercise Price” applicable under this Warrant shall be $3.80.

       

      1.  Exercise
        of Warrant.

       

      1.1.  Number
        of Shares Issuable upon Exercise.
        From
        and after the issue date of this Warrant through and including the Expiration
        Date, the Holder shall be entitled to receive, upon exercise of this Warrant
        in
        whole or in part, by (a) delivery of an original or fax copy of an exercise
        notice in the form attached hereto as Exhibit A (the “Exercise Notice”), (b)
        surrender of this Warrant, and (c) making payment to the Company as set forth
        herein, shares of Common Stock of the Company, subject to adjustment pursuant
        to
        Section 4.

       

      

       

      1.2.  Company
        Acknowledgment.
        The
        Company will, at the time of the exercise of this Warrant, upon the request
        of
        the Holder hereof acknowledge in writing its continuing obligation to afford
        to
        such holder any rights to which such holder shall continue to be entitled
        after
        such exercise in accordance with the provisions of this Warrant. If the Holder
        shall fail to make any such request, such failure shall not affect the
        continuing obligation of the Company to afford to such holder any such
        rights.

       

      1.3.  Trustee
        for Warrant Holders.
        In the
        event that a bank or trust company shall have been appointed as trustee for
        the
        Holders of this Warrant pursuant to Subsection 3.2, such bank or trust company
        shall have all the powers and duties of a warrant agent (as hereinafter
        described) and shall accept, in its own name for the account of the Company
        or
        such successor person as may be entitled thereto, all amounts otherwise payable
        to the Company or such successor, as the case may be, on exercise of this
        Warrant .

       

      2.  Procedure
        for Exercise.

       

      2.1.  Delivery
        of Stock Certificates, Etc., on Exercise.
        The
        Company agrees that the shares of Common Stock purchased upon exercise of
        this
        Warrant shall be deemed to be issued to the Holder as the record owner of
        such
        shares as of the close of business on the date on which this Warrant shall
        have
        been surrendered and payment made for such shares in accordance herewith.
        As
        soon as practicable after the exercise of this Warrant in full or in part,
        and
        in any event within three (3) business days thereafter, the Company at its
        expense (including the payment by it of any applicable issue taxes) will
        cause
        to be issued in the name of and delivered to the Holder, or as such Holder
        (upon
        payment by such Holder of any applicable transfer taxes) may direct in
        compliance with applicable securities laws, a certificate or certificates
        for
        the number of duly and validly issued, fully paid and nonassessable shares
        of
        Common Stock (or Other Securities) to which such Holder shall be entitled
        on
        such exercise.

       

      2.2.  Exercise.

       

      (a)  Payment
        may be made by wire transfer to the Company in an amount equal to the applicable
        aggregate Exercise Price, for the number of Common Shares specified in such
        Exercise Notice (as such exercise number shall be adjusted to reflect any
        adjustment in the total number of shares of Common Stock issuable to the
        Holder
        per the terms of this Warrant) and the Holder shall thereupon be entitled
        to
        receive the number of duly authorized, validly issued, fully-paid and
        non-assessable shares of Common Stock (or Other Securities) determined as
        provided herein.

       

      3.  Effect
        of Reorganization, Etc.; Adjustment of Exercise Price.

       

      3.1.  Reorganization,
        Consolidation, Merger, Etc.
        In case
        at any time or from time to time, the Company shall (a) effect a reorganization,
        (b) consolidate with or merge into any other person, or (c) transfer all
        or
        substantially all of its properties or assets to any other person under any
        plan
        or arrangement contemplating the dissolution of the Company, then, in each
        such
        case, as a condition to the consummation of such a transaction, proper and
        adequate provision shall be made by the Company whereby the Holder, on the
        exercise hereof as provided in Section 1 at any time after the consummation
        of
        such reorganization, consolidation or merger or the effective date of such
        dissolution, as the case may be, shall receive, in lieu of the Common Stock
        (or
        Other Securities) issuable on such exercise prior to such consummation or
        such
        effective date, the stock and other securities and property (including cash)
        to
        which such Holder would have been entitled upon such consummation or in
        connection with such dissolution, as the case may be, if such Holder had
        so
        exercised this Warrant, immediately prior thereto, all subject to further
        adjustment thereafter as provided in Section 4.

       

      3.2.  Dissolution.
        In the
        event of any dissolution of the Company following the transfer of all or
        substantially all of its properties or assets, the Company, concurrently
        with
        any distributions made to holders of its Common Stock, shall at its expense
        deliver or cause to be delivered to the Holder the stock and other securities
        and property (including cash, where applicable) receivable by the Holder
        pursuant to Section 3.1, or, if the Holder shall so instruct the Company,
        to a
        bank or trust company specified by the Holder and having its principal office
        in
        New York, NY as trustee for the Holder (the “Trustee”).

       

      3.3.  Continuation
        of Terms.
        Upon
        any reorganization, consolidation, merger or transfer (and any dissolution
        following any transfer) referred to in this Section 3, this Warrant shall
        continue in full force and effect and the terms hereof shall be applicable
        to
        the shares of stock and other securities and property receivable on the exercise
        of this Warrant after the consummation of such reorganization, consolidation
        or
        merger or the effective date of dissolution following any such transfer,
        as the
        case may be, and shall be binding upon the issuer of any such stock or other
        securities, including, in the case of any such transfer, the person acquiring
        all or substantially all of the properties or assets of the Company, whether
        or
        not such person shall have expressly assumed the terms of this Warrant as
        provided in Section 4. In the event this Warrant does not continue in full
        force
        and effect after the consummation of the transactions described in this Section
        3, then the Company’s securities and property (including cash, where applicable)
        receivable by the Holder will be delivered to the Holder or the Trustee as
        contemplated by Section 3.2.

       

      4.  Extraordinary
        Events Regarding Common Stock.
        (I) In
        the event that the Company shall (a) issue additional shares of the Common
        Stock
        as a dividend or other distribution on outstanding Common Stock or any preferred
        stock issued by the Company (b) subdivide its outstanding shares of Common
        Stock, or (c) combine its outstanding shares of the Common Stock into
        a
        smaller number of shares of the Common Stock, then, in each such event, the
        Exercise Price shall, simultaneously with the happening of such event, be
        adjusted by multiplying the then Exercise Price by a fraction, the numerator
        of
        which shall be the number of shares of Common Stock outstanding immediately
        prior to such event and the denominator of which shall be the number of shares
        of Common Stock outstanding immediately after such event, and the product
        so
        obtained shall thereafter be the Exercise Price then in effect. The Exercise
        Price, as so adjusted, shall be readjusted in the same manner upon the happening
        of any successive event or events described herein in this Section 4. (II)
        The
        number of shares of Common Stock that the Holder shall thereafter, on the
        exercise hereof as provided in Section 1, be entitled to receive shall be
        adjusted to a number determined by multiplying the number of shares of Common
        Stock that would otherwise (but for the provisions of this Section 4) be
        issuable on such exercise by a fraction of which (a) the numerator is the
        Exercise Price that would otherwise (but for the provisions of this Section
        4)
        be in effect, and (b) the denominator is the Exercise Price in effect on
        the
        date of such exercise (taking into account the provisions of this Section
        4).
        Notwithstanding the provisions of this Section 4(II), with effect upon the
        irrevocable payment in full of the Obligations (as defined in the Master
        Security Agreement) no further adjustment to the number of shares of Common
        Stock required by this Section 4(II) shall be required. 

       

      5.  Certificate
        as to Adjustments.
        In each
        case of any adjustment or readjustment in the shares of Common Stock (or
        Other
        Securities) issuable on the exercise of this Warrant, the Company at its
        expense
        will promptly cause its Chief Financial Officer or other appropriate designee
        to
        compute such adjustment or readjustment in accordance with the terms of this
        Warrant and prepare a certificate setting forth such adjustment or readjustment
        and showing in detail the facts upon which such adjustment or readjustment
        is
        based, including a statement of (a) the consideration received or
        receivable by the Company for any additional shares of Common Stock (or Other
        Securities) issued or sold or deemed to have been issued or sold, (b) the
        number of shares of Common Stock (or Other Securities) outstanding or deemed
        to
        be outstanding, and (c) the Exercise Price and the number of shares of Common
        Stock to be received upon exercise of this Warrant, in effect immediately
        prior
        to such adjustment or readjustment and as adjusted or readjusted as provided
        in
        this Warrant. The Company will forthwith mail a copy of each such certificate
        to
        the Holder of this Warrant and any Warrant Agent of the Company (appointed
        pursuant to Section 11 hereof).

       

      6.  Reservation
        of Stock, Etc., Issuable on Exercise of Warrant.
        The
        Company will at all times reserve and keep available, solely for issuance
        and
        delivery on the exercise of this Warrant, shares of Common Stock (or Other
        Securities) from time to time issuable on the exercise of this
        Warrant.

       

      7.  Assignment;
        Exchange of Warrant.
        Subject
        to compliance with applicable securities laws, this Warrant, and the rights
        evidenced hereby, may be transferred by any registered holder hereof (a
“Transferor”) in whole or in part. On the surrender for exchange of this
        Warrant, with the Transferor’s endorsement in the form of Exhibit B attached
        hereto (the “Transferor Endorsement Form”) and subject to compliance with the
        requirements set forth in the Transferor Endorsement Form, together with
        evidence reasonably satisfactory to the Company demonstrating compliance
        with
        applicable securities laws, which shall include, without limitation, the
        provision of a legal opinion from the Transferor’s counsel (at the Holder’s
        expense) that such transfer is exempt from the registration requirements
        of
        applicable securities laws, the Company at its expense (but with payment
        by the
        Transferor of any applicable transfer taxes) will issue and deliver to or
        on the
        order of the Transferor thereof a new Warrant of like tenor, in the name
        of the
        Transferor and/or the transferee(s) specified in such Transferor Endorsement
        Form (each a “Transferee”), calling in the aggregate on the face or faces
        thereof for the number of shares of Common Stock called for on the face or
        faces
        of the Warrant so surrendered by the Transferor.

       

      8.  Replacement
        of Warrant.
        On
        receipt of evidence reasonably satisfactory to the Company of the loss, theft,
        destruction or mutilation of this Warrant and, in the case of any such loss,
        theft or destruction of this Warrant, on delivery of an indemnity agreement
        or
        security reasonably satisfactory in form and amount to the Company or, in
        the
        case of any such mutilation, on surrender and cancellation of this Warrant,
        the
        Company at its expense will execute and deliver, in lieu thereof, a new Warrant
        of like tenor.

       

      9.  Registration
        Rights.
        The
        Holder has been granted certain registration rights by the Company. These
        registration rights are set forth in a Registration Rights Agreement entered
        into by the Company and Holder dated as of the date hereof, as the same may
        be
        amended, modified and/or supplemented from time to time.

       

      10.  Maximum
        Exercise.
        Notwithstanding anything contained herein to the contrary, the Holder shall
        not
        be entitled to exercise this Warrant in connection with that number of shares
        of
        Common Stock which would exceed the difference between (i) 4.99% of the issued
        and outstanding shares of Common Stock and (ii) the number of shares of Common
        Stock beneficially owned by the Holder for the purposes of the immediately
        preceding sentence, beneficial ownership shall be determined in accordance
        with
        Section 13(d) of the Exchange Act, as amended, and Regulation 13d-3 thereunder.
        The conversion limitation described in this Section 10 shall automatically
        become null and void following notice to the Company upon the occurrence
        and
        during the continuance of an Event of Default under and as defined in the
        Note
        made by the Company to the Holder dated the date hereof (as amended, modified
        or
        supplemented from time to time, the “Note”), or upon 75 days prior notice to the
        Company, except that at no time shall the number of shares of Common Stock
        beneficially owned by the Holder exceed 19.99% of the outstanding shares
        of
        Common Stock. Notwithstanding anything contained herein to the contrary,
        the
        number of shares of Common Stock issuable by the Company and acquirable by
        the
        Holder at a price below $3.10 per share pursuant to the terms of this Warrant,
        the Note, the Purchase Agreement (as defined in the Note), any Related Agreement
        (as defined in the Purchase Agreement) or otherwise, shall not exceed an
        aggregate of 1,377,533 shares of Common Stock (subject to appropriate adjustment
        for stock splits, stock dividends, or other similar recapitalizations affecting
        the Common Stock) (the “Maximum
        Common Stock Issuance”),
        unless the issuance of Common Stock hereunder in excess of the Maximum Common
        Stock Issuance shall first be approved by the Company’s shareholders. If at any
        point in time and from time to time the number of shares of Common Stock
        issued
        pursuant to the terms of this Warrant, the Note, the Purchase Agreement or
        any
        Related Agreement, together with the number of shares of Common Stock that
        would
        then be issuable by the Company to the Holder in the event of a conversion
        or
        exercise pursuant to the terms of this Warrant, the Note, the Purchase
        Agreement, any Related Agreement or otherwise, would exceed the Maximum Common
        Stock Issuance but for this Section 10, the Company shall promptly call a
        shareholders meeting to solicit shareholder approval for the issuance of
        the
        shares of Common Stock hereunder in excess of the Maximum Common Stock Issuance.
        Notwithstanding anything contained herein to the contrary, the Holder shall
        not,
        pursuant to any Exercise Notice, be entitled to exercise this Warrant on
        an
        Exercise Date for fewer than 3,000 shares of Common Stock. 

       

      11.  Warrant
        Agent.
        The
        Company may, by written notice to the each Holder of the Warrant, appoint
        an
        agent for the purpose of issuing Common Stock (or Other Securities) on the
        exercise of this Warrant pursuant to Section 1, exchanging this Warrant pursuant
        to Section 7, and replacing this Warrant pursuant to Section 8, or any of
        the
        foregoing, and thereafter any such issuance, exchange or replacement, as
        the
        case may be, shall be made at such office by such agent.

       

      12.  Transfer
        on the Company’s Books.
        Until
        this Warrant is transferred on the books of the Company, the Company may
        treat
        the registered Holder hereof as the absolute owner hereof for all purposes,
        notwithstanding any notice to the contrary.

       

      13.  Notices,
        Etc.
        All
        notices and other communications from the Company to the Holder shall be
        delivered by a nationally recognized overnight courier or mailed by first
        class
        registered or certified mail, postage prepaid, at such address as may have
        been
        furnished to the Company in writing by such Holder or, until any such Holder
        furnishes to the Company an address, then to, and at the address of, the
        last
        Holder who has so furnished an address to the Company. 

       

      14.  The
        Holder has substantial experience in evaluating, lending and investing in
        private placement transactions of securities in companies similar to the
        Company
        so that it is capable of evaluating the merits and risks of its investment
        in
        the Company and has the capacity to protect its own interests. The Holder
        must
        bear the economic risk of this transaction until the Common Stock issuable
        upon
        exercise of this Warrant are sold pursuant to: (i) an effective registration
        statement under the 1933 Act; or (ii) an exemption from registration is
        available with respect to such sale. The Holder represents that by reason
        of
        its, or of its management’s, business and financial experience, the Holder has
        the capacity to evaluate the merits and risks of its investment in the Note,
        the
        Warrant and the securities deriving from this transaction, and to protect
        its
        own interests in connection with the transactions contemplated in the Securities
        Purchase Agreement and any Related Agreement (as defined in the Securities
        Purchase Agreement), and is experienced in evaluating and investing in private
        placement transactions of securities of companies in a similar stage of
        development. Further, Holder has not lent the monies involved and entered
        into
        this transaction as a result of any form of general advertising, including
        advertisements, articles, notices, or other communications in any newspaper,
        magazine, or similar media, or telecommunications in connection with the
        transactions contemplated in the Securities Purchases Agreement or any Related
        Agreement. The
        Holder represents that it is an “accredited investor” within the meaning of
        Regulation D under the 1933 Act.
        

       

      15.  Holder’s
        Status.
        The
        Holder shall not, by virtue of its status as a Holder of the Warrant, be
        entitled to any rights of a shareholder in the Company, either at law or
        equity,
        and the rights of the Holder are limited to those expressly set forth in
        this
        Warrant. 

       

      16.  Voluntary
        Adjustment by the Company. The Company may, at any time and at its sole
        discretion, during the effective term of this Warrant, reduce the then current
        Exercise Price to any amount below the then current Exercise Price, for such
        period of time deemed appropriate by the Board of Directors of the Company
        in
        the exercise of their good faith business judgment.

       

      17.  Miscellaneous.
        This
        Warrant and any term hereof may be changed, waived, discharged or terminated
        only by an instrument in writing signed by the party against which enforcement
        of such change, waiver, discharge or termination is sought. THIS WARRANT
        SHALL
        BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF STATE OF NEW
        YORK
        WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS. ANY ACTION BROUGHT CONCERNING
        THE TRANSACTIONS CONTEMPLATED BY THIS WARRANT SHALL BE BROUGHT ONLY IN THE
        STATE
        COURTS OF NEW YORK OR IN THE FEDERAL COURTS LOCATED IN THE STATE OF NEW YORK;
        PROVIDED, HOWEVER, THAT THE HOLDER MAY CHOOSE TO WAIVE THIS PROVISION AND
        BRING
        AN ACTION OUTSIDE THE STATE OF NEW YORK. The individuals executing this Warrant
        on behalf of the Company agree to submit to the jurisdiction of such courts
        and
        waive trial by jury. The prevailing party shall be entitled to recover from
        the
        other party its reasonable attorneys’ fees and costs. In the event that any
        provision of this Warrant is invalid or unenforceable under any applicable
        statute or rule of law, then such provision shall be deemed inoperative to
        the
        extent that it may conflict therewith and shall be deemed modified to conform
        with such statute or rule of law. Any such provision which may prove invalid
        or
        unenforceable under any law shall not affect the validity or enforceability
        of
        any other provision of this Warrant. The headings in this Warrant are for
        purposes of reference only, and shall not limit or otherwise affect any of
        the
        terms hereof. The invalidity or unenforceability of any provision hereof
        shall
        in no way affect the validity or enforceability of any other provision hereof.
        The Company acknowledges that legal counsel participated in the preparation
        of
        this Warrant and, therefore, stipulates that the rule of construction that
        ambiguities are to be resolved against the drafting party shall not be applied
        in the interpretation of this Warrant to favor any party against the other
        party.

       

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        OF PAGE INTENTIONALLY LEFT BLANK;

       

      SIGNATURE
        PAGE FOLLOWS]

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      IN
        WITNESS WHEREOF, the Company has executed this Warrant as of the date first
        written above.

       

      

      
        	 	
                XFONE,
                  INC.

              
	 	 
	
                WITNESS:

              	 
	 	
                By:
                        
                  

              
	 	
                Name: Guy
                  Nissenson

              
	                                                                   
                	
                Title: President
                  & CEO

              

      

       

      

      
        
          
             

          

          
          

        

        
          
          

          
            

          

        

        
          
          

          
          

        

      

      Exhibit
        A

       

      FORM
        OF SUBSCRIPTION

      (To
        Be
        Signed Only On Exercise Of Warrant)

       

      TO: XFONE,
        INC.

       

      Attention: Chief
        Financial Officer

       

      The
        undersigned, pursuant to the provisions set forth in the attached Warrant
        (No.____), hereby irrevocably elects to purchase (check applicable
        box):

      
        	
                 ________

              	
                 

                ________
                  shares of the Common Stock covered by such Warrant; or

              
	
                 ________

              	
                 

                the
                  maximum number of shares of Common Stock covered by such Warrant
                  pursuant
                  to the cashless exercise procedure set forth in Section
                  2.

              

      

       

      The
        undersigned herewith makes payment of the full Exercise Price for such shares
        at
        the price per share provided for in such Warrant, which is $___________.
        Such
        payment takes the form of (check applicable box or boxes):

      
        	
                 ________

              	
                 

                $__________
                  in lawful money of the United States; and/or

              
	
                 ________

              	
                 

                the
                  cancellation of such portion of the attached Warrant as is exercisable
                  for
                  a total of _______ shares of Common Stock (using a Fair Market
                  Value of
                  $_______ per share for purposes of this calculation);
                  and/or

              
	
                 ________

              	
                 

                the
                  cancellation of such number of shares of Common Stock as is necessary,
                  in
                  accordance with the formula set forth in Section 2.2, to exercise
                  this
                  Warrant with respect to the maximum number of shares of Common
                  Stock
                  purchasable pursuant to the cashless exercise procedure set forth
                  in
                  Section 2.

              

      

       

      The
        undersigned requests that the certificates for such shares be issued in the
        name
        of, and delivered to ______________________________________________ whose
        address is
        ___________________________________________________________________________.

       

      The
        undersigned represents and warrants that all offers and sales by the undersigned
        of the securities issuable upon exercise of the within Warrant shall be made
        pursuant to registration of the Common Stock under the Securities Act of
        1933,
        as amended (the “Securities Act”) or pursuant to an exemption from registration
        under the Securities Act.

       

      
        	
                Dated:
                        
                  

              	                                                                       
                                     
                
	 	
                (Signature
                  must conform to name of holder as specified on the face of the
                  Warrant)

              
	 	 
	 	
                Address:     

              
	 	           
                                                                         
                 

      

       

      
        
        

        
          

        

      

      
        
        

        
        

      

      Exhibit
        B

       

      FORM
        OF TRANSFEROR ENDORSEMENT

       

      (To
        Be
        Signed Only On Transfer Of Warrant)

       

      For
        value
        received, the undersigned hereby sells, assigns, and transfers unto the
        person(s) named below under the heading “Transferees” the right represented by
        the within Warrant to purchase the percentage and number of shares of Common
        Stock of XFONE, INC.into which the within Warrant relates specified under
        the
        headings “Percentage Transferred” and “Number Transferred,” respectively,
        opposite the name(s) of such person(s) and appoints each such person Attorney
        to
        transfer its respective right on the books of XFONE, INC.with full power
        of
        substitution in the premises.

      
        	
                 

                Transferees

              	
                 

                Address

              	
                 

                Percentage
                  Transferred

              	
                 

                Number

                Transferred

              
	                                                     
                	                                                    
                	                                 
                	                                     
                 
	                                                     
                	                                                    
                	                                 
                	                                       
                
	                                                     
                	                                                    
                	                                 
                	                                       
                
	                                                     
                	                                                    
                	                                 
                	                                       
                

      

       

      

      
        	
                 

                Dated:
                         

              	                                                                                    
                
	 	
                (Signature
                  must conform to name of holder as specified on the face of the
                  Warrant)

              
	 	 
	 	
                Address:
                       
                  

              
	 	           
                                                                                      
                 
	 	
                 

                SIGNED
                  IN THE PRESENCE OF:

              
	 	                                                                                                
                
	 	
                (Name)

              
	
                ACCEPTED
                  AND AGREED:

              	 
	
                [TRANSFEREE]

              	 
	                                                                                           
                	 
	
                (Name)Unassociated Document

    
      Exhibit
        10.52

       

      REGISTRATION
        RIGHTS AGREEMENT

       

      This
        Registration Rights Agreement (this “Agreement”) is made and entered into as of
        September 27, 2005, by and between XFONE, INC., a Nevada corporation (the
        “Company”), and Laurus Master Fund, Ltd. (the “Purchaser”).

       

      This
        Agreement is made pursuant to the Securities Purchase Agreement, dated as
        of the
        date hereof, by and between the Purchaser and the Company (as amended, modified
        or supplemented from time to time, the “Securities Purchase Agreement”) calling
        for the issuance by the Company of a convertible term note in the aggregate
        principal amount of US$2,000,000 and warrants, and pursuant to the Note and
        the
        Warrants referred to therein.

       

      The
        Company and the Purchaser hereby agree as follows:

       

      1.  Definitions.
        Capitalized terms used and not otherwise defined herein that are defined
        in the
        Securities Purchase Agreement shall have the meanings given such terms in
        the
        Securities Purchase Agreement. As used in this Agreement, the following terms
        shall have the following meanings:

       

      “Commission”
        means
        the Securities and Exchange Commission.

       

      “Common
        Stock”
        means
        shares of the Company’s common stock, par value $0.001 per share.

       

      “Effectiveness
        Date”
        means
        (i) with respect to the initial Registration Statement required to be filed
        hereunder, a date no later than one hundred and twenty (120) days following
        the
        date hereof and (ii) with respect to each additional Registration Statement
        required to be filed hereunder, a date no later than forty five (45) days
        following the applicable Filing Date.

       

      “Effectiveness
        Period”
        has the
        meaning set forth in Section 2(a).

       

      “Exchange
        Act”
        means
        the Securities Exchange Act of 1934, as amended, and any successor
        statute.

       

      “Filing
        Date”
        means,
        with respect to (i) the Registration Statement required to be filed hereunder
        in
        respect of the shares of Common Stock issuable upon conversion of the Note,
        and
        (ii) the shares of Common Stock issuable upon exercise of any Warrant, a
        date no
        later than forty five (45) days following the date hereof, Shares of Common
        Stock issuable to the Holder as a result of adjustments to the Fixed Conversion
        Price or
        Exercise Price, as the case may be,
        made
        pursuant to the Note or the Warrant or otherwise, thirty (30) days after
        the
        occurrence such event or the date of the adjustment of the Fixed Conversion
        Price or Exercise Price, as the case may be, provided however, that unless
        the
        shares of Common Stock issuable to the Holder as a result of adjustments
        to the
        Fixed Conversion Price or Exercise Price exceed an aggregate of 65,000 shares,
        the Holder shall have “piggyback’ registration rights in respect of such shares
        as set forth in Section 7(e) hereof .

       

      “Holder”
        or
“Holders”
        means
        the Purchaser or any of its affiliates or transferees to the extent any of
        them
        hold Registrable Securities, other than those purchasing Registrable Securities
        in a market transaction.

       

      “Indemnified
        Party”
        has the
        meaning set forth in Section 5(c).

       

      “Indemnifying
        Party”
        has the
        meaning set forth in Section 5(c).

       

      “Note”
        has the
        meaning set forth in the Securities Purchase Agreement.

       

      “Proceeding”
        means
        an action, claim, suit, investigation or proceeding (including, without
        limitation, an investigation or partial proceeding, such as a deposition),
        whether commenced or threatened.

       

      “Prospectus”
        means
        the prospectus included in the Registration Statement (including, without
        limitation, a prospectus that includes any information previously omitted
        from a
        prospectus filed as part of an effective registration statement in reliance
        upon
        Rule 430A promulgated under the Securities Act), as amended or supplemented
        by
        any prospectus supplement, with respect to the terms of the offering of any
        portion of the Registrable Securities covered by the Registration Statement,
        and
        all other amendments and supplements to the Prospectus, including post-effective
        amendments, and all material incorporated by reference or deemed to be
        incorporated by reference in such Prospectus.

       

      “Registrable
        Securities”
        means
        the shares of Common Stock issued upon the conversion of the Note and issuable
        upon exercise of the Warrants ;
        provided however that Registrable Securities shall not include (1) any shares
        of
        Common Stock which have previously been registered or have been sold to the
        public either pursuant to a registration statement or Rule 144, or (2) any
        shares held by a Holder of Registrable Securities which would be permitted
        to be
        sold by such Holder under Rule 144(k) or within the volume limitations of
        Rule
        144 during any 90-day period, as applicable, or (3) any shares held by a
        Holder
        of Registrable Securities which have been sold in a private transaction in
        which
        the transferor's rights under this Agreement are not assigned.

       

      “Registration
        Statement”
        means
        each registration statement required to be filed hereunder, including the
        Prospectus therein, amendments and supplements to such registration statement
        or
        Prospectus, including pre- and post-effective amendments, all exhibits thereto,
        and all material incorporated by reference or deemed to be incorporated by
        reference in such registration statement.

       

      “Rule
        144”
        means
        Rule 144 promulgated by the Commission pursuant to the Securities Act, as
        such
        Rule may be amended from time to time, or any similar rule or regulation
        hereafter adopted by the Commission having substantially the same effect
        as such
        Rule.

       

      “Rule
        415”
        means
        Rule 415 promulgated by the Commission pursuant to the Securities Act, as
        such
        Rule may be amended from time to time, or any similar rule or regulation
        hereafter adopted by the Commission having substantially the same effect
        as such
        Rule.

       

      “Securities
        Act”
        means
        the Securities Act of 1933, as amended, and any successor statute.

       

      “Securities
        Purchase Agreement”
        has the
        meaning given to such term in the Preamble hereto.

       

      “Trading
        Market”
        means
        any of the NASD Over The Counter Bulletin Board, NASDAQ SmallCap Market,
        the
        NASDAQ National Markets System, the American Stock Exchange or the New York
        Stock Exchange.

       

      “Warrants”
        means
        the Common Stock purchase warrants issued in connection with the Securities
        Purchase Agreement, whether on the date hereof or thereafter.

       

      2.  Registration.

       

      (a)  On
        or
        prior to the Filing Date the Company shall prepare and file with the Commission
        a Registration Statement covering the Registrable Securities for a selling
        stockholder resale offering to be made on a continuous basis pursuant to
        Rule
        415. The Registration Statement shall be on Form SB-2 , or any other appropriate
        form in accordance herewith so as to permit the public offering and resale
        of
        the Registrable Securities. The Company shall cause each Registration Statement
        to become effective and remain effective as provided herein. The Company
        shall
        use its reasonable commercial efforts to cause each Registration Statement
        to be
        declared effective under the Securities Act as promptly as possible after
        the
        filing thereof, but in any event no later than the Effectiveness Date. The
        Company shall use its reasonable commercial efforts to keep each Registration
        Statement continuously effective under the Securities Act until the date
        which
        is the earlier date of when (i) all Registrable Securities have been sold
        or
        (ii) all Registrable Securities covered by such Registration Statement may
        be
        sold immediately without registration under the Securities Act and without
        volume restrictions pursuant to Rule 144(k), as determined by the counsel
        to the
        Company pursuant to a written opinion letter to such effect, addressed and
        acceptable to the Company’s transfer agent and the affected Holders (the
“Effectiveness Period”).

       

      (b)  If:
        (i)
        any Registration Statement is not filed on or prior to the applicable Filing
        Date; (ii) a Registration Statement filed hereunder is not declared effective
        by
        the Commission by the applicable Effectiveness Date; (iii) after a Registration
        Statement is filed with and declared effective by the Commission, a
        Discontinuation Event (as hereafter defined) shall occur and be continuing,
        or
        such Registration Statement ceases to be effective (by suspension or otherwise)
        as to all Registrable Securities to which it is required to relate at any
        time
        prior to the expiration of the Effectiveness Period (without being succeeded
        immediately by an additional registration statement filed and declared
        effective), for a period of time which shall exceed 30 days in the aggregate
        per
        year or more than 20 consecutive calendar days (defined as a period of 365
        days
        commencing on the date the Registration Statement is declared effective);
        or
        (iv) the Common Stock is not listed or quoted, or is suspended from trading
        on
        any Trading Market for a period of three (3) consecutive Trading Days (provided
        the Company shall not have been able to cure such trading suspension within
        30
        days of the notice thereof or list the Common Stock on another Trading Market);
        (any such failure or breach being referred to as an “Event,” and for purposes of
        clause (i) or (ii) the date on which such Event occurs, or for purposes of
        clause (iii) the date which such 30 day or 20 consecutive day period (as
        the
        case may be) is exceeded, or for purposes of clause (iv) the date on which
        such
        three (3) Trading Day period is exceeded, being referred to as “Event Date”),
        then as partial relief for the damages to the Purchaser by reason of the
        occurrence of any such Event (which remedy shall not be exclusive of any
        other
        remedies available at law or in equity), the Company shall pay to the Purchaser
        for each day that an Event has occurred and is continuing, as liquidated
        damages, and not as a penalty, an amount in cash equal to one-thirtieth
        (1/30th)
        of the
        product of: (A) the then outstanding principal amount of the Note multiplied
        by
        (B)0.015. Notwithstanding the immediately foregoing, with effect after September
        27, 2007 (other than with respect to any then outstanding and unpaid liquidated
        damages and the occurrence of each Discontinuation Event), no additional
        liquidated damages shall accrue to the account of the Company. 

       

      (c)  Within
        three business days of the Effectiveness Date, the Company shall cause its
        counsel to issue a blanket opinion in the form attached hereto as Exhibit
        A, to
        the transfer agent stating that the shares are subject to an effective
        registration statement and can be reissued free of restrictive legend upon
        notice of a sale by the Purchaser and confirmation by the Purchaser that
        it has
        complied with the prospectus delivery requirements, provided that the Company
        has not advised the transfer agent orally or in writing that the opinion
        has
        been withdrawn. Copies of the blanket opinion required by this Section 2(c)
        shall be delivered to the Purchaser within the time frame set forth
        above.

       

      3.  Registration
        Procedures.
        If and
        whenever the Company is required by the provisions hereof to effect the
        registration of any Registrable Securities under the Securities Act, the
        Company
        will, as expeditiously as possible:

       

      (a)  prepare
        and file with the Commission a Registration Statement with respect to such
        Registrable Securities, respond as promptly as possible to any comments received
        from the Commission, and use its best efforts to cause the Registration
        Statement to become and remain effective for the Effectiveness Period with
        respect thereto;

       

      (b)  prepare
        and file with the Commission such amendments and supplements to the Registration
        Statement and the Prospectus used in connection therewith as may be necessary
        to
        comply with the provisions of the Securities Act with respect to the disposition
        of all Registrable Securities covered by such Registration Statement and
        to keep
        such Registration Statement effective until the expiration of the Effectiveness
        Period applicable to such Registration Statement;

       

      (c)  furnish
        to the Purchaser such number of copies of the Registration Statement and
        the
        Prospectus included therein (including each preliminary Prospectus) as the
        Purchaser reasonably may request to facilitate the public sale or disposition
        of
        the Registrable Securities covered by the Registration Statement;

       

      (d)  use
        its
        commercially reasonable efforts to register or qualify the Purchaser’s
        Registrable Securities covered by such Registration Statement under the
        securities or “blue sky” laws of such jurisdictions within the United States as
        the Purchaser may reasonably request, provided, however, that the Company
        shall
        not for any such purpose be required to qualify generally to transact business
        as a foreign corporation in any jurisdiction where it is not so qualified
        or to
        consent to general service of process in any such jurisdiction;

       

      (e)  list
        the
        Registrable Securities covered by such Registration Statement with any
        securities exchange on which the Common Stock of the Company is then
        listed;

       

      (f)  immediately
        notify the Purchaser at any time when a Prospectus relating thereto is required
        to be delivered under the Securities Act, of the happening of any event of
        which
        the Company has knowledge as a result of which the Prospectus contained in
        such
        Registration Statement, as then in effect, includes an untrue statement of
        a
        material fact or omits to state a material fact required to be stated therein
        or
        necessary to make the statements therein not misleading in light of the
        circumstances then existing; and

       

      (g)  make
        available for inspection by the Purchaser and any attorney, accountant or
        other
        agent retained by the Purchaser, all publicly available, non-confidential
        financial and other records, pertinent corporate documents and properties
        of the
        Company, and cause the Company’s officers, directors and employees to supply all
        publicly available, non-confidential information reasonably requested by
        the
        attorney, accountant or agent of the Purchaser.

       

      (h)  The
        Purchaser covenants and agrees that it will cooperate with the Company in
        all
        respects in connection with this Agreement, including timely supplying all
        information reasonably requested by the Company (which shall include all
        information regarding the Purchaser and proposed manner of sale of the
        Registrable Securities required to be disclosed in any Registration Statement)
        and executing and returning all documents reasonably requested in connection
        with the registration and sale of the Registrable Securities and entering
        into
        and performing its obligations under the Securities Purchase Agreement and/or
        the Related Agreements (including this Agreement), if the offering is an
        underwritten offering, in usual and customary form, with the managing
        underwriter or underwriters of such underwritten offering.  Any delay
        or
        delays caused by the Purchaser, or by any other purchaser of securities of
        the
        Company having registration rights similar to those contained herein, by
        failure
        to cooperate as required hereunder shall not constitute a breach or default
        of
        the Company under the Securities Purchase Agreement or any Related Agreement
        (including this Agreement). 

       

      (i)  
        With
        respect to any sale of Registrable Securities pursuant to the Registration
        Statement, the Purchaser hereby covenants with the Company (i) not to make
        any
        sale of the Registrable Securities without effectively causing the prospectus
        delivery requirements under the Securities Act to be satisfied and (ii) to
        notify the Company promptly upon disposition of all of the Registrable
        Securities.

       

      4.  Registration
        Expenses.
        All
        expenses relating to the Company’s compliance with Sections 2 and 3 hereof,
        including, without limitation, all registration and filing fees, printing
        expenses, fees and disbursements of counsel and independent public accountants
        for the Company, fees and expenses (including reasonable counsel fees) incurred
        in connection with complying with state securities or “blue sky” laws, fees of
        the NASD, transfer taxes, fees of transfer agents and registrars, fees of,
        and
        disbursements incurred by, one counsel for the Holders, are called “Registration
        Expenses”. All selling commissions applicable to the sale of Registrable
        Securities, including any fees and disbursements of any special counsel to
        the
        Holders beyond those included in Registration Expenses, are called “Selling
        Expenses.” The Company shall only be responsible for all Registration
        Expenses.

       

      5.  Indemnification.

       

      (a)  In
        the
        event of a registration of any Registrable Securities under the Securities
        Act
        pursuant to this Agreement, the Company will indemnify and hold harmless
        the
        Purchaser, and its officers, directors and each other person, if any, who
        controls the Purchaser within the meaning of the Securities Act, against
        any
        losses, claims, damages or liabilities, joint or several, to which the
        Purchaser, or such persons may become subject under the Securities Act or
        otherwise, insofar as such losses, claims, damages or liabilities (or actions
        in
        respect thereof) arise out of or are based upon any untrue statement or alleged
        untrue statement of any material fact contained in any Registration Statement
        under which such Registrable Securities were registered under the Securities
        Act
        pursuant to this Agreement, any preliminary Prospectus or final Prospectus
        contained therein, or any amendment or supplement thereof, or arise out of
        or
        are based upon the omission or alleged omission to state therein a material
        fact
        required to be stated therein or necessary to make the statements therein
        not
        misleading, and will reimburse the Purchaser, and each such person for any
        reasonable legal or other expenses incurred by them in connection with
        investigating or defending any such loss, claim, damage, liability or action;
        provided,
        however,
        that
        the Company will not be liable in any such case if and to the extent that
        any
        such loss, claim, damage or liability arises out of or is based upon an untrue
        statement or alleged untrue statement or omission or alleged omission so
        made in
        conformity with information furnished by or on behalf of the Purchaser or
        any
        such person in writing specifically for use in any such document.
        Notwithstanding the provisions of this paragraph, the Company shall not be
        required to indemnify any person or entity in excess of the amount of the
        Obligations (as defined in the Master Security Agreement).

       

      (b)  In
        the
        event of a registration of the Registrable Securities under the Securities
        Act
        pursuant to this Agreement, the Purchaser will indemnify and hold harmless
        the
        Company, and its officers, directors and each other person, if any, who controls
        the Company within the meaning of the Securities Act, against all losses,
        claims, damages or liabilities, joint or several, to which the Company or
        such
        persons may become subject under the Securities Act or otherwise, insofar
        as
        such losses, claims, damages or liabilities (or actions in respect thereof)
        arise out of or are based upon any untrue statement or alleged untrue statement
        of any material fact which was furnished in writing by the Purchaser to the
        Company expressly for use in (and such information is contained in) the
        Registration Statement under which such Registrable Securities were registered
        under the Securities Act pursuant to this Agreement, any preliminary Prospectus
        or final Prospectus contained therein, or any amendment or supplement thereof,
        or arise out of or are based upon the omission or alleged omission to state
        therein a material fact required to be stated therein or necessary to make
        the
        statements therein not misleading, and will reimburse the Company and each
        such
        person for any reasonable legal or other expenses incurred by them in connection
        with investigating or defending any such loss, claim, damage, liability or
        action, provided,
        however,
        that
        the Purchaser will be liable in any such case if and only to the extent that
        any
        such loss, claim, damage or liability arises out of or is based upon an untrue
        statement or alleged untrue statement or omission or alleged omission so
        made in
        conformity with information furnished in writing to the Company by or on
        behalf
        of the Purchaser specifically for use in any such document. Notwithstanding
        the
        provisions of this paragraph, the Purchaser shall not be required to indemnify
        any person or entity in excess of the amount of the aggregate net proceeds
        received by the Purchaser in respect of Registrable Securities in connection
        with any such registration under the Securities Act.

       

      (c)  Promptly
        after receipt by a party entitled to claim indemnification hereunder (an
        “Indemnified Party”) of notice of the commencement of any action, such
        Indemnified Party shall, if a claim for indemnification in respect thereof
        is to
        be made against a party hereto obligated to indemnify such Indemnified Party
        (an
“Indemnifying Party”), notify the Indemnifying Party in writing thereof, but the
        omission so to notify the Indemnifying Party shall not relieve it from any
        liability which it may have to such Indemnified Party other than under this
        Section 5(c) and shall only relieve it from any liability which it may have
        to
        such Indemnified Party under this Section 5(c) if and to the extent the
        Indemnifying Party is prejudiced by such omission. In case any such action
        shall
        be brought against any Indemnified Party and it shall notify the Indemnifying
        Party of the commencement thereof, the Indemnifying Party shall be entitled
        to
        participate in and, to the extent it shall wish, to assume and undertake
        the
        defense thereof with counsel satisfactory to such Indemnified Party, and,
        after
        notice from the Indemnifying Party to such Indemnified Party of its election
        so
        to assume and undertake the defense thereof, the Indemnifying Party shall
        not be
        liable to such Indemnified Party under this Section 5(c) for any legal expenses
        subsequently incurred by such Indemnified Party in connection with the defense
        thereof; if the Indemnified Party retains its own counsel, then the Indemnified
        Party shall pay all fees, costs and expenses of such counsel, provided,
        however,
        that,
        if the defendants in any such action include both the Indemnified Party and
        the
        Indemnifying Party and the Indemnified Party shall have reasonably concluded
        that there may be reasonable defenses available to it which are different
        from
        or additional to those available to the Indemnifying Party or if the interests
        of the Indemnified Party reasonably may be deemed to conflict with the interests
        of the Indemnifying Party, the Indemnified Party shall have the right to
        select
        one separate counsel and to assume such legal defenses and otherwise to
        participate in the defense of such action, with the reasonable expenses and
        fees
        of such separate counsel and other expenses related to such participation
        to be
        reimbursed by the Indemnifying Party as incurred.

       

      (d)  In
        order
        to provide for just and equitable contribution in the event of joint liability
        under the Securities Act in any case in which either (i) the Purchaser, or
        any
        officer, director or controlling person of the Purchaser, makes a claim for
        indemnification pursuant to this Section 5 but it is judicially determined
        (by
        the entry of a final judgment or decree by a court of competent jurisdiction
        and
        the expiration of time to appeal or the denial of the last right of appeal)
        that
        such indemnification may not be enforced in such case notwithstanding the
        fact
        that this Section 5 provides for indemnification in such case, or (ii)
        contribution under the Securities Act may be required on the part of the
        Purchaser or such officer, director or controlling person of the Purchaser
        in
        circumstances for which indemnification is provided under this Section 5;
        then,
        and in each such case, the Company and the Purchaser will contribute to the
        aggregate losses, claims, damages or liabilities to which they may be subject
        (after contribution from others) in such proportion so that the Purchaser
        is
        responsible only for the portion represented by the percentage that the public
        offering price of its securities offered by the Registration Statement bears
        to
        the public offering price of all securities offered by such Registration
        Statement, provided,
        however,
        that,
        in any such case, (A) the Purchaser will not be required to contribute any
        amount in excess of the public offering price of all such securities offered
        by
        it pursuant to such Registration Statement; and (B) no person or entity guilty
        of fraudulent misrepresentation (within the meaning of Section 10(b) of the
        Securities Act) will be entitled to contribution from any person or entity
        who
        was not guilty of such fraudulent misrepresentation.

       

      6.  Representations
        and Warranties.

       

      (a)  The
        Common Stock is registered pursuant to Section 12(b) of the Exchange Act
        and,
        except with respect to certain matters which the Company has disclosed to
        the
        Purchaser on Schedule 4.21 to the Securities Purchase Agreement, the Company
        has
        timely filed all reports, schedules, forms, statements and other documents
        required to be filed by it under the Exchange Act. The Company has filed
        (i) its
        Annual Report on Form 10-K for its fiscal year ended December 31, 2004 and
        (ii)
        its Quarterly Report on Form 10-Q for the fiscal quarters ended March 31,
        2005
        and June 30, 2005 (collectively, the “SEC Reports”). Each SEC Report was, at the
        time of its filing, in substantial compliance with the requirements of its
        respective form and none of the SEC Reports, nor the financial statements
        (and
        the notes thereto) included in the SEC Reports, as of their respective filing
        dates, contained any untrue statement of a material fact or omitted to state
        a
        material fact required to be stated therein or necessary to make the statements
        therein, in light of the circumstances under which they were made, not
        misleading. The financial statements of the Company included in the SEC Reports
        comply as to form in all material respects with applicable accounting
        requirements and the published rules and regulations of the Commission or
        other
        applicable rules and regulations with respect thereto. Such financial statements
        have been prepared in accordance with generally accepted accounting principles
        (“GAAP”) applied on a consistent basis during the periods involved (except (i)
        as may be otherwise indicated in such financial statements or the notes thereto
        or (ii) in the case of unaudited interim statements, to the extent they may
        not
        include footnotes or may be condensed) and fairly present in all material
        respects the financial condition, the results of operations and the cash
        flows
        of the Company and its subsidiaries, on a consolidated basis, as of, and
        for,
        the periods presented in each such SEC Report.

       

      (b)  The
        Common Stock is listed for trading on the American Stock Exchange and satisfies
        all requirements for the continuation of such listing, and the Company shall
        do
        all things necessary for the continuation of such listing. The Company has
        not
        received any notice that its Common Stock will be delisted from the American
        Stock Exchange (except for prior notices which have been fully remedied)
        or that
        the Common Stock does not meet all requirements for the continuation of such
        listing.

       

      (c)  Neither
        the Company, nor any of its affiliates, nor any person acting on its or their
        behalf, has directly or indirectly made any offers or sales of any security
        or
        solicited any offers to buy any security under circumstances that would cause
        the offering of the Securities pursuant to the Securities Purchase Agreement
        to
        be integrated with prior offerings by the Company for purposes of the Securities
        Act which would prevent the Company from selling the Common Stock pursuant
        to
        Rule 506 under the Securities Act, or any applicable exchange-related
        stockholder approval provisions, nor will the Company or any of its affiliates
        or subsidiaries take any action or steps that would cause the offering of
        the
        Securities to be integrated with other offerings.

       

      (d)  The
        Warrant, the Note and the shares of Common Stock which the Purchaser may
        acquire
        pursuant to the Warrant and the Note are all restricted securities under
        the
        Securities Act as of the date of this Agreement. The Company will not issue
        any
        stop transfer order or other order impeding the sale and delivery of any
        of the
        Registrable Securities at such time as the Registrable Securities are registered
        for public sale or an exemption from registration is available, except as
        required by federal or state securities laws.

       

      (e)  The
        Company understands the nature of the Registrable Securities issuable upon
        the
        conversion of the Note and the exercise of the Warrant and recognizes that
        the
        issuance of such Registrable Securities may have a potential dilutive effect.
        The Company specifically acknowledges that subject to applicable law, its
        obligation to issue the Registrable Securities is binding upon the Company
        and
        enforceable regardless of the dilution such issuance may have on the ownership
        interests of other shareholders of the Company.

       

      (f)  Except
        for agreements made in the ordinary course of business, there is no agreement
        that has not been filed with the Commission as an exhibit to a registration
        statement or to a form required to be filed by the Company under the Exchange
        Act, the breach of which could reasonably be expected to have a material
        and
        adverse effect on the Company and its subsidiaries, or would prohibit or
        otherwise interfere with the ability of the Company to enter into and perform
        any of its obligations under this Agreement in any material
        respect.

       

      (g)  The
        Company will at all times have authorized and reserved a sufficient number
        of
        shares of Common Stock for the full conversion of the Note and exercise of
        the
        Warrants.

       

      7.  Miscellaneous.

       

      (a)  Remedies.
        In the
        event of a breach by the Company or by a Holder, of any of their respective
        obligations under this Agreement, each Holder or the Company, as the case
        may
        be, in addition to being entitled to exercise all rights granted by law and
        under this Agreement, including recovery of damages, will be entitled to
        specific performance of its rights under this Agreement.

       

      (b)  No
        Piggyback on Registrations.
        Except
        as and to the extent specified in Schedule 7(b) hereto, neither the Company
        nor
        any of its security holders (other than the Holders in such capacity pursuant
        hereto) may include securities of the Company in any Registration Statement
        other than the Registrable Securities, and the Company shall not after the
        date
        hereof enter into any agreement providing any such right for inclusion of
        shares
        in the Registration Statement to any of its security holders. Except as and
        to
        the extent specified in Schedule 7(b) hereto, the Company has not previously
        entered into any agreement granting any registration rights with respect
        to any
        of its securities to any person or entity that have not been fully
        satisfied.

       

      (c)  Compliance.
        Each
        Holder covenants and agrees that it will comply with the prospectus delivery
        requirements of the Securities Act as applicable to it in connection with
        sales
        of Registrable Securities pursuant to the Registration Statement.

       

      (d)  Discontinued
        Disposition.
        Each
        Holder agrees by its acquisition of such Registrable Securities that, upon
        receipt of a notice from the Company of the occurrence of a Discontinuation
        Event (as defined below), such Holder will forthwith discontinue disposition
        of
        such Registrable Securities under the applicable Registration Statement until
        such Holder’s receipt of the copies of the supplemented Prospectus and/or
        amended Registration Statement or until it is advised in writing (the “Advice”)
        by the Company that the use of the applicable Prospectus may be resumed,
        and, in
        either case, has received copies of any additional or supplemental filings
        that
        are incorporated or deemed to be incorporated by reference in such Prospectus
        or
        Registration Statement. Notwithstanding paragraph 6(d) above, the Company
        may
        provide appropriate stop orders to enforce the provisions of this paragraph.
        For
        purposes of this Agreement, a “Discontinuation Event” shall mean (i) when the
        Commission notifies the Company whether there will be a “review” of such
        Registration Statement and whenever the Commission comments in writing on
        such
        Registration Statement (the Company shall provide true and complete copies
        thereof and all written responses thereto to each of the Holders); (ii) any
        request by the Commission or any other Federal or state governmental authority
        for amendments or supplements to such Registration Statement or Prospectus
        or
        for additional information; (iii) the issuance by the Commission of any stop
        order suspending the effectiveness of such Registration Statement covering
        any
        or all of the Registrable Securities or the initiation of any Proceedings
        for
        that purpose; (iv) the receipt by the Company of any notification with respect
        to the suspension of the qualification or exemption from qualification of
        any of
        the Registrable Securities for sale in any jurisdiction, or the initiation
        or
        threatening of any Proceeding for such purpose; and/or (v) the occurrence
        of any
        event or passage of time that makes the financial statements included in
        such
        Registration Statement ineligible for inclusion therein or any statement
        made in
        such Registration Statement or Prospectus or any document incorporated or
        deemed
        to be incorporated therein by reference untrue in any material respect or
        that
        requires any revisions to such Registration Statement, Prospectus or other
        documents so that, in the case of such Registration Statement or Prospectus,
        as
        the case may be, it will not contain any untrue statement of a material fact
        or
        omit to state any material fact required to be stated therein or necessary
        to
        make the statements therein, in light of the circumstances under which they
        were
        made, not misleading.

       

      (e)  Piggy-Back
        Registrations.
        If at
        any time during the Effectiveness Period there is not an effective Registration
        Statement covering all of the Registrable Securities and the Company shall
        determine to prepare and file with the Commission a registration statement
        relating to an offering for its own account or the account of others under
        the
        Securities Act of any of its equity securities, other than on Form S-4 or
        Form
        S-8 (each as promulgated under the Securities Act) or their then equivalents
        relating to equity securities to be issued solely in connection with any
        acquisition of any entity or business or equity securities issuable in
        connection with stock option or other employee benefit plans, then the Company
        shall send to each Holder written notice of such determination and, if within
        seven (7) business days after receipt of such notice, any such Holder shall
        so
        request in writing, the Company shall include in such registration statement
        all
        or any part of such Registrable Securities such Holder requests to be registered
        to the extent the Company may do so without violating registration rights
        of
        others which exist as of the date of this Agreement, subject to customary
        underwriter cutbacks applicable to all holders of registration rights and
        subject to obtaining any required consent of any selling stockholder(s) to
        such
        inclusion under such registration statement.

       

      (f)  Amendments
        and Waivers.
        The
        provisions of this Agreement, including the provisions of this sentence,
        may not
        be amended, modified or supplemented, and waivers or consents to departures
        from
        the provisions hereof may not be given, unless the same shall be in writing
        and
        signed by the Company and the Holders of the then outstanding Registrable
        Securities. Notwithstanding the foregoing, a waiver or consent to depart
        from
        the provisions hereof with respect to a matter that relates exclusively to
        the
        rights of certain Holders and that does not directly or indirectly affect
        the
        rights of other Holders may be given by Holders of at least a majority of
        the
        Registrable Securities to which such waiver or consent relates; provided,
        however,
        that
        the provisions of this sentence may not be amended, modified, or supplemented
        except in accordance with the provisions of the immediately preceding
        sentence.

       

      (g)  Notices.
        Any
        notice or request hereunder may be given to the Company or the Purchaser
        at the
        respective addresses set forth below or as may hereafter be specified in
        a
        notice designated as a change of address under this Section 7(g). All notices
        of
        changes of address under this Section 7(g) shall be delivered to the other
        party
        hereto at least ten (10) business days in advance of the effective day of
        such
        change of address. Any notice or request hereunder shall be given by registered
        or certified mail, return receipt requested, hand delivery, overnight mail,
        Federal Express or other national overnight next day carrier (collectively,
        “Courier”) or telecopy (confirmed by mail). Notices and requests shall be, in
        the case of those by hand delivery, deemed to have been given when delivered
        to
        any party to whom it is addressed, in the case of those by mail or overnight
        mail, deemed to have been given three (3) business days after the date when
        deposited in the mail having
        been sent by registered or certified mail, return receipt requested, postage
        prepaid;
        or with
        the overnight mail carrier, in the case of a Courier, the next business day
        following timely delivery of the package with the Courier, and, in the case
        of a
        telecopy, when
        sent
        by confirmed facsimile if sent during normal business hours of the recipient,
        if
        not, then on the second business day.
        The
        address for such notices and communications shall be as follows:

      

        
          	
                  If
                    to the Company:

                	
                  to
                    the address set forth in Section 11.8 of the Securities Purchase
                    Agreement

                
	 	 
	
                  If
                    to a Purchaser:

                	
                  To
                    the address set forth under such Purchaser name on the signature
                    pages
                    hereto.

                
	 	 
	
                  If
                    to any other Person who is 

                	 
	
                  then
                    the registered Holder:

                	
                  To
                    the address of such Holder as it appears in the stock transfer
                    books of
                    the Company

                

        

      

       

      or
        such
        other address as may be designated in writing hereafter in accordance with
        this
        Section 7(g) by such Person.

       

      (h)  Successors
        and Assigns.
        This
        Agreement shall inure to the benefit of and be binding upon the successors
        and
        permitted assigns of each of the parties and shall inure to the benefit of
        each
        Holder. The Company may not assign its rights or obligations hereunder without
        the prior written consent of each Holder. Subject
        to compliance with applicable securities laws,
        each
        Holder may assign their respective rights hereunder in the manner and to
        the
        persons and entities as permitted under the Note and the Securities Purchase
        Agreement, but in no event shall any such right be assigned to a direct
        competitor of the Company.

       

      (i)  Execution
        and Counterparts.
        This
        Agreement may be executed in any number of counterparts, each of which when
        so
        executed shall be deemed to be an original and, all of which taken together
        shall constitute one and the same agreement. In the event that any signature
        is
        delivered by facsimile transmission, such signature shall create a valid
        binding
        obligation of the party executing (or on whose behalf such signature is
        executed) the same with the same force and effect as if such facsimile signature
        were the original thereof.

       

      (j)  Governing
        Law, Jurisdiction and Waiver of Jury Trial.
        THIS
        AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH
        THE
        LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED
        IN SUCH
        STATE, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. The Company hereby
        consents and agrees that the state or federal courts located in the County
        of
        New York, State of New York shall have exclusion jurisdiction to hear and
        determine any Proceeding between the Company, on the one hand, and the
        Purchaser, on the other hand, pertaining to this Agreement or to any matter
        arising out of or related to this Agreement; provided,
        that
        the Purchaser and the Company acknowledge that any appeals from those courts
        may
        have to be heard by a court located outside of the County of New York, State
        of
        New York, and further provided,
        that
        nothing in this Agreement shall be deemed or operate to preclude the Purchaser
        from bringing a Proceeding in any other jurisdiction to collect the obligations,
        to realize on the Collateral or any other security for the obligations, or
        to
        enforce a judgment or other court order in favor of the Purchaser. The Company
        expressly submits and consents in advance to such jurisdiction in any Proceeding
        commenced in any such court, and the Company hereby waives any objection
        which
        it may have based upon lack of personal jurisdiction, improper venue or
forum
        non conveniens.
        The
        Company hereby waives personal service of the summons, complaint and other
        process issued in any such Proceeding and agrees that service of such summons,
        complaint and other process may be made by registered or certified mail
        addressed to the Company at the address set forth in Section 7(g) and that
        service so made shall be deemed completed upon the earlier of the Company’s
        actual receipt thereof or three (3) days after deposit in the U.S. mails,
        proper
        postage prepaid. The parties hereto desire that their disputes be resolved
        by a
        judge applying such applicable laws. Therefore, to achieve the best combination
        of the benefits of the judicial system and of arbitration, the parties hereto
        waive all rights to trial by jury in any Proceeding brought to resolve any
        dispute, whether arising in contract, tort, or otherwise between the Purchaser
        and/or the Company arising out of, connected with, related or incidental
        to the
        relationship established between then in connection with this Agreement.
        If
        either party hereto shall commence a Proceeding to enforce any provisions
        of
        this Agreement, the Securities Purchase Agreement or any other Related
        Agreement, then the prevailing party in such Proceeding shall be reimbursed
        by
        the other party for its reasonable attorneys’ fees and other costs and expenses
        incurred with the investigation, preparation and prosecution of such
        Proceeding.

       

      (k)  Cumulative
        Remedies.
        The
        remedies provided herein are cumulative and not exclusive of any remedies
        provided by law.

       

      (l)  Severability.
        If any
        term, provision, covenant or restriction of this Agreement is held by a court
        of
        competent jurisdiction to be invalid, illegal, void or unenforceable, the
        remainder of the terms, provisions, covenants and restrictions set forth
        herein
        shall remain in full force and effect and shall in no way be affected, impaired
        or invalidated, and the parties hereto shall use their reasonable efforts
        to
        find and employ an alternative means to achieve the same or substantially
        the
        same result as that contemplated by such term, provision, covenant or
        restriction. It is hereby stipulated and declared to be the intention of
        the
        parties that they would have executed the remaining terms, provisions, covenants
        and restrictions without including any of such that may be hereafter declared
        invalid, illegal, void or unenforceable.

       

      (m)  Headings.
        The
        headings in this Agreement are for convenience of reference only and shall
        not
        limit or otherwise affect the meaning hereof.

       

      [Balance
        of page intentionally left blank;

       

      signature
        page follows]

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      IN
        WITNESS WHEREOF, the parties have executed this Registration Rights Agreement
        as
        of the date first written above.

       

      

      
        	
                XFONE,
                  INC.

              	
                LAURUS
                  MASTER FUND, LTD.

              
	 	 
	 	 
	
                By:
                        
                  

              	
                By:
                   
                                                                        
                  

              
	
                Name: Guy
                  Nissenson

              	
                Name:                                                    
                  

              
	
                Title: President
                  & CEO

              	
                Title:                                                      
                  

              
	 	 
	 	
                Address
                  for Notices:

              
	 	 
	 	
                825
                  Third Avenue, 14th
                  Floor

              
	 	
                New
                  York, NY 10022

              
	 	
                Attention: David
                  Grin

              
	 	
                Facsimile: 212-541-4434

              

      

       

      

       

      

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

       

      EXHIBIT
        A

       

      [__________
        __, 200__]

       

      [Continental
        Stock Transfer

      &
        Trust Company

      Two
        Broadway

      New
        York,
        NY 10004

      Attn:
        William Seegraber]

       

      Re: XFONE,
        INC.. Registration Statement on Form [S-3]

       

      Ladies
        and Gentlemen:

       

      As
        counsel to XFONE, INC., a __________ corporation (the “Company”), we have been
        requested to render our opinion to you in connection with the resale by the
        individuals or entitles listed on Schedule A attached hereto (the “Selling
        Stockholders”), of an aggregate of __________ shares (the “Shares”) of the
        Company’s Common Stock.

       

      A
        Registration Statement on Form [S-3] under the Securities Act of 1933, as
        amended (the “Act”), with respect to the resale of the Shares was declared
        effective by the Securities and Exchange Commission on [date]. Enclosed is
        the
        Prospectus dated [date]. We understand that the Shares are to be offered
        and
        sold in the manner described in the Prospectus.

       

      Based
        upon the foregoing, upon request by the Selling Stockholders at any time
        while
        the registration statement remains effective, it is our opinion that the
        Shares
        have been registered for resale under the Act and new certificates evidencing
        the Shares upon their transfer or re-registration by the Selling Stockholders
        may be issued without restrictive legend. We will advise you if the registration
        statement is not available or effective at any point in the future.

       

      Very
        truly yours,

       

      [Company
        counsel]

       

      

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

       

      Schedule
        A to Exhibit A

      
        	
                 

                Selling
                  Stockholder

              	
                 

                Shares

                Being
                  Offered

              
	 	 

      

       

      

      
        
           

        

        
           

          
            

          

        

        
           

          
          

        

      

       

      SCHEDULE
        7(b)

       

      

      	·  	
              5,500,000
                shares underlying the 5,500,000 options under The Company's 2004
                SOP.

            

      	·  	
              Up
                to 125,000 shares plus up to 750,000 shares underlying 750,000 warrants
                in
                connection with the Finders Agreement and the Financial Consulting
                Agreement between the Company and Oberon Securities, LLC (as each
                may be
                amended, modified, restated and/or supplemented from time to
                time).

            

      	·  	
              Up
                to 125,000 shares underlying 125,000 warrants in connection with
                the
                Public Relations Agreement between the Company and Elite Financial
                Communications Group, LLC.

            

      	·  	
              Shares
                underlying warrants valued in the aggregate amount of up to $50,000
                in
                connection with a Legal Services Agreement between the Company and
                Mr.
                Yitzhak Rosenbaum.

            

      	·  	
              3,150
                shares issued to Mr. Simon Langbart.

            

      	·  	
              Up
                to 2,700,000 shares and/or warrants which will be issued and/or granted
                in
                connection with that certain Agreement and Plan of Merger by and
                among the
                Company, Xfone USA, Inc., I-55 Internet Services, Inc. and the Principals
                (as defined therein) dated August 18, 2005, as may be amended, modified,
                restated or supplemented from time to time (though no more than 2,700,000
                shares and/or warrants may be issued and/or granted without prior
                written
                approval by Purchaser), and the acquisition of I-55 Internet Services,
                including any issuance and/or grant of shares and/or warrants to
                creditors
                and/or debt holders of I-55 Internet Services and/or to MCG Capital
                Corporation.

            

      	·  	
              Up
                to 900,000 shares and/or warrants which may be issued and/or granted
                in
                connection with that certain Agreement and Plan of Merger by and
                among the
                Company, Xfone USA, Inc., I-55 Telecommunications, LLC and the Principal
                (as defined therein) dated August 26, 2005, as may be amended, modified,
                restated or supplemented from time to time (though no more than 900,000
                shares and/or warrants may be issued and/or granted without prior
                written
                approval by Purchaser), and the acquisition of I-55 Telecommunications,
                including any issuance and/or grant of shares and/or warrants to
                creditors
                and/or debt holders of I-55
                Telecommunications.

            

      	·  	
              Up
                to 550,000 shares and/or warrants which will be issued and/or granted
                to
                the Purchaser in connection with the Purchaser's $1,500,000 incremental
                funding.

            

      	·  	
              Shares
                and/or warrants which will be issued, issuable and/or granted by
                the
                Company in connection with additional financing transactions between
                the
                Company and investors other than the Purchaser, in an aggregate amount
                not
                to exceed $5,000,000, to be completed on or before March 1, 2006,
                together
                with any additional shares and/or warrants to be issued, issuable
                and/or
                granted to such investors as a result of an adjustment to the Fixed
                Conversion Price (as defined in the
                Note).

            

      	·  	
              As
                disclosed in the Exchange Act Filings and in the SEC
                Reports.

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