NOTE AND WARRANT PURCHASE,
                 PAYING AND CONVERSION/EXERCISE AGENCY AGREEMENT










                                INTELLICALL, INC.
                            CARROLLTON, TEXAS, U.S.A.



                                USD 2'000'000.--
                 7% Convertible Notes of 1999 due June 11, 2004
                   and 200'000 Warrants expiring June 11, 2004






















                                  June 8, 1999


<PAGE>


                                                                              1.


                                TABLE OF CONTENTS
                                -----------------


DEFINITIONS

I.                   SUBJECT                                                  3
II.                  ANNEXES                                                  4
III.                 SALES RESTRICTIONS                                       5
IV.                  COMMISSION AND EXPENSES                                  8
V.                   WARRANTIES                                               9
VI.                  PAYMENT TO THE COMPANY                                  12
VII.                 CONDITIONS TO THE OBLIGATIONS
                     OF BANCA DEL GOTTARDO                                   12
VIII.                INFORMATION MEMORANDUM                                  13
IX.                  PRINTING OF THE NOTES AND WARRANTS                      13
X.                   SERVICING OF THE NOTES                                  15
XI.                  CANCELLATION OF NOTES AND COUPONS OR WARRANTS           16
XII.                 COVENANTS                                               17
XIII.                RIGHT OF TERMINATION                                    18
XIV.                 COMMUNICATIONS                                          19
XV.                  APPLICABLE LAW AND JURISDICTION                         19
XVI.                 EFFECTIVENESS                                           20
XVII.                CURRENCY INDEMNITY                                      20
XVIII.               ENTIRE AGREEMENT                                        20
XIX.                 AMENDMENT, CANCELLATION AND WAIVER                      21

ANNEX A              TERMS OF THE NOTES                                      22
ANNEX B              DEFINITIVE NOTE (FACE)                                  38
ANNEX C              INTEREST COUPONS                                        40
ANNEX D              GLOBAL NOTE                                             41
ANNEX E              TERMS OF THE WARRANTS                                   43
ANNEX F              DEFINITIVE WARRANT (FACE)                               60
ANNEX G              GLOBAL WARRANT                                          62
ANNEX H              CONVERSION AGENCY AGREEMENT                             64
ANNEX I              WARRANT AGENCY AGREEMENT                                79
ANNEX J              DEPOSIT AGREEMENT                                       94
ANNEX K-1/K-2        CERTIFICATION OF NON U.S. BENEFICIAL OWNERSHIP         103
ANNEX L              CERTIFICATE OF NO MATERIAL ADVERSE CHANGE              105
ANNEX M              SPECIMEN SIGNATURE FORM                                106
ANNEX N              CERTIFICATE BY BANCA DEL GOTTARDO                      107


<PAGE>


                                                                              2.


                           NOTE AND WARRANT PURCHASE,
                           --------------------------
                 PAYING AND CONVERSION/EXERCISE AGENCY AGREEMENT
                 -----------------------------------------------

                    entered into effective as of June 8, 1999

                                     between

INTELLICALL, INC.
being a corporation existing under the laws of the State of Delaware, whose head
office is situated at 2155 Chenault,  Suite 410,  Carrollton,  Texas 75006-5023,
U.S.A.,

(hereinafter called the "Company")
                                                                 on the one part
                                       and

BANCA DEL GOTTARDO
being a corporation duly organized with limited liability and existing under the
laws of Switzerland,  whose  registered head office is situated at Viale Stefano
Franscini 8, 6901 Lugano, Switzerland,
                                                               on the other part

Some Definitions
----------------

The Company's 7%  Convertible  Notes of 1999 due June 11, 2004,  are referred to
herein as the "Notes" and the  Warrants  of 1999  expiring  June 11, 2004 as the
"Warrants".

Until the Notes have been  printed in  definitive  form  pursuant  to Article IX
hereof,  the  expression  "Notes"  herein shall include  entitlements  under the
Global  Note,  and the  expressions  "Noteholder(s)"  and  "Coupon-  holder(s)",
mutatis  mutandis,  shall mean and include persons and entities  entitled to the
benefits under the Global Note. Each Noteholder  possesses a co-ownership in the
Global  Note in  relation  to the  principal  amount  of Notes of which he is an
owner.  "Global Note" means a global note for the total principal  amount of USD
2'000'000.-- issued in bearer form and representing 400 single Notes each in the
amount of USD 5'000.--  and  representing  the  aforementioned  total  principal
amount.  The Global Note will be destroyed by Banca del Gottardo  when the Notes
are printed.

Until the Warrants have been printed in  definitive  form pursuant to Article IX
hereof,  the expression  "Warrants" herein shall include  entitlements under the
Global Warrant, and the expressions "Warrantholder(s)",  mutatis mutandis, shall
mean and include persons and entities  entitled to the benefits under the Global
Warrant.  Each  Warrantholder  possesses a co-ownership in the Global Warrant in
relation to the principal number of Warrants he is an owner of.

"Global Warrant" means a global warrant for the total number of 200'000 Warrants
issued in  bearer  form.  The  Global  Warrant  will be  destroyed  by Banca del
Gottardo when the Warrants are printed.

Global Note and Global Warrant are hereinafter  sometimes  collectively referred
to as the "Global Certificates".

     I.  SUBJECT
         -------

         Subject to the terms and conditions hereof



<PAGE>


                                                                              3.


         -   the Company,  pursuant to  authorization by its Board of Directors,
             agrees  to issue and sell to Banca del  Gottardo  USD  2'000'000.--
             Notes at a price of 100% of their  principal  amount,  and  200'000
             Warrants in a ratio of one Note and 500 Warrants and

         -   Banca del Gottardo agrees not later than June 11, 1999

         (1)    to purchase (i.e. underwrite) on a firm basis for USD 2'000'000.
                -- Notes at a price of 100% of their principal amount and
                200'000 Warrants, and

         (2)    to offer the Notes and  Warrants in a placement  exclusively  to
                its clients and other financial  institutions at a price of 100%
                of their principal amount,


                                    (i) Notes
                                    ---------

    with a total principal amount of         USD 2'000'000.--
                                             (United States Dollars two million)

    maturing on                              June 11, 2004

    bearing interest at the rate of          7% per annum, payable
                                             semi-annually in arrear each
                                             June 11 and December 11,
                                             commencing December 11, 1999
                                             until maturity

                                      and

                                 (ii) Warrants
                                 -------------

    in a total number of                     200'000 (two hundred thousand)

    expiring on                              June 11, 2004


    The  aggregate  amount  for  which  Notes  and  Warrants  are  sold are
hereinafter referred to as the "Proceeds".

         The net Proceeds of the Notes will be utilized by the Company as
         follows:

         A.   USD 1'000'000.-- to Retire existing debt.; and

         B.   the remaining proceeds are at the Company's free disposal for the
              financing of acquisitions, working capital and general
              corporate purposes.

    Banca del Gottardo shall not have any  responsibility for or be obliged
to concern itself with the application of the net Proceeds of the Notes.



<PAGE>


                                                                              4.


     II. ANNEXES
         -------

         The contents of each of the Annexes attached hereto, i.e.

         Annex A:          Terms of the Notes
         Annex B:          Form of Definitive Note (face)
         Annex C:          Form of Interest Coupons
         Annex D:          Form of Global Note
         Annex E:          Terms of the Warrants
         Annex F:          Form of Definitive Warrant (face)
         Annex G:          Form of Global Warrant
         Annex H:          Conversion Agency Agreement
         Annex I:          Warrant Agency Agreement
         Annex J:          Deposit Agreement
         Annex K:          Certification of Non U.S. Beneficial Ownership
         Annex L:          Form of Certificate of No Material Adverse Change
         Annex M:          Specimen signature form
         Annex N:          Certificate by Banca del Gottardo

         shall constitute an integral part of this Agreement.

III.     SALES RESTRICTIONS
         ------------------

         a)   The Notes and Warrants to be issued pursuant to this Agreement
              have not been registered under the United States Securities Act
              of 1933, as amended (the "Securities Act"), and may not be
              offered, sold or delivered, directly or indirectly, in the
              United States or to, or for the account of, any U.S. person except
              in transactions exempt from the registration requirements
              of the Securities Act. Banca del Gottardo certifies that it is
              not a United States person and is not acquiring the Notes or the
              Warrants for the account or benefit of any United States
              person. Banca del Gottardo recognizes that the Company will (i)
              implement reasonable procedures to prevent any transfer of the
              Notes or Warrants not made in accordance with the provisions of
              Regulation S under the Securities Act and (ii) refuse to register
              any transfer of the Notes and Warrants unless such transfer is
              made in accordance with the registration or exemption provisions
              of the Securities Act or in accordance with the requirements of
              Regulation S.

         b)   As to the Company, the Notes and Warrants are intended to be
              obligations that are not required to be in registered form for
              purposes of United States federal tax laws and the principal (to
              the extent characterized as original issue discount) and interest
              payable on the Notes are intended to be "portfolio interest"
              under Sections 871(h) and 881(c) of the United States Internal
              Revenue Code of 1986 as amended (the "Code"). Accordingly, the
              Notes and the Warrants may not, as part of any part of the initial
              distribution, be offered for sale or resale, sold or delivered,
              directly or indirectly, to a person in the United States or to a
              United States person. Banca del Gottardo (i) agrees and represents
              that no Notes or Warrants will be offered, sold or delivered to
              or on behalf of a person within the United States or a United
              States person, (ii) represents and agrees that (a) it will not
              offer or sell, and, during the period beginning on the earlier
              of the first date that the Notes and Warrants are offered or
              the date on which the Notes are issued and ending on the date one
              year after the later of the date upon which the Notes and Warrants
              were first offered or the date of closing of this offering (the
              "Distribution Compliance Period"), it will not offer or sell,
              Notes or Warrants


<PAGE>


                                                                              5.


              to a person who is within the United  States or to a United States
              person,  (b) it has not delivered and will not deliver  within the
              United States  definitive Notes or coupons or definitive  Warrants
              that are sold during the Distribution  Compliance  Period,  (c) it
              has and throughout the Distribution Compliance Period will have in
              effect procedures reasonably designed to ensure that its employees
              or agents who are  directly  engaged in selling  Notes or Warrants
              are aware that such Notes or  Warrants  may not be offered or sold
              during  the  Distribution  Compliance  Period  to a person  who is
              within the United  States or to a United  States person and (d) it
              has  not  entered   and  will  not  enter  into  any   contractual
              arrangement  with respect to the  distribution and delivery of the
              Notes and the  Warrants,  except with its  affiliates  or with the
              prior written consent of the Company,  (iii) represents and agrees
              with  respect to each  affiliate  that  acquires  from it Notes or
              Warrants  for the  purpose of  offering  or selling  such Notes or
              Warrants during the Distribution Compliance Period,  repeating and
              confirming the representations and agreements contained in clauses
              (ii) (a),  (b),  (c) and (d) on each such  affiliate's  behalf and
              (iv)  represents and agrees that it will not sell or deliver Notes
              and Warrants to a holder which is (a)  immediately  after the sale
              or delivery,  a "10- percent.  shareholder"  of the Company within
              the meaning of Section  871 (h) (3) of the Code,  (b) a bank on an
              extension of credit made pursuant to a loan agreement entered into
              in the ordinary course of its trade or business,  (c) a controlled
              foreign  corporation which is related to the Company under section
              864 (d) (4) of the Code, or (d) within a foreign country which the
              United  States  Secretary  of the Treasury  has  determined  under
              section 871 (h) (6) of the Code that the  exchange of  information
              with the  foreign  country is  inadequate  to  prevent  evasion of
              United States tax by United States  persons and (v) represents and
              agrees  that  it  and  its  affiliates   will  send,   during  the
              Distribution  Compliance Period, a confirmation or other notice to
              any party to whom it delivers Notes or Warrants that such party is
              subject to the same  restrictions on offers and sales of the Notes
              or Warrants  that apply to it. Banca del Gottardo  will deliver to
              the Company the certificate in the form attached hereto as Annex N
              within ten business days of the  commencement of the  Distribution
              Compliance  Period.  For  purposes of this  Agreement,  whether an
              offer,  sale or  delivery  is made to a person  within  the United
              States or to a United States  person will be determined  under the
              rules set out in the Code, and United States  Treasury  Regulation
              Section  1.163-5(c)(2)(i)(D).  Banca del  Gottardo  agrees that it
              will comply  fully with the selling  restrictions  set out in this
              Sub-Section  (b) and, in  particular,  Banca del  Gottardo  hereby
              covenants  and agrees to the  effect  set out in clauses  (ii) and
              (iii) of the second preceding  sentence.  Additionally,  Banca del
              Gottardo  agrees  (i)  that  any  offer  or sale of the  Notes  or
              Warrants  will only be made in accordance  with the  provisions of
              Regulation S adopted  pursuant to the Securities Act,  pursuant to
              an  exemption  from  registration  under the  Securities  Act,  or
              pursuant to a registration  statement declared effective under the
              Securities Act and (ii) to not engage in any hedging  transactions
              with  regard  to  the  Notes  or  Warrants   unless  such  hedging
              transactions are in compliance with the Securities Act.

         c)   The Notes will be represented initially by a temporary Global
              Convertible Note (the "Global Note"), without interest coupons,
              and the Warrants will be represented initially by a temporary
              Global Certificate (the "Global Warrant"), the Global Note and
              Global Warrant to be deposited by the Company with Banca del
              Gottardo, on the Payment Date. The Global Note may be exchanged,
              as a whole or in part, for appropriate definitive Notes, in bearer
              form in the denominations of USD 5'000.-- with interest coupons
              (the "coupons") attached, and the Global Warrant may be exchanged,
              as a whole or in part, for appropriate definitive Warrants, in
              bearer form not earlier than one year after the later of the date
              on which the Notes and the Warrants are first offered or the
              Payment Date, before which time no Notes represented by the
              Global Note or Warrants represented by the Global Warrant or
              interest


<PAGE>


                                                                              6.


              therein may be offered, sold or transferred into the United States
              or  to  a  U.S.   person.   Such  exchange   shall  be  made  upon
              certification,  in the form attached hereto as Annex K-1, that the
              beneficial  owners of the  Notes or  Warrants  either  (i) are not
              United  States  persons  or U.S.  persons  or (ii)  are  financial
              institutions   (within  the  meaning  of  United  States  Treasury
              Regulation Section  1.165-12(c)(1)(v))  located outside the United
              States that are not United States  persons and have purchased such
              Notes or Warrants for resale  during the  Distribution  Compliance
              Period  and  certify  they  have  not  acquired  the  Notes or the
              Warrants for purposes of resale directly or indirectly to a United
              States  person  or to a  person  within  the  United  States.  Any
              certificates  provided by a clearing organization must be based on
              statements  provided to it by its members.  A beneficial  owner of
              Notes must  exchange  its share of the Global Note for  definitive
              Notes before such Notes or interests therein may be transferred or
              as regards the Notes before  interest  payments or other  payments
              will be made and a beneficial  owner of Warrants must exchange its
              position of the Global Warrant for definitive Warrants before such
              Warrants  will be  exercised.  Banca del  Gottardo  agrees  (i) to
              furnish  to the  Company a  properly  completed  certificate  with
              respect to each Note and Warrant,  in the form attached  hereto as
              Annex K-1 and K-2  (and,  in the case of  clearing  organizations,
              required statements of members of the clearing  organization),  on
              the earlier of the date of the first actual payment of interest on
              the Note or the date of  delivery  by the  Company  of the Note or
              Warrant in definitive form, and (ii) to issue definitive Notes and
              Warrants   within  a   reasonable   time  after  the  end  of  the
              Distribution  Compliance  Period  (for this  purpose,  a temporary
              global security is not a security in definitive form).

         d)   In this Agreement, references to "dollars" and "USD" are to United
              States dollars, the term "United States" means the United States
              of America (including the States and the District of Columbia),
              its territories, its possessions and other areas subject to its
              jurisdiction, and the term "United States person" means a citizen
              or resident of the United States, a corporation, partnership or
              other entity created or organized in or under the laws of the
              United States or any political subdivision thereof, or an estate
              or trust the income of which is subject to United States federal
              income taxation regardless of its source, "U.S. person" shall have
              the meaning set forth in Sections 230.901 through 904 of Title 17
              of the United States Code of Federal Regulations ("Regulation S").

         e)   The following legends will appear on the Global Note and all Notes
              and coupons issued pursuant to the Offer: (i) "Any United States
              person who holds this obligation will be subject to limitations
              under the United States income tax laws, including the limitations
              provided in sections 165(j) and 1287(a) of the Internal Revenue
              Code", and (ii) "This Note has not been and will not be registered
              under the United Stated Securities Act of 1933, as amended (the
              "Securities Act"), and may not be offered, sold or delivered,
              directly or indirectly, in the United States or to, or for the
              benefit of, any U.S. person (as such terms are defined in
              Regulation S under the Securities Act) unless this Note is
              registered under the Securities Act or an exemption from the
              registration requirements of the Securities Act is available.
              Hedging transactions involving this Note may not be conducted
              unless such hedging transactions are made in compliance with the
              Securities Act." The sections referred to in the legend provide
              that, with certain exceptions, a United States person will not be
              permitted to deduct any loss, and will not be eligible for
              capital gain treatment with respect to any gain, realized on a
              sale, exchange or redemption of such Notes or coupons.

         f)   The  following  legends will appear on the Global  Warrant and all
              Warrants issued pursuant to the Offer:  "This Warrant has not been
              and will not be registered under the United Stated  Securities Act
              of  1933,  as  amended  (the  "Securities  Act"),  and  may not be
              offered, sold or


<PAGE>


                                                                              7.


              delivered,  directly or indirectly, in the United States or to, or
              for the benefit of, any U.S.  person (as such terms are defined in
              Regulation  S under the  Securities  Act) unless  this  Warrant is
              registered  under  the  Securities  Act or an  exemption  from the
              registration  requirements  of the  Securities  Act is  available.
              Hedging  transactions  involving this Warrant may not be conducted
              unless such hedging  transactions  are made in compliance with the
              Securities Act."

         g)   The Company represents, warrants and covenants that the Notes and
              the Warrants have not been and shall not be offered or sold except
              in accordance with Rule 903 promulgated under the Securities Act
              or in a transaction exempt from the registration requirements of
              the Securities Act. Each of the Company and Banca del Gottardo
              represents, warrants and covenants that (i) none of it, its
              affiliates or any person acting on its behalf has engaged or
              will engage in any directed selling efforts (as defined in Rule
              902 promulgated under the Securities Act) in the United States
              and it has complied and will comply with the offering restrictions
              of Regulation S under the Securities Act in connection with the
              offer of the Notes and the Warrants, (ii) none of it, its
              affiliates or any person acting on its behalf has utilized
              or will utilize any form of general solicitation or general
              advertising (as such terms are used in Regulation D promulgated
              under the Securities Act) in connection with the offer of the
              Notes and the Warrants in the United States, (iii) none of it,
              its affiliates or any person acting on its behalf has made or
              will make an offer of the Notes in circumstances that would
              require the registration of the Notes or Warrants under the
              Securities Act and (iv) requests to purchase Notes and/or Warrants
              shall be accepted only from persons who are not within the
              United States.

         h)   Banca  del   Gottardo   has  been   advised  by  the  Company  and
              acknowledges and confirms that it is aware (a) that a violation or
              breach of any of the terms and  conditions  of Article III of this
              Agreement  could  directly  cause the Company to become subject to
              damages and  liabilities  (including,  but not limited to,  excise
              taxes,  a  loss  of  the  interest  deduction  and  assumption  of
              withholding  taxes) under various United States securities and tax
              laws, and (b) that, as a consequence,  Banca del Gottardo could be
              held liable for such damages and  liabilities,  in the event Banca
              del Gottardo violated or breached such terms and conditions.

IV.      COMMISSION AND EXPENSES
         -----------------------

         a)   The Company will pay on June 11, 1999 Lugano time (the "Closing
              Date") to Banca del Gottardo

              (1)   a managing and underwriting commission of 5% calculated on
                    the principal amount of the Notes

              (2)   USD 10'000.-- for  out-of-pocket  expenses incurred by Banca
                    del  Gottardo,  which shall include all its Swiss legal fees
                    and expenses.

              The  payment  by the  Company of (1) and (2) above will be made by
              deduction from the payment by Banca del Gottardo to the Company of
              the Proceeds, resulting in the Net Proceeds as per Article VI.

         b)   The Company shall further bear when ascertainable and due



<PAGE>


                                                                              8.



              -   all present or future taxes, duties or other charges levied by
                  or within the United States of America in connection  with the
                  execution and delivery of this Agreement,  the Global Note and
                  the Global Warrant  (excluding tax on interest or principal on
                  the Notes which is addressed in Annex A); and

              -    the  commissions  and  expenses  for  the  servicing  and the
                   conversion  of the Notes as per Article X and the exercise of
                   the Warrants as set forth in the Warrant Agency Agreement;

         c)   The Company will reimburse  Banca del Gottardo on first demand for
              all reasonable bank charges, legal fees and other reasonable costs
              and  expenses  incurred or to be incurred by Banca del Gottardo in
              case   of   or  in   connection   with   reorganization,   merger,
              restructuring or default, actual or threatened,  of the Company as
              well as in connection with the convening of a Noteholders' meeting
              and the  preservation  and  enforcement of any of the rights under
              this  Agreement,  the Global  Warrant or the Warrants,  the Global
              Note or the Notes.

         d)   Banca del Gottardo shall bear

              -   all costs and expenses in connection with the initial offering
                  and placement of the Notes and the Warrants incurred by it.

              Banca del Gottardo shall further bear

              -   the cost for the  printing  and delivery to the holders of the
                  definitive  Notes or of the  definitive  Warrants  incurred by
                  Banca del Gottardo on behalf of the Company.

              -   all costs  incurred  by it in  connection  with the  offering,
                  including  the  printing  in  Switzerland  of the  Information
                  Memorandum relating to the Notes and the Warrants.

V.         WARRANTIES
           ----------

           A)     The Company warrants to and for the benefit of Banca del
                  Gottardo that:

                  1.   Status: it is a corporation duly incorporated and
                       existing in good standing under the laws of the State of
                       Delaware capable of suing and being sued and has the
                       power and authority to own its assets and to conduct the
                       business which it presently conducts;

                  2.   Powers:  it has the  power to enter  into,  exercise  its
                       rights and perform and comply with its obligations  under
                       this Agreement;

                  3.   Authorization and Consents: except as to the registration
                       requirements provided for herein, all actions, conditions
                       and things  required by the laws of the State of Delaware
                       and  the  United  States  of  America  have  been  taken,
                       fulfilled  and  done  (including  the  obtaining  of  any
                       necessary consents) in order

                       a)  to enable it lawfully to enter into, exercise its
                           rights and perform and comply with its obligations
                           under this Agreement; and




<PAGE>


                                                                              9.


                       b)  to ensure that those  obligations are legally binding
                           and   enforceable  in  accordance  with  their  terms
                           subject to general equity  principles,  to applicable
                           bankruptcy,       insolvency,        conservatorship,
                           reorganization  and other similar debtor relief laws,
                           and to other laws  establishing  liens and priorities
                           or    otherwise     relating    to    or    affecting
                           creditors-rights;

                  4.   Non-Violation  of Laws, etc: its entry into, and exercise
                       of its rights and/or  performance  of or compliance  with
                       its obligations  under this  Agreement,  the terms of the
                       Global  Note and the Notes  and the  terms of the  Global
                       Warrant  and the  Warrants do not and will not violate in
                       any material way

                       a)  any law to which it is subject; or

                       b)  its Certificate of Incorporation; or

                       c)  except for matters for which the Company has received
                           a  waiver,  any  agreement  to which it is a party or
                           which is  binding on it or its  assets,  and does not
                           and will not result in the  existence of, or obligate
                           it  to  increase,  any  security  interest  in  those
                           assets,  except to the extent that such violations in
                           the  aggregate  would  not  have a  material  adverse
                           effect on the financial conditions of the Company;

                  5.   Obligations   Binding:   its   obligations   under   this
                       Agreement,  the  Global  Note and the  Notes,  the Global
                       Warrant and the  Warrants  when duly  executed are valid,
                       binding and  enforceable  in accordance  with their terms
                       subject  to  general  equity  principles,  to  applicable
                       bankruptcy, insolvency,  conservatorship,  reorganization
                       and other similar  debtor relief laws,  and to other laws
                       establishing  liens and priorities or otherwise  relating
                       to or affecting creditors' rights;

                  6.   Information Memorandum: the information pertaining to the
                       Company and its  subsidiaries  which is  contained in the
                       Information  Memorandum  (defined  in  Article  VIII)  is
                       accurate in all material  respects and there are no other
                       facts the omission of which makes any  statement  therein
                       materially misleading;

                  7.   Accounts:   the   audited  and   unaudited   consolidated
                       financial   statements   included  as  contained  in  the
                       Information  Memorandum  present  fairly the  results and
                       financial  condition  of the  Company  as a whole for the
                       periods  and  as  of  the  dates  thereof,   and  are  in
                       accordance with generally accepted accounting  principles
                       in the United States of America;

                  8.   No Material  Adverse  Change:  save as  disclosed  in the
                       Information Memorandum and the Company's filings with the
                       Securities and Exchange Commission in the U.S., there has
                       been  no  material  adverse  change  in the  consolidated
                       financial  condition  of the Company  since  December 31,
                       1998;

                  9.   Litigation: except as disclosed in the Information
                       Memorandum, no litigation, arbitration or administrative
                       proceedings or judgment or award is current or, so far
                       as the Company is aware, threatened or pending

                       a)   to restrain the entry into, exercise of its rights
                            under and/or performance or enforcement of or
                            compliance with its obligations under this
                            Agreement; or


<PAGE>


                                                                             10.



                       b)   which either individually or collectively are
                            material in the context of the issue and sale of
                            the Notes or the Warrants or the making and
                            performance of this Agreement;

                  10.  No Breach or Default:  neither  failure by the Company to
                       comply  with  Article  III nor  any  event  described  in
                       Sections  8,  9 or 10 of  the  Terms  of  the  Notes  has
                       occurred and is continuing.  The Company is not in breach
                       or in default  under any  agreement  to an extent or in a
                       manner  which has had or could  have a  material  adverse
                       effect on the financial  condition of the Company and its
                       consolidated affiliates taken as a whole.

           (B)    Since the commitment of Banca del Gottardo to purchase the
                  Notes and the Warrants is made on the basis of the aforesaid
                  representations and warranties, the Company hereby
                  undertakes with Banca del Gottardo that it will hold Banca
                  del Gottardo harmless against all losses, liabilities, costs,
                  charges and expenses which it may incur as a noteholder as
                  a result of or in relation to any material misrepresentation
                  or any material breach of said representations and warranties
                  by the Company, and as long as any of the Notes and the
                  Warrants are outstanding Banca del Gottardo shall be given
                  prompt notice by the Company of any claim, action or
                  proceeding which might give rise to an obligation under
                  this clause (B) of Article V. This indemnification by the
                  Company shall be in addition to any other remedy available to
                  Banca del Gottardo under applicable law.


VI.        PAYMENT TO THE COMPANY
           ----------------------

           On the Closing  Date,  Banca del Gottardo will pay to the Company the
           net  proceeds   (the  "Net   Proceeds")   of  the  offering  -  after
           compensation  with the commissions and expenses  mentioned in Article
           IV against the Global Note and the Global Warrant being  delivered to
           Banca del Gottardo pursuant to Article VII.

           Such net proceeds  will be placed by Banca del Gottardo in US Dollars
           to the  credit  of the  Company  in a US Dollar  denominated  account
           designated by the Company.

           Such net proceeds will be at the free disposal of the Company subject
           to any Swiss National Bank regulations or other  regulations that may
           be in force on the Closing Date.

VII.       CONDITIONS TO THE OBLIGATIONS OF BANCA DEL GOTTARDO
           ---------------------------------------------------

           Banca del Gottardo shall have received from the Company at the latest
           on June 9, 1999 the following documents:

           (1)    a copy of the Certificate of Incorporation,  together with all
                  amendments  thereto, of the Company certified by the Secretary
                  or the  Assistant  Secretary  of the  Company  and a copy of a
                  Certificate of the Secretary of State of the State of Delaware
                  as to the good  standing  of the  Company,  each dated as of a
                  recent date;

           (2)    a certified copy of a resolution or  resolutions  duly adopted
                  by the  Board of  Directors  of the  Company  signed by a duly
                  authorized  officer of the Company,  conferring  the necessary
                  authority  upon the  person(s)  signing  this  Agreement,  the
                  Information


<PAGE>


                                                                             11.


                  Memorandum,  the Global Note, the Notes,  the Global  Warrant,
                  the Warrants and any related  documents;  and a certificate of
                  the Secretary, or Assistant Secretary of the Company as to the
                  incumbency  and  signatures  of the  officer(s) of the Company
                  signing  the  documents  provided  for in this  clause  (2) on
                  behalf of the Company and the approval of this  Agreement  and
                  the Information Memorandum;

           (3)    Global Note (in the form of Annex D, without  interest coupons
                  and  without  reproduction  of the Terms of the Notes) and the
                  Global  Warrant  (in the form of Annex G) both duly issued and
                  signed by an  authorized  officer of the Company to be held in
                  escrow  by  Banca  del  Gottardo  pending  payment  of the Net
                  Proceeds pursuant to Article VI;

           (4)    an executed copy of the Conversion  Agency Agreement as set
                  forth n Annex H hereto;

           (5)    an executed copy of the Warrant Agency  Agreement as set
                  forth in Annex I hereto;

           (6)    an executed copy of the Deposit Agreement as set forth in
                  Annex J hereto;

           (7)    specimen signatures for the printing of the Notes;

           (8)    Certificate  of No  Material  Adverse  Change  dated as of the
                  Closing  Date  and  signed  by an  authorized  officer  of the
                  Company, substantially in the form of Annex L hereto;

           (9)    a legal opinion of Kane, Russell,  Coleman and Logan, external
                  U.S.  counsel to the Company on the laws of the United  States
                  of America, dated as of the Closing Date;

           (10)   an opinion of the  Company's  Tax Counsel  with respect to the
                  status of the Notes in respect of United States  taxes,  dated
                  as of the Closing Date;

           (11)   a  certificate  of two officers of the Company  approving  the
                  terms of the Notes and of the  Warrants and the issue and sale
                  thereof by the Company;

           (12)   2 copies  of the  Information  Memorandum  duly  signed  by an
                  authorized officer of the Company; and

           (13)   an executed copy of the  Registration  Rights  Agreement dated
                  June 11, 1999 by and among the Company and Banca del  Gottardo
                  in a form as agreed by Banca del Gottardo.

           Each of documents 5, 6, 7, 8, 9, 10 and 12 shall be  substantially as
           agreed by the  Company  and Banca del  Gottardo  prior to the Closing
           Date.

VIII.      INFORMATION MEMORANDUM
           ----------------------

           The Company  will supply  Banca del Gottardo on behalf of the holders
           of the Notes in due time with information and  documentation  for the
           preparation by Banca del Gottardo of the Information  Memorandum (the
           "Information  Memorandum")  relating to the Issue, in compliance with
           Swiss law.

           The Information Memorandum shall be reviewed by the Company and Banca
           del Gottardo.




<PAGE>


                                                                             12.


    IX.    PRINTING OF THE NOTES AND WARRANTS
           ----------------------------------

           Banca del  Gottardo  shall  provide for the  printing of all, but not
           some only, of the Notes or of the Warrants,  at its cost on behalf of
           the  Company.  A proof  of the  Notes  and of the  Warrants  shall be
           approved by the Company, unless the Company is then in default, prior
           to the printing thereof.

           (1)    The Notes shall

                  -  be in the form of Annex B,

                  -  have the Terms of the Notes (as per Annex A) reproduced
                     in English on the reverse side,

                  -  be dated the Closing Date, and

                  -  bear in facsimile the signature(s) of one or more duly
                     authorized officer(s) of the Company

                  -  have Coupons attached, whereas

           (2)    the Coupons shall

                  -  be in the form of Annex C, and

           (3)    The Warrants shall

                  -  be in the form of Annex F

                  -  have the Terms of the Warrants (as per Annex E) reproduced
                     in English on the reverse side

                  -  to be dated the Closing Date, and

                  -  bear in facsimile the signature(s) of one or more duly
                     authorized officer(s) of the Company.

           (4)    The Notes with Coupons attached shall be exchanged against the
                  Global  Note  delivered  to Banca  del  Gottardo  pursuant  to
                  Article VII of this Agreement.

           The Global  Certificates so exchanged  shall  thereafter be cancelled
           and returned to the Company.

           The  Company  hereby  irrevocably  authorizes  Banca del  Gottardo to
           reproduce on the Notes, the coupons and the Warrants the signature of
           the President of the Company set forth in the specimen signature form
           of Annex M attached  hereto,  with the same  binding  effect upon the
           Company  as if the Notes and the  coupons  or the  Warrants  had been
           issued and signed by the Company on the Closing Date.



<PAGE>


                                                                             13.


           Notes  and/or  Coupons  or  Warrants  which  are  mutilated,  lost or
           destroyed  may be replaced by Banca del Gottardo in  accordance  with
           the respective  provisions of the Terms of the Notes and the Terms of
           the Warrants respectively.

X.         SERVICING OF THE NOTES
           ----------------------

           (1)    Transfer of funds

                  The  Company  will  effect  transfer  of the  funds in  freely
                  disposable  United States Dollars required to make any payment
                  of  principal  or  interest  on  the  Notes,   including   the
                  commissions  referred to in paragraph (2) hereafter,  to Banca
                  del  Gottardo,   Lugano,   as  Paying  Agent,  for  value  the
                  respective  due date provided  that, if such due date does not
                  fall on a Business Day, the Company shall be obliged to effect
                  transfer  of  such   payments   for  value  the  Business  Day
                  immediately  preceding  such due date. Any transfer risk shall
                  be borne by the Company.

                  "Business Day" means a day on which  commercial banks are open
                  for domestic business and foreign exchange (including dealings
                  in US Dollars) in Lugano and New York.

                  Banca del Gottardo  will supply the  Company,  by facsimile or
                  otherwise  in writing  received  by the  Company not less than
                  five  Business  Days  prior to each  due date for any  payment
                  under the  Notes,  with any  necessary  information  including
                  reference  numbers  and the name of a contact  person  for the
                  receipt of funds.  Further information  regarding the transfer
                  may be obtained by Banca del Gottardo  from the Company at the
                  address set out in Article XIV below.

                  Banca del Gottardo shall credit the funds received to separate
                  non-interest bearing accounts with Banca del Gottardo for each
                  Coupon due date and/or  redemption  date. The receipt by Banca
                  del Gottardo of the due and  punctual  payment of the funds in
                  Lugano shall release the Company of its obligations  under the
                  Global Note or under the Notes for the interest and principal,
                  to the extent of such payment.

                  Any funds held by Banca del Gottardo which will not be used as
                  a consequence  of Coupons and Notes not having been  collected
                  within  the  relevant  period  described  by  the  Statute  of
                  Limitations,  shall  be  held by  Banca  del  Gottardo  at the
                  disposal of the  Company.  Banca del Gottardo  shall  promptly
                  after the expiry of the  relevant  period  inform the  Company
                  about the respective amount.

                  The risk of any exchange loss on the transfer of funds so held
                  by Banca del  Gottardo  from Banca del Gottardo to the Company
                  shall be borne by the  Company,  provided the transfer is made
                  by order of, or with the consent of, the Company.

           (2)    Commissions and Expenses

                  The Company will pay to Banca del Gottardo for the servicing
                  of the Notes a commission of

                  - 0.25% on the face  amount of Coupons to be paid and
                  - 0.125% on the principal amount of Notes redeemed.



<PAGE>


                                                                             14.


           (3)    Modalities

                  Except  as  provided  in  paragraph  (1) of  Article  XI or in
                  Section  5 of the  Terms of the  Notes,  any  transfer  by the
                  Company as per (1) and (2) above,  shall be made in US Dollars
                  freely disposable,  without any restrictions, and whatever the
                  circumstances  may  be,  irrespective  of the  nationality  or
                  domicile of the holder of Notes  and/or  Coupons,  and without
                  requiring  any  affidavit,  or the  fulfilment  of  any  other
                  formality.

           (4)    Paying Agency

                  The Company hereby  appoints Banca del Gottardo as sole Paying
                  Agent (the "Paying  Agent") and Banca del  Gottardo  agrees to
                  pay to the  Noteholders  all  amounts  to become due under the
                  Notes.

                  The Company  undertakes,  in connection with the Issue, not to
                  appoint any  institutions  as paying agent without the consent
                  of Banca del Gottardo, which consent shall not be unreasonably
                  withheld  and not to pay to  other  banks  any  commission  or
                  remuneration  for the payment of interest or  principal on the
                  Notes.

XI.        CANCELLATION OF NOTES AND COUPONS OR WARRANTS
           ---------------------------------------------

           The Company  requests and authorizes Banca del Gottardo and Banca del
           Gottardo  undertakes to cancel and destroy all Coupons paid and Notes
           redeemed,  converted or replaced and Warrants  exercised or replaced,
           after the period  prescribed by law, and to certify to the Company in
           writing the serial numbers of Notes or Warrants,  as the case may be,
           destroyed,  the dates when such  destruction took place and the names
           of the persons witnessing such destruction.

           Banca del  Gottardo  reserves the right to record  cashed  Coupons as
           well as redeemed,  repaid,  converted or replaced Notes and exercised
           or  replaced  Warrants  on video tape or other data  carriers  and to
           store them in this way instead of keeping them physically  during the
           period  prescribed  by law and to  destroy  them  subsequently.  This
           reproduction  of Coupons  and/or  Notes or  Warrants  will  remain in
           safekeeping at Banca del Gottardo during the statutory limitation.

XII.       COVENANTS
           ---------

           As long as any of the  Notes  or  Warrants  remain  outstanding,  the
           Company undertakes:

           (1)    To send to Banca del Gottardo

                  a)   Annual  Reports,  on Form 10-K,  as filed with the United
                       States  Securities and Exchange  Commission  (the "SEC"),
                       which report shall include or be accompanied by a copy of
                       the report of the Company's independent auditor', and

                  b)   such regular and  periodic  reports on Form 10-Q and Form
                       8-K (deemed material) as the Company files with the SEC.

                  Banca del Gottardo is  authorized  to hold these  documents at
                  the  disposal  of the  Noteholders  and/or  holders of Coupons
                  and/or Warrantholders for inspection.




<PAGE>


                                                                             15.


           (2) To provide  Banca del  Gottardo  forthwith  upon  becoming  aware
               thereof with

                  -  any change of its Certificate of  Incorporation  or By-laws
                     of itself and of ILD Telecommunications, Inc. (if any), and
                     without  waiting for Banca del  Gottardo to take any of the
                     actions mentioned in Section 8, 9 or 10 of the Terms of the
                     Notes, with

                  -  a notice in writing of any event provided for in Section 8,
                     9 or 10 of the Terms of the Notes.

           (3)    To hold meetings of the Board of Directors on a at least
                  quarterly basis, i.e. at least one meeting each quarter.

           (4)    To  provide  Banca  del  Gottardo  with  quarterly   financial
                  statements of the Company by no later than the 45th day of the
                  month following the quarter covered by such  statements.  Such
                  statements  shall provide Banca del Gottardo with a summary of
                  all of the Company's operation, in addition to a brief summary
                  of how the  Net  Proceeds  of this  issue  have  been  used by
                  Company.

           (5)    To keep  appointed Mr. John J.  McDonald,  President and Chief
                  Executive  Officer of the  Company,  unless Banca del Gottardo
                  agrees to his relieve from office.

           (6)    (a)  So  long  as  any  Notes  are  outstanding,  to  keep
                       available authorized shares of Common Stock sufficient to
                       permit all Notes or Warrants  outstanding and unconverted
                       or unexercised to be converted or exercised in accordance
                       with  the  Provisions  (Exhibit  1  to  Annex  H  of  the
                       Agreement) and the terms of the Warrants respectively;

                  (b)  to assure that all shares of Common Stock  delivered upon
                       conversion  of  Notes or  exercise  of  Warrants  will be
                       validly issued, fully-paid and non-assessable;

                  (c)  to file, on or before  November 1, 1999,  if required,  a
                       registration  under the  United  States  securities  laws
                       pursuant to the  Registration  Rights Agreement set forth
                       in Art.  VII,  Section  13  hereof  that may be  required
                       before the Shares can be delivered upon conversion of the
                       Notes or exercise of Warrants and freely  marketed in the
                       United States.

           (7)    To  maintain  the  deposit  on fifty  percent of the shares of
                  common  stock owned by the Company in ILD  Telecommunications,
                  Inc. as provided in the deposit agreement entered into between
                  the Company and Banca del Gottardo pursuant to Annex J.

XIII.      RIGHT OF TERMINATION
           --------------------

           Notwithstanding  anything  contained  in this  Agreement,  Banca  del
           Gottardo may by notice to the Company terminate this Agreement at any
           time before the time on the Closing Date when payment would otherwise
           be due under this  Agreement  to the  Company in respect of the Notes
           and Warrants if:

           (1)    in the  reasonable  opinion of Banca del Gottardo,
                  circumstances shall be such as:

                  a)   to prevent or to a material extent restrict payment for
                       the Notes and the Warrants in the manner contemplated in
                       this Agreement; or


<PAGE>


                                                                             16.



                  b)   to a material  extent  prevent or restrict  settlement of
                       transactions  in the Notes or  Warrants  in the market or
                       otherwise; or

           (2)    in the reasonable opinion of Banca del Gottardo, there shall
                  have been:

                  a)   any change in national or international political, legal,
                       tax or regulatory conditions;
                       or

                  b)   any calamity or emergency

           which  has in the view of Banca  del  Gottardo  caused a  substantial
           deterioration in the price and/or value of the Notes or the Warrants.

           Any such termination of this Agreement shall be without  liability on
           the part of Banca del Gottardo or on the part of the Company.

           Upon any such termination of this Agreement  pursuant to Article XIII
           (i),  the  parties  hereto  shall  (except for the  liability  of the
           Company in  relation  to  expenses  as provided in Article IV (a) (2)
           hereof and except for any liability  arising before or in relation to
           such  termination) be released and discharged  from their  respective
           obligations under this Agreement.

XIV.       COMMUNICATIONS
           --------------

           All communications among Banca del Gottardo and the Company regarding
           this  Agreement  shall be made in the English  language,  by telex or
           facsimile, followed by registered letter, and shall be transmitted

           by the Company to:               by Banca del Gottardo to:
           -----------------                ------------------------

           Banca del Gottardo               Intellicall, Inc.
           Viale Stefano Franscini 8        2155 Chenault, Suite 410
           6901 Lugano, Switzerland         Carrollton, Texas 75006-5023, U.S.A.

           Attn:      New Issue Department  Attn:       Chief Financial Officer
           Telex No.: 841 052
           Facsimile: 0114191 808 18 43     Facsimile:  972-416-9454

XV.        APPLICABLE LAW AND JURISDICTION
           -------------------------------

           The Terms of this Agreement  shall be governed by Swiss law, save and
           except  that  paragraph 8 of the terms of the Notes shall be governed
           by the laws of the State of New York.

           Any dispute  which might arise  between Banca del Gottardo on the one
           hand and the Company on the other hand regarding this Agreement shall
           fall within the jurisdiction of the ordinary Courts of Justice of the
           Canton of Ticino,  the place of jurisdiction  being Lugano,  with the
           right of appeal to the Swiss  Federal  Court of Justice  in  Lausanne
           where the law permits.




<PAGE>


                                                                             17.


           Solely for purposes of the preceding paragraph and for the purpose of
           execution of a judgment in Switzerland,  the Company elects legal and
           special domicile at Banca del Gottardo's office in Lugano,  and Banca
           del  Gottardo  shall  send to the  Company  as soon as  possible  any
           documents received by it in this connection.

           Banca del Gottardo shall also be at liberty to enforce its rights and
           to take legal action before the competent courts of the United States
           of America,  in which case Swiss law shall be applicable with respect
           to the construction and interpretation of this Agreement.

XVI.       EFFECTIVENESS
           -------------

           The effectiveness of this Agreement is subject to:

           (a)    the  receipt  by  Banca  del  Gottardo  of  all  documents  as
                  requested  in  Article  VII  of  this  Agreement,  in  a  form
                  acceptable to Banca del Gottardo,

           (b)    no exercise of the Right of Termination as per Article XIII.

XVII.      CURRENCY INDEMNITY
           ------------------

           If any sum due from the Company in favour of the Paying  Agent has to
           be converted from United States Dollars (the "first  currency")  into
           another  currency  (the  "second  currency")  for the  purpose of (i)
           making or filing a claim or proof against the Company, (ii) obtaining
           an  order  or  judgment  in any  court  or  other  tribunal  or (iii)
           enforcing any order or judgment given or made in relation hereto, the
           Company shall indemnify and hold harmless Banca del Gottardo from and
           against any loss suffered as a result of any discrepancy  between (a)
           the rate of  exchange  used for such  purpose to  convert  the sum in
           question from the first currency into the second currency and (b) the
           rate or rates of  exchange  at which  Banca del  Gottardo  may in the
           ordinary  course of business  purchase  the first  currency  with the
           second  currency  upon  receipt  of a sum paid to them in the  second
           currency  in  satisfaction  in whole  or in part of any  such  order,
           judgment, claim or proof.

           This indemnity shall constitute a separate and independent obligation
           from the other  obligations  contained  herein,  shall give rise to a
           separate   and   independent   cause  of  action  and  shall   apply,
           irrespective of any waiver granted by Banca del Gottardo from time to
           time and shall continue in full force and effect  notwithstanding any
           judgment or order for a liquidated  sum or sums in respect of amounts
           due hereunder or under any such  judgment or order.  Any such loss or
           damage  aforesaid  shall be deemed to  constitute a loss  suffered by
           Banca del  Gottardo  and no further  proof or  evidence of any actual
           loss shall be required by the Company.

XVIII.     ENTIRE AGREEMENT
           ----------------

           This Agreement  together with the Annexes hereto and other agreements
           and  documents   delivered  pursuant  hereto  set  forth  the  entire
           agreement and  understanding of the parties in respect of the subject
           matter  hereof  and  thereof  and  supersede  all  prior  agreements,
           arrangements and understandings relating to the subject matter hereof
           and thereof.




<PAGE>


                                                                             18.


XIX.       AMENDMENT, CANCELLATION AND WAIVER
           ----------------------------------

           This  Agreement  and the  Annexes  hereto may be  amended,  modified,
           superseded or  cancelled,  and any of the terms hereof or thereof may
           be waived,  only by a written instrument  executed by the Company and
           Banca del Gottardo hereto or thereto,  as the case may be, or, in the
           case of a waiver,  by the party or parties  waiving  compliance.  The
           failure of any party at any time or times to require  performance  of
           any provision hereof or of any Annex hereto shall in no manner affect
           the  rights at a later  time to  enforce  the same.  No waiver by any
           party of any condition or of the breach of any term contained in this
           Agreement or in any Annex hereto, whether by conduct or otherwise, in
           any one or more  instances,  shall be  deemed  to be  construed  as a
           further or continuing  waiver of any such breach or the breach of any
           other term of this Agreement or of the Annexes hereto.

THUS DONE AND SIGNED in 2 originals, of which one is for the Company,

in Carrollton/Lugano effective as of June 8, 1999

INTELLICALL, INC.

By:   _____________________________

BANCA DEL GOTTARDO

By:   _____________________________


<PAGE>


                                                                             19.


                                                                         ANNEX A
                                                                         -------

                 TERMS OF THE "CONVERTIBLE NOTES" OF THE COMPANY
                 -----------------------------------------------

(1)    Form and Denomination
       ---------------------

       The  Notes  are  issuable  in  bearer  form in the  denominations  of USD
       5'000.--  nominal  amount each,  with  interest  coupons (the  "Coupons")
       attached.  The Notes will be represented  initially by a temporary Global
       Note (the "Global Note"),  without interest  coupons,  to be deposited by
       the Company with Banca del Gottardo on the Payment Date.  The Global Note
       may be  exchanged,  as a whole or in  part,  for  appropriate  definitive
       Notes, in bearer form in  denominations  of USD 5'000.-- with the Coupons
       attached,  not earlier than one year after the later of the date on which
       the Notes are first offered or the Payment Date.  Such exchange  shall be
       made upon  certification  that the beneficial  owners of the Notes either
       (i) are not United States  persons or U.S.  persons or (ii) are financial
       institutions  (as defined in United States  Treasury  Regulation  Section
       1.165-12(c)(1)(v))  located outside the United States that are not United
       States  persons and that have purchased such Notes for purposes of resale
       directly or indirectly  to a United  States person or U.S.  person within
       the United  States  during the  Distribution  Compliance  Period and that
       certify  that they have not  acquired  the Notes for  purposes  of resale
       directly or  indirectly  to a United  States person or to a person within
       the United States. A beneficial owner of Notes must exchange its share of
       the Global  Note for  definitive  Notes  before  such Notes or  interests
       therein  may be  transferred  or interest  payments or other  payments in
       respect of the Notes will be made.

       For purposes hereof, (i) the term "Distribution  Compliance Period" means
       the period  beginning on the earlier of the first date that the Notes are
       offered or the date on which the Notes are issued  (the  "Payment  Date")
       and  ending on the date one year  after the later of the date upon  which
       the Notes and Warrants  were first offered or the date of closing of this
       offering,  (ii) the term  "United  States"  means  the  United  States of
       America  (including  the  States  and  the  District  of  Columbia),  its
       possessions, its territories and other areas subject to its jurisdiction,
       (iii) the term "United  States person" means a citizen or resident of the
       United  States,  a  corporation,  partnership  or other entity created or
       organized  in or under the laws of the  United  States  or any  political
       subdivision thereof, or an estate or trust the income of which is subject
       to United States  federal  income  taxation  regardless of its source and
       (iv) the term "U.S. person" has the meaning set forth in Sections 230.901
       through .904 of Title 17 of the United States Code of Federal Regulations
       ("Regulation S").

(2)    Interest
       --------

       The  Notes  bear  interest  from the  Payment  Date at the rate of 7% per
       annum, payable semi-annually in arrear on June 11 and December 11 of each
       year until  maturity  (the "Coupon Due Dates")  whereby the first payment
       shall be made on December 11, 1999 in respect of the period from June 11,
       1999 to December  11,  1999.  Such  interest is payable in United  States
       Dollars.  Each Note will cease to bear interest on the date on which they
       become due for redemption or repayment unless payment of principal and/or
       premium  (if  any) is  improperly  withheld  or  refused  or  default  is
       otherwise made in respect of such payment.  In such event,  interest will
       continue  to accrue  (as well  after as before  any  judgment)  up to but
       exluding the date on which  payment in full of the principal of such Note
       is  made  or (if  earlier)  the  date on  which,  payment  in full of the
       principal  thereof having been received by Banca del Gottardo,  notice to
       that effect  shall have been given to the holders of the Notes.  Interest
       is computed on the basis of a 360-day year of twelve 30-day months.




<PAGE>


                                                                             20.


(3)    Repayment
       ---------

       The Company undertakes to repay the principal amount of the Notes, unless
       previously redeemed, without any previous notice on June 11, 2004.

(4)    Optional Redemption and Conversion
       ----------------------------------

       (a)   The Company reserves the right to call all, but not part, of the
             outstanding Notes for redemption on November 1, 1999, or thereafter
             up to the close of business on June 10, 2004, at a price of 110%
             of the principal amount thereof, together with interest accrued
             to the date of such redemption provided that the average of the
             daily closing sales prices of a Share for a period of 30
             consecutive trading days, the last day of which trading days is
             not more than 10 days prior to the day upon which the Company sends
             a notice to Banca del Gottardo of its intention to redeem the
             Notes under this sub-section (a), is at least 200% of the
             Conversion Price in effect on such last day (taking into account
             any retroactive adjustment not then reflected in the Conversion
             Price). The closing sales price for any day shall be the average of
             the closing prices on the New York Stock Exchange and if not listed
             any longer thereon, the average of the closing bid and asked prices
             on the National Association of Securities Dealers Automated
             Quotation (NASDAQ). All outstanding Notes will become due 60 days
             after receipt of the aforesaid notice of early redemption by
             Banca del Gottardo.

             As long as the Shares are listed on a stock  exchange or  exchanges
             in the United States of America,  reference in this sub-section (a)
             to the  sales  price  for any day  shall be  deemed to refer to the
             closing price (regular way) of a Share as reported by the principal
             stock  exchange  on which the Shares are listed for such day. If no
             such sales price is reported for one or more trading days, such day
             or days  shall not be deemed  as  trading  day or days and shall be
             disregarded in the calculation of the said 30 trading day period.

       (b)   The Company  reserves  the right to call any Note or Notes and each
             Noteholder will have the right to require the Company to redeem any
             Note or Notes during the following  periods at the following prices
             of the principal amount thereof,  together with interest accrued to
             the due date of redemption:

             from June 11,  1999 until June 11,  2000 at 105% from June 12, 2000
             until June 11,  2001 at 110% from June 12, 2001 until June 11, 2002
             at 115% from June 12,  2002 until  June 11,  2003 at 120% from June
             12, 2003 until June 11, 2004 at 125%

             whenever  the  Company  sells some or all of the Series A Preferred
             Stock    and/or    shares   of   common   stock   issued   by   ILD
             Telecommunication,  Inc. subject to the deposit pledge agreement as
             set forth in a separate  deposit  agreement  entered  into  between
             Banca del  Gottardo  and the  Company  on June 8, 1999 set forth in
             Section 8 hereof.

             This  right  will  have  to  be  exercised  by  giving  notice  and
             surrendering the Note(s),  so to be redeemed to Banca del Gottardo,
             Lugano,  at any time on or after the date when  Banca del  Gottardo
             has released some or all of the shares from the pledge as set forth
             in  Section 8 hereof  accompanied  by an  irrevocable  request  for
             redemption.  Notes  called for  redemption  will  become due on the
             tenth  day  after  such  request  has been  received  by Banca  del
             Gottardo.  Notes called for redemption shall cease to bear interest
             from the date fixed for such redemption,


<PAGE>


                                                                             21.


             unless the Company  shall  default in providing  for the payment of
             the  redemption  price.  The Notes must be presented  for repayment
             with all unmatured Coupons attached. An amount equal to any missing
             unmatured   Coupon  shall  be  deducted  from  the  amount  due  on
             redemption.  Such Coupons shall,  however,  be paid upon subsequent
             presentation provided they shall not have become barred pursuant to
             Section 11 hereof.

(5)    Payments
       --------

       Payments  with respect to the Notes and Coupons  shall be made in dollars
       of the United  States of America  against  presentation  and surrender of
       such Notes or Coupons in the manner specified below.  Such payments shall
       be made  without cost to the  Noteholders,  without any  limitations  and
       under  all  circumstances   notwithstanding  any  transfer  restrictions,
       regardless of any bilateral or multilateral payment or clearing agreement
       in  existence  between  the  United  States  of  America  and  the  Swiss
       Confederation,  irrespective of the nationality, residence or domicile of
       any of the Note-  holders  and without  requiring  any  affidavit  or the
       fulfillment  of any  formalities.  The funds  required for the payment of
       principal and interest  shall be made  available to Banca del Gottardo in
       Switzerland as Paying Agent by the Company prior to each Coupon Due Date.
       The  receipt  of the funds by Banca del  Gottardo  in  Switzerland  shall
       release the Company from its  obligations  in respect of the payments due
       on the respective dates for principal and interest.

       Banca del Gottardo will arrange for payment of such funds as and when due
       to the holders of Notes and  Coupons.  Notes and coupons may be presented
       for payment at the principal  amount  printed on the Notes and the amount
       of interest  printed on the Coupons only at the offices in Switzerland of
       Banca del  Gottardo.  No payment on the Notes or Coupons  will be made by
       transfer  to an account  in, or by  mailing to an address  in, the United
       States.

(6)    Tax Status
       ----------

       All  payments of  principal  and interest on the Notes and Coupons by the
       Company shall be made without  deduction for or on account of any present
       or future tax,  assessment or other governmental charge ("Taxes") imposed
       upon such  payment  by the  United  States of  America  or any  political
       subdivision or taxing authority thereof or therein (the "United States").
       If the Company  shall at any time be required by law to withhold any such
       Taxes,  the Company will pay as additional  amounts to Banca del Gottardo
       for the account of the holders of Notes and Coupons,  such amounts as may
       be  necessary  so that every net  payment  on each Note or Coupon,  after
       withholding  for or on account of any such  Taxes  (including  any backup
       withholding  tax or similar charge that may be required in order for such
       payment  to be  made  without  any  certification  or  disclosure  of the
       nationality,  residence or identity of the beneficial  owner of such Note
       or  Coupon)  will not be less than the  amount  provided  in such Note or
       Coupon to be then due or  payable;  provided,  however,  that the Company
       will not be required to pay such additional  amounts for or on account of
       any such Taxes that are imposed (i) otherwise than by withholding  from a
       payment on a Note or  Coupon,  (ii) upon a holder of a Note or Coupon who
       is subject to  taxation  by the United  States for any reason  other than
       such holder's ownership or receipt of payments in respect of such Note or
       Coupon, or (iii) on interest or principal  received by a holder of a Note
       or Coupon which is (a) a "10-per cent. shareholder" of the Company within
       the  meaning of section  871(h) (3) (B)(a) of the Code,  (b) a bank or an
       extension of credit made pursuant to a loan agreement entered into in the
       ordinary  course  of its  trade or  business,  (c) a  controlled  foreign
       corporation  which is related to the Company under  section  864(d)(4) of
       the  Code,  (d)  other  than  a  nonresident   individual  or  a  foreign
       corporation  (as  determined  under United  States tax  principles)  with
       respect to the  United  States,  or (e) a holder  whose Note or Coupon is
       presented for retirement or redemption, or payment is otherwise made,


<PAGE>


                                                                             22.


       other  than  outside  the  United  States as  provided  in United  States
       Treasury  Regulations.  Any  reference  in this  Note to the  payment  of
       principal  or  interest  shall  be  deemed  to  include  payment  of  the
       additional amounts payable pursuant to the provisions of this paragraph.

       If, as the result of any change in,  enactment  of, or  amendment  to any
       laws or regulations of the United States or any political  subdivision or
       taxing  authorities  thereof  affecting  taxation,  or any  change in the
       official  application  of such laws or  regulations,  or any  change  in,
       execution of or amendment to any treaty or treaties affecting taxation to
       which the United States is a party,  it is determined by the Company that
       it would be required at any time to pay  additional  amounts  pursuant to
       the preceding paragraph,  the Company is entitled to redeem the Notes, as
       a whole but not in part,  on  giving  not more than 60 days' but not less
       than 30 days' prior notice to Banca del  Gottardo,  on or after  December
       11, 1999 at par.

       Notice of  redemption  shall be given by the  Company in writing to Banca
       del  Gottardo  and  such  notice  so  given  shall  constitute  good  and
       sufficient  notice  and shall be binding  upon all  holders of the Notes,
       regardless of who they may be or where they may be located.

       Banca del Gottardo shall as soon as practicable notify the Noteholders of
       such redemption in accordance with Section 12 hereof.

       The Company has been advised by Banca del Gottardo  that  pursuant to the
       Swiss  federal laws at present in force,  interest  payments on the Notes
       are not subject to Swiss withholding tax.

(7)    Authorizations
       --------------

       The Company has confirmed to Banca del Gottardo that no authorizations or
       approvals  are  required   under  the  laws  of  the  United  States  for
       performance of its  obligations  hereunder,  except for the  registration
       requirements provided for herein.

(8)    Status of the Notes and Collateral
       ----------------------------------

       The Company,  for itself,  its  successors  and assigns,  covenants and
       agrees,  and  each  Holder  of  this  Note  ("Holder"),  by  his or its
       acceptance hereof, likewise covenants and agrees, that the indebtedness
       evidenced by this Note (and any renewals,  refinancings,  modifications
       or extensions thereof), including the principal of and interest thereon
       and any  interest  payable  on such  interest  and all fees,  costs and
       expenses  (including  attorneys' fees and collection  costs) payable in
       connection  with  this  Note,  and  all  requirements  of  the  Company
       contained  in this  Note  shall be  unsubordinated  obligations  of the
       Company and shall rank pari passu among  themselves  and with all other
       unsecured  and  unsubordinated  obligations  of the  Company  with  the
       exception  of  obligations  in respect of national  and local taxes and
       with certain other statutory exceptions.

       So long as any of the Notes  remains  outstanding  (but not  beyond the
       date on which payment of the final amounts being due for principal plus
       premium (if any) has been made by the  Company to Banca del  Gottardo),
       the  Company  will  not  at any  time  secure  any  present  or  future
       indebtedness of the Company or any guarantee by the Company by creating
       any pledge,  mortgage  or other  charge on any of its present or future
       assets or revenues for the benefit of the holders  thereof,  unless the
       benefit of the  security is at the same time  extended  rateably to the
       Notes or unless  there is  provided  for the  holders of the Notes (the
       "Noteholders")  such other  security or guarantee as Banca del Gottardo
       shall,  in its  reasonable  opinion,  deem  to be not  materially  less
       favourable  than such security.  The prohibition set forth in the prior
       sentence shall not relate to any security arrangements


<PAGE>


                                                                             23.


       in existence as of the first date that the Notes are offered.

       So long as any of the Notes  remains  outstanding  (but not  beyond the
       date on which payment of the final amounts being due for principal plus
       premium (if any) has been made by the  Company to Banca del  Gottardo),
       the Company  covenants  that it will keep free and clear of any charge,
       lien,  encumbrance  or any other similar  rights in favour of any third
       party other than the third Amended and Restated Shareholders  Agreement
       dated  April 3,  1998  (the  "Shareholders  Agreement")  to  which  the
       ILD-Shares are subject,  Series A Preferred  Stock which is convertible
       into  35'000  shares  of common  stock of USD 0.01 par value  each (the
       "ILD-Shares")  of ILD  Telecommunications,  Inc.,  being a  corporation
       existing  under the laws of the State of Delaware  whose head office is
       situated  at 16200  Addison  Road,  Suite 100,  Addison,  Texas  75001,
       U.S.A.,  which  ILD-Shares  represent  initially  50% of the  Company's
       holding in ILD Telecommunications, Inc.

       The Company has further covenanted that this undertaking  extends also to
       all  ILD-Shares  received  following any split thereof or any spin-off of
       assets thereunder received by the Company.

 (9)   Conversion
       ----------

       Exhibit 1 to Annex H  attached  to the  Agreement  dated June 8, 1999 and
       entered  into  between  the  Company  and  Banca del  Gottardo,  which is
       available  for  inspection  at the Head  Office  in  Lugano  of Banca del
       Gottardo,  as Conversion  Agent for the Notes,  contains full  provisions
       relevant to  conversion of the Notes into freely  transferable  Shares of
       Common Stock which are duly registered under the 1933 Securities Act. The
       following is a summary of such provisions:

       The  conversion  price  will be  fixed  on June  11,  1999  whereby  such
       conversion  price  shall be the  equivalent  of 90% of the average of the
       closing  prices of the shares of Common  Stock during the period from May
       28 to June 11,  1999,  but shall in any event not be higher than USD 2.50
       (Such price hereinafter called the "Conversion Price").

       The holder of 10 Notes or more will be  entitled at any time on and after
       November 1, 1999 [i.e. to be 135 days after the Filing Date as defined in
       the  Registration  Rights  Agreement] up to the close of business on June
       11,  2004,  subject to prior  redemption,  to convert  the Notes,  at the
       principal amount thereof,  into freely  transferable  and  non-restricted
       (such   transferability   and   non-restriction   being  subject  to  the
       effectiveness of a registration  statement under the U.S. securities laws
       covering such common stock,  if required,)  shares of Common Stock of the
       Company,  at the  Conversion  Price,  subject to  adjustment as described
       below.  No payment or  adjustment  will be made on conversion of any Note
       for interest  accrued  thereon or  dividends on any Common Stock  issued,
       except that accrued  interest will be paid on the  conversion of any Note
       which has been called for redemption  prior to the  conversion  date. The
       Company is not required to issue  fractional  shares of Common Stock upon
       conversion  of Notes and,  in lieu  thereof,  will pay a cash  adjustment
       based upon the market  price of the Common  Stock on the last trading day
       prior  to the  date of  conversion.  In the  case  of  Notes  called  for
       redemption, conversion rights will expire at the close of business on the
       fifth business day prior to the redemption  date.  Notes may be presented
       for conversion only to an office of Banca del Gottardo outside the United
       States  and  Banca  del  Gottardo  will  deliver  Common  Stock  or other
       consideration  received  upon  conversion  only to an  account or address
       outside the United States.




<PAGE>


                                                                             24.


       The  Conversion  Price is subject to adjustment  in the following  events
       occurring after June 11, 1999:


       -   the issuance of stock of the Company as a dividend or distribution
           on the Common Stock;

       -   subdivisions of outstanding shares of the Common Stock into a
           greater number of shares;

       -   combinations of outstanding shares of Common Stock into a smaller
           number of shares;

       -   reclassification of the Common Stock into other shares of the
           Company's capital stock;

       -   issuance to all holders of Common Stock of certain rights or warrants
           entitling  them to  subscribe  for Common  Stock at a price per share
           less than the current market price but not for shares  issuable under
           the Company's stock option and stock purchase plans; and

       -   the distribution to all holders of Common Stock of debt securities or
           assets of the Company or rights or  warrants  to  purchase  assets or
           debt   securities  of  the  Company   (excluding  cash  dividends  or
           distributions from retained earnings).

       No adjustment in the Conversion Price will be made unless such adjustment
       would  require  an  increase  or  decrease  of at  least  USD 0.05 in the
       Conversion Price then in effect;  but any adjustment that would otherwise
       be required to be made shall be carried forward and taken into account in
       any  subsequent  adjustment.  No  adjustment  need be made for  rights to
       purchase  Common  Stock  pursuant  to  a  Company  dividend  or  interest
       reinvestment  plan.  The Company  may at any time  reduce the  Conversion
       Price by any amount,  provided that the Conversion Price is not less than
       the par value of a share of Common Stock. If the Company  consolidates or
       merges into or transfers or leases all or substantially all of its assets
       to any person, or is a party to a merger that reclassifies or changes its
       outstanding Common Stock, the Notes will become convertible into the kind
       and amount of  securities,  cash or other assets which the Holders  would
       have owned immediately after the transaction if the holders had converted
       the Notes immediately before the effective date of the transaction.

(10)   Events of Default
       -----------------

       Subject to the  provisions  of Section 15,  Banca del Gottardo as regards
       all Notes or Holders having 10% or more of the aggregate principal amount
       of all Notes outstanding shall have the right to declare by notice to the
       Company the Notes held by such Holder,  plus accrued interest,  to be due
       and payable if any of the following events of default shall occur:

       (a)    default in the payment of principal, or, for a period of 15 days,
              in the payment of interest on any Note; or

       (b)    default in the  performance or observance in any material  respect
              of any  covenant or  agreement of the Company in the Notes if such
              default continues for a period of 30 days after notice thereof has
              been given to the Company; or

       (c)    a default shall occur under any evidence of indebtedness for money
              borrowed by the Company or under any instrument  under which there
              may be issued or by which there may be secured or  guaranteed  any
              indebtedness  for money  borrowed by the  Company,  which  default
              involves the failure to pay when due (after any  applicable  grace
              period and subject to


<PAGE>


                                                                             25.


              any extension or postponement of such maturity), or results in the
              acceleration  of,  indebtedness  in an  amount  in  excess  of USD
              500'000.--  without such  indebtedness  having been  discharged or
              such  default or  acceleration  having been  waived,  rescinded or
              annulled,  within a period of 30 days after notice  thereof  shall
              have been given to the Company; or

       (d)    the entry of a decree or order in  respect  of the  Company  in an
              involuntary case under any bankruptcy, insolvency or other similar
              law,  or  appointing  a  receiver,  liquidator,  trustee  or other
              similar official of the Company or for any substantial part of its
              property,  or  ordering  the  winding  up or  liquidation  of  its
              affairs,  and the continuance of any such decree or order unstayed
              and in effect for a period of 45 consecutive days; or

       (e)    the Company shall commence a voluntary case under any  bankruptcy,
              insolvency or other similar law, or consent to the  appointment of
              or taking possession by a receiver,  liquidator,  trustee or other
              similar  official,  of the Company or for any substantial  part of
              its property,  or the making by it of a general assignment for the
              benefit of  creditors,  or if it shall fail  generally  to pay its
              debts as they become due,  or shall take any  corporate  action in
              furtherance of any of the foregoing; or

       (f)    if the Company shall merge or consolidate, or sell or convey all
              or substantially all of its assets to, any other corporation,
              unless (i) the Company is the surviving corporation, or (ii)
              the surviving or transferee corporation expressly assumes all
              obligations of the Company under the Notes by supplemental
              agreement, confirmed by an opinion of U.S. counsel reasonably
              satisfactory to Banca del Gottardo and the Company, or (iii)
              the Company or the surviving or transferee corporation irrevocably
              deposits in trust with Banca del Gottardo, money or U.S.
              government obligations sufficient to pay principal and interest
              on the Notes to maturity.

       Upon the  occurrence of an event of default,  the Company shall  promptly
       give notice thereof to Banca del Gottardo which shall publish such notice
       of default in accordance with Section 12 hereof. Banca del Gottardo shall
       in relation  to any event of default  have no other  obligation  than the
       publication of such event of default.

       The  principal  amount of all Notes  declared to be due and payable  plus
       accrued  interest  thereon  shall  become  due and  payable 15 days after
       notice to the  Company by Banca del  Gottardo  or by each  Holder of such
       event of  default;  provided,  however,  that such  declaration  shall be
       rescinded if, within 15 days of such notice,  such event of default shall
       have been remedied by payment,  in the case of a payment default, or in a
       manner reasonably satisfactory to Banca del Gottardo.

       In the event that a Resolution or Extraordinary Resolution is passed at a
       meeting of  Holders  held  pursuant  to Section  15,  any  actions  taken
       pursuant  to  this  Section  10 by a  Holder  shall  be  subject  to  any
       previously taken action pursuant to such Section 15.

(11)   Prescription
       ------------

       In  accordance  with the Swiss  Statute of  Limitations  the coupons will
       become  barred five years and the Notes ten years after their  respective
       due dates.




<PAGE>


                                                                             26.


(12)   Notices and Publications
       ------------------------

       All  notices  to the  Holders  shall be deemed to have been duly given if
       published  in the Feuille  Officielle  Suisse du Commerce  and in a daily
       newspaper in Zurich and Lugano.  All notices to the Company by any Holder
       shall be deemed to have been duly given if sent by cable, fax or telex to
       the principal office of the Company.

(13)   Listing of the Notes
       --------------------

       No application will be made for the admission and quotation of the Notes
       on any stock exchange.

(14)   Replacement of Notes or Coupons / Printing of the Notes
       -------------------------------------------------------

       If any Note or coupon is defaced,  mutilated,  destroyed, stolen or lost,
       it may be renewed or replaced at the head office of Banca del Gottardo in
       Lugano,  Switzerland  on  payment  of such  costs as may be  incurred  in
       connection  therewith and on  presentation of such evidence and indemnity
       as Banca del Gottardo may require.  Defaced or mutilated Notes or coupons
       must be surrendered before replacements may be issued.

       Banca  del  Gottardo  shall  keep the  Global  Note in the  amount of USD
       2'000'000.--  representing  the whole issue of the Notes as custodian for
       all the Noteholders.  No physical delivery of the Notes and Coupons shall
       be made by Banca del  Gottardo  unless  and  until the Notes and  Coupons
       shall have been  printed.  Whether any Notes and Coupons shall be printed
       shall be determined in the sole discretion of Banca del Gottardo,  unless
       any Noteholder or the Company has requested Banca del Gottardo  following
       any Event of  Default  to print the  Notes and  Coupons.  If any Event of
       Default has happened Banca del Gottardo shall arrange for the printing of
       the Notes and Coupons  and arrange for  delivery of the Notes and Coupons
       to the Noteholders.

(15)   Noteholders' Meeting
       --------------------

       a)     A meeting of the Holders  (hereinafter  called a "Meeting") may be
              convened  by the Company or shall be convened by the Company if so
              requested by Notes representing not less than 25% of the aggregate
              principal amount of all Notes  outstanding  under the Terms of the
              Notes after (i) the event of default  shall have  occurred  and be
              continuing  to  consider  a waiver of an event of  default  or any
              modification  or amendment of the  provisions  of the terms of the
              Notes, or (ii) a substitution of Banca del Gottardo.

              The cost and expenses of a Meeting shall be borne by the Company.

       b)     Notice of the Meeting  specifying  the place,  day and hour of the
              Meeting shall be given at least 20 days prior to the proposed date
              thereof (exclusive of the day on which the notice is given and the
              day on which the Meeting is to be held) in accordance with Section
              12 hereof.  Such notice  shall state  generally  the nature of the
              business to be  transacted  at the Meeting  thereby  convened  but
              (except for an  Extraordinary  Resolution  (as defined  below)) it
              shall not be  necessary to specify in such notice the terms of any
              resolution to be proposed.




<PAGE>


                                                                             27.


       c)     The  Meeting  shall be held in Lugano  and shall be  chaired  by a
              representative  of the  Company or if such  representative  of the
              Company  shall not be  present  within 30  minutes  after the time
              appointed for the holding of the Meeting,  the Noteholders present
              shall  choose one of their  members to be  chairman.  The  Meeting
              shall be conducted in the English language exclusively.

       d)     Resolutions shall only be passed if a quorum of two or more
              persons holding 25% or more of the aggregate principal amount of
              all Notes outstanding are present. The quorum at any Meeting for
              passing an Extraordinary Resolution shall be two or more persons
              holding two-thirds or more of the aggregate principal amount of
              all Notes outstanding. Resolutions shall be passed if approved
              by the absolute majority of votes cast save that an Extraordinary
              Resolution shall be passed only if approved by three-fourths or
              more of votes cast. Any resolution passed at a Meeting duly
              convened and held in accordance with the terms of the Notes shall
              be binding upon all the Holders, whether present or not present
              at such Meeting and whether or not voting, and upon all the
              holders of coupons.

       e)     If within 30 minutes after the time appointed for any such
              Meeting a quorum is not present, the Meeting shall, if convened
              upon the request of Holders, be dissolved. In any other case,
              it shall stand adjourned for such period being not less than 14
              days nor more than 28 days, and at such place as may be appointed
              by the Company. At such adjourned Meeting, two or more persons
              present holding 10% or more of the aggregate principal amount of
              all Notes outstanding shall form a quorum, provided that if the
              business of such adjourned Meeting includes consideration of a
              proposed Extraordinary Resolution, the quorum shall be two or
              more persons present holding one-third or more of the aggregate
              principal amount of all Notes for the time being outstanding.

       f)     If within 30 minutes after the time appointed for any such
              adjourned Meeting the respective quorum is not present the
              Meeting shall stand further adjourned for such period being not
              less than 14 days nor more than 28 days, and at such place as
              may be appointed by the Company and at such further adjourned
              Meeting two or more persons present holding any Notes out-
              standing (whatever the principal amount of the Notes so held by
              them) shall form a quorum, provided that if the business of such
              further adjourned Meeting includes consideration of a proposed
              Extraordinary Resolution, the quorum shall be two or more persons
              present holding one-third or more of the aggregate principal
              amount of all Notes for the time being outstanding.

       g)     Notice of any adjourned Meeting or further adjourned Meeting shall
              be given in the same manner as notice of an original Meeting and
              such notice shall state, in the case of an adjourned Meeting,
              that two or more persons present holding 10% (or in the case of a
              Meeting the business of which includes consideration of a proposed
              Extraordinary Resolution, one-third) or more of the aggregate
              principal amount of all Notes for the time being outstanding
              will form a quorum, or, in the case of a further adjourned
              Meeting, that two or more persons present holding any Notes
              outstanding (or in the case of a Meeting the business of which
              includes the consideration of a proposed Extraordinary Resolution,
              two or more persons present holding one-third or more of the
              aggregate principal amount of all Notes for the time being
              outstanding), shall form a quorum.

       h)     The voting rights of the Holders shall be determined  according to
              the  principal  amount of Notes  held,  each Note with a principal
              amount of USD  5'000.--  giving the right to one vote.  Holders of
              the coupons shall not have any voting rights.  Notes held by or on
              behalf of the


<PAGE>


                                                                             28.


              Company shall have no voting rights and shall be  disregarded  for
              the purpose of this  Section  15,  save that the Company  shall be
              entitled to vote in respect of Notes held by it for the benefit of
              and at the direction of an independent third party. In the case of
              an equality  of votes the  chairman  shall have a casting  vote in
              addition to the vote or votes (if any) to which he may be entitled
              as a Holder.

       i)     Any  director  or officer of the  Company  and its lawyers and any
              other person  authorized  on its behalf by it may attend and speak
              at any Meeting.

       j)     The  Meeting  shall  have  the  following  powers  exercisable  by
              Extraordinary Resolution with the consent of the Company:

              (i)    extension of the date fixed for final maturity of the
                     Notes;

              (ii)   reduction or cancellation of the principal payable on the
                     Notes;

              (iii)  reduction or cancellation of the rate or amount payable, or
                     extension  of  the  date  of  payment,  in  respect  of any
                     coupons;

              (iv)   alteration of the majority required to pass an
                     Extraordinary Resolution; and

              (v)    waiver of any Event of Default.

       k)     Any  reference  in these  Terms of the Notes to an  "Extraordinary
              Resolution" shall be construed as references to resolutions of the
              Holders passed in accordance with the foregoing provisions of this
              Section  15  with  respect  to  any  of  the  matters   stated  in
              sub-section j) above.

(16)   Applicable Law and Jurisdiction
       -------------------------------

       The terms,  conditions  and form of the Notes and  coupons  (the  English
       language  version  of  which  shall  govern)  shall  be  governed  by and
       construed in accordance with Swiss law.

       Any action or proceedings  against the Company  relating to the Notes may
       be brought and enforced in the  ordinary  courts of the Canton of Ticino,
       venue  being in the City of  Lugano,  or,  if such  courts  fail to grant
       jurisdiction  in the ordinary  courts of the Canton of Basle-City,  venue
       being  in  Basle,  and the  Company  hereby  irrevocably  submits  to the
       jurisdiction  of such courts in respect of any such action or proceeding,
       with the right to appeal,  as provided by law, to the Swiss Federal Court
       in  Lausanne,  the  judgment  of which  shall be final.  Solely  for that
       purpose,  the Company  hereby  elects  legal and special  domicile at the
       office of Banca del  Gottardo,  Viale  Stefano  Franscini 8, 6901 Lugano,
       Switzerland.  The  Company  covenants  that  so  long  as any  Notes  are
       outstanding  it  will  maintain  an  agent  for  service  of  process  in
       Switzerland.  The aforementioned jurisdiction shall also be valid for the
       cancellation  and  replacement  of lost,  stolen,  defaced,  mutilated or
       destroyed  Notes and coupons.  Payment  effected to a holder of Notes who
       has been  identified  as the  legitimate  holder of a Note or coupon by a
       final  judgment  of a Swiss court  shall  release  the  Company  from its
       payment obligations under such Note or coupon.

       Any  Noteholder  shall  also have the right to bring any legal  action or
       proceeding  against  the  Company  in respect of a Note or coupon and all
       covenants  contained  therein in any state or federal court in the United
       States of America which may have jurisdiction.



<PAGE>


                                                                             29.


                                                                         ANNEX B
                                                                         -------

                           (Form of Convertible Note)

No. ________________

ANY  UNITED  STATES  PERSON  WHO  HOLDS  THIS  OBLIGATION  WILL  BE  SUBJECT  TO
LIMITATIONS  UNDER THE UNITED STATES INCOME TAX LAWS,  INCLUDING THE LIMITATIONS
PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE.

THIS  NOTE  HAS NOT BEEN AND WILL NOT BE  REGISTERED  UNDER  THE  UNITED  STATES
SECURITIES  ACT OF 1933,  AS  AMENDED  (THE  "SECURITIES  ACT"),  AND MAY NOT BE
OFFERED, SOLD OR DELIVERED,  DIRECTLY OR INDIRECTLY, IN THE UNITED STATES OR TO,
OR FOR THE BENEFIT OF, ANY U.S.  PERSON (AS SUCH TERMS ARE DEFINED IN REGULATION
S UNDER THE SECURITIES ACT) UNLESS THIS NOTE IS REGISTERED  UNDER THE SECURITIES
ACT OR AN EXEMPTION FROM THE REGISTRATION  REQUIREMENTS OF THE SECURITIES ACT IS
AVAILABLE.  HEDGING TRANSACTIONS INVOLVING THIS NOTE MAY NOT BE CONDUCTED UNLESS
SUCH HEDGING TRANSACTIONS ARE MADE IN COMPLIANCE WITH THE SECURITIES ACT.

                                INTELLICALL, INC.
                                -----------------

                     (Incorporated in the State of Delaware)

                                  USD 5'000.--

                           7% Notes due June 11, 2004

                          Convertible into freely transferable and
                                 non-restricted shares of
                               Common Stock of the Company

INTELLICALL,  INC. (the "Company"), for value received, hereby certifies that it
owes  to the  bearer,  payable  upon  presentation  and  surrender  hereof,  the
principal  amount of 5'000.-- US Dollars (USD five thousand) on June 11, 2004 or
on such earlier date as such principal  amount may become due in accordance with
the Terms of the Notes appearing on the reverse  hereof,  and interest from June
11, 1999 on said principal  amount at the rate of 7% (seven  percent) per annum,
payable in cash, semi-annually in arrear on June 11 and December 11 of each year
and at maturity, beginning on June 11, 1999 for the period from June 11, 1999 to
December 11, 1999,  until payment of said principal amount has been made or duly
provided for, but only, in the case of interest due on or before maturity,  upon
presentation and surrender of the interest coupons attached hereto as they shall
severally become due, all in accordance with the Terms of the Notes.

This Note is one of a duly authorized issue of 7% Notes due June 11, 2004 of the
Company in the  aggregate  principal  amount of  2'000'000.--  US  Dollars  (the
"Notes")   issued  pursuant  to  a  Note  and  Warrant   Purchase,   Paying  and
Conversion/Exercise   Agency   Agreement,   dated  as  of  June  8,   1999  (the
"Agreement"),  between the  Company of the first part and Banca del  Gottardo of
the second  part.  The Notes are issued  subject to and with the  benefit of the
Agreement.




<PAGE>


                                                                             30.


IN WITNESS  WHEREOF,  the Company has caused this Note to be duly executed under
its corporate seal as of June 11, 1999.


Swiss Securities no.:      813'346

                                             INTELLICALL, INC.


                                             By:  _____________________________









<PAGE>


                                                                             31.


                                                                         ANNEX C
                                                                         -------
                                (Form of Coupon)

ANY  UNITED  STATES  PERSON  WHO  HOLDS  THIS  OBLIGATION  WILL  BE  SUBJECT  TO
LIMITATIONS  UNDER THE UNITED STATES INCOME TAX LAWS,  INCLUDING THE LIMITATIONS
PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE.

THIS  NOTE  HAS NOT BEEN AND WILL NOT BE  REGISTERED  UNDER  THE  UNITED  STATES
SECURITIES  ACT OF 1933,  AS  AMENDED  (THE  "SECURITIES  ACT"),  AND MAY NOT BE
OFFERED, SOLD OR DELIVERED,  DIRECTLY OR INDIRECTLY, IN THE UNITED STATES OR TO,
OR FOR THE BENEFIT OF, ANY U.S.  PERSON (AS SUCH TERMS ARE DEFINED IN REGULATION
S UNDER THE SECURITIES ACT) UNLESS THIS NOTE IS REGISTERED  UNDER THE SECURITIES
ACT OR AN EXEMPTION FROM THE REGISTRATION  REQUIREMENTS OF THE SECURITIES ACT IS
AVAILABLE.  HEDGING TRANSACTIONS INVOLVING THIS NOTE MAY NOT BE CONDUCTED UNLESS
SUCH HEDGING TRANSACTIONS ARE MADE IN COMPLIANCE WITH THE SECURITIES ACT.

                                                                 Coupon No. 1-10

INTELLICALL, INC.
Carrollton, TX, U.S.A.

US Dollars 5'000.--

7% Notes due June 11, 2004

Note of US Dollars 5'000.-- (five thousand)

Semi-annual interest due on December 11 and June 11, 1999/2004 payable in cash
on the terms set forth in the Terms of the Notes:       US Dollars 175.--
                                             INTELLICALL, INC.

                                             By:  _____________________________

                                (Reverse Coupon)
                    This coupon is payable at the head office in
                           Lugano of Banca del Gottardo.


<PAGE>


                                                                             32.


                                                                         ANNEX D
                                                                         -------
(to be typed on security paper)

                                   GLOBAL NOTE
                                   -----------

ANY  UNITED  STATES  PERSON  WHO  HOLDS  THIS  OBLIGATION  WILL  BE  SUBJECT  TO
LIMITATIONS  UNDER THE UNITED STATES INCOME TAX LAWS,  INCLUDING THE LIMITATIONS
PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE.

THIS  NOTE  HAS NOT BEEN AND WILL NOT BE  REGISTERED  UNDER  THE  UNITED  STATES
SECURITIES  ACT OF 1933,  AS  AMENDED  (THE  "SECURITIES  ACT"),  AND MAY NOT BE
OFFERED, SOLD OR DELIVERED,  DIRECTLY OR INDIRECTLY, IN THE UNITED STATES OR TO,
OR FOR THE BENEFIT OF, ANY U.S.  PERSON (AS SUCH TERMS ARE DEFINED IN REGULATION
S UNDER THE SECURITIES ACT) UNLESS THIS NOTE IS REGISTERED  UNDER THE SECURITIES
ACT OR AN EXEMPTION FROM THE REGISTRATION  REQUIREMENTS OF THE SECURITIES ACT IS
AVAILABLE.  HEDGING TRANSACTIONS INVOLVING THIS NOTE MAY NOT BE CONDUCTED UNLESS
SUCH HEDGING TRANSACTIONS ARE MADE IN COMPLIANCE WITH THE SECURITIES ACT.

                                INTELLICALL, INC.

                                USD 2'000'000.--

                           7% Notes due June 11, 2004

                        Convertible into freely transferable and
                   non-restricted shares of Common Stock of the Company

This Global Note without  interest coupons is a Global Note in respect of a duly
authorized  issue of 7% Notes due June 11, 2004 (the  "Notes")  of  Intellicall,
Inc. (the  "Company"),  a corporation duly organized and existing under the laws
of the State of Delaware,  in the principal amount of two million US Dollars and
issued pursuant to a Note and Warrant Purchase,  Paying and  Conversion/Exercise
Agency Agreement (the "Agreement")  dated as of June 8, 1999 between the Company
of the first part and Banca del Gottardo of the second part.

Subject  to the  provisions  of the  Agreement,  Intellicall,  Inc.,  for  value
received, hereby promises to pay to the holder of this Global Note, payable upon
presentation and surrender hereof, the amount of US Dollar 2'000'000.-- (USD two
million) and interest  thereon at 7% per annum,  in accordance with the Terms of
the Notes set forth in Annex A of the Agreement.

In accordance with Section 1 of the Terms, this Global Note may be exchanged, as
a whole or in part, for definitive Notes, in bearer form in the denominations of
USD 5'000.--,  with interest coupons  attached,  not earlier than one year after
the later of the date on which the Notes are first  offered or the Payment Date,
before which time no Notes  represented  by this Global Note or interest  herein
may be  transferred  into the United States or to a U.S.  person.  Such exchange
shall  be made  upon  certification,  in the  form  set  forth in Annex K of the
Agreement and appended to this Global Note,  that the  beneficial  owners of the
Notes  are  not  United  States  persons  or  U.S.   persons  or  are  financial
institutions  (as  defined  in the United  States  Treasury  Regulation  Section
1.165-12(c)(1)(v))  located  outside the United States that have  purchased such
Notes for resale during the Distribution Compliance Period and that certify that
they have


<PAGE>


                                                                             33.


not acquired the Notes for purposes of resale directly or indirectly to a United
States  Person or a U.S.  person or to a person  within  the  United  States.  A
beneficial  owner of Notes  must  exchange  its  share  of the  Global  Note for
definitive  Notes before  interest  payments or other payments in respect of the
Notes will be made.

The  Terms  of the  Notes  set  forth  in Annex A of the  Agreement  are  hereby
incorporated  by reference  herein  mutatis  mutandis  and,  except as otherwise
provided  herein,  shall be binding on the Company  and the holder  hereof as if
fully set forth herein.  Except as otherwise  provided herein, the Company shall
make all payments  hereunder as and when  provided in the Terms of the Notes and
shall be bound by all its covenants set forth therein.

This Global Note shall be governed by and construed in accordance  with the laws
of Switzerland.

IN WITNESS WHEREOF,  the Company has caused this Global Note to be duly executed
under its corporate seal as of June 11, 1999.
Dated: June 11, 1999
Swiss Security no.: 813'346
                                             INTELLICALL, INC.

                                             By:  _____________________________

This Global Note shall not become  valid for any purpose  until this Global Note
has been authenticated by any two officers of Banca del Gottardo.

By:   _____________________________          By:  _____________________________
      Authorized Officer                          Authorized Officer


<PAGE>


                                                                             34.


                                                                         ANNEX E
                                                                         -------

                     TERMS OF THE "WARRANTS" OF THE COMPANY
                     --------------------------------------

1.     General
       -------

       The  Warrants are issuable in bearer form and have the benefit of and are
       subject to the  provisions  for the  exercise  thereof  contained  in the
       Warrant  Agency  Agreement  to be dated as of June 8,  1999  between  the
       Company and Banca del  Gottardo  (the  "Warrant  Agent" or the  "Standing
       Agent" as the case may be) which will be available for  inspection at the
       office in Lugano of the Warrant Agent or its successor as Warrant  Agent.
       The holders of the Warrants (the  "Holders") are deemed to have knowledge
       of the  provisions  of such  Agreement,  all of which  will be binding on
       them, provided,  however, that the rights of such Holders hereunder shall
       be governed by the terms hereof.

       The Standing  Agent or the Warrant  Agent may resign in its duties and be
       discharged  from  all  further  duties  as  Agent  or  Warrant  Agent  in
       accordance with the terms of the Warrant Agency Agreement.  In such event
       a successor  Standing  Agent or Warrant  Agent,  which will have the same
       duties as its  predecessor and will agree to be bound by the terms of the
       Warrant  Agency  Agreement,  will be appointed by the Company,  or if the
       Company shall fail to appoint such  successor  Standing  Agent or Warrant
       Agent, by a court of competent jurisdiction.

       The  Global  Warrant  may  be  exchanged,  as a  whole  or in  part,  for
       appropriate  definitive  Warrants,  in bearer form,  not earlier than one
       year after the later of the date on which the Warrants are first  offered
       or the Payment Date. Such exchange shall be made upon  certification that
       the  beneficial  owners of the Warrants are not United States  persons or
       U.S.  persons or are financial  institutions (as defined in United States
       Treasury Regulation Section 1.165-12(c)(1)(v)) located outside the United
       States that are not United States persons and that the beneficial  owners
       have not  purchased  such  Warrants  for resale  during the  Distribution
       Compliance  Period and that the beneficial  owners certify that they have
       not acquired the Warrants for purposes of resale  directly or  indirectly
       to a United  States  person or to a person  within the United  States.  A
       beneficial  owner of  Warrants  must  exchange  its  share of the  Global
       Warrant for definitive  Warrants  before such Warrants may be transferred
       or shares may be  delivered  upon  exercise of the Warrants in respect of
       the Warrants will be made.

       For purposes hereof, (i) the term "Distribution  Compliance Period" means
       the period  beginning on the earlier of the first date that the Notes are
       offered or the date on which the Notes are issued  (the  "Payment  Date")
       and  ending on the date one year  after the later of the date upon  which
       the Notes and Warrants  were first offered or the date of closing of this
       offering,  (ii) the term  "United  States"  means  the  United  States of
       America  (including  the  States  and  the  District  of  Columbia),  its
       possessions, its territories and other areas subject to its jurisdiction,
       (iii) the term "United  States person" means a citizen or resident of the
       United  States,  a  corporation,  partnership  or other entity created or
       organized  in or under the laws of the  United  States  or any  political
       subdivision thereof, or an estate or trust the income of which is subject
       to United States  federal  income  taxation  regardless of its source and
       (iv) the term "U.S. person" has the meaning set forth in Sections 230.901
       through .904 of Title 17 of the United States Code of Federal Regulations
       ("Regulation S").

2.     Duration
       --------

       The  right  to  subscribe  for  and  purchase  shares  of  Warrant  Stock
       represented by the Warrants shall commence subject to Section 8 hereof on
       November 1, 1999 and shall expire June 11, 2004 at 5:00


<PAGE>


                                                                             35.


       P.M. US Eastern  Time,  provided,  however,  that if, on such  expiration
       date,  the Company is then  required,  pursuant to an  effective  request
       therefor,  to effect,  or is in the process of effecting,  a registration
       under the Securities  Act for an  underwritten  public  offering in which
       shares of Warrant  Stock are,  pursuant to this  Warrant,  entitled to be
       included,  or if the Company is in default of any obligations  created by
       this Warrant,  said right to subscribe for and purchase shares of Warrant
       Stock  shall  expire  at 5:00  P.M.,  US  Eastern  Time,  on the 30th day
       following the date on which such registration shall have become effective
       (but in no event  longer  than  180 days  beyond  the date  this  Warrant
       otherwise  would have  expired) or on the 30th day following the date all
       of such defaults have been cured, as the case may be.

3.     Warrant Price; Method of Exercise; Payment; Issuance of New Warrant;
       --------------------------------------------------------------------
       Transfer and Exchange
       ---------------------

       The exercise  price will be fixed on June 11, 1999 whereby such  exercise
       price shall be the equivalent of 90% of the average of the closing prices
       of Common Stock during the period from May 28 to June 11, 1999, but shall
       in any event not be higher than USD 2.50 (such price  hereinafter  called
       the "Warrant Price").

       The purchase  right  represented  by this Warrant may be exercised at any
       time and from  time to time  prior to  expiration  subject  to  Section 8
       hereof.

       In order to exercise  the Warrants  and receive  certificates  for Shares
       legally  issuable  on such  exercise,  the  Holder  shall  deposit  2'000
       Warrants  or more with the  Warrant  Agent at its  office  in Lugano  and
       accompanied   by  a  written   notice   (which   notice  must  contain  a
       certification of non-U.S. beneficial ownership) signed by or on behalf of
       the Holder to the effect that such Holder elects to exercise the Warrants
       and payment of the Warrant Price (the "Warrant Consideration Amount"). As
       a further condition precedent to the exercise of the Warrants, the Holder
       must pay all stamp, issue, registration or other taxes and duties arising
       upon  exercise in  Switzerland  or payable in any  jurisdiction  upon the
       issue or delivery of Shares,  if any, to the exercising  Holder or to the
       order of a person other than the exercising Holder.

       The date on which these conditions  precedent to exercise as stated above
       have been verified and recognized by the Warrant Agent as being fulfilled
       is hereafter called the "Deposit Date". The Common Stock Warrant shall be
       treated as exercised at the close of business in New York on the Exercise
       Date. The "Exercise  Date" for the Warrant means the business days in New
       York immediately  following the Deposit Date. The "Exercise Date" for the
       Common Stock Warrant shall not be later than the Termination Date.

       The Company  shall not be obligated to issue any fraction of a Share upon
       the  exercise  of any  Warrant or make any  payment  for a fraction  of a
       Share.  If more than one Warrant  shall be  exercised  at one time by the
       same  Holder,  the number of full Shares  which  shall be  issuable  upon
       exercise  thereof shall be computed on the basis of the aggregate  number
       of shares  issuable  upon the exercise of all the  Warrants  exercised by
       such  Holder.  Any Shares  issued upon the  exercise of the Common  Stock
       Warrants shall be delivered in accordance  with the  instructions  of the
       Holder.

       In the event of any  exercise of the rights  represented  by this Warrant
       certificates  for the shares of Warrant Stock so purchased shall be dated
       the date of such  exercise and  delivered to the Holder  hereof  within a
       reasonable  time,  not exceeding  five Business Days after such exercise,
       and the Holder  hereof  shall be deemed for all purposes to be the Holder
       of the  shares  of  Warrant  Stock  so  purchased  as of the date of such
       exercise.



<PAGE>


                                                                             36.


       Neither this Warrant nor any Warrant Stock has been registered  under the
       Securities Act.  Accordingly,  neither this Warrant nor any Warrant Stock
       is transferable except as permitted under various exemptions contained in
       the  Securities  Act,  or  upon  satisfaction  of  the  registration  and
       prospectus   delivery   requirements  of  the  Securities  Act.   Hedging
       transactions  involving  this  Warrant may not be  conducted  unless such
       hedging transactions are made in compliance with the Securities Act.

4.     Stock Fully Paid; Reservation of Shares
       ---------------------------------------

       The Company  covenants  and agrees that all shares of Warrant Stock which
       may be issued upon the exercise of this Warrant will,  upon issuance,  be
       fully paid and  non-assessable and free from all taxes, liens and charges
       with respect to issuance.  The Company further  covenants and agrees that
       during the period within which this Warrant may be exercised, the Company
       will at all times have  authorized  and  reserved  for the purpose of the
       issue upon exercise of the subscription  rights evidenced by this Warrant
       a sufficient number of shares of Common Stock to provide for the exercise
       of this  Warrant.  If the Warrant  Price is at any time less than the par
       value of the Warrant  Stock or if the Warrant at any time is  exercisable
       by  its   delivery   alone  and   without   payment  of  any   additional
       consideration, the Company also covenants and agrees to cause to be taken
       such action  (whether by decreasing  the par value of the Warrant  Stock,
       the  conversion of the Warrant  Stock from par value to no par value,  or
       otherwise)  as will  permit the  exercise  of this  Warrant  without  any
       additional  payment  by the  Holder  hereof  (other  than  payment of the
       Warrant Price,  if any, and applicable  transfer  taxes, if any), and the
       issuance of the Warrant Stock,  which Warrant Stock,  upon such issuance,
       will be fully paid and non-assessable.

       The  Company  shall  not by any  action  including,  without  limitation,
       amending its certificate of incorporation or through any  reorganization,
       transfer of assets, consolidation,  merger, dissolution, issue or sale of
       securities  or any  other  voluntary  action,  avoid or seek to avoid the
       observance or performance  of any of the terms of this Warrant,  but will
       at all times in good faith  assist in the  carrying out of all such terms
       and in the taking if all such actions as may be necessary or  appropriate
       to protect the rights of the Holders hereof against  impairment.  Without
       limiting  the  generality  of the  foregoing,  the  Company  will (a) not
       increase the par value of any shares of Common Stock  receivable upon the
       exercise of this  Warrant  above the amount  payable  therefor  upon such
       exercise  immediately  prior to such increase in par value,  (b) take all
       such action as may be necessary or  appropriate in order that the Company
       may  validly and legally  issue fully paid and  non-assessable  shares of
       Common  Stock,  free and clear of any  liens,  claims,  encumbrances  and
       restrictions  (other than as provided  herein)  upon the exercise of this
       Warrant,  and (c) use its best efforts to obtain all such authorizations,
       exemptions   or  consents   from  any  public   regulatory   body  having
       jurisdiction thereof as may be necessary to enable the Company to perform
       its obligations under this Warrant.

5.     Adjustment of Purchase Price and Number of Shares
       -------------------------------------------------

       The number and kind of securities  purchasable  upon the exercise of this
       Warrant  and the  payment  of the  Warrant  Price  shall  be  subject  to
       adjustment  from time to time upon the  happening  of  certain  events as
       follows:

       a)     Recapitalization, Reorganization, Reclassification, Consolidation,
              ------------------------------------------------------------------
              Merger or Sale
              --------------

              In case of any  recapitalization  or reorganization of the Company
              or  any  reclassification  or  change  of  outstanding  Securities
              issuable upon exercise of this Warrant (other than a change


<PAGE>


                                                                             37.


              in par value,  or from par value to no par  value,  or from no par
              value  to  par  value  or  as  a  result  of  a   subdivision   or
              combination),  or in case of any  consolidation  or  merger of the
              Company with or into another corporation (other than a merger with
              another   corporation  in  which  the  Company  is  the  surviving
              corporation and which does not result in any  reclassification  or
              change - other than a change in par value, or from par value to no
              par value,  or from no par value to par value, or as a result of a
              subdivision or combination - of  outstanding  Securities  issuable
              upon exercise of this Warrant), or in case of any sale or transfer
              to  another  corporation  of the  Property  of the  Company  as an
              entirety or  substantially  as an entirety  in  connection  with a
              liquidation  or  dissolution  of the Company,  the Company or such
              successor or purchasing  corporation  therefor,  shall issue a new
              Warrant,  providing  that the Holder(s) of this Warrant shall have
              the right to  exercise  such new  Warrant  and  procure  upon such
              exercise  in lieu of  each  share  of  Warrant  Stock  theretofore
              issuable  upon  exercise of this  Warrant the kind and the highest
              amount of shares of Stock,  other  securities,  money and property
              receivable    upon    such    recapitalization,    reorganization,
              reclassification,  change, consolidation, merger, sale or transfer
              by a Holder of one share of Common Stock issuable upon exercise of
              this  Warrant  had it been  exercised  immediately  prior  to such
              recapitalization,    reorganization,   reclassification,   change,
              consolidation,  merger sale or  transfer.  Such new Warrant  shall
              provide for adjustments which shall be as nearly equivalent as may
              be practicable to the adjustments  provided for in this Section 5.
              The  provisions of this  subsection (a) shall  similarly  apply to
              successive recapitalizations,  reorganizations, reclassifications,
              changes, consolidations, mergers, sales and transfers.

       b)     Subdivision or Combination of Shares
              ------------------------------------

              If the  Company,  at any time while this  Warrant is  outstanding,
              shall subdivide or combine any class or classes of its Common, (i)
              in case of  subdivision  of shares,  the  Warrant  Price  shall be
              proportionately   reduced  (as  at  the  effective  date  of  such
              subdivision  of, if the Company  shall take a record of Holders of
              its Common for the purpose of so subdividing, as at the applicable
              record date,  whichever is earlier) to reflect the increase in the
              total number of shares of Common  outstanding  as a result of such
              subdivision,  or (ii) in the case of a combination of shares,  the
              Warrant  Price  shall  be  proportionately  increased  (as  at the
              effective date of such combination,  or, if the Company shall take
              a record of Holders of its Common for the purpose of so combining,
              as at the applicable record date, whichever is earlier) to reflect
              the reduction in the total number of shares of Common  outstanding
              as a result of such combination.

       c)     Certain Dividends and Distributions
              -----------------------------------

              If the  Company,  at any time while this  Warrant is  outstanding,
              shall:

              (i)   Stock Dividends
                    ---------------

                    Pay a dividend in, or make any other distribution of, shares
                    of any class or classes of Common,  the Warrant  Price shall
                    be adjusted,  as at the date the Company shall take a record
                    of the  holders of such class or classes of Common,  for the
                    purpose of receiving such dividend or other distribution (or
                    if no such record is taken,  as at the date of such  payment
                    or  other   distribution),   to  that  price  determined  by
                    multiplying the Warrant Price in effect immediately prior to
                    such  record  date  (or if no such  record  is  taken,  then
                    immediately prior to such payment or other distribution), by
                    a fraction  (1) the  numerator  of which  shall be the total
                    number of shares of Common outstanding immediately prior


<PAGE>


                                                                             38.


                    to such dividend or distribution, and (2) the denominator of
                    which  shall  be  the  total  number  of  shares  of  Common
                    outstanding  immediately after such dividend or distribution
                    (plus in the event that the Company paid cash for fractional
                    shares,  the number of  additional  shares  which would have
                    been  outstanding  had  the  Corporation  issued  fractional
                    shares in connection with said dividends); or

             (ii)   Liquidating Dividends, etc.
                    ---------------------------

                    Make a  distribution  of its  Property to the holders of its
                    Common as a dividend in liquidation  or partial  liquidation
                    or by way of  return of  capital  other  than as a  dividend
                    payable out of funds legally  available for dividends  under
                    the  laws of the  State  of  Delaware,  the  Holder  of this
                    Warrant  shall,  upon  exercise  and  payment of the Warrant
                    Price, be entitled to receive,  in addition to the number of
                    shares of Warrant Stock  receivable  thereupon,  and without
                    payment  of any  additional  consideration  therefor,  a sum
                    equal to the  amount  of such  Property  as would  have been
                    payable to such  Holder as owner of that number of shares of
                    Warrant Stock of the receivable by exercise of this Warrant,
                    had such  Holder  been the holder of record of such  Warrant
                    Stock  on the  record  date for  such  distribution,  and an
                    appropriate  provision  therefor shall be made a part of any
                    such distribution.

       d)     Issuance of Additional Shares of Common
              ---------------------------------------

              If the  Company,  at any time while this  Warrant is  outstanding,
              shall issue any  Additional  Shares of Common  (otherwise  than as
              provided  in the  foregoing  subsections  (a)  through (c) of this
              Section 5), at a price per share less than the Warrant  Price then
              in effect or less than (i) the Current Market Price then in effect
              is  such  issue  is  pursuant  to  a  public  offering,   or  (ii)
              ninety-five  percent  (95%) of the  Current  Market  Price then in
              effect if such issue is pursuant to a private  placement in excess
              of USD  3'500'000.-- in the aggregate,  or without  consideration,
              then the Warrant Price upon each such  issuance  shall be adjusted
              to that price  determined  by  multiplying  the Warrant Price by a
              fraction:

              (A)    If issued for a  consideration  per share less than (i) the
                     Current  Market  Price  then in  effect  if such  issue  is
                     pursuant to a public offering,  or (ii) ninety-five percent
                     (95%) of the  Current  Market  Price then in effect if such
                     issue is pursuant to a private  placement  in excess of USD
                     3'500'000.-- in the aggregate, or for no consideration:

                     1)    the  numerator of which shall be the number of shares
                           of  Common  outstanding   immediately  prior  to  the
                           issuance of such Additional Shares of Common plus the
                           number  of  shares  of  Common  which  the  aggregate
                           consideration for the total number of such Additional
                           Shares of Common so issued would  purchase at (i) the
                           Current  Market Price then in effect if such issue is
                           pursuant to a public  offering,  or (ii)  ninety-five
                           percent  (95%) of the  Current  Market  Price then in
                           effect  if  such  issue  is  pursuant  to  a  private
                           placement  in  excess  of  USD  3'500'000.--  in  the
                           aggregate, and

                     2)    the  denominator  of  which  shall be the  number  of
                           shares of Common  outstanding  immediately  after the
                           issuance of such Additional Shares of Common.

              (B)    If issued for a consideration per share of Common less than
                     the Warrant Price or for no consideration:


<PAGE>


                                                                             39.



                     1)    the  numerator of which shall be the number of shares
                           of  Common  outstanding   immediately  prior  to  the
                           issuance of such Additional Shares of Common plus the
                           number  of  shares  of  Common  which  the  aggregate
                           consideration for the total number of such Additional
                           Shares  of Common so  issued  would  purchase  at the
                           Warrant Price, and

                     2)    the  denominator  of  which  shall be the  number  of
                           shares of Common  outstanding  immediately  after the
                           issuance of such Additional Shares of Common.

                     If such  Additional  Shares of Common  shall be issued at a
                     price per share  less than both the  Warrant  Price and the
                     Current  Market Price,  the Warrant Price shall be adjusted
                     in the  manner  provided  in  clauses  (i) or  (ii) of this
                     subsection  (d) which will result in the greater  reduction
                     in the amount of the Warrant Price.

                     The provisions of this subsection (d) shall not apply under
                     any  of  the  circumstances  for  which  an  adjustment  is
                     provided in subsections  (a), (b) or (c) of this Section 5.
                     No adjustment of the Warrant Price shall be made under this
                     subsection (d) upon the issuance of any  Additional  Shares
                     of Common  which are issued  pursuant  to any Common  Stock
                     Equivalent  if  upon  the  issuance  of such  Common  Stock
                     Equivalent (1) any adjustment shall have been made pursuant
                     to  subsection  (e) of this Section 5 or (2) no  adjustment
                     was required pursuant to subsection (e) of this Section 5.

       e)     Issuance of Common Stock Equivalents
              ------------------------------------

              In case the  Company  shall  at any time  while  this  Warrant  is
              outstanding,  issue any Common Stock  Equivalent and the price per
              share of Common  for  which  Additional  Shares  of Common  may be
              issuable thereafter pursuant to such Common Stock Equivalent shall
              be less  than the  Warrant  Price  then in  effect  on the date of
              issuance  of such  Common  Stock  Equivalent  or less than (i) the
              Current Market Price then in effect if such issue is pursuant to a
              public offering,  or (ii) ninety five percent (95%) of the Current
              Market Price then in effect if such issue is pursuant to a private
              placement in excess of USD  3'500'000.-- in the aggregate,  or if,
              after any such issuance of Common Stock Equivalents, the price per
              share  for which  Additional  Shares  of  Common  may be  issuable
              thereafter is amended  (other than as a result of the operation of
              anti-dilution   provisions   of  or  relating   to  Common   Stock
              Equivalents  outstanding as of the date hereof  pursuant to events
              or  circumstances  which would also result in an adjustment in the
              Warrant  Price),  and such price as so amended  shall be less than
              the  Warrant  Price or the Current  Market  Price in effect at the
              time of such  amendment,  then the  Warrant  Price  upon each such
              issuance or  amendment  shall be adjusted as provided in the first
              sentence of subsection (d) of this Section 5 on the basis that (1)
              the  maximum  number  of  Additional  Shares  of  Common  issuable
              pursuant to all such Common Stock  Equivalents  shall be deemed to
              have been issued (whether or not such Common Stock Equivalents are
              actually then exercisable, convertible or exchangeable in whole or
              in part) as of the  earlier  of (A) the date on which the  Company
              shall enter into a firm  contract  for the issuance of such Common
              Stock  Equivalent,  or (B) the  date of  actual  issuance  of such
              Common Stock Equivalent,  and (2) the aggregate  consideration for
              such maximum number of Additional Shares of Common shall be deemed
              to be the minimum  consideration  received and  receivable  by the
              Company  for the  issuance  of such  Additional  Shares  of Common
              pursuant to such Common Stock  Equivalent.  No  adjustment  of the
              Warrant  Price  shall be made under this  subsection  (e) upon the
              issuance of any  Convertible  Security which is issued pursuant to
              the exercise of any


<PAGE>


                                                                             40.


              warrants or other subscription or purchase rights therefor, if any
              adjustment  shall  previously  have been made in the Warrant Price
              then in effect upon the issuance of such  warrants or other rights
              pursuant to this subsection (e).

       f)     Other Provisions Applicable to Adjustments Under this Section A
              ---------------------------------------------------------------

              The  following  provisions  shall be  applicable  to the making of
              adjustments  in the Warrant  Price  hereinbefore  provided in this
              Section 5:

              (i)   Computation of Consideration
                    ----------------------------

                    The consideration received by the Company shall be deemed to
                    be the  following:  (a) to the  extent  that any  Additional
                    Shares of Common or any Common  Stock  Equivalents  shall be
                    issued for a cash consideration,  the consideration received
                    by the Company  therefor,  or, (b) if such Additional Shares
                    of Common or Common  Stock  Equivalents  are  offered by the
                    Company for subscription, the subscription price, or, (c) if
                    such Additional Shares of Common or Common Stock Equivalents
                    are sold to  underwriters  or dealers  for  public  offering
                    without a subscription offering, the initial public offering
                    price,  in any  such  case  excluding  any  amounts  paid or
                    receivable  for accrued  interest or accrued  dividends  and
                    without   deduction   of   any   compensation,    discounts,
                    commissions, or expenses paid or incurred by the Company for
                    or in connection with the underwriting  thereof or otherwise
                    in connection with the issue thereof; (d) to the extent that
                    such issuance shall be for a consideration  other than cash,
                    then,  except as herein otherwise  expressly  provided,  the
                    fair market value of such  consideration at the time of such
                    issuance  as  determined  in good  faith by the  Board.  The
                    consideration  for any Additional  Shares of Common issuable
                    pursuant  to  any  Common  Stock  Equivalents  shall  be the
                    consideration  received  by the  Company  for  issuing  such
                    Common Stock Equivalents,  plus the additional consideration
                    payable to the  Company  upon the  exercise,  conversion  or
                    exchange of such Common  Stock  Equivalents.  In case of the
                    issuance at any time of any  Additional  Shares of Common or
                    Common Stock  Equivalents in payment or  satisfaction of any
                    dividend  upon any class of Stock  other  than  Common,  the
                    Company shall be deemed to have received for such Additional
                    Shares of Common or Common Stock Equivalents a consideration
                    equal to the mount of such dividend so paid or satisfied. In
                    any case in which the  consideration  to be received or paid
                    shall be other than cash,  the Board shall notify the Holder
                    of  this   Warrant   through   Banca  del  Gottardo  of  its
                    determination of the fair market value of such consideration
                    prior to payment or accepting  receipt  thereof.  If, within
                    thirty  days after  receipt of said  notice,  the Holders of
                    Warrants  exercisable  for at least a  majority  of  Warrant
                    Stock  then  unissued  shall  notify the Board in writing of
                    their objection to such  determination,  a determination  of
                    fair  market  value of such  consideration  shall be made by
                    arbitration  in  accordance  with the Rules of the  American
                    Arbitration Association,  by an arbitrator in the Borough of
                    Manhattan, City of New York, State of New York.




<PAGE>


                                                                             41.


              (ii)  Readjustment of Warrant Price
                    -----------------------------

                    Upon the  expiration  of the right to  convert,  exchange or
                    exercise any Common Stock  Equivalent  the issuance of which
                    effected an adjustment in the Warrant Price,  if such Common
                    Stock Equivalent shall not have been converted, exercised or
                    exchanged, the number of shares of Common Stock deemed to be
                    issued and  outstanding by reason of the fact that they were
                    issuable upon  conversion,  exchange or exercise of any such
                    Common Stock  Equivalent  shall no longer be computed as set
                    forth  above,  and the  Warrant  Price  shall  forthwith  be
                    readjusted  and  thereafter be the price which it would have
                    been (but  reflecting  any other  adjustments in the Warrant
                    Price made  pursuant  to the  provisions  of this  Section 5
                    after the issuance of such Common Stock  Equivalent) had the
                    adjustment of the Warrant Price been made in accordance with
                    the issuance or sale of the number of  Additional  Shares of
                    Common actually issued upon conversion, exchange or issuance
                    of such  Common  Stock  Equivalent  and  thereupon  only the
                    number of  Additional  Shares of Common  actually  so issued
                    shall  be  deemed  to  have   been   issued   and  only  the
                    consideration  actually received by the Company (computed as
                    in clause  (i) of this  subsection  (f))  shall be deemed to
                    have been received by the Company.

              (iii) Treasury Shares
                    ---------------

                    The number of shares of Common at any time outstanding shall
                    not include any shares  thereof then  directly or indirectly
                    owned or held by or for the account of the Company or any of
                    its Subsidiaries.

       g)     Other Action Affecting Common
              -----------------------------

              In case after the date  hereof the  Company  shall take any action
              affecting its common, other than an action described in any of the
              foregoing   subsections   (a)  through  (f)  of  this  Section  5,
              inclusive,  and the  failure  to make  any  adjustment  would  not
              failure protect the purchase rights represented by this Warrant in
              accordance with the essential intent and principle of this Section
              5, then the Warrant  Price shall be adjusted in such manner and at
              such time as the Board may in good faith determine to be equitable
              in the circumstances.

       h)     Adjustment of Number of Shares
              ------------------------------

              Upon  each  adjustment  in  the  Warrant  Price  pursuant  to  any
              provision of this Section 5, the number of shares of Warrant Stock
              purchasable  hereunder  shall be  adjusted,  to the nearest  whole
              share,  to the  product  obtained  by  multiplying  such number of
              shares  purchasable  immediately  prior to such  adjustment in the
              Warrant  Price by a fraction,  the numerator of which shall be the
              Warrant  Price  immediately  prior  to  such  adjustment  and  the
              denominator  of  which  shall  be the  Warrant  Price  immediately
              thereafter. If the Company shall be in default under any provision
              contained  in the last  sentence  of Section 5 of this  Warrant so
              that shares  issued at the Warrant  price  adjusted in  accordance
              with this Section 5 would not be validly issued, the adjustment of
              number of shares  provided  for in the  foregoing  sentence  shall
              nonetheless  be made  and the  Holder  of this  Warrant  shall  be
              entitled to purchase  such greater  number of shares at the lowest
              price at  which  such  shares  may then be  validly  issued  under
              applicable law. Such exercise shall not constitute a waiver of any
              claim  arising  against the Company by reason of its default under
              Section 5 of this Warrant.




<PAGE>


                                                                             42.


       i)     Notwithstanding anything in this Section 5 to the contrary,
              neither the number of shares of Warrant Stock purchasable
              hereunder nor the Warrant Price shall be adjusted with respect to
              any Common Stock Equivalents issued and outstanding as of the date
              of the issuance of this Warrant, or the issuance of any
              Securities upon exercise or conversion of any such Common
              Stock Equivalent, including, without limitation, any Securities
              issued from time to time pursuant to (i) the exercise of options
              outstanding as of the date of issuance of the Warrant
              and held by present or former directors, officers or employees
              of the Company, (ii) the exercise of the Warrant dated December
              29, 1995 ("Ferraro 1995") issued to Jack Ferraro, (iii) the
              exercise of the Warrant dated November 11, 1996 ("Ferraro 1996")
              issued to Jack Ferraro, (iv) the exercise of the Warrant dated
              January 20, 1999 ("Paytel Warrant") issued to Paytel Canada, Ltd.,
              (v) the exercise of the Warrants, dated December 29, 1995
              ("Gottardo 1995") issued to Banca del Gottardo, (vi) the exercise
              of Warrants, dated November 11, 1996 ("Gottardo 1996") issued to
              Banca del Gottardo, (vii) the effect of any antidilution
              provisions contained in the Ferraro 1995, the Ferraro 1996 and
              the Paytel Warrant, the Gottardo 1995 and Gottardo 1996 Warrants
              and (viii) the issuance of up to 150'000 stock options per
              calendar year pursuant to the Company's stock option or stock
              purchase plan.

6.     Notice of Adjustments
       ---------------------

       Whenever the Warrant Price or number of Warrant Shares  purchasable  upon
       exercise of this Warrant shall be adjusted  pursuant to Section 5 hereof,
       the Company shall deliver to Banca del Gottardo for  certification to the
       Holder(s) of the Warrant a  certificate  (the  "Adjustment  Certificate")
       setting forth, in reasonable  detail, the event requiring the adjustment,
       the amount of the  adjustment,  the method by which such  adjustment  was
       calculated  (including a description of the basis on which the Board made
       any determination hereunder), and the Warrant Price and number of Warrant
       Shares purchasable hereunder after giving effect to such adjustment,  and
       shall cause copies of such  certificate to be mailed (by first class mail
       postage  prepaid) to the  Holder(s) of this Warrant  promptly  after each
       adjustment;  provided,  however,  that  in  the  event  that  any  Holder
       disagrees  with  the  calculations,  amounts  or other  information  with
       respect to the adjustments set forth in the Adjustment Certificate,  such
       Holder shall  within 10 Business  Days after  receipt of such  Adjustment
       Certificate  request that the Company  cause the  independent  accounting
       firm then  regularly  engaged by it to audit its financial  statements to
       propose and execute and promptly  deliver to the  Holder(s) a certificate
       with  respect  to  each  of  the  items  set  forth  in  the   Adjustment
       Certificate.  Such determination as to adjustments of the accounting firm
       shall be final and binding in the absence of manifest error.

7.     Fractional Shares
       -----------------

       No fractional  shares of Warrant Stock will be issued in connection  with
       any exercise hereof,  but in lieu of such fractional  shares, the Company
       shall  cause the payment  therefor  equal in amount to the product of the
       applicable fraction multiplied by the Warrant Price then in effect.

8.     Definitions
       -----------

       For the purposes of this Warrant,  the following terms have the following
       meanings:




<PAGE>


                                                                             43.


       "Additional  Shares of Common"  shall mean all shares of Common issued by
       the Corporation after the date hereof except Warrant Stock.

       "Board" shall mean the Board of Directors of the Corporation.

       "Business Day" shall mean any day except a Saturday,  a Sunday or a legal
       holiday in New York City.

       "Closing Date" shall mean the date of the closing of the sale and
       delivery of the Notes.

       "Commission"  shall mean the  Securities  and Exchange  Commission or any
       other Federal agency at the time administering the Securities Act.

       "Common" shall mean the Common Stock and any capital stock of the Company
       of any class which shall be authorized at any time after the date of this
       Warrant and which shall have the right to participate in the distribution
       of earnings and assets of the Company without limitation as to amount.

       "Common Stock Equivalent" shall mean any Convertible Security or warrant,
       option or other right to subscribe for or purchase any Additional  Shares
       of Common or any Convertible Security.

       "Company" shall mean Intellicall, Inc., a Delaware corporation, and its
       successors and assigns.

       "Convertible Securities" shall mean evidences of Indebtedness,  shares of
       Stock or other  Securities  which  are or may be at any time  convertible
       into  or  exchangeable  for  Additional   Shares  of  Common.   The  term
       "Convertible Security" shall mean one of the Convertible Securities.

       "Current  Market  Price"  means with  respect to any Trading Day the last
       sale price (regular way) of the Common on such day as reported on the New
       York Stock  Exchange  Consolidated  Tape (as published in the Wall Street
       Journal),  or,  if  such  Common  is not  listed  on the New  York  Stock
       Exchange,  Inc. or reported on such Consolidated Tape, then the last sale
       price on such day on the principal  domestic stock exchange on which such
       stock is then listed or  admitted to trading,  or, if no sale takes place
       on such day on such  exchange,  the  average of the closing bid and asked
       prices on such day as  officially  quoted on such  exchange,  or, if such
       Common is not then listed or admitted  to trading on any  domestic  stock
       exchange but is quoted in the National  Market System  ("NMS/NASDAQ")  of
       the National Association of Securities Dealers,  Inc. Automated Quotation
       System  ("NASDAQ"),  then the Current  Market Price for each such Trading
       Day shall be the last sale price on such day as quoted by NMS/NASDAQ, or,
       if no sale takes place on such day or if such Common is neither listed or
       admitted to trading on any  domestic  stock  exchange  nor quoted on such
       National  Market  System,  then the  Current  Market  Price for each such
       Trading  Day shall be the average of the  reported  closing bid and asked
       price quotations on such day in the over-the-counter  market, as reported
       by NASDAQ, or, if not so reported, as furnished by the National Quotation
       Bureau, Inc., or, if such firm at the time is not engaged in the business
       of reporting  such prices,  as furnished by any similar firm then engaged
       in such business as selected by the Company, or if there is no such firm,
       as  furnished  by any member of the National  Association  of  Securities
       Dealers,  Inc.  selected by the Company with the written  approval of the
       Holders of  Warrants  execrable  for a majority  of the shares of Warrant
       Stock usable under then outstanding  Warrants. If at any time such Common
       is  not  listed  on any  domestic  exchange  or  quoted  in the  domestic
       over-the-counter  market,  the Current Market Price shall be deemed to be
       an amount  mutually  agreed  upon in writing  between the Company and the
       Holder of this Warrant within fifteen days immediately following the date
       on which the Current Market Price is to be determined. If no


<PAGE>


                                                                             44.


       agreement as to Current Market Price is determined as stated herein,  (i)
       the Holder of this Warrant  shall  select an  independent  appraiser  who
       shall determine the fair market value per share of the Common which shall
       be the Current  Market  Price,  provided the Company  shall agree to such
       Current  Market  Price.  If the  Company  shall not agree to the  Current
       Market  Price as  determined  in the  preceding  sentence  then  (ii) the
       Company and Banca del Gottardo shall each select an independent appraiser
       who  shall,  independently  of the other  appraiser,  determine  the fair
       market value of the Common of the Company. If the value determined by the
       appraiser  whose  determination  is the higher of the two appraisals does
       not  exceed by more than ten  percent  (10%) the  average  of the  values
       determined by each appraiser,  then the Current Market Price shall be the
       average  of the values  determined  by the two  appraisers.  If the value
       determined by the appraiser whose  determination is the higher of the two
       appraisals  does exceed by more than ten percent (10%) the average of the
       value determined by each appraiser,  then the two appraisers shall select
       a third  independent  appraiser  who  shall,  independently  of the other
       appraisals,  determine  the fair market  value of the  Common.  The value
       determined by the appraiser  whose  determination  is the most discrepant
       from the  average of the three  appraisals  shall be  discarded,  and the
       Current  Market  Price  shall  equal the  average  of the  remaining  two
       appraisals;  except  that  in the  event  that  the  highest  and  lowest
       appraisals  are  equally   discrepant  from  the  average  of  the  three
       appraisals,  the Current Market Price shall be such average.  The Company
       shall bear the expenses of all appraisals.

       "Governmental Body" shall mean any federal,  state,  county,  city, town,
       village, municipal or other governmental department,  commission,  board,
       bureau, agency, authority or instrumentality, domestic or foreign.

       "Holders"  shall  mean the  Persons  who  shall  from time to time own of
       record any Warrant. The term "Holder" shall mean one of the Holders.

       "Material  Adverse  Effect"  means  any  change or  changes  or effect or
       effects that  individually  or in the  aggregate  are or are likely to be
       materially  adverse  to (i) the  assets,  business,  operations,  income,
       prospects or condition  (financial  or  otherwise) of the Company and its
       Subsidiaries   taken  as  a  whole,   (ii)  the  legality,   validity  or
       enforceability of the Warrants,  and (iii) the ability of the Corporation
       to fulfill its obligations under the Warrants.

       "Note  Purchase  Agreement"  shall  mean the Note and  Warrant  Purchase,
       Paying  and  Conversion/Exercise  Agency  Agreement,  dated as of June 8,
       1999, by and between the Company and Banca del Gottardo as such Agreement
       may hereafter from time to time be amended,  modified or  supplemented in
       accordance with the terms thereof.

       "Notes" shall mean collectively the Convertible Notes (each as defined in
       the Note Purchase Agreement).

       "Person"  shall mean and include an individual,  a  partnership,  a joint
       venture,  a corporation,  a trust,  an  unincorporated  organization or a
       government or any department or agency thereof.

       "Property"  with  respect to any Person,  shall mean any  interest in any
       kind of property or asset,  whether real, personal or mixed,  tangible or
       intangible, of such Person.

       "Registrable  Securities"  shall  mean  (a) any  Warrant  Stock  or other
       Securities issued or issuable upon exercise of any Warrants,  and (b) any
       Securities  issued or issuable  with respect to any such Warrant Stock or
       other Securities by way of stock dividend or stock split or in connection
       with a combination of shares, recapitalization,  merger, consolidation or
       other reorganization or otherwise. As to any


<PAGE>


                                                                             45.


       particular Registrable Securities,  once issued such shares or securities
       shall  cease  to  be  Registrable  Securities  when  (i)  a  registration
       statement with respect to the sale of such  Securities  shall have become
       effective  under the Securities Act and such  Securities  shall have been
       disposed of in accordance  with such  registration  statement,  (ii) they
       shall have been  distributed  to the public  pursuant to Rule 144 (or any
       successor provision) under the Securities Act, (iii) they shall have been
       otherwise  transferred,  new  certificates  for them not bearing a legend
       restricting further transfer shall have been delivered by the Company and
       subsequent   disposition  of  them  shall  not  require  registration  or
       qualification  of them under the  Securities act or any similar state law
       then in force,  (iv) they shall have cased to be  outstanding  or (v) the
       Company  agrees to  remove  the  legend  restricting  transferability  in
       accordance  with  applicable  law on  the  certificates  evidencing  such
       Securities.

       "Registration Expenses" shall mean all expenses incident to the Company's
       performance  of  or  compliance  with  Section  7,   including,   without
       limitation,   all  registration,   filing  and  National  Association  of
       Securities  Dealers  fees,  all  fees  and  expenses  of  complying  with
       securities  or blue  sky  laws,  all  word  processing,  duplicating  and
       printing  expenses,   messenger  and  delivery  expenses,  the  fees  and
       disbursements  of counsel for the Company and of its  independent  public
       accountants,  including  the  expenses  of any  special  audits  or "cold
       comfort"  letters  required  by  or  incident  to  such  performance  and
       compliance,  the reasonable fees and  disbursements  of not more than one
       firm of attorneys  retained by the holders of the Registrable  Securities
       being  registered,  premiums  and other costs of  policies  of  insurance
       against liabilities arising out of the public offering of the Registrable
       Securities   being   registered  and  any  fees  and   disbursements   of
       underwriters  customarily  paid by issuers or sellers of securities,  but
       excluding  underwriting  discounts and commissions and transfer taxes, if
       any, provided that, in any case where Registration Expenses are not to be
       borne by the Company, such expenses shall not include salaries of Company
       personnel or general  overhead  expenses of the Company,  auditing  fees,
       premiums or other expenses  relating to liability  insurance  required by
       underwriters  of the Company or other  expenses  for the  preparation  of
       financial  statements or other data normally  prepared by the Corporation
       in the ordinary  course of its  business or which the Company  would have
       incurred in any event.

       "Securities"  shall  mean any debt or equity  securities  of the  Company
       whether now or hereafter authorized,  and any instrument convertible into
       or exchangeable for Securities or a Security.
       "Security" shall mean one of the Securities.

       "Securities Act" shall mean as of any date the Securities Act of 1933, as
       amended, or any similar Federal statute then in effect.

       "Stock" shall include any and all shares,  interests or other equivalents
       (however  designated)  of, or  participations  in the capital  stock of a
       corporation of any class.

       "Subsidiary"  shall mean, with respect to any Person,  any corporation or
       other entity of which at least a majority of the outstanding Voting Stock
       is at the time directly or indirectly  owned or controlled by such Person
       or by one or  more  of any  entities  directly  or  indirectly  owned  or
       controlled by such Person.

       "Trading Day" shall mean any day on which equity securities are traded on
       any national securities exchange or on NASDAQ.

       "Voting Stock",  as applied to the Stock of any  corporation,  shall mean
       Stock of any class or classes (however designated) having ordinary voting
       power for the election of a majority of the members


<PAGE>


                                                                             46.


       of the Board of Directors (or other governing body) of such  corporation,
       other than Stock  having such power only by reason of the  happening of a
       contingency.

       "Warrant  Price" shall mean the price specified in the first paragraph of
       this Warrant and such other  prices as shall result from the  adjustments
       specified in Section 5 hereof.

       "Warrant Stock" shall mean the Common Stock issuable upon exercise of
       any Warrant or Warrants.

       "Warrants"  shall mean the Warrants  issued and sold pursuant to the Note
       Purchase Agreement, including, without limitation, this Warrant.

9.     Amendment and Waiver; Assignees
       -------------------------------

       Any  term,  covenant,  agreement  or  condition  in this  Warrant  may be
       amended, or compliance  therewith may be waived (either generally or in a
       particular  instance and either  retroactively  or  prospectively),  by a
       written  instrument  or written  instruments  executed by the Company and
       Banca del Gottardo;  provided,  however, that no such amendment or waiver
       shall  reduce the number of shares of Warrant  Stock  issuable  under the
       Warrants, increase the Warrant Price, shorten the period during which the
       Warrants  may be  exercised  or modify any  provision  of this  Section 9
       without the consent of the Holders of all Warrants then outstanding.

10.    Loss or Mutilation
       ------------------

       Upon receipt by the Warrant Agent of evidence  satisfactory  to it of the
       ownership  of and the  loss,  theft,  destruction  or  mutilation  of any
       Warrant  and (in the case of loss,  theft or  destruction)  of  indemnity
       satisfactory  to it, and (in the case of  mutilation)  upon surrender and
       cancellation thereof, the Warrant Agent shall execute and deliver in lieu
       thereof a new Warrant  entitling  the Holder to acquire  without  further
       consideration  the same  number  of  Shares  upon  the same  terms as the
       Warrant so lost, stolen or destroyed or so surrendered and canceled.  Any
       such  substitute   Warrant  shall  constitute  an  original   contractual
       obligation of the Company,  whether or not the allegedly lost,  stolen or
       destroyed Warrant shall be at any time enforceable by anyone.  Applicants
       for a  substitute  Warrant  shall also comply with such other  reasonable
       regulations  and pay such other  reasonable  charges as the Warrant Agent
       may prescribe.

11.    Notices and Publications
       ------------------------

       All  notices  to the  Holders  shall be deemed to have been duly given if
       published  in the Feuille  Officielle  Suisse du Commerce  and in a daily
       newspaper in Lugano and Zurich.

12.    Governing Law
       -------------

       The terms,  conditions  and form of the Warrants  and the Warrant  Agency
       Agreement  shall be governed by and  construed in  accordance  with Swiss
       law. The issuance of the Common Stock upon exercise of the Warrants shall
       be governed by and construed in accordance  with the laws of the State of
       Delaware.

       Any action or  proceedings  against the Company  relating to the Warrants
       may be  brought  and  enforced  in the  ordinary  courts of the Canton of
       Ticino,  venue  being in the City of Lugano,  or if such  courts  fail to
       grant  jurisdiction  in the ordinary  courts of the Canton of Basle-City,
       venue  being in the city of Basle,  and the  Company  hereby  irrevocably
       submits to the jurisdiction of such courts


<PAGE>


                                                                             47.


       in respect of any such  action or  proceeding  in either  case,  with the
       right to  appeal,  as  provided  by law,  to the Swiss  Federal  Court in
       Lausanne,  the judgment of which shall be final. Solely for that purpose,
       the Company  hereby  elects legal and special  domicile at the  principal
       office of Banca del  Gottardo,  Viale  Stefano  Franscini 8, 6901 Lugano,
       Switzerland.  The  Company  covenants  that so long as any  Warrants  are
       outstanding  it  will  maintain  an  agent  for  service  of  process  in
       Switzerland.  The aforementioned jurisdiction shall also be valid for the
       cancellation  and  replacement  of lost,  stolen,  defaced,  mutilated or
       destroyed  Warrants.  Issuance  of Common  Stock to a Holder who has been
       identified as the legitimate  Holder by a final judgment of a Swiss Court
       shall release the Company from its obligations under such Warrants.

13.    Delivery and Printing of the Warrants
       -------------------------------------

       Banca del Gottardo shall keep the Global Warrant  representing  the whole
       issue of the Warrants as  custodian  for the  Noteholders  instead of the
       definitive Warrant(s). No physical delivery of the Warrants shall be made
       by Banca del Gottardo until the Warrants shall have been printed. Whether
       the Warrants shall be printed shall be determined in the sole  discretion
       of Banca del  Gottardo,  unless the Company is breach of the Terms of the
       Warrants and any  Warrantholder  or the Company has  requested  Banca del
       Gottardo to print the Warrants.  In such case,  Banca del Gottardo  shall
       arrange for the  printing of the Warrants and arrange for delivery of the
       Warrants to the Warrantholders.




<PAGE>


                                                                             48.


                                                                         ANNEX F
                                                                         -------

                                 FORM OF WARRANT
                                 ---------------
                                     (FACE)

THIS  WARRANT HAS NOT BEEN AND WILL NOT BE  REGISTERED  UNDER THE UNITED  STATED
SECURITIES  ACT OF 1933,  AS  AMENDED  (THE  "SECURITIES  ACT"),  AND MAY NOT BE
OFFERED, SOLD OR DELIVERED,  DIRECTLY OR INDIRECTLY, IN THE UNITED STATES OR TO,
OR FOR THE BENEFIT OF, ANY U.S.  PERSON (AS SUCH TERMS ARE DEFINED IN REGULATION
S UNDER  THE  SECURITIES  ACT)  UNLESS  THIS  WARRANT  IS  REGISTERED  UNDER THE
SECURITIES  ACT  OR AN  EXEMPTION  FROM  THE  REGISTRATION  REQUIREMENTS  OF THE
SECURITIES ACT IS AVAILABLE. HEDGING TRANSACTIONS INVOLVING THIS WARRANT MAY NOT
BE CONDUCTED  UNLESS SUCH HEDGING  TRANSACTIONS  ARE MADE IN COMPLIANCE WITH THE
SECURITIES ACT.


                                     WARRANT

No.             Warrant to Purchase __________ Shares of Common Stock
                (subject to adjustment)

                                INTELLICALL, INC.

              Incorporated Under the Laws of the State of Delaware

This Warrant  entitles  the holder  hereof (the  "Holder") to subscribe  for and
purchase,  during the period  specified in this Warrant,  one share  (subject to
adjustment as hereinafter  provided) of duly authorized,  validly issued,  fully
paid and  non-assessable  Common  Stock,  par value USD 0.01 per share  ("Common
Stock") of INTELLICALL,  INC., a Delaware  corporation  (the  "Company"),  at an
initial  exercise  price per share as  determined  pursuant  to Section 3 of the
terms of the Warrants,  subject,  however,  to the provisions and upon the terms
and conditions  hereinafter set forth (such exercise price, as form time to time
adjusted in  accordance  with the terms  hereof,  being  hereinafter  called the
"Warrant Price"). 2'000 Warrants or more are required for any exercise.

Reference is hereby made to the further  provisions of this Warrant set forth on
the reverse hereof and such further  provisions  shall for all purposes have the
same effect as though fully set forth at this place.

IN WITNESS WHEREOF, INTELLICALL, INC. has caused this Warrant to be signed in
its name by the facsimile signature of its Chief Executive Officer and President
or one of its Vice Presidents.

Dated: June 11, 1999

Swiss Securities no.:      813'352

                                             INTELLICALL, INC.


                                             By:  _____________________________
                                                  John J. McDonald
                                                  Chief Executive Officer
                                                  and President


<PAGE>


                                                                             49.


                                                                         ANNEX G
                                                                         -------
(to be typed on security paper)

THIS  WARRANT HAS NOT BEEN AND WILL NOT BE  REGISTERED  UNDER THE UNITED  STATED
SECURITIES  ACT OF 1933,  AS  AMENDED  (THE  "SECURITIES  ACT"),  AND MAY NOT BE
OFFERED, SOLD OR DELIVERED,  DIRECTLY OR INDIRECTLY, IN THE UNITED STATES OR TO,
OR FOR THE BENEFIT OF, ANY U.S.  PERSON (AS SUCH TERMS ARE DEFINED IN REGULATION
S UNDER  THE  SECURITIES  ACT)  UNLESS  THIS  WARRANT  IS  REGISTERED  UNDER THE
SECURITIES  ACT  OR AN  EXEMPTION  FROM  THE  REGISTRATION  REQUIREMENTS  OF THE
SECURITIES ACT IS AVAILABLE. HEDGING TRANSACTIONS INVOLVING THIS WARRANT MAY NOT
BE CONDUCTED  UNLESS SUCH HEDGING  TRANSACTIONS  ARE MADE IN COMPLIANCE WITH THE
SECURITIES ACT.

                                 GLOBAL WARRANT
                                 --------------

                                INTELLICALL, INC.

              Incorporated Under the Laws of the State of Delaware

This Global Warrant is a Global Warrant in respect of a duly authorized issue of
200'000  Warrants,  each  entitling  the holder to subscribe  for and  purchase,
during  the  period  specified  in this  Warrant,  200'000  shares  (subject  to
adjustment as hereinafter  provided) of duly authorized,  validly issued,  fully
paid and  non-assessable  Common  Stock,  par value USD 0.01 per share  ("Common
Stock") of INTELLICALL,  INC., a Delaware  corporation  (the  "Company"),  at an
initial  exercise per share as determined  pursuant to Section 3 of the terms of
the  Warrants,  subject,  however,  to the  provisions  and upon the  terms  and
conditions  hereinafter  set forth (such  exercise  price,  as from time to time
adjusted in  accordance  with the terms  hereof,  being  hereinafter  called the
"Warrant Price"). 2'000 Warrants or more are required for any exercise.

The Warrants are issued  pursuant to the Note and Warrant  Purchase,  Paying and
Conversion/Exercise  Agency  Agreement  dated as of June 8,  1999  between,  the
Company as issuer of the Warrants and Banca del Gottardo (the "Agreement").

The Global  Warrant may be  exchanged,  as a whole or in part,  for  appropriate
definitive  Warrants,  in bearer form, not earlier than one year after the later
of the date on which the Warrants are first  offered or the Payment  Date.  Such
exchange  shall be made upon  certification  that the  beneficial  owners of the
Warrants  are not  United  States  persons  or  U.S.  persons  or are  financial
institutions   (as  defined  in  United  States  Treasury   Regulation   Section
1.165-12(c)(1)(v))  located outside the United States that are not United States
persons and that the  beneficial  owners have not  purchased  such  Warrants for
resale during the Distribution  Compliance Period and that the beneficial owners
certify that they have not acquired the Warrants for purposes of resale directly
or indirectly to a United States person or to a person within the United States.
A beneficial owner of Warrants must exchange its share of the Global Warrant for
definitive  Warrants  before such Warrants may be  transferred  or shares may be
delivered upon exercise of the Warrants in respect of the Warrants will be made.

For purposes hereof,  (i) the term  "Distribution  Compliance  Period" means the
period  beginning on the earlier of the first date that the Notes with  Warrants
are offered or the date on which the Notes are issued (the  "Payment  Date") and
ending on the date one year after the later of the date upon which the Notes and
Warrants  were first offered or the date of closing of this  offering,  (ii) the
term "United  States" means the United States of America  (including  the States
and the District of Columbia), its possessions, its territories


<PAGE>


                                                                             50.


and other  areas  subject to its  jurisdiction,  (iii) the term  "United  States
person"  means a citizen  or  resident  of the  United  States,  a  corporation,
partnership  or other  entity  created or  organized in or under the laws of the
United States or any political  subdivision  thereof,  or an estate or trust the
income of which is subject to United States federal income  taxation  regardless
of its source  and (iv) the term  "U.S.  person"  has the  meaning  set forth in
Sections  230.901  through .904 of Title 17 of the United States Code of Federal
Regulations ("Regulation S"). Until so exchanged, this Global Warrant shall have
the same rights and benefits as the definitive Warrants.

The Terms of the  Warrants  set  forth in Annex E of the  Agreement  are  hereby
incorporated  by reference  herein  mutatis  mutandis  and,  except as otherwise
provided  herein,  shall be binding on the Company  and the holder  hereof as if
fully set forth herein.  Except as otherwise  provided herein, the Company shall
meet all its  obligations  hereunder  as and when  provided  in the Terms of the
Warrants and shall be bound by all its covenants set forth herein.

This Global  Warrant shall be governed by and  construed in accordance  with the
laws of Switzerland.

IN WITNESS  WHEREOF,  the  Company  has caused  this  Global  Warrant to be duly
executed under its corporate seal as of June 11, 1999.

Dated: June 11, 1999

Swiss Securities no.: 813'352

                                             INTELLICALL, INC.

                                             By:  _____________________________
                                                  John J. McDonald
                                                  Chief Executive Officer
                                                  and President


This Global  Warrant  shall not become  valid for any purpose  until this Global
Warrant has been authenticated by any two officers of Banca del Gottardo.

By:   _____________________________          By:  _____________________________
      Authorized Officer                          Authorized Officer


<PAGE>


                                                                             51.


                                                                         ANNEX H
                                                                         -------


                           CONVERSION AGENCY AGREEMENT
                           ---------------------------

This  agreement  is  entered  into  effective  as  of  June  11,  1999,  between
INTELLICALL,  INC.,  a  Delaware  corporation  with  principal  offices  at 2155
Chenault, Suite 410, Carrollton, Texas 75006-5023, United States of America (the
"Company") of the first part and BANCA DEL GOTTARDO,  a Swiss  corporation  with
principal offices at Viale Stefano Franscini 8, 6901 Lugano, Switzerland ("Banca
del Gottardo") of the second part.

As  authorized  by its Board of  Directors on May 6, 1999 and pursuant to a Note
and Warrant Purchase, Paying and Conversion/Exercise Agency Agreement dated June
8, 1999 (the  "Agreement"),  the Company  proposes to make an offer on the Swiss
capital market for the sale of its convertible notes (the  "Convertible  Notes")
and Warrants. The Convertible Notes will be convertible into freely transferable
and non-restricted shares (the "Shares") of the Common Stock of the Company (the
"Common Stock"), on the terms and conditions  provided  hereafter.  The Board of
Directors of the Company has approved this  agreement as regards the  conversion
of the Notes and has authorized the conversion of the Convertible Notes into the
Common Stock of the Company on the terms and conditions hereof.

Article 1     Conversion Agent
              ----------------

              1.1.  The  Company  hereby  appoints  Banca del  Gottardo,  acting
                    through  its  specified  office  in  Switzerland,   as  sole
                    Conversion Agent (the "Conversion Agent") for the conversion
                    of Notes or  coupons  into  Shares  in  accordance  with the
                    provisions for conversion set forth in Exhibit 1 hereto (the
                    "Conversion  Provisions") which constitutes an integral part
                    of this agreement.

              1.2.  So long as any  Notes are  outstanding,  the  Company  shall
                    maintain a stock transfer agent (the "Stock Transfer Agent")
                    or shall itself perform the functions required of such agent
                    under this agreement.

              1.3.  The  appointment of the  Conversion  Agent  hereunder  shall
                    continue in effect until the conversion  right in respect of
                    the  Convertible  Notes  shall have  terminated.  So long as
                    Banca del Gottardo  satisfactorily  performs its obligations
                    hereunder the Company shall not without the consent of Banca
                    del Gottardo  appoint any other  Conversion Agent or pay any
                    other bank any commission or remuneration for the conversion
                    of the Convertible Notes or coupons.

Article 2     Commissions
              -----------

              2.1.  In consideration for the services rendered by the Conversion
                    Agent in connection  with the conversion of the  Convertible
                    Notes and coupons, the Company undertakes to pay upon demand
                    to the  Conversion  Agent in US Dollars a commission of 0.25
                    per cent of the  principal  amount of each  Note  converted,
                    however at least USD 50.-- per  conversion  of a Convertible
                    Note in a principal  amount of USD  5'000.--  together  with
                    reasonable   out-of-pocket  expenses  (e.g.,  telex,  cable,
                    postage,  telephone,  legal and insurance expenses,  if any)
                    incurred  by the  Conversion  Agent in  connection  with its
                    services hereunder.



<PAGE>


                                                                             52.


              2.2.  Neither  Banca del Gottardo nor the  Noteholders  shall have
                    any  obligation  to pay  to the  Stock  Transfer  Agent  any
                    commission,  fees,  costs or charges in connection  with the
                    conversion  of  Convertible  Notes or coupons and the making
                    available of the respective Shares as provided hereafter.

Article 3     Indemnification
              ---------------

              The Company will indemnify and hold harmless the Conversion  Agent
              against any losses, liabilities, costs, claims, actions or demands
              which it may incur or which may be made  against it as a result of
              or in  connection  with its  appointment  or the  exercise  of its
              powers and duties under this Agreement other than those based upon
              or arising out of the negligence of willful misconduct on the part
              of the Conversion Agent or any of its employees.

Article 4     Conversion of Convertible Notes and Coupons
              -------------------------------------------

              Each Convertible Note and all unmatured  coupons attached thereto,
              submitted  for  conversion to the  Conversion  Agent (a "Converted
              Note") shall be imprinted or stamped by the Conversion  Agent with
              a legend to the effect  that such  Convertible  Note or coupon has
              been  converted.  All Converted Notes and coupons shall be held by
              Banca del  Gottardo  for the  account  of the  Company.  Banca del
              Gottardo shall maintain a record of Convertible  Notes and coupons
              converted.

Article 5     Notices
              -------

              All notices  required under this Agreement shall be deemed to have
              been duly given if sent by cable, telex or facsimile  transmission
              (confirmed  in  writing,   sent  by  registered  airmail)  to  the
              following addresses: If to the Company:

              INTELLICALL, INC.
              2155 Chenault, Suite 410
              Carrollton
              Texas 75006-5023, U.S.A.

              Attention:    Chief Financial Officer
              Facsimile:    (972) 416-9454

              If to the Conversion Agent:

              BANCA DEL GOTTARDO
              Viale Stefano Franscini 8
              6901 Lugano, Switzerland

              Attention:    New Issue Department
              Telex:        841 052
              Facsimile:    0114191 808 18 43

              or to such  other  address  as at the party  receiving  the notice
              shall have  notified to the other  party in  writing.  Such cable,
              telex or  facsimile  transmission  notice  shall be deemed to have
              been duly given at the time of  dispatch.  Any party  receiving  a
              notice by cable, telex or


<PAGE>


                                                                             53.


              facsimile  transmission  will be  protected  by  relying  upon the
              cabled,  telexed or transmitted  notice even though such notice is
              not subsequently confirmed in writing.

Article 6     Governing Law
              -------------

              6.1.  This  agreement  shall  be  governed  by  and  construed  in
                    accordance  with Swiss law,  except as to matters  regarding
                    conversion  of the Notes into Common  Stock of the  Company,
                    which shall be governed by and construed in accordance  with
                    the laws of Delaware.  Any action or proceedings against the
                    Company relating to this agreement or the Convertible  Notes
                    or  coupons  may be brought  and  enforced  in the  ordinary
                    courts of the Canton of Ticino,  venue  being in the City of
                    Lugano, and the Company hereby  irrevocably  submits to such
                    courts in respect of any such action or proceeding  with the
                    right to appeal,  as provided  by law, to the Swiss  Federal
                    Court in  Lausanne,  the  judgment  of which shall be final.
                    Solely for that  purpose and for the purpose of execution in
                    Switzerland,  the Company  hereby  elects  legal and special
                    domicile  at the head  office of Banca del  Gottardo,  Viale
                    Stefano  Franscini  8, 6901 Lugano,  Switzerland.  Banca del
                    Gottardo  shall notify the Company  promptly upon receipt of
                    any notice by it in its capacity as the Company's  agent for
                    service of process.

              6.2.  The Conversion  Agent shall also have the right to bring any
                    legal action or proceeding  hereunder against the Company in
                    any state or federal  court in the United  States of America
                    which may have jurisdiction.

Article 7     Counterparts
              ------------

              This agreement may be executed in any number of counterparts, each
              of  which  shall  be an  original;  but  such  counterparts  shall
              together constitute but one and the same instrument.

              IN WITNESS WHEREOF, the Company and Banca del Gottardo have caused
              this  agreement to be signed and  acknowledged  by their  officers
              authorized to do so, as of June 8, 1999.


                                             INTELLICALL, INC.


                                             By:  ______________________________



                                             BANCA DEL GOTTARDO


                                             By:  ______________________________


<PAGE>


                                                                             54.


                                                            Exhibit 1 to ANNEX H
                                                            --------------------

                              CONVERSION PROVISIONS
                              ---------------------

The  following  are  the  provisions  for  the   conversion   (the   "Conversion
Provisions") of the USD 2'000'000.- - 7% Convertible  Notes due June 11, 2004 of
Intellicall,  Inc.,  Carrollton,  Texas (the "Company") into freely transferable
and non-restricted  shares of the common stock of the Company.  Unless otherwise
defined herein,  the terms used herein have the meanings ascribed to them in the
Note and Warrant Purchase,  Paying and Conversion/Exercise  Agency Agreement and
the Conversion  Agency  Agreement (the "Agency  Agreement")  dated as of June 8,
1999, between the Company and Banca del Gottardo.


--------------------------------------------------------------------------------
Article 1
---------

Conversion Right

1.1.   Subject to and upon compliance with these Conversion Provisions, the
       holder of any Note (a "Noteholder") will have the right at any time on
       and after November 1, 1999 up to the close of business of banks in Lugano
       on June 11, 2004, or, in case the Notes are called for redemption in
       accordance with Section 4 of the Terms of the Notes, then prior to the
       close of business of banks in Lugano on the earlier of June 11, 2004 and
       the fifth business day preceding the date fixed for redemption, but in
       no event thereafter, to convert ten Notes or more Notes into freely
       transferable and non-restricted (such transferability and non-restriction
       being subject to the effectiveness of a registration statement under the
       U.S. securities laws covering such common stock) shares of common stock
       which are duly registered under the 1933 Securities Act, with par value
       USD 0.01 per share (such presently authorized capital stock and any other
       stock into which such presently authorized common stock may hereafter be
       changed, the "Common Stock"), of the Company, calculated as to each
       conversion to the greatest number of full Shares, disregarding fractions,
       at the price of initially as determined pursuant to Section 3 of the
       terms of the Notes for each Share, such price being subject to
       adjustment in certain instances as provided in Article 2 hereafter (as so
       adjusted from time to time, the "Conversion Price"). Fractions of a share
       will not be issued on conversion; provided, however, that if a Noteholder
       at any one time delivers more than one Note for conversion, the number
       of Shares issued shall be calculated on the basis of the aggregate
       principal amount of the Notes so delivered. A cash adjustment shall be
       paid in respect of any fractional Share which would otherwise be issuable
       upon conversion of any Note in an amount in U.S. Dollars based upon the
       market price of the Common Stock on the last trading day prior to the
       date of conversion. Cash adjustments for fractional shares will not be
       made for amounts less than one U.S. Dollar.

1.2.   In order to exercise the right of conversion, a Noteholder shall (a)
       deliver the Note or Notes to be converted during normal business hours,
       accompanied by the conversion notice in the form obtainable from the
       Conversion Agent (the "Conversion Notice") to any Conversion Agent and
       (b) pay to the Conversion Agent any stamp or other taxes that may be
       payable in Switzerland on such conversion. Each Note delivered for
       conversion must be delivered with all unmatured coupons attached and/or
       with an amount equal to the face value of any missing, unmatured coupons.
       Such missing, unmatured coupons shall be paid by Banca del Gottardo upon
       subsequent presentation thereof, provided they shall not have become
       barred pursuant to Section 11 of the Terms of the Notes.

1.3.   The Conversion Agent undertakes to:



<PAGE>


                                                                             55.


       (a)    make available to Noteholders  the Conversion  Notice in such form
              as may  from  time  to  time  be  agreed  by the  Company  and the
              Conversion Agent;

       (b) upon receipt of a Conversion Notice from a Noteholder:

              (i)    verify  that  (A)  the  Conversion  Notice  has  been  duly
                     completed  and  signed by or on  behalf  of the  Noteholder
                     named therein,  (B) the Conversion Notice is accompanied by
                     all Notes to which it  relates  and all  unmatured  coupons
                     appertaining  to such Notes  and/or an amount  equal to the
                     face value of any  missing  unmatured  coupons  and (C) the
                     amount  of  any  stamp  or  other  taxes   payable  by  the
                     Noteholder has been paid; and

              (ii)   endorse the Conversion Notice;

       (c)    imprint or stamp all Notes submitted to it for conversion, and all
              unmatured coupons attached  thereto,  in accordance with Article 4
              of  the  Agency  Agreement   promptly  upon  satisfaction  by  the
              Noteholder of all conditions precedent to the conversion; and

       (d)    dispatch  within  two  business  days  after  satisfaction  by the
              Noteholder of all  conditions  precedent to the  conversion to the
              relevant tax authorities, payment in respect of any stamp or other
              taxes payable on the  conversion,  in accordance  with the laws of
              Switzerland.

1.4.   The Conversion Agent shall promptly, upon the later of the date of
       receipt of the Conversion Notice and the satisfaction of all other
       conditions precedent to the conversion stated above, endorse the
       Conversion Notice and notify the Company and the Stock Transfer Agent
       of the Company (at present Chase Mellon Shareholder Services, LLC, 2323
       Bryan St., Suite 2300, Dallas TX 75201-2656), by facsimile, telex or
       cable of (a) the principal amount and serial numbers of the Notes
       deposited for conversion, (b) the number of Shares issuable upon
       conversion of such Notes and (c) the name and address of each person
       (the "Shareholder") to whom such Shares are to be issued.  Such
       conversion shall become effective at the close of business on the date
       (the "Conversion Date") on which the Company shall have received at its
       principal executive offices, during normal business hours, from the
       Conversion Agent a fax, telex or cable notification. If such facsimile,
       telex or cable notification is received after the close of business on
       such date, the Conversion Date will be the immediately following business
       day. At such Conversion Date the rights of the holder (other than the
       Company) of a Note shall cease and the Shareholder shall be deemed to
       have become the holder of such Shares.

1.5.   As soon as practicable on or after the Conversion Date, but in no event
       later than seven business days thereafter, the Company shall (a) cause
       the Shareholder to be registered as the owner of the Shares issued upon
       conversion of such Shareholder's Notes in the register of Shareholders of
       the Company, (b) make available, or cause the Stock Transfer Agent to
       issue, a certificate or certificates for such Shares registered in the
       name of the Shareholder (together with any other securities, properties
       or cash deliverable at the Conversion Date) and (c) at the request of
       the Shareholder, cause the Stock Transfer Agent to forward, at the risk
       and expense and for account of such Shareholder, such certificate or
       certificates (together with any other securities, properties or cash
       deliverable upon conversion) to such person or persons at the address
       specified in the Conversion Notice, together with such assignments and
       other documents, if any, as may be required by law to effect the transfer
       thereof with full benefits under the laws of the applicable jurisdiction
       of the United States of America.

1.6.   The Company covenants that:


<PAGE>


                                                                             56.



       (a)    so long as any  Notes are  outstanding,  it shall  keep  available
              authorized  shares of Common Stock  sufficient to permit all Notes
              outstanding  and  unconverted  to be converted in accordance  with
              these Conversion Provisions;

       (b)    all shares of Common Stock  delivered upon  conversion of Notes as
              provided   herein   will  be  validly   issued,   fully-paid   and
              non-assessable;

       (c)    it shall file,  on or before  November 1, 1999,  if required,  any
              registration  under the United States  securities laws that may be
              required before the Shares can be delivered upon conversion of the
              Notes and freely marketed in the United States.

1.7.   Shares  issued  upon  conversion  and  registered  in  the  name  of  the
       Shareholder shall be freely  transferable and non-restricted and shall be
       entitled to receive all  dividends  paid on such Common Stock on or after
       the  Conversion  Date,  except  for  dividends  payable  to  Shareholders
       registered as such as of a record date occurring  prior to the Conversion
       Date.  No payments  shall be made upon  conversion  for interest  accrued
       since the Coupon Due Date next preceding the Conversion Date.

1.8.   Notes may be presented for conversion only to an office of the Conversion
       Agent outside the United  States.  The Company and the  Conversion  Agent
       will deliver Common Stock or other consideration received upon conversion
       only to an account or address outside the United States.

Article 2
---------

The  Conversion   Price  shall  be  subject  to  adjustments  in  the  following
circumstances occurring after June 11, 1999:

2.1.   In case the Company shall hereafter (i) pay a dividend on its Common
       Stock in shares of its Common Stock or make a distribution in shares of
       its Common Stock with respect to its outstanding Common Stock, (ii)
       subdivide its outstanding shares of Common Stock into a greater number of
       shares of Common Stock or (iii) combine its outstanding shares of Common
       Stock into a smaller number of shares of Common Stock, the Conversion
       Price in effect at the time of the record date for such dividend or of
       the effective date of such subdivision or combination shall be determined
       by multiplying the Conversion Price in effect immediately prior to such
       record date or effective date by a fraction, the numerator of which shall
       be the total number of outstanding shares of Common Stock immediately
       prior to such record date or effective date, and the denominator of which
       shall be the total number of outstanding Common Stock immediately
       following such record date or effective date. Such adjustments made
       pursuant to this Section 2.1 shall be made successively whenever any
       event listed above shall occur.

2.2.   In case the Company shall fix a record date for the issuance of rights,
       options or warrants to all (but not less than all) holders of its
       outstanding Common Stock entitling them to subscribe for or purchase
       shares of Common Stock (or securities convertible into shares of Common
       Stock) at a price per share (or having a Conversion Price per share, if
       a security convertible into Common Stock) less than the Current Market
       Price per share of Common Stock (as defined in Section 2.4) on such
       record date, the Conversion Price to be in effect after such record date
       shall be determined by multiplying the Conversion Price in effect
       immediately prior to such record date by a fraction, of which the
       numerator shall be the number of shares of Common Stock outstanding on
       such record date plus the number of shares of Common Stock which the
       aggregate offering price of the total number of shares of Common Stock
       so to be offered (or the aggregate initial Conversion Price of


<PAGE>


                                                                             57.


       the  convertible  securities  so to be  offered)  would  purchase at such
       Current Market Price and of which the denominator  shall be the number of
       shares of Common Stock outstanding on such record date plus the number of
       additional  shares of Common  Stock to be  offered  for  subscription  or
       purchase  (or into which the  convertible  security  so to be offered are
       initially  convertible).  In case such subscription or exercise price may
       be paid in a consideration  part or all of which shall be in a form other
       than cash, the value of such consideration  shall be as determined by the
       Board of  Directors  of the  Company.  Shares of Common Stock owned by or
       held for the  account  of the  Company or any  majority-owned  subsidiary
       shall not be deemed  outstanding for the purpose of any such computation.
       Such adjustment shall be made successively whenever such a record date is
       fixed;  and in the event that such rights or warrants  are not so issued,
       the Conversion  Price shall again be adjusted to be the Conversion  Price
       which would then be in effect if such record date had not been fixed.

       Notwithstanding anything in this Section 2.2 to the contrary, neither the
       number of shares subscribable hereunder nor the Conversion Price shall be
       adjusted  with  respect  to  any  Common  Stock  Equivalents  issued  and
       outstanding  as of the date of the issuance of this Note, or the issuance
       of any  securities  upon  exercise or conversion of any such common stock
       equivalent,  including,  without  limitation,  any securities issued from
       time to time  pursuant to (i) the exercise of options  outstanding  as of
       the date of issuance of the Note and held by present or former directors,
       officers or employees  of the  Company,  (ii) the exercise of the Warrant
       dated  December 29, 1995 ("Ferraro  1995") issued to Jack Ferraro,  (iii)
       the  exercise of the Warrant  dated  November 11, 1996  ("Ferraro  1996")
       issued to Jack  Ferraro,  (iv) the exercise of the Warrant  dated January
       20,  1999  ("Paytel  Warrant")  issued to Paytel  Canada,  Ltd.,  (v) the
       exercise of the  Warrants,  dated  December  29, 1995  ("Gottardo  1995")
       issued  to Banca del  Gottardo,  (vi) the  exercise  of  Warrants,  dated
       November 11, 1996 ("Gottardo  1996") issued to Banca del Gottardo,  (vii)
       the effect of any antidilution  provisions contained in the Ferraro 1995,
       the Ferraro 1996 and the Paytel  Warrant,  the Gottardo 1995 and Gottardo
       1996  Warrants and (viii) the issuance of up to 150'000 stock options per
       calendar year pursuant to the  Company's  stock option or stock  purchase
       plan.

2.3.   In case the Company shall fix a record date for the making of a distri-
       bution to all (but not less than all) holders of shares of Common Stock
       of evidences of its indebtedness or assets (other than cash dividends or
       cash distributions payable out of surplus legally available for dividends
       under the laws of the jurisdiction of incorporation of the Company,
       dividends or distributions payable in shares of Common Stock as described
       in Section 2.1, or rights, options or warrants or convertible securities
       containing the right to subscribe for or purchase shares of Common Stock
       (excluding those referred to in Section 2.2)), the Conversion Price to be
       in effect after such record date shall be determined by multiplying the
       Conversion Price in effect immediately prior to such record date by a
       fraction, of which the numerator shall be the Current Market Price per
       share of Common Stock (as defined in Section 2.4) on such record date,
       less the fair market value per share (as determined by the Board of
       Directors of the Company, whose determination shall be conclusive, and
       described in a statement filed with Banca del Gottardo) of the portion
       of the assets or evidences of indebtedness so to be distributed, or of
       such rights, options, or warrants or convertible securities, applicable
       to one share of Common Stock, and of which the denominator shall be such
       Current Market Price per share of Common Stock. Such adjustment shall be
       made successively whenever such a record date is fixed; and in the event
       that such distribution is not so made, the Conversion Price shall again
       be adjusted to be the Conversion Price which would then be in effect if
       such record date had not been fixed. If any such rights, options, or
       warrants or convertible securities shall by their terms provide for an
       increase or increases, with the passage of time, in the amount of
       additional consideration per share of Common Stock payable to the
       Company upon the exercise or conversion thereof, the Conversion
       Price then in effect shall, forthwith upon any such increase becoming
       effective, be readjusted to


<PAGE>


                                                                             58.


       reflect such increase.

2.4.   For the purpose of any computation under Sections 2.2 and 2.3, the
       "Current Market Price" means with respect to any Trading Day the last
       sale price (regular way) of the Common on such day as
       reported on the New York Stock Exchange Consolidated Tape (as published
       in the Wall Street Journal), or, if such Common Stock is not listed on
       the New York Stock Exchange, Inc. or reported on such Consolidated Tape,
       then the last sale price on such day on the principal domestic stock
       exchange on which such stock is then listed or admitted to trading, or,
       if no sale takes place on such day on such exchange, the average of the
       closing bid and asked prices on such day as officially quoted on such
       exchange, or, if such Common Stock is not then listed or admitted to
       trading on any domestic stock exchange but is quoted in the National
       Market System ("NMS/NASDAQ") of the National Association of Securities
       Dealers, Inc. Automated Quotation System ("NASDAQ"), then the Current
       Market Price for each such Trading Day shall be the last sale price on
       such day as quoted by NMS/NASDAQ, or, if no sale takes place on such day
       or if such Common Stock is neither listed or admitted to trading on any
       domestic stock exchange nor quoted on such National Market System, then
       the Current Market Price for each such Trading Day shall be the average
       of the reported closing bid and asked price quotations on such day in the
       over-the-counter market, as reported by NASDAQ, or, if not so reported,
       as furnished by the National Quotation Bureau, Inc., or, if such firm at
       the time is not engaged in the business of reporting such prices, as
       furnished by any similar firm then engaged in such business as selected
       by the Company, or if there is no such firm, as furnished by any member
       of the National Association of Securities Dealers, Inc. selected by the
       Company with the written approval of the Holders of Warrants exercisable
       for a majority of the shares of Warrant Stock issuable under then
       outstanding Warrants. If at any time such Common Stock is not listed on
       any domestic exchange or quoted in the domestic over-the-counter market,
       the Current Market Price shall be deemed to be an amount mutually agreed
       upon in writing between the Company and the Holder of this Warrant within
       fifteen days immediately following the date on which the Current Market
       Price is to be determined. If no agreement as to Current Market Price
       is determined as stated herein, (i) the Holder of this Warrant shall
       select an independent appraiser who shall determine the fair market value
       per share of the Common Stock which shall be the Current Market Price,
       provided the Company shall agree to such Current Market Price. If the
       Company shall not agree to the Current Market Price as determined in the
       preceding sentence then (ii) the Company and Banca del Gottardo shall
       each select an independent appraiser who shall, independently of the
       other appraiser, determine the fair market value of the Common Stock of
       the Company. If the value determined by the appraiser whose determination
       is the higher of the two appraisals does not exceed by more than ten
       percent (10%) the average of the values determined by each appraiser,
       then the Current Market Price shall be the average of the values
       determined by the two appraisers. If the value determined by the
       appraiser whose determination is the higher of the two appraisals does
       exceed by more than ten percent (10%) the average of the value determined
       by each appraiser, then the two appraisers shall select a third
       independent appraiser who shall, independently of the other appraisals,
       determine the fair market value of the Common Stock. The value determined
       by the appraiser whose determination is the most discrepant from the
       average of the three appraisals shall be discarded, and the Current
       Market Price shall equal the average of the remaining two appraisals;
       except that in the event that the highest and lowest appraisals are
       equally discrepant from the average of the three appraisals, the Current
       Market Price shall be such average.  The Company shall bear the expenses
       of all appraisals.

       For the purpose of this  Section 2.4,  "trading  day" shall mean a day on
       which the securities exchange or on NASDAQ specified for purposes of this
       Section 2.4 shall be open for  business or, if the shares of Common Stock
       shall not be listed on such exchange for such period,  a day with respect
       to which  quotations of the character  referred to in the next  preceding
       sentence shall be reported.


<PAGE>


                                                                             59.



2.5.   In computing an adjustment in the  Conversion  Price pursuant to Sections
       2.1 to 2.3 above,  shares of Common Stock not  outstanding at the time of
       such  computation  shall be deemed  outstanding  to the  extent  that the
       Conversion Price has been previously  adjusted to reflect the issuance of
       such shares of Common  Stock or rights,  options or warrants to subscribe
       for or purchase such shares of Common Stock.

2.6.   Except as stated in Sections 2.1, 2.2 and 2.3 above, the Conversion Price
       (except at the  Company's  option) shall not be adjusted for the issuance
       of shares of Common Stock of the Company  whether or not at less than the
       Current Market Price or the current Conversion Price, whether for cash or
       property.

2.7.   No  adjustment  shall  be  made  to  the  Conversion  Price  unless  such
       adjustment  would result in any increase or decrease of at least USD 0.05
       in the  Conversion  Price then in  effect;  provided,  however,  that any
       adjustments  which by reason of this  Section 2.7 are not  required to be
       made will by carried  forward  and taken into  account in any  subsequent
       adjustment.

2.8.   All calculations  under these Conversion  Provisions shall be made to the
       nearest one U.S. cent, with 0.5 U.S. cent or more to be considered a full
       U.S. cent, or to the nearest  one-hundredth  of a share,  as the case may
       be.

2.9.   Whenever the Conversion Price is adjusted as herein provided, the Company
       shall  promptly send to Banca del Gottardo a  certificate  of the Company
       setting  forth the  Conversion  Price after such  adjustment  and setting
       forth a brief  statement of the facts  requiring such  adjustment and the
       date on which it  becomes  effective.  The  contents  of any  certificate
       required by this Section 2.9 may be  transmitted  by telex or cable,  but
       shall be  confirmed  in  writing  as  hereinbefore  provided.  Banca  del
       Gottardo may rely upon such certificate (or such transmission by cable or
       telex,  whether  or not  so  confirmed)  as  conclusive  evidence  of the
       correctness of the adjustment referred to therein.

2.10.  Notwithstanding the foregoing,  no adjustment shall be made to the extent
       that it would reduce the  Conversion  Price to less than the par value of
       the shares of Common Stock (USD .01 at the date hereof).

2.11.  Anything in this Article 2 to the contrary  notwithstanding,  the Company
       shall be entitled,  but shall not be required, to make such reductions in
       the Conversion Price in addition to those required by this Article as it,
       in its discretion, shall determine to be advisable.

2.12.  In any case in which this Article  shall  require that an  adjustment  be
       made retroactively immediately following a record date, the Company shall
       as  promptly  as  practicable  issue to the holder of any Note  converted
       after such record date the shares of Common  Stock and other common stock
       of the  Company  issuable on such  conversion  in excess of the shares of
       Common  Stock and other  common  stock of the  Company  issuable  on such
       conversion on the basis of the Conversion Price prior to such adjustment.

Article 3
---------

3.1.   In the event that:

       (a)    the Company shall  authorize the issuance to all holders of shares
              of Common Stock of rights, options or warrants to subscribe for or
              purchase any shares of Common Stock or any


<PAGE>


                                                                             60.


              securities convertible into shares of Common Stock, or of any
              other subscription rights or warrants;

       (b)    the Company  shall  authorize the  distribution  to all holders of
              shares of Common Stock of evidences of its  indebtedness or assets
              (other than cash  dividends or cash  distributions  payable out of
              consolidated  earnings or earned  surplus or dividends  payable in
              Common Stock);

       (c)    there shall be any consolidation or merger to which the Company is
              a party and for which approval of any  shareholders of the Company
              is required,  or there shall be the  conveyance or transfer of all
              or substantially  all of the properties and assets of the Company,
              or there shall be any reorganization or reclassification or change
              of  outstanding   Common  Stock  issuable  upon  the  exercise  of
              conversion  rights hereunder (other than a change in par value, or
              from par value to no par value, or from no par value to par value,
              or as a result of a subdivision or combination);

       (d)    there shall be voluntary or involuntary dissolution, liquidation
              or winding-up of the Company; or

       (e)    the Company proposes to take any action (other than the actions of
              the  type  described  in  Section  2.1)  which  would  require  an
              adjustment of the Conversion Price pursuant to Article 2;

       then the Company shall,  at least 10 days prior to the applicable  record
       date,  provide written notice of such event to Banca del Gottardo stating
       (x) the  record  date in the  United  States of  America  as of which the
       holders of record of shares of Common Stock to be entitled to receive any
       such rights, warrants, or distributions are to be determined,  or (y) the
       date in the  United  States  of  America  on which  such  reorganization,
       consolidation,  merger, conveyance, transfer, dissolution, liquidation or
       winding-up is expected to become  effective,  and the date as of which it
       is expected that holders of record of the shares of Common Stock shall be
       entitled to vote upon,  and, if  approved,  to exchange  their  shares of
       Common Stock for securities or other property,  if any,  deliverable upon
       such reorganization, reclassification, consolidation, merger, conveyance,
       transfer, dissolution, liquidation or winding-up.

3.2.   If the event  described in the notice given pursuant to Section 3.1. will
       result in an adjustment of the  Conversion  Price  pursuant to Article 2,
       such  notice  shall  also  state  the new  Conversion  Price  unless  the
       Conversion Price cannot be calculated at the time such notice is given.

3.3.   The failure to give or publish the notice  required by this  Article 3 or
       any defect  therein  shall not affect the  legality  or  validity  of the
       proceedings referred to in Section 3.1.

Article 4
---------

So long as any of the Convertible  Notes remain  convertible,  the Company shall
not take any action which would result in an adjustment of the Conversion  Price
pursuant to Article 2 if, after giving  effect  thereto,  the  Conversion  Price
would be  decreased  to such an extent  that the  Shares  could  not be  legally
issued, under applicable law of the jurisdiction of incorporation of the Company
then  in  effect,   at  such  decreased   Conversion  Price  as  fully-paid  and
non-assessable Shares.




<PAGE>


                                                                             61.


Article 5
---------

The Conversion  Agent shall not at any time be responsible to any Noteholder for
determining  whether any facts exist (a) which may require any adjustment of the
Conversion  Price,  (b)  with  respect  to the  nature  or  extent  of any  such
adjustment when made, (c) with respect to the method  employed,  or herein or in
any  supplemental  agreement (if any) provided to be employed in making any such
adjustment.  The Conversion Agent makes no  representation as to the validity or
value  (or the  kind  or  amount)  of any  shares  of  Common  Stock,  or of any
securities,  property or cash, which may at any time be issued or delivered upon
the  conversion  of any  Convertible  Note.  The  Conversion  Agent shall not be
responsible for any failure of the Company to make any cash payment or to issue,
transfer  or  deliver  any  shares  of  stock  or  stock  certificates  or other
securities  or  property  upon the  surrender  of any Note  for the  purpose  of
conversion  or to comply with any of the  covenants of the Company  contained in
these Conversion Provisions.

Article 6
---------

6.1.   In case of any consolidation of the Company with, or merger of the
       Company into, any other corporation (other than a consolidation or merger
       in which the Company is the continuing corporation), or in the case of
       any sale or transfer of all of the assets of the Company as an entirety
       or substantially as an entirety, the corporation formed by such
       consolidation or the corporation into which the Company shall have been
       merged or the corporation which shall have acquired such assets, as the
       case may be, shall execute with Banca del Gottardo a supplemental
       agreement which shall (a) provide that the holder of each Convertible
       Note then outstanding shall have the right to receive thereafter,
       during the period such Convertible Note shall be convertible as specified
       in Article 2, upon conversion of such Convertible Note, in lieu of each
       share of Common Stock deliverable on such conversion immediately prior
       to such event, only the kind and amount of shares and/or other securities
       and/or property and/or cash which are receivable, or which, but for the
       failure to distribute to holders of Common Stock all or substantially all
       of the consideration receivable on such sale or transfer of assets, would
       be receivable upon such consolidation, merger, sale or transfer by a
       holder of one share of Common Stock of the Company and (b) set forth the
       Conversion Price for the shares and/or other securities and/or property
       and/or cash so issuable, which shall be an amount equal to the Conversion
       Price per share of Common Stock of the Company immediately prior to such
       event.

6.2.   In case of any reclassification or change of the shares of Common Stock
       issuable upon conversion of the Notes (other than a change in par value,
       or from par value to no par value, or as a result of a subdivision or
       combination) or in case of any consolidation or merger of another
       corporation into the Company in which the Company is the continuing
       corporation and in which the holders of the shares of Common Stock
       thereafter receive shares, other securities, property, cash or any
       combination thereof for such shares of Common Stock (including for this
       purpose shares reflecting a change in par value or from par value to no
       par value or as a result of a subdivision or combination of the shares
       of Common Stock), the Company shall execute with Banca del Gottardo
       a supplemental agreement which shall (a) provide that the holder of each
       Convertible Note then outstanding shall receive, upon conversion thereof,
       in lieu of each share of Common Stock of the Company deliverable upon
       such conversion immediately prior to such event, the kind and amount
       of shares and/or other securities and/or property and/or cash receivable
       upon such reclassification, change, consolidation or merger by a holder
       of one share of Common Stock, and (b) set forth the Conversion Price for
       the shares and/or other securities and/or property and/or cash so
       issuable, which shall be an amount equal to the Conversion Price per
       share of Common Stock immediately prior to such event.



<PAGE>


                                                                             62.


6.3.   If, as a result of Section 6.1 or Section 6.2, the holder of any
       Convertible Note thereafter surrendered for conversion shall become
       entitled to receive shares of two or more classes of common stock of
       the Company, the Board of Directors (whose determination shall be
       conclusive) shall determine the allocation of the Conversion Price
       between or among shares of such classes of capital stock. Any
       supplemental agreement executed pursuant to Sections 6.1 and 6.2 shall
       provide for adjustments which shall be as nearly equivalent as
       practicable to the adjustments provided for herein, and, where
       appropriate, state the Conversion Price in terms of one full share of
       Common Stock or one full share of common stock of any successor or
       purchasing corporation. The terms of this Article 6 also shall apply to
       successive consolidations, merger, sales or transfers. In the event
       that at any time as a result of an adjustment made pursuant to this
       Article 6 the holder of any Note thereafter surrendered for conversion
       shall become entitled to receive any shares or securities other
       than shares of Common Stock, thereafter the prices or price of such
       other shares or other securities so receivable on conversion of any
       Convertible Note shall be subject to adjustment from time to time in a
       manner and on terms as nearly equivalent as practicable to the provisions
       with respect to Common Stock contained in Article 2, and the provisions
       of Article 2 with respect to the Common Stock shall apply on like terms
       to any such other shares.

6.4.   The Conversion Agent shall have no responsibility  for any consolidation,
       merger,  sale or transfer,  the form or  substance  or any plan  relating
       thereto or the consequences thereof to any Noteholder.

       The  Conversion  Agent  shall have no  responsibility  to  determine  the
       correctness  of any  provision  contained in any  supplemental  agreement
       relating either to the kind or amount of shares of stock or securities or
       property   receivable  by  Noteholders   upon  the  conversion  of  their
       Convertible Notes after any such consolidation, merger, sale or transfer,
       or to any adjustment made with respect thereto. The Conversion Agent may,
       at its  option,  receive  an  opinion  of  counsel  for  the  Company  as
       conclusive  evidence that any such supplemental  agreement  complies with
       the provisions of this Article.

Article 7
---------

Conversion Agent:
-----------------

BANCA DEL GOTTARDO
Viale Stefano Franscini 8, 6901 Lugano


<PAGE>


                                                                             63.


                                                                         ANNEX I
                                                                         -------

                            WARRANT AGENCY AGREEMENT
                            ------------------------

                            Dated as of June 8, 1999


                                INTELLICALL, INC.

                                       AND

                               BANCA DEL GOTTARDO

                                as Standing Agent


WARRANT AGENCY AGREEMENT dated as of June 8, 1999 between  INTELLICALL,  INC., a
Delaware  corporation  (the  "Company"),  and  Banca  del  Gottardo  of  Lugano,
Switzerland,  as Warrant Agent (the "Warrant  Agent") and as Standing Agent (the
"Standing Agent").

                                   WITNESSETH:

WHEREAS, the Company proposed to issue Warrants,  as hereinafter  described (the
"Warrants") (the certificate  representing the Warrants being referred to herein
as the "Warrant  Certificate"),  in  connection  with the sale by the Company to
issue USD  2'000'000.--  principal  amount of 7% Convertible  Notes due June 11,
2004 (the  "Notes"),  one warrant  entitling  to acquire  against  consideration
initially  one  share of  Common  Stock  par  value of USD 0.01 per Share of the
Company (the "Common Stock").

WHEREAS,  the Board of Directors of the Company has duly authorized the issuance
of the Warrants and the shares issuable upon exercise thereof;

WHEREAS,  the Company desires to provide for the issuance of the Warrants and to
provide  herein for certain terms and provisions of the Warrants more fully then
is set forth in the Warrants Certificate; and

WHEREAS, the Company desires the Standing Agent and the Warrants Agent to act on
behalf of the Company,  and the Standing Agent and the Warrant Agent are willing
so to act, in  connection  with the  issuance of Warrants  and other  matters as
provided herein;

NOW,  THEREFORE,  in  consideration  of the premises  and the mutual  agreements
hereinafter  set forth and for the purpose of defining the terms and  provisions
of the  Warrants  and the  Warrant  Certificate  and the  respective  rights and
obligations  thereunder  of the  Company,  the holders of the  Warrants  and the
Standing Agent and Warrant Agent, the parties hereto agree as follows:

                                    SECTION 1

Definitions
-----------

In addition to the definitions set forth elsewhere herein, as used herein:




<PAGE>


                                                                             64.


"Deposit Date" shall have the meaning assigned to it in the Terms of Warrants,
as appropriate.

"Holder"  shall mean the person  depositing  the  Warrant  Certificate  with the
Warrant  Certificate  with the Warrant Agent or  Sub-Warrant  Agent  pursuant to
Section 4.

"Termination Date" shall mean 12.00 Noon, Lugano Time, June 11, 2004.

"Terms of  Warrants"  shall refer to Annex E of the Note and  Warrant  Purchase,
Paying and  Conversion/Exercise  Agency Agreement dated June 8, 1999 made by and
between the Company and Banca del Gottardo.

                                    SECTION 2

Appointment of Standing Agent and Warrant Agent
-----------------------------------------------

The Company  hereby  appoints the Standing Agent and the Warrant Agent to act as
agents for the Company in accordance with the instructions set forth hereinafter
in this Agreement,  and the Standing Agent and Warrants Agent hereby accept such
appointments, upon the terms and conditions hereinafter set forth.

                                    SECTION 3

Number, Form and Execution of Warrant Certificates
--------------------------------------------------

The number of Warrant  Certificates  is  limited  in each case to  200'000.  The
Warrant  Certificate shall be in bearer form  substantially in the forms annexed
hereto as Exhibit 1 (the provisions of which are hereby incorporated herein) and
may have such letters,  numbers or other marks of identification or designation,
and such legends, summaries or endorsements,  printed,  lithographed or engraved
thereon as the Company may deem appropriate and as are not inconsistent with the
provisions  of this  Agreement,  or as may be required to comply with any law or
with any rule or regulation made pursuant thereto.

The  Warrant  Certificate  shall be  signed  on  behalf  of the  Company  by its
President or a Vice  President and by its  Secretary or an Assistant  Secretary.
Each  such  signature  upon  the  Warrant  Certificate  may be in the  form of a
facsimile  signature of the President,  Vice  President,  Secretary or Assistant
Secretary  and  may  be  imprinted  or  otherwise   reproduced  on  the  Warrant
Certificate.  The Company, the Standing Agent and the Warrant Agent may deem and
treat  the  Holder(s)  of  the  Warrants  as  the  absolute   owner(s)   thereof
(notwithstanding  any  notation of ownership  or other  writing  thereon made by
anyone),  for the  purpose of any  exercise  thereof,  any  distribution  to the
Holder(s)  thereof,  and for all other  purpose,  and neither the  Company,  the
Standing  Agent nor the  Warrant  Agent  shall be  affected by any notice to the
contrary.

                                    SECTION 4

Exercise; No Fractional Shares
------------------------------

(a)    The provisions of Sections 5 and 7 of the Terms of the Warrants are
       incorporated herein.

(b)    On  the  Deposit  Date,  the  Warrant  Agent  shall  give  notice  of the
       individual  exercise  of the  Warrants  (the  "Exercise  Notice")  to the
       Standing Agent.

(c)    Upon  surrender  of a Warrant  Certificate,  and payment of the  Exercise
       Price, the Standing Agent shall thereupon (i) promptly requisition,  from
       the transfer agent of the Common Stock of the


<PAGE>


                                                                             65.


       Company,  one or  more  certificates  for  the  number  of  shares  to be
       purchased,  and  (ii)  promptly  after  receipt  of such  certificate  or
       certificates  for shares,  cause the same to be delivered  in  accordance
       with the instructions of the Holder of such Warrant Certificate  together
       with a check  in  payment  for  any  fraction  of a  share.  The  Company
       irrevocably  authorizes  the Standing Agent to make all such requests for
       shares and the transfer agent or transfer  agents for the Common Stock of
       the Company to comply with all such requests.

                                    SECTION 5

Authorization; Reservation of Shares; Listing; Reports to Warrantholders, etc.
------------------------------------------------------------------------------

The provisions of Section 4 of the Terms of Warrants are incorporated herein.

                                    SECTION 6

Loss or Mutilation
------------------

The provisions of Section 11 of the Terms of Warrants are incorporated herein.

                                    SECTION 7

Adjustment of Exercise Price and Number of Share Deliverable
------------------------------------------------------------

The provisions of Section 5 of the Terms of Warrants are incorporated herein.

                                    SECTION 8

Concerning the Standing Agent and the Warrant Agent
---------------------------------------------------

1.     The Standing Agent and the Warrant Agent act hereunder solely as agents
       for the Company and each of their duties shall be determined solely by
       the provisions hereof. The Standing Agent and the Warrant Agent shall
       not, by delivering the Warrant Certificate or by any other act hereunder,
       be deemed to make any representations as to the validity of this Warrant
       Agency Agreement (except its valid execution) or the validity or value
       or authorization of the Warrant Certificate or Warrants represented
       thereby or of any shares or other property delivered upon exercise of
       any Warrants or whether any such shares or other shares are fully paid
       and non-assessable. The Standing Agent and the Warrant Agent shall not
       at any time be under any duty or responsibility to any Holder of the
       Warrants to make or cause to be made any adjustment of the Exercise Price
       or any adjustment to the number of shares of Common Stock issuable upon
       exercise of the Warrants provided in this Agreement, or to determine
       whether any fact exists which may require any such adjustment, or with
       respect to the nature or extent of any such adjustment, when made, or
       with respect to the method employed in making the same. Each shall not
       (i) be liable for the correctness of any recital or statement of fact
       contained herein or in the Warrant Certificate or for any action taken,
       suffered, or omitted by them in reliance on any Warrant Certificate or
       other document or instrument believed by them in good faith to be genuine
       and to have been signed, sent or presented by the proper party or
       parties, (ii) be responsible for any failure on the part of the Company
       to comply with any of its covenants and obligations contained in this
       Agreement or in the Warrant Certificate, or (iii) be liable for any act
       or omission in connection with this Agreement except for their own
       negligence or willful misconduct.



<PAGE>


                                                                             66.


2.     The  Standing  Agent or the Warrant  Agent may at any time  consult  with
       counsel  satisfactory  to them (who may be  counsel to the  Company)  and
       shall  incur no  liability  or  responsibility  to the  Company or to any
       Holder of any Warrant or any other person or  corporation  for any action
       taken,  suffered or omitted by them in good faith in accordance  with the
       opinion or advice of such counsel.

3.     Any notice, statement,  instruction,  request, direction, order, election
       or demand of the Company shall be sufficiently evidenced by an instrument
       signed by its President,  any of its Vice Presidents,  its Secretary, any
       of its Assistant  Secretaries or its Treasurer  (unless other evidence in
       respect thereof is herein specifically prescribed). The Standing Agent or
       the Warrant Agent shall not be liable for any action  taken,  suffered or
       omitted by them in accordance with such notice,  statement,  instruction,
       request,  direction,  order or demand  believed b the  Standing  Agent or
       Warrant Agent to be genuine and to have been signed, sent or presented by
       the proper party or parties.

4.     The  Company  agrees  to pay the  Standing  Agent and the  Warrant  Agent
       reasonable  compensation  for  each  of  its  services  hereunder  and to
       reimburse it for all expenses (e.g.  telex,  cable,  postage,  telephone,
       etc.),  including counsel fees, taxes and governmental  charges and other
       charges of any kind and nature,  incurred by the  Standing  Agent and the
       Warrant Agent. In consideration  for the services rendered by the Warrant
       Agent, the Company  undertakes to pay upon demand to the Warrant Agent in
       USD a  commission  which  is USD  -.10  for  each  Common  Stock  Warrant
       exercised.

5.     The Company further agrees to indemnify the Standing Agent or the Warrant
       Agent and save each of them harmless against any and all losses, expenses
       and  liabilities,  including  judgments,  costs and counsel fees, for any
       thing  done or  omitted by the  Standing  Agent or  Warrant  Agent in the
       execution of their duties and powers hereunder,  except losses,  expenses
       and  liabilities  arising  as a result  of the  Standing  Agent's  or the
       Warrant Agent's negligence or willful misconduct. The Company will not be
       liable for any Swiss  taxes that may be payable  for or in respect of the
       deposit or surrender of the Warrants, or the issue and delivery of shares
       or the surrender of the Warrants.

6.     Neither  Banca  del  Gottardo  nor  the  Warrantholders  shall  have  any
       obligation  to pay to the  Standing  Agent and Stock  Transfer  Agent any
       commission,  fees,  costs or charges in  connection  with the exercise of
       Warrants and the making  available of the  respective  Shares as provided
       hereafter.

7.     The Standing Agent or the Warrant Agent may resign its duties and be
       discharged from all further duties and liabilities hereunder (except
       liabilities arising as a result of the Standing Agent's own negligence
       or willful misconduct), after giving thirty days' prior written notice
       to the Company. At least fifteen days prior to the date such resignation
       is to become effective, the Standing Agent or the Warrant Agent shall
       cause a copy of such notice of resignation to be published in the manner
       set forth in Section 10. Upon such resignation, the Company shall appoint
       in writing a new Standing Agent or Warrant Agent and if the Company shall
       fail to make such appointment within a period of thirty days after it
       has notified in writing of such resignation by the resigning Standing
       Agent or Warrant Agent, then the Holders of any Warrant may apply to any
       court of competent jurisdiction for the appointment of such successor
       Standing Agent or Warrant Agent and if such successor Standing Agent or
       the Warrant Agent shall be carried out by the Company pending such
       appointment.

       After acceptance in writing of such appointment by the successor Standing
       Agent or Warrant Agent is received by the Company, such successor
       Standing Agent or Warrant Agent shall be vested with the same powers,
       rights, duties and responsibilities as if it had been originally named
       herein as the Standing Agent or the Warrant Agent, without any further
       assurance, conveyance, act or deed. Not


<PAGE>


                                                                             67.


       later than the effective date of any such  appointment  the Company shall
       file notice  thereof with the resigning  Standing  Agent or Warrant Agent
       and shall cause a copy of such notice to be  published  in the manner set
       forth in Section 10. Any corporation into which the Standing Agent or the
       Warrant  Agent or any  successor  Standing  Agent or Warrant Agent may be
       converted or merged or any corporation  resulting from any  consolidation
       succeeding to the corporate  trust  business of the Standing Agent or the
       Warrant Agent, shall be a successor Standing Agent or Warrant Agent under
       this Agreement without any further act. Any such successor Standing Agent
       or  Warrant  Agent  shall  promptly  cause  notice of its  succession  as
       Standing  Agent or Warrant  Agent to be mailed to the  Company and notice
       published in the manner set forth in Section 10.

       The  Warrant  Agent,  its  subsidiaries  and  affiliates,  and any of its
       officers, directors,  stockholders, or employees may buy and hold or sell
       Warrants or other  securities of the Company and otherwise  deal with the
       Company in the same manner and to the same extent and with like effect as
       though it were not Warrant  Agent.  Nothing  herein  shall  preclude  the
       Standing Agent or the Warrant Agent from acting in any other capacity for
       the Company or for any other legal entity.

                                    SECTION 9

Modification of Agreement
-------------------------

The  Standing  Agent,  the Warrant  Agent and the Company  may, by  supplemental
agreement,  make any changes or  corrections  in this  Agreement that they shall
deem  appropriate  to  cure  any  ambiguity  or  to  correct  any  defective  or
inconsistent provisions or manifest mistake or error herein contained.


                                   SECTION 10

Notices
-------

The provisions of Section 12 of the Terms of Warrants are incorporated herein.

                                   SECTION 11

Governing Law
-------------

The provisions of Section 13 of the Terms of Warrants are incorporated herein.

                                   SECTION 12

Persons Benefiting
------------------

This  Agreement  shall be binding  upon and inure to the benefit of the Company,
the  Standing  Agent,  the  Warrant  Agent and their  respective  successor  and
assigns,  and, to the extent that the provisions  hereof are incorporated in the
Warrants  by the terms  thereof,  shall be binding  upon and shall  inure to the
benefit of the Holders form time to time of the Warrants,  and their  respective
successor  and  assigns.  Nothing  in this  Agreement  is  intended  or shall be
construed to confer upon any other person or corporation any legal or equitable,
remedy,  or claim or to impose  upon any other  persons any duty,  liability  or
obligation.




<PAGE>


                                                                             68.


                                   SECTION 13

Notices
-------

All  notices  required  under this  Agreement  shall be deemed to have been duly
given if sent by cable, telex or facsimile  transmission  (confirmed in writing,
sent by registered airmail) to the following addresses:

If to the Company:

INTELLICALL, INC.
2155 Chenault, Suite 410
Carrollton, Texas 75006-5023, U.S.A.

Attention:    Chief Financial Officer
Facsimile:    (972) 416 9454

If to the Warrant Agent and to the Standing Agent:

BANCA DEL GOTTARDO
Viale Stefano Franscini 8
6901 Lugano, Switzerland

Attention:    New Issue Department
Telex:        841 052
Facsimile:    0114191 808 18 43

or to such  other  address  as at the party  receiving  the  notice  shall  nave
notified  to the  other  party  in  writing.  Such  cable,  telex  or  facsimile
transmission  notice  shall be deemed  to have  been  duly  given at the time of
dispatch. Any party receiving a notice by cable, telex or facsimile transmission
will be protected by relying upon the cabled, telexed or transmitted notice even
though such notice is not subsequently confirmed in writing.

                                   SECTION 14

Descriptive Headings
--------------------

The descriptive  headings of the several Sections of this Agreement are inserted
for convenience only and shall not control or affect the meaning or construction
of any of the provisions hereof.

                                   SECTION 15

Termination
-----------

This Agreement shall terminate on the Termination  Date of Warrants,  subject to
completion of actions taken on or prior thereto  pursuant to this Agreement,  or
on any earlier date if all the Warrants have been exercised.




<PAGE>


                                                                             69.


IN WITNESS  WHEREOF,  the parties  hereto have caused this  Agreement to be duly
executed as of the date first above written.

                                             INTELLICALL, INC.

                                             By:  _____________________________

                                             Its: _____________________________

                                             BANCA DEL GOTTARDO
                                             As Warrant Agent and Standing Agent

                                             By:  _____________________________

                                             Its: _____________________________


<PAGE>


                                                                             70.


                                                            Exhibit 1 to ANNEX I
                                                            --------------------

                       COMMON STOCK WARRANT EXERCISE FORM
            FOR THE EXERCISE OF WARRANTS ISSUED BY INTELLICALL, INC.
                             EXPIRING JUNE 11, 2004

To:      _____________
         (Warrant Agent)

The undersigned, the holder of Warrants

(please list serial numbers):


(A)        hereby irrevocably elects to exercise the above-mentioned  Warrant(s)
           in  accordance  with the terms thereof and agrees to accept shares of
           common  stock  of the  Company  on the  terms of the  Warrant  Agency
           Agreement  dated as of June 8, 1999 (the  "Warrant  Agreement")  duly
           executed and  delivered by the Company,  and Banca del  Gottardo,  as
           Warrant  Agent  (the  "Warrant  Agent")  and as  Standing  Agent (the
           "Standing Agent");


(B)        hereby (i)  certifies  that the  undersigned  is not a United  States
           person and this Warrant is not being  exercised on behalf of a United
           States  person  (as such term is defined  in  Regulation  S under the
           Securities Act of 1933) or (ii) delivers  herewith a written  opinion
           of counsel  that this  Warrant  and the shares to be  delivered  upon
           exercise of this Warrant have been  registered  under the  Securities
           Act of 1933 or are exempt from registration thereunder;

(C)        requests that a certificate or  certificates  for shares be issued in
           the  name(s)  of  _______________________  and sent to the  following
           address:

           Address   _____________________________________________

                     ---------------------------------------------


________________, 19___

                           ----------------------------------
                           Name:
                           Title:


<PAGE>


                                                                             71.


                                                            Exhibit 2 to ANNEX I
                                                            --------------------

                               BANCA DEL GOTTARDO

Facsimile Transmission
----------------------

To:      INTELLICALL, INC.
         2155 Chenault, Suite 410
         Carrollton, Texas 75006, U.S.A.

Attn:    Chief Financial Officer

Exercise of INTELLICALL, INC. Common Stock Warrants
---------------------------------------------------

Ladies and Gentlemen:

We kindly ask you to take note and to execute the  following  exercise of Common
Stock Warrants:

Exercise number
---------------

a)       number of Common Stock Warrants:

b)       equal number of shares:

c)       shares to be registered in the name of:

d)       shares to be sent to:

e)       amounts, if any, to be sent to:

The  transfer  of  USD  [  ]  will  be  effected   according  to  your  standing
instructions. Please confirm receipt of this fax by return fax.

Thanks and regards,

BANCA DEL GOTTARDO


<PAGE>


                                                                             72.


                                                                         ANNEX J
                                                                         -------

                                DEPOSIT AGREEMENT
                                -----------------
                                     between
INTELLICALL, INC.
being a  corporation  existing  under the  State of  Delaware,  whose  office is
situated at 2155 Chenault, Suite 410, Carrollton, Texas 75006-5023, U.S.A.

(hereinafter "Intellicall" as depositor)
                                                               of the first part

                                       and

BANCA DEL GOTTARDO
being a corporation duly organized with limited liability and existing under the
laws of  Switzerland  whose  registered  office  is  situated  at Viale  Stefano
Franscini 8, 6901 Lugano, Switzerland

(hereinafter "Banca del Gottardo" as "Depositholder" or security custodian)

                                                              of the second part

                                    RECITALS

1.    Intellicall will own certain Series A Preferred Stock which is convertible
      into 35'000  shares of common  stock of a par value of USD .01 each issued
      by ILD  Telecommunication,  Inc.,  being a corporation  existing under the
      laws of the State of  Delaware,  whose  registered  office is  situated at
      16'200  Addison  Road,  Suite  100,  Addison,  Texas  75001,  U.S.A.  (the
      "ILD-Shares").

2.    Intellicall will issue USD 2'000'000.-- 7% convertible  notes due June 11,
      2004 (the "Notes") with warrants (the  "Warrants")  to purchase  shares of
      Common  Stock of  Intellicall  (the  "Shares")  under a Note  and  Warrant
      Purchase,  Paying  and  Conversion/Exercise  Agency  Agreement  (the  "NW-
      Agreement") dated June 8, 1999, entered into between Intellicall and Banca
      del Gottardo.

3.    Intellicall  has  covenanted  in  favour  of the  holders  of the Notes in
      connection with its performance of the obligations under the Notes to keep
      the  ILD-Shares  free and clear from any charge,  pledge,  encumbrance  or
      other  similar  right in  favour  of a third  party  other  than the Third
      Amended  and  Restated  Shareholders  Agreement  dated  April 3, 1998 (the
      "Shareholders Agreement") to which the ILD-Shares are subject.

                                    ARTICLE I
                                    ---------

                                    Covenant
                                    --------

1.    (A)  Intellicall hereby agrees to deliver the ILD-Shares (together the
           "Covenanted  Assets") to the  Depositholder  to hold such  ILD-Shares
           until its  obligations  to the  holders  of the Notes for  payment of
           principal,  interest  and  premium  (if any) of the  Notes  have been
           satisfied or the Notes have been converted.




<PAGE>


                                                                             73.


      (B)  The  Depositholder  agrees to hold the  ILD-Shares,  and  Intellicall
           agrees to transfer the proceeds of any sale of the Covenanted  Assets
           to its account opened with the  Depositholder  for the benefit of the
           holders of the Notes pursuant to this Agreement.

      (C)  Intellicall  shall  not  withdraw  the  Covenanted  Assets  from  the
           Depositholder without consent of the Depositholder. The Depositholder
           agrees to release the relevant  ILD-Shares to  Intellicall,  whenever
           the Notes have been paid in full and/or the Notes have been converted
           in accordance  with the terms  thereof and are no longer  outstanding
           and/or to the extent  Intellicall  delivers the relevant  proceeds of
           such sale so as to repay the Notes.

      The Deposit by  Intellicall  specified in the preceding  paragraphs  shall
      include with  respect to each such Deposit all present and future  claims,
      demands, causes and causes in action in respect of any or all of the items
      specified in such Deposit and all payments on or under and all proceeds of
      every kind and nature whatsoever in respect of any or all of such items.

2.    Intellicall shall  immediately  deliver all the Covenanted Assets into the
      possession of Banca del Gottardo as  Depositholder,  and hereby  instructs
      any and all persons in possession of such Covenanted Assets for account of
      Intellicall  to deliver the same to Banca del Gottardo or any  institution
      nominated by Banca del Gottardo, in accordance with this Agreement.

      Where  Covenanted  Assets are safekept by third parties on behalf of Banca
      del Gottardo,  Banca del Gottardo is empowered to take all or part of such
      assets  into its own  custody  at any  time,  notwithstanding  that it has
      earlier  consented to  safekeeping  by any third parties or delivered such
      assets to any third parties for safekeeping.

      Intellicall  hereby  instructs  Banca del  Gottardo and Banca del Gottardo
      hereby consents that the Covenanted  Assets are held and recorded by Banca
      del  Gottardo  in the safe  custody  account in the name of  accountholder
      Intellicall / reference BANCA DEL GOTTARDO.

3.    All sums received by Banca del Gottardo to the account of  Intellicall  as
      interest or dividends or payments for any other reason with respect to the
      Deposit shall be kept by Banca del Gottardo as Depositholder.

4.    The supervision, observation and exercise of rights (including voting
      rights) arising from calls, conversion and exchange offers, repayments
      in full or in part, subscription rights, payments of dividends or
      interest, as well as all other notices, offers and communications
      concerning the Covenanted Assets shall be the responsibility of
      Intellicall, and Banca del Gottardo is obliged only to redispatch such
      written notices, offers and communications which are received by it to
      Intellicall by registered letter addressed to the last address
      communicated to it by Intellicall. Banca del Gottardo will also dispatch
      to Intellicall copies of public notices contained in newspapers and
      circulars which come to Banca del Gottardo's attention, but Banca del
      Gottardo accepts no responsibility or liability for failure to do so,
      unless caused by the wilful misconduct or gross negligence of Banca del
      Gottardo.

5.    Intellicall  agrees that at any time it is in default under the Notes upon
      receipt of a request by Banca del Gottardo, it will undertake such actions
      as may be required under the  Shareholders  Agreement to transfer to Banca
      del Gottardo  such amount of the  ILD-Shares  as may be necessary to repay
      the Notes.




<PAGE>


                                                                             74.


                                   ARTICLE II
                                   ----------

           Representations, Warranties and Undertakings of Intellicall
           -----------------------------------------------------------

      Intellicall represents and warrants that:

      (a)    it will be the legal and lawful owner of the ILD-Shares,

      (b)    the ILD-Shares will be fully paid up,

      (c)    the ILD-Shares have not been pledged,  encumbered or otherwise made
             subject to any lien except as mentioned herein,

      (d)    it has not granted  and will not grant any options or other  rights
             in respect of the ILD-Shares to any third party except as mentioned
             herein, and

      (e)    it is  authorised to sign this  Agreement and that its  obligations
             hereunder constitute legal and binding obligations.

      Intellicall  undertakes that as long as any obligations  hereunder  remain
      outstanding:

      (a)    it will remain the sole beneficial owner of the ILD-Shares,

      (b)    it will  not  sell,  transfer  or  pledge  the  ILD-Shares  except
             as mentioned herein.

                                   ARTICLE III
                                   -----------

                              Conditions Precedent
                              --------------------

It shall be a condition  precedent to the Deposit that Banca del Gottardo  shall
have  received  on or before the date the Deposit is to take effect each in form
and substance satisfactory to Banca del Gottardo:

    (A)    A copy of the  Resolution  of the Board of Directors  of  Intellicall
           authorizing   the  execution,   delivery  and   performance  of  this
           Agreement,  accompanied by an incumbency  certificate  certifying the
           incumbency  and  signatures  of the  officers  signing  on  behalf of
           Intellicall;

    (B)    such other  documents,  instruments,  approvals (and, if requested by
           Banca del Gottardo,  certified duplicates of executed copies thereof)
           or opinions as Banca del Gottardo may reasonably request.

                                   ARTICLE IV
                                   ----------

                                   Amendments
                                   ----------

No amendment, waiver, modification or release of any provision of this Agreement
nor consent to any  departure  by  Intellicall  therefrom  shall in any event be
effective, irrespective of any course of dealing with any of the parties hereto,
unless the same shall be in writing and signed by Banca del  Gottardo,  and then
such amendment,  waiver,  modification or release shall be effective only in the
specific instance and for the specific purpose for which given.




<PAGE>


                                                                             75.


                                    ARTICLE V
                                    ---------

                        Notices and Addresses for Notices
                        ---------------------------------

All notices and other communications  provided for hereunder shall be in writing
and, if to  Intellicall,  mailed or  delivered  to it,  addressed  to it at 2155
Chenault, Suite 410, Carrollton, Texas 75006-5023, U.S.A., attn. Chief Financial
Officer,  Fax:  972-416-9454  or if to Banca del Gottardo mailed or delivered to
it,  addressed to them at Banca del Gottardo,  Viale  Stefano  Franscini 8, 6901
Lugano, Switzerland;  Attention: New Issue Department,  Telephone:  41-91-808 11
11, Fax: 41-91-808 18 43. All such notices and other communications  shall, when
mailed,  be  effective  seven  days  after  the date of  deposit  in the  mails,
addressed as aforesaid.  All such notices and other  communications to Banca del
Gottardo shall be effective  immediately  upon the receipt  thereof by Banca del
Gottardo.  Either  Intellicall or Banca del Gottardo may change the above stated
address  for giving  notices  and other  communications  hereunder  by mailing a
letter regarding the same to the other party at the address above stated,  which
change of address shall be effective only upon the actual receipt of such letter
by the other party.

                                   ARTICLE VI
                                   ----------

                               No Waiver; Remedies
                               -------------------

No failure by Banca del Gottardo to exercise,  and to delay in  exercising,  any
right  hereunder  shall  operate  as a waiver  thereof;  nor shall any single or
partial  exercise of any right  hereunder  preclude any other  further  exercise
thereof or the exercise of any other right.

                                   ARTICLE VII
                                   -----------

                                    Expenses
                                    --------

Intellicall  will  pay  any  and  all  claims,  damages,  losses,   liabilities,
reasonable  costs and expenses  whatsoever  (including  attorneys'  fees and the
allocated costs, if any, of Banca del Gottardo's  in-house legal services) which
Banca del  Gottardo in its capacity as  pledgeholder  may incur (or which may be
claimed against Banca del Gottardo by any person or entity whatsoever) by reason
of or in connection with the preparation, execution and delivery or transfer of,
or payment or failure to pay under this  Agreement,  except,  only if and to the
extent that any such claim,  damage, loss,  liability,  cost or expense shall be
caused by the wilful misconduct,  fraud, dishonesty or gross negligence of Banca
del Gottardo in exercising its rights under this Agreement.

                                  ARTICLE VIII
                                  ------------

                            Costs, Expenses and Taxes
                            -------------------------

Intellicall  shall pay any and all stamp and other taxes  (including  Swiss VAT)
and fees payable or determined to be payable in connection  with the  execution,
delivery,  filing and recording of this Agreement and any related  documents and
agrees  to save  Banca  del  Gottardo  harmless  from  and  against  any and all
liabilities with respect to or resulting from any delay in paying or omission to
pay such taxes and fees.  All taxes,  costs,  expenses or fees incurred by Banca
del Gottardo in connection with any sale of Covenanted  Assets are at the charge
of Intellicall.




<PAGE>


                                                                             76.


                                   ARTICLE IX
                                   ----------

                                  Severability
                                  ------------

Any  provision  of this  Agreement  which is  prohibited,  unenforceable  or not
authorized in any jurisdiction shall, as to such jurisdiction, be ineffective to
the extent of such prohibition,  unenforceability or non- authorization  without
invalidating  the  remaining   provisions  hereof  or  affecting  the  validity,
enforceability or legality of such provision in any other jurisdiction.

                                    ARTICLE X
                                    ---------

                                  Governing Law
                                  -------------

This Agreement shall be governed by, and construed in accordance  with, the laws
of Switzerland in the absence of mandatory  applications of the relevant laws in
respect of Intellicall.

                                   ARTICLE XI
                                   ----------

                                    Headings
                                    --------

Section  headings in this  Agreement  are  included  herein for  convenience  of
reference  only and shall not  constitute a part of this Agreement for any other
purpose.

                                   ARTICLE XII
                                   -----------

                                  Counterparts
                                  ------------

This Agreement may be executed in several  counterparts,  each of which shall be
regarded  as the  original  and all of which shall  constitute  one and the same
Agreement.




<PAGE>


                                                                             77.


                                  ARTICLE XIII
                                  ------------

                             Jurisdiction and Venue
                             ----------------------

Place for all measures to be taken,  if any, under the Swiss Loi federale sur la
Poursuite  pour Dettes et la Faillite and exclusive  venue for all legal actions
under this Agreement are at the ordinary  courts of the Canton of Ticino,  venue
being in Lugano and if such  courts  should fail to grant  jurisdiction,  in the
ordinary  courts of the Canton of Basle-City,  venue being in the city of Basle.
Intellicall  specifically  agrees to  jurisdiction in accordance with the above.
Banca del Gottardo may, however,  bring an action against Intellicall before the
courts  or other  competent  authority  at its  domicile  or  before  any  other
competent court.

Carrollton, June 8, 1999                         INTELLICALL, INC.


                                                 --------------------------
                                                 Attorney-in-Fact


Lugano, June 8, 1999                             BANCA DEL GOTTARDO


                                                 --------------------------



<PAGE>


                                                                             78.


                                                                       ANNEX K-1
                                                                       ---------

                 CERTIFICATION OF NON-U.S. BENEFICIAL OWNERSHIP
                 ----------------------------------------------

                                INTELLICALL, INC.
                     7% CONVERTIBLE NOTES DUE JUNE 11, 2004

The  undersigned  certifies that as to the portion of the Global Note (i) hereby
presented  for exchange  into  definitive  Notes,  or (ii) hereby  presented for
conversion  into  Common  Stock the  beneficial  owners of the Notes (a) are not
either United States persons or U.S.  persons or (b) are financial  institutions
(within   the   meaning   of   United   States   Treasury   Regulation   Section
1.165-12(c)(1)(v))  located outside the United States that are not United States
persons and that have  purchased  such Notes for  purposes of resale  during the
Distribution  Compliance Period.  Financial institutions that have purchased the
Notes for  purposes of resale  during the  Distribution  Compliance  Period also
hereby  certify  that they have not  acquired  the Notes for  purposes of resale
directly or indirectly  to a United States person or U.S.  person or to a person
within the United States.  The undersigned  certifies further that it is (i) the
beneficial owner of the portion of the Global Note tendered for exchange or (ii)
a financial institution (within the meaning of United States Treasury Regulation
Section  1.165-12(c)(1)(v))  through  which the  beneficial  owner  directly  or
indirectly holds the portion of the Global Note tendered.

For  purposes  of this  certification,  (i) the  term  "Distribution  Compliance
Period"  means the period  beginning  on the  earlier of the first date that the
Notes are offered or the date on which the Notes are issued (the "Payment Date")
and  ending one year after the later of the date upon which the Notes were first
offered or the date of closing of the  offering,  (ii) the term "United  States"
means the United  States of America  (including  the States and the  District of
Columbia),  its  possessions,  its  territories  and other areas  subject to its
jurisdiction,  (iii) the term "United States person" means a citizen or resident
of the United  States,  a  corporation,  partnership  or other entity created or
organized in or under the laws of the United States or any political subdivision
thereof,  or an estate or trust the income of which is subject to United  States
federal income taxation regardless of its source and (iv) the term "U.S. person"
has the meaning set forth in Sections  230.901  through  .904 of Title 17 of the
United States Code of Federal Regulations ("Regulation S").

                                                 -----------------------------
                                                 Beneficial Owner or
                                                 Financial Institution
                                                 Name:
                                                 Address:


<PAGE>


                                                                             79.


                                                                       ANNEX K-2
                                                                       ---------

                 CERTIFICATION OF NON-U.S. BENEFICIAL OWNERSHIP
                 ----------------------------------------------

                                INTELLICALL, INC.
                         WARRANTS EXPIRING JUNE 11, 2004

The  undersigned  certifies  that as to the  portion of the Global  Warrant  (i)
hereby  presented for exchange into definitive  Warrants,  or (ii) presented for
exercise  into Common  Stock the  beneficial  owners of the Warrants (a) are not
either United States persons or U.S.  persons or (b) are financial  institutions
(within   the   meaning   of   United   States   Treasury   Regulation   Section
1.165-12(c)(1)(v))  located outside the United States that are not United States
persons and that have  purchased such Warrants for purposes of resale during the
Distribution  Compliance Period.  Financial institutions that have purchased the
Warrants for purposes of resale during the Distribution  Compliance  Period also
hereby  certify  that they have not acquired the Warrants for purposes of resale
directly or indirectly  to a United States person or U.S.  person or to a person
within the United States.  The undersigned  certifies further that it is (i) the
beneficial  owner of the portion of the Global Warrant  tendered for exchange or
(ii) a  financial  institution  (within the  meaning of United  States  Treasury
Regulation  Section   1.165-12(c)(1)(v))  through  which  the  beneficial  owner
directly or indirectly holds the portion of the Global Warrant tendered.

For  purposes  of this  certification,  (i) the  term  "Distribution  Compliance
Period"  means the period  beginning  on the  earlier of the first date that the
Warrants are offered or the date on which the Warrants are issued (the  "Payment
Date") and ending one year after the later of the date upon which the Notes were
first  offered  or the date of closing of the  offering,  (ii) the term  "United
States"  means the  United  States of  America  (including  the  States  and the
District of Columbia), its possessions,  its territories and other areas subject
to its  jurisdiction,  (iii) the term "United  States person" means a citizen or
resident  of the United  States,  a  corporation,  partnership  or other  entity
created or organized in or under the laws of the United  States or any political
subdivision  thereof,  or an estate or trust the  income of which is  subject to
United States federal income taxation regardless of its source and (iv) the term
"U.S.  person" has the meaning set forth in  Sections  230.901  through  .904 of
Title 17 of the United States Code of Federal Regulations ("Regulation S").

                                                 -----------------------------
                                                 Beneficial Owner or
                                                 Financial Institution
                                                 Name:
                                                 Address:


<PAGE>


                                                                             80.


                                                                         ANNEX L
                                                                         -------

Dated:            June 11, 1999

To:               Banca del Gottardo
                  Viale Stefano Franscini 8
                  CH-6901 Lugano/Switzerland

Re:               Intellicall, Inc. (the "Company")
                  USD 2'000'000.-- 7% Convertible Notes of 1999
                  Due June 11, 2004 (the "Notes")
                  and Warrants of 1999 expiring June 11, 2004
                  (the "Warrants")
--------------------------------------------------------------------------------

                   "Certificate of No Material Adverse Change"
                   -------------------------------------------

Pursuant to the Note and Warrant Purchase, Paying and Conversion/Exercise Agency
Agreement dated June 8, 1999 (the "Agreement") between the Company and Banca del
Gottardo covering the issue of the Notes and Warrants by the Company.

I, John J. McDonald,  being President of the Company HEREBY CERTIFY on behalf of
the Company  that except as set forth in the  Information  Memorandum  as to the
date hereof:

a)     there has been no material adverse change in the financial condition of
       the Company and its consolidated affiliates taken as a whole since
       December 31, 1998, and

b)     no event has occurred rendering untrue or incorrect any of the warranties
       set forth in Article V of the Agreement to a material extent, and

c)     no event has  occurred  which  constitutes  or which  with the  giving of
       notice or lapse of time would constitute one of the events referred to in
       Section 10 of the Terms of the Notes.

                                             Yours truly,
                                             Intellicall, Inc.

                                             ----------------------------------
                                             John J. McDonald
                                             President


<PAGE>


                                                                             81.


                                                                         ANNEX M
                                                                         -------

(Specimen Signature Form)


                                INTELLICALL, INC.
                            Carrollton, Texas, U.S.A.


                  US Dollars 2'000'000.-- 7 per cent US Dollars
                                Convertible Notes
                                Due June 11, 2004
                                       and
                                    Warrants
                             expiring June 11, 2004


The specimen signature of Mr. John J. McDonald, the President to be used for the
printing of the above-captioned Notes and coupons and Warrants is as follows:



                                              ----------------------------------



                                              ----------------------------------



                                              ----------------------------------





June 11, 1999


<PAGE>


                                                                             82.

                                                                         ANNEX N
                                                                         -------

                    CERTIFICATE OF COMPLETION OF DISTRIBUTION


The  undersigned,  being the duly  authorized  officer of Banca del Gottardo,  a
corporation duly organized with limited liability and existing under the laws of
Switzerland ("Gottardo"), does hereby certify for and on behalf of Gottardo that
the  offering of those  certain 7%  Convertible  Notes due 2004 of  Intellicall,
Inc., a Delaware  corporation  ("Intellicall"),  and those  certain  Warrants to
Purchase Common Stock of Intellicall, each as described in that certain Note and
Warrant Purchase,  Paying and  Conversion/Exercise  Agency Agreement,  effective
June 8, 1999 (the "Note and Warrant Purchase  Agreement"),  between the Gottardo
and  Intellicall,  has closed and the one year  distribution  compliance  period
described in the Note and Warrant Purchase Agreement has commenced.

IN WITNESS  WHEREOF,  the  undersigned has executed this document as of the date
set forth below.


                                            BANCA DEL GOTTARDO


                                            By:  _______________________________

                                            Its: _______________________________