MANAGEMENT AGREEMENT

THIS MANAGEMENT AGREEMENT is effective as of the 12th day of October, 2005 and is by and between I-55 Telecommunications, L.L.C., a Louisiana limited liability company (“I-55 Telecom”) and XFone USA, Inc., a Mississippi corporation ("XFone USA" or "Manager") (referred to collectively hereinafter as "the Parties").

WHEREAS, pursuant to the terms of that certain Agreement and Plan of Merger dated as of August 26, 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. Manager agrees to perform all of its obligations under this Agreement in good faith. 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.

(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 the ordinary course of business 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.

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 aggregate 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.

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 March 1, 2006