Renewal and Modification Agreement

         This Renewal and Modification  Agreement (the  "Agreement") is made and
entered  into as of this  28th day of  February,  1997 by and  between  American
Network Exchange,  Inc., a Delaware  corporation  ("AMNEX") and National Telecom
USA, Inc., a New Jersey corporation ("NTI").

                                    Recitals

         WHEREAS,  AMNEX is an interexchange  carrier providing both direct dial
and operator assisted services (collectively,  the "Services") to subscribers at
COCOT locations throughout the United States;

         WHEREAS,  NTI is a  Dealer  and an  aggregator  of  long  distance  and
operator assisted traffic generated by subscribers at such COCOT locations;

         WHEREAS,  NTI  and  AMNEX  are  parties  to a  Prime  COCOT  Aggregator
Agreement  dated as of November 24,  1993,  as amended to the date hereof (as so
amended, the "COCOT Agreement"),  pursuant to which, among other things, NTI has
engaged AMNEX,  and AMNEX has agreed to serve, as the principal  provider of the
Services to subscribers  at  substantially  all existing and hereafter  acquired
COCOT locations of NTI and its Subaccounts;

         WHEREAS,  NTI and AMNEX are parties to a certain  Settlement  Agreement
dated  November  27,  1995,  as amended to the date hereof (as so  amended,  the
"Settlement  Agreement"),  pursuant to which,  among other  things,  the parties
completely and finally resolved, compromised and settled all claims asserted and
assertable between them, and in so doing,  provided for certain consideration to
be paid to each  other,  including  but not  limited  to the  payment of certain
additional commissions to NTI; and

         WHEREAS,  subject to the terms and conditions set forth herein, NTI and
AMNEX desire to amend the COCOT Agreement and the Settlement Agreement, in order
to extend and modify their  relationship  with one another as set forth  therein
and governed thereby.

         NOW,  THEREFORE,  in  consideration  of the  foregoing  and the  mutual
covenants as hereinafter contained, the parties hereby agree as follows:

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1. Definitions.  Except as otherwise defined herein,  all capitalized terms used
herein  shall have the meanings  ascribed to them in the COCOT  Agreement or the
Settlement  Agreement.  To the extent  that any term or  provision  of the COCOT
Agreement or the Settlement  Agreement is contrary to or  inconsistent  with the
terms  and  provisions  of this  Agreement,  the terms  and  provisions  of this
Agreement shall control.

2. Scope of Agreement.  Paragraph 1 of the COCOT  Agreement,  entitled "Scope of
Agreement", is hereby modified to provide that AMNEX be engaged and serve as the
exclusive   (rather  than  principal)   provider  of  Services  to  the  Phones.
Accordingly,  subject to AMNEX's  guidelines and  Applicable  Laws and the terms
hereof, AMNEX shall be entitled to serve as the exclusive carrier for and handle
100% of the Calls.

3. NTI's Rights and Obligations.  Paragraph 2 of the COCOT  Agreement,  entitled
"NTI's Rights and  Obligations",  is hereby modified to the extent  necessary to
incorporate and fully effectuate the following provisions:

         (a) NTI shall sell,  market and promote  only the Services of AMNEX and
shall in no event sell,  market or promote the Services of any other  carrier or
provider for or in respect of the Phones or Calls.

         (b) NTI shall maintain its  interstate  tariff on file with the Federal
Communications  Commission  (the  "Tariff") and promptly  update and modify such
Tariff as may be required by Applicable Law or, if requested in writing by AMNEX
and the request is approved by NTI's counsel,  within thirty (30) days after the
date of such written request.  NTI shall, with the assistance of AMNEX, and in a
reasonably prompt manner, make the necessary filings to become duly certified or
authorized  by the  applicable  regulatory  authorities  to  provide  intrastate
service  within the States of New Jersey and Michigan and an additional  two (2)
states to be  designated  by  AMNEX.  Where  required  by the  applicable  state
regulatory  authorities,  NTI shall, with AMNEX's assistance,  file tariffs and,
thereafter,  promptly  update and modify  such  tariffs  as may be  required  by
Applicable  Law or, if requested in writing by AMNEX and the request is approved
by NTI's  counsel,  within  thirty  (30)  days  after  the date of such  written
request.  NTI shall  forward  to  AMNEX,  via  overnight  mail,  all  regulatory
complaints within seventy two (72) hours of NTI's receipt of same.

         (c) NTI shall no longer be obligated to maintain at least $1,000,000 in
monthly Combined Revenue during the Maintenance Period.

         (d)      NTI shall no longer be responsible for the provision of
customer services and administrative support to its Subaccounts.

         (e) NTI shall no  longer be  responsible  to pay  commissions  or other
compensation to, or to collect 1+ usage charges from, each of its Subaccounts.

         (f) NTI shall no longer be responsible for ensuring (i) that all Phones
are programmed to route and deliver to AMNEX,  in the case of operator  assisted
calls, only Permitted Operator Assisted Calls,  and are otherwise  operated in 
compliance with Applicable Laws; and (ii) that all Subaccounts  comply with the
Act, the Rules,  and all Applicable  Laws, including the posting  requirements 
thereunder and the provisions thereof which prohibit  the  blocking  of 800, 950
and 10XXX  access  codes of  interexchange carriers other than AMNEX.

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         (g) NTI shall  maintain all of its books and records and provide  AMNEX
with originals or copies of all of NTI's agreements, correspondence and magnetic
records  as may be  requested  by AMNEX,  for the  confidential  use by AMNEX as
necessary to provide the Services to the Subaccounts.

         (h) NTI shall take whatever  steps may be required by Applicable Law or
reasonably  deemed  necessary  or  advisable  by  AMNEX,  in order to  maintain,
preserve and protect NTI's corporate existence,  business, operations and assets
from, among other things, dissolution,  bankruptcy,  diminution, liens, or other
adverse  effects.  In that  connection,  NTI  hereby  represents,  warrants  and
covenants  with AMNEX,  that it is solvent and in good  standing in its state of
incorporation  and shall so remain  at all  times  during  the term of the COCOT
Agreement as amended hereby. NTI further represents, warrants and covenants with
AMNEX, that all of its contracts and other assets are owned by it free and clear
of any and all liens, security interests,  mortgages or other encumbrances,  and
shall so remain at all times  during the term of the COCOT  Agreement as amended
hereby.  NTI agrees to timely file any and all  reports,  returns and  documents
necessary to effectuate the foregoing, including but not limited to any required
federal or state tax returns.

4. AMNEX's Rights and Obligations.  Paragraph 3 of the COCOT Agreement, entitled
"AMNEX's Rights and Obligations",  is hereby modified to the extent necessary to
incorporate and fully effectuate the following provisions:

         (a)      AMNEX accepts and assumes the right and obligation to
become the exclusive provider of the Services to NTI and the
Phones.

         (b) AMNEX  accepts  and assumes  the  obligation  of NTI to provide all
necessary  and customary  customer  services and  administrative  support to the
Subaccounts.  AMNEX shall use its  reasonable  best  efforts to comply with this
obligation.

         (c) AMNEX accepts and assumes the obligation of NTI to pay  commissions
and other  compensation  to, and to collect 1+ usage charges  from,  each of the
Subaccounts.  AMNEX shall use its  reasonable  best  efforts to comply with this
obligation.

         (d)      AMNEX accepts and assumes the obligation of NTI to ensure
(i) that all Phones are programmed to route and deliver to AMNEX or
to NTI, as the case may be, for operator assisted calls, only Permitted Operator
Assisted Calls,  and are otherwise  operated in compliance with Applicable Laws;
and (ii) that all Subaccounts comply with the Act, the Rules, and all Applicable
Laws, including the posting  requirements  thereunder and the provisions thereof
which prohibit the blocking of 800, 950 and 10XXX access codes of  interexchange
carriers other than AMNEX.

         (e) AMNEX  agrees to timely  provide  such data and  reports  as may be
reasonably required by NTI in order to maintain its records and accounting data.

         (f) AMNEX agrees to respond timely and  appropriately to all regulatory
complaints  generated by Permitted Operator Assisted Calls made from the Phones,
in  accordance  with the  guidelines  customarily  used by AMNEX and approved by
counsel for NTI.

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<PAGE>

         (g) AMNEX agrees to reimburse NTI for all reasonable costs and expenses
it incurs to become duly  certified  to provide  intrastate  service  within the
states of New Jersey and Michigan and the additional  two (2) states  designated
by AMNEX, as provided in subparagraph 3(b) hereof.

5.  Compensation and Remittances.  In consideration of NTI's  performance of its
obligations hereunder, and subject to the terms and conditions set forth herein,
in lieu of paying NTI compensation in the manner and at the time provided for in
Paragraph 4 of the COCOT Agreement and the relevant provisions of the Settlement
Agreement  (and as may  exist  by  virtue  of any  existing  verbal  agreements,
arrangements  or course of  dealing),  AMNEX  shall pay NTI a  commission,  once
monthly,  based upon the Billed  Revenue (as  defined  below)  generated  by the
Phones during each calendar  month,  such Billed Revenue to be calculated  based
upon the total  activity of the  Subaccounts  for the preceding  month and to be
paid to NTI by the twentieth (20th) day of the month then following.  During the
period  commencing  March 1, 1997 and ending on February 28, 2000, the amount of
such monthly payment (the "Residual") shall be equal to the greater of $7,500 or
1/2 of 1 percent (.5%) of such Billed Revenue.  The amount of the Residual shall
be subject to adjustment by AMNEX and NTI on the third  anniversary  of the date
hereof,  it being  understood  and agreed  that (i) the  Residual is intended to
compensate  NTI  solely  for  its  ongoing   obligations  of  maintaining  NTI's
regulatory  certifications  and  authorizations,  the Tariff,  the state tariffs
(where applicable),  NTI's books and records and NTI's corporate  existence,  as
set forth in and contemplated by subparagraphs  3(b), 3(g) and 3(h) hereof;  and
(ii) any  adjustment  made to the  Residual  at such time  shall be  solely  for
purposes of more accurately  reflecting  such  intention.  The Residual shall be
deemed earned by NTI so long as NTI is in full  compliance  with this  Agreement
and such payment is not in violation of any law, rule,  regulation or order with
which AMNEX is required to comply.  For purposes hereof,  "Billed Revenue" means
gross revenue derived from (i) completed interstate operator assisted calls 
originating from the Phones and the Subaccounts or other accounts  serviced by 
AMNEX,  which calls are billed in NTI's name and under the Tariff; and (ii) 
completed intrastate operator assisted calls originating from the Phones and the
Subaccounts or other accounts serviced by AMNEX,  which calls are billed in 
NTI's name (and under NTI's state  tariffs, where applicable).

6. Term and Termination.  Paragraph 5 of the COCOT Agreement, entitled "Term and
Termination",  is hereby  modified to provide that the term shall commence as of
March 1, 1997 and shall  continue  in full  force and effect for a period of ten
(10) years  thereafter.  Upon expiration of this initial ten (10) year term, the
COCOT Agreement,  as modified by this Agreement,  shall  automatically renew for
successive  one (1) year  periods.  Notwithstanding  the  foregoing,  the  COCOT
Agreement,  as  modified by this  Agreement,  may be  terminated  as provided in
subparagraph  5(b) and 5(c) of the COCOT Agreement.  Subparagraph 5(a) shall not
apply so long as NTI remains in compliance with the terms and provisions of this
Agreement,  including but not limited to the obligation to  exclusively  utilize
the Services of AMNEX, as provided herein.

7.       Notices.  Paragraph 13 of the COCOT Agreement is hereby modified by 
deleting the Connecticut address as set forth therein and substituting in lieu
thereof, the Orlando address as already provided therein, but with copies to be
directed to the Vice President - Legal and Regulatory.

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<PAGE>

8. Modification to and Acknowledgements  Concerning the Settlement Agreement. It
is  understood  and  agreed  that,  notwithstanding  anything  to  the  contrary
contained in the Settlement Agreement, AMNEX shall no longer be obligated (i) to
pay NTI any  monies  for calls  originated  from any NTI  accounts  which  AMNEX
transfers  to MCI's  network,  as  provided  in  Paragraph  2 of the  Settlement
Agreement;  or (ii) to pay NTI any commissions  with regard to 1+ minutes billed
and  collected  by AMNEX and  originating  from NTI's  accounts,  as provided in
subparagraph  3(a) of the  Settlement  Agreement.  Accordingly,  the  Settlement
Agreement is hereby modified to delete and exclude those portions of Paragraph 2
and  subparagraph  3(a) thereof which make reference to or otherwise  pertain to
such  obligations of AMNEX to NTI. It is further  understood and agreed that all
other  monies and  obligations  on the part of AMNEX to be paid to NTI and to be
performed  for the benefit of NTI under and in  accordance  with the  Settlement
Agreement have been fully paid,  performed,  satisfied and otherwise discharged.
Accordingly,  (i) the parties hereto  acknowledge  and agree that all consulting
fees and  consideration  required  to be paid to NTI  under  Paragraph  5 of the
Settlement Agreement have been paid in full; (ii) all obligations of AMNEX under
subparagraph 6(a) of the Settlement  Agreement relative to the Warrant have been
fully  performed and satisfied;  and (iii) all monies  required to be paid under
Paragraph 7 of the Settlement Agreement with regard to the 75,000 AMNEX, Inc.
shares described therein have been paid in full.  As for the Special Fund 
provided for in subparagraph 6(c) of the Settlement Agreement, it is understood
and agreed that, notwithstanding anything to the contrary contained in the
Settlement Agreement, (i) such fund and the mechanics thereof shall remain in 
effect for and in respect of February 1997; and (ii) commencing March 1, 1997, 
such fund and all of the parties' obligations with regard thereto shall
terminate.

9. Grant of the Right and Associated  Security Interest.  NTI hereby irrevocably
grants to AMNEX the exclusive right to manage the business and operations of NTI
and all contracts and agreements associated therewith, including but not limited
to all contracts of NTI with,  among others,  any  Subaccount,  for the full ten
(10) year initial term of the COCOT  Agreement,  as amended hereby,  and any and
all  renewals  thereof  (the  "Right").  The Right shall be deemed  personal and
proprietary  to AMNEX and coupled with an interest,  and NTI hereby  agrees that
the Right  shall be binding  upon NTI's  successors  and assigns and any and all
purchasers of the business, stock or assets of NTI to the same extent and degree
as NTI hereunder.  In  furtherance of the foregoing,  and in order to secure and
protect AMNEX's interest in and to the Right, NTI hereby grants to AMNEX a first
priority lien against and security  interest in all written and oral  contracts,
contract rights, agreements,  arrangements and related intangible rights of NTI,
including  but not  limited to all  contracts  of NTI with,  among  others,  any
Subaccount (collectively,  the "Operating Contracts").  NTI hereby represents to
AMNEX that it is the sole and absolute  owner of the Operating  Contracts,  that
there are no existing  liens,  security  interests or  encumbrances  of any kind
whatsoever  upon the  Operating  Contracts,  and covenants and agrees with AMNEX
that for so long as AMNEX  retains the Grant,  NTI shall not,  and shall use its
best efforts to ensure that its successors,  assigns and purchasers as described
above shall not, (a) create,  permit or suffer to exist any such liens, security
interests or encumbrances  upon any of the Operating  Contracts  (except for the
lien and  security  interest  granted  to AMNEX  herein);  or (b) sell,  assign,
transfer,  hypothecate  or otherwise  dispose of any of the Operating  Contracts
without AMNEX's prior written consent.  NTI agrees to defend at its sole expense
the Operating Contracts against the claims and demands of all third parties. NTI
further  agrees  to join  with  AMNEX in  executing  such  financing  statements
(including  amendments  thereto  and  continuation  statements  thereof) in form
satisfactory  to AMNEX as AMNEX may  specify,  and to take such  other  steps as
AMNEX may  reasonably  direct  from time to time in order to perfect and protect
AMNEX's lien and security  interest as granted  herein.  NTI hereby  irrevocably
authorizes  and  empowers  AMNEX,  on behalf of NTI,  to  execute  and file such
financing and  continuation  statements  and to take such other actions as AMNEX
deems  necessary or advisable  from time to time at NTI's expense to perfect and
continue AMNEX's lien and security  interest as granted herein.  In the event of
bankruptcy or similar proceedings by or against NTI or an actual or
threatened  loss of the Right due to or arising out of NTI's  breach of any term
hereof, AMNEX shall be entitled to proceed against,  seize and otherwise recover
upon the Operating  Contracts in any commercially  reasonable manner in order to
compensate  it for the loss of the  Right.  In  connection  with the  foregoing,
simultaneously  with the execution hereof, NTI is delivering to AMNEX for filing
with the  Secretary of State of the State of Florida,  a Form UCC-3  termination
statement,  duly  executed by Mark B. Arbeit,  evidencing  the  termination  and
complete release by him of his security interest in and to all contracts between
NTI and AMNEX,  Inc. and all  commissions,  proceeds  and monetary  entitlements
arising therefrom.

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<PAGE>

10.  Renewal  Incentive.  In  consideration  of  extension  of the  term  of the
relationship between AMNEX and NTI as provided hereby, the grant by NTI to AMNEX
of the  Right,  and for such  other good and  valuable  consideration  as may be
derived from the COCOT Agreement,  as modified hereby,  the following  aggregate
consideration (collectively, the "Special Consideration") is being paid to NTI:

         (a) simultaneously  with the execution hereof,  AMNEX is paying the sum
of One Hundred Seventy Five Thousand  Dollars  ($175,000) and on or before March
31,  1997,  AMNEX  shall  pay the sum of Four  Hundred  Fifty  Thousand  Dollars
($450,000),  in each case, by wire transfer of immediately  available funds to a
depository designated in writing by NTI;

         (b)  simultaneously  with the execution hereof,  AMNEX is executing and
delivering to NTI a promissory  note in the aggregate  principal  amount of Five
Hundred Thousand Dollars ($500,000), such note to bear interest on the principal
amount  thereof from time to time  outstanding  at the rate of ten percent (10%)
per annum  and to be  payable  in twelve  (12)  equal  and  consecutive  monthly
installments of principal and interest; and

         (c) upon  expiration  of the NASDAQ  Clearance  Period  (as  defined in
subparagraph 11(b) below), AMNEX, Inc., the parent company of AMNEX, shall issue
and  deliver  to NTI or  Brian  E.  King,  its  sole  shareholder,  or to  their
designees,  a total of 346,154  shares of the Common  Stock of AMNEX,  $.001 par
value (the "AMNEX Common  Stock"),  such number of shares having been calculated
based upon the average  closing  selling price for the AMNEX Common Stock during
the  eighty two (82) day  period  immediately  preceding  the date  hereof.  For
purposes of this Agreement,  such shares of AMNEX Common Stock shall hereinafter
be referred to collectively as the "Shares".

It is  understood  and agreed  that the Special  Compensation  is being given by
AMNEX and  AMNEX,  Inc.  to NTI in  material  reliance  upon  NTI's  anticipated
compliance  with the terms  hereof,  continuance  of the Right for the full term
contemplated  hereby,  and  is in  lieu  of any  and  all  other  consideration,
compensation, payments or other
monies now due and owing or  hereafter  alleged to be due and owing to NTI under
any  and all  existing  agreements  (whether  oral  or  written),  arrangements,
understandings or claims arising under or out of or in connection with the COCOT
Agreement or the Settlement Agreement (as it relates to NTI).

11.  Acknowledgements and Agreements Concerning the Shares.

(a) It is understood  and agreed that the Shares shall not be  registered  under
the  Securities  Act  of  1933,  as  amended,  and  the  rules  and  regulations
promulgated thereunder (collectively,  the "1933 Act"). Each of NTI and Brian E.
King,  for it or  himself,  and on  behalf  of its  or his  designees,  if  any,
acknowledges  that the Shares are not being registered under the 1933 Act due to
AMNEX's reliance upon Section 4(2) thereof,  which section provides an exemption
from registration for certain transactions by an issuer not involving any public
offering. Each of NTI and Brian E. King, for it or himself, and on behalf of its
or his designees,  if any,  further  acknowledges  that AMNEX,  Inc.'s  reliance
thereon is  predicated  on their  representations  and  warranties  contained in
Paragraph 12 below.  Accordingly,  each of NTI and Brian E. King understands and
will ensure that its and his designees, if any, will understand, that the Shares
must be held indefinitely unless they are subsequently registered under the 1933
Act  or  an  exemption  from  such  registration  exists,  and  that  the  stock
certificate(s)  evidencing ownership of the Shares which they receive shall bear
the following restrictive legend:

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<PAGE>

         "The shares  represented by this  certificate  have not been registered
          under the Securities Act of 1933.  These shares have been acquired for
          investment and not for  distribution or resale.  They may not be sold,
          assigned, mortgaged,  pledged,  hypothecated, or otherwise transferred
          or disposed of without an effective  registration  statement  for such
          shares under the  Securities  Act of 1933 or an opinion of counsel for
          AMNEX that registration is not required under such Act."

         (b) Notwithstanding  anything to the contrary contained herein,  AMNEX,
Inc.  shall not be obligated  to deliver any of the Shares  until prior  written
notice of their issuance in compliance  with Rule 10b-17  promulgated  under the
Securities Exchange Act of 1934 (the "1934 Act") shall have been given to NASDAQ
and the National  Association  of Securities  Dealers,  Inc. and the  applicable
pre-issuance  notification period therefor (the "NASDAQ Clearance Period") shall
have expired.  AMNEX,  Inc.  agrees to cause such written  notice to be given to
NASDAQ and the  National  Association  of  Securities  Dealers,  Inc. as soon as
reasonably practicable after the date hereof.

         (c)      Each of NTI and Brian E. King agrees (i) to cause its or
his designees, if any, to execute letters containing
acknowledgments,  agreements and representations concerning the Shares which are
identical to the  acknowledgments,  agreements and representations made by it or
him in  Paragraphs  11 and 12 of this  Agreement  (collectively,  the  "Designee
Letters"); and (ii) to deliver all such Designee Letters to AMNEX, Inc. prior to
the date of issuance of the Shares. The execution and delivery to AMNEX, Inc. of
a Designee Letter for each such designee, if any, shall be a condition precedent
to AMNEX, Inc.'s obligation to deliver a stock certificate issued in the name of
such designee.  Accordingly,  notwithstanding anything to the contrary contained
herein, AMNEX, Inc. shall not be obligated to deliver any certificate evidencing
ownership  of any Shares by any  designee  of NTI or Brian E.  King,  unless and
until AMNEX shall be in receipt of a Designee Letter with respect thereto.

         (d) AMNEX,  Inc.  warrants  that upon  issuance,  the  Shares  shall be
validly  issued,  fully paid and  nonassessable,  subject to the  provisions  of
Section  630 of the  Business  Corporation  Law of the  State  of New  York,  if
applicable.

12. Investment Intent;  Qualification as Investor.  (a) Each of NTI and Brian E.
King  represents  and warrants that the Shares are being acquired for its or his
own account,  for investment  and not with a view to the resale or  distribution
thereof  within  the  meaning  of the 1933  Act.  Each of NTI and  Brian E. King
further represents and warrants that it and he shall not sell, assign, transfer,
encumber,  or otherwise  dispose of any of the Shares unless (i) a  registration
statement  under  the  1933  Act  with  respect  thereto  is in  effect  and the
prospectus  included  therein meets the  requirements  of Section 10 of the 1933
Act; or (ii) AMNEX,  Inc. has  received a written  opinion from its counsel that
after  investigation of the relevant facts,  such counsel is of the opinion that
such proposed sale,  assignment,  transfer,  encumbrance or disposition does not
require registration under the 1933 Act.

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<PAGE>

         (b) Each of NTI and Brian E.  King  represents  that  AMNEX,  Inc.  has
furnished it and him with its recent  filings with and reports to the Commission
on Form 10-K for the year  ended  December  31,  1995,  Form 10-Q for the fiscal
periods ended March 31, 1996,  June 30, 1996,  and September 30, 1996,  Form 8-K
and Amendment  No. 1 thereto for an event dated June 28, 1996,  and Form 8-K for
an event dated  November 20, 1996, and that it and he have reviewed the same and
been afforded the  opportunity to obtain such other  information as necessary to
evaluate  the  investment  contemplated  hereby.  Each of NTI and  Brian E. King
Seller further  represents and warrants that it and he are either an "accredited
investor" within the meaning of Rule 501(a)  promulgated  under the 1933 Act, or
have substantial  knowledge and experience in financial and business matters and
are capable of evaluating the merits and risks  associated  with the acquisition
of the Shares  provided for herein.  Each of NTI and Brian E. King  acknowledges
that such acquisition may entail significant risks.

13.  Limitation  of  Liability;  No Warranty.  AMNEX MAKES NO  WARRANTY,  EITHER
EXPRESS OR IMPLIED, WITH RESPECT TO THE MANAGEMENT OR OTHER SERVICES PROVIDED BY
IT HEREUNDER AND EXPRESSLY DISCLAIMS ANY WARRANTY OF MERCHANTABILITY OR WARRANTY
OF FITNESS  FOR A  PARTICULAR  PURPOSE.  AMNEX'S  LIABILITY  HEREUNDER  SHALL BE
LIMITED TO ITS OBLIGATION TO PAY THE SPECIAL COMPENSATION AND RESIDUAL TO NTI IN
ACCORDANCE  WITH THE TERMS  HEREOF.  NO PARTY  HERETO SHALL BE LIABLE TO ANOTHER
PARTY HERETO FOR ANY SPECIAL,  INDIRECT,  INCIDENTAL,  CONSEQUENTIAL OR PUNITIVE
DAMAGES  OR LOSS OF ANY KIND  (WHETHER  OR NOT SUCH  PARTY  WAS  ADVISED  OF THE
POSSIBILITY  OF SUCH  DAMAGES OR LOSS),  BY REASON OF ANY ACT OR OMISSION IN ITS
PERFORMANCE  UNDER THIS  AGREEMENT.  NOTWITHSTANDING  THE FOREGOING,  EACH PARTY
SHALL REMAIN LIABLE TO THE OTHER PARTY FOR ALL ACTUAL DAMAGES  RESULTING FROM OR
ARISING  OUT OF ITS GROSS  NEGLIGENCE  OR  WILLFUL OR WANTON  MISCONDUCT  IN THE
PERFORMANCE OF, OR THE FAILURE TO PERFORM, ITS OBLIGATIONS HEREUNDER.

14. Indemnification of NTI. AMNEX shall indemnify and hold harmless NTI from and
against any claim made by a third party,  which claim is based upon,  arises out
of or relates to AMNEX's  conduct in performing or failing to perform any of its
obligations  hereunder,  or to any service  provided under the Tariff (or to the
extent applicable,  NTI's state tariffs) pursuant to the terms and provisions of
this Agreement or on AMNEX's behalf, or for any violation,  alleged violation or
complaint made by a third party regarding  compliance with the Act, the Rules or
any Applicable  Laws,  which violation or complaint  arises out of or relates to
AMNEX's  conduct in  performing  or failing  to perform  any of its  obligations
hereunder.  For purposes of this  Paragraph  14, "third party" shall include any
applicable  regulatory agency or governmental  authority.  This  indemnification
shall  include,   but  not  be  limited  to,  reasonable   attorneys'  fees  and
disbursements,  court  costs,  and  the  amount  of  any  monetary  judgment  or
settlement,  including any  interest,  fines and  penalties  thereon.  NTI shall
provide  AMNEX with prompt  notice of receipt of any such claim,  together  with
copies of all documentation received in connection therewith. Upon notice to NTI
that AMNEX  desires to assume the  defense  of any legal  action,  complaint  or
proceeding,  AMNEX  shall not be  liable  to NTI for any legal or other  expense
subsequently  incurred by NTI. In the event that NTI determines  that there is a
reasonable  probability  that any claim may materially and adversely  affect NTI
other  than as a result of money  damages,  NTI shall have the right at its sole
cost and  expense to  defend,  compromise  or settle  such  claim.  In no event,
however,  shall NTI enter into any settlements or compromises with regard to any
claim  without  AMNEX's  prior  written  consent,  which  consent  shall  not be
unreasonably  withheld or delayed.  AMNEX shall not, without NTI's prior written
consent, which consent shall not be unreasonably withheld or delayed,  settle or
compromise  a claim or demand or consent to the entry of a judgment  against NTI
which does not include as an  unconditional  term thereof the giving to NTI of a
release from all liability in respect thereof.

15. Mutual Release.  Subject only to the  exceptions set forth herein,  AMNEX 
hereby  releases NTI, and NTI hereby releases AMNEX, together with each such 
party's respective heirs, administrators, successors, assigns, attorneys, share-
holders, officers, directors, employees,  representatives  and agents,  from all
claims,  demands, debts, obligations, liabilities, damages, actions, causes of 
action and suits at law or equity  of  whatever  kind, whether known or unknown,
anticipated or unanticipated,  contingent or  otherwise,  that each such party 
had, now has, or hereafter  can,  shall or may have,  for  anything  that has  
occurred up to and including the date hereof,  including but not limited to any
matters relating to or  arising  out of the COCOT  Agreement  and the Settlement
Agreement  (as it relates to NTI), such as, but not limited to, the distribution
of any monies deposited  in the Special  Fund.  The only  exceptions  to this  
release are the obligations of AMNEX and NTI under this Agreement,  the 
Settlement Agreement, as amended hereby, and the ZPDI Agreement.

                                       8
<PAGE>

16.  Reconciliation  of Certain Calls.  The regular monthly  reconciliation  for
payments made and compensation  earned for calls made during February 1997 shall
be completed by AMNEX by March 17, 1997 and provided to NTI. Any amounts owed to
NTI shall be paid by AMNEX to NTI on or before March 21,  1997,  and any amounts
owed to AMNEX shall be paid by NTI to AMNEX on or before March 24, 1997.

17. Treatment of Certain Advances and Adjustments.  Pursuant to a Third Addendum
to the January 28, 1994 Telephone  Agreement between NTI and Teleplex Coin Comm.
Inc. ("Teleplex"), (i) NTI has previously advanced $75,000 to Teleplex; and (ii)
there is a balance of $50,000 remaining to be advanced to Teleplex,  the payment
of  which  is  required  to be  made  by  NTI in  four  (4)  consecutive  weekly
installments of $12,500 each, commencing the date hereof. AMNEX agrees to assume
NTI's obligation to pay these four (4) weekly  installments.  In addition to the
aforementioned $75,000, NTI is owed $10,000 by Global Network,  another customer
of NTI to which NTI previously  advanced funds.  Such $85,000 is scheduled to be
repaid by  Teleplex  and Global  Network  within  eight (8) months from the date
hereof. It is agreed that, in lieu of passing through such monthly repayments to
NTI,  AMNEX will  retain  them as they are  received  from  Teleplex  and Global
Network,  and pay out the total sum of  $85,000 to NTI under a  promissory  note
covering  such dollar  amount,  which note shall be payable in full within sixty
(60) days from the date hereof. It is acknowledged and agreed that, by virtue of
an  overpayment  made in NTI's  $70,000  monthly  fee to  AMNEX,  which  fee was
adjusted  downwards as a result of the sale of Coastal Telecom Payphone Company,
Inc., an affiliate of NTI, to Crescent Public  Comunications  Inc., an affiliate
of AMNEX, NTI is owed $50,000.  Accordingly,  AMNEX agrees to repay such $50,000
to NTI by  inclusion  of such sum in the  aforementioned  sixty  (60) day  note.
Accordingly,  simultaneously  with the execution hereof,  AMNEX is executing and
delivering to NTI a
promissory note in the aggregate principal amount of $135,000, such amount to be
payable in full to NTI no later than sixty (60) days from the date hereof.

18.  Arrangements  Concerning  Mark B. Arbeit.  It is understood and agreed that
Mark B. Arbeit  ("Arbeit"),  a senior  officer of each of NTI and its affiliated
companies,  will be  employed  by  AMNEX  in a  similar  capacity.  Accordingly,
effective as of the date Arbeit's  employment with AMNEX  commences  (which date
will be provided by AMNEX to NTI and set forth in a written employment agreement
between AMNEX and Arbeit) (the "Starting Date"), each of NTI and such affiliated
companies (consisting of The Keystone Corporation,  National Telecom Hospitality
USA, Inc. and Select Tel Communications, Inc.) shall release Arbeit from any and
all of his obligations under that certain exclusive  employment  agreement dated
November 19, 1996 (the  "Pre-existing  Employment  Agreement") by and among NTI,
The Keystone  Corporation,  National Telecom  Hospitality USA, Inc.,  Select Tel
Communications,  Inc. and Arbeit, and any non-competition or similar restrictive
agreements  relating  thereto (but only to the extent that such  non-competition
and similar agreements  restrict Arbeit's ability to comply with his obligations
under his new employment  agreement  with AMNEX),  such release to be in writing
and in form and substance reasonably acceptable to Arbeit and AMNEX (with a copy
of same being provided to AMNEX simultaneously  therewith);  provided,  however,
that Arbeit executes and delivers to each of NTI and such affiliated  companies,
a release in form and substance reasonably acceptable to NTI and such affiliated
companies.  Arbeit's employment term under the Pre-existing Employment Agreement
will  terminate  effective as of the  Starting  Date and he will  thereafter  be
deemed to be an exclusive employee of AMNEX.

19. Non-Contravention.  (a) In furtherance of the exclusivity provisions hereof,
and in consideration of the benefits to be accrued to him hereunder, Brian E. 
King, the President and sole shareholder of NTI, hereby agrees to be personally
bound by the exclusivity provisions of this Agreement to the same extent as NTI
is bound hereunder, and further agrees, for so long as the COCOT Agreement, as 
amended hereby, remains in full force and effect and AMNEX retains the Right 
granted to it by NTI hereunder, that he shall cause any and all business 
opportunities for the reselling of long distance and operator assisted traffic
generated by COCOTs (which is the business currently conducted by NTI) that come
to his attention (collectively, "Business Opportunities", and individually, a 
"Business Opportunity"), to be offered or referred to AMNEX, in accordance with
the provisions of subparagraph 19(b) below.

                                       9
<PAGE>

         (b) Brian E. King shall offer all Business  Opportunities  as described
above to AMNEX, as NTI's exclusive  manager,  and on its behalf, and AMNEX shall
have the right of first refusal with regard  thereto (the "Option  Right").  The
Option Right must be exercised by AMNEX, if at all, within thirty (30) days 
after AMNEX receives written notice from  Brian E. King that he has a Business
Opportunity  (the  "Notice"),  which Notice shall  include a summary of the 
material  terms thereof and copies of all correspondence  from the  reseller  
or COCOT at issue. In the event  that AMNEX elects to exercise the Option Right,
it shall do so by sending  written  notice thereof to Brian E. King within the 
time period specified above. Upon receipt of such notice from AMNEX,  Brian E. 
King shall  direct such  Business  Opportunity exclusively to AMNEX,  as NTI's
exclusive  manager and on its behalf,  upon the terms and conditions stated in
the Notice, unless otherwise mutually agreed upon by the relevant parties.

20.  Injunctive  Relief. In the event of a breach by NTI or Brian E. King of the
exclusivity  or  non-contravention  provisions  hereof,  it is agreed that AMNEX
shall be without an adequate remedy at law, and in addition to any other rights,
remedies or damages available to it at law or in equity, AMNEX shall be entitled
to such  temporary  and  permanent  injunctive  relief as shall be  necessary or
appropriate to prevent or restrain any such breach or threatened breach, without
the necessity of proving damages,  without prejudice to any other remedies which
AMNEX may have at law or in equity,  and without obligation to post any security
in connection therewith.

21.      Effect of this Agreement.  Except as expressly amended hereby, the 
terms and provisions of the COCOT Agreement and the Settlement Agreement  shall
remain in full force and effect without waiver or  modification of the rights of
any party hereto.

22. Miscellaneous Provisions.  This Agreement shall be governed by and construed
in  accordance  with  the  laws of the  State  of New  York  without  regard  to
principles of conflicts of laws. This Agreement constitutes the entire agreement
between the parties hereto and supersedes all prior and contemporaneous  written
or oral agreements, understandings,  representations,  negotiations and promises
between  the  parties  hereto   concerning   the  subject   matter  hereof.   No
modification,  rescission or waiver of this  Agreement or any  provision  hereof
shall be binding unless made in writing and signed by a duly authorized  officer
of  each  party  hereto.   This  Agreement  may  be  executed  in  two  or  more
counterparts,  each of  which  shall be  deemed  an  original,  but all of which
together shall constitute one and the same instrument. NTI hereby represents and
warrants to AMNEX that it has full power,  authority and legal right to execute,
deliver, perform and observe the provisions of this Agreement, that in so doing,
NTI  shall not  contravene,  be in breach  of or  trigger a default  under,  its
certificate of incorporation or bylaws or any contracts, agreements, instruments
or other  documents to which it is party,  and that the execution,  delivery and
performance  by it of this  Agreement has been duly  authorized by all necessary
corporate action on its part.


                                       10
<PAGE>


         IN WITNESS  WHEREOF,  the parties  hereto have caused this  Renewal and
Modification  Agreement  to be  executed as of the date first set forth above by
their respective officers thereunto duly authorized.

AMERICAN NETWORK EXCHANGE, INC.

By:/s/

Name:__________________________

Title:_________________________

AMNEX, INC. *

By:/s/

Name:__________________________

Title:_________________________

* with regard to Paragraphs 10 and 11 hereof only

NATIONAL TELECOM USA, INC.

By:/s/

Name:__________________________

Title:_________________________


/s/
--------------------------------
Brian E. King, individually **

** with regard to Paragraphs 11, 12, 13, 19, 20 and 22 hereof only

THE KEYSTONE CORPORATION ***
NATIONAL TELECOM HOSPITALITY USA, INC. ***
SELECT TEL COMMUNICATIONS, INC. ***

By:____________________________
   Brian E. King, President

*** with regard to Paragraph 18 hereof only



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