Sample Business Contracts

VoIP Agreement - Pakistan Communication Co. Ltd and M/s Fusion Telecommunications International Inc.

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PAKISTAN                                                                 100 RS.

                               [GRAPHIC OMITTED]

                         No: - PSP/TECH-069/VoIP/Fusion







                               THE TERMINATION OF


                                FROM USA & EUROPE




                                TABLE OF CONTENTS

1.             DEFINITIONS                                                     3
2.             THE AGREEMENT DOCUMENTS                                         5
3.             ENTIRE AGREEMENT                                                5
4.             DURATION OF AGREEMENT                                           5
5.             SERVICE COMMENCEMENT DATE                                       5
6.             OBLIGATION OF THE CONTRACTOR                                    5
7.             APPROVAL OF EQUIPMENT                                           7
8.             ACCESS TO THE VoIP PLATFORM                                     7
9.             TECHNICAL ARRANGEMENTS WITH PTCL NETWORK                        7
10.            REPORTING OBLIGATIONS OF CONTRACTOR                             7
11.            BILLING & PAYMENT                                               8
12.            CHARGES AND DEPOSITS                                            9
13.            PROGRAMME OF COMMITMENTS (MILESTONE)                           10
14.            CURRENCY OF PAYMENT                                            10
15.            SUBCONTRACTORS                                                 10
16.            REVIEW                                                         10
17.            FORCE MAJEURE                                                  11
18.            TERNS NATION                                                   12
19.            OBLIGATION AT TERMINATION                                      14
20.            CONTRACTOR TO COMPLY WITH APPLICABLE LAW                       14
21.            FAIRNESS AND GOOD FAITH                                        14
22.            SETTLEMENT OF DISPUTES & ARBITRATION                           15
23.            CONFIDENTIALITY                                                1S
24.            INDEMNITIES                                                    16
25.            AFFIRMATION                                                    16
26.            APPLICABLE LAWS                                                16
27.            RULES OF CONSTRUCTION                                          16
28.            NOTICES                                                        17
29             ADDITIONAL                                                     17


Schedule - I   IP Telephony Solutions Analysis                                20
Schedule - II  Platform Connectivity Topology Diagram                         24
Schedule - III Accounting and Method of Settlement                            25
Schedule - IV  List of Incumbent Carriers in USA & Europe                     26
Schedule - V   Programme of Commitments (Milestone)                           27



This Agreement is made in duplicate and is executed at Islamabad on this 1st Day
of September 2004.


Pakistan  Telecommunication  Company Ltd., a public limited company incorporated
under  the  Companies  Ordinance  1984,  with  its  registered  office  at  PTCL
headquarters,   G-8/4,  Islamabad  (hereinafter  referred  to  as  "PTCL"  which
expression  shall,  where the context so permits,  be deemed to mean and include
its   successors-in-interest   and   assigns),   through  its  duly   authorised
representative, OF THE ONE PART


M/s Fusion  Telecommunications  International,  Inc., a Delaware USA corporation
with its  registered  office at 420 Lexington  Avenue,  Suite 518, New York, New
York 10170,USA  (hereinafter  referred to as the  "Contractor"  which expression
shall,  where  the  context  so  permits,  be  deemed  to mean and  include  its
successor-in-interest and assigns),  through its duly authorised representative,

WHEREAS  PTCL  is  a  Telecommunication   carrier  duly  authorised  to  provide
telecommunication  services  in Pakistan  under the  license  granted by PTA and
Pakistan  Telecommunication  (Re-Organization  Act,  1996 and PTCL is not barred
from executing and performing this Agreement under the license.;

AND WHEREAS PTCL proposed on non-exclusive  basis to arrange for the termination
of additional incoming international Traffic,  focusing on channellising illegal
traffic,  from  non-Incumbent  Carriers  through Voice over IP (VoIP) from USA &
Europe into Pakistan;

WHEREAS the contractor, in pursuance of an Agreement No  PSP/TECH-069VoIP/Fusion
dated May 20, 2002 signed with PTCL,  procured  and install  entirely at its own
cost and expense for and or behalf of PTCL appropriate  equipment and facilities
as per  specifications  mentioned  in  respective  Clauses of that  Agreement at
premises  and at points  controlled  by PTCL to  terminate  the VoIP  traffic in
Pakistan  through  VoIP  gateway  at  Rawalpindi  to be  connected  with  PTCL's
respective gateway/DTE exchange from the USA & Europe.

AND WHEREAS the Contractor has agreed with PTCL that the VoIP Platform installed
at Rawalpindi by the Contractor shall be owned and operated by PTCL;

AND WHEREAS,  the said Agreement has expired and both the parties are willing to
extend the Agreement on the term and conditions hereinafter mentioned;

NOW THEREFORE in consideration  of the mutual covenants  hereinafter set out and
for  good  and  valuable   consideration,   the  adequacy  of  which  is  hereby
acknowledged, the Parties have agreed as under:


      Unless the context otherwise requires,  the following terms, wherever used
      in this Agreement, shall have the following meanings:

      (a)   "Act" means the Pakistan  Telecommunication  (Re-organisation)  Act,
            1996 (Act No. XVII of 1996).

      (b)   "Applicable Law" means the law of Pakistan including any instruments
            having the force of law in Pakistan;


      (c)   "Agreement"  means this  Agreement  between PTCL and the  Contractor
            along with the other  documents  forming  part of this  Agreement as
            described in Clause 2 hereof;

      (d)   "Telephone Service" means "telephone service" as defined in the Act;

      (e)   "VoIP" or "Voice over IP" means the  transmission of voice sent over
            the packet switched data communication protocol set of TCP/IP;

      (f)   "Customer"  means a person in the USA and/or Europe who makes a call
            or fax to Pakistan  and such call or fax is routed  through the VoIP
            Platform in accordance with this Agreement;

      (g)   "License" means the license issued by PTA to PTCL and any amendments

      (h)   "Party"  means  PTCL,  or the  Contractor,  as the case may be,  and
            "Parties" means both of them;

      (i)   "VoIP Platform" means the equipment, hardware/ software installed at
            PTCL  premises  at   Rawalpindi   and  connected  at  the  level  of
            gateway/DTE  exchange by the Contractor for and on behalf of PTCL to
            enable  international  incoming  calls to be terminated on any fixed
            line or  mobile  subscribers,  through  PTCL  Network,  anywhere  in
            Pakistan (using VoIP technology);

      (j)   "US Settlement Rate" means 50% of Total Accounting Rate (TAR), in US
            cents per minute,  agreed  between  Incumbent  Carriers and PTCL for
            termination of international traffic in Pakistan;

      (k)   "PTA" means the  Pakistan  Telecommunication  Authority  established
            under the Act;

      (l)   "Services"  means the work to be performed by and the services to be
            undertaken by the Contractor pursuant to this Agreement;

      (m)   "Effective Date" means the date of signing of both the parties.

      (n)   "Legal Traffic" means total incoming international voice/fax traffic
            passing  through  PTCL's  or  any  other  LDIs  Licensed  Operator's
            international  gateway  exchanges  and  terminated  on any  type  of
            telephone  subscribers  through  PTCL  or any  other  LDIs  Licensed
            Operator's network of gateway and local exchanges;

      (o)   "Illegal  Traffic" means  international  incoming  voice/fax traffic
            using  VoIP  or any  other  technology  terminating  on any  type of
            telephony  network,  bypassing  PTCL's  or any other  LDIs  Licensed
            Operator's  international  gateway  exchanges  through various means
            including  leaky PABX  (excluding VoIP traffic under this Agreement)
            and/or  any  other  bypass   mechanism   using  VoIP  or  any  other

      (p)   "Day" means a Day on which banks are open for business in USA and/or
            Pakistan,  as may be  relevant.  This  definition  relates  only  to
            payment obligations under this Agreement.

      (q)   "Terminated   Minutes,"  means  the  total  incoming   international
            voice/fax   traffic   terminated  at  PTCL's  gateway   exchange  at
            Rawalpindi routed through the VoIP Platform. For avoidance of doubt,
            Terminated   Minutes  shall  not  include   incoming   international
            voice/fax  traffic,  the  duration  of  which  is less  than 6 (six)

      (r)   "TAR" means Total Accounting Rate

      (s)   "Incumbent  Carriers"  means such  foreign  carriers of USA & Europe
            with whom PTCL has bilateral  agreements or arrangements  for direct
            international traffic as listed in Schedule IV;

      (t)   "Designated  Account"  means the bank account to be notified by PTCL
            to the Contractor on or before the Service Commencement Date or from
            time  to  time  thereafter,  in  which  the  Contractor  shall  make


      (u)   "Statement  of  Qualification  (SoQ)":  means the  statement  in the
            format  specified in the Proposal  Form  comprising  benchmarks  and
            requirements for eligibility of the party to enter into an agreement
            with  PTCL for  termination  of  additional  incoming  international
            traffic through VoIP.

      (v)   "USA" shall mean and  include  the United  States of America and all
            other countries bearing Country Code,"+1"

      (w)   "CDR" shall mean Call Data Record.

      (x)   "IPLC" shall mean International Private Leased Circuit.

      Other  terms not  defined in this  Section  will have the same  meaning as
      defined in the Act and, if not defined in the Act, as generally understood
      in the telecommunication industry.


      The  following  documents  form an integral and  substantive  part of this
      Agreement and, in the event of any inconsistencies between them; the order
      of  precedence  shall  (unless  expressly  stated to the  contrary)  be as

      (a)   Preamble and Recitals to this Agreement;

      (b)   Main body of this Agreement; and

      (c)   Schedules to this Agreement.

      (d)   Statement of Qualification

      (e)   Minutes of Meeting dated September 20, 2004

      (f)   Proposal of Contract

      (g)   Correspondence between PTCL & Contractor


      This Agreement and the Agreement Documents  aforementioned  constitute the
      entire  agreement  with  respect to the subject  matter  hereof and hereby
      cancels  and  supersedes  any  and/  or all  previous  or  contemporaneous
      agreements,  representations  or  understandings,  whether oral or written
      between  the  Parties  pertaining  to  the  subject  matter  hereof.  This
      Agreement  shall not be  modified  or amended  except by an  agreement  in
      writing signed by the Parties.


      This Agreement shall come into effect on the Effective Date for the period
      of one (1) year and same is renewable with mutual consent on the terms and
      conditions agreed between the parties.


      The Contractor undertakes and agrees that the VoIP Platform shall be fully
      functional  so as to  enable  Customers  to make  international  calls  to
      Pakistan using VoIP technology through the VoIP Platform in the manner and
      on the terms contemplated by this Agreement.


      6.1   The Services

            (a)   In case of  upgradation/modification  of the VoIP Platform the
                  Contractor agrees to procure,  install, test and commission at
                  entirely  its own cost and expense the  equipment  approved by
                  PTCL in the VoIP  Platform  Rawalpindi in PTCL premises as may
                  be mutually  agreed by the Parties in writing.  After  testing
                  and  commissioning  in to service  the  additional  equipment,
                  shall also be handed over to PTCL at no cost. For avoidance of
                  doubt it is clarified  that after the equipment is handed over
                  to PTCL, the Contractor  shall not under any  circumstances or
                  for any  reason  claim  return  of the  equipment,  its  cost,
                  damages etc, if the Agreement expires or is earlier terminated
                  under the terms hereof.



      In case of  upgradation/modification  of the VoIP  Platform  PTCL will not
      unreasonably  delay  processing of a request for approval of the equipment
      to be used in the  VoIP  Platform  from the  Contractor.  PTCL  shall  not
      unreasonably  withhold  approval of such equipment for use in the Services
      and will inform the  Contractor  of the reasons for not approving any such
      equipment. Any approval provided by PTCL shall not in any way impact on or
      derogate  from the  obligation  on the  Contractor to obtain all approvals
      required  under the laws of Pakistan in respect of the such  equipment and
      the installation  there of including any Type Approvals  required from the
      PTA. The  Contractor  shall submit to PTCL details of the  equipment to be
      used in the VoIP  Platform  within 7 (seven) Days of the  Effective  Date.
      PTCL shall within 7 (seven)  Days  thereafter  approve  such  equipment or
      suggest  changes  therein.  In the  event  PTCL does not  communicate  its
      decision as  aforesaid,  the details of such  equipment  submitted  by the
      Contractor shall be deemed acceptable.


      The number of circuits to be provided by PTCL will be based on the size of
      the VoIP  Platform and the traffic  analysis  and will be mutually  agreed
      between PTCL and the Contractor.  PTCL will provide the Contractor  access
      to the VoIP Platform within 60 (sixty) Days of the request  received under
      the Agreement.


      9.1   PTCL will provide the VoIP Platform,  an  interconnection  at the E1
            level   on   the   Rawalpindi   gateway    exchange/DTE   as   shown
            diagrammatically  in Schedule-II.  No special routing  requests from
            the Contractor will be entertained by PTCL.

      9.2   PTCL  and the  Contractor  will  mutually  agree to  prepare  demand
            analysis for the projected  traffic and the consequent sizing of the
            connectivity requirements of the Contractor for the VoIP Platform in
            Rawalpindi. This exercise will be conducted at least once a year but
            may be conducted  earlier or more  frequently  on mutual  agreement.
            PTCL will fully  cooperate  with the  Contractor in  finalizing  the
            connectivity  requirement  schedule and will not unreasonably  delay
            such an arrangement.

      9.3   PTCL  will  co-operate  with the  Contractor  and will  furnish  the
            Contractor with all relevant  information and data concerning  PTCL,
            which PTCL and the  Contractor  mutually  agree as  appropriate  for
            determining the  compatibility of interfacing its equipment with the
            PTCL network.


      10.1  The  Contractor  shall  submit to PTCL CDRs  generated in a platform
            installed in USA and Europe on a  fortnightly  basis  alongwith  the
            details particularly  elaborating the total number of CDRs and total
            number of minutes terminated. CDRs for the fast fortnight of a given
            month shall be  submitted  on or before the 21st of such month,  and
            the  CDRs for the  second  fortnight  in the  given  month  shall be
            submitted  on or  before  the  7th  of  the  following  month.  CDRs
            submitted  as aforesaid  will  include  number of calls and recorded
            Terminated  Minutes on a per originating and destination  basis, and
            shall be in the following format:

Date      A-Tel*      B-Tel     Start Time     End Time     End Date    Duration


* Note: Country Code will be a part of A-Tel.


      10.2  Notwithstanding  the  foregoing,   the  Contractor  shall  be  under
            obligation  to provide  the CDRs and other  details  relating to the
            CDRs for the such  period as and when it is required by PTCL for the
            reconciliation  purposes  in  accordance  with  the  above-mentioned


      The Contractor shall:

      i.    Keep  accurate  and  systematic  accounts  and records in respect of
            revenues  generated  from  sale  of VoIP  service  to  Customers  in
            accordance with internationally accepted accounting principles.  For
            avoidance  of doubt it is  clarified  that CDRs will be generated on
            per  second  basis,  however,  will  be  charged  on  the  basis  of
            cumulative minutes.  (e.g. if the total number of cumulative seconds
            in a billing period is 106,800,261, then the total number of minutes
            to be billed at the Termination Rate will be 1,780,004 minutes).

      ii(a) Submit CDRs generated in a platform  installed in USA/Europe to PTCL
            under  Clause 10 above.  Such CDRs  will be  compared  with  records
            created in the PTCL gateway/DTE exchanges.  PTCL will generate bills
            based  on  figures  at PTCL  gateway  exchanges.  However,  the CDRs
            supplied  by the  Contractor  must be in a formal  readable  by PTCL
            billing  centers.  Subject to provisions of sub clause (b) below, in
            case of any variation  between the Contractor's CDRs and the figures
            generated through CDRs of PTCL gateway exchanges/DTE/VoIP  Platform,
            the PTCL CDRs  figures  shall  (subject  to  paragraphs  (b) and (c)
            below) be  considered  as final and  conclusive  for the  purpose of
            billing  under this  "Agreement".  Amount so  determined  and billed
            shall be binding on the Contractor.

      (b)   In case of any discrepancy in CDR's  reconciliation  (where PTCL CDR
            shows more minutes terminated than the Contractor's CDR) up to 0.75%
            or less of the relevant CDR, the Contractor  shall not make the same
            a basis for dispute and shall pay the same. However,  the contractor
            will be given due opportunity to highlight any discrepancy in PTCL's
            CDR for correction and if, such  discrepancy is accepted by the PTCL
            the  contractor  shall be  entitled  for the  credit.  In case,  the
            discrepancy  exceeds the afore said figure of 0.75%,  the Contractor
            shall pay the  undisputed  amount  and the  parties  will  resort to
            mutual negotiations,  reconciliation and settlement for the disputed

      (c)   If the settlement is not arrived at amicably within four weeks,  the
            dispute may be resolved  through the dispute  resolution  mechanisms
            provided in this agreement or as may otherwise be agreed between the

      iii.  be billed  fortnightly  for the number of minutes  multiplied by the
            agreed  rate  which is US$  0.1458 (US cents  fourteen  point  fifty
            eight) per minute at present. The bill will be e-mailed and faxed to
            the  Contractor or its  designated  agent,  which shall be the valid
            document for the purpose of payments.  However,  for the purposes of
            record and fulfillment of other contractual  requirements,  the hard
            copies of such invoices shall later on be provided to the contractor
            by the PTCL.

      iv.   solely be  responsible  for the  payment  within  seven  days of the
            confirmed  issuance/transmission  of the invoice  through e-mail and
            fax. The date and time for the payment shall be calculated  from the
            date of issuance/transmission of such invoices. For avoidance of any
            doubt it is hereby clarified that only the date of credit of payment
            into the "Designated Account" shall be considered as payment receipt


      v.    solely be responsible  for the temporary  termination of service for
            the nonpayment of invoices by the due date. However,  such temporary
            termination shall lead to termination of the Agreement in accordance
            with Schedule-III of the Agreement.


      12.1  Bank Guarantee for Billing

            12.1.1  The  Contractor  shall  within  15  (fifteen)  days  of  the
                    Effective Date of the "Agreement" provide  Unconditional and
                    irrevocable Bank guarantee in the format as provided by PTCL
                    to  secure  amounts  due  from  the  Contractor  under  this
                    Agreement in respect of calls terminating through use of the
                    VoIP  Platform.  The  Bank  guarantee  shall be based on the
                    PTCL's  billing  estimate for 30 (Thirty) Days following the
                    effective  Date and the minimum amount of the Bank guarantee
                    shall be based on 7 (Seven) million  Terminated  Minutes per
                    month per site.  In case the  Terminated  Minutes  per month
                    increase above 7 (seven)  million.  the bank guarantee shall
                    be increased PRO RATA. The bank guarantee will be revised in
                    accordance  with the procedure laid down in clause-12 of the
                    "Agreement"  and the  amount  of  bank  guarantee  shall  be
                    maintained by the  contractor  until the  termination of the
                    "Agreement"   and   thereafter   till  the  full  and  final
                    settlement  of its amounts  due to PTCL.  In the event there
                    are no amounts due to PTCL from the Contractor,  the balance
                    of the bank guarantee shall be refunded. No interest, profit
                    or other return  shall  accrue on the bank  guarantee to the
                    Contractor.  Whenever  traffic exceeds seven million minutes
                    in a  calendar  month,  PTCL will  issue  the  notice to the
                    contactor for enhancing the bank guarantee  amount,  and the
                    Contractor  shall  within 7  (seven)  Days  revise  the bank
                    guarantee.  In case  Contractor  fails  to  revise  the bank
                    guarantee, PTCL may at its sole discretion and without prior
                    notice to the Contractor  terminate  this Agreement  without
                    prejudice  to any  other  interest  or  claim  that may have
                    accrued in favour of PTCL or to which PTCL may in the future
                    be entitled to under this Agreement.

      12.2  The Contractor  shall make all due payments under this Agreement (as
            per relevant  Clauses/Schedules) in PTCL's Designated account, which
            will not be subject to any deductions, counter-claims or set-off.

      12.3  PTCL  reserves  the right at any time to require the  Contractor  to
            provide an  additional  security  deposit,  or  irrevocable  standby
            letter of credit or other form of security  acceptable  to PTCL,  in
            case of the Contractor's unsatisfactory financial condition, payment
            history or credit check is or becomes  unacceptable  to PTCL. In all
            such cases, the Contractor will be given 15 (fifteen) Days notice to
            remedy the situation to the  satisfaction of PTCL. If the contractor
            does not agree  with the  demand of PTCL then  either  party has the
            right to terminate the contract effective immediately.


            PTCL will not impose penalty if contractor  terminates  less than 03
            (three) million minutes per month through a VoIP Platform.  However,
            PTCL  shall  have  the  right  to  terminate  the  Agreement  if the
            Contractor  fails to terminate less than 03 (three)  million minutes
            per month for consecutive three months.



            PTCL shall give  discount  of 15% upto  maximum 07 (M)  minutes  per
            month per site a U.S.  Settlement  rate The  maximum  traffic  limit
            would be 07 (M)/ per month per site.  Exceeding  the traffic  limits
            from 07 to 10 million only 10 % discount will be a applied and above
            10 million minutes per month no discount shall be applicable.


            The VoIP rate shall be  reviewed  on  quarterly  basis and  discount
            shall be considered in the perspective of prevailing APC rate.


      13.1  Notwithstanding   any  thing   contained  in  the   Agreement,   the
            commitments for the  commencement of service shall be carried out in
            accordance  with  the  programme  of  commitments   (Milestones)  as
            stipulated in Schedule V.

      13.2  If, after the Date of execution of the Agreement, either party shall
            have been  delayed  or impeded  by any act or  omission  of the said
            party or any  circumstances  beyond the  reasonable  control of that
            party, in that event the subsequent  milestones shall be extended by
            the period of such delay.

      13.3  Notwithstanding  any thing  contained  in the  Agreement  other than
            clause 13.2, if the Contractor  fails to complete the commitments by
            the  completion  Dates in  accordance  with the Schedule V, the PTCL
            shall have the right to terminate  the  Agreement  by returning  the
            Bank  Guarantee to  Contractor  and retaining the equipment by PTCL,
            provided that the delay is more than four weeks.


      All  payments  by the  Contractor  under this  Agreement  except  Proposal
      Security shall be made to the Designated Account in US Dollars.


      15.1  The Contractor  shall not engage any  subcontractor  in Pakistan for
            the  performance  of any of the Services  without the prior  written
            approval  of  PTCL  including  the  terms  of such  engagement.  The
            Contractor  shall  provide to PTCL such details as PTCL may request.
            The  Contractor  may not  terminate  or amend terms of the  approved
            subcontractor without prior written approval of PTCL.

      15.2  The  appointment  of  any   subcontractor   shall  not  relieve  the
            Contractor from any liability or obligation under this Agreement.

16.   REVIEW

      16.1  Either  Party may seek to amend  this  Agreement  by  serving on the
            other a review notice if:

            (a)   the License is  materially  modified  (whether by amendment or
                  replacement)   to  the  extent  that  such   modification   or
                  replacement  directly or  indirectly  affects the provision of
                  the Services; or


            (b)   a material change occurs in the law or regulations  (including
                  codes of  practice  whether  or not  having  the force of law)
                  governing telecommunications in Pakistan, or

            (c)   a  material  change  (including   enforcement  action  by  any
                  regulatory authority) occurs which affects or reasonably could
                  be expected to affect he commercial or technical basis of this

      16.2  A review notice shall set out in reasonable details the issues to be
            discussed between the Parties.

      16.3  On the  service of a review  notice,  the  Parties  shall  forthwith
            negotiate in good faith,  the matters to be resolved  with a view to
            agreeing the relevant amendments to this Agreement.

      16.4  If the Parties fail to reach  agreement  on the subject  matter of a
            review  notice  within 3 (three)  months from the date of service of
            such review notice,  either Party may at its option after the expiry
            of  the   aforementioned  3  (three)  month  period  terminate  this
            Agreement without any further obligation or liability.

      16.5  If either  Party is  required by  applicable  law or  regulation  to
            modify or  discontinue  the Services or any part thereof then either
            Party  reserves the right to do so and will notify the other as soon
            as  possible  of any such  modification  which  shall  forthwith  be
            binding on the Parties and neither will have any further  obligation
            or liability to the other in respect of such modification.  However,
            if these modifications are materially detrimental to the other Party
            then that other Party can terminate this Agreement without liability
            by providing one month's notice in writing to the first party.


      For the  purposes  of the  Agreement,  "Force  Majeure"  means an event or
      circumstance  which is beyond the reasonable control of a Party, and which
      makes a  Party's  performance  of its  obligations  under  this  Agreement
      impossible,  and includes, but is not limited to, Acts of God, war, riots,
      civil disorder, earthquake, fire, explosion, storm, flood or other adverse
      weather conditions, strikes, lookouts or other industrial action.,

      17.1  Force Majeure shall not include:

            17 1.1  an event,  which is caused  by the  negligence  or   willful
                    action of a Party or its subcontractor;

            17 1.2  an  event  which  a  diligent  Party could  reasonably  have
                    been expected to;

                        (i)   have taken into account as at the Effective  Date,

                        (ii)  have avoided or overcome in the course of carrying
                              out its obligations under this Agreement.

      17.2  Force   Majeure  shall  not  include   insufficiency   of  funds  or
            circumstances arising from a failure to make any payment required by
            this Agreement.

      17.3  The failure of a Party to fulfill any of its obligations  under this
            Agreement  shall not be  considered  to be a breach of, or a default
            under,  this Agreement insofar as the inability arises from an event
            of Force Majeure, provided that the Party affected by that event has
            taken reasonable precautions, due care and attempted to put in place
            reasonable  alternative   arrangement  all  with  the  objective  of
            carrying out the terms of this Agreement without delay.


      17.4  Measures to be Taken

            A party  affected  by an  event  of  Force  Majeure  shall  take all
            reasonable   measures  to  remove  its   inability  to  fulfill  its
            obligations  under this  Agreement with a minimum of delay and shall
            notify the other party in writing of the event  concerned as soon as
            possible,  and in any event not later than 7 (seven) Days  following
            the  occurrence of the event  concerned,  and shall  similarly  give
            notice of the restoration of normal  conditions as soon as possible.
            The Parties  shall take all  reasonable  measures  to  minimize  the
            consequences of any event of the Force Majeure.

      17.5. Extension of Time

            Any period,  within which a Party must,  pursuant to this Agreement,
            complete any action or task,  shall be extended  Day-for-Day up to a
            period  equal to the time  during  which  that  Party was  unable to
            perform such action as a result of Force Majeure.

      17.6  Consultation

            Not later than 14 (fourteen) Days after a Party has become unable to
            perform a material portion of the Services as the result of an event
            of Force  Majeure,  the Parties shall consult with each other with a
            view  to  agreeing  on  appropriate  measures  to be  taken  in  the


      18.1  Either Party may terminate  this  Agreement  immediately  on written
            notice if the other:

            (a)   commits a material breach of this Agreement,  which is capable
                  of remedy,  and the Party in breach falls to remedy the breach
                  within a reasonable time of a written notice to do so; or

            (b)   commits a material  breach of this  Agreement  which cannot be
                  remedied; or

            (c)   is  repeatedly  in breach of this  Agreement and has had prior
                  notice in writing that a further breach of this agreement will
                  result in termination of it; or

            (d)   is the subject of a bankruptcy order, or becomes insolvent, or
                  makes any  arrangement or  composition  with or assignment for
                  the  benefit  of its  creditors,  or if it  goes  into  either
                  voluntary (other than for  reconstruction  or amalgamation) or
                  compulsory  liquidation,  or a receiver  or  administrator  is
                  appointed  over its  assets or if the  equivalent  of any such
                  events  under  the laws of any of the  relevant  jurisdictions

      18.2  PTCL may, by not less than 15 (fifteen)  Days' written notice to the
            Contractor (during which period the contractor shall be entitled and
            permitted to attempt to remedy the breach), terminate this Agreement
            without  prejudice to any rights  which may have accrued  under this
            Agreement to either Party prior to such termination, if:

            18.2.1  the VoIP Platform has an adverse impact on PTCL network;

            18.2.2  any  subcontractor  does or allows anything to be done which
                    in PTCL's  reasonable  opinion is likely to  jeopardize  the
                    operation of the PTCL network;


            18.2.3  the Contractor  files with PTCL a statement in writing which
                    has  a  material  effect  on  the  rights,   obligations  or
                    interests of PTCL and which the  Contractor  knows or should
                    reasonably have known to be false;

            18.2.4  the Contractor is unable as a result of Force Majeure or for
                    any  other  reason  to  perform a  material  portion  of the
                    Services for a continuous period of not less than 60 (sixty)

            18.2.5  the Contractor  introduces any equipment  which has not been
                    approved in advance by PTCL and, where required, by PTA;

            18.2.6  the  Contractor  introduces or provides any service  through
                    the VoIP  Platform or otherwise  which has not been approved
                    by PTCL;

            18.2.7  the Contractor commits an act which is in violation or which
                    places PTCL in violation of its License or of the Act;

            18.2.8  the Contractor fails to comply with Clause 12.1.

            18.2.9  Notwithstanding   the  foregoing,   this  Agreement  may  be
                    terminated at any time by either Party by giving 90 (ninety)
                    Days written notice to the other Party.

            18.2.10 Without  prejudice to PTCL's general rights to terminate the
                    Agreement,  the  following  INTER  ALIA shall  constitute  a
                    material  irremediable  breach by the  Contractor  entitling
                    PTCL  to  terminate  the  Agreement  forthwith  without  any
                    further liability:-

                    a.  If Contractor  fails to keep the Bank Guarantee valid in
                        accordance with clause 12.1.1 of the Agreement.

                    b.  if  Contractor  terminates  less than 3 (three)  million
                        minutes   per  month   through  a  VoIP   Platform   for
                        consecutive 3 (three) months.,

                    c.  if Contractor terminates traffic from origins other than
                        Europe and USA through VoIP Platform;

                    d.  if more  than  25%  (twenty  five  percent)  A-telephone
                        numbers in CDRs are not provided;

                    e.  if  Contractor  terminates  traffic  through  any  other
                        mechanism  (except  bilateral  gateways)  bypassing VoIP
                        Platform installed under this Agreement.  In addition to
                        the termination,  the Contractor shall also be liable to
                        compensate  for the loss caused due to bypassing of PTCL
                        International/VoIP Gateways.

                    f.  if the  service  is  terminated  for  three  times  in a
                        calendar  year (due to non recouping and non revising of
                        the Bank Guarantee),.

                    g.  any disclosure  contrary to the  information,  documents
                        and other material provided by the contractor.

                    h.  any  disclosure  contrary to the  affirmations  given in
                        Clause 24.



      19.1  On termination of this  Agreement in accordance  with its terms;  or
            upon  expiration of this Agreement as the case may be all rights and
            obligations of the Parties shall cease, except:

                  a.    rights and obligations  that have accrued as of the date
                        of termination or expiration;

                  b.    the  obligation  of  confidentiality  set  forth in this

                  c.    any right  which a Party may have  under the  Applicable

                  d.    the  indemnification   obligations  set  forth  in  this

      19.2  Upon termination of this Agreement:

                  (a)   the   Contractor   shall   forthwith  pay  to  PTCL  any
                        outstanding  amounts,  which it is  liable  to pay under
                        this Agreement,

                  (b)   PTCL  shall  without  delay  return  to  Contractor  all
                        amounts held by it after the  adjustment of payments due
                        to PTCL, if any.

      19.3  Upon  termination of this Agreement by notice of either Party to the
            other pursuant to this Agreement,  the Contractor shall, immediately
            on receipt of notice to that  effect,  take all  necessary  steps to
            bring the Services to a close within 30 (thirty) Days of the receipt
            of the notice in an orderly manner.


      20.1  The  Contractor  shall  pay  all  the  taxes,  levies,   duties  and
            impositions  on the  import of  equipment  which  are  levied on the
            Contractor   within  the  time  period  stipulated  by  the  levying
            authority.  The Contractor is solely  responsible for all such taxes
            and duties  even if they are imposed or become  effective  after the
            Effective Date.

      20.2  The  Contractor  shall  be  solely  responsible  for  obtaining  any
            authorization, registration, permit or licenses ("Authorization") as
            required   under  the  Applicable  Law  at  its  own  cost  for  any
            import/export  required to be undertaken for the  performance of its
            obligations  under  this  Agreement.  PTCL will  provide  reasonable
            assistance  to the  Contractor  in  this  regard  and any  delay  in
            clearance of any equipment to be used in the VoIP Platform  shall be
            considered as Force Majeure  pursuant to the relevant Clause of this

      20.3  The Parties  will at all times comply with the  Applicable  Law. The
            Parties will use their best efforts to ensure that their  respective
            subcontractors and personnel comply with the Applicable Law.


      21.1  The  Parties  undertake  to act in good faith  with  respect to each
            other's rights and obligations under this Agreement and to adopt all
            reasonable  measures to ensure the  realization of the objectives of
            this Agreement.

      21.2  The Parties  recognize  that it is  impractical in this Agreement to
            provide for every  contingency,  which may arise  during the life of
            the Agreement, and the Parties agree that it is their intention that
            this  Agreement  shall operate  fairly as between them,  and without
            detriment to the  interest of either of them.  If during the term of
            this Agreement,  either Party has evidence to believe that the other
            is performing its obligations  under this Agreement  unfairly,  then
            the  Parties  undertake  to use their best  efforts to agree on such
            action as may be  necessary  to  remove  the cause or causes of such


      21.3  PTCL shall not take any action,  discriminatory or arbitrary,  which
            'materially  or  adversely  affects  or  is  likely  to  affect  the
            enjoyment  of the rights and  interests of the  Contractor  under or
            pursuant to this Agreement.

      21.4  The parties agree that,  save in respect of death,  personal  injury
            and any other  liabilities  that cannot be  excluded  by law,  their
            aggregate  liabilities  to  each  other  under  or  related  to this
            agreement  shall not exceed the value of the Bank  Guarantee  at the
            date upon which the event giving rise to the liability arose.


      22.1  The   provisions   contained  in  this  Clause  shall   survive  the
            termination and/or expiration of this Agreement.

      22.2  The  Parties  shall use their best  efforts to settle  amicably  all
            disputes  arising out of or in connection with this Agreement or its
            interpretation.  Any  dispute  between  the  Parties  as to  matters
            arising under this Agreement which cannot be settled amicably within
            10 (ten)  days  after  receipt  by one  Party of the  other  Party's
            request for amicable  settlement may be submitted by either Party to
            arbitration in accordance with the provisions set out below.

      22.3  In the event of  disputes  between  the  Parties  arising out of the
            terms of this Agreement, the same shall be settled by arbitration by
            2 (two)  arbitrators,  1 (one) each to be  appointed by the Parties.
            The Parties shall appoint such  arbitrators  within 10 (ten) working
            days of receipt of the first  notice in this  behalf by a Party.  In
            case of a disagreement  among the  arbitrators or if they are unable
            to resolve the matter within 30 (thirty) days thereafter, the matter
            will be referred  to an umpire  nominated  by both  parties or their
            arbitrators  who  shall be a  retired  judge of the High  Court of a
            Province  or the Supreme  Court of  Pakistan  or an  internationally
            reputed  Telecom  Lawyer.  The award given by the  arbitrator(s)  as
            aforesaid shall be binding on the Parties,

      22.4  Arbitration  proceedings shall be held in Islamabad,  Pakistan.  The
            procedure shall be that provided in the Arbitration Act 1940 and all
            subsequent amendments thereto.

      22.5  In any arbitration  proceedings under this Agreement the decision of
            the  arbitrator  shall be final and binding and shall be enforceable
            in any  court of  competent  jurisdiction,  and each of the  Parties
            waives any  objections  to or claims to  immunity  in respect of the
            enforcement of the claim.

      22.6  Arbitration  shall be  precondition to any action by any party under
            the law.


      23.1  The  Contractor  shall not,  either  during  the term,  or after the
            expiration  of  this   Agreement,   disclose  any   proprietary   or
            confidential  information relating to the Services,  this Agreement,
            or PTCL's  business or operations  without the prior written consent
            of PTCL,  unless such disclosure is required by law or regulation or
            such  information  has  entered  the public  domain  other than by a
            breach of this Agreement. The Contractor agrees that it will use its
            best efforts to  ensure-that  its  subcontractors  and personnel are
            bound by and comply with the requirement of confidentiality  set out
            in this Clause.

      23.2  PTCL shall not,  either during the term, or after the  expiration of
            this Agreement, disclose any proprietary or confidential information
            relating  to the  Services,  this  Agreement,  or  the  Contractor's
            business  or  operations  without the prior  written  consent of the
            Contractor,  unless such disclosure is required by law or regulation
            or such  information  has entered the public  domain other than by a
            breach of this


            Agreement.  PTCL agrees that it will use its best  efforts to ensure
            that its  subcontractors  and personnel are bound by and comply with
            the requirement of confidentiality set out in this Clause.

      23.3  Notwithstanding  the  provisions  of the  above  paragraphs  of this
            Clause, the Parties may require each other to sign a confidentiality
            Agreement on a case-by-case basis before specific information can be
            made available.


      The  Contractor  shall keep PTCL,  both  during and after the term of this
      Agreement,  fully and effectively  indemnified against all losses, claims,
      damages, liabilities,  costs and expenses incurred by or imposed upon PTCL
      as a consequence of:

            (a)   any  conclusive   claim  made  by  a   subcontractor   of  the

            (b)   any  conclusive  claim  made by a  Customer  in respect of the


      The Contractor declares and affirms that;

      a)    the Contractor and its shareholders, directors, officers, employees,
            and  agents  have not paid or  received,  nor  undertaken  to pay or
            receive,  any bribe,  pay-off,  kick-back or unlawful commission and
            that  the  Contractor  and its  shareholders,  directors,  officers,
            employees,  and agents  have not in any other way or manner paid any
            sums,  whether  in Rupees  or a  foreign  currency  and  whether  in
            Pakistan  or  abroad,  given or  offered  to give any such gifts and
            presents in Pakistan or abroad,  to any  official or employee of the
            PTCL or any other person to procure this  Agreement.  The Contractor
            undertakes  not to engage in any of these or similar nets during the
            term of this Agreement.

      b)    Neither  the  Contractor  nor any of its  director or  executive  is
            Israeli  or Indian  national.  Notwithstanding  any thing  contained
            elsewhere  in this  Agreement  PTCL will have the right to terminate
            the  Agreement  in the event PTCL has  reasons  to believe  that the
            Contractor  or any of its director or executive is Israeli or Indian


      This Agreement shall be governed by the laws of Pakistan.


      27.1  The  captions  or  headings  in  this  Agreement  are  strictly  for
            convenience  and  shall  not  be  considered  in  interpreting  this
            Agreement or as amplifying or limiting any of its content.  Words in
            this  Agreement,  which  import the singular  connotation,  shall be
            interpreted   as  plural,   and  words,   which  import  the  plural
            connotation,  shall be interpreted  as singular,  as the identity of
            the Parties or objects referred to may require.

      27.2  Unless expressly  defined herein,  words having well known technical
            or trade meanings shall be so construed.  All listing of items shall
            not be taken to be exclusive, but shall include other items, whether
            similar or  dissimilar to those  listed,  as the context  reasonably

      27.3  Except as set forth to the contrary  herein,  any right or remedy of
            PTCL or the Contractor shall be cumulative and without  prejudice to
            any other right or remedy, whether contained herein or not.

      27.4  This Agreement has been fully negotiated between and jointly drafted
            by the Parties.


      27.5  All actions, activities,  consents, approvals and other undertakings
            of the Parties in this Agreement  shall be performed in a reasonable
            and timely manner,  it being expressly  acknowledged  and understood
            that  time  is of the  essence  in the  performance  of  obligations
            required  to be  performed  by a date  expressly  specified  herein,
            Except as  specifically  set forth  herein,  for the purpose of this
            Clause   the   normal   standards   of   performance    within   the
            telecommunications  industry  in the  relevant  market  shall be the
            measure of whether a  Contractor's  performance  is  reasonable  and


      28.1  Any notice,  request or consent required or permitted to be given or
            made  pursuant  to this  Agreement  shall be in writing and shall be
            deemed to have been  given or made when  delivered  in person to any
            authorized  representative of the Party to whom the communication is
            addressed,  or when sent by  registered  mail,  telex,  telegram  or
            facsimile to such Party at the following addresses:

FOR CONTRACTOR:                         FOR PTCL:
Eric D. Ram, EVP-International          i) General Manager (Tele-Housing &
Fusion Telecommunications                  VoIP)
420 Lexington Avenue, Suite 518         Pakistan Telecommunication Company
New York, NY 10170                      Limited, Headquarters, G-8/4, Islamabad,
1.212.972.2000 (Phone)                  PakistanPhone: 92-51-227 2021
1.954.493.8449 (Facsimile               Fax: 92-51-220 1015
ERAM@FUSIONTEL.COM                      E-mail: GMTH@PTCL.COM.PK
                                        ii) General Manager international
                                        Pakistan Telecommunication Company
                                        Limited, Headquarters, G-8/4, Islamabad,
                                        Pakistan Phone: 92-51-2252883
                                        Fax: 92-51-2254291

      28.2  A Notice will be deemed to be effective as follows:

            In case of personal delivery or registered mail, on delivery; and in
            the case of facsimiles,  24 (twenty -four) hours following confirmed
            transmission, disregarding weekends and national holidays. Facsimile
            notices shall not require confirmation by hard copies.

      28.3  Party may  change its  address  or fax number for notice  under this
            Agreement by giving the other Party notice pursuant to this Clause.


      29.1  The Contractor  undertakes and warrants that in case of upgrading of
            the VoIP Platform the  equipment  installed for PTCL will not in any
            manner  damage  property  of PTCL or in any  way  interfere  with or
            affect PTCL's  existing system or services.  The Contractor  hereby
            undertakes to indemnify PTCL for any loss,  damage,  cost or expense
            incurred by PTCL (unless caused by erroneously  supplied information
            or the Act or omission of PTCL) as a consequence  of a breach by the
            Contractor of this  undertaking  and warranty.  For the avoidance of
            doubt, it is understood that  commencement of operations  under this
            Agreement on the Effective Date shall be deemed  fulfillment of this
            Clause, and the Contractor shall, following the Effective Date, have
            no liability under this Clause.


      29.2  The Contractor does not have an exclusive right under this Agreement
            to terminate  traffic through VoIP technology,  and PTCL will not be
            prevented  by  virtue  of this  Agreement  from  engaging  any other
            contractors to provide VoIP services, in Pakistan.

      29.3  VoIP   Platform   will  be   installed   in  PTCL   premises  to  be
            interconnected to PSTN network at appropriate levels. This Agreement
            is strictly for traffic  brought into PTCL network from USA & Europe
            through the packet switched data communication protocol of TCP/IP.

      29.4  The  Contractor  will provide free of cost  training to 1 (one) PTCL
            official in USA or EUROPE and 3 (three)  PTCL  officials in Pakistan
            so that they gain  expertise and experience in the operation of VoIP
            Platform.  For the purpose of this Clause and all matters  connected
            therewith,  the  Contractor  or its  nominees  shall be allowed free
            access to the premises  where the VoIP Platform is  installed.  PTCL
            also undertakes to provide the Contractor or its nominees due access
            to the VOIP  Platform so that it may,  from time to time, to monitor
            proper   functioning   or  operations  of  the  same  including  its
            interconnectivity with VoIP Platforms installed by Contractor in USA
            and Europe.

      29.5  The quality of service of calls routed  through VoIP Platform  shall
            not be less than GSM quality (MOS 3.5 or above) as well as according
            to service parameters as recommended by ITU.

      29.6  The Contractor shall at its own cost and discretion take appropriate
            legal  action in USA & Europe to stop  Illegal  Traffic  coming into
            Pakistan there from.

      29.7  The Contractor agrees to cooperate with PTCL in exchange of relevant
            information  for  monitoring of the volume and source of any Illegal
            Traffic and  originating  points to safeguard  interests of both the
            Parties The Parties  agree as to the manner and the  mechanism to be
            adopted (on best effort basis).

      29.8  The  Contractor  will not enter into any agreement with an Incumbent
            Carrier for diversion of normal bilateral traffic on to VoIP routes.
            The Contractor will not procure or re-file legal  bilateral  traffic
            of PTCL meaning only gray area traffic will be addressed.  A list of
            the  Incumbent  Carriers is attached  herewith as  Schedule-IV.  Any
            change thereof shall be duly communicated to the Contractor.

      29.9  It is mutually  agreed and  understood  that this agreement is being
            executed on a non-exclusive  basis.  Nothing  contained herein shall
            curtail,  limit or restrict  the right of PTCL to enter into similar
            agreements  with other  parties.  Provided  always  that none of the
            other parties shall be offered commercial terms more beneficial than
            those contained herein.

      29.10 All obligations  outside Pakistan whether in respect of the Services
            or in respect of incoming  traffic into the VoIP  Platform  shall be
            the sole  responsibility  of the  Contractor.  PTCL shall in any way
            neither be  responsible  nor shall be  considered  as providing  any
            Service  outside  Pakistan as a consequence of this  Agreement.  The
            Contractor  hereby  indemnifies  PTCL in respect  of any  conclusive
            action  against PTCL directly  pertaining  to this  Agreement or the
            performance  of its terms  herein  where  the  action  relates  to a
            matter,  which was the  result  of any  direct  or  indirect  act or
            omission of the contractor.


      29.11 The  Contractor  hereby  acknowledges  and  declares  that  it is an
            independent  Contractor for the  performance  of Services  mentioned
            herein and no  relationship  of  Agency,  Licensee  or sub  Licensee
            between  PTCL  and the  Contractor  is  created  by  virtue  of this

      29.12 The  Contractor   undertakes  to  make,  during  the  term  of  this
            Agreement,  complete  written  disclosure of its existing and future
            business and agreements  executed  relating to VoIP services,  which
            directly or indirectly lead to termination of traffic into Pakistan.

      29.13 The PTCL and PTA shall have the right to inspect the VoIP  Platforms
            installed,  owned and operated by the  Contractor in USA and Europe,
            which relate to termination of traffic into Pakistan.

      29.14 The Parties recognize that time is of the essence of this Agreement.

IN WITNESS WHEREOF the Parties have caused this Agreement to be signed as of the
Day and year first above written.

FOR AND ON BEHALF                             FOR AND ON BEHALF OF
OF THE PTCL                                   THE CONTRACTOR

                                              /s/ Eric D. Ram
-----------------------------                 ----------------------------------
                                              Eric D. Ram, EVP-Int'l

Witnesses                                     Witnesses:

(1)                                           (1) /s/ Randy Sue Valone
-----------------------------                 ----------------------------------
                                              Randy Sue Valone
                                              Sr. Manager Int'l contracts

(2)                                           (2) /s/ Susan E. Casella
-----------------------------                 ----------------------------------




IP TELEPHONY SOLUTIONS ANALYSIS TEMPLATE (shall remain effective unless there is
an upgrade or modification)

Port Capacity-Analog
Port Capacity-T1/E1
A-law / u - law Compatibility
Call Capacity
Chassis based with embedded processing
Architecture Nomenclature
DTMF support
H.323 Fast Connect
Type of Service
Registered Service-Pre-paid
Registered Service-Post-paid
Real-Time Fax-T.30
T.38 Fax
Data Calls
Dynamic Universal Port (Voice/Fax/Data)
Multiple Calling Cards
ANI Authentication
Single Stage Dialing
Pre-Paid Calling Card
Messaging Services Support
Language Selection
Trouble Announcement


IVR Editor
IVR location
Creation/Billing Per port
Redundant Routes
Call Routing-Country / Area Code
Proscribed Number
Call Block Destination Number
Maximum GW/GK Ratio
Existing Numbering Plans
Service Classes & User Groupings
Location of Routing Logic
Call Progress Signals
Ring back, Busy Tone
Timer for Inter Digit, First-digit, No Answer
Maximum latency

      o     End-to-end

      o     Element wise
5. Billing
Authentication (User/Subscriber)
Billing Data Creation per Gateway
Central Billing Data Storage
Retransmit Billing Data During Link Failure
Rating by Country / Area
Automatic Rate Change
Real-Time Billing
No Charge Function for Small Fraction Call
Standard DB for Billing Storage
Multiple Rates / Route
Drop-Off Rates


Billing Increments
Billing based on Units or Money
Holiday Rates
Grace Period
Billing Answer After Egress
Network Management
Fault Monitoring
Performance Statistics
Command Line Interface
Web-based Management
Physical Interfaces
Redundant Link
# Point Codes Supported
Signaling Level
Standalone Processor
Embedded Processor
Transport Protocol Suit
Support for Industry standard H.323 Clients


      o     Interfacing / Inter-working With IP-Backbone
Frame Relay
Secure Administration
Secure Voice
Codecs Supported
Compression Algorithm Scalability
Built-In Inter-connection Capability for Traffic Sharing




a)    Fortnightly traffic account and methods of settlement

      i)  Within  2 (two)  days  from the end of every  fortnight  to which  the
      account  relates,  PTCL will  prepare a  fortnightly  accounts  settlement
      statement  in a format  designed  by PTCL in its  discretion  showing  the
      balances from the fortnightly  accounts to which it relates and shall send
      the same to the Contractor. The contractor shall make payment within seven
      days of transmission of invoice as provided in clausal-11. In the event of
      dispute  between the Parties and subject to the  provisions  of clause-11,
      the  Contractor  shall still be obliged to make payment by the Due Date in
      accordance with PTCL's fortnightly  accounts  settlement  statement in the
      Designated Account.

      ii) In case the Contractor fails to make the payment by the Due Date, then
      PTCL may at its sole discretion and having provided four days prior notice
      in  writing  (during  which  period  contractor  may remedy the breach and
      prevent  termination  of the  Agreement) to the  Contractor  terminate the
      Agreement  without  prejudice to any other interest or claim that may have
      accrued in favor of PTCL or to which PTCL may in the future be entitled to
      under the Agreement.

b)    Bank Guarantee Calculation for Thirty (30) Days & Applicability

      The Contractor shall provide  Unconditional and irrevocable Bank Guarantee
      from scheduled banks in Pakistan of an amount of US$ 1,020600 (One million
      twenty thousand six hundred US$) i.e. the  termination  price of 7 million
      minutes  (maximum  traffic for thirty days) per VoIP Platform @ US$ 0.1458
      (US cents  fourteen  point five  eight)  per minute  within 15 days of the
      Effective Date in the format provided by PTCL.


            i)    Only traffic from USA/Europe  shall be terminated  through the
                  VoIP  Platform.  Contractor  hereby agrees to terminate 3 to 7
                  million  minutes  per  month  of  VoIP  Platform  focusing  on
                  capturing of Illegal Traffic.

            ii.   Termination  rate of US$ 0.1458 (US cents  fourteen point five
                  eight) per minute  will be  applicable  until  revision  of US
                  carrier settlement rate (bilateral  carrier rate).  Subsequent
                  termination  rate would be kept up to 15% below the US Carrier
                  Settlement Rate (bilateral carrier rate) and the same shall be
                  automatically revised inline with US Carrier Settlement Rate.

            iii)  The  VoIP  service   shall  be  operated   only  for  incoming
                  international  calls  from the USA and  Europe  routed  as per
                  network topology agreed between the Parties.

The Contractor will ensure that only identified calling party is given access to
VoIP  Gateway.  The CDR provided to PTCL as per Clause II (ii) must also contain
identity of calling  party.  Up to 25%  un-identified  calling  numbers  will be
accepted and no further investigation carried out.



                  List of Incumbent Carriers in USA and Europe


          S No.          Country               Carrier
          1              USA                   Concert
          2              USA                   MCI World Com
          3              USA                   Sprint USA
          4              USA                   IDT
          5              USA                   Primus
          6              CANADA                Teleglobe


          S No.          Country               Carrier
          1              Austria               Austria-(PTA)
          2              Belgium               Belgacom
          3              Cyprus                CTA
          4              Germany               Deutsche Telecom
          5              France                France Telecom
          6              Greece                OTE
          7              Italy                 Telecom Italia-Sporkle
          8              Norway                Tele nor
          9              Spain                 Telephonica
          10             Netherlands           KPN
          11             Switzerland           Swiss Com
          12             United Kingdom        BT(CGNS)
          13             United Kingdom        C & WC


                                                                    Schedule - V

                     Programme of commitments (Milestones)


S.NC      Description of Task                              Action to be           responsibility
                                                           completed by
 1        Signing of the Agreement                         1st Day                PTCL &
 2        Submission of list, specification & site         With in 7 Days         Contractor/PTCL
          plan of the equipment in case of                 after receipt of
          upgradation /modification in the VoIP            the request
 3        Equipment Approval in case of new                Within 7Days           PTCL
          additional equipment                             after receipt of
                                                           the request
 4        Confirmed provision of the Irrevocable           15th Day from          Contractor
          bank Guarantee                                   Effective Date
 5        Equipment on site (in case of                    Within 14 days         Contractor
          upgradation/modification in the VoIP             after the receipt
          Platform                                         of the request
 6        Equipment installation completed in              Within2l days          Contractor
          case of upgradation/modification in the          after the receipt
          VoIP Platform                                    of the request
 7        Provision of 10 E1s for connectivity             10 number of           PTCL &
          between PTCL Gateway/DTE and                     E1s have already       Contractor
          VoIP Platform, 2MB clear channel via             been provided          (Contractor to
          IPLC                                                                    arrange 1/2 IPLC)
 8        Testing, commissioning and making                Within28 days          Contractor
          over of the additional equipment to              after the receipt
          PTCL                                             of the request
 9        Effective date                                   1st Day of             Contractor/PTCL
                                                           September 2004
 10       Local Training                                   60th Day of the        PTCL, &
                                                           Effective date         Contractor
 11       Foreign Training                                 60th Day of the        Contractor
                                                           Effective date