Document:

XFone Exhibit 10.48 Agreement and Plan of Merger

    
      AGREEMENT
        AND PLAN OF MERGER

      By
        and
        Among

      I-55
        TELECOMMUNICATIONS, L.L.C.,

      XFONE,
        INC. AND XFONE USA, INC.

      Dated
        August 26, 2005

      

      
        	
                ARTICLE
                  I

              	
                THE
                  MERGER

              	
                2

              
	
                1.01

              	
                The
                  Merger; Effective Time

              	
                2

              
	
                1.02

              	
                Effect
                  of the Merger

              	
                2

              
	
                1.03

              	
                Consideration;
                  Conversion of Shares

              	
                2

              
	
                1.04

              	
                No
                  Dissenters Rights

              	
                4

              
	
                1.05

              	
                Surrender
                  of Certificates

              	
                4

              
	
                1.06

              	
                Value
                  of Parent Common Stock

              	
                5

              
	
                1.07

              	
                Treatment
                  of the Company Options and
                  Warrants

              	
                5

              
	
                1.08

              	
                No
                  Further Ownership Rights in the Company Capital
                  Stock

              	
                5

              
	
                1.09

              	
                Lost,
                  Stolen or Destroyed Certificates

              	
                5

              
	
                1.10

              	
                Taking
                  of Necessary Action; Further Action

              	
                5

              
	
                1.11

              	
                Tax
                  Consequences

              	
                5

              
	
                ARTICLE
                  II

              	
                REPRESENTATIONS
                  AND WARRANTIES OF THE COMPANY AND THE
                  PRINCIPALS

              	
                6

              
	
                2.01

              	
                Organization

              	
                6

              
	
                2.02

              	
                Subsidiaries

              	
                6

              
	
                2.03

              	
                Capital
                  Structure

              	
                6

              
	
                2.04

              	
                Authority

              	
                7

              
	
                2.05

              	
                No
                  Conflict

              	
                7

              
	
                2.06

              	
                Consents

              	
                7

              
	
                2.07

              	
                The
                  Company Financial Statements

              	
                8

              
	
                2.08

              	
                No
                  Undisclosed Liabilities

              	
                8

              
	
                2.09

              	
                No
                  Changes

              	
                8

              
	
                2.10

              	
                Tax
                  Matters

              	
                10

              
	
                2.11

              	
                Restrictions
                  on Business Activities

              	
                11

              
	
                2.12

              	
                Title
                  of Properties; Absence of Liens and Encumbrances;
                  Condition of Equipment

              	
                11

              
	
                2.13

              	
                Material
                  or Significant Agreements, Contracts and
                  Commitments

              	
                12

              
	
                2.14

              	
                Interested
                  Party Transactions

              	
                14

              
	
                2.15

              	
                Governmental
                  Authorization

              	
                14

              
	
                2.16

              	
                Litigation

              	
                15

              
	
                2.17

              	
                Accounts
                  Receivable

              	
                15

              
	
                2.18

              	
                Assets
                  Necessary to Business

              	
                15

              
	
                2.19

              	
                Minute
                  Books

              	
                15

              
	
                2.20

              	
                Environmental
                  Matters

              	
                15

              
	
                2.21

              	
                Brokers'
                  and Finders' Fees

              	
                16

              
	
                2.22

              	
                Employee
                  Benefit Plans and Compensation

              	
                16

              
	
                2.23

              	
                Compliance
                  with Laws; Relations with Governmental
                  Entities

              	
                20

              
	
                2.24

              	
                Merger
                  Tax Matters

              	
                20

              
	
                2.25

              	
                Intellectual
                  Property

              	
                20

              
	
                2.26

              	
                Customer
                  Contracts

              	
                20

              
	
                2.27

              	
                Relationships
                  with Suppliers

              	
                21

              
	
                2.28

              	
                Investment
                  Representation; Legends

              	
                21

              
	
                2.29

              	
                Stockholder
                  Matters

              	
                22

              
	
                2.30

              	
                Banking
                  and Insurance

              	
                22

              
	
                2.31

              	
                Representations
                  Complete

              	
                22

              
	
                ARTICLE
                  III

              	
                REPRESENTATIONS
                  AND WARRANTIES OF PARENT AND
                  SUBSIDIARY

              	
                23

              
	
                3.01

              	
                Organization
                  and Standing

              	
                23

              
	
                3.02

              	
                Authorization

              	
                23

              
	
                3.03

              	
                Binding
                  Obligation

              	
                24

              
	
                3.04

              	
                Issuance
                  of Parent Common Stock and Parent Stock
                  Warrants

              	
                24

              
	
                3.05

              	
                Litigation

              	
                24

              
	
                3.06

              	
                Securities
                  and Exchange Commission Filings

              	
                24

              
	
                ARTICLE
                  IV

              	
                COVENANTS
                  OF PARTIES PRIOR TO THE EFFECTIVE
                  TIME

              	
                25

              
	
                4.01

              	
                [Intentionally
                  omitted]

              	
                25

              
	
                4.02

              	
                Restrictions
                  on Transfer; Legends

              	
                25

              
	
                4.03

              	
                Access
                  to Information

              	
                25

              
	
                4.04

              	
                Public
                  Disclosure

              	
                26

              
	
                4.05

              	
                Conduct
                  Business in Ordinary Course

              	
                26

              
	
                4.06

              	
                Consents
                  and Approvals

              	
                27

              
	
                4.07

              	
                Financial
                  Statements

              	
                27

              
	
                4.08

              	
                Notification
                  of Certain Matters

              	
                27

              
	
                4.09

              	
                Additional
                  Documents and Further
                  Assurances

              	
                28

              
	
                4.10

              	
                Federal
                  and State Securities Exemptions

              	
                28

              
	
                4.11

              	
                Shareholder
                  List

              	
                28

              
	
                4.12

              	
                Non-Competition
                  and Non-Solicitation

              	
                28

              
	
                4.13

              	
                Approval
                  of Shareholders

              	
                29

              
	
                4.14

              	
                No
                  Shop

              	
                29

              
	
                ARTICLE
                  V

              	
                CONDITIONS
                  TO THE MERGER

              	
                30

              
	
                5.01

              	
                Conditions
                  to Obligations of Each Party to Effect the
                  Merger

              	
                30

              
	
                5.02

              	
                Conditions
                  to the Obligations of Parent and
                  Subsidiary

              	
                31

              
	
                5.03

              	
                Conditions
                  to Obligations of the Company and the
                  Principals

              	
                33

              
	
                ARTICLE
                  VI

              	
                SURVIVAL
                  OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION;
                  POST-CLOSING COVENANTS

              	
                35

              
	
                6.01

              	
                Survival
                  of Representations, Warranties and
                  Covenants

              	
                35

              
	
                6.02

              	
                Indemnification
                  by the Principals; Escrow
                  Fund

              	
                36

              
	
                6.03

              	
                Indemnification
                  Procedures

              	
                38

              
	
                6.04

              	
                No
                  Contribution

              	
                39

              
	
                6.05

              	
                Benefit
                  Plans

              	
                39

              
	
                ARTICLE
                  VII

              	
                TERMINATION,
                  AMENDMENT AND
                  WAIVER

              	
                40

              
	
                7.01

              	
                Termination

              	
                40

              
	
                7.02

              	
                Effect
                  of Termination

              	
                40

              
	
                7.03

              	
                Expenses;
                  Termination Fees.

              	
                40

              
	
                7.04

              	
                Amendment

              	
                41

              
	
                7.05

              	
                Extension;
                  Waiver

              	
                41

              
	
                ARTICLE
                  VIII

              	
                GENERAL
                  PROVISIONS

              	
                42

              
	
                8.01

              	
                Notices

              	
                42

              
	
                8.02

              	
                Interpretation

              	
                43

              
	
                8.03

              	
                Counterparts

              	
                43

              
	
                8.04

              	
                Entire
                  Agreement; Assignment

              	
                44

              
	
                8.05

              	
                No
                  Third Party Beneficiaries

              	
                44

              
	
                8.06

              	
                Severability

              	
                44

              
	
                8.07

              	
                Other
                  Remedies

              	
                44

              
	
                8.08

              	
                Governing
                  Law; Dispute Resolution

              	
                44

              
	
                8.09

              	
                Rules
                  of Construction

              	
                44

              
	
                8.10

              	
                Attorneys'
                  Fees

              	
                44

              
	
                8.11

              	
                Shareholder's
                  Post Closing Sale
                  Restrictions

              	
                45

              

      

      

      

      Exhibits

       

      
        	
                Exhibit
                  A

              	
                Articles
                  of Merger

              
	
                Exhibit
                  B

              	
                Escrow
                  Agreement

              
	
                Exhibit
                  C

              	
                Management
                  Agreement

              
	
                Exhibit
                  D

              	
                Release

              
	
                Exhibit
                  E

              	
                Restricted
                  Area

              

      

      

      Schedules

      
        	
                Schedule
                  2.03

              	
                Capital
                  Structure

              
	
                Schedule
                  2.07

              	
                The
                  Company Financial Statements

              
	
                Schedule
                  2.08

              	
                No
                  Undisclosed Liabilities

              
	
                Schedule
                  2.09

              	
                No
                  Changes

              
	
                Schedule
                  2.10

              	
                Tax
                  Matters

              
	
                Schedule
                  2.12(b)

              	
                Properties

              
	
                Schedule
                  2.13

              	
                Agreements,
                  Contracts, Commitments

              
	
                Schedule
                  2.15

              	
                Governmental
                  Authorization

              
	
                Schedule
                  2.16

              	
                Litigation

              
	
                Schedule
                  2.22

              	
                Employee
                  Benefit Plans and Compensation

              
	
                Schedule
                  2.25

              	
                Intellectual
                  Property

              
	
                Schedule
                  2.26

              	
                Customer
                  Contracts

              
	
                Schedule
                  2.30

              	
                Banking
                  and Insurance

              
	
                Schedule
                  5.02(b)

              	 

      

      

      
         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

            Table
              of Contents

          

        

        AGREEMENT
          AND PLAN OF MERGER

         

        This
          AGREEMENT AND PLAN OF MERGER ("Agreement"), dated as of August 26, 2005
          by and
          among I-55 TELECOMMUNICATIONS, L.L.C., a limited liability company organized
          under the laws of the State of Louisiana (â€œI-55â€� or the â€œCompanyâ€�),
          XFONE, INC., a corporation organized under the laws of the State of Nevada
          ("Parent"), XFone USA, Inc. (â€œSubsidiaryâ€�), a corporation organized under
          the laws of the State of Mississippi, a wholly owned subsidiary of Parent
          , and
          Randall Wade James Tricou (the "Principal").

         

        BACKGROUND

         

        A. The
          Board
          of Directors of each of Parent, Subsidiary, and the Company believe it
          is in the
          best interests of their respective companies and their respective shareholders
          that Parent acquire the Company through the statutory merger of the Company
          with
          and into the Subsidiary (the "Merger")
          and,
          in furtherance thereof, have approved the Merger.

         

        B. Pursuant
          to the Merger, among other things, all of the issued and outstanding capital
          stock of the Company shall be acquired and converted into the right to
          receive
          the consideration upon the terms and conditions set forth herein. 

         

        C. The
          Company and the Principal, on the one hand, and Parent and Subsidiary,
          on the
          other hand, desire to make certain representations, warranties, covenants
          and
          other agreements in connection with the Merger.

         

        D. Concurrently
          with the execution and delivery of this Agreement, as material inducements
          to
          Parent and Subsidiary to enter into this Agreement, Parent, the Subsidiary,
          the
          Escrow Agent (as defined herein) and the Principal are entering into an
          Escrow
          Agreement, in the form attached as Exhibit
          B
          (the
          "Escrow
          Agreement").

         

        NOW,
          THEREFORE, in consideration of the covenants, promises and representations
          set
          forth in this Agreement, the parties agree as follows:

         

        

        
          
            
            

          

          
            -1-

            
              

            

          

          
            
            

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        ARTICLE
          I

        THE
          MERGER

         

        1.01 The
          Merger; Effective Time.
          The
          Company shall be merged with and into Subsidiary, and Subsidiary shall
          be the
          surviving corporation (sometimes referred to herein as the "Surviving
          Corporation"). The Merger shall be consummated effective at the time Articles
          of
          Merger attached hereto as Exhibit
          A,
          are
          completed, executed and filed with the later of the Mississippi and Louisiana
          Secretaries of State. The date and time of such consummation are referred
          to as
          the "Closing Date" and the "Effective Time," respectively. The "Management
          Date"
          shall mean a date prior to the Closing Date that the Company and the Subsidiary
          enter into a Management Operating Agreement; provided, however, if the
          Company
          and Subsidiary fail to enter into a Management Operating Agreement, the
          Management Date shall be the Closing Date.

         

        1.02 Effect
          of the Merger.
          At the
          Effective Time, (i) the separate existence of the Company shall cease and
          the
          Company shall be merged with and into Subsidiary, (ii) Subsidiary shall
          continue
          to possess all of the rights, privileges and franchises possessed by it
          and
          shall, at the Effective Time, become vested with and possess all property,
          rights, privileges, powers and franchises possessed by and all the property,
          real or personal, causes of action and every other asset of the Company,
          (iii)
          Subsidiary shall be responsible for all of the liabilities and obligations
          of
          the Company in the same manner as if Subsidiary had itself incurred such
          liabilities or obligations, and the Merger shall not affect or impair the
          rights
          of the creditors or of any persons dealing with the Company, (iv) the Articles
          of Incorporation and the Bylaws of Subsidiary shall become the Articles
          of
          Incorporation and the Bylaws of the Company, (v) the existing officers
          and
          directors of Subsidiary shall remain in such offices, and (vi) the Merger
          shall
          have all the effects provided by applicable Mississippi law.

         

        1.03 Consideration;
          Conversion of Shares.

         

        (a) Definitions.
          For all
          purposes of this Agreement, the following terms shall have the following
          respective meanings:

         

        (i) "Aggregate
          Merger Consideration"
          shall
          mean the: (1) the Parent Stock Consideration, and (2) the Parent Warrant
          Consideration. 

         

        (1) "Parent
          Stock Consideration"
          shall
          mean a number of shares of the common stock of the Parent Common Stock
          with an
          agreed market value of $333,333.00 determined using the weighted average
          price
          as reported on the website of the American Stock Exchange of the Parent
          Common
          Stock for the ten (10) trading days preceding the trading day immediately
          prior
          to the Management Date (which weighted average price shall in no event
          be less
          than $2.70 per share or greater than $3.70 per share).

         

        (2) "Parent
          Warrant Consideration"
          shall
          mean a number of Parent Stock Warrants with a value of $166,667.00 with
          the
          value calculated as of the Management Date assuming 90% volatility of the
          underlying Parent Common Stock pursuant to the Black Scholes option - pricing
          model.

         

        
          
            
            

          

          
            -2-

            
              

            

          

          
            
            

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        (ii) "Company
          Common Stock"
          shall
          mean shares of the Company's common stock. The terms â€œstockâ€� and â€œcommon
          stockâ€� shall be construed to include any ownership interest in the
          Company.

         

        (iii) "Company
          Stockholders"
          or
          "Company
          Shareholders"
          shall
          mean the holders of the Total Company Common Stock at the Effective Time.
          â€œStockholdersâ€� and â€œshareholdersâ€� includes any owners of any interest in
          the Company.

         

        (iv) "Escrow
          Agent"
          shall
          mean Trustmark National Bank or such other person or entity mutually agreed
          to
          by the parties to serve as an escrow agent under the Escrow
          Agreement.

         

        (v) "GAAP"
          shall
          mean U.S. generally accepted accounting principles.

         

        (vi) "Knowledge"
          shall
          mean (i) with respect to the Company, the actual knowledge of any of the
          Company's officers or directors or either of the Principals and the knowledge
          that such persons would have obtained of the matter represented after reasonable
          inquiry thereof under the circumstances; and (ii) with respect to the Parent
          and
          Subsidiary, the actual knowledge of the Parent's and Subsidiaryâ€TMs Chairman,
          President or any Executive Vice President and the knowledge that such person
          would have obtained of the matter represented after reasonable inquiry
          thereof
          under the circumstances.

         

        (vii) "Material
          Adverse Effect"
          shall
          mean any change, event or effect that is materially adverse to the business,
          assets, financial condition, prospects or results of operations of the
          Company
          and its Subsidiaries, taken as a whole.

         

        (viii) "Parent
          Common Stock"
          shall
          mean shares of the common stock of Parent.

         

        (ix) "Parent
          Stock Warrants"
          shall
          mean warrants convertible on a one to one basis into Parent Common Stock
          with a
          term of five (5) years, a strike price that is 10% above the closing price
          of
          the Parent Common Stock on the Closing Date with the Parent Common Stock
          into
          which the warrant is convertible is restricted stock.

         

        (x) "SEC"
          shall
          mean the U.S. Securities and Exchange Commission.

         

        (xi) "Total
          Company Common Stock"
          shall
          be the aggregate number of all shares of Company Common Stock issued and
          outstanding immediately prior to the Effective Time.

        
           

                  (b) The
            Aggregate Merger Consideration shall be allocated among the Company Stockholders
            as of the Effective Date as follows:

        

         

        (c) Each
          share of Company Common Stock issued and outstanding immediately prior
          to the
          Effective Time (other than Dissenting Shares as defined in Section 1.04)
          will be
          canceled and extinguished and be converted automatically into the right
          to
          receive upon surrender of certificate(s) representing Company Common Stock
          (i)
          an amount of the Parent Stock Consideration equal to the product of one
          times
          the Parent Stock Consideration divided by the Total Company Common Stock;
          and
          (ii) an amount of the Parent Warrant Consideration equal to the product
          of one
          times the Parent Warrant Consideration divided by the Total Company Common
          Stock. 

        
          
            
              
              

            

            
              -3-

              
                

              

            

            
              
              

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        1.04 No
          Dissenters Rights.
          Since
          the sole shareholder by execution of this Agreement has approved this Agreement
          and the Merger and transactions contemplated hereby, the Company and Principal
          represent and warrant that there are no dissenterâ€TMs rights available under the
          Limited Liability Company Law of Louisiana or otherwise.

         

        1.05 Surrender
          of Certificates.

         

        (a) Exchange
          Agent.
          Transfer Online, Inc. shall serve as the exchange agent (the "Exchange
          Agent")
          for
          the Merger.

         

        (b) Parent
          to Provide Parent Common Stock and Parent Stock Warrants.
          Upon
          the terms and subject to the conditions of Section 1.03, promptly after
          the
          Effective Time, in exchange for outstanding Company Common Stock, Parent
          shall
          make available to the Exchange Agent for exchange in accordance with this
          Article I, the Aggregate Consideration issuable pursuant to Section 1.03,
          less
          the Parent Common Stock and Parent Stock Warrants being escrowed in accordance
          with Section 6.02(b) hereof (the "Escrow Shares"), which Parent shall deposit
          into the Escrow Fund as defined in Section 6.02(b) hereof.

         

        

          (c) Exchange
            Procedures.
            As
            promptly as practicable after the Effective Time, Parent shall cause
            the
            Exchange Agent to mail to each holder of record of a certificate(s) which,
            immediately prior to the Effective Time, represented outstanding Company
            Common
            Stock(the "Certificates"),
            whose
            Company Common Stock was converted into the right to receive shares of
            Parent
            Common Stock and Parent Stock Warrants pursuant to Section 1.03: (i)
            a letter of
            transmittal (which shall specify that delivery shall be effected, and
            risk of
            loss and title to the Certificates shall pass, only upon delivery of
            the
            Certificates to the Exchange Agent and shall be in such form and have
            such other
            provisions as Parent may reasonably specify); and (ii) instructions for
            use in
            effecting the surrender of the Certificates in exchange for certificate(s)
            representing shares of Parent Common Stock and for the Parent Stock Warrants.
            Upon surrender of Certificates for cancellation to the Exchange Agent
            or to such
            other agent or agents as may be appointed by Parent, together with such
            letter
            of transmittal, duly completed and validly executed in accordance with
            the
            instructions thereto, the holders of such Certificates shall be entitled
            to
            receive in exchange therefor certificate(s) representing the number of
            whole
            shares of Parent Common Stock and Parent Stock Warrants, and the Certificates
            so
            surrendered shall forthwith be canceled. Until so surrendered, outstanding
            Certificates will be deemed from and after the Effective Time, for all
            corporate
            purposes other than the payment of dividends, to evidence the ownership
            of the
            number of full shares of Parent Common Stock and Parent Stock Warrants
            into
            which such Company Common Stock shall have been so converted.

           

          (d) Distributions
            With Respect to Unexchanged Shares.
            No
            dividends or other distributions declared or made after the Effective
            Time with
            respect to Parent Common Stock with a record date after the Effective
            Time will
            be paid to the holder of any unsurrendered Certificate with respect to
            the
            Parent Common Stock represented thereby until the holder of record of
            such
            Certificates shall surrender such Certificates. Subject to applicable
            law, as
            promptly as practicable following surrender of any such Certificates,
            the
            Exchange Agent shall deliver to the record holder thereof, without interest,
            (i)
            certificate(s) representing whole shares of Parent Common Stock and Parent
            Stock
            Warrants issued in exchange therefore, and (ii) the amount of dividends
            or other
            distributions with a record date after the Effective Time but prior to
            surrender
            payable with respect to such whole shares of Parent Common Stock.

           

          
            
              
              

            

            
              -4-

              
                

              

            

            
              
              

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        (e) No
          Liability.
          Notwithstanding anything to the contrary in this Section 1.05, neither
          the
          Exchange Agent, the Surviving Corporation nor any party hereto shall be
          liable
          to a holder of shares of Company Common Stock or Company Preferred Stock
          for any
          amount properly paid to a public official pursuant to any applicable abandoned
          property, escheat or similar law.

         

        1.06 Value
          of Parent Common Stock.
          For
          purposes of the indemnification obligations described in Article VI hereof,
          the
          parties hereto agree that the Parent Common Stock shall be deemed to have
          a
          value determined using the weighted average price as reported on the website
          of
          the American Stock Exchange for the ten (10) trading days preceding the
          date on
          which a claim for indemnification is made, and Parent Stock Warrants issued
          in
          the Merger shall be deemed to have a value per share equal to the value
          per
          share determined in accordance with Section 1.03.

         

        1.07 Treatment
          of the Company Options and Warrants.
          All
          outstanding options, warrants and other rights to purchase Company Common
          Stock
          or any other equity interest in the Company as set forth in Section 2.03
          that
          remain unexercised as of the Effective Time will be terminated, and the
          rights
          granted thereunder will be forfeited. Prior to the Management Date, the
          Company
          shall provide all necessary notifications, and obtain all necessary consents,
          releases or cancellation agreements from the holders of such options, warrants
          and other rights as Parent may reasonably require.

         

        1.08 No
          Further Ownership Rights in the Company Capital Stock.
          The
          shares of Parent Common Stock and Parent Stock Warrants paid in respect
          of the
          surrender for exchange of Company Common Stock in accordance with the terms
          hereof (including any cash paid with respect to fractional shares of Parent
          Common Stock or Parent Stock Warrants) shall be deemed to be in full
          satisfaction of all rights pertaining to such Company Common Stock, and
          there
          shall be no further registration of transfers on the records of the Surviving
          Corporation of capital stock that was outstanding immediately prior to
          the
          Effective Time. If, after the Effective Time, Certificates are presented
          to the
          Surviving Corporation for any reason, they shall be canceled and exchanged
          as
          provided in this Article I.

         

        1.09 Lost,
          Stolen or Destroyed Certificates.
          In the
          event any certificates evidencing shares of Company Common Stock shall
          have been
          lost, stolen or destroyed, the Exchange Agent shall issue in exchange for
          such
          lost, stolen or destroyed certificates, upon the making of an affidavit
          of that
          fact by the holder thereof, such shares of Parent Common Stock, Parent
          Stock
          Warrants or such cash consideration as may be required pursuant to Section
          1.03
          hereof; provided, however, that Parent may, in its discretion and as a
          condition
          precedent to the issuance thereof, require the owner of such lost, stolen
          or
          destroyed certificates to deliver a bond in such amount as it may reasonably
          direct against any claim that may be made against Parent or the Exchange
          Agent
          with respect to the certificates alleged to have been lost, stolen or
          destroyed.

         

        1.10 Taking
          of Necessary Action; Further Action.
          If at
          any time after the Effective Time any further action is necessary or desirable
          to carry out the purposes of this Agreement and to vest the Surviving
          Corporation with full right, title and possession to all assets, property,
          rights, privileges, powers and franchises of the Company, then the officers,
          directors and employees of the Company, Parent and Subsidiary are fully
          authorized in the name of their respective companies or otherwise to take,
          and
          will take, all such lawful and necessary action.

         

        1.11 Tax
          Consequences.
          It is
          intended that the Merger shall constitute a reorganization within the meaning
          of
          Section 368(a)(1)(A), by reason of Section 368(a)(2)(D) of the Internal
          Revenue
          Code of 1986, as amended (the "Code"), and that this Agreement shall constitute
          a "plan of reorganization" within the meaning of Section 368 of the
          Code.

        
          
            
              
              

            

            
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        ARTICLE
          II

        REPRESENTATIONS
          AND WARRANTIES OF THE COMPANY AND THE PRINCIPALS

         

        The
          Company, and each of the Principals, hereby represent and warrant to Parent
          and
          Subsidiary that on the date hereof and as of the Effective Time as though
          made
          on the Effective Date as follows:

         

        2.01 Organization.
          The
          Company is a limited liability company duly organized, validly existing
          and in
          good standing under the laws of the State of Louisiana and the Company
          has filed
          its only tax return in a manner consistent with taxation as a corporation.
          The
          Company has all requisite power and authority to own, lease and operate
          its
          properties and to carry on its business as now being conducted, and is
          duly
          licensed or qualified to do business in each jurisdiction in which its
          ownership
          or leasing of its properties or the nature of the business conducted by
          the
          Company makes such licensing or qualification necessary. The copies of
          the
          Articles of Organization of the Company and the operating agreement of
          the
          Company, certified by its Secretary as of the date of this Agreement, which
          are
          being delivered to Parent and Subsidiary herewith, are complete and correct
          copies of such documents in effect as of the date of this Agreement. The
          minute
          books of the Company contain true and complete records of all meetings
          and other
          corporate actions of its shareholders/members (herein â€œShareholdersâ€� or
â€œMembersâ€�) and their Boards of Managers (herein â€œBoard of Directorsâ€�)
          (including all committees of their Boards of Directors).

         

        2.02 Subsidiaries.
          There
          is no other corporation, limited liability company, partnership, association,
          joint venture or other business entity that the Company owns or controls,
          directly or indirectly.

         

        2.03 Capital
          Structure.

         

        (a) The
          authorized capital stock of the Company consists of (i) 100 shares of Company
          Common Stock, 100 shares of which are issued and outstanding to the Principal.
          Except as set forth in this Section 2.03 or on Schedule
          2.03(a)
          hereto,
          there are no shares of capital stock of the Company authorized, issued
          or
          outstanding. Except for Company Common Stock set forth in this Section
          2.03 or
          on Schedule
          2.03(a)
          hereto,
          there are no classes or series of ownership interests of the Company of
          any kind
          authorized, outstanding or issuable. All outstanding shares of Company
          Common
          Stock are duly authorized, validly issued, fully paid and non-assessable,
          and
          are not subject to preemptive rights created by statute, the Articles of
          Organization or Operating Agreement of the Company, or any agreement to
          which
          the Company is a party or by which it is bound. All shares of Company Common
          Stock have been issued in compliance with all applicable federal and state
          securities laws. The designations, powers, preferences, rights, qualifications,
          limitations and restrictions in respect of Company Common Stock are as
          set forth
          in Schedule
          2.03(a)
          hereto.
          There are no declared or accrued but unpaid dividends with respect to any
          shares
          of the Company capital stock and none of the Company capital stock is held
          in
          treasury.

         

        (b) As
          of the
          date hereof, there are no options, warrants or similar rights outstanding
          or
          authorized with respect to the capital stock or equity of the Company.
          There are
          no outstanding or authorized stock appreciation, phantom stock, profit
          participation, or other similar rights with respect to the Company. There
          are no
          voting trusts, proxies, or other agreements or understandings with respect
          to
          Company Common Stock. The Principal has good, valid and marketable title
          to
          Company Common Stock free and clear of any claim, lien, pledge, charge,
          security
          interest options, charges, assessments or other encumbrance of any nature
          whatsoever.

        
          
            
            

          

          
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        (c) The
          requisite vote required to approve the Merger under Louisiana law, the
          Company's
          Articles of Organization, Operating Agreement and any other agreement to
          which
          the Company or any Shareholder of the Company is majority of the Company
          Common
          Stock voting as a class.

         

        2.04 Authority.
          The
          Company and the Principal have all requisite power and authority to enter
          into
          this Agreement and any Related Agreement (as defined below) to which they
          are
          party and to consummate the transactions contemplated hereby and thereby.
          The
          execution and delivery of this Agreement, any Related Agreement to which
          the
          Company is party and the consummation of the transactions contemplated
          hereby
          and thereby have been duly authorized by all necessary limited liability
          company
          action on the part of the Company, including approval of the sole Company
          Shareholder. No further action is required on the part of the Principal
          to
          authorize the Agreement, any Related Agreement to which he is a party and
          the
          transactions contemplated hereby and thereby. This Agreement, any Related
          Agreement to which the Company is a party and the merger and the transactions
          contemplated thereby have been unanimously approved by the board of directors
          and the Principal, as sole Shareholder of the Company. This Agreement and
          any
          Related Agreement to which the Company and/or any of the Principals is
          a party
          has been duly executed and delivered by the Company and/or the Principal,
          as the
          case may be, and constitute the valid and binding obligations of the Company
          and
          the Principal, enforceable against each such party in accordance with their
          respective terms, except as such enforceability may be subject to the laws
          of
          general application relating to bankruptcy, insolvency and the relief of
          debtors
          and rules of law governing specific performance, injunctive relief or other
          equitable remedies. For the purposes of this Agreement, the term "Related
          Agreements"
          shall
          mean the Escrow Agreement, the Articles of Merger and Management Agreement,
          and
          any other agreements to which the Company and/or the Principal is a party
          that
          is entered into in order to consummate the transactions contemplated hereby
          or
          thereby.

         

        2.05 No
          Conflict.
          The
          execution and delivery by the Company and the Principal of this Agreement
          and
          any Related Agreement to which the Company and/or the Principal is a party,
          and
          the consummation of the transactions contemplated hereby and thereby, will
          not
          conflict with or result in any violation of or default under (with or without
          notice or lapse of time, or both) or give rise to a right of termination,
          cancellation, modification or acceleration of any obligation or loss of
          any
          benefit under (any such event, a "Conflict"):
          (i)
          any provision of the Articles of Organization or Operating Agreement of
          the
          Company, each as amended to date; (ii) any contract to which the Company
          is a
          party, or to which any of the Principals, is subject; or (iii) any judgment,
          order, decree, statute, law, ordinance, rule or regulation applicable to
          the
          Company or any respective properties or assets, or applicable to any of
          the
          Principals.

         

        2.06 Consents.
          No
          consent, waiver, approval, order or authorization of, or registration,
          declaration or filing with any court, administrative agency or commission
          or
          other federal, state, county, local or other foreign governmental authority,
          instrumentality, agency, commission, military division or department,
          inspectorate, minister, ministry or public or statutory person (whether
          autonomous or not) thereof (or of any political subdivision thereof) (each,
          a
          "Governmental
          Entity"),
          is
          required by or with respect to the Company, or the Principal in connection
          with
          the execution and delivery of this Agreement, any of the Related Agreements
          to
          which the Company, or the Principal is a party, or the consummation of
          the
          transactions contemplated hereby or thereby, except for: (i) the approval
          of the
          Public Service Commission of the States of Louisiana and Mississippi; (ii)
          the
          filing of the Articles/Certificate of Merger with the Secretary of State
          of the
          State of Mississippi and Louisiana; (iii) the consents as set forth in
          Section
          5.02(b); and (iv) such other consents, filings, approvals, registrations
          or
          declarations, the failure of which to make or obtain is not reasonably
          likely,
          individually, or in the aggregate, to have a Material Adverse Effect.

          
            
              
              

            

            
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2.07 The
            Company Financial Statements.
            Attached as Schedule
            2.07
            are the
            (i) unaudited balance sheet as of December 31, 2002, 2003 and 2004, and
            the
            Profit and Loss Statement for the Company for the years ended December
            31, 2002,
            2003 and 2004 and (ii) the unaudited balance sheet as of June 30, 2005
            and the
            Profit and Loss Statement for the Company for the three months ending
            June 30,
            2005 (collectively, the "Financials").
            The
            Financials are true, correct and accurate and have been based upon the
            information contained in the books and records of the Company and have
            been
            prepared in accordance with GAAP except that the June 30, 2005
            Financials
            do not have notes thereto and may be subject to normal and recurring
            year end
            adjustments consistently applied throughout the periods covered thereby.
            The
            Financials present fairly the financial condition, operating results
            and cash
            flows of the Company as of the dates and during the periods indicated
            therein.
            The Company's unaudited balance sheet as of June 30, 2005 is referred
            to
            hereinafter as the "Current
            Balance Sheet."
            The
            Company maintains and will continue, prior to the Effective Time, to
            maintain a
            standard system of accounting established and administered in accordance
            with
            GAAP. 

        

         

         

        2.08 No
          Undisclosed Liabilities.
          Except
          as and to the extent reflected or reserved against in the Financials or
          as
          disclosed on Schedule
          2.08,
          which
          shall include all the Company's accounts payable and other accrued expenses
          as
          of the date of this Agreement, and subject to the thresholds set forth
          in
          Section 2.13 of this Agreement (except that the thresholds of Section 2.13
          shall
          not apply if the cumulative undisclosed liabilities based on such threshold
          exceed $25,000), the Company has no liabilities, claims or obligations
          (whether
          accrued, absolute, contingent, unliquidated or otherwise, whether or not
          known
          to the Company or Principals or any directors, officers or employees of
          the
          Company, whether due to become payable and regardless of when or by whom
          asserted) or any unrealized or anticipated losses from any unrealized or
          anticipated losses of a contractual nature.

         

        2.09 No
          Changes.
          Except
          as set forth on Schedule
          2.09,
          since
          the Current Balance Sheet Date, there has not been, occurred or arisen
          any of
          the following with respect to the Company: 

         

        (a) material
          transaction by the Company except in the ordinary course of business consistent
          with past practices;

         

        (b) amendments
          or changes to the organizational documents of the Company;

         

        (c) capital
          expenditure or capital expenditure commitment exceeding $5,000 individually
          or
          $10,000 in the aggregate;

         

        (d) payment,
          discharge or satisfaction, in any amount in excess of $5,000 in any one
          case, or
          $10,000 in the aggregate, of any claim, liability or obligation (absolute,
          accrued, asserted or unasserted, contingent or otherwise), other than payments,
          discharges or satisfactions made or given in the ordinary course of business
          consistent with past practices;

         

        (e) destruction
          of, damage to or loss of any material assets or material business or loss
          of any
          material customer (whether or not covered by insurance);

         

        (f) claim
          of
          wrongful discharge or other unlawful labor practice or action;

         

        (g) material
          change in accounting methods or practices (including any change in depreciation
          or amortization policies or rates by the Company) other than as required
          by
          GAAP;

        
          
            
              
              

            

            
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        (h) change
          in
          any election in respect of Taxes (as defined below), adoption or change
          in any
          accounting method in respect of Taxes, agreement or settlement of any claim
          or
          assessment in respect of Taxes, or extension or waiver of the limitation
          period
          applicable to any claim or assessment in respect of Taxes;

         

        (i) revaluation
          by the Company of any of their respective assets;

         

        (j) declaration,
          setting aside or payment of a dividend or other distribution (whether in
          cash,
          stock or property) in respect of any share of capital stock, or any split,
          combination or reclassification in respect of any share of capital stock,
          or any
          issuance or authorization of any issuance of any other securities in respect
          of,
          in lieu of or in substitution for any share of capital stock, or any direct
          or
          indirect repurchase or redemption of any share of capital stock (or options
          or
          other rights convertible into, exercisable or exchangeable
          therefor);

         

        (k) increase
          in the salary or other compensation (cash, equity or otherwise) payable
          by the
          Company to any officers, directors, employees or advisors, or the declaration,
          or commitment or obligation of any kind for the payment by the Company
          of a
          severance payment, termination payment, bonus or other additional salary
          or
          compensation (cash, equity or otherwise) to any such person;

         

        (l) sale,
          lease or other disposition of any of the material assets or material properties
          or any creation of any security interest in such material assets or material
          properties;

         

        (m) loan
          by
          the Company to any person or entity, incurring by the Company of any
          indebtedness, guaranteeing of any indebtedness (in each case, except in
          the
          ordinary course of business and consistent with past practice, including,
          without limitation, travel and related expenses advanced to employees),
          issuance
          or sale of any debt securities or guaranteeing of any debt securities of
          others,
          except for advances to employees for travel and business expenses in the
          ordinary course of business consistent with past practices;

         

        (n) waiver
          or
          release of any material or valuable right or claim of the Company, including
          any
          write-off or other compromise of any account receivable of the
          Company;

         

        (o) the
          commencement, settlement, notice or threat of any lawsuit or proceeding
          or other
          investigation against the Company or its affairs, or any reasonable basis
          for
          any of the foregoing;

         

        (p) notice
          to
          the Company, or their respective directors, officers or managers or advisors
          of
          any claim of ownership by any person other than the Company of the intellectual
          property owned by or developed or created by the Company or of infringement
          by
          the Company of any other person's intellectual property;

         

        (q) issuance
          or sale, or contract to issue or sell, by the Company of any capital stock,
          or
          any securities, warrants, options or rights to purchase any of the
          foregoing;

         

        (r) agreement
          or modification to any agreement pursuant to which any other party was
          granted
          marketing, distribution, development or similar rights of any type or scope
          with
          respect to any products or technology of the Company;

        
          
            
              
              

            

            
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        (s) hiring
          or
          termination of any employee of the Company;

         

        (t) event
          or
          condition of any character that has had or is reasonably likely to have
          a
          Material Adverse Effect; or

         

        (u) agreement
          by the Company, or any officer, manager or employee thereof on behalf of
          the
          Company to do any of the things described in the preceding clauses (a)
          through
          (t) (other than negotiations with Parent and its representatives regarding
          the
          transactions contemplated by this Agreement).

         

        2.10 Tax
          Matters.

         

        (a) Definition
          of Taxes.
          For the
          purposes of this Agreement, the term "Tax"
          or,
          collectively, "Taxes"
          shall
          mean: (i) any and all federal, state, local and foreign taxes, assessments
          and
          other governmental charges, duties, impositions and liabilities, including
          taxes
          based upon or measured by gross receipts, income, profits, capital gains,
          capital stock, sales, use and occupation, and value added, ad valorem,
          transfer,
          franchise, withholding, payroll, recapture, employment, stamp, excise and
          property taxes, together with all interest, penalties and additions imposed
          with
          respect to such amounts (whether payable directly or by withholding, and
          whether
          or not requiring the filing of a Return (defined below)); (ii) any liability
          for
          the payment of any amounts of the type described in clause (i) above as
          a result
          of being a member of an affiliated, consolidated, combined or unitary group
          for
          any period; and (iii) any liability for the payment of any amounts of the
          type
          described in clauses (i) or (ii) above as a result of any express or implied
          obligation to indemnify any other person or as a result of any obligations
          under
          any agreements or arrangements with any other person with respect to such
          amounts and including any liability for taxes of a predecessor
          entity.

         

        (b) Taxes.
          All
          Taxes which are due and payable by the Company and any interest or penalties
          thereon have been paid in full or accrued on the balance sheets included
          in the
          Financials. All federal, state and other tax returns of the Company required
          by
          law to be filed have been timely filed, and Company has paid or accrued
          on the
          balance sheets included in the Financials (including taxes on properties,
          income, franchises, licenses, sales and payrolls) all taxes which have
          become
          due pursuant to such returns or pursuant to any assessment. All such tax
          returns
          have been prepared in compliance with all applicable laws and regulations
          and
          are true and accurate in all material respects. The amounts set up as provisions
          for Taxes (including provision for deferred income taxes) on the Financials
          are
          sufficient for the payment of all unpaid federal, state, county and local
          taxes
          accrued for or applicable to all periods (or portions thereof) ending on
          or
          before the Effective Date. There are no tax liens on any of the property
          of the
          Company except those with respect to taxes not yet due and payable. There
          are no
          pending tax examinations nor has the Company received a revenue agent's
          report
          asserting a tax deficiency. The Company does not expect any taxing authority
          to
          claim or assess any amount of additional taxes against it. No claim has
          ever
          been made by a taxing authority in a jurisdiction where the Company does
          not
          file tax returns that the Company is or may be subject to taxes assessed
          by such
          jurisdiction.

        
          
            
            

          

          
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        Copies
          of
          Companyâ€TMs only federal, state and local income tax returns are included as
Schedule
          2.10(b).
          No
          waivers of any statute of limitations relating to the payment of taxes
          have been
          given by the Company and no waivers therefor have been requested by the
          Internal
          Revenue Service from the Company. No extensions have been obtained to file
          any
          tax return which has not heretofore been filed. The Company has withheld
          from
          each payment made to employees of the Company the amount of all taxes
          (including, but not limited to, federal, state and local income taxes,
          Federal
          Insurance Contribution Act taxes and Unemployment Tax Act taxes) required
          to be
          withheld therefrom and all amounts customarily withheld therefrom, and
          have set
          aside all other employee contributions or payments customarily set aside
          with
          respect to such wages and have paid or will pay the same to, or have deposited
          or will deposit such payment with, the proper tax receiving officers or
          other
          appropriate authorities. All Taxes and other amounts required to be collected
          and paid to a third party as required by law from customers' payments have
          been
          timely withheld and paid by the Company. The Company has filed its only
          tax
          return in a manner consistent with taxation as a corporation.

         

        2.11 Restrictions
          on Business Activities.
          There
          is no agreement (noncompete or otherwise), commitment, judgment, injunction,
          order or decree to which the Company is a party or otherwise binding upon
          the
          Company, which has or may reasonably be expected to have the effect of
          prohibiting or impairing in any material respect any business practice,
          any
          acquisition of property, the conduct of business as currently conducted
          or
          otherwise materially limiting the freedom of the Company to engage in any
          line
          of business or to compete with any person.

         

        2.12 Title
          of Properties; Absence of Liens and Encumbrances; Condition of
          Equipment.

         

        (a) The
          Company has good and valid title to, or, in the case of leased properties
          and
          assets, valid leasehold interests in, all of its properties and assets,
          real,
          personal and mixed, used or held for use in its business, free and clear
          of any
          Liens, except: (i) as reflected in the Financials; (ii) Liens for Taxes
          not yet
          due and payable; and (iii) such imperfections of title and encumbrances,
          if any,
          which do not detract materially from the value of, or interfere materially
          with
          the present use of, the property subject thereto or affected
          thereby.

         

        (b) Schedule
          2.12(b)
          contains
          an accurate and complete list and description of all real property owned
          by the
          Company or in which the Company has a leasehold or other interest or which
          is
          used by the Company in connection with the operation of its business, together
          with a description of each lease, sublease, license, or any other instrument
          under which the Company claims or holds such leasehold or other interest
          or
          right to the use thereof or pursuant to which the Company has assigned,
          sublet
          or granted any rights therein, identifying the parties thereto, the rental
          or
          other payment terms, expiration date and cancellation and renewal terms
          thereof,
          and all machinery, tools, equipment, motor vehicles, rolling stock and
          other
          tangible personal property (other than inventory and supplies), owned,
          leased or
          used by the Company except for items having a value of less than $2,000
          which do
          not, in the aggregate, have a total value of more than $10,000, setting
          forth
          with respect to all such listed property a summary description of all leases,
          liens, claims, encumbrances, charges, restrictions, covenants and conditions
          relating thereto, identifying the parties thereto, the rental or other
          payment
          terms, expiration date and cancellation and renewal terms thereof.

        
          
            
            

          

          
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        (c) The
          Company has not granted to any third party any right or license to use
          the
          Company's customer lists, customer contact information, customer correspondence
          or customer licensing and purchasing histories relating to its current
          and
          former customers.

         

        2.13 Material
          or Significant Agreements, Contracts and Commitments.

         

        (a) Except
          as
          set forth on Schedule
          2.13(a),
          the
          Company is not presently a party to or bound by:

         

        (i) any
          employment, consulting or sales agreement with any employee, consultant
          or
          salesperson of the Company that is not otherwise terminable without penalty
          upon
          no more than 30 days notice or involves payments of more than $10,000 per
          annum;

         

        (ii) any
          agreement or plan relating to employee benefits or compensation involving
          payments of more than $10,000 per annum, including without limitation any
          option
          plan or purchase plan with respect to Equity Interests of the Company ,
          any of
          the benefits of which will be increased, or the vesting of benefits of
          which
          will be accelerated, by the occurrence of any of the transactions contemplated
          by this Agreement or the value of any of the benefits of which will be
          calculated on the basis of any of the transactions contemplated by this
          Agreement;

         

        (iii) any
          material fidelity or surety bond or completion bond;

         

        (iv) any
          lease
          of personal property having an annual rental rate in excess of $2,000
          individually or $20,000 in the aggregate;

         

        (v) any
          agreement, contract or commitment relating to capital expenditures and
          involving
          future payments in excess of $5,000 individually or $20,000 in the
          aggregate;

         

        (vi) any
          agreement, contract or commitment relating to the disposition or acquisition
          of
          assets or any interest in any business enterprise outside the ordinary
          course of
          the Company's business that involves future payments of more than
          $10,000;

         

        (vii) any
          payables, mortgages, indentures, guarantees, loans or credit agreements,
          security agreements or other agreements or instruments relating to the
          borrowing
          of money or extension of credit or evidencing any debt or any payable,
          debt or
          agreement which is secured by any assets of the Company and has a balance
          of
          more than $5,000.00;

         

        (viii) any
          purchase order or contract for the purchase of materials or services involving
          in excess of $2,000 individually or $20,000 in the aggregate;

         

        (ix) any
          material construction contracts;

        
          
            
              
              

            

            
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        (x) any
          dealer, distribution, joint marketing or development agreement or agreements
          relating to territorial arrangements, sales representation, operating or
          consulting agreements that is not otherwise terminable without penalty
          upon no
          more than 30 days notice or involves payments of more than $10,000 per
          annum;

         

        (xi) any
          remarketer, reseller or other agreement for use or distribution of the
          Company's
          products, technology or services that may not be cancelled without penalty
          upon
          no more than 30 days notice;

         

        (xii) any
          supplier or third party provider agreements that involves future payments
          in
          excess of $10,000 per annum and is not cancelable without penalty within
          30
          calendar days;

         

        (xiii) any
          joint
          venture, partnership or other management agreements that involves future
          payments of more than $10,000;

         

        (xiv) any
          advertising, marketing, telemarketing or promotional agreements that involves
          future payments of more than $5,000;

         

        (xv) any
          material tax sharing agreement with any other party;

         

        (xvi) any
          non-compete or other agreements restricting the business in any
          way;

         

        (xvii) any
          independent agent or independent contractor agreements that is not cancelable
          without penalty within 30 calendar days;

         

        (xviii) any
          agreements for the discount of the services or products offered by the
          Company
          that involve discounts of more than $5,000 per annum;

         

        (xix) any
          material agreements pursuant to which the Company is obligated to indemnify
          any
          party;

         

        (xx) any
          agreements that involves future payments of more than $5,000 or which is
          not
          otherwise cancelable without penalty within 30 calendar days with any current
          or
          former officer, director, employee, consultant or equity holder or any
          partnership, corporation, joint venture or other entity in which any such
          person
          has an interest;

         

        (xxi) any
          irrevocable right of use or similar agreements that is not cancelable without
          penalty within 30 calendar days;

         

        (xxii) any
          agreement providing for the purchase of telecommunications minutes, services
          or
          traffic that involves future payments of more than $5,000 or which is not
          otherwise cancelable without penalty within 30 calendar days; or

        
          
            
            

          

          
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        (xxiii) any
          other
          agreement, contract or commitment that involves $2,000 individually or
          $20,000
          in the aggregate or more and is not cancelable without penalty within thirty
          (30) calendar days.

         

        The
          undisclosed liabilities based on the thresholds as provided in this Section
          2.13(a) do not exceed in the aggregate $25,000.

         

        (b) The
          Company is in compliance with and has not breached, violated or defaulted
          under,
          or received notice that it has breached, violated or defaulted under, any
          of the
          terms or conditions of any agreement, contract, lease, license or commitment
          to
          which it is a party or by which it is bound, including those included on
          Schedule
          2.13(a)
          (collectively, the "Contracts"),
          nor
          does the Company have knowledge of any event that would constitute such
          a
          material breach, violation or default with the lapse of time, giving of
          notice
          or both. Each Contract is in full force and effect and is not subject to
          any
          material default thereunder, nor, to the Knowledge of the Company, is any
          party
          obligated to the Company pursuant thereto subject to any material default
          thereunder.

         

        (c) The
          Company has obtained, or will obtain prior to the Effective Time, all necessary
          consents, waivers and approvals of parties to any Contract as are required
          thereunder in connection with the Merger or for such Contracts to remain
          in
          effect without modification, limitation or alteration after the Effective
          Date.
          Following the Effective Date, the Company will be permitted to exercise
          all of
          its rights under the Contracts without the payment of any additional amounts
          or
          consideration other than amounts or consideration which the Company would
          otherwise be required to pay had the transactions contemplated by this
          Agreement
          not occurred.

         

        2.14 Interested
          Party Transactions.
          No
          officer, director, employee, shareholder, manager or member of the Company
          (nor
          any ancestor, sibling, descendant or spouse of any such person, or trust,
          partnership or corporation in which any such person has or has had an interest)
          has or has had, directly or indirectly: (i) an interest in any entity which
          furnished or sold, or furnishes or sells, services, products or technology
          that
          the Company furnishes or sells; (ii) any interest in any entity that purchases
          from or sells or furnishes to the Company, any goods or services; or (iii)
          a
          beneficial interest in any Contract to which the Company is a party; provided,
          however, that ownership of no more than 1% of the outstanding voting stock
          of a
          publicly traded corporation shall not be deemed to be an "interest in any
          entity" for purposes of this Section 2.14.

         

        2.15 Governmental
          Authorization.

         

        (a) Each
          consent, license, permit, grant, certificate, approval or other authorization
          (i) pursuant to which the Company currently operates or holds any interest
          in
          any of its properties, or (ii) which is required for the operation of its
          business as currently conducted or the holding of any such interest has
          been
          issued or granted and is listed on Schedule
          2.15
          (collectively, the "the
          Company Authorizations").
          The
          Company is operating in compliance with all Company Authorizations. Each
          Company
          Authorization has been lawfully and validly issued and no proceeding or
          investigation is currently pending or threatened, and the Company has received
          no notice of any investigation, revocation, cancellation or modification
          with
          respect to any Company Authorization and knows of no basis therefor. The
          Company
          has timely filed all reports, data and other information required to be
          filed
          with any governmental entity or as required to maintain the Company
          Authorizations. The Company Authorizations are in full force and effect,
          and,
          shall remain in full force and effect without modification after the Effective
          Time.

        
          
            
            

          

          
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        2.16 Litigation.
          Except
          as set forth on Schedule
          2.16,
          there
          is no action, suit, claim or proceeding of any nature pending or threatened
          against the Company or the Principal or their respective properties or
          any
          person or entity whose liability the Company or the Principal may have
          retained
          or assumed, either contractually or by operation of law, nor, to the Knowledge
          of the Company or Principal, is there any reasonable basis therefor. There
          is no
          investigation or other proceeding pending or threatened against the Company
          or
          the Principal, any of their respective properties or any person or entity
          whose
          liability the Company or the Principal may have retained or assumed, either
          contractually or by operation of law, by or before any Governmental Entity,
          nor,
          to the Knowledge of the Company or Principal, is there any reasonable basis
          therefor. Except as set forth on Schedule
          2.16,
          no
          Governmental Entity has at any time challenged or questioned the legal
          right of
          the Company to conduct its operations as presently or previously
          conducted.

         

        2.17 Accounts
          Receivable.
          All
          receivables of the Company (including accounts receivable, loans receivable
          and
          advances) which are reflected in the Balance Sheet, and all such receivables
          which will have arisen since the date thereof, shall have arisen only from
          bona
          fide transactions in the ordinary course of the business of the Company
          and
          shall be (or have been) fully collected when due, or in the case of each
          account
          receivable within 90 days after it arose (or, in the case of the BellSouth
          receivable reflected on Schedule 2.09(g), 180 days from the Management
          Date),
          without resort to litigation and without offset or counterclaim, in the
          aggregate face amounts thereof except to the extent of the normal allowance
          for
          doubtful accounts with respect to accounts receivable computed as a percentage
          of sales consistent with the Company's prior practices as reflected on
          the
          Financials.

         

        2.18 Assets
          Necessary to Business.
          The
          Company presently has and at Closing will have title to all property and
          assets,
          real, personal and mixed, tangible and intangible, and all leases, licenses
          and
          other agreements, necessary to permit Subsidiary to carry on the business
          of the
          Company, as currently conducted.

         

        2.19 Minute
          Books.
          The
          minutes of the Company made available to counsel for Parent are the only
          minutes
          of the Company and contain substantially accurate summaries of all material
          meetings of the board of directors (or committees thereof), the board of
          managers (or committees thereof), the shareholders (or committees thereof),
          the
          members (or committees thereof) of the Company , as applicable, and each
          action
          by written consent since the inception of each such entity.

         

        2.20 Environmental
          Matters.

         

        (a) Hazardous
          Material.
          The
          Company has not: (i) operated any underground storage tanks at any property
          that
          the Company has at any time owned, operated, occupied or leased; or (ii)
          illegally released any amount of any substance that has been designated
          by any
          Governmental Entity or by applicable federal, state or local law to be
          radioactive, toxic, hazardous or otherwise a danger to health or the
          environment, including without limitation PCBs, asbestos, petroleum, and
          urea-formaldehyde and all substances listed as hazardous substances pursuant
          to
          the Comprehensive Environmental Response, Compensation, and Liability Act
          of
          1980, as amended, or defined as a hazardous waste pursuant to the United
          States
          Resource Conservation and Recovery Act of 1976, as amended, and the regulations
          promulgated pursuant to said laws (a "Hazardous
          Material").
          To
          the Knowledge of the Company, no Hazardous Materials are present in, on
          or under
          any property, including the land and the improvements, ground water and
          surface
          water thereof, that the Company or any Subsidiary has at any time owned,
          operated, occupied or leased.

        
          
            
              
              

            

            
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        (b) Hazardous
          Materials Activities.
          The
          Company has not transported, stored, used, manufactured, disposed of, released
          or exposed its employees or others to Hazardous Materials in violation
          of any
          law in effect on or before the Effective Time, nor has the Company or any
          Subsidiary disposed of, transported, sold, or manufactured any product
          containing a Hazardous Material (any or all of the foregoing being collectively
          referred to herein as "Hazardous
          Materials Activities")
          in
          violation of any rule, regulation, treaty or statute promulgated by any
          Governmental Entity in effect prior to or as of the date hereof to prohibit,
          regulate or control Hazardous Materials or any Hazardous Material
          Activity.

         

        (c) Permits.
          The
          Company currently holds all environmental approvals, permits, licenses,
          clearances and consents (the "Environmental
          Permits")
          necessary for the conduct of Hazardous Material Activities by them,
          respectively, and other businesses of the Company as such activities and
          businesses are currently being conducted.

         

        (d) Environmental
          Liabilities.
          No
          action, proceeding, revocation proceeding, amendment procedure, writ, injunction
          or claim is pending or, to the Knowledge of the Company, threatened concerning
          any Environmental Permit, Hazardous Material or any Hazardous Materials
          Activity
          of the Company or any Subsidiary. The Company has no Knowledge of any fact
          or
          circumstance that is reasonably likely to involve the Company in any
          environmental litigation or impose upon the Company any environmental
          liability.

         

        2.21 Brokers'
          and Finders' Fees.
          The
          Company has not incurred, nor will it incur, directly or indirectly, any
          liability for brokerage or finders' fees or agents' commissions or any
          similar
          charges in connection with this Agreement or any transaction contemplated
          hereby.

         

        2.22 Employee
          Benefit Plans and Compensation.

         

        (a) Definitions.
          For all
          purposes of this Agreement, the following terms shall have the following
          respective meanings:

         

        (i) "Affiliate"
          shall
          mean any other person or entity under common control with the Company or
          Parent,
          as applicable, within the meaning of Section 414(b), (c), (m) or (o) of
          the
          Code, and the regulations issued thereunder.

         

        (ii) "COBRA"
          shall
          mean the Consolidated Omnibus Budget Reconciliation Act of 1985, as
          amended.

         

        (iii) "the
          Company Employee Plan"
          shall
          mean any plan, program, policy, practice, contract, agreement or other
          material
          arrangement providing for compensation, severance, termination pay, deferred
          compensation, performance awards, stock or stock related awards, fringe
          benefits
          or other employee benefits or remuneration of any kind, whether written,
          unwritten or otherwise, funded or unfunded, including without limitation,
          each
          "employee benefit plan," within the meaning of Section 3(3) of ERISA which
          is or
          has been maintained, contributed to, or required to be contributed to,
          by the
          Company or any Affiliate for the benefit of any Employee, or with respect
          to
          which the Company or any Affiliate has or may have any liability or
          obligation.

        
          
            
              
              

            

            
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        (iv) "DOL"
          shall
          mean the United States Department of Labor.

         

        (v) "Employee"
          shall
          mean any current or former employee, consultant or director of the Company
          or
          any Affiliate.

         

        (vi) "Employment
          Agreement"
          shall
          mean each management, employment, severance, consulting, relocation,
          repatriation, expatriation, visas, work permit or other agreement, or contract
          between the Company or any Affiliate and any Employee.

         

        (vii) "ERISA"
          shall
          mean the Employee Retirement Income Security Act of 1974, as
          amended.

         

        (viii) "FMLA"
          shall
          mean the Family Medical Leave Act of 1993, as amended.

         

        (ix) "IRS"
          shall
          mean the United States Internal Revenue Service.

         

        (x) "Pension
          Plan"
          shall
          mean each the Company Employee Plan, which is an "employee pension benefit
          plan," within the meaning of Section 3(2) of ERISA.

         

        (b) Schedule.
          Schedule
          2.22(b)
          contains
          an accurate and complete list of each the Company Employee Plan and each
          Employment Agreement. The Company has no plan or commitment to establish
          any new
          the Company Employee Plan or Employment Agreement, to modify any the Company
          Employee Plan or Employment Agreement (except to the extent required by
          law), or
          to enter into any the Company Employee Plan or Employee Agreement.

         

        (c) Documents.
          The
          Company has provided to Parent correct and complete copies of: (i) all
          documents
          embodying each the Company Employee Plan and each Employment Agreement
          including
          (without limitation) all amendments thereto and all related trust documents,
          administrative service agreements, group annuity contracts, group insurance
          contracts, and policies pertaining to fiduciary liability insurance covering
          the
          fiduciaries for each Plan; (ii) the most recent annual actuarial valuations,
          if
          any, prepared for each the Company Employee Plan; (iii) the three (3) most
          recent annual reports (Form Series 5500 and all schedules and financial
          statements attached thereto), if any, required under ERISA or the Code
          in
          connection with each the Company Employee Plan; (iv) if the Company Employee
          Plan is funded, the most recent annual and periodic accounting of the Company
          Employee Plan assets; (v) the most recent summary plan description together
          with
          the summary(ies) of material modifications thereto, if any, required under
          ERISA
          with respect to each the Company Employee Plan; (vi) all IRS determination,
          opinion, notification and advisory letters, and all applications and
          correspondence to or from the IRS or the DOL with respect to any such
          application or letter; (vii) all communications material to any Employee
          or
          Employees relating to any the Company Employee Plan and any proposed the
          Company
          Employee Plans, in each case, relating to any amendments, terminations,
          establishments, increases or decreases in benefits, acceleration of payments
          or
          vesting schedules or other events which would result in any material liability
          to the Company; (viii) all correspondence to or from any governmental agency
          relating to any the Company Employee Plan; (ix) all COBRA forms and related
          notices (or such forms and notices as required under comparable law); (x)
          the
          three (3) most recent plan years discrimination tests for each the Company
          Employee Plan; and (xi) all registration statements, annual reports (Form
          11-K
          and all attachments thereto) and prospectuses prepared in connection with
          each
          Company Employee Plan.

        
          
            
            

          

          
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        (d) Employee
          Plan Compliance.
          Except
          as set forth on Schedule
          2.22(d),
          (i) the
          Company has performed in all material respects all obligations required
          to be
          performed by it under, is not in material default or violation of, and
          has no
          knowledge of any material default or violation by any other party to each
          the
          Company Employee Plan, and each the Company Employee Plan has been established
          and maintained in all material respects in accordance with its terms and
          in
          compliance with all applicable laws, statutes, orders, rules and regulations,
          including but not limited to ERISA or the Code; (ii) each the Company Employee
          Plan intended to qualify under Section 401(a) of the Code and each trust
          intended to qualify under Section 501(a) of the Code has either received
          a
          favorable determination, opinion, notification or advisory letter from
          the IRS
          with respect to each such Company Employee Plan as to its qualified status
          under
          the Code, including all amendments to the Code effected by the Tax Reform
          Act of
          1986 and subsequent legislation, or has remaining a period of time under
          applicable Treasury regulations or IRS pronouncements in which to apply
          for such
          a letter and make any amendments necessary to obtain a favorable determination
          as to the qualified status of each such Company Employee Plan; (iii) no
          "prohibited transaction," within the meaning of Section 4975 of the Code
          or
          Sections 406 and 407 of ERISA, and not otherwise exempt under Section 4975
          of
          the Code or Section 408 of ERISA (or any administrative class exemption
          issued
          thereunder), has occurred with respect to any the Company Employee Plan;
          (iv)
          there are no actions, suits or claims pending, or, to the Knowledge of
          the
          Company, threatened or reasonably anticipated (other than routine claims
          for
          benefits) against any the Company Employee Plan or against the assets of
          any the
          Company Employee Plan; (v) each Company Employee Plan can be amended, terminated
          or otherwise discontinued after the Effective Time, without material liability
          to the Parent, the Subsidiary, or the Company (other than ordinary
          administration expenses); (vi) there are no audits, inquiries or proceedings
          pending or, to the Knowledge of the Company , threatened by the IRS or
          DOL with
          respect to any Company Employee Plan; and (vii) the Company is not subject
          to
          any penalty or tax with respect to any the Company Employee Plan under
          Section
          502(i) of ERISA or Sections 4975 through 4980 of the Code.

         

        (e) No
          Pension Plans.
          The
          Company has not ever maintained, established, sponsored, participated in,
          or
          contributed to, any (i) Pension Plans subject to Title IV of ERISA or Section
          412 of the Code; (ii) "multiemployer plan" within the meaning of Section
          (3)(37)
          of ERISA; or (iii) multiemployer plan, or to any plan described in Section
          413
          of the Code.

         

        (f) No
          Post-Employment Obligations.
          No
          Company Employee Plan provides, or reflects or represents any liability
          to
          provide, retiree life insurance, retiree health or other retiree employee
          welfare benefits to any person for any reason, except as may be required
          by
          COBRA or other applicable statute, and the Company has never represented,
          promised or contracted (whether in oral or written form) to any Employee
          (either
          individually or to Employees as a group) or any other person that such
          Employee(s) or other person would be provided with retiree life insurance,
          retiree health or other retiree employee welfare benefit, except to the
          extent
          required by statute.

         

        (g) Health
          Care Compliance.
          The
          Company has not , prior to the Effective Time and in any material respect,
          violated any of the health care continuation requirements of COBRA, the
          requirements of FMLA, the requirements of the Health Insurance Portability
          and
          Accountability Act of 1996, the requirements of the Women's Health and
          Cancer
          Rights Act of 1998, the requirements of the Newborns' and Mothers' Health
          Protection Act of 1996, or any amendment to each such act, or any similar
          provisions of state law applicable to its Employees.

        
          
            
            

          

          
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        (h) Effect
          of Transaction.

         

        (i) Execution
          of this Agreement and the consummation of the transactions contemplated
          hereby
          will not constitute an event under any Company Employee Plan, Employment
          Agreement, trust or loan that will or may result in any payment (whether
          of
          severance pay or otherwise), acceleration, forgiveness of indebtedness,
          vesting,
          distribution, increase in benefits or obligation to fund benefits with
          respect
          to any Employee.

         

        (ii) No
          payment or benefit which will or may be made by the Company with respect
          to any
          Employee or any other "disqualified individual" (as defined in Code Section
          280G
          and the regulations thereunder) will be characterized as a "parachute payment,"
          within the meaning of Section 280G(b)(2) of the Code.

         

        (i) Employment
          Matters.
          The
          Company : (i) is in compliance with all applicable foreign, federal, state
          and
          local laws, rules and regulations respecting employment, employment practices,
          terms and conditions of employment and wages and hours, in each case, with
          respect to Employees; (ii) has withheld and reported all amounts required
          by law
          or by agreement to be withheld and reported with respect to wages, salaries
          and
          other payments to Employees; (iii) is not liable for any arrears of wages
          or any
          taxes or any penalty for failure to comply with any of the foregoing; and
          (iv)
          is not liable for any payment to any trust or other fund governed by or
          maintained by or on behalf of any governmental authority, with respect
          to
          unemployment compensation benefits, social security or other benefits or
          obligations for Employees (other than routine payments to be made in the
          normal
          course of business and consistent with past practice). There are no pending
          or,
          to the knowledge of the Company or Principals, threatened or reasonably
          anticipated claims or actions against the Company under any worker's
          compensation policy or long-term disability policy.

         

        (j) Labor.
          No work
          stoppage or labor strike against the Company is pending, or, to the knowledge
          of
          the Company or Principals, threatened or reasonably anticipated. To the
          knowledge of the Company or Principals, there are neither any activities
          nor
          proceedings of any labor union to organize any Employees, nor have there
          ever
          been. There are no actions, suits, claims, labor disputes or grievances
          pending,
          or, to the knowledge of the Company or Principals, threatened or reasonably
          anticipated relating to any labor, safety or discrimination matters involving
          any Employee, including without limitation charges of unfair labor practices
          or
          discrimination complaints. The Company has not has engaged in any unfair
          labor
          practices within the meaning of the National Labor Relations Act. The Company
          is
          not presently, or has been in the past, a party to, or bound by, any collective
          bargaining agreement or union contract with respect to Employees and no
          collective bargaining agreement is being negotiated by the Company.

         

        (k) Employees.
          Schedule
          2.22(k)
          contains
          a true and complete list of the names and current salary rates and bonus
          commitments to all present employees of the Company and Schedule
          2.22(k)
          or other
          Schedules attached as part of Section 2.22 contains a list of all contracts,
          agreements, Company Employee Plans, arrangements, commitments and understanding
          (formal and informal) pertaining to terms of employment, compensation,
          bonuses,
          profit sharing, stock purchases, stock repurchases, stock options, commissions,
          incentives, loans or loan guarantees, severance pay or benefits, change
          in
          control payments, use of the Company's property and related matters of
          the
          Company with any current or former officer, director, employee or consultant,
          and true and complete copies of all such contracts, agreements, plans,
          arrangements and understandings have been delivered to Parent
          heretofore.

         

        (l) The
          Company will not have any responsibility for continuing any person in the
          employ
          (or retaining any person as a consultant) of the Subsidiary from and after
          the
          Effective Time or have any liability for any severance payments to or similar
          arrangements with any such person who shall cease to be an employee or
          consultant of the Company at or prior to the Effective Time.

        
          
            
              
              

            

            
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        (m) No
          facts
          or circumstances are known to exist that could provide a reasonable basis
          for a
          claim of wrongful termination or employment discrimination by any current
          or
          former employee of the Company against the Company.

         

        2.23 Compliance
          with Laws; Relations with Governmental Entities.
          The
          Company has complied in all respects with, is not in violation of, and
          has not
          received any notices of violation with respect to, any foreign, federal,
          state
          or local statute, law or regulation. Neither the Company nor the Principal,
          nor,
          to the Knowledge of the Company or the Principal, any of the Company's
          officers,
          directors, employees or agents (or shareholders, distributors, representatives
          or other persons acting on the express, implied or apparent authority of
          the
          Company) have paid, given or received or have offered or promised to pay,
          give
          or receive, any bribe or other unlawful payment of money or other thing
          of
          value, any unlawful discount, or any other unlawful inducement, to or from
          any
          person or Governmental Entity in the United States or elsewhere in connection
          with or in furtherance of the business of the Company (including any offer,
          payment or promise to pay money or other thing of value (a) to any foreign
          official, political party (or official thereof) or candidate for political
          office for the purposes of influencing any act, decision or omission in
          order to
          assist the Company in obtaining business for or with, or directing business
          to,
          any person or entity, or (b) to any person or entity, while knowing that
          all or
          a portion of such money or other thing of value will be offered, given
          or
          promised to any such official or party for such purposes. To the knowledge
          of
          the Company or the Principal, the business of the Company is not in any
          manner
          dependent upon the making or receipt of such payments, discounts or other
          inducements. The Company nor the Principal has otherwise taken any action
          that
          would cause the Company to be in violation of the Foreign Corrupt Practices
          Act
          of 1977, as amended, or any applicable Laws of similar effect.

         

        2.24 Merger
          Tax Matters.
          The
          Company and the Principal represents that each of them understands that
          he or
          she must rely solely on his or her advisors and not on any statements or
          representations by Parent, or its agents, with respect to Tax consequences
          of
          the Merger and that the Company is relying on its own advisors as to such
          matters. No tax opinions are being required under Article V of this
          Agreement.

         

        2.25 Intellectual
          Property.
          Schedule
          2.25 contains
          a true, correct and complete listing of all Intellectual Property owned
          or
          licensed by or registered in the name of the Company and used or held for
          use in
          operations of the Business, all of which are transferable to Buyer by the
          sole
          act and deed of the Company , and no consent on the part of any other person
          is
          necessary to effectuate the transfer to Buyer of such Intellectual Property.
          The
          Company pays no royalty to anyone with respect to the Intellectual Property
          and
          has the right to bring action for the infringement thereof. The Company
          owns or
          possesses all rights to use all such Intellectual Property necessary to
          or
          useful for the conduct of the Business. The Company has not received any
          notice
          to the effect that any service rendered by the Company relating to the
          Business
          may infringe on any Intellectual Property right or other legally protectable
          right of another, nor does the Company or any Principal otherwise have
          any
          knowledge of any such infringement.

         

        2.26 Customer
          Contracts.
          The
          contracts, agreements, understandings and commitments set forth and described
          in
Schedule
          2.26 (the
          "Customer
          Contracts") are
          the
          current forms of all of the types of customer contracts, agreements, commitments
          or understandings relating to the business and operations thereof to which
          the
          Company is a party. Separately described in Schedule
          2.26 are
          all
          Customer Contracts of the Company that have generated $2,000 or more in
          revenue
          in any month since June 1, 2004 ("Significant
          Customer Contracts") and
          a
          list of all current customers of the Company.

        
          
            
              
              

            

            
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        The
          Company has not entered into any binding agreement with respect to any
          Customer
          Contract that could adversely affect the Companyâ€TMs ability to enforce its
          rights under such Customer Contract. The Company has delivered true and
          complete
          copies of all written Significant Customer Contracts (and all amendments
          and
          modifications thereto) to Parent and Subsidiary prior to the execution
          of this
          Agreement, and each Significant Customer Contract represents the entire
          agreement between the Company and any other party to such Significant Customer
          Contract.

         

        Since
          120
          days prior to the date of this Agreement, (i) no customer (or group of
          related
          customers) purchasing in the aggregate $25,000 in products and services
          over the
          past twelve (12) months-has terminated its relationship with the Company
          , and
          (ii) the Company has not received any written or oral communication from
          any
          customer (or group of related customers) purchasing in the aggregate $25,000
          in
          products and services over the past twelve (12) months to the effect that
          such
          customer (or group of related customers) is experiencing financial difficulties
          which reasonably could be expected to affect adversely full and timely
          payment
          by such customer for services rendered by the Company.

         

        2.27 Relationships
          with Suppliers.
          The
          Company or the Principal does not know of any written or oral communication,
          fact, event or action which exists or has occurred within 120 days prior
          to the
          date of this Agreement which would indicate that any current supplier to
          the
          Company or its Subsidiaries of items or services essential to the conduct
          of the
          business of the Company and its Subsidiaries may terminate or materially
          reduce
          its business with the Company.

         

        2.28 Investment
          Representation; Legends.

         

        (a) The
          Company understands that the Parent Common Stock and the Parent Stock Warrants
          to be issued pursuant to the terms of this Agreement have not been registered
          under the Securities Act of 1933 as amended (the "Securities Act") and
          the
          Parent Common Stock and Parent Stock Warrants are "restricted securities"
          as the
          term is defined in Rule 144 promulgated by the Securities and Exchange
          Commission (the "SEC") under the Securities Act and the Company shareholders
          cannot transfer any of such Parent Common Stock and Parent Stock Warrants
          unless
          such shares are subsequently registered under the Securities Act or in
          a
          transfer that, in the opinion of legal counsel to Parent, is exempt from
          such
          registration.

         

        (b) Each
          Company shareholder has been advised that the Parent Company Stock and
          the
          Parent Stock Warrants issued hereunder have not been and are not being
          registered under the Securities Act or under the Blue Sky laws of any
          jurisdiction, and that Parent in issuing such shares is relying upon, among
          other things, the representations and warranties of the Company and Principals
          contained in this Section including that such issuance is a "private offering"
          and does not require compliance with the registration provisions of the
          Securities Act.

        
          
            
              
              

            

            
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        2.29 Stockholder
          Matters.
          The
          Principal is and shall continue to be the sole holder of all of the Company's
          capital stock as of the date hereof and as of the Closing Date is an accredited
          investor as defined in Rule 501(a) under the Securities Act of 1933, as
          amended.

         

        2.30 Banking
          and Insurance.

         

        (a) Schedule
          2.30(a)
          contains
          a true and complete list of the names and locations of all financial
          institutions at which the Company maintains a checking account, deposit
          account,
          securities account, safety deposit box or other deposit or safekeeping
          arrangement, the number or other identification of all such accounts and
          arrangements and the names of all persons authorized to draw against any
          funds
          therein.

         

        (b) Schedule
          2.30(b)
          contains
          a true and complete list of all insurance policies and bonds and self insurance
          arrangements currently in force that cover or purport to cover risks or
          losses
          to or associated with the Company's business, operations, premises, properties,
          assets, employees, agents and directors and sets forth, with respect to
          each
          such policy, bond and self insurance arrangement, a description of the
          insured
          loss coverage, the expiration date and time of coverage, the dollar limitations
          of coverage, a general description of each deductible feature and principal
          exclusion and the premiums paid and to be paid prior to expiration. The
          Company
          has no obligation, liability or other commitment relating to any contract
          of
          insurance containing a provision for retrospective rating or adjustment
          of the
          Company's premium obligation. To the Companyâ€TMs knowledge, no facts or
          circumstances exist that would cause the Company to be unable to renew
          its
          existing insurance coverage as and when the same shall expire other than
          possible increases in premiums that do not result from any act or omission
          of
          the Company.

         

        2.31 Representations
          Complete.
          None of
          the representations or warranties made by the Company or the Principal
          in this
          Agreement, or to be furnished in or in connection with documents mailed
          or
          delivered to the Company Shareholders for use in soliciting their consent
          to
          this Agreement and the Merger, contains or, with respect to documents to
          be
          mailed to the Company Shareholders, will when mailed contain, any untrue
          statement of a material fact or omits or, with respect to documents to
          be mailed
          to the Company Shareholders, will when mailed omit, to state any material
          fact
          necessary in order to make the statements contained herein or therein,
          in light
          of the circumstances under which they were made, not misleading. No
          representations and warranties by the Company and Principal in this Agreement
          and no statement in this Agreement or any document or certificate furnished
          or
          to be furnished to Parent or Subsidiary pursuant hereto contains or will
          contain
          any untrue statement or omits or will omit to state a fact necessary in
          order to
          make the statements contained therein not misleading. The Company and Principal
          have disclosed to Parent and Subsidiary all facts known to any of them
          material
          to the assets, liabilities, business, operation and property of the Company
          or
          its Subsidiaries. There are no facts known to the Company or Principal
          not yet
          disclosed which would adversely affect the Company's business, financial
          condition or future operations of the Company's business. All facts of
          material
          importance to the assets and to the business have been fully and truthfully
          disclosed to Parent and Subsidiary in this Agreement.

        
          
            
              
              

            

            
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        ARTICLE
          III

        REPRESENTATIONS
          AND WARRANTIES OF PARENT AND SUBSIDIARY

         

        Parent
          and Subsidiary represent and warrant to the Company that on the date hereof
          and
          as of the Effective Date as though made at the Effective Time as
          follows:

         

        3.01 Organization
          and Standing.
          Parent
          is a corporation duly organized, validly existing and in good standing
          under the
          laws of the State of Nevada. Subsidiary is a corporation duly organized,
          validly
          existing and in good standing under the laws of the State of Mississippi.
          Each
          of Parent and Subsidiary has the full and unrestricted corporate power
          and
          authority to carry on its business as currently conducted. Each of Parent
          and
          Subsidiary has the full and unrestricted corporate power and authority
          to
          execute and deliver this Agreement, the Related Agreements and each other
          document required hereunder and to carry out the transactions contemplated
          hereby and thereby. Parent has the full and unrestricted corporate power
          and
          authority to issue the Parent Common Stock and Parent Stock Warrants hereunder
          and to carry out the transactions to be carried out by it as contemplated
          by
          this Agreement and all other Related Agreements.

         

        3.02 Authorization.
          The
          execution, delivery and performance by each of Parent and Subsidiary of
          this
          Agreement and each other Related Agreement, the fulfillment of and compliance
          with the respective terms and provisions hereof and thereof, and the
          consummation by each of Parent and Subsidiary of the transactions contemplated
          hereby and thereby have been duly authorized by their respective Board
          of
          Directors and subject to the approval of the shareholders of the Parent
          and
          shareholders of the Subsidiary (a) will not conflict with, or violate any
          term
          or provision of (i) any law having applicability to each of Parent and
          Subsidiary, the effect of which would have an adverse material effect on
          the
          business of Parent or Subsidiary, or (ii) any provision of the certificate
          of
          incorporation or bylaws of Parent or Subsidiary; (b) will not conflict
          with, or
          result in any material breach of, or constitute a default (or an event
          which
          with notice or lapse of time or both would become a default) under, any
          material
          agreement to which Parent or Acquisition Sub is a party or by which it
          is bound;
          or (c) will not result in or require the creation or imposition of or result
          in
          the acceleration of any indebtedness, or of any encumbrance of any nature
          upon,
          or with respect to, Parent or Subsidiary. No other corporate action on
          the part
          of Parent or Subsidiary is necessary for Parent or Subsidiary to enter
          into this
          Agreement and all other Related Agreements and to consummate the transactions
          contemplated hereby and thereby, other than the approval of the Parent
          as the
          sole shareholder of the Subsidiary. The issuance by Parent of the Parent
          Common
          Stock and Parent Stock Warrants hereunder and the performance by Parent
          or
          Subsidiary of the terms and provisions of this Agreement and each other
          Related
          Agreements required to be performed by it have been duly authorized by
          all
          necessary corporate action of Parent (which authorization has not been
          modified
          or rescinded and is in full force and effect) other than the approval of
          the
          Parent as sole shareholder of the Subsidiary.

        
          
            
              
              

            

            
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        3.03 Binding
          Obligation.
          This
          Agreement and each other agreement to be executed by Parent or Subsidiary
          hereunder constitutes a valid and binding obligation of the Parent or
          Subsidiary, as applicable, enforceable against the Parent or Subsidiary,
          as
          applicable, in accordance with its terms, except as such enforceability
          may be
          subject to the laws of general application relating to bankruptcy, insolvency
          and the relief of debtors and rules of law governing specific performance,
          injunctive relief or other equitable remedies.

         

        3.04 Issuance
          of Parent Common Stock and Parent Stock Warrants.
          All of
          the Parent Common Stock and Parent Stock Warrants to be issued pursuant
          to this
          Agreement have been duly authorized by Parent and, when issued in accordance
          with the terms of this Agreement, shall be validly issued, fully paid and
          nonassessable.

         

        3.05 Litigation.
          There
          are no actions, suits, claims, arbitrations, proceedings or investigations
          pending, threatened or reasonably anticipated against, or involving Parent
          or
          Subsidiary or the transactions contemplated by this Agreement or any other
          Related Agreement, at law or in equity, or before or by any arbitrator
          or
          governmental authority, domestic or foreign, which could reasonably be
          expected
          to have a material adverse effect on the Parent or Subsidiary. Neither
          Parent
          nor Subsidiary is operating under, subject to or in default with respect
          to any
          order, award, writ, injunction, decree or judgment of any arbitrator or
          governmental authority relating to Parent or Subsidiary or their respective
          employees.

         

        3.06 Securities
          and Exchange Commission Filings.
          Parent
          and Subsidiary have furnished the Company and the Principals with a true
          and
          complete copy of each final annual, quarterly and current report and each
          final
          prospectus filed by Parent with the SEC since January 1, 2002. No
          such
          filing with the SEC by Parent contained to Parent's Knowledge, as of the
          time of
          such filing, any untrue statement of a material fact or omitted a material
          fact
          necessary in order to make the statements made therein, in the light of
          the
          circumstances under which they were made, not misleading.

        
          
            
              
              

            

            
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        ARTICLE
          IV

        COVENANTS
          OF PARTIES PRIOR TO THE EFFECTIVE TIME

         

        4.01 [Intentionally
          omitted] 

         

        4.02 Restrictions
          on Transfer; Legends.
          The
          Parent Common Stock and all the Parent Stock Warrants to be issued in the
          Merger
          shall be characterized as "restricted securities" for purposes of Rule
          144 under
          the Securities Act, and each certificate representing any of such shares
          shall
          bear a legend identical or similar in effect to the following legend (together
          with any other legend or legends required by applicable state securities
          laws or
          otherwise):

         

        THE
          SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
          ACT
          OF 1933, AS AMENDED THE "ACT"), OR UNDER ANY APPLICABLE STATE SECURITIES
          LAWS,
          AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, ASSIGNED, PLEDGED
          OR
          HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT AND SUCH LAWS OR
          IN
          COMPLIANCE WITH AN EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS.
          IN
          ADDITION, THE SECURITIES REPRESENTED HEREBY ARE SUBJECT TO CERTAIN SALE
          RESTRICTIONS AS PROVIDED IN SECTION 8.11 OF THAT CERTAIN AGREEMENT AND
          PLAN OF
          MERGER BY AND AMONG I-55 TELECOMMUNICATIONS, L.L.C., XFONE, INC. AND XFONE
          USA,
          INC. DATED AS OF AUGUST 26, 2005.

         

        4.03 Access
          to Information.

         

        (a) The
          Company shall afford Parent, Subsidiary and its accountants, counsel and
          other
          representatives, reasonable access during the period prior to the Effective
          Date
          and during normal business hours upon reasonable advance notice to (i)
          all of
          the Company's properties, books, contracts, commitments and records; (ii)
          all
          other information concerning the business, properties and personnel (subject
          to
          restrictions imposed by applicable law) of the Company as Parent may reasonably
          request; and (iii) all employees of the Company as identified by Parent.
          The
          Company agrees to provide to Parent and its accountants, counsel and other
          representatives copies of internal financial statements (including Tax
          returns
          and supporting documentation) promptly upon request.

         

        (b) No
          information or knowledge obtained in any investigation pursuant to this
          Section
          4.03 shall affect or be deemed to modify: any representation or warranty
          contained herein, the conditions to the obligations of the parties to consummate
          the Merger in accordance with the terms and provisions hereof, or the
          indemnification obligations of the Company and the Principals.

        
          
            
              
              

            

            
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        (c) All
          information furnished by one party to another pursuant hereto shall be
          treated
          as the sole property of the party furnishing the information until consummation
          of the Merger contemplated hereby and, if such Merger shall not occur,
          the party
          receiving the information shall retrieve, if necessary, and return to the
          party
          which furnished such information all documents or other materials containing,
          reflecting or referring to such information, shall use its best efforts
          to keep
          confidential all of such information, and shall not directly or indirectly
          use
          such information for any competitive or other commercial purpose. If the
          Merger
          is not consummated, the obligation to keep such information confidential
          shall
          continue for two (2) years from the date the proposed Merger is abandoned
          and
          shall not apply to (i) any information which (a) the party receiving the
          information can establish by convincing evidence was already in its possession
          prior to the disclosure thereof by the party furnishing the information,
          (b) was
          then generally known to the public or set forth in public records, (c)
          became
          known to the public through no fault of the party receiving the information,
          or
          (d) was disclosed to the party receiving the information by a third party
          not
          bound by an obligation of confidentiality, or (ii) disclosures in accordance
          with an order of a court of competent jurisdiction.

         

        4.04 Public
          Disclosure.
          The
          parties hereto agree that prior to the Effective Time, none of them will
          make or
          engage in any press release, publicity or other public disclosure of the
          matters
          which are the subject of this Agreement without the prior written consent
          of
          Parent and the Company, unless such party believes in good faith upon
          consultation with counsel that such press release, publicity or other public
          disclosure is required by law or legal process, in which event such party
          will
          give Parent and the Company as much advance notice thereof as is practicable
          under the circumstances and will give good faith consideration to any comments
          made with respect thereto by the other parties hereto prior to the time
          when
          such press release, publicity or other public disclosure is made.

         

        4.05 Conduct
          Business in Ordinary Course.
          The
          Company shall, through the Management Date, use its best efforts to preserve
          its
          business and the assets and maintain its existing contracts and licenses
          and to
          preserve for the Subsidiary the present relationships with customers, employees,
          lessors and any other persons having business relations with the Company.
          Except
          as contemplated by this Agreement or as reasonably required to carry out
          its
          obligations hereunder, the Company shall, through the Management Date,
          maintain
          and service the business and the assets only in the ordinary course of
          business
          and, in addition, shall not (except to the extent that Parent has consented
          in
          advance in writing thereto: (i) enter into any agreement in connection
          with the
          business or assets that may not be terminated on less than thirty (30)
          days'
          notice or that may reasonably be expected to have a Material Adverse Effect
          on
          the business or assets, (ii) make any capital purchases or commitments
          relating
          to the Assets that exceed, individually or in the aggregate, $10,000; (iii)
          place, or allow to be placed, an Encumbrance on any of the assets, (iv)
          sell,
          assign, lease or otherwise transfer or dispose of any interest in any asset
          (other than in the ordinary course of business), (v) commit any act or
          omit to
          do any act, or engage in any activity or transaction or incur any obligation
          (by
          conduct or otherwise), that (individually or in the aggregate) reasonably
          could
          be expected to have a Material Adverse Effect on the business or assets;
          (vi) do
          or omit to do any act (or permit such action or omission) which reasonably
          could
          be expected to cause a breach of any contract or Governmental Authorizations,
          or
          (vii) take any action or fail to take any action that would reasonably
          be
          expected to cause any of the representations, warranties or covenants contained
          herein to be untrue or incorrect or incapable of being performed or satisfied
          on
          the Management Date. Through the Management Date, the Company shall not
          (except
          to the extent that Parent has consented in advance in writing thereto):
          (i)
          provide service or agree to provide service to any customer at rates that
          are
          different than those that were in effect for such customer (or would have
          been
          in effect for any new customer) as of June 23, 2005, (ii) offer any promotions
          or special incentives or arrangements to customers that were not being
          offered
          to all customers at June 23, 2005, including, but not limited to, any promotions
          or special incentives or arrangements with respect to pricing or usage,
          or (iii)
          amend or modify any Customer Contract. Prior to and through the day following
          the Management Date, the Company and its Subsidiaries shall maintain in
          full
          force and effect all of its existing casualty, liability, and other insurance
          in
          amounts not less than those in effect on the date hereof, except for changes
          in
          such insurance that are made in the Ordinary Course of Business.

        
          
            
              
              

            

            
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        4.06 Consents
          and Approvals.
          The
          Company shall use its best efforts to obtain, prior to the Closing, the
          consent
          of the Public Service Commissions in Louisiana and Mississippi and all
          waivers,
          consents and approvals including those as provided in Schedule
          5.02(b),
          that
          are required in order to effect the Merger so as to preserve all rights
          of and
          benefits of the Company thereunder for the Subsidiary. Parent and Subsidiary
          shall use commercially reasonable efforts to assist the Company in the
          Company's
          efforts to obtain such waivers, consents and approvals. In addition, the
          Company
          and Parent and Subsidiary shall use their commercially reasonable efforts
          to
          obtain all other waivers, consents and approvals of all Governmental Authorities
          that are required in order for them to consummate the transactions contemplated
          by this Agreement or to perform the other obligations of the Company and
          Parent
          and Subsidiary hereunder. The Company and Parent and Subsidiary shall:
          (i)
          cooperate in the filing of all forms, notifications, reports and information,
          if
          any, required or reasonably deemed advisable pursuant to applicable statutes,
          rules, regulations or orders of any Governmental Authority or supra-governmental
          authority in connection with the transactions contemplated by this Agreement;
          and (ii) use their respective best efforts to cause any applicable waiting
          periods thereunder to expire and any objections to the transactions contemplated
          hereby to be withdrawn before the Effective Date. All expenses incurred
          in
          obtaining the waivers, consents and approvals described in this Section
          4.06
          shall be paid by the Company.

         

        4.07 Financial
          Statements.
          Through
          the Management Date, the Company shall provide Parent with unaudited statements
          of assets and liabilities of the Company, and statements of revenues and
          expenses reflecting the results of operations of the Company for each month
          beginning with August 2005 within twenty (20) days of the end of each such
          month. All of the foregoing financial statements shall comply with the
          requirements concerning financial statements set forth in Section
          2.07.

         

        4.08 Notification
          of Certain Matters.

         

        (a) Through
          the Management Date, the Company and the Principal, as the case may be,
          shall
          give prompt written notice to Parent of: (i) the occurrence or non-occurrence
          of
          any event, the occurrence or non-occurrence of which is likely to cause
          any
          representation or warranty of the Company or any of the Principals, respectively
          and as the case may be, contained in this Agreement to be untrue or inaccurate
          in any material respect at or prior to the Effective Date; and (ii) any
          failure
          of the Company or the Principal, as the case may be, to comply with or
          satisfy
          any covenant, condition or agreement to be complied with or satisfied by
          it
          hereunder; provided, however, that the delivery of any notice pursuant
          to this
          Section 4.08(a) shall not constitute an acknowledgment or admission of
          a breach
          of this Agreement. No disclosure by the Company or the Principal pursuant
          to
          this Section 4.08(a) shall be deemed to have cured any breach of any
          representation or warranty made in this Agreement for purposes of determining
          whether or not the conditions set forth in Article V have been satisfied,
          or be
          deemed to have cured any such breach of a representation or warranty in
          this
          Agreement and to have been disclosed as of the date of this Agreement for
          purposes of Article VI hereof.

         

        (b) The
          Parent and Subsidiary shall give prompt written notice to the Company of:
          (i)
          the occurrence or non-occurrence of any event, the occurrence or non-occurrence
          of which is likely to cause any representation or warranty of the Parent
          and
          Subsidiary contained in this Agreement to be untrue or inaccurate in any
          material respect at or prior to the Effective Time; and (ii) any failure
          of the
          Parent and Subsidiary to comply with or satisfy any covenant, condition
          or
          agreement to be complied with or satisfied by it hereunder; provided, however,
          that the delivery of any notice pursuant to this Section 4.08(b) shall
          not
          constitute an acknowledgment or admission of a breach of this Agreement.
          No
          disclosure by the Parent or Subsidiary pursuant to this Section 4.08(b)
          shall be
          deemed to have cured any breach of any representation or warranty made
          in this
          Agreement for purposes of determining whether or not the conditions set
          forth in
          Article VI have been satisfied, or be deemed to have cured any such breach
          of a
          representation or warranty in this Agreement and to have been disclosed
          as of
          the date of this Agreement for purposes of Article VI hereof.

        
          
            
              
              

            

            
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        4.09 Additional
          Documents and Further Assurances.
          Each
          party hereto, at the request of another party hereto, shall execute and
          deliver
          such other instruments and do and perform such other acts and things as
          may be
          necessary or desirable for effecting completely the consummation of the
          Merger
          and the transactions contemplated hereby.

         

        4.10 Federal
          and State Securities Exemptions.
          The
          parties agree to use commercially reasonable efforts to ensure that the
          issuance
          of the Parent Stock Consideration will be exempt from registration under
          the
          Securities Act by reason of Section 4(2) and/or Regulation D thereof (the
          "Private
          Placement Exemption").

         

        4.11 Shareholder
          List.
          As of a
          date which is two (2) calendar days prior to the Effective Date, the Company
          shall provide Parent and its counsel with a statement certified by the
          principal
          executive officer of the Company and Principals setting forth any changes
          which
          would have been required to be set forth on Schedule
          2.03
          or
          Section 2.29 as if such had been made and certification that there are
          no
          outstanding options or other rights to any equity interest in the Company
          (the
          "Updated
          Capitalization Certificate").

         

        4.12 Non-Competition
          and Non-Solicitation.

         

        (a) As
          a
          material inducement to Parent and Subsidiary to enter into and perform
          their
          obligations under this Agreement, and in order to preserve and protect
          the trade
          secrets and proprietary, confidential information of Parent and Subsidiary
          after
          the Closing, for a period of two (2) years following the date of this Agreement
          (the "Noncompetition
          Period"),
          the
          Principal will not, directly or indirectly, either for himself or for any
          partnership, limited liability company, individual, corporation, joint
          venture
          or any other entity "participate in" (as defined below) any business (including,
          without limitation, any division, group or franchise of a larger organization)
          which engages in any "Internet Services and Telecommunications Business"
          in the
          parishes and counties listed on Exhibit â€œEâ€� (the "Restricted Area"). For
          purposes of this Agreement, "Internet
          Services and Telecommunications
          Business"
          shall
          mean the business of providing any type of telecommunication services or
          internet access services to any person or customer within the Restricted
          Area,
          including, without limitation, local, long distance, broadband, dial up
          data
          services, wireless, DSL, Voice-over-Internet Protocol (VoIP) and any other
          service or product being offered or provided by the Parent or Subsidiary
          or any
          of its affiliates. For purposes of this Agreement, the term "participate
          in"
          shall include, without limitation, having any direct or indirect interest
          in any
          corporation, partnership, limited liability company, joint venture or other
          entity, whether as a sole proprietor, owner, shareholder, partner, member,
          manager, joint venturer, creditor or otherwise, or rendering any direct
          or
          indirect service or assistance to any individual corporation, partnership,
          limited liability company, joint venture and other business entity (whether
          as a
          director, officer, manager, supervisor, employee, agent, consultant or
          otherwise). Notwithstanding the foregoing, nothing in this Section 4.12
          shall
          prohibit any Principal or any other Non-Compete Party from owning not more
          than
          five percent (5%) of the debt or equity securities of a publicly traded
          corporation which may compete with Parent.

         

        (b) During
          the Noncompetition Period, and in order to preserve and protect the trade
          secrets and proprietary, confidential information of Parent and the Subsidiary
          after the Effective Date, the Principal shall not (i) induce or attempt
          to
          induce any employee of Parent or the Subsidiary to leave the employ of
          Parent or
          the Subsidiary, or in any way interfere with the relationship between Parent
          or
          Subsidiary or any employee thereof, (ii) hire directly or through another
          entity
          any individual employed by Parent or the Subsidiary who was previously
          employed
          by the Company, or (iii) induce or attempt to induce any customer, supplier,
          licensee, distributor or other business relation of Parent or the Subsidiary
          (including those previously with the Company) to cease doing business with
          Parent or the Subsidiary, or in any way interfere with the relationship
          between
          any such customer, supplier, licensee, distributor or business relation
          and
          Parent or the Subsidiary (including, without limitation, making any negative
          statements or communications concerning Parent or the Subsidiary).

        
          
            
              
              

            

            
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        (c) If,
          at
          the time of enforcement of this Section 4.12, a court shall hold that the
          duration, scope or area restrictions stated herein are unreasonable under
          circumstances then existing, the parties hereto agree that the maximum
          duration,
          scope or area reasonable under such circumstances shall be substituted
          for the
          stated duration, scope or area and that the court shall be allowed to revise
          the
          restrictions contained herein to cover the maximum period, scope and area
          permitted by law. The Principal with respect to the terms of this Section
          4.12
          agrees that the restrictions contained in this Section 4.12 are
          reasonable.

         

        (d) If
          at any
          time during the Noncompetition Period the Principal desires to participate
          in an
          activity that he believes might be prohibited by this Section 4.12, such
          person
          may request in writing (a "Clarification
          Request")
          a
          determination by Parent as to whether such proposed activity would violate
          this
          Section 4.12. Parent shall respond in writing to such Clarification Request
          (a
          "Clarification
          Response")
          within
          thirty (30) days of receipt thereof from the requesting person.

         

        (e) The
          Principal by execution of this Agreement agrees to the terms of this Section
          4.12 as to himself. 

         

        (f) Nothing
          in this Section 4.12 shall be construed to prohibit Principal from acting
          as a
          reseller of Parentâ€TMs or Subsidiaryâ€TMs services, acting as an agent of Parent
          or Subsidiary, or otherwise from earning commissions by obtaining customers
          for
          Parent or Subsidiary.

         

        4.13 Approval
          of Shareholders.
          The
          Principal by execution hereof does hereby as the sole owner of all of the
          Company Common Stock, which constitutes all of the equity of the Company,
          approve for and on behalf of the Company this Agreement and Related Agreements
          and the Merger and the execution and delivery of this Agreement and the
          Related
          Agreements by the Company and the consummation of the Merger and the
          transactions contemplated by this Agreement and the Related Agreements
          and the
          performance by the Company through its officers and directors/managers
          of all of
          its obligations as provided in this Agreement and the Related Agreements
          in
          order to consummate the Merger and transactions contemplated under this
          Agreement and the Related Agreements.

         

        4.14 No
          Shop.
          Until
          such time, if any, as this Agreement is terminated pursuant to Article
          VII,
          neither the Company or the Principal will not and each of their representatives
          will not directly or indirectly solicit, initiate, or encourage any inquiries
          or
          proposals from, any person (other than Parent) relating to any transaction
          involving the sale of the business or assets of the Company, or any of
          the
          capital stock of the Company, or any merger, consolidation, business
          combination, or similar transaction involving the Company.

        
          
            
              
              

            

            
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        ARTICLE
          V

        CONDITIONS
          TO THE MERGER

         

        5.01 Conditions
          to Obligations of Each Party to Effect the Merger.
          The
          respective obligations of the Company, Parent and Subsidiary to effect
          the
          Merger shall be subject to the satisfaction at or prior to the Effective
          Date of
          the following conditions:

         

        (a) Shareholder
          Approval.
          This
          Agreement and the Merger shall be approved and adopted by the shareholders
          of
          Subsidiary by the requisite vote under applicable law and the Subsidiaryâ€TMs
          Certificate of Incorporation.

         

        (b) No
          Order.
          No
          Governmental Entity shall have enacted, issued, promulgated, enforced or
          entered
          any statute, rule, regulation, executive order, decree, injunction or other
          order (whether temporary, preliminary or permanent) which is in effect
          and which
          has the effect of making the Merger illegal or otherwise prohibiting
          consummation of the Merger.

         

        (c) No
          Injunctions or Restraints; Illegality.
          No
          temporary restraining order, preliminary or permanent injunction or other
          order
          issued by any court of competent jurisdiction or other legal restraint
          or
          prohibition preventing the consummation of the Merger shall be in effect,
          nor
          shall any proceeding brought by an administrative agency or commission
          or other
          governmental authority or instrumentality, domestic or foreign, seeking
          any of
          the foregoing be pending.

         

        (d) Articles
          of Merger.
          The
          Articles of Merger shall have been filed with the Secretary of State of
          the
          State of Mississippi and the Certificate of Merger shall have been filed
          with
          the Louisiana Secretary of State.

         

        (e) Tax-Free
          Merger.
          The
          Merger and the proposed transaction among Parent, Subsidiary and I-55 Internet
          Services, Inc., taken individually or together, shall have no adverse tax
          consequences to Company, I-55 Internet Services, Inc., or either of their
          shareholders.

         

        (f) Debt
          Restructure.
          The
          Parent and Subsidiary shall have entered into agreements for the terms
          for
          repayment or purchase of the debt due from Company to the Principal, Tricou
          Construction, Bon Aire Estates, Bon Aire Utility, Danny Acosta, Intercosmos
          and
          Jeff Smyly, all on terms satisfactory to Parent and Subsidiary.

         

        (g) BellSouth
          Credits.
          On or
          before the Management Date, Parent shall create an escrow satisfactory
          to
          Principal, Parent and Subsidiary into which Parent shall deposit $100,000
          in
          Parent Common Stock and $50,000 in Parent Stock Warrants, to be held in
          the name
          of the escrow agent, to be released to Principal if and to the extent that
          Principal and/or Subsidiary recovers from BellSouth monies or payables
          not
          reflected on the financials of the Company (other than the new receivable
          reflected on Schedule 2.09(g)).  The escrow shall terminate on the
          Closing
          Date, and any stock or warrants remaining in the escrow on the Closing
          Date
          shall revert to Parent.

        
          
            
              
              

            

            
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        5.02 Conditions
          to the Obligations of Parent and Subsidiary.
          The
          obligation of Parent and Subsidiary to effect the Merger shall be subject
          to the
          satisfaction at or prior to the Effective Time of each of the following
          conditions, any of which may be waived, in writing, exclusively by
          Parent:

         

        (a) Representations,
          Warranties and Covenants.

         

        (i) The
          representations and warranties of the Company and the Principal in this
          Agreement (other than the representations and warranties of the Company
          and the
          Principal as of a specified date, which will be true and correct as of
          such
          date) shall be true and correct on and as of: (A) the date of this Agreement
          and
          (B) the Effective Time as though such representations and warranties were
          made
          on and as of the Effective Time (it being understood that, for purposes
          determining the accuracy of each such representation and warranty pursuant
          to
          clauses (A) and (B), any update of or modification to the Disclosure Schedule
          made or purported to have been made after the date of this Agreement shall
          be
          disregarded).

         

        (ii) Each
          of
          the Company and the Principal shall have performed and complied with all
          covenants and obligations under this Agreement required to be performed
          and
          complied with by such parties as of the Effective Time.

         

        (b) Third
          Party Consents.
          Parent
          shall have been furnished with evidence satisfactory to it that the Company
          has
          obtained all consents, waivers, approvals, and assignments listed in
Schedule
          5.02(b).

         

        (c) No
          Material Adverse Change.
          There
          shall not have occurred any event or condition of any character since the
          date
          of this Agreement that has had or is reasonably likely to have a material
          adverse effect on the Company or its business, assets or prospects.

         

        (d) Certificate
          of the Company and the Principal.
          Parent
          shall have received a certificate, validly executed by the Principal and
          the
          principal executive officer of the Company for and on its behalf, to the
          effect
          that, as of the Closing:

         

        (i) all
          representations and warranties made by the Company and the Principal in
          this
          Agreement (other than the representations and warranties of the Company
          and the
          Principal as of a specified date, which will be true and correct as of
          such
          date) were true and correct on and as of: (A) the date of this Agreement
          and (B)
          the Effective Date as though such representations and warranties were made
          on
          and as of the Effective Time;

         

        (ii) all
          covenants and obligations under this Agreement to be performed by the Company
          or
          the Principal on or before the Closing have been so performed; and

         

        (iii) the
          conditions to the obligations of Parent and Subsidiary set forth in Section
          5.02
          have been satisfied (unless otherwise waived in accordance with the terms
          hereof).

        
          
            
              
              

            

            
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        (e) Certificate
          of Secretary of the Company.
          Parent
          shall have received a certificate, validly executed by the Secretary of
          the
          Company, certifying as to (i) the correct form and effectiveness of the
          Articles
          of Organization and the Operating Agreement of the Company, including all
          amendments thereto; and (ii) the valid adoption of resolutions of the board
          of
          directors of the Company and the sole Company Shareholder Member approving
          this
          Agreement and the consummation of the transactions contemplated
          hereby.

         

        (f) Certificate
          of Good Standing.
          Parent
          shall have received certificates of good standing of the Company from the
          Secretary of State of the State of Mississippi and Louisiana and any other
          jurisdiction where the Company is required to qualify to do business, each
          dated
          within ten (10) business days prior to the Closing.

         

        (g) Working
          Capital Requirement.
          The
          Companyâ€TMs "Working Capital" (as defined herein) as of the Management Date
          shall not be more than a deficit of $10,000.00 ("Working Capital Requirement"),
          as shown on a balance sheet and Profit and Loss Statement and combining
          worksheet (prepared in accordance with GAAP and consistent with the December
          31,
          2004 Financials) as of the Management Date ("Management Date Financials").
          "Working Capital" shall mean the current assets less the total liabilities
          (excluding the Long Term Liabilities as defined in Section 5.02(q)) as
          determined in accordance with GAAP. In the event that the Working Capital
          Requirement is not met, the Parent and Subsidiary may nevertheless elect
          to
          close and reduce the Parent Stock Consideration by an amount equal to the
          difference between the Working Capital Requirement and the actual Working
          Capital Deficit. In the event that the Working Capital deficit is less
          than the
          Working Capital Requirement, then the Parent Stock Consideration shall
          be
          increased by an amount equal to the amount by which the Working Capital
          Deficit
          is less than the Working Capital Requirement. 

         

        (h) [Intentionally
          Omitted]

         

        (i) Shareholder
          List.
          Parent
          shall have received from the principal executive officer of the Company
          a
          certification that the Principal is the sole owner and holder of all of
          the
          Company Common Stock.

         

        (j) Amendments
          to Certain Documents.
          The
          Parent shall have received a duly executed amendment or restated agreement
          on
          terms satisfactory to the Parent for the following agreements:
          None.

         

        (k) Escrow
          Agreement.
          The
          Principal and Escrow Agent shall have entered into the Escrow Agreement
          in the
          form of Exhibit
          B
          hereto.

         

        (l) Irrevocable
          Proxy from Principals.
          The
          Principal shall have entered into an Irrevocable Proxy in form reasonably
          satisfactory to Parent in which each Principal agrees to irrevocably appoint
          Guy
          Nissenson or such other party designated by Parent as proxy to vote the
          Principal's Parent Common Stock or any Parent Common Stock issued to or
          acquired
          hereafter by the Principal whether from the exercise of any of the Parent
          Stock
          Warrants or any other stock options or warrants granted hereafter or otherwise
          until such time as the Principal sells all of his Parent Common Stock,
          subject
          to the condition that if at any time, Guy Nissenson and Abraham Keinan
          together
          command less than 50% of the voting rights of Parent, then such proxies
          shall
          automatically terminate. 

        
          
            
              
              

            

            
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        (m) Management/Operating
          Agreement.
          Contemporaneous with the closing of the Merger of I-55 Internet Services,
          Inc.
          with and into the Subsidiary pursuant to that certain Agreement and Plan
          of
          Merger among them and Parent dated August 18, 2005, the Company shall have
          entered into a Management/Operating Agreement with the Parent or Subsidiary
          in
          the form of Exhibit
          C. 

         

        (n) Merger
          with I-55 Internet Services, Inc.
          The
          merger of I-55 Internet Services, Inc. into the Subsidiary shall have previously
          closed or shall close simultaneously with the Merger under this
          Agreement.

         

        (o) Releases.
          Each
          officer and director shall have executed and delivered a Release in
          substantially the form attached hereto as Exhibit â€œD.â€�

         

        (p) Audit.
          The
          Company shall have completed an audit of fiscal year 2004 and a review
          of the
          six months ending June 30, 2005 and the audited financial statements issued
          in
          connection with the audit for such fiscal year shall be in form and substance
          satisfactory to Parent and Subsidiary.

         

        (q) Long
          Term Liabilities.
          The sum
          of the Long Term Liabilities (as defined below) as of the Management Date
          shall
          not exceed $1,200,000 as shown on the Management Date Financials. The term
          â€œLong Term Liabilitiesâ€� shall mean the amount due for the following: Note
          Payable - Taqua; Note Payable to Randy Tricou; Note Payable - Rene Tricou;
          Note
          Payable to Danny Acosta; Note Payable to Intercosmos; Note Payable to Loan
          Pay -
          New Borrowings, any debt or amounts due to AmSouth Bank and any other debt
          for
          borrowed money or purchase or lease of assets. In the event that the sum
          of the
          Long Term Liabilities exceeds $1,200,000 as of the Management Date, the
          Parent
          and Subsidiary may nevertheless elect to close and reduce the Parent Stock
          Consideration by an amount equal to the amount by which the sum of the
          Long Term
          Liabilities exceeds $1,200,000. In the event the Long Term Liabilities
          are less
          than $1,200,000 (which shall not include any adjustments due to the Debt
          Restructure as required by Section 5.02(h) hereof), then the Parent Stock
          Consideration shall be increased by an amount equal to the amount by which
          Long
          Term Liabilities are less than $1,200,000. 

         

        5.03 Conditions
          to Obligations of the Company and the Principals.
          The
          obligations of the Company and the Principal to consummate and effect this
          Agreement and the transactions contemplated hereby shall be subject to
          the
          satisfaction at or prior to the Effective Time of each of the following
          conditions, any of which may be waived, in writing, exclusively by the
          Company:

         

        (a) Representations,
          Warranties and Covenants.

         

        (i) The
          representations and warranties of Parent and Subsidiary in this Agreement
          (other
          than the representations and warranties of Parent as of a specified date,
          which
          will be true and correct as of such date) shall be true and correct on
          and as
          of: (A) the date of this Agreement and (B) the Effective Time as though
          such
          representations and warranties were made on and as of the Effective Time
          (it
          being understood that, for purposes determining the accuracy of each such
          representation and warranty pursuant to clauses (A) and (B), any update
          of or
          modification to the Parent Disclosure Schedule made or purported to have
          been
          made after the date of this Agreement shall be disregarded).

        
          
            
              
              

            

            
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        (ii) Each
          of
          Parent and Subsidiary shall have performed and complied with all covenants
          and
          obligations of this Agreement required to be performed and complied with
          by it
          as of the Effective Time.

         

        (b) Certificate
          of Parent.
          The
          Company shall have received a certificate executed on behalf of Parent
          and
          Subsidiary by the Chief Executive Officer of each to the effect that, as
          of the
          Closing:

         

        (i) all
          representations and warranties made by the Parent and Subsidiary in this
          Agreement (other than the representations and warranties of the Parent
          and
          Subsidiary as of a specified date, which will be true and correct as of
          such
          date) were true and correct on and as of: (A) the date of this Agreement
          and (B)
          the Effective Time as though such representations and warranties were made
          on
          and as of the Effective Time;

         

        (ii) all
          covenants and obligations under this Agreement to be performed by Parent
          and
          Subsidiary on or before the Closing have been so performed; and

         

        (iii) the
          conditions to the obligations of the Company and the Principals set forth
          in
          Section 5.03 have been satisfied (unless otherwise waived in accordance
          with the
          terms hereof).

         

        (c) No
          Material Adverse Change.
          There
          shall not have occurred any event or condition of any character since the
          date
          of this Agreement that has had or is reasonably likely to have a Parent
          Material
          Adverse Effect.

        
          
            
              
              

            

            
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        ARTICLE
          VI

        SURVIVAL
          OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION; POST-CLOSING
          COVENANTS

         

        6.01 Survival
          of Representations, Warranties and Covenants.

         

        (a) The
          representations and warranties of the Company and the Principal contained
          in
          this Agreement, or in any certificate or other instrument delivered pursuant
          to
          this Agreement, shall remain in effect until, and will expire upon the
          third
          year following the Closing Date (the "Termination
          Date"),
          except for the representations and warranties set forth in Section 2.10
          (Tax
          Matters) which shall survive the Termination Date until the expiration
          of the
          applicable statute of limitations. The representations and warranties of
          the
          Parent and the Subsidiary contained in this Agreement, or in any certificate
          or
          other instrument delivered pursuant to this Agreement will expire upon
          the
          Termination Date, provided that the maximum liability of the Parent and
          Subsidiary for any breach of a representation or warranty shall be fifty
          percent
          of the Aggregate Merger Consideration, and any liability shall be satisfied
          by
          the issuance of a number of shares of Parent Common Stock and Parent Stock
          Warrants in a ratio of 2/3 Parent Common Stock and 1/3 Parent Stock Warrants
          with a value equal to the amount of such liability as established at the
          time of
          payment using the same formula as in the definition of such terms as provided
          in
          Section 1.03 hereof. Notwithstanding the foregoing:

         

        (i) the
          Termination Date or limitation or indemnification as set forth in 6.2(e)
          shall
          not apply to claims based upon intentional fraud; and

         

        (ii) the
          representation, warranty, covenant or obligation that is the subject matter
          of a
          timely submitted Claim Notice (as defined in Section 6.01(c)) shall not
          so
          expire with respect to such Claim Notice or any subsequent Claim Notice
          that is
          reasonably related to the subject matter of such Claim Notice, but rather
          shall
          remain in full force and effect until such time as each and every claim
          that is
          based upon, or that reasonably relates to, any breach or alleged breach
          of such
          representation, warranty, covenant or obligation and that is reasonably
          related
          to the subject matter of such Claim Notice or any such subsequent Claim
          Notice
          has been fully and finally resolved, either by means of a written settlement
          agreement executed by the Principal and the Parent and Subsidiary or by
          means of
          a final, non-appealable judgment issued by a court of competent
          jurisdiction.

         

        (b) No
          disclosure in any Schedule referred to in Article II will be deemed adequate
          to
          disclose an exception to a representation or warranty made in this Agreement
          unless the applicable disclosure schedule identifies the exception. Without
          limiting the generality of the foregoing, the mere listing (or inclusion
          of a
          copy) of a document or other item will not be deemed adequate to disclose
          an
          exception to a representation or warranty made in this Agreement (unless
          the
          representation or warranty regards the existence of the document or other
          item
          itself).

         

        (c) For
          purposes of this Agreement, a "Claim
          Notice"
          relating to a particular representation, warranty, covenant or obligation
          shall
          be deemed to have been given if the Parent or Subsidiary, acting in good
          faith,
          delivers within the time periods provided in Section 6.01(a) to the Principals
          and the Escrow Agent a written notice stating that such Indemnified Party
          believes that there is or has been a possible breach of such representation,
          warranty, covenant or obligation and containing (i) a brief description
          of the
          circumstances supporting such Indemnified Party's belief that there is
          or has
          been such a possible breach; and (ii) a non-binding, preliminary estimate
          of the
          aggregate dollar amount of the actual and potential damages that have arisen
          and
          may arise as a direct or indirect result of such possible breach. For purposes
          of this Agreement, "Parent Indemnified Parties" shall mean the following
          persons
          and entities: (a) Parent; (b) Parent's current and future affiliates, including
          Subsidiary; (c) the respective officers, directors, employees and agents
          of the
          persons and entities referred to in clauses "(a)" and "(b)" above; and
          (d) the
          respective successors and assigns of the persons and entities referred
          to in
          clauses "(a)" and "(b)" above; provided, however, that none of the Company
          Shareholders shall be deemed to be a Parent Indemnified Party.

        
          
            
              
              

            

            
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        6.02 Indemnification
          by the Principals; Escrow Fund.

         

        (a) The
          Principal agrees that, subject to the limits of Sections 6.01 and 6.02(b)-(e),
          from and after the Effective Date, the Principal shall indemnify and hold
          the
          Parent Indemnified Parties harmless against all claims, losses, liabilities,
          damages, lawsuits, administrative proceedings, investigations, audits,
          demands,
          assessments, adjustments, judgments, settlement payments, penalties, fines,
          interest, deficiencies, costs and expenses, including reasonable attorneys'
          fees
          and expenses of investigation and defense (individually a "Loss"
          and
          collectively "Losses")
          incurred by the Parent Indemnified Parties directly or indirectly as a
          result
          of:

         

        (i) any
          inaccuracy or breach of a representation or warranty of the Company or
          any
          Principal contained in: (A) this Agreement both as of the date of this
          Agreement
          and as of the Effective Time as if made on and as of the Effective Time;
          (B) any
          of the agreements executed in connection with this Agreement; or (C) or
          in any
          certificate, instrument or other document delivered by the Company or any
          Principal pursuant to the terms of this Agreement; or

         

        (ii) any
          failure by the Company or the Principal to perform or comply with any covenant
          contained in this Agreement or in any of the agreements executed in connection
          with this Agreement.

         

         (b) (i) As
          security for the indemnity provided to the Parent Indemnified Parties in
          this
          Article VI and by virtue of this Agreement and the Articles of Merger,
          the
          Principals agree that an amount of the Parent Company Stock and Parent
          Stock
          Warrants to which they are entitled at the Effective Date of the Merger
          equal to
          fifty percent (50%) of the Aggregate Merger Consideration (the "Escrow
          Shares")
          shall be deposited with the Escrow Agent and held in the name of the Escrow
          Agent pursuant to the Escrow Agreement and the Principal directs the Parent
          to
          deposit the Escrow Shares (plus any additional shares as may be issued
          in
          respect of any stock split, stock dividend or recapitalization effected
          by
          Parent after the Effective Time with respect to the Escrow Shares) with
          the
          Escrow Agent, without any act of the Principals, such deposit to constitute
          an
          escrow fund (the "Escrow
          Fund").
          The
          escrow shall be funded in the same proportions of Parent Company Stock
          to Parent
          Stock Warrant that the Principal received in connection with the Merger.
          It is
          understood and agreed that the portion of the Aggregate Merger Consideration
          deposited into the Escrow Fund by the Principal shall be issued and outstanding
          on the books of Parent, and the Principal shall be the owners thereof,
          but
          registered in the Escrow Agent's name until the Escrow Agreement is
          terminated.

        
          
            
              
              

            

            
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        Any
          cash
          dividends paid on Parent Common Stock in the Escrow Fund shall be deposited
          with
          the Escrow Agent and become part of the Escrow Fund. The Principal shall
          have
          voting rights with respect to the shares of Parent Common Stock contributed
          to
          the Escrow Fund (and on any voting securities added to the Escrow Fund
          in
          respect of such shares of Parent Common Stock) so long as such shares of
          Parent
          Common Stock or other voting securities are held in the Escrow Fund. The
          Escrow
          Fund shall be in existence immediately following the Effective Time and
          shall
          terminate at 5:00 p.m., Central Time, on the second year from the Effective
          Date, unless sooner terminated due to the distribution of the Escrow Fund
          at an
          earlier date or unless the termination date is extended due to pending
          Claims
          Notice(s) for indemnification in accordance with this Section 6.03. For
          purposes
          of satisfying the indemnification obligations of this Section 6.02, the
          shares
          of Parent Common Stock and Parent Stock Warrants in the Escrow Fund shall
          be
          valued as of (i) the date that the Parent Indemnified Party sends notice
          to
          release a portion of the Escrow Fund in satisfaction of a Loss as determined
          in
          accordance with this Article VI or (ii) the date that the Principals request
          a
          release of a portion of the Escrow Fund in accordance with Section 6.02(b);
          provided if there is a counter-notice to the requested release from the
          Escrow
          given disputing the requested release from the Escrow, then the date for
          valuation shall be suspended until such time as the Escrow Agent is requested
          to
          make payment upon a joint instruction or the date of a final non-appealable
          order of a court of competent jurisdiction is entered as to the disputed
          release. The Parent Common Stock shall be valued at the closing trading
          price
          for the ten trading days immediately preceding the valuation date and the
          Parent
          Stock Warrants shall be valued at the price at which they were valued and
          issued
          on the Effective Date in connection with the Merger. The Escrow Agent shall
          satisfy any indemnification obligations first with the Parent Common Stock
          and
          then with the Parent Stock Warrants. The Escrow Fund shall be governed
          by the
          terms of this Agreement and the Escrow Agreement. The Parent Indemnified
          Parties' right to recover any property held pursuant to the Escrow Agreement
          shall be in addition to and not in limitation of any other rights or remedies
          of
          the Parent Indemnified Parties at law or in equity.

         

        (ii) The
          percentage set forth below of the Escrow Fund shall be released upon the
          happening of the following events provided that at the date of the required
          release that there remains sufficient Escrow Funds to cover the maximum
          amount
          of any pending Claims Notice(s) as provided in this Article VI: (1) one-half
          (1/2) shall be released within 60 days after the end of the first full
          12 month
          period following the Effective Date ("Post Close Year 1" and each succeeding
          12
          month period is hereinafter referred to as Post Close Year 2, etc.); and
          (2)
          One-half (1/2) shall be released within 60 days after the end of Post Close
          Year
          2 (less an amount equal in value to the maximum amount claimed to satisfy
          any
          Pending Claims Notices) shall be released on the third anniversary date
          of the
          Effective Date. If there are any Pending Claims outstanding at the second
          anniversary of the Effective Date, the Escrow Agreement shall continue
          until
          final resolution of any such Pending Claims in accordance with this Article
          VI.

         

        (c) For
          purposes of quantifying the amount owing to any Parent Indemnified Party
          under
          this Section 6.02 resulting from a Loss or Losses caused by a breach of
          any
          representation or warranty given in Article II hereof, the term material
          adverse
          effect or other materiality qualification or any similar qualification
          contained
          or incorporated directly or indirectly in such representation or warranty
          shall
          be disregarded.

         

        (d) For
          purposes of this Agreement and without limitation, a breach of the
          representations and warranties included in Sections 2.01, 2.02 and 2.03
          hereof
          will be deemed a "willful misrepresentation."

        
          
            
            

          

          
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        (e) Limitation
          on Indemnification.
          Notwithstanding any provision of this Agreement to the contrary, after
          the
          Effective Time, no Parent Indemnified Party shall be entitled to indemnification
          until such Parent Indemnified Parties suffer Losses in excess of $25,000.00
          in
          the aggregate (the "Basket
          Amount"),
          in
          which case the Parent Indemnified Parties shall be entitled to recover
          all
          Losses including the Basket Amount; provided, however, any amounts required
          to
          be paid resulting from any failure by the Company or the Principal to perform
          or
          comply with any covenant contained in this Agreement or any Related Agreement
          shall not be subject to such Basket Amount; and provided further, however,
          that
          any amounts required to be paid by the Parent or the Surviving Corporation
          as a
          result of the Company's breach of, or any inaccuracy contained in, Section
          2.21
          herein shall not be subject to such Basket Amount. The total liability
          of the
          Principal shall be limited to his Escrow Shares then remaining in the escrow,
          and the Principal shall not have any personal liability beyond his Escrow
          Shares
          unless the claim is based upon intentional fraud by the Principal.

         

        6.03 Indemnification
          Procedures.
          All
          claims for indemnification under Sec6.02 shall be asserted and resolved
          as
          follows:

         

        (a) Third-Party
          Claims.
          In the
          event any Parent Indemnified Party becomes aware of a third-party claim
          that
          such Parent Indemnified Party believes may result in a demand under Section
          6.02, such Parent Indemnified Party shall notify the Principal of such
          claim,
          and the Principal shall be entitled, at its expense, to participate in,
          but not
          to determine or conduct, the defense of such claim. The Parent Indemnified
          Party
          shall have the right in its sole discretion to conduct the defense of and
          settle
          any such claim; provided, however, that except with the written consent
          of the
          Principal, no settlement of any such claim with third-party claimants shall
          alone be determinative of the amount of Losses relating to such matter.
          In the
          event that the Principal has consented to any such settlement, then the
          Principal shall not have the power or authority to object to the amount
          of any
          claim by any Parent Indemnified Party with respect to such
          settlement.

         

        (b) Non-Third
          Party Claims.
          In the
          event a Parent Indemnified Party has a claim hereunder that does not involve
          a
          claim being asserted against or sought to be collected by a third party,
          the
          Parent Indemnified Party shall with reasonable promptness send a Claim
          Notice
          with respect to such claim to the Principal and the Escrow Agent (if
          applicable). If the Principal does not notify the Parent Indemnified Party
          within ten (10) calendar days from the date of receipt of such Claim Notice
          that
          indemnifying party disputes such claim, the amount of such claim shall
          be
          conclusively deemed a liability of the indemnifying party hereunder. In
          case the
          Principal shall object in writing to any claim made in accordance with
          this
          Section 6.03(b), the Parent Indemnified Party shall have fifteen (15) calendar
          days to respond in a written statement to the objection of the Principal.
          If
          after such fifteen (15) calendar day period there remains a dispute as
          to any
          claim, the parties shall attempt in good faith for sixty (60) calendar
          days to
          agree upon the rights of the respective parties with respect to each of
          such
          claims. If the parties should so agree, a memorandum setting forth such
          agreement shall be prepared and signed by all parties. If the parties do
          not so
          agree, and a claim has been made against the Escrow Fund, the Escrow Agent
          shall
          refrain from disbursing any portion of the Escrow Fund until resolution
          of such
          dispute in the form of (i) a final written decision of an arbitrator or
          (ii) a
          final non-appealable order of a court of competent jurisdiction.

         

        (c) The
          Parent Indemnified Party's failure to give reasonably prompt notice to
          the
          Principal of any actual, threatened or possible claim or demand which may
          give
          rise to a right of indemnification hereunder shall not relieve any indemnifying
          party of any liability which the indemnifying party may have to the Parent
          Indemnified Party unless the failure to give such notice materially and
          adversely prejudiced the indemnifying party.

        
          
            
            

          

          
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        6.04 No
          Contribution.
          The
          Principal waives, and acknowledges and agrees that it shall not have and
          shall
          not exercise or assert (or attempt to exercise or assert), any right of
          contribution, right of indemnity or other right or remedy against the Subsidiary
          in connection with any indemnification or other rights any Indemnified
          Party may
          have under or in connection with this Agreement.

         

        6.05 Benefit
          Plans.
          Each
          former Company employee who is offered and accepts employment with Subsidiary
          shall be entitled to credit for time served with the Company for any purpose
          relating to the Subsidiaryâ€TMs or Parentâ€TMs plans, including the amount of any
          benefits, whether such benefits are available, and the vesting of any benefits.
          Nothing in this Section 6.05 obligates Subsidiary to offer employment to
          any
          Company employee.

        
          
            
              
              

            

            
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        ARTICLE
          VII

        TERMINATION,
          AMENDMENT AND WAIVER

         

        7.01 Termination.
          Except
          as provided in Section 7.02 hereof, this Agreement may be terminated and
          the
          Merger abandoned at any time prior to the Effective Time:

         

        (a) by
          mutual
          agreement of the Company and Parent;

         

        (b) by
          Parent
          or the Company if the Effective Time has not occurred by December 31,
          2005
          unless the only reason the merger cannot be consummated is due to the failure
          to
          have obtained the necessary Public Service Commission regulatory approvals
          or
          Bell South consent required to consummate the Merger, in which case such
          date
          shall be extended to April 30, 2006; provided, however, that the right
          to
          terminate this Agreement under this Section 7.01(b) shall not be available
          to
          any party whose action or failure to act has been a principal cause of
          the
          failure of the Merger to occur on or before such date and such action or
          failure
          to act constitutes a breach of this Agreement.

         

        Where
          action is taken to terminate this Agreement pursuant to this Section 7.01,
          it
          shall be sufficient for such action to be authorized by the Board of Directors
          of the party taking such action.

         

        7.02 Effect
          of Termination.

         

        (a) In
          the
          event of termination of this Agreement as provided in Section 7.01 hereof,
          this
          Agreement shall forthwith become void and there shall be no liability or
          obligation on the part of Parent, Subsidiary, the Company, the Principal,
          or
          their respective officers, directors or shareholders; provided, however,
          that
          each party shall remain liable for any breaches of this Agreement prior
          to its
          termination and the Break-Up Fee as set forth in 7.02(b) hereof for any
          such
          breach; and provided further, however, that, the provisions of Sections
          4.03(c),
          4.04, 7.03 and Article VIII hereof and this Section 7.02 shall remain in
          full
          force and effect and survive any termination of this Agreement.

         

        (b) Break-Up
          Fee.
          In the
          event that Company does not close the Merger as a result of the receipt,
          consideration or acceptance of an offer relating to any transaction involving
          the sale of the business or the assets of the Company, or any of the Capital
          Stock of the Company, or any merger, consolidation, business combination,
          or
          similar transaction involving the Company, then Company shall pay to Parent
          a
          Break-Up Fee equal to $500,000, payable immediately.

         

        7.03 Expenses;
          Termination Fees.
          

         

        (a) Except
          as
          set forth in Section 7.03(b), all fees and expenses incurred in connection
          with
          this Agreement and the transactions contemplated by this Agreement (i)
          by the
          Company and the Principals shall be paid by the Company and the Principals
          and
          (ii) by the Parent and Subsidiary shall be paid by the Parent, whether
          or not
          the Merger is consummated.

        
          
            
              
              

            

            
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        (b) Parent,
          on the one hand, and the Company, on the other hand, agree that in the
          event
          either party terminates this Agreement prior to the Effective Time for
          any
          reason other than those allowable under Section 7.01, then the terminating
          party
          shall pay to the other party the amount of actual fees and expenses incurred
          by
          such party in connection with this transaction.

         

        7.04 Amendment.
          This
          Agreement may be amended by the parties at any time by execution of an
          instrument in writing signed on behalf of each of the parties
          hereto.

         

        7.05 Extension;
          Waiver.
          At any
          time prior to the Effective Time, Parent and Acquisition Sub, on the one
          hand,
          and the Company, on the other hand, may, to the extent legally allowed,
          (i)
          extend the time for the performance of any of the obligations of the other
          party
          hereto; (ii) waive any inaccuracies in the representations and warranties
          made
          to such party contained herein or in any document delivered pursuant hereto;
          and
          (iii) waive compliance with any of the agreements or conditions for the
          benefit
          of such party contained herein. Any agreement on the part of a party hereto
          to
          any such extension or waiver shall be valid only if set forth in an instrument
          in writing signed on behalf of such party.

        
          
            
            

          

          
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        ARTICLE
          VIII
GENERAL
          PROVISIONS

         

        8.01 Notices.
          All
          notices and other communications hereunder shall be in writing and shall
          be
          deemed given if delivered personally or by commercial messenger or courier
          service, or mailed by registered or certified mail (return receipt requested)
          or
          sent via facsimile (with acknowledgment of complete transmission) to the
          parties
          at the following addresses (or at such other address for a party as shall
          be
          specified by like notice); provided, however, that notices sent by mail
          will not
          be deemed given until received:

                
          (a) if
          to
          Parent or Subsidiary, to:

        
          
            	 	
                    XFone,
                      Inc.

                  
	 	
                    Britannia
                      House

                  
	 	
                    960
                      High Road

                  
	 	
                    London,
                      N129RY

                  
	 	
                    United
                      Kingdom USA

                  
	 	
                    Attention:
                      Guy Nissenson

                  
	 	
                    Telephone: +44
                      208-446-9494

                  
	 	
                    Facsimile: +44
                      208-446-7010

                  
	 	
                    Email:  guy@xfone.com

                  
	 	 
	 	
                    and

                  
	 	 
	 	
                    Xfone
                      USA, Inc.

                  
	 	
                    2506
                      Lakeland Drive

                  
	 	
                    Suite
                      100

                  
	 	
                    Jackson,
                      Mississippi 39232

                  
	 	
                    Attention: Wade
                      Spooner

                  
	 	
                    Telephone: 601-420-6500

                  
	 	
                    Facsimile: 509-271-7741

                  
	 	
                    Email:  wspooner@expetel.com

                  
	 	 
	 	
                    with
                      a copy to:

                  
	 	 
	 	
                    Oberon
                      Securities, LLC

                  
	 	
                    79
                      Madison Ave., 6th
                      Floor

                  
	 	
                    New
                      York, NY 10016

                  
	 	
                    Attention: Adam
                      Breslawsky

                  
	 	
                    Telephone: 212-386-7052

                  
	 	
                    Facsimile: 212-447-7212

                  
	 	
                    Email:  adam@oberonsecurities.com

                  
	 	 
	 	
                    and

                  
	 	 
	 	
                    Watkins
                      Ludlam Winter & Stennis, P.A.

                  
	 	
                    633
                      North State Street (39202)

                  
	 	
                    P.
                      O. Box 427

                  
	 	
                    Jackson,
                      MS 39205-0427

                  
	 	
                    Attention: Gina
                      M. Jacobs

                  
	 	
                    Telephone: 601-949-4705

                  
	 	
                    Facsimile: 601-949-4804

                  
	 	
                    Email:  gjacobs@watkinsludlam.com

                  

          

          
            
              
                
                

              

              
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            (b) if
              to the
              Company or the Principals, to: 

          

          
            
              	 	
                      Randall
                        Wade James Tricou

                    
	 	
                      650
                        Poydras Street

                    
	 	
                      Suite
                        1000

                    
	 	
                      New
                        Orleans, Louisiana 70130

                    
	 	
                      Telephone:
                         985-969-4822

                    
	 	
                      Email:  rtricou@i-55telecom.com

                    
	 	 
	
                       

                    	 With
                      a copy to:
	 	 
	 	
                      David
                        Kurtz

                    
	 	
                      Baker,
                        Donelson, Bearman, Caldwell & Berkowitz, P.C.

                    
	 	
                      201
                        St. Charles Ave., Suite 3600

                    
	 	
                      New
                        Orleans, Louisiana 70170

                    
	 	
                      Telephone: (504)
                        566-5259

                    
	 	
                      Facsimile: (504)
                        636-3959

                    
	 	
                      Email:  dkurtz@bakerdonelson.com

                    

            

          

        

        

        8.02 Interpretation.
          The
          words "include," "includes" and "including" when used herein shall be deemed
          in
          each case to be followed by the words "without limitation." References
          to
          "property" includes both intangible and tangible property. References to
          "assets" includes both intangible and tangible assets. The table of contents
          and
          headings contained in this Agreement are for reference purposes only and
          shall
          not affect in any way the meaning or interpretation of this
          Agreement.

         

        8.03 Counterparts.
          This
          Agreement may be executed in one or more counterparts, each of which shall
          constitute an original and all of which, when taken together, shall be
          considered one and the same agreement.

        
          
            
              
              

            

            
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        8.04 Entire
          Agreement; Assignment.
          This
          Agreement and the documents and instruments and other agreements among
          the
          parties hereto referenced herein: (i) constitute the entire agreement among
          the
          parties with respect to the subject matter hereof and supersede all prior
          agreements and understandings both written and oral, among the parties
          with
          respect to the subject matter hereof; and (ii) shall not be assigned by
          operation of law or otherwise.

         

        8.05 No
          Third Party Beneficiaries.
          This
          Agreement, the schedules and exhibits hereto and the documents and instruments
          and other agreements among the parties hereto referenced herein are not
          intended
          to confer upon any person other than the parties hereto any rights or remedies
          hereunder.

         

        8.06 Severability.
          In the
          event that any provision of this Agreement or the application thereof,
          becomes
          or is declared by a court of competent jurisdiction to be illegal, void
          or
          unenforceable, the remainder of this Agreement will continue in full force
          and
          effect and the application of such provision to persons or circumstances
          other
          than those with respect to which it is deemed void will be interpreted
          so as
          reasonably to effect the intent of the parties hereto within the boundaries
          of
          applicable law. The parties further agree to replace such void or unenforceable
          provision of this Agreement with a valid and enforceable provision that
          will
          achieve, to the extent practicable within applicable law, the economic,
          business
          and other purposes of such void or unenforceable provision.

         

        8.07 Other
          Remedies.
          Except
          as otherwise provided herein, any and all remedies herein expressly conferred
          upon a party will be deemed cumulative with and not exclusive of any other
          remedy conferred hereby, or by law or equity upon such party, and the exercise
          by a party of any one remedy will not preclude the exercise of any other
          remedy.

         

        8.08 Governing
          Law; Dispute Resolution.
          This
          Agreement shall be governed by and construed in accordance with the laws
          of the
          State of Mississippi, regardless of the laws that might otherwise govern
          under
          applicable principles of conflicts of laws thereof. EACH PARTY HEREBY
          IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A
          JURY
          TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH
          OR
          ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED
          HEREBY.

         

        8.09 Rules
          of Construction.
          The
          parties hereto agree that they have been represented by counsel during
          the
          negotiation and execution of this Agreement and, therefor, waive the application
          of any law, regulation, holding or rule of construction providing that
          ambiguities in an agreement or other document will be construed against
          the
          party drafting such agreement or document.

         

        8.10 Attorneys'
          Fees.
          If any
          action or other proceeding relating to the enforcement of any provision
          of this
          Agreement is brought by any party hereto, the prevailing party shall be
          entitled
          to recover reasonable attorneys' fees, costs and disbursements (in addition
          to
          any other relief to which the prevailing party may be entitled).

        
          
            
              
              

            

            
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        8.11 Shareholder's
          Post Closing Sale Restrictions.
          Each
          shareholder of the Company by submission of its Company Common Stock in
          exchange
          for the Parent Common Stock and Warrants agrees that the total shares of
          common
          stock of the Parent sold by him/her in any one month period shall not exceed
          2.5% of the average monthly trading volume of the Parent Common Stock for
          the
          month prior to the date in which sale takes place. Each shareholder of
          the
          Company agrees that this Parent Common Stock sales restriction shall apply
          to
          any Parent Common Stock, whether owned as a result of the Merger or thereafter
          acquired for as long as either owns any Parent Common Stock and that this
          provision shall survive the consummation of the Merger.

        
          
            
              
              

            

            
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        IN
          WITNESS WHEREOF, Parent, Subsidiary, the Company, each of
          the Principals and the Shareholder Representative have caused this Agreement
          to
          be signed, all as of the date first written above.

        

        
          	
                  XFONE,
                    INC.

                  By:      

                  Name:
                    Guy Nissenson

                  Title:
                    President and CEO

                	
                  I-55
                    TELECOMMUNICATIONS, L.L.C.

                  By:      

                  Name:
                    Randall Wade James Tricou

                  Title:
                    President and CEO

                
	
                  XFONE
                    USA, INC.

                  By:      

                  Name:
                    Wade Spooner

                  Title:
                    President

                	
                  PRINCIPAL

                  Randall
                    Wade James Tricou, Individually

                

        

        

        
          
            
              
              

            

            
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        EXHIBIT
          "A"

         

        
          

        OFFICE
          OF THE MISSISSIPPI SECRETARY OF
          STATE

        PO
          BOX 136, JACKSON, MS 39205-0136 
          (601)359-1333

        Articles
          of Merger or Share
          Exchange

        Profit
          Corporation

        The
          undersigned corporation pursuant to Section
          79-4-11.05, as amended, hereby executes the following document and sets
          forth:

         

        1.
          Name of Corporation 1

            I-55
          Telecomunications, L.L.C., a Louisiana limited liability co.
          ("I-55")

        2.
          Name of Corporation 2

            XFone
          USA, Inc., a Mississippi Corporation

        3.
          Name of Corporation 3

         

        4.
          The future effect date is (complete if
          applicable)

         

        5.
          The plan of merger or share exchange (Attach
          page)

         

        6.
          Mark the appropriate
          box.

          o  (a)
          Sholder approval of the plan of merger or share exchange was not
          required

            or

          x  (b)
          If approval of the Shareholders of one or more corporations party to
          the merger or share exchange was requires

                (i)
          the
          designation, number of outstanding shares, and number of voyes entitled
          to be
          cast by 

                   
          Each class entitled to vote seperately on the plan as
          to each corporation were

         

        
          	 Name
                  of
                  Corporation 	Designation 	 No.
                  of
                  outstanding shares	No. of
                  votes
                  entitled to be cast 
	 I-55	 Interests	 N/A	 100%
	 XFone USA, Inc.	 Common	 100	 100

        

         

        
          
            
            

          

          
            Exhibit
              A-1-

            
              

            

          

          
            
            

            Table
              of Contents

          

        

        
          OFFICE
            OF THE MISSISSIPPI SECRETARY OF
            STATE

          PO
            BOX 136, JACKSON, MS 39205-0136 
            (601)359-1333

          Articles
            of Merger or Share
            Exchange

          And
            Either

           

              a.
            the total number
            of votes cast for and asainst the plan by each class entitled to vote
            seperately
            on the plan was

          
            
              	 Name
                      of
                      Corporation 	Class	 Total
                      no.
                      of votes cast FOR the plan	Total
                      no. of
                      votes cast AGAINST the plan
	 	
                    	
                    	
                    
	 	
                    	
                    	
                    

            

          

           

          OR

           

              b.
            the total number
            of undisputed votes cast for the plan seperately by each class was

          

            
              
                	 Name
                        of
                        Corporation 	Class	 Total
                        no.
                        of votes cast FOR the plan
	 I-55	Interests	100%
	 XFone USA, Inc.	Common	100

              

            

             

            and
              the number of votes cast for the plan was sufficient for approval
              by that class.

             

            
              Name
                of Corporation 1

                  

                  I-55
                Telecomunications, L.L.C.

              
                	 	 	 
	 
 	 
 	 
 
	 	By:  	/s/  
                        Signature
	 	
                        

                        Printed Name
	 	Title 

              

               

              
                
                  
                  

                

                
                  Exhibit
                    A-2-

                  
                    

                  

                

                
                  
                    OFFICE
                      OF THE MISSISSIPPI SECRETARY OF
                      STATE

                    PO
                      BOX 136, JACKSON, MS 39205-0136 
                      (601)359-1333

                    Articles
                      of Merger or Share
                      Exchange

                  

                  Table
                    of Contents

                  Name
                    of Corporation 2

                      XFone
                    USA, Inc.

                

              

            

          

          
            
              	 	 	 
	 
 	 
 	 
 
	 	By:  	/s/  
                      Signature
	 	
                      

                      Printed Name
	 	Title 

            

             

            Name
              of Corporation 3

            
               

            
              
                	 	 	 
	 
 	 
 	 
 
	 	By:  	/s/  
                        Signature
	 	
                        

                        Printed Name
	 	Title 

              

               

            

          

          NOTE

          1.
            If shareholder approval is required, the plan must be approved by
            each voting group entitled to vote on the plan by a majority of all votes
            to be
            cast by that voting group unless the Act ot the articles of incorporation
            provide for a greater or lesser vote, but not less than a majority of
            all votes
            cast at a meeting.

           

          2.
            The articles cannot be filed unless the corporation(s) has (have)
            paid all fees and taxes (and delinquencies) imposed by law.

           

          3.
            The articles must be similarly executed by each corporation that
            is a party to the merger.

           

        

        
          
            
            

          

          
            Exhibit
              A-3-

            
              

            

          

          
            
            

            Table
              of Contents

          

        

        EXHIBIT
          "B"

         

        Form
          of Escrow Agreement 

        
          ESCROW
            AGREEMENT

           

          This
            Escrow Agreement, dated as of ____________, 2005 (the "Closing Date"),
            among
            I-55 Telecommunications, L.L.C., a Louisiana limited liability company
            (â€œI-55â€� or the â€œCompanyâ€�), XFone, Inc., a Nevada corporation, and XFone
            USA, Inc., a Mississippi corporation (collectively "Buyer"), Randall
            Wade James
            Tricou, an individual resident of Louisiana ("Tricou" or â€œPrincipalâ€�) and
            Trustmark National Bank, a national banking association as escrow agent
            ("Escrow
            Agent").

           

          This
            is
            the Escrow Agreement referred to in the Agreement and Plan of Merger
            Agreement
            dated _______________, 2005 (the "Merger Agreement") among Buyer, the
            Company
            and the Principal. Capitalized terms used in this agreement without definition
            shall have the respective meanings given to them in the Merger
            Agreement.

           

          In
            order
            to provide Buyer security for certain rights of indemnification that
            the Buyer
            possesses under the Merger Agreement in the event of a breach of the
            representations, warranties or agreements by the Company or the Principal
            thereunder, or otherwise pursuant to the terms of the Merger Agreement,
            the
            Principal and the Buyer have agreed that the number of shares of XFone,
            Inc.
            Common Stock (the "XFone Common Stock") and the number of XFone, Inc.
            Stock
            Warrants ("XFone Stock Warrants") as set forth in Exhibit "A", which
            constitutes
            part of the purchase price under the Merger Agreement, shall be deposited
            with
            the Escrow Agent by the Principal and Buyer to be held and handled by
            Escrow
            Agent in accordance with the terms and conditions herein set forth.

           

          The
            XFone, Inc. Common Stock is currently traded under the symbol AMEX:XFN
            and the
            Buyer shall notify the Escrow Agent of any change in the market on which
            the
            stock is listed or the symbol under which it is traded.

           

          The
            parties, intending to be legally bound, hereby agree as follows:

           

          1.  ESTABLISHMENT
            OF ESCROW

           

          (a)  Deposit
            of XFone Common Stock and XFone Stock Warrants.
            The
            Principal hereby deposits in escrow the number of shares of XFone Common
            Stock
            and XFone Common Stock Warrants set out opposite his names on Exhibit
            "A"
            attached to this Agreement ("Escrow Shares"), registered in the name
            of the
            Escrow Agent or its nominee. 

           

          (b)  Escrow
            Fund.
            The
            Escrow Shares, all dividends and distributions thereon, and all income
            and
            property resulting therefrom ("Escrow Fund") shall be held by the Escrow
            Agent
            for the benefit of the Principal and Buyer on the terms set out
            herein.

           

          (c)  Voting
            Rights of Shares in Escrow.
            All
            voting rights with respect to the XFone Common Stock composing a part
            of the
            Escrow Fund may be exercised by the Principal who deposited such XFone
            Common
            Stock in escrow, and the Escrow Agent shall from time to time execute
            and
            deliver to the Principal such proxies, consents, or other documents as
            may be
            necessary to enable the Principal to exercise such rights with respect
            to any
            XFone Common Stock deposited by the Principal which remains a part of
            the Escrow
            Fund.

           

          (d)  Distributions
            on Escrow Fund.
            All
            dividends and other distributions (whether in cash, securities, or other
            property) paid or made on the Escrow Fund shall be deemed to have been
            paid or
            made to the Principal, for income tax purposes, but shall be received
            by the
            Escrow Agent and constitute part of the Escrow Fund.

           

          
            
              
              

            

            
              Exhibit
                B-1-

              
                

              

            

            
              
              

              Table
                of Contents

            

          

          (e)  Taxes
            and Charges on Escrow Fund.
            The
            Principal shall maintain the Escrow Fund free and clear of all liens
            and
            encumbrances and shall, promptly upon request by the Escrow Agent, pay
            and
            discharge all taxes, assessments, and governmental charges imposed on
            or with
            respect to the Escrow Fund.

           

          (f)  Acceptance
            of Escrow.
            Escrow
            Agent hereby agrees to act as escrow agent and to hold, safeguard and
            disburse
            the Escrow Fund pursuant to the terms and conditions hereof.

           

          (g)  Notice
            of Claim.
            Buyer
            shall be entitled to recover under this Escrow Agreement in respect of
            any Loss
            (as defined in Section 6.2 of the Merger Agreement) and may give notice
            in
            writing in the form attached hereto as Appendix A ("Pending Claims Notice")
            to
            the Escrow Agent and the Principal of any claim on which a Loss may be
            based,
            which Pending Claims Notice shall include a brief description of the
            nature of
            the claim, the identity of the party by whom it is being asserted, and
            an
            estimate of the amount of loss that may be sustained by Buyer (the "Estimated
            Loss").

           

          2.  DISTRIBUTIONS
            FROM ESCROW FUND

           

          (a)  Buyer
            Request.
            If
            Buyer (or either of them) submits a notice and request to the Principal
            and
            Escrow Agent in substantially the form attached as Appendix B stating
            that a
            Loss (as defined in the Merger Agreement) has been determined in accordance
            with
            Section 6.2 of the Merger Agreement and specifying the dollar amount
            of the Loss
            and the property from the Escrow Fund to be released to the Buyer in
            satisfaction of the Loss (including specifying the number of shares of
            the XFone
            Common Stock and the XFone Stock Warrants to be released to the Buyer
            or its
            designee from the Escrow Fund), then on the 15th
            business
            day following such notice, Escrow Agent shall release the number of shares
            of
            the XFone Common Stock and XFone Stock Warrants as directed in said notice,
            unless the Escrow Agent has received a Counter-Notice (as defined herein)
            from
            the Principal that it disputes the requested release from the Escrow
            Fund for
            the Loss.

           

          (b)  Request
            by Principal.
            If the
            Principal gives a notice in substantially the form attached as Appendix
            C to the
            Escrow Agent and Buyer stating that he is entitled to a distribution
            from the
            Escrow Fund as required under Section 6.2(b)(ii) of the Merger Agreement
            specifying the number of XFone Common Stock and XFone Stock Warrants
            to be
            distributed, then on the 15th
            business
            day following such notice, the Escrow Agent shall release the XFone Common
            Stock
            and XFone Stock Warrants pursuant to the directions given by the Principal
            in
            the notice, unless the Escrow Agent shall have received from Buyer a
            Counter-Notice (as defined herein) that it disputes the requested release
            from
            the Escrow Fund requested by the Principal.

           

          (c)  If
            a
            counter-notice ("Counter-Notice") is given with respect to a request
            for
            distributions from the Escrow Fund, then the Escrow Agent shall make
            a
            distribution from the Escrow Fund only in accordance with (i) joint written
            instructions of Buyer and the Principals or (ii) a final non-appealable
            order of
            a court of competent jurisdiction. Any court order shall be accompanied
            by legal
            opinion by counsel for the presenting party satisfactory to the Escrow
            Agent to
            the effect that the order is final and non-appealable. Escrow Agent shall
            act on
            such court order and legal opinion without further question.

           

          (d)  Notwithstanding
            anything to the contrary contained in this Agreement, the Escrow Agent
            shall
            make distributions from the Escrow Fund in accordance with the joint
            written
            instructions of Buyer and Principal.

           

          
            
              
              

            

            
              Exhibit
                B-2-

              
                

              

            

            
              
              

              Table
                of Contents

            

          

          3.  DURATION
            AND TERMINATION OF ESCROW

           

          (a)  On
            the
            third anniversary date of this Agreement, the Escrow Agent shall retain
            an
            amount of the Escrow Fund equal to the aggregate dollar value of the
            Estimated
            Losses for all outstanding Pending Claims Notices and the remainder of
            the
            Escrow Fund shall be disbursed to the Principal. For these purposes,
            the value
            of the Parent Common Stock and the Parent Stock Warrants shall be determined
            in
            accordance with Exhibit "A."

           

          (b)  The
            Escrow Agreement shall continue in full force and effect until the first
            to
            occur of the close of business on the last day during which there is
            any Escrow
            Fund remaining with the Escrow Agent or December 31, 2020, at which time
            this
            Escrow shall terminate and any Escrow Fund remaining shall be interpled
            with the
            registry or custody of any court of competent jurisdiction and thereupon
            the
            Escrow Agent shall be discharged of all further duties under this
            Agreement.

           

          4.  DUTIES
            OF
            ESCROW AGENT

           

          (a)  Escrow
            Agent shall not be under any duty to give the Escrow Fund held by it
            hereunder
            any greater degree of care than it gives its own similar property and
            shall not
            be required to invest any funds held hereunder except as directed in
            this
            Agreement. Uninvested funds held hereunder shall not earn or accrue
            interest.

           

          (b)  Escrow
            Agent shall not be liable, except for its own gross negligence or willful
            misconduct and, except with respect to claims based upon such gross negligence
            or willful misconduct that are successfully asserted against Escrow Agent,
            the
            others hereto shall jointly and severally indemnify and hold harmless
            Escrow
            Agent (and any successor Escrow Agent) from and against any and all losses,
            liabilities, claims, actions, damages and expenses, including reasonable
            attorneys' fees and disbursements, arising out of and in connection with
            this
            Agreement.

           

          (c)  Escrow
            Agent shall be entitled to rely upon any order, judgment, certification,
            demand,
            notice, instrument or other writing delivered to it hereunder without
            being
            required to determine the authenticity or the correctness of any fact
            stated
            therein or the propriety or validity of the service thereof. Escrow Agent
            may
            act in reliance upon any instrument or signature believed by it to be
            genuine
            and may assume that the person purporting to give receipt or advice or
            make any
            statement or execute any document in connection with the provisions hereof
            has
            been duly authorized to do so. Escrow Agent may conclusively presume
            that the
            undersigned representative of any party hereto which is an entity other
            than a
            natural person has full power and authority to instruct Escrow Agent
            on behalf
            of that party unless written notice to the contrary is delivered to Escrow
            Agent.

           

          (d)  Escrow
            Agent may act pursuant to the advice of counsel with respect to any matter
            relating to this Agreement and shall not be liable for any action taken
            or
            omitted by it in good faith in accordance with such advice.

           

          (e)  Escrow
            Agent does not have any interest in the Escrow Fund deposited hereunder
            but is
            serving as escrow holder only and having only possession thereof. Any
            payments
            of income from this Escrow Fund shall be subject to withholding regulations
            then
            in force with respect to United States taxes. The parties hereto will
            provide
            Escrow Agent with appropriate Internal Revenue Service Forms W-9 for
            tax
            identification number certification, or non-resident alien certifications.
            This
            Section 5(e) and Section 5(b) shall survive notwithstanding any termination
            of
            this Agreement or the resignation of Escrow Agent.

           

          (f)  Escrow
            Agent makes no representation as to the validity, value, genuineness
            or the
            collectibility of any security or other document or instrument held by
            or
            delivered to it.

           

          
            
              
              

            

            
              Exhibit
                B-3-

              
                

              

            

            
              
              

              Table
                of Contents

            

          

          (g)  Escrow
            Agent (and any successor Escrow Agent) may at any time resign as such
            by
            delivering the Escrow Fund to any successor Escrow Agent jointly designated
            by
            the other parties hereto in writing, or to any court of competent jurisdiction,
            whereupon Escrow Agent shall be discharged of and from any and all further
            obligations arising in connection with this Agreement. The resignation
            of Escrow
            Agent will take effect on the earlier of (a) the appointment of a successor
            (including a court of competent jurisdiction) or (b) the day which is
            30 days
            after the date of delivery of its written notice of resignation to the
            other
            parties hereto. If at that time Escrow Agent has not received a designation
            of a
            successor Escrow Agent, Escrow Agent's sole responsibility after that
            time shall
            be to retain and safeguard the Escrow Fund until receipt of a designation
            of
            successor Escrow Agent or a joint written disposition instruction by
            the other
            parties hereto or a final non-appealable order of a court of competent
            jurisdiction.

           

          (h)  In
            the
            event of any disagreement between the other parties hereto resulting
            in adverse
            claims or demands being made in connection with the Escrow Fund or in
            the event
            that Escrow Agent is in doubt as to what action it should take hereunder,
            Escrow
            Agent shall be entitled to retain the Escrow Fund until Escrow Agent
            shall have
            received (i) a final non-appealable order of a court of competent jurisdiction
            directing delivery of the Escrow Fund or (ii) a written agreement executed
            by
            the other parties hereto directing delivery of the Escrow Fund, in which
            event
            Escrow Agent shall disburse the Escrow Fund in accordance with such order
            or
            agreement. Any court order shall be accompanied by a legal opinion by
            counsel
            for the presenting party satisfactory to Escrow Agent to the effect that
            the
            order is final and non-appealable. Escrow Agent shall act on such court
            order
            and legal opinion without further question.

           

          (i)  Buyer
            and
            Principal shall pay Escrow Agent compensation (as payment in full) for
            the
            services to be rendered by Escrow Agent hereunder in the amount of [$1,000.00]
            at the time of execution of this Agreement and [$1,000.00] annually thereafter
            and agree to reimburse Escrow Agent for all reasonable expenses, disbursements
            and advances incurred or made by Escrow Agent in performance of its duties
            hereunder (including reasonable fees, expenses and disbursements of its
            counsel). Any such compensation and reimbursement to which Escrow Agent
            is
            entitled shall be borne 50% by Buyer and 50% by the Principal. Any fees
            or
            expenses of Escrow Agent or its counsel that are not paid as provided
            for herein
            may be taken from any property held by Escrow Agent hereunder.

           

          (j)  No
            printed or other matter in any language (including, without limitation,
            prospectuses, notices, reports and promotional material) that mentions
            Escrow
            Agent's name or the rights, powers, or duties of Escrow Agent shall be
            issued by
            the other parties hereto or on such parties' behalf unless Escrow Agent
            shall
            first have given its specific written consent thereto.

           

          5.  LIMITED
            RESPONSIBILITY

           

          This
            Agreement expressly sets forth all the duties of Escrow Agent with respect
            to
            any and all matters pertinent hereto. No implied duties or obligations
            shall be
            read into this agreement against Escrow Agent. Escrow Agent shall not
            be bound
            by the provisions of any agreement among the other parties hereto except
            this
            Agreement.

           

          6.  OWNERSHIP
            FOR TAX PURPOSES

           

          Principal
            agrees that, for purposes of federal and other taxes based on income,
            the
            Principal will be treated as the owner of the Escrow Fund and that the
            Principal
            will report all income, if any, that is earned on, or derived from, the
            Escrow
            Fund as his income in the taxable year or years in which such income
            is properly
            includible and pay any taxes attributable thereto.

           

          
            
              
              

            

            
              Exhibit
                B-4-

              
                

              

            

            
              
              

              Table
                of Contents

            

          

          7.  NOTICES

           

          All
            notices, consents, waivers and other communications under this Agreement
            must be
            in writing and will be deemed to have been duly given when (a) delivered
            by
            hand (with written confirmation of receipt), (b) sent by telecopier
            (with
            written confirmation of receipt) provided that a copy is mailed by registered
            mail, return receipt requested, or (c) when received by the addressee,
            if
            sent by a nationally recognized overnight delivery service (receipt requested),
            in each case to the appropriate addresses and telecopier numbers set
            forth below
            (or to such other addresses and telecopier numbers as a party may designate
            by
            notice to the other parties):

           

          IF
            TO
            COMPANY OR PRINCIPALS, TO:

           

          Randall
            Wade James Tricou

          I-55
            Telecommunications, L.L.C.

          14599
            Highway 22

          Ponchatoula,
            LA 70454

          Telephone:
            (504) ___________

          Facsimile:
            (504) ___________

          Email:     

           

          IF
            TO
            PARENT OR SUBSIDIARY, TO:

           

          XFone,
            Inc.

          Britannia
            House

          960
            High
            Road

          London,
            N129RY

          United
            Kingdom

          Attention: Guy
            Nissenson

          Telephone: +44
            208-446-9494

          Facsimile: +44
            208-446-7010
Email:guy@xfone.com

           

          and

           

          XFone
            USA, Inc.

          2506
            Lakeland Drive, Suite 100

          Flowood,
            MS 39232

          Attention: Wade
            Spooner

          Telephone: (601)
            664-1108

          Facsimile: (601)
            664-1190

          Email: wspooner@expetel.com

           

          
            
              
              

            

            
              Exhibit
                B-5-

              
                

              

            

            
              
              

              Table
                of Contents

            

          

                                    
            with a copy to:

           

          The
            Oberon Group, LLC

          79
            Madison Ave., 6th
            Floor

          New
            York,
            NY 10016

          Attention: Adam
            Breslawsky

          Telephone: 212-386-7052

          Facsimile: 212-447-7212

          Email:
            adam@oberongroup.com

           

          Watkins
            Ludlam Winter & Stennis, P.A.

          633
            North
            State Street (39202)

          P.
            O. Box
            427

          Jackson,
            MS 39205-0427

          Attention: Gina
            M.
            Jacobs

          Telephone: 601-949-4705

          Facsimile: 601-949-4804

          Email:
            gjacobs@watkinsludlam.com

           

          IF
            TO
            ESCROW AGENT:

           

          Trustmark
            National Bank

          248
            East
            Capitol Street

          Jackson,
            MS 39201

          Attention: W.
            Sanders (â€œSandyâ€�) Carter, V.P.

           

          8.  JURISDICTION;
            SERVICE OF PROCESS

           

          Any
            action or proceeding seeking to enforce any provision of, or based on
            any right
            arising out of, this Agreement may be brought against any of the parties
            in the
            courts of the State of Mississippi or, if it has or can acquire jurisdiction,
            in
            the United States District Court for the Southern District of Mississippi,
            and
            each of the parties consents to the jurisdiction of such courts (and
            of the
            appropriate appellate courts) in any such action or proceeding and waives
            any
            objection to venue laid therein. Process in any action or proceeding
            referred to
            in the preceding sentence may be served on any party anywhere in the
            world.

           

          9.  COUNTERPARTS

           

          This
            Agreement may be executed in one or more counterparts, each of which
            will be
            deemed to be an original and all of which, when taken together, will
            be deemed
            to constitute one and the same.

           

          
            
              
              

            

            
              Exhibit
                B-6-

              
                

              

            

            
              
              

              Table
                of Contents

            

          

          10.  SECTION
            HEADINGS

           

          The
            headings of sections in this Agreement are provided for convenience only
            and
            will not affect its construction or interpretation.

           

          11.  WAIVER

           

          The
            rights and remedies of the parties to this Agreement are cumulative and
            not
            alternative. Neither the failure nor any delay by any party in exercising
            any
            right, power, or privilege under this Agreement or the documents referred
            to in
            this Agreement will operate as a waiver of such right, power, or privilege,
            and
            no single or partial exercise of any such right, power, or privilege
            will
            preclude any other or further exercise of such right, power, or privilege
            or the
            exercise of any other right, power, or privilege. To the maximum extent
            permitted by applicable law, (a) no claim or right arising out
            of this
            Agreement or the documents referred to in this Agreement can be discharged
            by
            one party, in whole or in part, by a waiver or renunciation of the claim
            or
            right unless in writing signed by the other party; (b) no waiver
            that may
            be given by a party will be applicable except in the specific instance
            for which
            it is given; and (c) no notice to or demand on one party will
            be deemed to
            be a waiver of any obligation of such party or of the right of the party
            giving
            such notice or demand to take further action without notice or demand
            as
            provided in this Agreement or the documents referred to in this
            Agreement.

           

          12.  EXCLUSIVE
            AGREEMENT AND MODIFICATION

           

          This
            Agreement supersedes all prior agreements among the parties with respect
            to its
            subject matter and constitutes (along with the documents referred to
            in this
            Agreement) a complete and exclusive statement of the terms of the agreement
            between the parties with respect to its subject matter. This Agreement
            may not
            be amended except by a written agreement executed by the Buyer, the Principal
            and the Escrow Agent.

           

          13.  GOVERNING
            LAW

           

          This
            Agreement shall be governed by the laws of the State of Mississippi,
            without
            regard to conflicts of law principles.

           

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

           

          

           

          
            
              
              

            

            
              Exhibit
                B-7-

              
                

              

            

            
              
              

              Table
                of Contents

              
              

            

          

          BUYERS:

           

          XFone,
            Inc.

           

          By: Guy
            Nissenson, President and CEO

           

          XFone
            USA, Inc.

           

          By: Wade
            Spooner, President 

           

          

          ESCROW
            AGENT:

           

          Trustmark
            National Bank

           

          By:

          Title:

          PRINCIPAL:

          

          Randall
            Wade James Tricou, Individually

          
            
              
              

            

            
              Exhibit
                B-8-

              
                

              

            

            
              
              

              Table
                of Contents

            

          

          EXHIBIT
            "A"

           

          XFone
            Common Stock XFone
            Stock Warrants

           

          Randall
            Wade James Tricou ________
            Shares ________
            Warrants

           

          VALUATION

           

          Parent
            Stock Warrants
            -
            $_______ per warrant

           

          Parent
            Common Stock
            - the
            average of the closing price for the ten (10) trading days immediately
            preceding
            the date of valuation.

          

           

          
            
              
              

            

            
              Exhibit
                B-9-

              
                

              

            

            
              
              

              Table
                of Contents

              
              

            

          

          APPENDIX
            A

           

          PENDING
            CLAIM NOTICE

           

          To:
              __________________________________,
            or its successor ("Escrow Agent")

          Randall
            Wade James Tricou ("Principal")

           

          From:   
            XFone, Inc and/or XFone USA, Inc ("XFone")

          Date:  _____________________

           

          Please
            be
            advised that, pursuant to Section 1(g) of the Escrow Agreement dated
            ____________, 2005 by and among the undersigned, the Escrow Agent, and
            the
            Principals, each of you are hereby notified that, Buyer believes that
            the Buyer
            has or may suffer a Loss pursuant to the provisions of Article 6.2 of
            the Merger
            Agreement dated as of _______________, 2005 ("Merger Agreement") by virtue
            of

           

           

           

           

          XFone
            estimates that the Loss is $_____________ ("Estimated Loss").

           

          Signed
            this _____ day of _________________, 20__.

           

          XFone,
            Inc./XFone USA, Inc.

           

          By: 
Title: 

          

           

          
            
              
              

            

            
              Exhibit
                B-10-

              
                

              

            

            
              
              

              Table
                of Contents

              
              

            

          

          APPENDIX
            B

           

          BUYER
            DEPOSITION NOTICE REQUEST

           

          
            	
                    To:

                  	 	
                    __________________________________,
                      or its successor ("Escrow
                      Agent")

                  

          

          Randall
            Wade James Tricou ("Principal")

           

          
            	
                    From:

                  	 	
                    XFone,
                      Inc./XFone USA, Inc.
                      ("XFone")

                  

          

           

          
            	
                    Date:

                  	 	
                    _______________________

                  

          

           

          
            	
                    Re:

                  	 	
                    Escrow
                      Agreement Dated ____________, 2004 Among the Above-referenced
                      Parties
                      ("Escrow Agreement")

                  

          

           

          Please
            be
            advised that pursuant to Section 2(a) of the Escrow Agreement you are
            hereby
            notified that a Loss (as defined in the Merger Agreement dated ________________,
            2005) has been determined and you are hereby instructed to deliver to
            XFone,
            Inc. the following XFone Common Stock and XFone Stock Warrants endorsed
            for
            transfer to XFone from the Escrow Fund.

           

          
            	
                    (1)

                  	
                    _________
                      shares XFone Common Stock as
                      follows:

                  

          

           

          
            	
                    (2)

                  	
                    _________
                      shares XFone Stock Warrants as
                      follows:

                  

          

           

          
            	
                    (3)

                  	
                    Cash
                      Dividends $________.

                  

          

           

          Check
            One:

           

          
            	
                    ____

                  	
                    This
                      is the Loss as determined for Pending Claims Notice
                      dated.

                  	
                     

                  

          

           

          
            	
                    ____

                  	
                    This
                      notice also constitutes a Pending Claims Notice and the Loss
                      arises out of
                      the following:

                  

          

           

          Sincerely,

           

          XFone,
            Inc./XFone USA, Inc.

           

          By: 

          Title: 

          

           

          
            
              
              

            

            
              Exhibit
                B-11-

              
                

              

            

            
              
              

              Table
                of Contents

              
              

            

          

          APPENDIX
            C

           

          PRINCIPALS
            DEPOSITION NOTICE REQUEST

           

          
            	
                    To:

                  	 	
                    ______________________,
                      or its successor ("Escrow
                      Agent")

                  

          

          XFone,
            Inc./XFone USA, Inc. ("XFone")

           

          
            	
                    From:

                  	 	
                    Randall
                      Wade James Tricou
                      ("Principal")

                  

          

           

          
            	
                    Date:

                  	 	
                    _____________________

                  

          

           

          
            	
                    Re:

                  	 	
                    Escrow
                      Agreement Dated ____________, 2004 Among the Above-referenced
                      Parties
                      ("Escrow Agreement")

                  

          

           

          Please
            be
            advised that pursuant to Section 2(b) of the Escrow Agreement you are
            hereby
            notified that the Principal is entitled to a distribution as set forth
            below
            from the Escrow Fund pursuant to Section 6.2(b)(ii) of the Merger Agreement
            dated ______________, 2005, and you are hereby requested to deliver to
            the
            Principal the following XFone Common Stock and Parent Stock Warrants
            endorsed as
            follows for transfer from the Escrow Fund:

           

          To
            Randall Wade James Tricou:

           

          __________ shares
            of
            XFone Common Stock Randall Wade James Tricou deposited in the Escrow
            Fund.

           

          __________ XFone
            Stock Warrants from Randall Wade James Tricouâ€TMs XFone Stock Warrants deposited
            in the Escrow Fund.

           

          Sincerely,

           

          Randall
            Wade James Tricou

           

        
          
            
            

          

          
            Exhibit
              B-12-

            
              

            

          

          
            
            

            Table
              of Contents
EXHIBIT
            "C"

        

         

        Form
          of Management Agreement 

        

          MANAGEMENT
            AGREEMENT

           

          THIS
            MANAGEMENT AGREEMENT is effective as of the ____ day of ___________,
            2005 and is
            by and between I-55 Telecommunications, L.L.C., a Louisiana limited liability
            company (â€œI-55 Telecomâ€�) and XFone USA, Inc., a Mississippi corporation
            ("XFone USA" or "Manager") and Randall Wade James Tricou (the "Guarantor")
            (referred to collectively hereinafter as "the Parties").

           

          WITNESSETH:

           

          WHEREAS,
            pursuant to the terms of that certain Agreement and Plan of Merger dated
            as of
            _____________, 2005 (the "Merger Agreement") among I-55 Telecom, Guarantor,
            XFone USA and XFone, Inc. (the "Parent"), I-55 Telecom is to be merged
            with and
            into XFone USA (the "Merger") for the Merger Consideration to be paid
            by Parent
            (capitalized terms not otherwise defined herein shall have the meaning
            as set
            forth in the Merger Agreement); and

           

          WHEREAS,
            certain regulatory approvals are required before the Merger may be consummated
            and the parties desire that XFone USA provide management services to
            I-55
            Telecom in accordance with the terms of this Agreement pending the consummation
            of the Merger.

           

          NOW,
            THEREFORE, in consideration of the mutual covenants and agreements contained
            herein, the Parties agree as follows:

           

          1. Retention
            of XFone USA.
            I-55
            Telecom does hereby hire and appoint XFone USA as Manager to be responsible
            for
            the operation and management of all of I-55 Telecom's business operations
            (the
            "Business") and XFone USA hereby accepts such appointment as Manager
            and shall
            manage the operations of the Business upon the terms set forth herein.
            The
            management services to be performed by Manager under this Agreement shall
            be
            performed by Manager as agent for I-55 Telecom and without limiting the
            foregoing, I-55 Telecom hereby grants the Manager the authority and powers
            necessary for the management of the Business in the ordinary and usual
            course of
            business generally consistent with past practice, including, without
            limitation,
            the following:

           

          (a) Personnel.
            Supervising the current employees and independent contractors of I-55
            Telecom
            with the Manager having the authority to hire, discharge and direct such
            personnel for the conduct of the Business.

           

          
            
              
              

            

            
              Exhibit
                C-1-

              
                

              

            

            
              
              

              Table
                of Contents

            

          

          (b) Accounting.
            Supervision and administration of all accounting and the maintenance
            of all
            books and records for the Business, including, without limitation, (i)
            all
            billing, communications and other services provided to customers serviced
            under
            I-55 Telecom's licenses; (ii) collection on behalf of I-55 Telecom of
            all fees,
            charges and other compensation relating to the Business; (iii) review
            of all
            bills received for services, work or supplies in connection with maintaining
            and
            operating the Business and paying all such bills as and when the same
            shall
            become due and payable except for the Long Term Liabilities (as defined
            in the
            Merger Agreement); and (iv) preparation on a monthly basis of a balance
            sheet
            and income and expense statement with respect to the Business.

           

          (c) Contracts.
            Maintain all existing contracts necessary for the operation of the Business
            and
            the authority to enter into or renew contracts in I-55 Telecom's name
            as
            necessary for the continuing operation of the Business provided that
            the consent
            of I-55 Telecom shall be required for any new contracts or renewals of
            existing
            contracts that are not terminable on 60 days notice, or that require
            the
            commitment of more than $5,000.00, which is not included in an approved
            operating budget.

           

          (d) Policies/Procedures.
            Preparation of all policies and procedures for the operation of the
            Business.

           

          (e) Budgets.
            Preparation of all operating, capital or other budgets which shall be
            prepared
            and submitted on a schedule to be approved by the Parties.

           

          2. Assignment
            of Revenues and Payment of Expenses.

           

          (a) For
            and
            in consideration of the management services to be provided hereunder,
            I-55
            Telecom hereby assigns and transfers to Manager all revenues generated
            from the
            operations of the Business (the "Revenues"), to be used in accordance
            with this
            Agreement and Manager agrees to pay and cause to be paid from the Revenues
            the
            normal operating, maintenance, administrative, and similar expenses of
            the
            Business incurred in the ordinary course of business during the term
            hereof,
            exclusive of the Long Term Liabilities (as defined in the Merger Agreement)
            ("Expenses").

           

          (b) I-55
            Telecom shall designate the Manager as the controlling party of the current
            operating accounts of the Business (the "Accounts") and all funds collected
            from
            the operations, fees, sales and other collections and operations of the
            Business
            shall be deposited in the Accounts and the Manager shall control and
            have
            authority with respect to all disbursements from said Accounts and the
            Manager
            agrees that the normal operating expenses shall be paid from the Revenues
            collected and deposited in such Accounts and then to the extent of available
            funds, the Long Term Liabilities and other non-recurring liabilities
            shall be
            paid.

           

          
            
              
              

            

            
              Exhibit
                C-2-

              
                

              

            

            
              
              

              Table
                of Contents

            

          

          3. Loans
            by Manager.
            The
            Manager, in its discretion, shall have the right to make advances or
            loans (the
            "Manager Loans") to I-55 Telecom payable on demand (or if no demand payable
            in
            equal quarterly installments of principal and interest) for an amount
            up to
[$500,000.00,]
            with
            interest at [7%]
            per
            annum from the date advanced until paid for the payment of any amounts
            due
            during the term of this Management Agreement under any of the Long Term
            Liabilities (as defined in the Merger Agreement) or for any other liabilities
            the Manager deems appropriate for which there are not sufficient Revenues
            generated to pay such debts and expenses. I-55 Telecom, by execution
            of this
            Agreement, grants to the Manager a security interest in all of the assets,
            whether now owned or hereafter acquired and wherever located, of I-55
            Telecom,
            including without limitation, all accounts, goods, equipment, inventory,
            contracts and contract rights, instruments, chattel paper, securities
            and other
            investment property. The Manager is hereby authorized to file such financing
            statements and amendments thereto and continuations thereof in such offices
            as
            necessary to perfect the security interest granted hereby.

           

          The
            Guarantor, by execution hereof, unconditionally guarantees the prompt
            payment as
            and when due whether at maturity or by acceleration or otherwise of the
            Manager
            Loans, together with any and all interest or other amounts due with respect
            to
            the Manager Loans and any renewals, extensions or amendments of the Manager
            Loans. The obligation of the Guarantor hereunder shall constitute a present
            and
            continuing guaranty of payment and not of collectibility only, shall
            be absolute
            and unconditional, shall not be subject to any counterclaim, setoff,
            deduction
            or defense Guarantor may at any time have against Manager or any other
            person,
            and shall remain in full force and effect without regard to any event
            whatsoever
            (whether or not Guarantor shall have any knowledge or notice thereof
            or shall
            have consented thereto), including without limitation: (1) any extensions,
            renewals or changes in form of this Agreement or any other documents
            evidencing
            the Manager Loan (the "Manager Loan Documents"), as the same may be amended
            and/or supplemented from time to time, any assignment or transfer of
            any part
            thereof, any renewals or extension of the terms of payment under any
            of the
            Manager Loan Documents or the granting of time in respect of the payment
            thereof, or any furnishing or acceptance of security or any release of
            any
            security so furnished or accepted in connection with any of the Manager
            Loan
            Documents; (2) any waiver, consent, extension, forbearance or other action
            or
            inaction under or in respect of this Guaranty or the Manager Loan Documents,
            or
            any exercise of or failure to exercise any right, remedy or power in
            respect
            hereof or thereof; (3) any failure, neglect or omission of Manager to
            protect,
            in any manner, the collection of the Manager Loans, or any portion thereof,
            or
            any security given therefor; (4) any bankruptcy, insolvency, reorganization,
            arrangement, readjustment, composition, liquidation or similar proceedings
            with
            respect to I-55 Telecom; or (5) any default by I-55 Telecom, Guarantor
            or party
            to any of the Manager Loan Documents, or the invalidity or any unenforceability
            of, or any misrepresentation, irregularity or other defect in, any of
            the
            Manager Loan Documents.

           

          
            
              
              

            

            
              Exhibit
                C-3-

              
                

              

            

            
              
              

              Table
                of Contents

            

          

          4. Terms.
            The
            term of this Agreement shall commence on the date hereof and shall continue
            until the consummation of the Merger, provided that this Agreement may
            be
            terminated by either party at any time after ______________, 2006 upon
            30 days
            prior notice.

           

          5. Termination
            Fee.
            In the
            event that the Agreement is terminated by either party as provided in
            Paragraph
            4 (other than due to the consummation of the Merger), then the Parties
            agree
            that the "Net Revenue" or "Net Loss" during the term of this Agreement
            shall be
            divided 50% to I-55 Telecom and 50% to the Manager, provided that in
            the event
            the Manager or any of its affiliates has made any Manager Loans to I-55
            Telecom,
            that the Manager may offset against any amounts due under any Manager
            Loans any
            amounts due to I-55 Telecom for the "Net Revenue" and in the event there
            is a
            "Net Loss", then I-55 Telecom's share of the "Net Loss" shall be added
            to the
            principal due under the Manager Loans. If this Agreement is terminated
            due to
            the consummation of the Merger, then in such event the Manager shall
            be entitled
            to all the Net Revenues or Net Losses. For purposes of this section "Net
            Revenue" is the excess of gross revenues derived from the Business during
            the
            Term, over expenses paid and losses incurred during the Term, and "Net
            Loss" is
            the excess of expenses paid and losses incurred during the Term, over
            gross
            revenues derived from the Business during the Term.

           

          6. Insurance.
            I-55
            Telecom shall include the Manager as an additional insured on all insurance
            currently maintained and such insurance shall continue throughout the
            term of
            this Management Agreement.

           

          7. Independent
            Contractor.
            It is
            the expressed intent of I-55 Telecom, on the one hand, and Manager, on
            the other
            hand, that neither a partnership, joint venture, nor employment relationship
            is
            created between the Parties by this Agreement; rather, it is the express
            intent
            of the Parties that this Agreement represents an independent contractor
            relationship under which I-55 Telecom is retaining the services of
            Manager.

           

          8. Force
            Majeure.
            The
            obligations of the Parties hereto shall be excused during such time as,
            and to
            the extent that, performance is prevented by any occurrence or act beyond
            their
            respective control and not due to their fault or negligence, including,
            without
            limitation, action of the elements, riots, fire, terrorism, war, acts
            of God,
            and any ruling, ordinance, law or regulation of any local, state or federal
            governmental body having jurisdiction over either party.

           

          9. Compliance
            with Law. Each of the Parties shall comply in all material respects with
            all
            applicable laws and regulations. Manager and I-55 Telecom shall immediately
            notify the other of any pending or threatened action by the FCC, PSC
            or any
            other Governmental Authority or third party to suspend, revoke, terminate,
            or
            challenge the licenses, or otherwise investigate the licenses of I-55
            Telecom.
            I-55 Telecom shall cooperate with Manager to assist Manager in fulfilling
            Manager's obligations under the terms of this Agreement.

           

          
            
              
              

            

            
              Exhibit
                C-4-

              
                

              

            

            
              
              

              Table
                of Contents

            

          

          10. Modifications.
            This
            Agreement constitutes the entire understanding and agreement between
            the Parties
            and it may not be altered or amended in any way whatsoever except in
            writing and
            signed by all of the Parties hereto.

           

          11. Confidentiality.
            During
            the term of this Agreement, each party will have access to certain confidential
            information of the other party, including but not limited to trade secrets,
            financial data and projections, data regarding suppliers and customers
            operations methods and practices, and marketing and sales approaches
            (the
            "Confidential Information"). Each party acknowledges that all Confidential
            Information which may be disclosed to it by the other party or which
            may come to
            the attention of such party (or its agents) in connection with the provision
            of
            services under this Agreement is confidential. Accordingly, each party
            agrees
            not to disclose such Confidential Information (or suffer its agents to
            disclose
            such Confidential Information) unless required to do so by law or unless
            such
            party has first obtained the prior written consent of the other party.
            Each
            party further agrees not to use such Confidential Information (or suffer
            its
            agents to use such Confidential Information) in any manner except in
            connection
            with the performance of the services described in this Agreement. Each
            party
            further agrees to take reasonable steps necessary to insure that no disclosure
            or use prohibited by this paragraph is made, including, without limitation,
            those steps, which a reasonable person would take to protect his own
            information, data or other tangible or intangible property, which he
            regards as
            proprietary or confidential. Upon breach of this paragraph, the non-breaching
            party shall be entitled to injunctive relief, either pending litigation
            or
            permanently or both, against the breaching party, since the Parties acknowledge
            that a remedy at law would be inadequate and insufficient. In addition,
            the
            non-breaching party shall be entitled to recover such damages as it may
            demonstrate as sustained by reason of such breach. Nothing contained
            herein or
            in any other provision of this Agreement shall be construed as limiting
            a
            party's remedies under this paragraph in any manner.

           

          12. Delegation
            and Assignment.
            Except
            as expressly provided herein, no party shall delegate its duties or assign
            its
            rights hereunder in whole or in part, without the prior written consent
            of the
            other.

           

          13. Notices.
            All
            notices required to be given hereunder shall be in writing and shall
            be deemed
            given if delivered in person, transmitted by electronic facsimile, or
            deposited
            in United States first class mail, postage prepaid, certified or registered
            mail, return receipt requested, addressed to the Parties as set forth
            opposite
            their respective names below. Notice shall be deemed given on the date
            it is
            personally delivered, on the date it is transmitted by electronic facsimile,
            or
            on the date it is deposited in the mail, as indicated by the United States
            postmark thereon, in accordance with the foregoing. Any party may change
            the
            address or facsimile number at which to send notices by notifying the
            other
            party of such change of address or facsimile number in writing in accordance
            with the foregoing.

           

          
            
              
              

            

            
              Exhibit
                C-5-

              
                

              

            

            
              
              

              Table
                of Contents

            

          

          14. Further
            Assurances.
            Each of
            the Parties hereto shall execute and deliver all documents, papers and
            instruments necessary or convenient to carry out the terms of this
            Agreement.

           

          15. Entire
            Agreement.
            The
            Parties acknowledge and agree that this document, together with all other
            documents expressly referred to herein, constitutes the entire agreement
            between
            the Parties. Except as set forth in such other documents (including the
            exhibits
            and schedules thereto and ancillary agreements referenced therein), no
            representatives, promises, conditions or warranties with reference to
            the
            execution of this document have been made or entered into between the
            Parties
            hereto.

           

          16. Waiver
            of Provisions.
            Any
            waiver of any term and condition hereof must be in writing and signed
            by the
            party giving the waiver. A waiver of any of the terms and conditions
            hereof
            shall not be construed as a waiver of any other terms and conditions
            hereof.

           

          17. Captions.
            Any
            captions to or headings of the articles, sections, subsections, paragraphs
            or
            subparagraphs of this Agreement are solely for the convenience of the
            Parties,
            are not a part of this Agreement, and shall not be used for the interpretation
            or determination of validity of this Agreement or any provision
            hereof.

           

          18. Severability.
            The
            invalidation of any clause or provision of this Agreement shall have
            no effect
            on the remaining provisions of this Agreement, and as such, the remaining
            Agreement shall remain in full force and effect, and be interpreted as
            consistently as possible.

           

          19. Authority.
            The
            Parties hereto represent and warrant that all necessary corporate action
            required to approve and authorize the execution of this Agreement has
            been
            accomplished and that this Agreement is a legally binding obligation
            of the
            Parties.

           

          20. Counterparts/Facsimile
            Delivery.
            This
            Agreement and any subsequent amendments may be executed in one or more
            counterparts, each of which shall be deemed to be an original, but all
            of which
            shall constitute one and the same agreement. This Agreement and any subsequent
            amendments may be signed and delivered by facsimile transmission, which
            delivery
            shall have the same binding effect as delivery of the document containing
            the
            original signature. At the request of any party, any document delivered
            by
            facsimile signature shall be followed by or re-executed by all Parties
            in an
            original form, provided that the failure of any party to do so will not
            invalidate the signature delivered by facsimile transmission.

           

          21. Mississippi
            Law.
            This
            Agreement shall be governed by the laws of the state of
            Mississippi.

           

          
            
              
              

            

            
              Exhibit
                C-6-

              
                

              

            

            
              
              

              Table
                of Contents

            

          

          IN
            WITNESS WHEREOF, the Parties have executed this Agreement effective the
            day and
            year first above written.

          
            	 Xfone
                    USA, Inc.
	 	 	 
	/s/ Guy
                    Nissenson	 	 	/s/ Randall
                    Wade                                                 
                    /s/James Tricou
	
                    

                  	 	 	
                    

                  
	Guy
                    Nissenson
President

                    Address: Britannia
                      House

                                    
                      960
                      High Road

                                    
                      London, N129RY

                                   
                      United Kingdom

                    Telephone: +44
                      208-446-9494

                    Facsimile: +44
                      208-446-7010

                    Email: guy@xfone.com

                      with
                        copy to:

                       

                      The
                        Oberon Group, LLC

                      79
                        Madison Ave., 6th Floor

                      New
                        York, NY 10016

                      Attention: Adam
                        Breslawsky

                      Facsimile: 212-447-7212

                      Email: adam@oberongroup.com

                       

                      and

                       

                      Watkins
                        Ludlam Winter & Stennis, P.A.

                      633
                        North State Street (39202)

                      P.
                        O. Box 427

                      Jackson,
                        MS 39205-0427

                      Attention: Gina
                        M. Jacobs

                      Telephone: 601-949-4705

                      Facsimile: 601-949-4804

                      Email: gjacobs@watkinsludlam.com

                      I-55
                        Telecommunications, L.L.C.

                    

                  	 	 	
                          
                      Randall
                      Wade                                                       James
                      Tricou

                     

                    New
                      Orleans, LA   

                    Telephone: 504-___-____

                    Facsimile: 504-___-____

                    Email:    

                  

          

               

        

        
          
            
            

          

          
            Exhibit
              C-7-

            
              

            

          

          
            
            

            Table
              of Contents

          

        

        EXHIBIT
"D"

         

        FORM
          OF RELEASE 

        
          RELEASE

           

          This
            Release (this "Release") is entered into by the undersigned officers
            and
            directors of the Company (as defined herein) (the "Officers and Directors"),
            effective as of the _____ day of _______________, 2005 in connection
            with the
            Transaction contemplated by the terms and provisions of that certain
            Agreement
            and Plan of Merger dated August ___, 2005 (the "Merger Agreement") I-55
            Telecommunications, L.L.C., a Louisiana limited liability company (the
            "Company"), XFone, Inc., a Nevada corporation (the "Parent"), XFone USA,
            Inc., a
            Mississippi corporation (the "Subsidiary") and Randall Wade James
            Tricou.

           

          WHEREAS,
            execution of this Release by each of the Officers and Directors of the
            Company
            is a condition precedent to the Closing of the Merger contemplated by
            the
            Agreement and Plan of Merger and as such is a material inducement to
            the Parent
            and the Subsidiary in order for them to enter into the Merger;
            and

           

          WHEREAS,
            the Parent and the Subsidiary would not have closed the Merger without
            the
            execution of this Release by each and everyone of the undersigned Officers
            and
            Directors; and

           

          WHEREAS,
            each Officer and Director has agreed to execute this
            Release.

           

          NOW,
            THEREFORE, as additional consideration for the Merger and the covenants,
            representations, agreements and undertakings contained herein and other
            good and
            valuable consideration, the receipt and sufficiency of all of which is
            hereby
            acknowledged and intending to be legally bound, the undersigned parties
            do
            hereby severally agree as follows:

           

          1.  Recitals.
            Each of
            the above referenced recitals is true and correct and incorporated into
            this
            Release by this reference.

           

          2.  Merger
            Agreement.
            Each of
            the undersigned hereby acknowledges receipt of a copy of the Merger Agreement
            and any amendments thereto. In the event of a conflict between the terms
            of this
            Release and the terms of the Merger Agreement, the terms and provisions
            of this
            Release shall govern. All capitalized terms which are not otherwise defined
            in
            this Release shall have the respective meaning ascribed to such terms
            in the
            Merger Agreement.

           

          3.  Release
            by Each Officer and Director.
            Each
            Officer and Director hereby severally releases and forever discharges
            the
            Company, and each of its respective officers, directors, partners, shareholders,
            members, employees and all of their successors and assigns (collectively,
            "
            Releasees") of and from any and all claims, causes or rights of action,
            demands
            and damages of every kind and nature which such Officer or Director may
            now
            have, whether known or unknown, anticipated or unanticipated and whether
            accrued
            or hereafter to accrue, against Releasees, caused by or arising out of
            or in any
            way related to the following: (i) the business, affairs, actions or omissions
            of
            the Company and/or the Officers or Directors or any other employee or
            independent contractor of the Company through the date of Closing under
            the
            Merger Agreement; (ii) such Officer's or Director's direct or beneficial
            ownership or interests in the Company, if any; (iii) such Officer's or
            Director's status as an Officer or Director or shareholder of the Company;
            (iv)
            any action or omission by any of the Officers or Directors of the Company,
            or
            any other employees or independent contractors of the Company through
            the date
            of Closing under the Merger Agreement; (v) any claims of such Officer
            or
            Director arising out of or relating in any manner to any prior business
            relationship or service of or with respect to the Company through the
            date of
            Closing under the Merger Agreement, and (vi) any and all agreements,
            events or
            occurrences by, between or among any Officer or Director and/or the Company
            prior to Closing or relating in any manner to this Merger, including,
            without
            limitation, any tax analysis with respect to the transactions contemplated
            by
            the Merger Agreement.

           

          
            
              
              

            

            
              Exhibit
                D-1-

              
                

              

            

            
              
              

              Table
                of Contents

            

          

          4.  Compromise.
            Each
            Officer and Director agrees that this settlement is a compromise of doubtful
            and
            disputed claims through the date of Closing under the Merger Agreement,
            and that
            the agreement to pay the consideration recited herein is not to be construed
            as
            an admission of any liability whatsoever by Releasees and that Releasees
            expressly deny any such liability.

           

          5.  Scope
            of Release.
            Each
            Officer and Director agrees that the consideration for this release was
            paid to
            secure full, complete, and final discharge of Releasees from any and
            all claims,
            demands, actions, or causes of action that any of the undersigned Officers
            or
            Directors of the Company may have against the Releasees as of the date
            hereof
            with respect to matters hereby released as set forth in paragraph 3 hereof,
            and
            each of the Officers or Directors of the Company hereby agree that such
            claims,
            demands, actions, or causes of action are wholly and forever satisfied
            and
            extinguished.

           

          6.  Covenant
            Not to Sue.
            Each
            Officer and Director will forever refrain and desist from instituting,
            prosecuting, or asserting against Releasees, or any of them, any further
            claim,
            demand, action, cause of action or suit of any kind or nature, either
            directly
            or indirectly, on account of matters hereby releases as set forth in
            paragraph 3
            hereof.

           

          7.  No
            Prior Assignment.
            Each
            Officer and Director specifically acknowledges, covenants, represents
            and
            warrants that there has been no assignment of any right or claim released
            hereby
            and that each Officer and Director will, severally, as with respect to
            actions
            by any such Officer and Director defend and hold harmless Releasees with
            respect
            to any matters hereby released.

           

          8.  Authority.
            Each
            Officer and Director represents and warrants that each are fully competent
            and
            authorized to execute this Release, and that upon execution this Release
            will be
            valid and binding upon each of them. Each Officer and Director represents
            and
            warrants that the undersigned constitute all of the Directors and Officers
            of
            the Company. Releasees represent and warrant that they are fully competent
            and
            authorized to execute this Release, and that upon execution this Release
            will be
            valid and binding upon each of them.

           

          9.  Acknowledgment.
            Each
            Officer and Director represents and warrants that the terms of this Release
            have
            been read, voluntarily accepted, understood by each such Officer and
            Director or
            explained to each such Officer and Director by its attorney(s), and agreed
            to
            and approved by its attorney(s). Each Officer and Director further represents
            and warrants that it has relied upon its own judgment, knowledge and
            belief as
            to the nature and extent of any damages which may have been suffered
            or
            sustained, or may be sustained in the future, with regard to the items
            released
            hereby under paragraph 3 hereof.

           

          10.  Entire
            Agreement.
            This
            Release constitutes the entire agreement between the parties with respect
            to the
            releases contemplated hereby. All prior to or contemporaneous agreements,
            understandings, representations, warranties and statements, oral or written
            are
            hereby superceded. Any alterations or additions shall be effective only
            if
            reduced to writing, dated and signed by the party against whom the enforcement
            thereof is or may be sought.

           

          11.  Waiver.
            No
            waiver of a breach of any of the terms, covenants or conditions of this
            Release
            by any party shall be construed or held to be a waiver of any succeeding
            or
            preceding breach of the same or any other term, covenant or condition
            herein
            contained. No waiver of any default by any party hereunder shall be implied
            from
            any omissions by either party to take any action on account of such default.
            If
            such default persists or is repeated, and no express waiver shall affect
            a
            default other than as specified in such waiver.

           

          12.  Severability.
            If any
            term, provision, covenant or condition of this Release is held to be
            invalid,
            void or otherwise unenforceable to any extent by any court of competent
            jurisdiction, the remainder of this Release shall not be affected thereby,
            and
            each term, provision, covenant or condition of this Release shall be
            valid and
            enforceable to the fullest extent permitted by law.

           

          
            
              
              

            

            
              Exhibit
                D-2-

              
                

              

            

            
              
              

              Table
                of Contents

            

          

          13.  Successors.
            Subject
            to the restriction on assignment provided herein, all terms of this Release
            shall be binding upon, inure to the benefit of, and be enforceable by
            the
            parties hereto and their respective heirs, legal representatives, successors
            and
            assigns.

           

          14.  Assignment.
            No
            party hereto shall assign their respective rights, obligations or interest
            under
            this Release in any manner.

           

          15.  Headings.
            The
            captions and paragraph headings used in this Release are inserted for
            convenience of reference only and are not intended to define, limit or
            affect
            the interpretation or construction of any term or provision
            hereof.

           

          16.  Counterparts.
            This
            Release may be executed in multiple copies, each of which shall be deemed
            an
            original, but all of which shall constitute one Agreement binding on
            all
            parties.

           

          17.  Facsimile
            Signatures.
            In
            order to expedite the Merger contemplated herein, telecopied signatures
            may be
            used in place of original signatures on this Release. All parties hereto
            intend
            to be bound by the signatures on the telecopied document, are aware that
            other
            parties will rely on the telecopied signatures, and hereby waive any
            and all
            defenses to the enforcement of the terms of this Release based on the
            form of
            signature.

           

          18.  Governing
            Law.
            This
            Release shall be governed, construed and enforced in accordance with
            the laws of
            the State of Louisiana.

           

          19.  Effective
            Date.
            The
            terms and provisions of this Release shall be effective upon Closing
            of the
            Transaction contemplated by the Merger Agreement.

           

          IN
            WITNESS WHEREOF, each Officer and Director set forth below has executed
            this
            Release as of the Effective Date.

           

          
            	
                    DIRECTORS:

                  	
                    OFFICERS:

                  

          

           

          
            	
                    Randall
                      Wade James Tricou

                  	
                    Randall
                      Wade James Tricou,
                      President

                  

          

           

           

           

           

        
          
            
            

          

          
            Exhibit
              D-3-

            
              

            

          

          
            
            

            Table
              of Contents

          

        

        EXHIBIT
          "E"

         

        Restricted
          Area

         

        Louisiana

        

        Acadia
          Parish, Allen Parish, Ascension Parish, Assumption Parish, Avoyelles Parish,
          Beauregard Parish, Bienville Parish, Bossier Parish, Caddo Parish, Calcasieu
          Parish, Caldwell Parish, Cameron Parish, Catahoula Parish, Claiborne Parish,
          Concordia Parish, De Soto Parish, East Baton Rouge Parish, East Carroll
          Parish,
          East Feliciana Parish, Evangeline Parish, Franklin Parish, Grant Parish,
          Iberia
          Parish, Iberville Parish, Jackson Parish, Jefferson Parish, Jefferson Davis
          Parish, La Salle Parish, Lafayette Parish, Lafourche Parish, Lincoln Parish,
          Livingston Parish, Madison Parish, Morehouse Parish, Natchitoches Parish,
          Orleans Parish, Ouachita Parish, Plaquemines Parish, Pointe Coupee Parish,
          Rapides Parish, Red River Parish, Richland Parish, Sabine Parish, St. Bernard
          Parish, St. Charles Parish, St. Helena Parish, St. James Parish, St. John
          the
          Baptist Parish, St. Landry Parish, St. Martin Parish, St. Mary Parish,
          St.
          Tammany Parish, Tangipahoa Parish, Tensas Parish, Terrebonne Parish, Union
          Parish, Vermilion Parish, Vernon Parish, Washington Parish, Webster Parish,
          West
          Baton Rouge Parish, West Carroll Parish, West Feliciana Parish, Winn
          Parish

        

        Mississippi

        

        Adams
          County, Alcorn County, Amite County, Attala County, Benton County, Bolivar
          County, Calhoun County, Carroll County, Chickasaw County, Choctaw County,
          Claiborne County, Clarke County, Clay County, Coahoma County, Copiah County,
          Covington County, DeSoto County, Forrest County, Franklin County, George
          County,
          Greene County, Grenada County, Hancock County, Harrison County, Hinds County,
          Holmes County, Humphreys County, Issaquena County, Itawamba County, Jackson
          County, Jasper County, Jefferson County, Jefferson Davis County, Jones
          County,
          Kemper County, Lafayette County, Lamar County, Lauderdale County, Lawrence
          County, Leake County, Lee County, Leflore County, Lincoln County, Lowndes
          County, Madison County, Marion County, Marshall County, Monroe County,
          Montgomery County, Neshoba County, Newton County, Noxubee County, Oktibbeha
          County, Panola County, Pearl River County, Perry County, Pike County, Pontotoc
          County, Prentiss County, Quitman County, Rankin County, Scott County, Sharkey
          County, Simpson County, Smith County, Stone County, Sunflower County,
          Tallahatchie County, Tate County, Tippah County, Tishomingo County, Tunica
          County, Union County, Walthall County, Warren County, Washington County,
          Wayne
          County, Webster County, Wilkinson County, Winston County, Yalobusha County,
          Yazoo County

        

        
          
            
              Exhibit
                E-1-

            

            
              
              

              
                

              

            

            
              
              

              Table
                of
                ContentsExhibit 4.1

NUMBER                                                                     UNITS

 U-

  SEE REVERSE FOR
CERTAIN DEFINITIONS
                         ALPHA SECURITY GROUP CORPORATION

                                                            CUSIP ______________

                               UNITS CONSISTING OF
                          ONE SHARE OF COMMON STOCK AND
                ONE WARRANT TO PURCHASE ONE SHARE OF COMMON STOCK

THIS CERTIFIES THAT                                           is the
owner
                                                                          Units.

Each Unit (collectively, the "Units") consists of one (1) share of common stock,
par value $.0001 per share ("Common Stock"), of Alpha Security Group
Corporation, a Delaware corporation (the "Company"), and one warrant
(collectively, the "Warrants"). Each Warrant entitles the holder to purchase one
(1) share of Common Stock for $6.00 per share (subject to adjustment). Each
Warrant will become exercisable on the later of (i)               , 2006 or (ii)
the earlier of the Company's completion of a merger, capital stock exchange,
asset acquisition or other similar business combination or the distribution of
funds held by that certain trust account for the benefit of the Company's public
stockholders, and will expire unless exercised before 5:00 p.m., New York City
Time, on             , 2009, or earlier upon redemption (the "Expiration Date").
The Common Stock and Warrants comprising the Units represented by this
certificate are not transferable separately prior to , 2005, subject to earlier
separation in the discretion of Maxim Group LLC. The terms of the Warrants are
governed by a Warrant Agreement, dated as of               , 2005, between the
Company and American Stock Transfer & Trust Company, as Warrant Agent, and are
subject to the terms and provisions contained therein, all of which terms and
provisions the holder of this certificate consents to by acceptance hereof.
Copies of the Warrant Agreement are on file at the office of the Warrant Agent
at 59 Maiden Lane, Plaza Level, New York, New York 10038, and are available to
any Warrant holder on written request and without cost.

This certificate is not valid unless countersigned by the Transfer Agent and
Registrar of the Company. Witness the facsimile seal of the Company and the
facsimile signature of its duly authorized officers.

By                       ALPHA SECURITY GROUP CORPORATION

                                 CORPORATE
                                  DELAWARE
-------------------------                       --------------------------------
    Steven M. Wasserman,           SEAL         Steven M. Wasserman,
      Chief Executive Officer                   Secretary
      and President
                                   2005

                      ALPHA SECURITY GROUP CORPORATION

<PAGE>

The Company will furnish without charge to each stockholder who so requests, a
statement of the powers, designations, preferences and relative, participating,
optional or other special rights of each class of stock or series thereof of the
Company and the qualifications, limitations, or restrictions of such preferences
and/or rights.

The following abbreviations, when used in the inscription on the face of this
certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:

<TABLE>
----------------------------------------------------------------------------------------------------------------------------------
<S>                       <C>                                                  <C>                            <C>
TEN COM -                 as tenants in common                                 UNIF GIFT MIN ACT -            Custodian

TEN ENT -                 as tenants by the entireties                         (Cust)                  (Minor)
JT TEN -                  as joint tenants with right of survivorship          under Uniform Gifts to Minors Act
                          and not as tenants in common
                                                                               -----------------------
                                                                                      (State)

----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

Additional Abbreviations may also be used though not in the above list.

For value received,                        hereby sell, assign and transfer unto

PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE

   ----------------------------------------------------------------------------
   (PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)

                                                                          Units
   ----------------------------------------------------------------------

represented by the within Certificate, and do hereby irrevocably constitute and
appoint

                                                        Attorney to transfer the
said Units on the books of the within named Company will full
power of substitution in the premises.

 Dated
        ---------------

          ----------------------------------------------------------------------
          NOTICE: The signature to this assignment must correspond with
                  the name as written upon the face of the certificate in every
                  particular, without alteration or enlargement or any change
                  whatever.

Signature(s) Guaranteed:

--------------------------------------------------------------------------------
THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION
(BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH
MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM, PURSUANT TO
S.E.C. RULE 17Ad-15).

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00090-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00090-of-00352.parquet"}]]