UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

                                 Form 10-KSB/A


  [X]  ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
       1934
       For the fiscal year ended December 31, 2000

  [_]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
       ACT OF 1934
            For the transition period from __________________ to _____________
                       Commission file number ________________________________

                                PC-EPhone, Inc.
                       ---------------------------------
                         Name of Small Business Issuer

<TABLE>
                            Nevada                                                      98-0197707
- ----------------------------------------------------------------------  -------------------------------------------
<S>                                                                     <C>
(State or other jurisdiction of incorporation or organization)             (I.R.S. Employer Identification No.)
</TABLE>

<TABLE>
                Suite 515, 3440 Wilshire Blvd,
                   Los Angeles, California                                                   90010
- ----------------------------------------------------------------------  -------------------------------------------
<S>                                                                     <C>
           (Address of principal executive offices)                                       (Zip Code)
</TABLE>

Issuer's telephone number: (213) 487-8000
                           --------------

Securities registered under Section 12(b) of the Exchange Act:  None

Securities registered under Section 12(g) of the Exchange Act:

                        Common Shares, $0.001 par value
                        -------------------------------
                               (Title of class)

  Check whether the issuer (1) filed all reports required to be filed by Section
  13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
  period that the registrant was required to file such reports), and (2) has
  been subject to such filing requirements for the past 90 days. [X] Yes [_] No

  Check if there is no disclosure of delinquent filers in response to Item 405
  of Regulation S-B is not contained in this form, and no disclosure will be
  contained, to the best of registrant's knowledge, in definitive proxy or
  information statements incorporated by reference in Part III of this Form 10-
  KSB or any amendment to this Form 10-KSB. [_]

  The issuer's revenues for the year ended December 31, 2000 were $872,000.

  The aggregate market value of the voting stock held by non-affiliates of the
  registrant as of February 28, 2001, based on the closing trading price of the
  day of $6.25 for the issuer's Common Shares, $0.001 par value (the "Common
  Shares") was $72,921,231.

  The number of shares outstanding of the issuer's common equity, as of February
  28, 2001, were 16,122,167.
<PAGE>

<TABLE>
<CAPTION>
DESCRIPTION                                                                          PAGE
<S>                                                                                  <C>

               PART I

Forward-Looking Statements                                                              3

Business                                                                                3

Properties                                                                             25

Legal Proceedings                                                                      25

Submission of Matters to a Vote of Securities Holders                                  25

               PART II

Market for Common Equity and Related Stockholder Matters                               27

Management's Discussion and Analysis of Financial Condition and Results of             28
Operations

Financial Statements                                                                 F-1

Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure                                                                             31

               PART III

Directors and Executive Officers of the Registrant; Compliance with Section 16(a)
of the Exchange Act                                                                    32

Executive Compensation                                                                 34

Security Ownership of Certain Beneficial Owners and Management                         34

Certain Relationships and Related Transactions                                         36

Exhibits and Reports on Form 8-K                                                       37
</TABLE>

                                      -2-
<PAGE>

                                    PART I
Forward-Looking Statements

This Annual Report on Form 10-KSB includes "forward-looking" statements within
the meaning of Section 21E of the Securities Exchange Act of 1934, as amended
(the "Exchange Act").  Certain important factors may affect the Company's actual
results and could cause such results to differ materially from any forward-
looking statements that may be deemed to have been made in this Form 10-KSB
including, without limitation, statements under "Description of Business" and
"Management's Discussion and Analysis or Plan of Operation", or that are
otherwise made by or on behalf of the Company.  For this purpose, any statements
contained in this Form 10-KSB that are not statements of historical fact may be
deemed to be forward-looking statements.  Without limiting the generality of the
foregoing, words such as "may," "expect," "believe," "anticipate," "intend,"
"could," "estimate," or "continue," or the negative or other variations
therefor, or comparable terminology, are intended to identify forward-looking
statements. Readers are directed to the discussion under "Risk Factors" herein
for a presentation of various risks that could materially affect the Company's
business and which could alter the actual outcome of any and all such forward-
looking statements.

Description of Business

PC-EPhone, Inc. (the "Company") is a corporation organized under the laws of the
State of Nevada.  On June 17, 1998, the Company was incorporated under the name
"Newlands Oil & Gas Inc." The name of the Company was changed to "PC-EPhone,
Inc." on December 15, 2000.

The Company was originally organized to explore and develop oil and gas
properties in California. By agreement (the "Agreement") dated March 1, 1999
between the Company and Brothers Oil & Gas Inc. ("Brothers"), the Company had an
option to earn 70% of Brothers' 10% working interest in certain oil and gas
leases, options to lease and seismic options located on the Travis 3D Seismic
Project located in Solano County, California (the "Lands").  The Company paid
$73,000 to Brothers pursuant to the Agreement which amount is equal to Brothers'
total land and seismic acquisition costs associated with the Lands.  The
estimated land and seismic costs were $83,000 at the time the Agreement was
entered into.  However, cost savings were realized and the total land and
seismic costs were in fact, $73,000.  The Company subsequently paid Brothers
$83,506 to drill wells on the property.

Under the terms of the Agreement, the Company was required to pay 10% of the
cost of each test well drilled.  If the Company elected not to pay this amount
within 15 days of a cash call, then the Company would not have rights to any
test wells or development wells drilled on that prospect.  The Company could
only participate in development wells on a prospect by contributing 10% of the
costs of drilling an initial test well on that prospect.  The Company's option
was not assignable without the written permission of Brothers.

On August 18, 2000, the Company decided not to exercise its option on the Lands
and abandoned the oil and gas exploration business, at which time it began to
pursue the opportunities related to PC-EPhone.

                                      -3-
<PAGE>

By a distribution agreement (the "Distribution Agreement") dated November 6,
2000, the Company's wholly own Bermuda subsidiary, PC-EPhone Ltd. ("PC-EPhone
Ltd.")  was granted certain distribution rights by Cyberbank Corp.
("Cyberbank"), a corporation incorporated in the Republic of Korea.  Cyberbank
has developed a handheld device/terminal, named the "PC-EPhone" that can be used
to perform multiple functions on a Code Division Multiple Access ("CDMA") or
other wireless application protocol system.

The Company intends to market and sell PC-EPhone units throughout Canada and the
United States pursuant to the Distribution Agreement.  The Company intends to
negotiate additional distributions rights with Cyberbank in the foreseeable
future. The Company, through PC-EPhone Ltd., has signed a sub-distribution
agreement with FutureCom Global, Inc. ("FutureCom"), a private Nevada
corporation in the business of development, distribution and servicing of
telecommunications products and services with an emphasis on the wireless
market.  The Company, in conjunction with FutureCom, plans to actively promote
and market the PC-EPhone throughout the United States and Canada.

Product

The PC-EPhone is a wireless handheld device developed by Cyberbank that combines
the features of a hand-held computer, with wireless Internet access, a cellular
phone, and a personal digital assistant.

Cyberbank built the original prototype of the PC-EPhone in late 1999.  Cyberbank
has continuously developed and refined the PC-EPhone and completed development
of a functional version of the PC-EPhone during the year 2000.  Cyberbank's
research and development department has continually improved and enhanced the
PC-EPhone.  New features and innovative enhancements are expected to be
introduced regularly.

The PC-EPhone is the Company's only product at this time.  As a practical and
convenient device, the PC-EPhone offers all of the features of a hand-held
computer with the flexibility of voice communication.  The PC-EPhone's principal
features are as follows:

     1.  Hand-held personal computer;
     2.  Mobile telecommunication equipped for both voice and data;
     3.  Bluetooth technology for wireless communication;
     4.  Mobile Internet and E-commerce enabled;
     5.  Four inch (4") color TFT LCD with touch screen capability; and
     6.  Multimedia functions with Mpeg and MP3 (video and audio streaming).

The PC-EPhone is a "multi" product with a broad array of functions, including
the following:

- ------------------------------------------------------------------------------
Personal Computer              .  Pocket Word
                               .  Address Book
                               .  Scheduler
                               .  Memo
                               .  Recorder
                               .  MS Pocket Office installable
- ------------------------------------------------------------------------------

                                      -4-
<PAGE>

- ------------------------------------------------------------------------------
Mobile Phone                   .  Built-in Microphone and Speaker
                               .  Head Set Communication
                               .  Data Communication Including SMS
                               .  Wireless Communication with a Stylus Handset
- ------------------------------------------------------------------------------
Wireless Internet              .  Direct Web Surfing (IE 4.0 CE)
                               .  Internet Mail (SMTP/POP, IMAP)
                               .  Chat Line Capabilities
                               .  Tel Net Capabilities
- ------------------------------------------------------------------------------
Multimedia & others            .  Gaming
                               .  MP3 Player
                               .  MPEG Video
                               .  Handwriting Recognition
                               .  Hand-held Navigation System (GPS)
                               .  Cyber Stock Trading and Banking
                               .  Compact Flash Memory
- ------------------------------------------------------------------------------

New Products & Features

Cyberbank intends to continue to upgrade and refine the PC-EPhone.  Cyberbank
has advised the Company that the PC-EPhone is expected to have the following
additional features available in the near future:

- ------------------------------------------------------------------------------
Other Plug-ins and Add-on      .  Wireless Payment System
Functions                      .  Video phone (video conferencing)
                               .  Web phone
                               .  Digital camera
                               .  Bar code scanner
                               .  Wireless printer
                               .  Hard disk
                               .  Plug & talk for GSM or CDMA module

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


Distribution

Under the Distribution Agreement, Cyberbank granted to the Company, through PC-
EPhone Ltd., an exclusive distribution license to market, sell and distribute
the PC-EPhone within the United States and Canada, as well as non-exclusive
distribution rights outside of the United States and Canada.  The term of the
Distribution Agreement will expire on December 31, 2007, subject to the Company
meeting certain performance requirements established thereunder.

The Company is required to purchase a minimum of 500,000 PC-EPhone units by the
later of December 31, 2001 and the date that is one year from the date that the
PC-EPhone is approved by the Federal Communications Commission ("FCC") for
retail sale in the United States. Thereafter, the Company will be required to
purchase an annual minimum of 500,000 units of the PC-EPhone product from
Cyberbank.  As of March 22, 2001, the FCC has not yet approved the PC-EPhone for
sale in the United States.

Pursuant to the Distribution Agreement, the Company made an initial purchase of
1,000 PC-EPhones in late 2000.  The Company was obligated pursuant to the
Distribution Agreement to purchase 35,000 PC-EPhone units within 7 days after
the receipt of the initial shipment of

                                      -5-
<PAGE>

1,000 PC-EPhones. The Distribution Agreement allows for termination by Cyberbank
should the Company fail to meet defined minimum purchase requirements. If
Cyberbank were to terminate the Distribution Agreement, the Company would have
no further rights to market, sell or distribute the PC-EPhone. However, in light
of the ongoing FCC approval process, the Company and Cyberbank executed a letter
agreement dated February 8, 2001, pursuant to which, Cyberbank waived and/or
deferred certain requirements imposed by the Distribution Agreement, described
in further detail below.

In consideration for the rights acquired, the Company, through PC-EPhone Ltd.,
issued 3,500,000 shares of its Common Shares, par value $ 0.001 (the "Common
Shares") to Cyberbank pursuant to the Distribution Agreement.  The Company also
agreed to use its best efforts to nominate two candidates put forth by Cyberbank
to its Board of Directors in the near future.  In the event that such conditions
are not met and maintained, Cyberbank may terminate the Distribution Agreement,
and in such case the Company would have no further rights with respect to the
PC-EPhone.

On March 29, 2001, the Board of Directors of the Company appointed two nominees
put forth by Cyberbank to sit on the Board.  If the shareholders fail to approve
such directors at the Company's annual meeting, Cyberbank could terminate the
Distribution Agreement.

Effective November 15, 2000, the Company, through PC-EPhone Ltd., entered into a
subdistributor agreement (the "Subdistributor Agreement") with FutureCom.
FutureCom is in the business of developing, distributing and servicing
telecommunications products with an emphasis on the wireless market.  The
Subdistributor Agreement authorizes FutureCom to market and distribute the PC-
EPhone and use the PC-EPhone trademark within the territory of Canada and the
United States in consideration for FutureCom's commitment to purchase certain
minimum quantities of PC-EPhones.

On February 8, 2001 the Company and Cyberbank executed a letter agreement
pursuant to which Cyberbank waived and/or deferred the certain of the Company's
obligations, including the Company's obligation to purchase 35,000 PC-EPhone
units within 7 days of receipt of the initial 1,000 PC-EPhone units (as
discussed above), until fifteen (15) business days subsequent to Cyberbank
having obtained final written approval from the FCC and the delivery of evidence
of such approval to the Company.

On February 9, 2001 the Company, Cyberbank and FutureCom entered into a tri-
party agreement (the "Tri-Party Agreement") that clarified some of the terms of
the contractual relationships among the three companies.  The Tri-Party
Agreement calls for a purchase order supported by a standby letter of credit to
be issued at least 3 months prior to the shipment dates of PC-EPhone units to be
ordered.

FutureCom is currently in negotiations to establish one or more letters of
credit in order to fulfill its obligations under the Subdistributor and Tri-
Party Agreements, however no such letters of credit have been established to
date.  There can be no assurances that such letters of credit can or will be
established.

                                      -6-
<PAGE>

Establishment of Distribution Networks

The Company and FutureCom expect to actively promote and market the PC-EPhone
throughout the United States and Canada.  The intention is to focus sales
efforts on the following types of customers in order to establish distribution
networks for the PC-EPhone:

     1.   Wireless Network Providers
     2.   Major Retail Distributors
     3.   Wholesale Distributors

Wireless Network Providers:  With respect to the PC-EPhones' wireless
communications capabilities, the Company expects to target companies such as
Verizon Wireless, Sprint, AT&T Wireless, MCI, Airtouch, Telus Mobility, Bell
Mobility, and others who offer retail wireless products in connection with
provision of wireless access services.

Major Retail Distributors:  Since the PC-EPhone is a multi-function wireless
convergence device, the Company will also focus on major retail distributors who
specialize in electronics products.  Target companies in this category include
Radio Shack, Best Buy, Future Shop, and London Drugs.

Wholesale Distributors:  The features of the PC-EPhone present an innovative
product for companies with a focus on retail electronics products.  There are
numerous independent retailers of computers and phones who source their products
from wholesalers.  The Company expects to target wholesalers who sell computers
and phones to these independent retailers.

In addition to the foregoing traditional distribution channels, the Company also
expects to pursue online marketing programs.  As a sales and marketing strategy,
the Company may offer various promotions for initial customers who purchase the
PC-EPhone.  The Company expects to actively participate in marketing and
promotion efforts regarding brand development and end-user interest in the PC-
EPhone.

Industry Overview

The Company believes that there are currently no other products or devices on
the market that combine all of the features and functionality of the PC-EPhone.
The PC-EPhone combines features of a handheld computer, mobile telephone,
wireless messaging device, and a personal digital assistant ("PDA"), with
wireless multimedia and Internet graphic Web browsing capability. The PC-EPhone
crosses established product and industry category lines that have traditionally
divided such products as computers, mobile phones and PDAs.  The Company
believes that the PC-EPhone can compete directly and indirectly with a
substantial number of products now on the market, such as mobile phones,
wireless Internet and other handheld computers and devices.

The Company believes that the prototypical end-user of the PC-EPhone will be the
same type of individual who has use for a high-end PDA with wireless Internet
capability: a busy professional who has become increasingly mobile.  The Company
further believes that these

                                      -7-
<PAGE>

individuals are seeking increasingly efficient ways to access, communicate and
manage, critical personal and professional information.

Many of these professionals used conventional paper-based organizers and, later,
stand-alone electronic pocket organizers or portable computers to accomplish
these tasks: early tools were met with mixed success, were often cumbersome and
offered limited functionality.

The introduction of the first PDAs ushered in a new market for handheld devices
that offered users a combination of simplicity and functionality.  Innovations
in design, synchronization technology, user interface, programmability, and
battery power management soon followed.  These devices have evolved into
convenient productivity tools significantly accelerating hand-held user demand.

The emergence of technologies enabling wireless access to the Internet and
enterprise data is again transforming the handheld device industry.  The
Internet has become an important way for consumers and professionals to access
personal and business information, communicate with peers and access services.
The Company believes that wireless access to Internet content and enterprise
data will make handheld computing devices increasingly valuable to users. This
value proposition is driving a variety of handheld information appliance
manufacturers to add Internet connectivity features to products such as mobile
phones.

With the PC-EPhone, the Company believes that it will introduce into the U.S.
and Canadian markets, a highly sophisticated and functional combination handheld
communications and productivity device. The Company is not aware of any other
product on the market today that provides the same combination of features as
the PC-EPhone.

The Company believes that continued technological innovations that address end-
user needs will be a critical component of industry-wide growth.  Technological
advances have led to significant reductions in size and weight of most analogous
products, not to mention improvements in battery life, reliability and storage
capacity.  Third-party developers, who create software applications and
complementary accessories, supplement manufacturers' innovations and allow end-
users to customize and enhance their respective devices. The Company expects to
benefit from such third-party developers creation and innovative software and
accessory products to complement the PC-EPhone which may attract new users and
encourage device upgrades.

Competition

The PC-EPhone will cross current competitive category product lines, combining
features of PDAs, mobile phones, wireless Internet access devices, and hand-held
computers.  The Company believes that it is reasonably well-positioned to
compete favorably with currently available products in each of these markets.
The market for such products is highly competitive.  Most of the Company's
competitors or potential competitors have significantly greater financial,
technical and marketing resources than does the Company.  In addition, in many
cases these competitors do not rely on outside organizations for product
development, and they may be able to respond more rapidly to new or emerging
technologies or changes in

                                      -8-
<PAGE>

customer requirements than is the Company. They may also devote greater
resources to the development, promotion and sale of their products than does the
Company.

The Company projects that the PC-EPhone will compete with a variety of handheld
devices, including pen and keyboard based devices, mobile phones, sub-notebook
computers, personal and hand-held computers, as well as PDAs and wireless
messaging systems.  The Company believes its principal competitors will include
Palm, Inc., Casio, Compaq, Kyocera, Hewlett-Packard, Nokia, Psion, Sharp,
Ericsson, Motorola, Samsung, Siemens and Visor Handspring.  In addition other
companies may develop products similar to the PC-EPhone in the near future.

The Company also believes that the principal competitive factors impacting the
market for the PC-EPhone will include functionality, features, operating system
performance, styling, availability, brand and price.  In addition, the Company
is dependent on suppliers such as Microsoft for the PC-EPhone operating system
and the development of third-party applications that will appeal to end-users.
Few if any of these factors fall within the Company's direct control given its
dependence on Cyberbank for ongoing product development.

The Company expects the PC-EPhone will compete with a variety of alternative
devices, technologies and services.  Mobile phone manufacturers and service
providers including Nokia, Motorola and Sprint have recently introduced mobile
phones that offer Internet connectivity.  The Company expects that the trend
toward integrating Internet connectivity into combination hand-held devices will
continue to accelerate as industry standards emerge.

The worldwide market for PDAs is anticipated to increase based on the following
factors:

     .    The number of domestic mobile internet users is anticipated to
increase due to the increased sales of mobile internet devices and the advent of
various mobile internet contents providers.

     .    23% of world mobile phone users have expressed their intention to
purchase a new mobile internet device for mobile data use within 5 years (ARC
Group Report).

     .    70% of mobile internet devices are forecasted to be subsidized in
whole or in part (Gartner Group, Itxpo2000 Report).

Certain products that are already available on the worldwide market have certain
features that could compete with the PC-EPhone.  However, a comparison of
recently reported comparables in the table below indicates that none of them
currently match the combination of features of the PC-EPhone:

                                      -9-
<PAGE>

                             Performance Comparison
                             ----------------------

<TABLE>
<CAPTION>
- -------------- --------------------- ---------------------- --------------------- ---------------------
    Item        PC-EPHONE                  Palm VIIx             Compaq iPAQ         HP Jornada 540
- -------------- --------------------- ---------------------- --------------------- ---------------------
<S>            <C>                    <C>                    <C>                    <C>
Product         PDA   +    CDMA   +   PDA + Wireless         PDA                   PDA
Concept         Bluetooth             Modem (Data only)
- -------------- --------------------- ---------------------- --------------------- ---------------------
- -------------- --------------------- ---------------------- --------------------- ---------------------
Voice           Yes                   No                     No                    No
Communication
- -------------- --------------------- ---------------------- --------------------- ---------------------
- -------------- --------------------- ---------------------- --------------------- ---------------------
Wireless                                                     Limited (possible     Limited (possible
Data            Yes                   Yes                    when connected        when connected
Communication                                                with cell phone)      with cell phone)
- -------------- --------------------- ---------------------- --------------------- ---------------------
- -------------- --------------------- ---------------------- --------------------- ---------------------
Wireless                                                     Limited (possible     Limited (possible
Internet        Yes (Unlimited)       Yes (Limited to        when connected        when connected
Access                                text)                  with cell phone)      with cell phone)
- -------------- --------------------- ---------------------- --------------------- ---------------------
- -------------- --------------------- ---------------------- --------------------- ---------------------
CPU             206 MHz RISC chip                            206 MHz RISC chip
                (Intel `Strong        Low CPU speed          (Intel `Strong        133MHz Hitachi SH3
                Arm' 1110)                                   Arm' 1110)
- -------------- --------------------- ---------------------- --------------------- ---------------------
- -------------- --------------------- ---------------------- --------------------- ---------------------
Memory          32MB Flash Memory     8MB storage capacity   16MB ROM              16MB ROM
                32MB RAM                                     32MB RAM              16MB RAM
- -------------- --------------------- ---------------------- --------------------- ---------------------
- -------------- --------------------- ---------------------- --------------------- ---------------------
Display         640x480 resolution                           240x320 resolution
                4" 256 Color TFT                             2.26x3.02" color      240x320 resolution
                LCD Touch screen      Mono backlit display   TFT LCD               Color TFT LCD
                                                             Touch screen          Touch screen
- -------------- --------------------- ---------------------- --------------------- ---------------------
- -------------- --------------------- ---------------------- --------------------- ---------------------
Interface       CDMA (MSM3000 chip)
                IrDA / Bluetooth      IrDA                   IrDA                  IrDA
                CompactFlash slot     Wireless Modem         CompactFlash slot     CompactFlash slot
- -------------- --------------------- ---------------------- --------------------- ---------------------
- -------------- --------------------- ---------------------- --------------------- ---------------------
Operating       Windows CE 3.00       Palm OS 3.5            Windows Powered      MS Windows for
System                                                       Pocket PC S/W         Pocket PC
- -------------- --------------------- ---------------------- --------------------- ---------------------
- -------------- --------------------- ---------------------- --------------------- ---------------------
Built-in        Serial port                                                        Serial port, USB
                (RS-232C)             Built-in connector     USB & Serial port     cradle
                Microphone, Speaker   to attach expansion    Microphone, Speaker   Microphone, Speaker
                Audio out jack        devices                Audio out jack        Audio out jack
- -------------- --------------------- ---------------------- --------------------- ---------------------
- -------------- --------------------- ---------------------- --------------------- ---------------------
Power           Lithium ion
                rechargeable                                                       Lithium ion
                battery               2 AAA batteries       Lithium Polymer        rechargeable
                (PDA 4H, Phone 6H,    last 2 to 4 weeks                            battery
                Standby time 60H)                                                  8 hours
- -------------- --------------------- ---------------------- --------------------- ---------------------
- -------------- --------------------- ---------------------- --------------------- ---------------------
Size            127H  x  102W x 22D
                (mm)
                                      133H x  82.5W  x 19D   129.7H  x  83.3W  x   130H  x  78W  x 16D
                Bluetooth Hand        (mm)                   15.7D (mm)            (mm)
                set:  120H  x 20W x
                13.4D
- -------------- --------------------- ---------------------- --------------------- ---------------------
- -------------- --------------------- ---------------------- --------------------- ---------------------
Weight          299 grams with        190 grams with         178 grams with        260 grams with
                battery               batteries              battery               battery
- -------------- --------------------- ---------------------- --------------------- ---------------------
</TABLE>

                                     -10-
<PAGE>

The Company is aware of competitive forces and plans to compete with them
through an aggressive marketing and distribution program.  To date the Company
has not made any commercial sales of the PC-EPhone and may not do so until
approval is obtained from the FCC, and Industry Canada.  See "Regulation" below.
The Company expects to be able to compete effectively in the market after such
approval is granted, however, there can be no assurance in this regard.

Suppliers

Cyberbank is the Company's sole supplier of PC-EPhones.

Patent/Trademark Information

The Company is in the process of trademarking the "PC-EPhone" brand name.  An
application has been filed to trademark the "PC-EPhone" brand name in Canada,
and the Company is preparing to file a trademark application for the "PC-EPhone"
brand name in the United States.  There is no guarantee that the Company will be
granted a trademark.

The Company is reliant on Cyberbank for protection of any and all patent-related
intellectual property rights with respect to the PC-EPhone.

Regulation

Users of two-way radios are regulated by a variety of governmental and other
regulatory agencies throughout the world.  In the United States, users of two-
way radios are licensed by the Federal Communication Commission ("FCC"), which
has broad authority to make rules and regulations and prescribe restrictions and
conditions to carry out the provisions of the Communications Act of 1934.  The
FCC's authority includes, among other things, the power to classify radio
stations, prescribe the nature of the service to be rendered by each class of
station, assign frequencies to the various classes of stations and regulate the
kinds of equipment that may be used.  Industry Canada, which regulates the
communications industry in Canada, has similar authority.  The Company's
business and results will initially depend on the approval by the FCC and
Industry Canada of the PC-EPhone for sale in their respective jurisdictions.
However, the Company's business and results could also be affected by rules and
regulations adopted by the FCC and/or Industry Canada from time to time in the
future.  In addition, the overall growth and results of the two-way radio
communications industry may be affected by the regulations of the FCC and/or
Industry Canada relating to the allocation of frequencies for land mobile
communications users, especially in urban areas where such frequencies are
heavily used.

In late January 2001, Cyberbank filed an application with the FCC with respect
to the sale of PC-EPhones in the United States.  The Company expects that the
FCC will approve the PC-EPhone for sale in the United States in the near future,
however there can be no assurance that such approval will be obtained.

                                     -11-
<PAGE>

The PC-EPhone will likewise require approval by Industry Canada prior to its
sale in Canada.  The Company expects to file an application for approval of the
PC-EPhone with Industry Canada following approval by the FCC.  The Company
expects that Industry Canada will approve the PC-EPhone for sale in the Canada
in the near future, however there can be no assurance that such approval will be
obtained.

Research & Development

To date, the Company has not borne any of the costs associated with the research
and development of the PC-EPhone, as such costs have been paid by Cyberbank.
The Company does not expect to incur any direct costs with respect to PC-EPhone
research and development during the foreseeable future, however there can be no
assurance in this regard.

Employees

The Company currently has no full-time employees.  The Company has several
management consultants that render administrative, managerial, and marketing
services to the Company.

Risk Factors

Limited Operating History.  The Company was incorporated under the laws of
Nevada on June 17, 1998, and therefore has a limited operating history.  From
incorporation through August 18, 2000, it was an oil and gas exploration and
development company.  It has only been a telecommunications distribution company
since November 2000.  The Company's chances of financial and operational success
are subject to the risks, uncertainties, expenses, delays and difficulties
associated with starting a new business in a highly competitive field, many of
which may be beyond the Company's control.  The Company's future financial
results will depend primarily on its ability to distribute the PC-EPhone and
meet the requirements of the Distribution Agreement with Cyberbank.  There can
be no assurance that the Company will achieve or sustain profitability or
positive cash flows from operating activities in the future.  The revenue and
income potential of the Company's products and business are unproven.  The
Company cannot predict the viability of the PC-EPhone in the market.  Failure by
the Company to sell PC-EPhones in adequate numbers and/or failure to overcome
startup risks, uncertainties, expenses, delays and difficulties could materially
and adversely affect the business, financial condition and results of operations
of the Company.

The Company will be Wholly Dependent on Cyberbank to Supply it with PC-EPhones.
The Company depends on Cyberbank to supply it with PC-EPhone units in sufficient
quantities, on a timely basis and at satisfactory quality levels.  Cyberbank
intends to either manufacture the PC-EPhones units, or sub-contract such
manufacturing processes to sub-manufacturers.  If Cyberbank fails to supply the
Company with a reliable product or to produce such product in adequate numbers
on a timely basis, the Company's reputation would suffer which would adversely
affect sales and therefore materially and adversely affect the business,
financial condition and results of operations of the Company.

                                     -12-
<PAGE>

The Market for Handheld Wireless Computing and Communication Devices such as the
PC-EPhone is Characterized by Rapid Technological Change and Evolving Industry
Standards.  The Company will be Wholly Dependent on Cyberbank to Modify and
Improve the PC-EPhone.  The market in which the PC-EPhone is expected to compete
is characterized by rapidly changing technology, evolving industry standards,
changes in customer needs, heavy competition and frequent new product
introductions.  The Company will be wholly dependent on Cyberbank to modify
and/or improve the PC-EPhone in response to changes in technology or industry
standards.  In the absence of the successful and timely implementation of such
modifications and improvements, the PC-EPhone could rapidly become less
competitive or even obsolete.  The Company's future success will depend, in
part, on Cyberbank's ability to:

     .  use leading technologies effectively;

     .  continue to develop technical expertise;

     .  enhance the PC-EPhone;

     .  influence and respond to emerging industry standards and other
        technological changes.

        The Company will depend on Cyberbank's timely and cost effective
responses to changing technology and industry standards. Cyberbank may not be
successful in effectively using new technologies, developing new products or
enhancing the PC-EPhone on a timely and cost effective basis. Cyberbank's
pursuit of necessary technology may require substantial time and expense, and
may require the licensing of new technologies to respond to technological
change. Such licenses might not be available on acceptable terms for the Company
and/or Cyberbank. In addition Cyberbank may not succeed in adapting the PC-
EPhone to new technologies as they emerge.

The Company Currently Depends on Cyberbank to Develop New, Innovative and
Commercially Viable Products.  Failure by Cyberbank to Develop such Products,
could Decrease Demand for the PC-EPhone.  The Company expects that Cyberbank
will develop additional and complementary products in the future, in connection
with the PC-EPhone.  The Company currently has no plans to utilize other
suppliers for new products, and would enjoy no advantages in any efforts to seek
out and develop relationships with other suppliers.  Failure by Cyberbank to
provide the Company with an ongoing line of new, innovative, and commercially
viable products in the future could damage the Company's credibility and
decrease consumer interest in and sales of the PC-EPhone.

If Popular Applications are not Developed for the PC-EPhone, Demand for the PC-
EPhone could be Limited.  To differentiate the Company's products from those of
competitors in the future, and attract large numbers of consumer purchasers for
the PC-EPhone in the future, the Company believes that third parties will need
to develop compelling software applications for the PC-EPhone.  There can be no
assurances that the Company will be able to attract such third-party application
developers in the near future, because of the unproven nature of the PC-EPhone
within the industry or for technological or other reasons.

                                     -13-
<PAGE>

If such applications are not developed, demand for the PC-EPhone may materially
diminish, thus adversely affecting the business, financial condition and results
of operations of the Company.

The Price and the Unique, Complex and Comprehensive Design of the PC-EPhone may
not be Accepted by Consumers.  The perceived value of the PC-EPhone is based on
the Company's unproven expectation that the PC-EPhone's unique, complex and
comprehensive design, and relatively high target retail price point when
compared with other currently available handheld devices with similar features,
will prove popular with consumers.  There can be no assurances that consumers
will prefer the PC-EPhone to other competing products currently on the market,
or that may be introduced from time to time in the future, or that consumers
will purchase the PC-EPhone in sufficient quantities to sustain the Company's
business.  Failure to achieve adequate sales of the PC-EPhone, would materially
and adversely affect the business, financial condition and results of operations
of the Company,

Failure to Accurately Anticipate Demand for the PC-EPhone could result in the
Company's Inability to Secure Sufficient Quantities of the PC-EPhone or in
Excess Inventory.  Because the Company has no operating history in this business
sector, and has not begun selling the PC-EPhone, there is very little
information about demand for the PC-EPhone.  The Company believes demand of the
PC-EPhone will depend on many factors and that it will be difficult to forecast.
Significant unanticipated fluctuations in demand could cause problems in the
Company's and its suppliers operations.  If demand does not develop as expected,
the Company could find itself with significant excess inventory resulting from
its obligation under the Distribution Agreement.  If demand exceeds the
Company's expectations, Cyberbank and/or its sub-manufacturers will need to
rapidly increase production, and there can be no assurances that this will be
possible.  Cyberbank's suppliers will also need to provide additional volumes of
components, which may not be possible within required timeframes.  Even if
Cyberbank and/or its sub-manufacturers are able to obtain enough components,
they might not be able to produce adequate PC-EPhones to meet market demands.
The inability of Cyberbank, its sub-manufacturers and/or its suppliers to
increase production rapidly enough, could cause the Company to fail to meet
customer demand and damage the Company's reputation. In addition, rapid
increases in production levels to meet unanticipated demand could result in
higher costs for manufacturing and supply of components and other expenses.
These higher costs might ultimately be passed on to the Company and could
adversely affect its profit margins.

The Company Will Rely on Third Parties for Repair Services and Technical
Support. The Company's Reputation and Results of Operations could be Harmed by
its Inability to Control Such Third Party's Operations.  The Company expects to
rely on third parties to repair units and provide technical support.  If such
repair services or technical support services are interrupted or experience
quality problems, the Company's ability to meet customer demands would be
harmed, causing a loss of revenue and harm to the Company's reputation.
Although the Company will have the ability to add new service providers or
replace existing ones, transition difficulties and lead times involved in
developing additional or new third party relationships could cause interruptions
in services and harm the Company's business.

                                     -14-
<PAGE>

Fluctuation in Quarterly Revenues and Operating Results Might Lead to Reduced
Prices for the Company's Stock.  Given the Company's lack of operating history,
prospective investors in the Company's securities should not rely on quarter-to-
quarter comparisons of the Company's results of operations as an indication of
its future performance. In some future periods, results of operations could be
below the expectations of investors and public market analysts. In this event,
the price of the Company's Common Shares would likely decline.  Factors that are
likely to cause the Company's results to fluctuate include, without limitation,
the following:

     .  the announcement and timely introduction of new products by the Company
        and its competitors;

     .  the timing and the availability of software programs and applications
        that are compatible with the PC-EPhone;

     .  market acceptance of existing and future versions of the PC-EPhone and
        compatible application;

     .  the availability of components to manufacture the PC-EPhone;

     .  the potential seasonality of PC-EPhone sales;

     .  the Company's ability to avoid system failures on its Web site;

     .  the price of products that both the Company and its competitors offer;
        and

     .  the mix of complementary products that the Company and/or third parties
        may offer.


Lawsuits Against the Company, Cyberbank and/or FutureCom Could Harm the Company.
Suits against any of the Company, Cyberbank, and/or FutureCom could effectively
halt the sales and marketing program with respect to the PC-EPhone.  Any
interruption of the sales and marketing program with respect to the PC-EPhone
could materially and adversely affect the business, financial condition and
results of operations of the Company.

A Portion of the Company's Revenues May be Derived From Sales Related to Direct
Marketing through the Company's and/or FutureCom's Web Site.  System Failures or
Delays Could Harm the Company.  The Company and/or FutureCom may market the PC-
EPhone by advertising over the Internet through their web sites.  Such marketing
program might result in referral sales amounting to a significant portion of the
Company's possible future revenues.  Such revenues may depend on the Company's
and/or FutureCom's ability to maintain and expand its computer systems.  The
Company and FutureCom must also protect their computer systems against damage
from fire, water, power loss, telecommunications failures, computer viruses,
vandalism and other malicious acts and similar unexpected adverse events.
Potential system interruptions and slowdowns often occur during the design and

                                     -15-
<PAGE>

implementation of web sites.  Such system interruptions and slowdowns could
interrupt the advertising for the PC-EPhone conducted via the Internet and harm
the Company's reputation.

The Company Expects that its Subdistributors will Rely in part on Retailers to
Sell the PC-EPhone, and any Disruptions in Retail Distribution Channels Could
Result in the Purchase of Fewer PC-EPhones by the Company's Sub-Distributors.
The Company expects to sell the PC-EPhone to subdistributors for distribution of
the PC-EPhone to retailers.  The Company is indirectly exposed to many risks
relating to the retail distribution of the PC-EPhone, including, without
limitation, the following:

     .  retailers may not maintain inventory levels sufficient to meet customer
        demand;

     .  if the Company reduces the prices of the PC-EPhone to be paid by end
        users, retailers may have to be compensated for the difference between
        the higher price they paid to buy their inventory and the new lower
        retail price of the PC-EPhone;

     .  product returns could increase as a result of the Company's and its Sub-
        Distributors strategic interest in assisting retailers in balancing
        inventories;

     .  retailers may emphasize the Company's competitors' products or decline
        to carry the PC-EPhone; and

     .  the Company and its subdistributors may not be able to attract or retain
        a sufficient number of qualified retailers; and

Cyberbank's Production Could be Seriously Harmed in the Event of Component
Shortages.  The Company is dependent on Cyberbank to supply it with PC-EPhones.
PC-EPhones contain components, including, without limitation, liquid crystal
displays, touch panels, memory chips and microprocessors, that Cyberbank must
procure from a variety of suppliers and/or sub-manufacturers and that are in
great demand.  Cyberbank may or may not carry any inventory of such products or
product components.  Cyberbank relies on its suppliers and/or sub-manufacturers
to deliver necessary components to its contract manufacturers in a timely manner
based on forecasts that the Company will provide.  The Company believes that at
various times, some of the key components for handheld computers, including
display components and flash memory, have been in short supply in the market.
The Company's competitors have reported in some cases waiting up to 180 days
between order and delivery of such components and supplies.  High industry
demand has been a significant factor in such capacity constraints, and
relatively long lead times are required for relevant suppliers to expand factory
capacity, should they elect to do so.  Some of the Company's competitors have
been unable to meet demand for their products as a result of these component
shortages.  Such shortages of components could harm Cyberbank's ability to
deliver PC-EPhones on a timely basis.  The cost, quality and availability of
components are essential to Cyberbank's successful production, and sales of the
PC-EPhone will depend on Cyberbank's successful and timely production.  Some
components, such as power supply integrated circuits, microprocessors and
certain discrete components, come from sole or single source suppliers.
Alternative sources may at times not be available for these sole and single

                                     -16-
<PAGE>

source components.  If suppliers are unable to meet Cyberbank's demand for sole
source components and if Cyberbank is unable to obtain an alternative source, or
if the price for an alternative source is prohibitive, Cyberbank's ability to
maintain timely and cost-effective production of the PC-EPhone would be
seriously harmed.  In addition, while Cyberbank may at times have some forward
supply contracts with certain suppliers and/or sub-manufacturers, Cyberbank is
expected to rely upon purchase orders with suppliers.  The Company cannot
predict with certainty Cyberbank's ability to procure components on a regular
basis at reasonable prices in the longer term.  If Cyberbank, or its sub-
manufacturers cannot obtain components or can only receive smaller allocations
of components than is necessary to manufacture the PC-EPhone in quantities
sufficient to meet customer demand, customers could choose to purchase competing
products.

The Company Expects to Face Seasonality in its Sales, which Could Cause its
Quarterly Operating Results to Fluctuate.  Based on industry trends, the Company
expects to experience seasonality in the sales of the PC-EPhone particularly
with respect to expected increases during holiday periods and lower volume
during summer months.  These seasonal variations in sales may lead to
fluctuations in quarterly operating results, and as a result, in the price of
the Company's Common Shares.

Failure by the Company to Develop Brand Recognition Could Limit or Reduce
Consumer Demand for the PC-EPhones.  The Company believes that the development
of brand recognition will be critical to developing demand for, and achieving
sales of the PC-EPhone. Some of the Company's competitors and potential
competitors have already developed powerful brands with widespread name
recognition.  Promoting and positioning the PC-EPhone brand will depend largely
on the success of the Company's marketing efforts.  To promote the brand, the
Company expects to increase marketing expenditures and otherwise increase
financial commitment to creating and maintaining brand loyalty among users.
Brand promotion activities may not yield increased revenues or customer loyalty
and, even if they do, any increased revenues may not offset the expenses
incurred in building and maintaining the brand.

The Company Relies on Management Consultants for Management of its Operations.
This System and the Consultants Employed, Could Prove Inadequate to Handle the
Company's Potential Growth.  The Company expects to experience rapid growth and
expansion in the near future.  This growth has the potential to place
significant strain on such management consultants, information systems and
operational and financial resources.  To manage future growth, the Company's
management consultants must continue to improve its operational and financial
systems.  The management consultants may not be able to manage the Company's
growth effectively.  If the Company's systems, procedures and controls are
inadequate to support its operations, its expected expansion would be halted and
its opportunity to gain significant market share could be lost.  Inability to
manage growth effectively could materially and adversely affect the business,
financial condition and results of operations of the Company.

The PC-EPhone May Contain Errors or Defects, or Could be Subject to Viruses,
Which Could Result in the Rejection of the PC-EPhone and Damage to the
Reputation of the

                                     -17-
<PAGE>

Company, as well as Lost Revenues, Diverted Development Resources, and Increased
Service Costs and Warranty Claims. The PC-EPhone is technologically complex and
must meet stringent user requirements. The Company will depend on Cyberbank to
develop products quickly to keep pace with the rapidly changing handheld
computing and communications market. Products as sophisticated as the PC-EPhone
are likely to contain detected and undetected errors or defects, especially when
first introduced or when new models or versions are released. In the future, the
Company may experience delays by Cyberbank in releasing new products as problems
are corrected. There could be an undetected error or defect of a significant
nature in the PC-EPhone, or that is perceived to be significant. Any such error
could result in the rejection of the PC-EPhone by consumers and/or distributors,
damage to the Company's reputation, lost revenues, diverted development
resources and increased customer service and support costs and warranty claims.
In addition, some undetected errors or defects may only become apparent as new
functions are added to the PC-EPhone through the use of future applications. The
Company anticipates that it will provide consumers with a warranty regarding the
PC-EPhone, however the terms of such warranty have not yet been decided by the
Company. Delays, costs and damage to the Company's reputation due to product
defects could materially and adversely affect the business, financial condition
and results of operations of the Company. The PC-EPhone could be affected by
viruses in the future. Since the PC-EPhone uses the Windows CE operating system,
any virus capable of disrupting such operating system could potentially harm the
PC-EPhone. It is possible that such viruses may become more prevalent in the
future, and that other viruses which affect handheld computers in particular,
may become more common as well, as handheld computers are developed that
facilitate more sophisticated sharing of files and other information. To the
extent that antivirus software is unable to protect users of the PC-EPhone from
such viruses, the PC-EPhone could be rejected by consumers and distributors, and
result in increased service costs.

The Company is Dependent on Cyberbank for Substantially all Intellectual
Property and Brand Protection Regarding the PC-EPhone. The Company is acting
solely in the capacity of a distributor of the PC-EPhone and therefore has
limited rights to take measures to ensure intellectual property and brand
protection with respect to the PC-EPhone, including without limitation,
trademark, copyright, patent protection and/or trade secrets. There can be no
assurance that any measures taken with respect to intellectual property
protection by Cyberbank, and/or the Company to the extent possible, will be
effective. If any such intellectual property rights are defective or held to be
invalid, the distribution rights purchased by the Company would be far less
valuable. There can be no assurance that any intellectual property right
protections will be granted to Cyberbank or the Company, or upheld if granted.
Failure by Cyberbank, and/or the Company to the extent possible, to successfully
secure legal protection for intellectual property rights could materially and
adversely affect the business, financial condition and results of operations of
the Company. The Company has limited ability to ascertain whether Cyberbank
and/or the PC-EPhone may infringe on third-party intellectual property rights.
Any litigation with respect to actual or alleged third-party infringement could
materially and adversely harm the Company. In addition, the Company may be
required to spend significant resources to protect, monitor and police the
intellectual property rights. The Company may not be able to detect infringement
on any rights within the scope of protections granted to Cyberbank and/or the
Company which may result in a loss of

                                     -18-
<PAGE>

competitive position in the market. Competitors may design around Cyberbank's
technology or develop competing technologies. Intellectual property rights may
also be unavailable or limited in some foreign countries, which could make it
easier for competitors to infringe on Cyberbank and/or the Company's rights. Any
such infringement could have a material adverse affect on the Company.

The Company and/or Cyberbank could be Subject in the Future to Claims of
Infringement of Third Party Intellectual Property, Which could Result in
Significant Expense and Loss of Intellectual Property Rights.  The industry in
which the Company believes the PC-EPhone will compete, is characterized by
uncertain and conflicting intellectual property claims and frequent intellectual
property litigation, especially regarding patent rights.  From time to time,
third parties have in the past and may in the future assert patent, copyright,
trademark or other intellectual property rights to technologies that are
important to the business.  Any litigation to determine the validity of such
claims, including claims arising through the Company's contractual
indemnification of its business partners, regardless of their merit or
resolution, would likely be costly and time consuming and divert the efforts and
attention of the Company's management consulting team.  There can be no
assurances that the Company would prevail in any such potential litigation given
the complex technical issues and inherent uncertainties in intellectual property
litigation.  If such litigation resulted in an adverse ruling, the Company could
be required to pay substantial damages, cease the use or sale of infringing
products, discontinue the use of certain technology, or obtain a license under
the intellectual property rights of the third party claiming infringement, which
license may not be available on reasonable terms, or at all.

The Company's Future could be Harmed as a result of Economic, Political,
Regulatory, and other Risks Associated with International Sales and Operations,
Particularly with respect to its Strategic Relationship with Cyberbank - whose
operations are situated in South Korea.  The Company expects to focus its sales
efforts on the North American market, where political and economic risks and
uncertainties have historically been low.  However, the Company depends on
Cyberbank, a Korean corporation located in South Korea, to supply it with the
PC-EPhone, its sole product to date.  Political tensions are significant between
North Korea and South Korea, and there can be no assurances that this region
will remain politically stable.  If political turmoil were to occur in the
region, it could easily affect or halt production and/or distribution of PC-
EPhones by Cyberbank.  Under such circumstances, the Company would have no
products to sell, and would not be capable of generating revenues.  In addition,
a substantial number of Cyberbank's material suppliers are based outside of the
United States, and are subject to a wide variety of international risks.
Accordingly, the Company's future results, which will be predicated on the
timely delivery of PC-EPhones by Cyberbank, could be harmed by a variety of
factors, including:

     .  changes in foreign currency exchange rates as between Cyberbank and its
        respective suppliers;

     .  changes in a specific country's or region's political or economic
        conditions, particularly in emerging markets;

                                     -19-
<PAGE>

     .  trade protection measures and import or export licensing requirements;

     .  development risks and expenses associated with customizing the PC-EPhone
        products for local requirements;

     .  potentially negative consequences from changes in tax laws;

     .  impact of natural disasters with an inability of the local government to
        quickly provide recovery services;

     .  difficulty in managing widespread sales and manufacturing operations;
        and

     .  less effective protection of intellectual property.

        The Company expects to enter additional international markets over time.
To the extent that the Company's revenue from international operations
represents an increasing portion of its total revenue, it may become subject to
increased exposure to international risks.

The Company May Pursue Strategic Acquisitions that might prove Difficult or
Impossible to Successfully Integrate.  The Company expects to evaluate
acquisition opportunities that could provide it with additional product or
services offerings, technologies or additional industry expertise.  Any future
acquisition could result in difficulties assimilating acquired operations and
products, diversion of capital and attention away from other business issues and
opportunities and amortization of acquired intangible assets.  Integration of
acquired companies may result in problems related to integration of technology
and management teams.  The Company's management consulting team has had limited
experience in assimilating acquired organizations and products into the
Company's operations.  The Company could fail to integrate the operations,
personnel or products that may be acquired in the future.  Failure to
successfully integrate such acquisitions could materially and adversely affect
the business, financial condition and results of operations of the Company.

The Price of the Company's Common Shares has been and Likely will Continue to be
Volatile and Subject to Wide Fluctuations.  The market prices of the securities
of technology-related companies have been especially volatile.  If the Company's
revenues do not grow or grow more slowly than anticipated, or, if operating or
capital expenditures exceed expectations and cannot be adjusted accordingly, or
if some other event adversely affects the Company, the market price of the
Company's Common Shares could decline.  In addition, if the market for
technology-related stocks or the stock market in general experiences a loss in
investor confidence or otherwise fails, the market price of the Company's Common
Shares could fall for reasons unrelated to the business, results of operations
and financial condition of the Company. The market price of the Company's Common
Shares also might decline in reaction to events that affect other companies in
the industry, even if these events do not directly affect the Company.  In the
past, companies that have experienced volatility in the market price of their
stock have been the subject of securities class action litigation.  If the
Company were to become the subject of securities litigation, it could result in
substantial costs and a diversion of its attention and resources.

                                     -20-
<PAGE>

Future Sales of Common Shares by Existing Stockholders Could Affect the Price of
the Company's Common Shares.  As of February 28, 2001, the Company has 50
million Common Shares authorized for issuance and an aggregate of 16,122,167
Common Shares issued and outstanding.  Of such shares, 9,090,897 Common Shares
are free trading and 7,031,270 are restricted.  Of the restricted shares, an
aggregate of 954,770 Common Shares are held by directors and officers of the
Company as a group and 3,500,000 are held by Cyberbank.  Giving effect to the
holdings of officers and directors of the Company, an aggregate of 4,454,770
restricted Common Shares are held by affiliate shareholders.  The balance of
2,576,500 restricted shares are held by non-affiliates of the Company and
therefore may be sold from time to time on or after July 13, 2001 pursuant to
Rule 144, promulgated under the Securities Act of 1933.  As a result, the
Company's stock price may reflect greater dilution in the public float which may
affect both trading volume and price volatility of the Company's Common Shares
when such restricted shares become eligible for public resale.  The Company also
expects to issue additional securities in connection with financing programs and
corporate development activities that will dilute the equity interests of
current Common Shareholders.  The Company may be obliged to grant registration
rights in connection with such issuances providing for accelerated entry into
the marketplace of such Common Shares.  In addition, Cyberbank holds a warrant
exercisable for the purchase of 2,500,000 restricted Common Shares.  If
Cyberbank exercises such warrant, Cyberbank will own approximately 32% ownership
of the Company's outstanding Common Shares which could result in a substantial
degree of control over the Company's policies and corporate governance.

Minimum Purchase Requirements - Cyberbank.  Marketing, distribution and sales
rights for the PC-EPhone are subject to the Company purchasing minimum required
volumes of the PC-EPhone from Cyberbank.  The Company does not presently have
sufficient funds to purchase the required minimum of PC-EPhones.  If the Company
is unable to raise sufficient funds to meet the minimum purchase requirements,
Cyberbank could unilaterally elect to cancel the Distribution Agreement.
Cancellation of the Distribution Agreement would materially and adversely affect
the business, financial condition and results of operations of the Company.

Required Financing May be Unavailable. The Company will require significant
additional financing in connection with the development of the PC-EPhone
business. Significant revenues from operations will not be realized until
material sales of the PC-EPhone are made. The Company may raise interim
financing through private placements to finance operations and/or resort to debt
financing, however, there can be no assurance that any funds can be made
available to the Company in either case. The Company has no assurance that any
future equity and/or debt financing will be available on acceptable terms, if at
all. If such financing is not available on satisfactory terms, the Company may
be unable to develop or expand its operations. Any equity financing may result
in substantial dilution to existing stockholders. Failure to locate necessary
financing could materially and adversely affect the business, financial
condition and results of operations of the Company.

                                     -21-
<PAGE>

Subdistributor May fail to Purchase Product. The Company is relying on
FutureCom, its subdistributor, to purchase significant numbers of PC-EPhones in
connection with the Subdistributor Agreement. There can be no assurances that
FutureCom will be able to perform its obligations under the Subdistibutor
Agreement or that any other subdistributors may be retained. Failure by
FutureCom to purchase adequate numbers of PC-EPhones will adversely affect the
Company's business plan and viability, and could materially and adversely affect
the business, financial condition and results of operations of the Company.

Complex and Unpredictable Business Strategy.  The Company's business plan calls
for a complex and unpredictable business strategy including without limitations:
(i) development of distribution networks for the PC-EPhone; (ii) successful
marketing of the PC-EPhone; (iii) effective responses to competitive pressures;
and (iv) continued development of the PC-EPhone business once development of the
product is complete.  There is no guarantee that the Company can accomplish any
of these goals.  Even if the Company successfully accomplishes each of these
milestones, there can be no guarantee of the sustainable viability of the
Company's strategy.

Operating Expenses to Increase - Revenue Unpredictable.  The Company expects to
continue to incur losses for the foreseeable future.  The Company will incur
expenses associated with establishment of distribution networks, marketing and
advertising of the PC-EPhone and expansion of the business operations.  The
Company will be required to incur these expenditures prior to realizing any
revenues and the Company cannot reasonably ascertain when it will realize
revenues, if at all.  Even if the Company ultimately does achieve profitability,
the Company may not be able to sustain or increase profitability on a quarterly
or annual basis.  If revenue grows more slowly than anticipated, or if operating
expenses exceed expectations and cannot be adjusted accordingly, the Company's
business will be harmed.  Failure by the Company to realize revenues would
materially and adversely affect the business, financial condition and results of
operations of the Company.

Business Plan Depends on Third Parties.  Failure to develop distribution
relationships with wholesalers, retailers and wireless service providers could
adversely affect development of the PC-EPhone business and the Company's ability
to achieve revenues.  Failure by the Company to achieve revenues would
materially and adversely affect the business, financial condition and results of
operations of the Company.

Inability to Attract/Retain Management and Skilled Personnel.  Failure to
attract, hire and retain skilled personnel that are in high demand may result in
the Company's inability to implement its business strategy.  The loss of the
services of any of senior management consultants could harm the Company's
business.  Future performance will depend, in part, on the ability of management
consultants retained by the Company to work together effectively.  Management
consultants retained by the Company may not be successful in carrying out their
duties or running the Company.  Any dissent among executive officers and senior
management consultants could impair the Company's ability to make strategic
decisions quickly in a rapidly changing market.

Market Acceptance and Competition.  To the Company's knowledge, competing
products

                                     -22-
<PAGE>

with similar all-in-one features are not currently available.  However,
competition is intense and will likely increase significantly.  Increased
competition could result in: (i) the development of competing products that
achieve greater market acceptance, (ii) price reductions by competitors and
lower profit margins; (iii) the emergence of new competitors, (iv) the Company's
inability to generate sales of the PC-EPhones at all; and/or (v) the Company's
inability to establish relationships with wholesalers and retailers for the
distribution and sale of the PC-EPhones.  Any and all of the foregoing may
occur, and any one alone could materially and adversely affect the business,
financial condition and results of operations of the Company.  The Company
expects its competitors to continue to improve the performance of their current
products and to introduce new products, services and technologies.  Successful
new product introductions or enhancements by the Company's competitors could
reduce sales and the market acceptance of the PC-EPhone, cause intense price
competition or make the PC-EPhone obsolete.  To be competitive, the Company must
continue to invest significant resources in sales and marketing and customer
support.  The Company cannot be sure that it will have sufficient resources to
make these investments or that Cyberbank will be able to make the technological
advances necessary to be competitive.  Increased competition could result in
price reductions, fewer customer orders, reduced margins and loss of market
share. Failure by the Company to compete successfully against current or future
competitors could materially and adversely affect the business, financial
condition and results of operations of the Company.

Distribution Agreement - Cyberbank Nominees.   The Distribution Agreement with
Cyberbank requires that forty percent of the Company's Board of Directors be
nominated by Cyberbank and for this requirement to be maintained throughout the
term of the Distribution Agreement.  Failure by the Company's shareholders to
elect the Cyberbank nominees in accordance with the Distribution Agreement would
allow Cyberbank to terminate the Distribution Agreement.  Termination of the
Distribution Agreement would leave the Company with no right to market,
distribute and sell the PC-EPhone which would materially and adversely affect
the business, financial condition and results of operations of the Company.

If Wireless Handsets and Devices are shown to Pose Health and Safety Risks, the
PC-EPhone may be Subject to New Regulations, and Demand for the PC-EPhone may
Decrease.  Media reports have suggested that radio frequency emissions from
wireless handsets and devices may be linked to various health concerns,
including cancer, and may interfere with various electronic medical devices,
including hearing aids and pacemakers. Concerns over radio frequency emissions
may have the effect of discouraging the use of wireless handsets, which would
decrease demand for the PC-EPhone.  In recent years, the FCC and foreign
regulatory agencies have updated the guidelines and methods they use for
evaluating radio frequency emissions from radio equipment, including wireless
handsets.  In addition, interest groups have requested that the FCC investigate
claims that wireless technologies pose health concerns and cause interference
with airbags, hearing aids and medical devices. There also are some safety risks
associated with the use of wireless handsets while driving. Concerns over these
safety risks and the effect of any legislation that may be adopted in response
to these risks could reduce demand for the PC-EPhone.  Reduced demand

                                     -23-
<PAGE>

for the PC-EPhone could materially and adversely affect the business, financial
condition and results of operations of the Company.

The Company will Depend on Third Parties to Provide Wireless Service to its
Users.  In order to utilize the PC-EPhone's telecommunication and wireless
Internet capabilities, users will be required to purchase wireless services from
third party vendors.  There can be no guarantee that such services will be
available on terms attractive to consumers, or that such services will meet the
requirements of the product.  If wireless services for the PC-EPhone are not
available on attractive terms, or if such services, for any reason, do not
function well, or as intended, the Company could be materially and adversely
affected.

FCC and Industry Canada Approval.  The PC-EPhone has not been approved by the
FCC for sales in the United States to date nor has the PC-EPhone been approved
by Industry Canada, and there can be no assurances as to when, if at all, such
approvals will be forthcoming.  If either or both of the FCC and Industry Canada
fail to provide timely approvals for the PC-EPhone, the Company may not be able
to make sales of the PC-EPhone in the United States and/or Canada.  Failure to
make sales of the PC-EPhone in either the United States or Canada would likely
cause the Company to fail.

Multiple Jurisdictions.  The Company may be required to qualify to do business
in multiple jurisdictions.  Such qualifications may be expensive, time
consuming, distracting or even unobtainable.  Failure to qualify as a foreign
company in a jurisdiction where required to do so could subject the Company to
taxes and penalties that the Company does not currently anticipate and which
could materially and adversely affect the business, financial condition and
results of operations of the Company.

No Assurance of Dividends.  It is not anticipated that the Company will pay
dividends on its capital stock at any time during the foreseeable future.
Investors who anticipate the need for immediate income from their investment in
the Company's securities should refrain from the purchase of the Company's
securities.

Authorization of Preferred Stock.  The Company is authorized to issue up to
1,000,000 shares of Preferred Stock, $0.01 par value. As of the date of this
Form 10-KSB, no shares of Preferred Stock have been issued. The Company's
Preferred Stock may bear such rights and preferences, including dividend and
liquidation preferences, as the Board of Directors may fix and determine from
time to time. Any such preferences may operate to the detriment of the rights of
the holders of Common Shares.

Provisions in the Company's Charter Might Deter a Company from Acquiring the
Company.  The Company's stockholders are unable to remove any director or the
entire Board of Directors without a super majority vote or to fill any vacancy
on the Board of Directors. The Company's stockholders must also meet advance
notice requirements for stockholder proposals. The Board of Directors may also
issue preferred stock without any vote or further action by the stockholders.
These provisions and other provisions under Nevada law could make it more
difficult for a third party to acquire the Company, even if doing so would
benefit the Company's stockholders.

                                     -24-
<PAGE>

The Company may be Subject to Residual Environmental Liabilities and Regulatory
Risk Based on Its Past Activities in the Oil and Gas Business.  The Company has
been involved with the oil and gas business in the past.  The Company may have
maintained interests in properties that could prove in the future to be
associated with environmental pollution.  The Company could under such
circumstances be liable for environmental damage, including historical
contamination, caused it, or by other former operators of such properties.
Liabilities could arise from continuing violations or contamination not
discovered during the Company's assessment of the acquired properties.

Description of Property

The Company occupies an office of approximately 1700 square feet at Suite 515,
3440 Wilshire Boulevard, Los Angeles, California.  The Company also leases an
office at Suite 1388, 885 West Georgia Street, Vancouver, British Columbia,
Canada.  The Company believes that such offices will be satisfactory during the
near term for the conduct of business.

The Company was engaged in the business of oil and gas exploration from its
inception until August 18, 2000.  Pursuant to an agreement dated March 1, 1999,
the Company acquired an option to earn 70% of Brothers' 10% working interest in
certain oil and gas leases, options to lease and seismic options located on the
Travis 3D Seismic Project located in Solano County, California (the "Lands").
The Company paid $73,000 to Brothers pursuant to the Option Agreement which
amount is equal to Brothers' total land and seismic acquisition costs associated
with the Lands. The estimated land and seismic costs were $83,000 at the time
the Option Agreement was entered into. However, cost savings were realized and
the total land and seismic costs were in fact, $73,000. The Company subsequently
paid Brothers $83,506 for the drilling of  wells on the property.

On August 18, 2000, the Company announced that it would not be exercising its
option to proceed with the Travis oil and gas property.  Investors are referred
to the "Exploration Conveyance and Assignment Agreement" between Brothers Oil &
Gas Inc. and the Company, as previously reported in the Company's Form 10-SB
filed with the Securities and Exchange Commission.  The Company paid for its
share of drilling costs for the first well, which resulted in a dry hole and
elected not to exercise its option to participate in further drilling. The
option was non-transferable, therefore the Company did not sell its option but
instead allowed it to expire.  The Company will not be penalized for allowing
the option to expire. The Company owns no property in relation to its former oil
and gas business.


Legal Proceedings

The Company is not currently involved in any legal proceedings and is not aware
of any pending or threatened legal actions.

Submission of Matters to a Vote of Security Holders

The Company held an Annual Meeting on December 15, 2000.

                                     -25-
<PAGE>

Douglas Yee, Negar Towfigh, Alan Crawford and Greg Burnett were all re-elected
as directors of the Company at the Annual Meeting.  Terrence King was also
elected as a director.

Each of the above directors were expected to hold office until the next annual
general meeting of the holders of the Company's Common Shares or until such
director's resignation or removal from office in accordance with the Company's
by-laws.

There were two matters voted upon at the Annual Meeting of the Company held on
December 15, 2000. The first matter was the election of the following management
nominees to serve as directors: Douglas Yee, Terrence E. King, Alan Crawford,
Greg Burnett and Negar Towfigh.

Nominee                      Number of Votes Cast:
                             For     Against  Abstain     Broker Non Votes

Douglas Yee              6,252,701      0        0               0
Terrence E. King         6,252,701      0        0               0
Alan Crawford            6,252,701      0        0               0
Greg Burnett             6,252,701      0        0               0
Negar Towfigh            6,252,701      0        0               0

All of management's nominees were elected as directors at the Annual Meeting.

The second matter voted upon at the Annual Meeting was the approval of the
amendment of the Company's articles of incorporation changing the name of the
Company to "PC-EPhone, Inc." from "Newlands Oil & Gas Inc."  The name change was
in response to the Company's change in principal focus from oil and gas
exploration to marketing and distribution of telecommunications products.

                         Number of Votes Cast
                         For        Against    Abstain    Broker Non Votes

Name Change           6,252,701        0          0              0

The name of the Company was changed to "PC-EPhone, Inc." at the Annual Meeting.

                                     -26-
<PAGE>

                                    PART II

Market for Common Equity and Related Stockholder Matters

The Company's Common Shares have been listed on the OTC Bulletin Board since
February 24, 2000.  The Common Shares were originally listed under the trading
symbol "NWOG", however the trading symbol changed to "PCPH" on December 18,
2000, to correspond with the Company's name change from "Newlands Oil & Gas
Inc." to "PC-EPhone, Inc.".  Since November 21, 2000, the Company's Common
Shares have also been listed on the third segment of the Frankfurt Stock
Exchange under the trading symbol "NL1" and its WKN number is 589 864.

On April 4, 2000, the first trade of the Company's Common Shares occurred on the
OTC Bulletin Board. The high and low sales price (denominated in US$) of the
Common Shares on the OTC Bulletin Board since trading commenced, by quarter, are
as follows:

                              High          Low
                              ----          ---
2000    Fourth Quarter      7             5 31/64
2000    Third Quarter       5 1/16          3 1/2
2000    Second Quarter      10 1/8          23/32

These quotations reflect inter-dealer prices, without retail mark-up, mark-down
or commission, and many not represent actual transactions.

The high and low sales price (denominated in Euros) of the Company's Common
Shares on the Frankfurt Stock Exchange since trading commenced during the forth
quarter of year 2000 are as follows:

                          High               Low
                          ----               ---
2000  Fourth Quarter      8.00               7.90

As of February 28, 2001, the Company had 21 stockholders of record.  The Company
has not declared or paid any cash dividends on its Common Shares since formation
and does not presently anticipate paying any cash dividends on its Common Shares
in the foreseeable future.

Unregistered Securities Issued and/or Sold

The Company has sold or issued the following securities that were not registered
under the Securities Act of 1933, as amended (the "Act").  Except as indicated
below, no underwriters were used in connection with these sales and issuances.

On July 12 and 13, 2000 the Company issued an aggregate of 2,500,000 shares of
restricted Common Shares to four accredited investors in connection with the
negotiated settlement and discharge of $250,000 of Company indebtedness due to
creditors of the Company.  The Company relied upon the exemption from
registration provided by Section 4(2) of the Act

                                     -27-
<PAGE>

with respect to such issuance. Neither the Company nor the investors paid any
fees or commissions to the creditors other than the principal amount of the
settlement.

On November 10, 2000 the Company received subscriptions for 75,000 shares of its
Common Shares to two accredited investors at a price of $3.00 per share for an
aggregate purchase price of $225,000.  These shares were subsequently issued on
February 17, 2001.  With respect to such issuances, the Company relied upon the
exemption from registration provided by Rule 506 under Regulation D promulgated
under the Act.

On November 21, 2000 the Company, on behalf of its wholly owned subsidiary, PC-
EPhone Ltd., issued 3,500,000 restricted, Common Shares to Cyberbank Corp., a
Korean company, pursuant to the Distribution Agreement.  In accordance with the
Distribution Agreement, Cyberbank granted to the Company, through PC-EPhone
Ltd., an exclusive distribution license to market, sell and distribute the PC-
EPhone within the United States and Canada, as well as non-exclusive
distribution rights outside of the United States and Canada.  The Company has
valued the 3,500,000 restricted shares of Common Shares at $2.70 per share for a
total valuation of $9,450,000.  The Company relied on the exemption from
registration provided by Regulation S of the Act with respect to such issuance
of these shares.

Effective February 27, 2001, the Company executed an option agreement with
Euromerica Capital Group Inc. ("Euromerica").  In consideration for Euromercia
providing consulting services to the Company, Euromerica was granted an option
to purchase a total of 25,000 shares of Common Shares of the Company at $3.00
per share on or before November 30, 2001.  The Company relied on Section 4(2) of
the Act with respect to this Option.

Effective February 27, 2001, the Company executed an option agreement with
Alexander Wurm.  In consideration for Mr. Wurm providing consulting services to
the Company, Mr. Wurm was granted an option to purchase a total of 100,000
shares of the Company at $3.00 per share on or before February 1, 2003.  The
Company relied on Section 4(2) of the Act with respect to this Option.

Effective February 27, 2001, the Company executed an option agreement with
Marketing Services, a German company.  In consideration for Marketing Services
providing consulting services to the Company, Marketing Services was granted an
option to purchase a total of 100,000 shares of the Company at $3.00 per share
on or before February 1, 2003.  The Company relied on Section 4(2) of the Act
with respect to this Option.


Management's Discussion and Analysis or Plan of Operation

Introduction

The Company began year 2000 drilling for oil and gas in California but after
some unsuccessful drilling efforts on the Travis Project, a decision was made to
change the Company's mission to focus on a technology related business.  On
August 18, 2000, the

                                     -28-
<PAGE>

Company abandoned the Travis Project and began seeking out new opportunities in
the technology industry.

In November 6, 2000, after several months of discussions and meetings, the
Company, through PC-EPhone Ltd., signed the Distribution Agreement with
Cyberbank.  Cyberbank's flagship product is the PC-EPhone, a wireless, handheld
device that combines the features of a hand-held computer with Internet access,
a cellular phone, and PDA.  This convergent product combines major features that
are desirable for users who need "anywhere, anytime" access to such tools.

Results of Operation

The Company took delivery of the first shipment of 1,000 PC-EPhone units in
December 2000 and recognized revenue of $872,000 with gross profit of $72,000 or
8.3% compared with no sales in fiscal year 1999.  The increase in sales reflects
the Company's change in business, as noted above, and the introduction of the
new PC-EPhone product.  General and administrative expenses have increased this
year by $507,322 or 285.8% over fiscal year 1999, which primarily reflects an
increase in:  (a) marketing and promotion expenses; (b) consulting and
management fees expenses; and (c) amortization expense associated with the
distribution rights obtained from Cyberbank.

The Company was represented at the Comdex trade show in Las Vegas in November
2000, a primary cause of the increase in marketing and promotion expenses as
well as the increase in travel expenses.  Consulting and management fees
expenses increased due to the additional efforts associated with identifying
technology opportunities, execution of the Distribution Agreement with
Cyberbank, attempts to raise financing, and efforts to develop the distribution
network for the PC-EPhone.  The amortization of the distribution rights is on a
straight-line basis over the term of the agreement.  For year 2000, two of 86
months were amortized.  Since the Company did not initiate its new business
until the latter part of year 2000, general and administrative expenses are
expected to increase in 2001 compared to year 2000, reflecting a full year of
operations.  In addition to a full year of management fees, expenses are
expected to increase in connection with increased advertising and increased
attendance by the Company at trade shows and events.  The Company also expects
to incur expenses related to the hiring of staff to meet needs for growth.

Expenses associated with the former oil and gas exploration business amounted to
$21,960 in year 2000 compared to $61,546 in prior year, representing an decrease
of 65%.  The Company expects to incur no further expenses related to the oil and
gas business.

The Company realized a net loss for 2000 of $688,640, or $0.06 per share,
compared to a net loss of $238,580, or $0.02, in prior year and to a net loss of
$29,916 or $0.03 per share in the fiscal period from June 17, 1998, the
Company's date of incorporation, to December 31, 1998.

                                     -29-
<PAGE>

Liquidity and Capital Resources

As of December 31, 2000, the Company had a working capital deficit of $160,795
compared to a deficit of $190,788 in prior year.  The Company has been unable to
secure any short-term bank financing to address the working capital deficiency
and does not expect to be able to secure such bank financing unless operations
increase.  Since signing the Distribution Agreement in November 2000, the
Company has been financing its operations primarily from related-party loans and
private placements of Common Shares.  At year-end, the Stockholders' equity was
$9,113,322 compared to a deficiency of $117,788 last year.  The change in equity
reflects the non-cash value of the 3,500,000 shares of Common Shares issued to
Cyberbank pursuant to the Distribution Agreement.  No cash was received by the
Company for the issuance of Common Shares to Cyberbank.  Significant additional
financing is required before the end of 2001 in order to meet the Company's cash
needs.

The Company is obligated by the Distribution Agreement and, thus, is targeting
to sell, a minimum of 500,000 PC-EPhones during each 12-month period after
regulatory approvals are obtained.  The Company plans to fulfill this commitment
and target through various sales and subdistribution agreements.  The Company,
through PC-EPhone Ltd., began this process by executing the Subdistributor
Agreement with FutureCom, a distributor of various telecommunications products
and services throughout the United States.

The Company does not currently have any material revenues.  The Company's
ability to commence significant distribution and sales in the United States and
Canada is dependent on obtaining approval for the PC-EPhone from the FCC and
Industry Canada, respectively.  If such approvals are not granted, the Company
will not be able to commence its sales program, thus precluding development of
any revenues.  The Company's ability to continue as a going concern is dependent
on its ability to raise capital from shareholders or other sources to sustain
operations.  These factors, particularly with respect to the Company's lack of
established source of revenue, raise substantial doubt that the Company will be
able to continue as a going concern.  The Company expects FCC approval to be
forthcoming very shortly, however there can be no assurance in this regard.

The Company is actively marketing and promoting the PC-EPhone through trade
shows, road shows and targeted campaigns in order to increase awareness and
create demand for the product while the PC-EPhone unit awaits approval by the
FCC and wireless network carriers.

In addition, the Company is working very closely with Cyberbank, the developer
of the PC-EPhone, to enhance the strategic alliance, to identify potential
partnerships to enhance the PC-EPhone's existing features and to plan for the
development of new models and products for the future.  The Distribution
Agreement provides the Company with rights to distribute all of Cyberbank's
future products.

The Company will need to increase its liquidity and capital resources to
purchase inventory to fulfill orders and, therefore, will need to obtain
additional financing for that

                                     -30-
<PAGE>

purpose. If the Company is able in the future to demonstrate its
creditworthiness, it is anticipated that some financing of inventory purchases
will occur through the use of letters of credit, but there is no guarantee that
such financing can be obtained.

The Company believes that the PC-EPhone is the world's first convergent product
that combines the features of a handheld PC with Internet access, a cellular
phone and a PDA.  Recent public announcements suggest that similar products are
forthcoming from competitors.  The Company is aware of these competitive forces
but believes it can obtain a competitive advantage by being the first such
product available in North America, however, there can be no assurance in this
regard.

The Company believes that it is not materially exposed to foreign currency and
interest rate changes as it deals primarily in U.S. dollars and has very few
loans outstanding.  However, Cyberbank may be subject to foreign currency risks
and interest rate changes in connection with its dealings with its suppliers who
may be based in foreign countries.

The Company plans to use its best efforts to seek to develop markets for the PC-
EPhone beyond the United States and Canada and to identify new opportunities to
increase shareholder value.  The Company's success in developing new markets for
the PC-EPhone in other parts of the world will depend on the product development
efforts of Cyberbank.  Current versions of the PC-EPhone use CDMA and PCS
wireless protocols that are functional for the United States, Canada and certain
other countries around the world.  However, future success of the PC-EPhone in
most of Europe and Asia will require units that function using the GSM wireless
protocol.  Other opportunities to increase shareholder value may involve the
identification of new products for distribution and/or the development of value-
added relationships that will support revenue growth for the Company.

Recently Issued Accounting Pronouncements

In December 1999, the Securities and Exchange Commission issued Staff Accounting
Bulletin No. 101 ("SAB 101"), Revenue Recognition in Financial Statements.  SAB
101 provides guidance for revenue recognition under certain circumstances. SAB
101 is effective beginning in the fourth quarter of fiscal 2000.  Implementation
of SAB 101 did not change the Company's existing revenue recognition policies
and therefore has not had a material effect on the Company's financial position
or results of operations.

Financial Statements

The Company's financial statements are contained in the financial pages that
follow and are incorporated herein by reference thereto.

Changes In and Disagreements with Accountants on Accounting and Financial
Disclosure

Not Applicable.

                                     -31-
<PAGE>

Financial Statements.
                                PC-EPHONE, INC.

                       (formerly Newlands Oil & Gas Inc.)

                  REPORT AND CONSOLIDATED FINANCIAL STATEMENTS

                        December 31, 2000, 1999 and 1998



                                      F-1
<PAGE>

                          INDEPENDENT AUDITORS' REPORT

To the Stockholders,
PC-EPhone, Inc.
(formerly Newlands Oil & Gas Inc.)

We have audited the accompanying consolidated balance sheets of PC-EPhone, Inc.
(formerly Newlands Oil & Gas Inc.) as at December 31, 2000, 1999 and 1998 and
the consolidated statements of operations, stockholders' equity and cash flows
for the years ended December 31, 2000 and 1999 and for the period from  June 17,
1998 (Date of Incorporation) to December 31, 1998.  These consolidated financial
statements are the responsibility of the company's management.  Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America.  Those standards require that we plan and
perform an audit to obtain reasonable assurance whether the consolidated
financial statements are free of material misstatement.  An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the consolidated financial statements.  An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation.

In our opinion, these consolidated financial statements present fairly, in all
material respects, the financial position of PC-EPhone, Inc. as at December 31,
2000, 1999 and 1998 and the results of its operations and its cash flows for the
years ended December 31, 2000 and 1999 and for the period from June 17, 1998
(Date of Incorporation) to December 31, 1998, in accordance with accounting
principles generally accepted in the United States of America.

The accompanying consolidated financial statements referred to above have been
prepared assuming that the company will continue as a going concern.  As
discussed in Note 1 to the financial statements, the company's ability to
continue as a going concern is dependent on its ability to raise capital from
shareholders or other sources to sustain operations.  These factors, along with
the company's lack of an established source of revenue and other matters as set
forth in Note 1, raise substantial doubt that the company will be able to
continue as a going concern.  The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.


Vancouver, Canada                                          /s/ Amisano Hanson
February 9, 2001, except as to Note 9(b), which is as      Chartered Accountants
of February 17, 2001 and as to Note 16, which is as
of February 27, 2001

                                      F-2
<PAGE>

                                PC-EPHONE, INC.
                       (formerly Newlands Oil & Gas Inc.)
                          CONSOLIDATED BALANCE SHEETS
                        December 31, 2000, 1999 and 1998


<TABLE>
<CAPTION>
                                                ASSETS
                                                ------
                                                                  2000                 1999                 1998
                                                               -----------           ----------            ---------
<S>                                                            <C>                  <C>                    <C>
Current
 Cash                                                          $    81,780           $    4,409            $  29,472
 Accounts receivable - Note 10                                           -                3,734                    -
 Prepaid expenses and deposits - Note 3                             35,016                    -               45,000
                                                               -----------           ----------            ---------
                                                                   116,796                8,143               74,472

Loan receivable - Note 4                                            20,000                    -                    -
Capital assets - Note 5                                             23,884                    -                    -
Oil and gas property - Note 6                                            -               73,000               50,000
Distribution rights - Notes 2(d), 7 and 11                       9,230,233                    -                    -
                                                               -----------           ----------            ---------
                                                               $ 9,390,913           $   81,143            $ 124,472
                                                               ===========           ==========            =========

                                              LIABILITIES
                                              -----------
Current
 Accounts payable - Note 10                                    $   157,591           $  120,431            $   3,680
 Loans payable - Notes 8 and 10                                    120,000               78,500                    -
                                                               -----------           ----------            ---------
                                                                   277,591              198,931                3,680
                                                               -----------           ----------            ---------

                                    STOCKHOLDERS' EQUITY (DEFICIENCY)
                                    ---------------------------------
Capital stock - Note 9                                              16,122               10,047               10,047
Additional paid-in capital - Note 11                            10,054,336              140,661              140,661
Deficit                                                           (957,136)            (268,496)             (29,916)
                                                               -----------           ----------            ---------
                                                                 9,113,322             (117,788)             120,792
                                                               -----------           ----------            ---------
                                                               $ 9,390,913           $   81,143            $ 124,472
                                                               ===========           ==========            =========
</TABLE>

Nature and Continuance of Operations - Note 1
Commitments - Notes 7 and 9
Subsequent Events - Notes 7, 9 and 16

APPROVED BY THE DIRECTORS:



/s/ Douglas Yee,  Director                    /s/ Terrence King, Director
- ----------------                              ------------------

                            SEE ACCOMPANYING NOTES

                                      F-3
<PAGE>

                                PC-EPHONE, INC.
                      (formerly Newlands Oil & Gas Inc.)
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                for the years ended December 31, 2000 and 1999
 and for the period June 17, 1998 (Date of Incorporation) to December 31, 1998


<TABLE>
<CAPTION>
                                                                                                           June 17, 1998
                                                                                                              (Date of
                                                                                                         Incorporation) to
                                                                                                            December 31,
                                                                         2000                1999               1998
                                                                         ----                ----               ----
<S>                                                                   <C>                 <C>                 <C>
Sales                                                                 $   872,000         $         -          $         -
Cost of sales - Note 10                                                   800,000                   -                    -
                                                                      -----------         -----------          -----------
Gross profit                                                               72,000                   -                    -
                                                                      -----------         -----------          -----------

Expenses
  General and Administrative Expenses - Note 10                           461,637             177,522               25,385
  Amortization of capital assets                                            3,440                   -                    -
  Amortization of distribution rights                                     219,767                   -                    -
                                                                      -----------         -----------          -----------
                                                                         (684,844)           (177,522)             (25,385)
                                                                      -----------         -----------          -----------
Loss from operations                                                     (612,844)           (177,522)             (25,385)
                                                                      -----------         -----------          -----------
Other income (loss)
  Exploration and development - Note 10                                   (21,960)            (61,546)              (4,531)
  Gain on settlement of debts - Note 10                                    18,008                   -                    -
  Write-off of oil and gas property - Note 10                             (73,000)                  -                    -
  Interest income                                                           1,156                 488                    -
                                                                      -----------         -----------          -----------
                                                                          (75,796)            (61,058)              (4,531)
                                                                      -----------         -----------          -----------
Net loss for the period                                               $  (688,640)        $  (238,580)         $   (29,916)
                                                                      ===========         ===========          ===========
Basic loss per share                                                  $     (0.06)        $     (0.02)         $     (0.03)
                                                                      ===========         ===========          ===========
Weighted average number of shares outstanding                          11,386,749          10,047,167            1,020,017
                                                                      ===========         ===========          ===========
</TABLE>

                            SEE ACCOMPANYING NOTES

                                      F-4
<PAGE>

                                PC-EPHONE, INC.
                      (formerly Newlands Oil & Gas Inc.)
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                for the years ended December 31, 2000 and 1999
 and for the period June 17, 1998 (Date of Incorporation) to December 31, 1998


<TABLE>
<CAPTION>
                                                                                                             June 17, 1998
                                                                                                                (Date of
                                                                                                          IIncorporation) to
                                                                                                              December 31,
                                                                           2000                1999               1998
                                                                           ----                ----               ----
<S>                                                                     <C>                 <C>                 <C>
Cash flows used in Operating Activities
 Net loss for the period                                                 (688,640)           (238,580)            (29,916)
 Add (deduct) items not affecting cash:
  Amortization of capital assets                                            3,440                   -                   -
  Amortization of distribution rights                                     219,767                   -                   -
  Write-off of oil and gas property                                        73,000                   -                   -
  Gain on settlement of debts                                             (18,008)                  -                   -
 Changes in non-cash working capital balances related to
 operations
  Accounts receivable                                                       3,734              (3,734)                  -
  Loan receivable                                                         (20,000)
  Prepaid expenses and deposits                                           (35,016)             45,000             (45,000)
  Accounts payable                                                        219,168             116,751               3,680
  Loans payable                                                           127,500              78,500                   -
                                                                       ----------          ----------           ---------
                                                                         (115,055)             (2,063)            (71,236)
                                                                       ----------          ----------           ---------
Cash flows from Financing Activity
 Issuance of common shares                                                219,750                   -             150,708
                                                                       ----------          ----------           ---------
Cash flows used in Investing Activities
 Oil and gas property                                                           -             (23,000)            (50,000)
 Acquisition of capital assets                                            (27,324)                  -                   -
                                                                       ----------          ----------           ---------
                                                                          (27,324)            (23,000)            (50,000)
                                                                       ----------          ----------           ---------
Net increase (decrease) in cash during the period                          77,371             (25,063)             29,472

Cash, beginning of the period                                               4,409              29,472                   -
                                                                       ----------          ----------           ---------
Cash, end of the period                                                $   81,780          $    4,409           $  29,472
                                                                       ==========          ==========           =========
Non-cash Transactions - Note 11
</TABLE>

                            SEE ACCOMPANYING NOTES

                                      F-5
<PAGE>

                                PC-EPHONE, INC.
                      (formerly Newlands Oil & Gas Inc.)
          CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIENCY)
                for the years ended December 31, 2000 and 1999
 and for the period June 17, 1998 (Date of Incorporation) to December 31, 1998


<TABLE>
<CAPTION>

                                                                       Common Shares       Additional
                                                                       -------------         Paid-in
                                                                       #       Par Value     Capital        Deficit        Total
                                                                   ----------  ---------     -------                       -----
<S>                                                                <C>         <C>        <C>            <C>            <C>
Issued for cash pursuant to offering memorandum - $0.015           10,047,167    $10,047   $   140,661   $          -   $  150,708

Net loss for the period                                                     -          -             -        (29,916)     (29,916)
                                                                   ----------     ------    ----------    -----------    ----------
Balance, December 31, 1998                                         10,047,167     10,047       140,661        (29,916)     120,792

Net loss for the year                                                       -          -             -       (238,580)    (238,580)
                                                                   ----------     ------    ----------    -----------    ----------
Balance, December 31, 1999                                         10,047,167     10,047       140,661       (268,496)    (117,788)
Issued pursuant to debt settlement agreements - $0.10 - Note 11     2,500,000      2,500       247,500              -      250,000
Issued pursuant to acquisition of distribution rights - $2.70 -
 Note 11                                                            3,500,000      3,500     9,446,500              -    9,450,000
Issued for cash pursuant to subscription agreements - $3.00            75,000         75       224,925              -      225,000
- - commission                                                                -          -        (5,250)             -     (5,250)
Net loss for the year                                                       -          -             -       (688,640)    (688,640)
                                                                   ----------     ------    ----------    -----------    ----------
Balance, December 31, 2000                                         16,122,167    $16,122   $10,054,336   $   (957,136)  $9,113,322
                                                                   ==========     ======    ==========    ===========    ==========
</TABLE>

Non-cash Transactions - Note 11

                            SEE ACCOMPANYING NOTES

                                      F-6
<PAGE>

                                PC-EPHONE, INC.
                       (formerly Newlands Oil & Gas Inc.)
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2000, 1999 and 1998



Note 1    Nature and Continuance of Operations
          ------------------------------------

          The company was incorporated in Nevada on June 17, 1998 as Newlands
          Oil & Gas Inc. and changed its name to PC-EPhone, Inc. on December 15,
          2000. The company's common shares trade on the NASD Over-the-Counter
          Bulletin Board in the United States.

          The company holds the exclusive distribution rights in the United
          States and Canada for a wireless handheld device that can be used to
          perform internet, personal computer, cellular phone and organizer
          functions (the "PC-EPhone") (Note 7).

          Since incorporation, June 17, 1998 and prior to the acquisition of the
          distribution rights, the company was in the exploration stage and held
          an interest in an oil and gas property located in California (Note 6).
          At December 31, 2000, the company is considered an operating company.

          These consolidated financial statements have been prepared on a going
          concern basis. The company has a working capital deficiency of
          $160,795 as at December 31, 2000 and has accumulated a deficit of
          $957,136 since incorporation. Its ability to continue as a going
          concern is dependent upon its ability to generate profitable
          operations in the future and/or to obtain the necessary financing to
          meet its obligations and repay its liabilities arising from normal
          business operations when they come due. The outcome of these matters
          cannot be predicted, with any certainty, at this time. The company has
          historically satisfied its capital needs primarily by issuing equity
          securities. Management plans to continue to provide for its capital
          needs during the year ended December 31, 2001 by the continued
          development of its sales of the PC-EPhone. In addition, the company's
          capital requirements during the year ended December 31, 2001 is
          expected to be supplemented by issuing equity securities. These
          consolidated financial statements do not include any adjustments to
          the amounts and classification of assets and liabilities that may be
          necessary should the company be unable to continue as a going concern.

Note 2    Summary of Significant Accounting Policies
          ------------------------------------------

          These consolidated financial statements have been prepared in
          accordance with accounting principles generally accepted in the United
          States of America. Because a precise determination of many assets and
          liabilities is dependent upon future events, the preparation of
          financial statements for a period necessarily involves the use of
          estimates which have been made using careful judgement. Actual results
          may differ from these estimates.

          The consolidated financial statements have, in management's opinion,
          been properly prepared within reasonable limits of materiality and
          within the framework of the significant accounting policies summarized
          below:

          (a)  Principles of Consolidation
               ---------------------------

               These consolidated financial statements include the accounts of
               the company and its wholly owned Bermuda subsidiary, PC-EPhone
               Ltd. During the year ended December 31, 2000, the company
               acquired all the issued and outstanding shares of PC-EPhone Ltd.
               for a nominal cash amount. At the time of acquisition, PC-EPhone
               Ltd. was non-active and had no net assets. The company accounts
               for this acquisition by the purchase method All intercompany
               transactions and balances have been eliminated on consolidation.

                                      F-7
<PAGE>

Note 2    Summary of Significant Accounting Policies - (cont'd)
          ------------------------------------------

          (b)  Oil and Gas Project Costs
               -------------------------

               The company follows the successful efforts method of accounting
               for its oil and gas properties. Under this method, the initial
               acquisition costs and the costs of drilling and equipping
               development wells, are capitalized. The costs of drilling
               exploratory wells are initially capitalized and, if subsequently
               determined to be unsuccessful, are charged to operations as dry
               hole expenses. Costs and reserves of properties are aggregated by
               country. All other exploration expenditures, including geological
               and geophysical costs and annual rentals on exploration acreage,
               are charged to operations as incurred. Lease acquisition costs,
               subsequently determined to be impaired in value, are charged to
               operations. Any capitalized balances are written-off upon the
               company's decision to abandon the property.


          (c)  Capital Assets and Amortization
               -------------------------------

               Capital assets are recorded at cost. The company provides for
               amortization using the straight-line method at the following
               annual rates:


                    Office furniture and equipment                5 years
                    Computer equipment                            4 years

               Website development costs are expensed as incurred.

           (d) Distribution Rights and Amortization
               ------------------------------------

               Distribution rights are recorded at the fair value of the non -
               cash consideration paid for these rights (Notes 7 and 11). The
               company provides for amortization on a straight-line basis over
               the term of the distribution agreement (86 months). In accordance
               with Statement of Financial Accounting Standards No. 121,
               "Accounting for the Impairment of Long-lived Assets and for Long-
               lived Assets to be Disposed Of", the distribution rights will be
               reviewed on a continuous basis throughout the following fiscal
               periods for impairment whenever assets or changes in
               circumstances indicate the carrying value of the asset may not be
               recoverable. An impairment loss would be recognized in the period
               it is determined.


          (e)  Foreign Currency Translation
               ----------------------------

               Foreign currency transactions are translated into U.S. dollars,
               the functional and reporting currency, by the use of the exchange
               rate in effect at the date of the transaction, in accordance with
               Statement of Financial Accounting Standards No. 52, "Foreign
               Currency Translation". At each balance sheet date, recorded
               balances that are denominated in a currency other than US dollars
               are adjusted to reflect the current exchange rate.


          (f)  Basic Loss per Share
               --------------------

               The company reports basic loss per share in accordance with
               Statement of Financial Accounting Standards No. 128, "Earnings
               Per Share". Basic loss per share is computed using the weighted
               average number of shares outstanding during the periods. Diluted
               loss per share has not been provided as it would be antidilutive.

                                      F-8
<PAGE>

Note 2    Summary of Significant Accounting Policies - (cont'd)
          ------------------------------------------

          (g)  Impairment of Long-lived Assets
               -------------------------------

               The company reports the impairment of long-lived assets and
               certain identifiable intangibles in accordance with Statement of
               Financial Accounting Standards No. 121, "Accounting for the
               Impairment of Long-lived Assets and for Long-lived Assets to be
               Disposed Of". Certain long-lived assets and identifiable
               intangibles held by the company are reviewed for impairment
               whenever assets or changes in circumstances indicate the carrying
               amount of an asset may not be recoverable. Accordingly, an
               impairment loss is recognized in the period it is determined.


          (h)  Income Taxes
               ------------

               The company uses the liability method of accounting for income
               taxes pursuant to Statement of Financial Accounting Standards,
               No. 109 "Accounting for Income Taxes".


          (i)  Fair Value of Financial Instruments
               -----------------------------------

               The carrying values of cash, accounts receivable, loan
               receivable, accounts payable and loans payable approximate fair
               value because of the short maturity of those instruments.


          (j)  Revenue Recognition
               -------------------

               Revenue from product sales is recognized when it is earned, the
               product has been shipped and collection is reasonably assured.
               During the year ended December 31, 2000, the company's revenue
               was derived from one subdistributor (Note 6 (b)).


Note 3    Prepaid Expenses and Deposits
          -----------------------------

          By an agreement dated July 1, 1998, the company engaged a consultant
          for the purpose of facilitating a private placement of the company's
          securities at a cost of $45,000, paid in advance of such services.
          During the year ended December 31, 1999, the consultant provided
          general consulting services to the company and consequently this
          amount was charged to consulting fees.

Note 4    Loan Receivable
          ---------------

          The loan receivable is unsecured, non-interest bearing and due on
          demand.

Note 5    Capital Assets
          --------------

<TABLE>
<CAPTION>
                                                         Accumulated                    Net Carrying Amount
                                           Cost          Amortization          2000          1999           1998
                                           ----          ------------          ----          ----           ----
<S>                                 <C>               <C>              <C>           <C>              <C>
Office furniture
 and equipment                        $      13,168      $     1,317     $     11,851   $          -     $         -
Computer equipment                           14,156            2,123           12,033              -               -
                                      -------------      -----------     ------------   ------------    ------------
                                      $      27,324      $     3,440     $     23,884   $          -    $          -
                                      =============      ===========     ============   ============    ============
</TABLE>

                                      F-9
<PAGE>

Note 6    Oil and Gas Property
          --------------------

          Pursuant to an exploration conveyance and assignment agreement with a
          related company (related by virtue of common directors), the company
          earned a 7% working interest in the Travis Oil and Gas project for
          total consideration of $73,000. The company is required to pay 10% of
          the costs for each test well drilled.

          During the year ended December 31, 2000, the company abandoned its
          interest in the Travis Oil and Gas Project and wrote-off the
          acquisition costs of $73,000.

Note 7    Distribution Rights - Notes 2(g) and 11
          ---------------------------------------

<TABLE>
<CAPTION>
                                                     Accumulated                  Net Carrying Amount
                                        Cost         Amortization          2000            1999            1998
                                        ----         ------------          ----            ----            ----
             <S>                   <C>             <C>              <C>              <C>              <C>
               Distribution rights   $  9,450,000    $    219,767     $   9,230,233    $          -     $          -
                                     ============    ============      ============    ============     ============
</TABLE>

          (a)  (i)  By a distribution agreement dated November 6, 2000 and
                    amended February 8, 2001 with Cyberbank Corp. ("Cyberbank"),
                    a Korean Corporation, PC-EPhone Ltd. was granted the
                    exclusive right to market, distribute and sell, within the
                    United States and Canada, a wireless handheld device which
                    performs internet, personal computer, cellular phone and
                    organizer functions (the "PC-EPhone"). In addition, PC-
                    EPhone Ltd. was granted the worldwide right on a non-
                    exclusive basis.

                    In consideration for these rights, the company, on behalf of
                    PC-EPhone Ltd., issued 3,500,000 common shares to Cyberbank,
                    valued at $2.70 per share for total non-cash consideration
                    of $9,450,000 (Notes 2 (g) and 11). As a condition of
                    maintaining the rights, PC-EPhone Ltd. must purchase from
                    Cyberbank a minimum of 500,000 units annually upon Cyberbank
                    receiving written approval for the product by the US Federal
                    Communications Commission.

                    The company granted Cyberbank share purchase warrants
                    entitling Cyberbank the right to acquire 2,500,000 common
                    shares at $3.20 per share. These warrants are exercisable
                    during the period November 1, 2001 to December 31, 2001.

                    PC-EPhone Ltd. has agreed to issue two binding purchase
                    orders to Cyberbank for a total of $25,300,000 to be paid
                    with cash of $2,000,000 and letters of credit totalling
                    $23,300,000.

                    The term of this agreement ends December 31, 2007 and will
                    automatically renew from year to year.

               (ii) By a warrant agreement dated November 6, 2000, Cyberbank
                    granted the company warrants to purchase the number of
                    common shares as determined below at a price of $223.54 per
                    share. The warrants are exercisable during the period from
                    November 1, 2001 to December 31, 2001.

                                      F-10
<PAGE>

Note 7    Distribution Rights - (cont'd)
          -------------------

          (a)  (ii) - (cont'd)

                    The ultimate number of Cyberbank warrants to be issued to
                    the company is to be determined based on the following:

                         If the Average Trading Price of the company's common
                         shares is greater than or equal to $6.00 per share,
                         35,789 Cyberbank warrants will be issued;

                         If the Average Trading Price of the company's common
                         shares is less than $6.00 per share, then the number of
                         Cyberbank warrants shall be determined as follows:

                         Number of Warrants = 35,789 Warrants X (Average Trading
                         Price/$6.00)

                    The "Average Trading Price" of the company's common shares
                    means the average trading price of the common stock of the
                    company for the twenty trading days prior to November 1,
                    2001 determined based on the closing price on each trading
                    day.

                    These warrants are subject to approval by the directors of
                    Cyberbank, such approval to be obtained no later than March
                    31, 2001.

          (b) By a subdistributor agreement dated November 15, 2000 with
              FutureCom Global, Inc. ("FutureCom"), PC-EPhone Ltd. granted
              FutureCom the exclusive right to market, distribute and sell,
              within the United States and Canada, the PC-EPhone product.

               As a condition of maintaining these rights, FutureCom must
               purchase from PC-EPhone Ltd. a minimum of 250,000 units
               quarterly, once Cyberbank has received written approval for the
               product by the US Federal Communications Commission.

               FutureCom has also agreed to issue two binding purchase orders to
               PC-EPhone Ltd. for a total of $25,300,000 to be paid with cash of
               $2,000,000 and letters of credit totalling $23,300,000.

               The term of this agreement ends December 31, 2007 and will
               automatically renew from year to year.

                                      F-11
<PAGE>

Note 8    Loans Payable
          -------------

<TABLE>
<S>                                                              <C>              <C>              <C>
                                                                       2000             1999              1998
                                                                       ----             ----              ----
          (a)  Loan payable, interest only payable monthly at
               12% per annum, unsecured, due June 30, 2001.       $    100,000     $            -     $            -

          (b)  Loan payable, non-interest bearing, unsecured,
               due on demand.                                           20,000                  -                  -

          (c)  Loans payable, non-interest bearing, unsecured,
               no specific terms for repayment                               -             78,500                  -
                                                                  ------------     --------------     --------------
                                                                  $    120,000     $       78,500     $            -
                                                                  ============     ==============     ==============
</TABLE>

Note 9    Capital Stock
          -------------

          (a)  Authorized:
               50,000,000 common shares , $0.001 par value
               1,000,000 preferred shares, $0.01 par value

          (b)  Share Subscriptions:

               At December 31, 2000, share subscriptions totalling $225,000 had
               been received with respect to subscription agreements for 75,000
               common shares at $3.00 per share. A commission of $5,250 was paid
               with respect to these subscriptions. On February 17, 2001, the
               company issued the 75,000 common shares.

          (c)  Warrants:

               At December 31, 2000, there were share purchase warrants
               outstanding entitling the holder thereof the right to purchase
               2,500,000 common shares of the company at $3.20 per share. These
               warrants are exercisable during the period November 1, 2001 to
               December 31, 2001.

                                      F-12
<PAGE>

Note 10   Related Party Transactions
          --------------------------

          (a)  The company has incurred charges by directors, companies with
               directors or officers in common or shareholders owning greater
               than 10% of the company as follows:

<TABLE>
<CAPTION>
                                                                                                        June 17, 1998
                                                                                                       (Date of Incor-
                                                                                                        poration) to
                                                                                                        December 31,
                                                                            2000             1999           1998
                                                                            ----             ----           ----
               <S>                                                       <C>               <C>          <C>
               Cost of sales                                             $   800,000      $       -     $         -
               General and Administrative Expenses
                 Consulting                                                  167,500         70,000               -
                 Office and telephone                                              -          4,000               -
                 Rent                                                          2,739          4,157               -
               Exploration and development                                    21,960              -               -
               Gain on settlement of debts                                 (  17,538)             -               -
               Write-off of oil and gas property - Note 6                     73,000              -               -
                                                                         -----------      ---------     -----------
                                                                         $ 1,047,661      $  78,157     $         -
                                                                         ===========      =========     ===========
</TABLE>

          (b)  At December 31, 2000, 1999 and 1998, the company owed directors,
               companies with directors or officers in common or shareholders
               owning greater than 10% of the company the following amounts:

<TABLE>
<CAPTION>
                                                                            2000             1999           1998
                                                                            ----             ----           ----
               <S>                                                       <C>              <C>           <C>
               Accounts payable                                          $    71,360      $  74,157     $         -
               Loans payable                                                       -         25,500               -
               Accounts receivable                                                 -       (  3,734)              -
                                                                         -----------      ---------     -----------
                                                                         $    71,360      $  95,923     $         -
                                                                         ===========      =========     ===========
</TABLE>

                                     F-13
<PAGE>

Note 11   Non-cash Transactions
          ---------------------

          Investing and financing activities that do not have a direct impact on
          current cash flows are excluded from the statement of cash flows.
          During the year ended December 31, 2000 the following transactions
          were excluded from the statement of cash flows:

          a)   the company issued 2,500,000 common shares at $0.10 per share as
               settlement of loans payable totalling $86,000 and accounts
               payable totalling $164,000;

          b)   the company issued 3,500,000 common shares at $2.70 per share (a
               total value of $9,450,000) as consideration for the acquisition
               of distribution rights (Notes 2 (d) and 7).

Note 12   Deferred Tax Assets
          -------------------

          The Financial Accounting Standards Board issued Statement Number 109
          in Accounting for Income Taxes ("FAS 109") which is effective for
          fiscal years beginning after December 15, 1992. FAS 109 requires the
          use of the asset and liability method of accounting of income taxes.
          Under the assets and liability method of FAS 109, deferred tax assets
          and liabilities are recognized for the future tax consequences
          attributable to temporary differences between the financial statements
          carrying amounts of existing assets and liabilities and their
          respective tax bases. Deferred tax assets and liabilities are measured
          using enacted tax rates expected to apply to taxable income in the
          years in which those temporary differences are expected to be
          recovered or settled.

          The following table summarizes the significant components of the
          company's deferred tax assets:

                                                                      Total
                                                                      -----
          Deferred Tax Assets
            Non-capital loss carryforwards                        $    957,136
                                                                  ============
          Gross deferred tax assets                               $    382,854
          Valuation allowance for deferred tax asset                (  382,854)
                                                                  ------------
                                                                  $          -
                                                                  ============

          The amount taken into income as deferred tax assets must reflect that
          portion of the income tax loss carryforwards which is likely to be
          realized from future operations. The company has chosen to provide an
          allowance of 100% against all available income tax loss carryforwards,
          regardless of their time of expiry.

                                     F-14
<PAGE>

Note 13   Income Taxes
          ------------

          No provision for income taxes has been provided in these consolidated
          financial statements due to the net loss. At December 31, 2000, the
          company has operating loss carryforwards, which expire commencing in
          2018 totalling approximately $957,136, the potential tax benefit of
          which has not been recorded in the consolidated financial statements.

Note 14   New Accounting Standards
          ------------------------

          In April 1998, the Accounting Standards Executive committee issued SOP
          98-5, "Reporting on the cost of start-up activities". This statement
          is effective for fiscal years beginning after December 15, 1998.
          Adopting this standard did not have a material impact on the company's
          financial position, results of operations or cash flows.

          In December 1999, the Securities and Exchange Commission issued Staff
          Accounting Bulletin No. 101, "Revenue Recognition in Financial
          Statements" which is effective the beginning of the fourth quarter of
          fiscal 2000.  Adopting this Bulletin did not have a material impact on
          the company's financial position, results of operations or cash flows.
        . Adopting this Bulletin did not have a material impact on the company's
          financial position, results of operations or cash flows.

Note 15   Comparative Figures
          -------------------

          Certain comparative figures have been reclassified to conform with the
          presentation used in the current year.

Note 16   Subsequent Events - Notes 7 and 9
          -----------------

          On February 27, 2001, the company granted stock purchase options
          entitling the holders thereof the right to acquire 225,000 common
          shares of the company at $3.00 per share. These options expire on
          November 30, 2001, as to 25,000 options, and February 1, 2003, as to
          200,000 options.


Changes In and Disagreements With Accountants on Accounting and Financial
Disclosure.

Not Applicable.

                                     F-15
<PAGE>

                                   PART III

Directors, Executive Officers, Promoters and Control Persons; Compliance With
Section 16(a) of the Exchange Act

The following table sets forth as of March 29, 2001, the name, age, position of
the executive officers and directors of the Company, along with their date of
appointment.  The directors serve until the Company's next annual general
meeting, or until a successor is elected and qualifies to be a director of the
Company, or until such director's resignation or removal from office in
accordance with the Company's By-Laws.

<TABLE>
<CAPTION>
Name                    Age     Position/Office held                    Served in Office Since

<S>                     <C>     <C>                                     <C>
Douglas Yee              32     Director, President, Treasurer          September 12, 2000
Terrence King            45     Director                                December 15, 2000
Negar Towfigh            28     Director                                February 16, 1999
                                Secretary                               July 22, 1999
Don-gil Park             42     Director                                March 29, 2001
Jaekil Song              36     Director                                March 29, 2001
Jin Lee                  41     Chief Technology Officer                January 31, 2001
</TABLE>

DOUGLAS YEE (Age 32), President, Treasurer, and a Director of the Company.   Mr.
- --------------------------------------------------------------------------
Yee has been a director of the Company since September 12, 2000.  Mr. Yee was
the Director of Finance of Conor Pacific Environmental Technologies Inc. from
1997 to June 2000.  From 1996 to 1997, Mr. Yee was Treasurer and Corporate
Controller of Triton Mining Corporation.  At Royal Oak Mines Inc., between 1992
and 1996, Douglas Yee worked in various positions: Controller, Manager of
Taxation, Assistant Treasurer and Corporate Accountant.  All these companies are
or were listed on the Toronto Stock Exchange ("TSE").  Mr. Yee has been involved
in the analysis and acquisition of several companies.  He has participated in
contract negotiations, reviewed joint venture agreements and prospectuses, and
prepared numerous financial schedules.  Mr. Yee is a Chartered Accountant and
graduated with honors from the University of British Columbia in 1990 with a
Bachelor of Commerce in Accounting.  Mr. Yee has taught several courses at the
School of Chartered Accountancy and the Institute of Chartered Accountants of
British Columbia.

TERRENCE E. KING (Age 45), a Director of the Company.  Mr. King is a lawyer and
- -----------------------------------------------------
is a principal at Holmes & King, an Association of Lawyers and Law Corporations.
Mr. King was admitted to the British Columbia Bar in 1982 and is a member of the
British Columbia Law Society and Canadian Bar Association. Mr. King graduated
from the University of British Columbia with a Bachelor of Arts (Political
Science) and, subsequently, a Bachelor of Law in 1982. Mr. King was a partner
with the law firm of Ferguson Gifford from 1987 to 1991. Mr. King established
Terrence E. King Law Corporation in 1991 and is presently practicing law in
association with Holmes & King, an association of lawyers and law corporations.
Mr. King's principal area of law practice is Securities and Corporate Finance,
Corporate and Commercial. Mr. King is presently a secretary of Prospector
International Resources Inc., a publicly traded company whose shares are traded
on the Canadian Venture Exchange. From 1996 to 1998,

                                     -32-
<PAGE>

Mr. King was a director of South Duval Gold Corp., a company whose shares were
previously listed on the Canadian Venture Exchange.

NEGAR TOWFIGH (Age 28), Director and Secretary of the Company.  Ms. Towfigh has
- --------------------------------------------------------------
been a director of the Company since February 16, 1999. Ms. Towfigh is Corporate
Secretary of First Goldwater Resources Inc., as well as Vice President and
Secretary of Habanero Resources Inc. Ms. Towfigh runs her own consulting firm
where she specializes in structuring companies from incorporation to a listing
on the CDNX or OTCBB; she assists companies with initial public offerings; and
handles all regulatory filings. She has previously been employed in the
investment industry with several brokerage houses including Canaccord Capital
Corporation, Nesbitt Burns Inc., RBC Dominion and Pacific International
Securities Inc. She graduated with a Bachelor of Commerce in Finance from the
University of British Columbia in 1995.

DON-GIL PARK (Age 42) a Director of the Company.  Mr. Park is a Senior Executive
- ------------------------------------------------
Director with Cyberbank Corp., a private Korean company. He has overseen
overseas marketing development for Cyberbank since June 2000 for Cyberbank. From
September 1994 to June 2000, Mr. Park was in the marketing field with SK
Telecom, a telecom carrier. Mr. Park is not currently a director or officer of
any other publicly traded corporation. Mr. Park graduated from the Korea
University in Seoul, Korea with a Bachelor of Economics.

JAEKIL SONG (Age 36) a Director of the Company.  Mr. Song is a general manager
- -----------------------------------------------
of Cyberbank Corp. since March 29, 2000. Mr. Song oversaw overseas investments
for Hyundai International's Merchant Banking division from January 3, 1990 until
September 13, 1999. Subsequently, Mr. Song was an investment banker with
Choheung Bank from September 13, 1999 to March 18, 2000. Mr. Song is not
currently a director or officer of any other publicly traded corporation. Mr.
Song graduated with a Bachelor of Business Administration from the Korea
University in Seoul, Korea. He went on to the University of Pennsylvania, where
he earned his Masters of Business Administration in Finance.

JIN LEE (Age 41) Chief Technology Officer.  Mr. Lee  has been the President of
- ------------------------------------------
Internet Interworld Inc., an Internet service provider, since November 1996.
From 1995 to 1996 Mr. Lee worked as a visiting professor in the Department of
Electrical Engineering at the University of British Columbia.  Mr. Lee graduated
from California State University with a Masters in Computer Science in 1989.
Mr. Lee is not currently a director or officer of any other publicly traded
corporation.

There are no family relationships between any of the directors and officers of
the Company.

Section 16 Compliance

     Douglas Yee was required to file a Form 3 with the SEC on or before
September 22, 2000.  The Form 3 was filed late with the SEC on November 22,
2000.

     Negar Towfigh was required to file a Form 4 with the SEC on or before
August 10, 2000.  She filed a Form 5 with the SEC February 15, 2001.

     Graeme Sewell, a former director of the Company, was required to file a
Form 4 with the SEC on or before August 10, 2000.  He filed a Form 5 with the
SEC on February 15, 2001.

                                     -33-
<PAGE>

     Allen Sewell, a former director of the Company, was required to file one
Form 4 with the SEC on or before August 10, 2000 and another Form 4 with the SEC
on or before December 8, 2000.  He filed a Form 5 with the SEC on February 15,
2001.

     Cyberbank Corp. was required to file a Form 3 with the SEC on or before
December 8, 2000.  The Form 3 was filed late with the SEC on December 19, 2000.
Cyberbank Corp. filed a Form 5 with the SEC on March 1, 2001.  By rule, the Form
5 was required to be filed with the SEC on or before February 14, 2001.

Executive Compensation.

The following table summarizes the total compensation of the three individuals
who served as CEO or in a similar capacity at various times throughout the last
two fiscal years.  No executive officers of the Company earned in excess of
$100,000 during either of the fiscal years ended December 31, 1999 or December
31, 2000.

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------
                        SUMMARY COMPENSATION TABLE
- -------------------------------------------------------------------------
                           Annual Compensation
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------

Name and Principle             Year                   Salary ($)
 Position
- -------------------------------------------------------------------------
<S>                      <C>                <C>
Douglas Yee                    2000                    22,500
President &
Director (1)
- -------------------------------------------------------------------------
Graeme Sewell                  2000                    24,000
Former President &
Director (2)                   1999                    30,000
- -------------------------------------------------------------------------
Allen Sewell
Former President &             2000                    32,000
Director (3)
                               1999                    40,000

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

(1) Douglas Yee has served as President from September 12, 2000 to present. Mr.
    Yee's management services company received $7,500 per month for providing
    management services to the Company.
(2) Graeme Sewell served as President from August 18, 2000 to September 12,
    2000.
(3) Allen Sewell served as President from June 17, 1998 to August 18, 2000.

Security Ownership of Certain Beneficial Owners and Management

The following table sets forth information as of March 28, 2001, based on
information obtained from the persons named below, with respect to the
beneficial ownership of the

                                     -34-
<PAGE>

Common Shares by (i) each person known by the Company to own beneficially 5% or
more of the Common Shares, (ii) each director and officer and (iii) all
directors and officers as a group:

<TABLE>
<CAPTION>
Title of Class                    Name & Address                     Amount & Nature              Percent of
                                  of Beneficial Owner              of Beneficial Owner (1)          Class

<S>                               <C>                              <C>                            <C>
Common Shares                     Douglas Yee                             500,000                   3.1%
                                  President, Director and Treasurer
                                  2505 East 5/th/ Avenue
                                  Vancouver, BC
                                  Canada  V5M 1M8

Common Shares                     Don-gil Park                                  0                     0%
                                  Director
                                  102 - 1601 Sindonga Apt.
                                  Yongdu-dong
                                  Dongdaemun-gu
                                  Seoul, Korea

Common Shares                     Jaekil Song                                   0                     0%
                                  Director
                                  109 - 406 Jugong Apt.
                                  Kwachon City
                                  Kyonggi-do, Korea

Common Shares                     Terrence King                                 0                     0%
                                  Director
                                  Suite 1300
                                  1111 West Georgia Street
                                  Vancouver, BC
                                  Canada  V6E 4M3

Common Shares                     Jin Lee                                 406,770                   2.5%
                                  Chief Technology Officer
                                  #1890-401 W. Georgia Street
                                  Vancouver, BC
                                  Canada V6B 5A1
 </TABLE>

                                    -35-
<PAGE>

<TABLE>
<CAPTION>
<S>                        <C>                                                         <C>               <C>
Common Shares              Negar Towfigh                                                   48,000         0.3%
                           Director and Secretary
                           1403 Chippendale Road
                           West Vancouver, BC
                           Canada  V7S 2N7

Common Shares              Cyberbank Corp. (2)                                          3,500,000        21.7%
                           18/th/ Floor, Mirae Bldg., 1306-6
                           Seocho-dong, Seocho-gu
                           Seoul, Korea  137-070

Common Shares              Directors & Officers as a                                      954,770         6.0%
                           Group (six persons)
</TABLE>

    (1)  Unless otherwise indicated, this column reflects amounts as to which
         the beneficial owner has sole voting power and sole investment power.

    (2)  Excludes a warrant exercisable for the purchase of 2,500,000 shares of
         Common Stock at a purchase price of $3.20 per share, which warrant is
         exercisable from November 1, 2001 through December 31, 2001.

Certain Relationships and Related Transactions

On March 19, 1999, the Company entered into the Agreement with Brothers, a
company owned and controlled by several members of the Sewell family, and whose
president is Allen Sewell. Graeme Sewell is Allen Sewell's son and Graeme
Sewell's two children owned shares in Brothers, at the time of the transaction.
The directors of Brothers are Allen Sewell and Michael Sewell, Graeme Sewell's
father and brother, respectively.

Brothers granted to the Company an option to earn 70% of Brothers' 10% working
interest in certain oil and gas leases, options to lease and seismic options
located on the Lands in Solano County, California. As discussed, the Company has
paid $73,000 to Brothers pursuant to the Agreement which amount is equal to
Brothers total land and seismic acquisition costs associated with the Lands. The
estimated land and seismic costs were $83,000 at the time the Agreement was
entered into. However, cost savings were realized and the total land and seismic
costs are in fact, $73,000. The Company subsequently paid Brothers $83,506 to
drill wells on the property.

On August 18, 2000, the Company announced that it would not be exercising its
option to proceed with the Travis oil and gas property. Investors are referred
to the "Exploration Conveyance and Assignment Agreement" between Brothers Oil &
Gas Inc. and the Company, as previously reported in the Company's Form 10-SB
filed with the Securities and Exchange Commission. The Company paid for its
share of drilling costs for the first well, which resulted in a dry hole and
elected not to exercise its option to participate in further drilling. The
option was non-transferable, therefore the Company did not sell its option but
instead allowed it to expire. The Company will not be penalized for allowing the
option to expire. The Company owns no property in relation to its former oil and
gas business.

                                     -36-
<PAGE>

Pursuant to the Distribution Agreement, the Company, through PC-EPhone Ltd.,
granted 3,500,000 shares of its Common Shares to Cyberbank in exchange for the
distribution rights thereunder. In addition, pursuant to the Warrants Agreement,
the Company granted to Cyberbank 2,500,000 warrants to purchase shares of the
Company's Common Shares. Upon receipt of the shares issued by the Company
pursuant to the Distribution Agreement, Cyberbank owns in excess of 5% of the
total equity interest in the Company.

Exhibits and Reports on Form 8-K

No reports on Form 8-K were filed during the fourth quarter of the year ending
December 31, 2000.


Index of Exhibits

2.1    Letter Agreement dated November 7, 2000 between Newlands Oil & Gas Inc.
       and Peace for the New Millennium Ltd., pursuant to which Newlands Oil &
       Gas Inc. acquired Peace for the New Millennium Ltd.

3      (i)   Articles of Incorporation including all Amendments thereto.

3      (ii)  ByLaws - incorporated by reference under the Company's Form 10-SB
             filed with the Securities & Exchange Commission on June 11, 1999 as
             Exhibit 3 (ii).

10.1   Indemnification Agreement with Douglas Yee.

10.2   Indemnification Agreement with Negar Towfigh.

10.3   Indemnification Agreement with Terrence King.

10.4   Indemnification Agreement with Alan Crawford.

10.5   Indemnification Agreement with Greg Burnett.

10.6   Indemnification Agreement with Jin Lee.

10.7   Indemnification Agreement with Don-gil Park.

10.8   Indemnification Agreement with Jaekil Song.

10.9   Debt Settlement Agreement dated July 12, 2000 between the Company and
       Next Millennium Management Ltd.

10.10  Debt Settlement Agreement dated July 12, 2000 between the Company and
       Shareholders.

10.11  Debt Settlement Agreement dated July 12, 2000 between the Company and
       Allen Sewell.

10.12  Debt Settlement Agreement dated July 12, 2000 between the Company and
       Amisano Hanson CA's.

                                     -37-
<PAGE>

10.13     Debt Settlement Agreement dated July 12, 2000 between the Company and
          Brothers Oil & Gas Inc.

10.14     Debt Settlement Agreement dated July 12, 2000 between the Company and
          First Place Capital Inc.

10.15     Debt Settlement Agreement dated July 12, 2000 between the Company and
          463563 BC Ltd.

10.16     Debt Settlement Agreement dated July 12, 2000 between the Company and
          Morton & Co.

10.17(1)  Distribution Agreement dated November 6, 2000 between the Company and
          Cyberbank Corp.

10.18     Warrants Agreement dated November 6, 2000 between the Company and
          Cyberbank Corp.

10.19(1)  Subdistributor Agreement dated as of November 15, 2000 between the
          Company and FutureCom Global, Inc.

10.20(1)  Letter Agreement dated February 8, 2001 between the Company and
          Cyberbank Corp.

10.21(1)  Tri-Party Agreement dated February 9, 2001 among the Company,
          Cyberbank Corp. and FutureCom Global, Inc.

10.22     Management Services Contract dated as of October 1, 2000 between the
          Company and All Seasons Consulting Inc.

10.23     Exploration Conveyance & Assignment Agreement dated March 1, 1999
          between the Company and Brothers Oil & Gas Inc. - incorporated by
          reference under the Company's Form 10-SB filed with the Securities &
          Exchange Commission on June 11, 1999 as Exhibit 10.1.

(1) Confidential Treatment Requested

                                     -38-
<PAGE>

                                  SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                       PC-EPHONE, INC.

                                       By: __/s/ Douglas Yee___________________
                                             Douglas Yee
                                             President, Treasurer and
                                             Director

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities indicated on March 28, 2001.


      Signature                        Title                 Date
      ---------                        -----                 ----

/s/ Douglas Yee                  President, Treasurer
- ------------------------------   and Director            June 8, 2001
      Douglas Yee


/s/ Terrence King                Director
- ------------------------------                           June 8, 2001
      Terrence King


/s/ Negar Towfigh                Secretary and             June 8, 2001
- ------------------------------   Director
      Negar Towfigh

                                     -39-
<PAGE>

                               Index of Exhibits

2.1     Letter Agreement dated November 7, 2000 between Newlands Oil & Gas Inc.
        and Peace for the New Millennium Ltd., pursuant to which Newlands Oil &
        Gas Inc. acquired Peace for the New Millennium Ltd.

3       (i)   Articles of Incorporation including all Amendments thereto.
3       (ii)  ByLaws - incorporated by reference under the Company's Form 10-SB
              filed with the Securities & Exchange Commission on June 11, 1999
              as Exhibit 3 (ii).

10.1    Indemnification Agreement with Douglas Yee.
10.2    Indemnification Agreement with Negar Towfigh.
10.3    Indemnification Agreement with Terrence King.
10.4    Indemnification Agreement with Alan Crawford.
10.5    Indemnification Agreement with Greg Burnett.
10.6    Indemnification Agreement with Jin Lee.
10.7    Indemnification Agreement with Don-gil Park.
10.8    Indemnification Agreement with Jaekil Song.
10.9    Debt Settlement Agreement dated July 12, 2000 between the Company and
        Next Millennium Management Ltd.
10.10   Debt Settlement Agreement dated July 12, 2000 between the Company and
        Shareholders.
10.11   Debt Settlement Agreement dated July 12, 2000 between the Company and
        Allen Sewell.
10.12   Debt Settlement Agreement dated July 12, 2000 between the Company and
        Amisano Hanson CA's.
<PAGE>

10.13     Debt Settlement Agreement dated July 12, 2000 between the Company and
          Brothers Oil & Gas Inc.
10.14     Debt Settlement Agreement dated July 12, 2000 between the Company and
          First Place Capital Inc.
10.15     Debt Settlement Agreement dated July 12, 2000 between the Company and
          463563 BC Ltd.
10.16     Debt Settlement Agreement dated July 12, 2000 between the Company and
          Morton & Co.
10.17(1)  Distribution Agreement dated November 6, 2000 between the Company and
          Cyberbank Corp.
10.18     Warrants Agreement dated November 6, 2000 between the Company and
          Cyberbank Corp.
10.19(1)  Subdistributor Agreement dated as of November 15, 2000 between the
          Company and FutureCom Global, Inc.
10.20(1)  Letter Agreement dated February 8, 2001 between the Company and
          Cyberbank Corp.
10.21(1)  Tri-Party Agreement dated February 9, 2001 among the Company,
          Cyberbank Corp. and FutureCom Global, Inc.
10.22     Management Services Contract dated as of October 1, 2000 between the
          Company and All Seasons Consulting Inc.
10.23     Exploration Conveyance & Assignment Agreement dated March 1, 1999
          between the Company and Brothers Oil & Gas Inc. - incorporated by
          reference under the Company's Form 10-SB filed with the Securities &
          Exchange Commission on June 11, 1999 as Exhibit 10.1.

(1) Confidential Treatment Requested


<PAGE>

                                                                     Exhibit 2.1

                            NEWLANDS OIL & GAS INC.

7th of November, 2000
Morningstar Capital Inc.
c/o Voyager Financial Services Ltd.
129 Front Street
Hamilton, Bermuda HM12


Dear Sirs:

              Re:     PEACE FOR THE NEW MILLENNIUM LTD.
              -----------------------------------------

This will confirm our offer to acquire from you all 12,000 shares of US$1.00
each (the "Shares") in the capital of Peace For The New Millennium Ltd. (the
"Company") upon the terms and subject to the conditions set forth below:

1.     Consideration
       -------------

The total consideration for the Shares will be US$3,700.00 which shall be paid
by cheque drawn on the US$ Trust Account of Cox Hallett Wilkinson and tendered
upon completion.

2.     Binding Agreement/Completion

2.1    A binding agreement will arise upon your executing and returning a copy
of this letter after which you will procure that there shall be held a meeting
of the board of directors of the Company at which there shall be duly passed
resolutions:

       i)  approving the share transfer referred to in 2.2 below;

       ii) accepting the resignations referred to in 2.2 below and appointing
our nominees to fill the vacancies created by such resignations;

                                    Page 1
<PAGE>

2.2  As soon as practicable after the meeting described in 2.1 above completion
     shall take place when the following shall occur:

     (i)  you will deliver or procure the delivery of the following:

          a)   duly executed resolution for all the Shares in favor of us,
               together with the relevant share certificates;

          b)   the written resignation of all directors and officers of the
               Company from their offices, which resignation shall include their
               written confirmation that they have no outstanding claims against
               the Company for of the office in question or otherwise arising;

          c)   the Certificate of Incorporation, Memorandum of Association, By-
               Laws, Minute Books, share register, register of directors and
               officers, common seal, share certificates and all books and
               records of the Company including, without limitation all
               cancelled and un-issued share certificates and signed minutes of
               the Company;

     (ii) we will deliver the cheque for Consideration.

3.   Condition Precedent
     -------------------

Our obligation to complete the sale and purchase of the Shares shall be
conditional upon our obtaining the approval of the Bermuda Monetary Authority
thereto and approval by the Board of Directors of Newlands Oil & Gas Inc.

4.   Representations and warranties
     ------------------------------

                                    Page 2
<PAGE>

We are purchasing the Shares on the basis of the following representations and
warranties by you:

     (i)   that the Shares constitute the entire authorised and issued share
           capital of the Company and are free and clear of all liens and
           encumbrances;

     (ii)  that the Shares may be sold and transferred to us without the consent
           of any third party other than the Bermuda Monetary Authority;

     (iii) that the Company has not conducted material business since it was
           incorporated and has no creditors except for legal fees for its
           incorporation to Cox Hallett Wilkinson which will be paid from the
           proceeds hereof.

5.   Change of Name
     --------------

We undertake forthwith following completion to procure the change of name of the
Company.

6.   This Agreement shall be governed and construed in accordance with Bermuda
     law.


Kindly confirm your agreement to the foregoing by signing and returning a copy
of this letter.

Yours faithfully,

/s/ Douglas Yee
Director
Newlands Oil & Gas Inc.



I agree with the above terms of this letter of agreement.

/s/                                         November 7, 2001
- ------------------------------------------------------------------------------
Morningstar Capital Inc.                    Date

Per:
    ----------------------------------

                                    Page 3

<PAGE>

                                                                       Exhibit 3


DEAN HELLER
Secretary of State
101 North Carson Street, Suite 3
Carson City, Nevada 89701-4785
(775) 684- 5708


                           Certificate of Amendment
                      (Pursuant to NRS 78.385 and 78.390)



             Certificate of Amendment to Articles of Incorporation
             -----------------------------------------------------

                        For Nevada Profit Corporations
                        ------------------------------

         (Pursuant to NRS 78.385 and 78.390 - After Issuance of Stock)

                              Remit in Duplicate





Name of corporation:                                     Newlands Oil & Gas Inc.

The articles have been amended as follows (provide article numbers, if
available):

Article I : The Name of the corporation is: PC-EPhone, Inc.

3. The vote by which the stockholders holding shares in the corporation
entitling them to exercise at least a majority of the voting power, or such
greater proportion of the voting power as may be required in the case of a vote
by classes or series, or as may be required by the provisions of the articles of
incorporation have voted in favor of the amendment is: 100%

Signatures (Required):


/s/ Douglas Yee                                  /s/ Negar Towfigh
- --------------------------------                 -----------------------------
President or Vice President         and          Secretary or Asst. Secretary.

*If any proposed amendment would alter or change any preference or any relative
or other right given to any class or series of outstanding shares, then the
amendment must be approved by the vote, in addition to the affirmative vote
otherwise required, of the holders of shares representing a majority of the
voting power each class or series affected by the amendment regardless of
limitations or restrictions on the voting power thereof.


IMPORTANT: Failure to include any of the above information and remit the proper
fees may cause this filing to be rejected.

                                     Page 1
<PAGE>

                           ARTICLES OF INCORPORATION

                                      OF

                            NEWLANDS OIL & GAS INC.

                                   ARTICLE I

The name of the corporation is Newlands Oil & Gas Inc. (the "Corporation").

                                  ARTICLE II

The purposes for which the Corporation is organized and its powers are to engage
in all lawful business, and to have, enjoy, and exercise all of the rights,
powers, and privileges conferred upon corporations incorporated pursuant to
Nevada law, whether now or hereafter in effect, and whether or not herein
specifically mentioned.

                                  ARTICLE III

The amount of total authorized capital stock which the Corporation shall have
authority to issue is 50,000,000 shares of common stock, each with $0.001 par
value, and 1,000,000 shares of preferred stock, each with $0.01 par value.  To
the fullest extent permitted by the laws of the State of Nevada (currently set
forth in NRS 78.195), as the same now exists or may hereafter be amended or
supplemented, the Board of Directors may fix and determine the designations,
rights, preferences or other variations of each class or series within each
class of capital stock of the Corporation.

                                     Page 2
<PAGE>

                                  ARTICLE IV

The business and affairs of the Corporation shall be managed by a Board of
Directors which shall exercise all the powers of the Corporation except as
otherwise provided in the Bylaws, these Articles of Incorporation or by the laws
of the State of Nevada.  The number of members of the Board of Directors shall
be set in accordance with the Company's Bylaws; however, the initial Board of
Directors shall consist of one member.  The name and address of the person who
shall serve as the director until the first annual meeting of stockholders and
until his successors are duly elected and qualified is as follows:

Name                                  Address
- ----                                  -------

Allen Charles Sewell          #604 - 750 W. Pender Street
                              Vancouver, British Columbia
                              V6C 2T7 CANADA

                                   ARTICLE V

The name and address of the incorporator of the Corporation is Craig A. Stoner,
455 Sherman Street, Suite 300, Denver, Colorado  80203.

                                  ARTICLE VI

To the fullest extent permitted by the laws of the State of Nevada (currently
set forth in NRS 78.037), as the same now exists or may hereafter be amended or
supplemented, no director or officer of the Corporation shall be liable to the
Corporation or to its stockholders for damages for breach of fiduciary duty as a
director or officer.

                                  ARTICLE VII

The Corporation shall indemnify, to the fullest extent permitted by applicable
law in effect from time to time, any person against all liability and expense
(including attorneys' fees) incurred by reason of the fact that he is or was a
director or officer of the Corporation, he is or was serving at the request of
the Corporation as a director, officer, employee, or agent of, or in any similar
managerial or fiduciary position of, another corporation, partnership, joint
venture, trust or other enterprise.  The Corporation shall also indemnify any
person who is serving or has served the Corporation as a director, officer,
employee, or agent of the Corporation to the extent and in the manner provided
in any bylaw, resolution of the shareholders or directors, contract, or
otherwise, so long as such provision is legally permissible.

                                     Page 3
<PAGE>

                                 ARTICLE VIII

The owners of shares of stock of the Corporation shall not have a preemptive
right to acquire unissued shares, treasury shares or securities convertible into
such shares.

                                  ARTICLE IX

Only the shares of capital stock of the Corporation designated at issuance as
having voting rights shall be entitled to vote at meetings of stockholders of
the Corporation, and only stockholders of record of shares having voting rights
shall be entitled to notice of and to vote at meetings of stockholders of the
Corporation.

                                   ARTICLE X

The initial resident agent of the Corporation shall be the Corporation Trust
Company of Nevada, whose street address is 1 East 1st Street, Reno, Nevada
89501.

                                  ARTICLE XI

The provisions of NRS 78.378 to 78.3793 inclusive, shall not apply to the
Corporation.

                                  ARTICLE XII

One-third of the votes entitled to be cast on any matter by each shareholder
voting group entitled to vote on a matter shall constitute a quorum of that
voting group for action on that matter by shareholders.

                                 ARTICLE XIII

The holder of a bond, debenture or other obligation of the Corporation may have
any of the rights of a stockholder in the Corporation to the extent determined
appropriate by the Board of Directors at the time of issuance of such bond,
debenture or other obligation.

                                     Page 4
<PAGE>

IN WITNESS WHEREOF, the undersigned incorporator has executed these Articles of
Incorporation this 15th day of June, 1998.


                                   By   /s/ Craig A. Stoner
                                     ------------------------------------
                                        Craig A. Stoner
                                        Incorporator

STATE OF COLORADO               )
                                )ss.
CITY AND COUNTY OF DENVER       )


Personally appeared before me this 15th day of June, 1998, Craig A. Stoner, who,
being first duly sworn, declared that he executed the foregoing Articles of
Incorporation and that the statements therein are true and correct to the best
of his knowledge and belief.

My commission expires:                      Witness my hand and official seal.

       10/26/98                            /s/ Nancy J. Parks
- ----------------------------------        ----------------------------------
                                          Notary Public
                                          455 Sherman Street, Suite 300
                                          Denver, Colorado 80203

                                     Page 5
<PAGE>

                   CERTIFICATE OF ACCEPTANCE OF APPOINTMENT
                               BY RESIDENT AGENT

The undersigned, Corporation Trust Company of Nevada, with address at One East
First Street, Town of Reno, County of Washoe, State of Nevada, hereby accepts
the appointment as Resident Agent of Newlands Oil & Gas Inc. in accordance with
NRS 78.090.

In Witness Whereof, I have hereunto set my hand this 16th day of June, 1998.
                                                     -----

                                            CT CORPORATION SYSTEM

                                                 /s/ Marcia J. Sunahara
                                            ------------------------------------
                                                 Signature

                                                 Marica J. Sunahara
                                            ------------------------------------
                                                 Print Name

                                                 Special Asst. Secretary
                                            ------------------------------------
                                                 Title

                                     Page 6

<PAGE>

                                                                    Exhibit 10.1

                            INDEMNIFICATION AGREEMENT
                            -------------------------


     INDEMNIFICATION AGREEMENT, dated as of this 1st day of March, 2001, by and
between PC-EPhone, Inc., a Nevada corporation (the "Company"), and the director
and/or officer whose name appears on the signature page of this Agreement
("Indemnitee").

                                   RECITALS
                                   --------

     A.  Highly competent persons are becoming more reluctant to serve as
directors or officers or in other capacities unless they are provided with
reasonable protection through insurance or indemnification against risks of
claims and actions against them arising out of their service to and activities
on behalf of the corporations.

     B.  The Board of Directors of the Company (the "Board" or the "Board of
Directors") has determined that the Company should act to assure its directors
and officers that there will be increased certainty of such protection in the
future.

     C.  It is reasonable, prudent and necessary for the Company contractually
to obligate itself to indemnify such persons to the fullest extent permitted by
applicable law so that they will serve or continue to serve the Company free
from undue concern that they will not be so indemnified.

     D.  Indemnitee is willing to serve, to continue to serve and to take on
additional service for or on behalf of the Company on the condition that
Indemnitee be so indemnified.

                                  AGREEMENT
                                  ---------

     In consideration of the premises and the covenants contained herein, the
Company and Indemnitee do hereby covenant and agree as follows:

     1.  Definitions.  For purposes of this Agreement:
         -----------

     (a)  "Affiliate" shall mean any corporation, partnership, joint venture,
trust or other enterprise in respect of which the Indemnitee is or was or will
be serving as a director, officer, advisory director or Board Committee member
at the request of the Company, and including, but not limited to, any employee
benefit plan of the Company or any of the foregoing.
<PAGE>

Page 2

     (b)  "Disinterested Director" shall mean a director of the Company who is
not or was not a party to the Proceeding in respect of which indemnification is
being sought by Indemnitee.

     (c)  "Expenses" shall include all attorneys' fees and costs, retainers,
court costs, transcripts, fees of experts, witness fees, travel expenses,
duplicating costs, printing and binding costs, telephone charges, postage,
delivery service fees and all other disbursements or expenses incurred in
connection with asserting or defending claims.

     (d)  "Independent Counsel" shall mean a law firm or lawyer that neither is
presently nor in the past five years has been retained to represent:  (i) the
Company or Indemnitee in any matter material to any such party or (ii) any other
party to the Proceeding giving rise to a claim for indemnification hereunder.
Notwithstanding the foregoing, the term "Independent Counsel" shall not include
any firm or person who, under the applicable standards of professional conduct
then prevailing, would have a conflict of interest in representing any of the
Company or Indemnitee in an action to determine Indemnitee's right to
indemnification under this Agreement.  All Expenses of the Independent Counsel
incurred in connection with acting pursuant to this Agreement shall be borne by
the Company.

     (e)  "Losses" shall mean all losses, claims, liabilities, judgments, fines,
penalties and amounts paid in settlement in connection with any Proceeding.

     (f)  "Proceeding" includes any action, suit, arbitration, alternate dispute
resolution mechanism, investigation, administrative hearing or any other
proceeding whether civil, criminal, administrative or investigative; provided,
                                                                     --------
however, that the term "Proceeding" shall include any action instituted by an
- -------
Indemnitee (other than an action to enforce indemnification rights under this
Agreement) only if such action is authorized by the Board of Directors.

     2.  Service by Indemnitee.  Indemnitee agrees to begin or continue to serve
         ---------------------
the Company or an Affiliate as a director and/or officer.  Notwithstanding
anything contained herein, this Agreement shall not create a contract of
employment between the Company and Indemnitee, and the termination of
Indemnitee's relationship with the Company or an Affiliate by either party
hereto shall not be restricted by this Agreement.

     3.  Indemnification.  The Company agrees to indemnify Indemnitee for, and
         ---------------
hold Indemnitee harmless from and against, any Losses or Expenses at any time
incurred by or assessed against Indemnitee arising out of or in connection with
the service of Indemnitee as a director, advisory director, Board Committee
member, officer, employee or agent of the Company or of an Affiliate
(collectively referred to as an "Officer or Director of the Company or of an
Affiliate"), whether the basis of such proceeding is alleged action in an
<PAGE>

Page 3

official capacity or in any other capacity while serving as an Officer or
Director of the Company or of an Affiliate, to the fullest extent permitted by
the laws of the State of Nevada in effect on the date hereof or as such laws may
from time to time hereafter be amended to increase the scope of such permitted
indemnification.  Without diminishing the scope of the indemnification provided
by this Section 3, the rights of indemnification of Indemnitee provided
hereunder shall include but shall not be limited to those rights set forth
hereinafter.

     4.  Action or Proceeding Other Than an Action by or in the Right of the
         -------------------------------------------------------------------
Company.  Indemnitee shall be entitled to the indemnification rights provided
- -------
herein if Indemnitee is a person who was or is made a party or is threatened to
be made a party to any pending, completed or threatened Proceeding, other than
an action by or in the right of the Company, by reason of (a) the fact that
Indemnitee is or was an Officer or Director of the Company or of an Affiliate or
(b) anything done or not done by Indemnitee in any such capacity.  Pursuant to
this Section, Indemnitee shall be indemnified against Losses or Expenses
incurred by Indemnitee or on Indemnitee's behalf in connection with any
Proceeding, if Indemnitee acted in good faith and in a manner Indemnitee
reasonably believed to be in or not opposed to the best interests of the Company
and, with respect to any criminal Proceeding, had no reasonable cause to believe
his conduct was unlawful.

     5.  Actions by or in the Right of the Company. Indemnitee shall be entitled
         -----------------------------------------
to the indemnification rights provided herein if Indemnitee is a person who was
or is made a party or is threatened to be made a party to any pending, completed
or threatened Proceeding brought by or in the right of the Company to procure a
judgment in its favor by reason of (a) the fact that Indemnitee is or was an
Officer or Director of the Company or of an Affiliate or (b) anything done or
not done by Indemnitee in any such capacity.  Pursuant to this Section,
Indemnitee shall be indemnified against Losses or Expenses actually and
reasonably incurred by Indemnitee or on Indemnitee's behalf in connection with
any Proceeding if Indemnitee acted in good faith and in a manner Indemnitee
reasonably believed to be in or not opposed to the best interests of the
Company.  Notwithstanding the foregoing provisions of this Section, no such
indemnification shall be made in respect of any claim, issue or matter as to
which Nevada law expressly prohibits such indemnification by reason of an
adjudication of liability of Indemnitee to the Company; provided, however, that
                                                        --------  -------
in such event such indemnification shall nevertheless be made by the Company to
the extent that the court in which such action or suit was brought shall
determine equitable under the circumstances.

     6.  Indemnification for Losses and Expenses of Party Who is Wholly or
         -----------------------------------------------------------------
Partly Successful.  Notwithstanding any provision of this Agreement, to the
- -----------------
extent that Indemnitee has been wholly successful on the merits or otherwise
absolved in any Proceeding on any claim, issue or matter, Indemnitee shall be
indemnified against all Losses or Expenses actually and reasonably incurred by
Indemnitee or on Indemnitee's behalf in connection therewith.  If Indemnitee is
<PAGE>

Page 4

not wholly successful in such Proceeding but is successful, on the merits or
otherwise, as to one or more but less than all claims, issues or matters in such
Proceeding, the Company agrees to indemnify Indemnitee, to the maximum extent
permitted by law, against all Losses and Expenses incurred by Indemnitee in
connection with each successfully resolved claim, issue or matter.  In any
review or Proceeding to determine the extent of indemnification, the Company
shall bear the burden of proving any lack of success and which amounts sought in
indemnity are allocable to claims, issues or matters which were not successfully
resolved.  For purposes of this Section and without limitation, the termination
of any such claim, issue or matter by dismissal with or without prejudice shall
be deemed to be a successful resolution as to such claim, issue or matter.

     7.  Payment for Expenses of a Witness.  Notwithstanding any other provision
         ---------------------------------
of this Agreement, to the extent that Indemnitee is, by reason of the fact that
Indemnitee is or was an Officer or Director of the Company or of an Affiliate, a
witness in any Proceeding, the Company agrees to pay to Indemnitee all Expenses
actually and reasonably incurred by Indemnitee or on Indemnitee's behalf in
connection therewith.

     8.  Advancement of Expenses and Costs.  All Expenses incurred by or on
         ---------------------------------
behalf of Indemnitee (or reasonably expected by Indemnitee to be incurred by
Indemnitee within three months) in connection with any Proceeding shall be paid
promptly by the Company, and in any event in advance of the final disposition of
such Proceeding within sixty days after the receipt by the Company of a
statement or statements from Indemnitee requesting from time to time such
advance or advances, whether or not a determination to indemnify has been made
under Section 9.  Such statement or statements shall evidence such Expenses
incurred (or reasonably expected to be incurred) by Indemnitee in connection
therewith and shall include or be accompanied by a written undertaking by or on
behalf of Indemnitee to repay such amount if it shall ultimately be determined
that Indemnitee is not entitled to be indemnified therefor pursuant to the terms
of this Agreement.  The right to indemnification of advances as granted by this
Section 8 shall be enforceable by the director or officer in any court of
competent jurisdiction, if the Company denies such request, in whole or in part,
or if no disposition thereof is made within 60 days.  Such person's costs and
expenses incurred in connection with successfully establishing his/her right to
indemnification, in whole or in part, in any such action shall also be
indemnified by the Company.  It shall be a defense to any such action seeking an
adjudication or award in arbitration pursuant to this Agreement (other than an
action brought to enforce a claim for the advance of costs, charges and expenses
under this Section 8 where the required undertaking, if any, has been received
by the Company) that the claimant has not met the standard of conduct set forth
in the Nevada General Corporation Law, as the same exists or hereafter may be
amended (but, in the case of any such amendment, only to the extent that such
amendment permits the Company to provide broader indemnification rights than
<PAGE>

Page 5

said law permitted the Company to provide prior to such amendment), but the
burden of proving such defense shall be on the Company.  Neither the failure of
the Company (including its Board of Directors, its independent legal counsel and
its stockholders) to have made a determination prior to the commencement of such
action that indemnification of the claimant is proper in the circumstances
because he/she has met the applicable standard of conduct set forth in the
Nevada General Corporation Law, as the same exists or hereafter may be amended
(but, in the case of any such amendment, only to the extent that such amendment
permits the Company to provide broader indemnification rights that said law
permitted the Company to provide prior to such amendment), nor the fact that
there has been an actual determination by the Company (including its Board of
Directors, its independent legal counsel and its stockholders) that the claimant
has not met such applicable standard of conduct, shall be a defense to the
action or create a presumption that the claimant has not met the applicable
standard of conduct.

     9.  Procedure for Determination of Entitlement to Indemnification.  (a)
         -------------------------------------------------------------
When seeking indemnification under this Agreement (which shall not include in
any case the right of Indemnitee to receive payments pursuant to Section 7 and
Section 8 hereof, which shall not be subject to this Section 9), Indemnitee
shall submit a written request for indemnification to the Company.  Such request
shall include documentation or information which is reasonably necessary for the
Company to make a determination of Indemnitee's entitlement to indemnification
hereunder and which is reasonably available to Indemnitee.  Determination of
Indemnitee's entitlement to indemnification shall be made promptly, but in no
event later than 60 days after receipt by the Company of Indemnitee's written
request for indemnification.  The Secretary of the Company shall, promptly upon
receipt of Indemnitee's request for indemnification, advise the Board that
Indemnitee has made such request for indemnification.

     (b)  The entitlement of Indemnitee to indemnification under this Agreement
in respect of any pending, contemplated or threatened Proceeding shall be
determined in the specific case by (a) the Board of Directors by a majority vote
of a quorum consisting of those directors who were not party to such Proceeding,
or (b) if such qourum is not obtainable, or if a quorum of disinterested
directors so directs, by Independent Counsel in a written opinion, or (c) by the
stockholders.

     (c)  In the event the determination of entitlement is to be made by
Independent Counsel, such Independent Counsel shall be selected by the Board and
approved by Indemnitee.  Upon failure of the Board to so select such Independent
Counsel or upon failure of Indemnitee to so approve of the choice thereof, such
Independent Counsel shall be selected by a neutral third party mutually
agreeable among the Board and the Indemnitee to make such selection.
<PAGE>

Page 6

     (d)  If the determination made pursuant to Section 9(b) is that Indemnitee
is not entitled to indemnification to the full extent of Indemnitee's request,
Indemnitee shall have the right to seek entitlement to indemnification in
accordance with the procedures set forth in Section 10 hereof.

     (e)  If the person or persons empowered pursuant to Section 9(b) hereof to
make a determination with respect to entitlement to indemnification shall have
failed to make the requested determination within 60 days after receipt by the
Company of such request, the requisite determination of entitlement to
indemnification shall be deemed to have been made and Indemnitee shall be
absolutely entitled to such indemnification, absent (i) misrepresentation by
Indemnitee of a material fact in the request for indemnification or (ii) a final
judicial determination that all or any part of such indemnification is expressly
prohibited by law.

     (f)  The termination of any Proceeding by judgment, order, settlement or
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
                              ---------------
itself, adversely affect the rights of Indemnitee to indemnification hereunder,
except as may be specifically provided herein, or create a presumption that
Indemnitee did not act in good faith and in a manner which Indemnitee reasonably
believed to be in or not opposed to the best interests of the Company or create
a presumption that (with respect to any criminal action or Proceeding)
Indemnitee had reasonable cause to believe that Indemnitee's conduct was
unlawful.

     (g)  For purposes of any determination of good faith hereunder, Indemnitee
shall be deemed to have acted in good faith if in taking an action Indemnitee
relied on the records or books of account of the Company or an Affiliate,
including financial statements, or on information supplied to Indemnitee by the
officers of the Company or an Affiliate in the course of their duties, or on the
advice of legal counsel for the Company or an Affiliate or on information or
records given or reports made to the Company or an Affiliate by an independent
certified public accountant or by an appraiser or other expert selected with
reasonable care by the Company or an Affiliate.  The Company shall have the
burden of establishing the absence of good faith.  The provisions of this
Section 9(g) shall not be deemed to be exclusive or to limit in any way the
other circumstances in which the Indemnitee may be deemed to have met the
applicable standard of conduct set forth in this Agreement.

     (h)  The knowledge and/or actions, or failure to act, of any director,
officer, agent or employee of the Company or an Affiliate shall not be imputed
to Indemnitee for purposes of determining the right to indemnification under
this Agreement.

     10. Remedies in Cases of Determination Not to Indemnify or to Advance
         -----------------------------------------------------------------
Expenses. (a)  In the event that (i) a determination is made that Indemnitee is
- --------
<PAGE>

Page 7

not entitled to indemnification hereunder, (ii) advances are not made pursuant
to Section 8 hereof or (iii) payment has not been timely made following a
determination of entitlement to indemnification pursuant to Section 9 hereof,
Indemnitee shall be entitled to seek an adjudication in an appropriate court of
the State of Nevada or any other court of competent jurisdiction as to
Indemnitee's entitlement to such indemnification or advance.

     (b)  In the event a determination has been made in accordance with the
procedures set forth in Section 9 hereof, in whole or in part, that Indemnitee
is not entitled to indemnification, any judicial proceeding or arbitration
referred to in paragraph (a) of this Section 10 shall be de novo and Indemnitee
                                                         -- ----
shall not be prejudiced by reason of any such prior determination that
Indemnitee is not entitled to indemnification, and the Company shall bear the
burdens of proof specified in paragraphs 6 and 9 hereof in such proceeding.

     (c)  If a determination is made or deemed to have been made pursuant to
the terms of Section 9 or 10 hereof that Indemnitee is entitled to
indemnification, the Company shall be bound by such determination in any
judicial proceeding or arbitration in the absence of (i) a misrepresentation of
a material fact by Indemnitee or (ii) a final judicial determination that all or
any part of such indemnification is expressly prohibited by law.

     (d)  The Company and Indemnitee agree that they shall be precluded from
asserting that the procedures and presumptions of this Agreement are not valid,
binding and enforceable.  The Company and Indemnitee further agree to stipulate
in any such court that the Company and Indemnitee are bound by all of the
provisions of this Agreement and are precluded from making any assertion to the
contrary.

     (e)  To the extent deemed appropriate by the court, interest shall be paid
by the Company to Indemnitee at a rate equal to the average Federal Funds rate
in effect during the period commencing with the date on which Indemnitee
requested indemnification (or reimbursement or advance of an Expense) and ending
with the date on which such payment is made to Indemnitee by the Company (the
"Interest Period") as published by the Wall Street Journal plus four percent 4%
and shall apply to all amounts for which the Company indemnifies or is obliged
to indemnify the Indemnitee over the duration of the Interest Period.

     11. Expenses Incurred by Indemnitee to Enforce this Agreement.  All
         ---------------------------------------------------------
Expenses incurred by Indemnitee in connection with the preparation and
submission of Indemnitee's request for indemnification hereunder shall be borne
by the Company.  In the event that Indemnitee is a party to or intervenes in any
proceeding in which the validity or enforceability of this Agreement is at issue
or seeks an adjudication to enforce Indemnitee's rights under, or to recover
damages for breach of, this Agreement, Indemnitee, if Indemnitee prevails in
<PAGE>

Page 8

whole in such action, shall be entitled to recover from the Company, and shall
be indemnified by the Company against, any Expenses incurred by Indemnitee.  If
it is determined that Indemnitee is entitled to indemnification for part (but
not all) of the indemnification so requested, Expenses incurred in seeking
enforcement of such partial indemnification shall be reasonably prorated among
the claims, issues or matters for which the Indemnitee is entitled to
indemnification and for claims, issues or matters for which the Indemnitee is
not so entitled.

     12. Non-Exclusivity.  The rights of indemnification and to receive advances
         ---------------
as provided by this Agreement shall not be deemed exclusive of any other rights
to which Indemnitee may at any time be entitled under or by reason of applicable
law, any certificate of incorporation or by-laws, any agreement, any vote of
stockholders or any resolution of directors or otherwise.  To the extent
Indemnitee would be prejudiced thereby, no amendment, alteration, rescission or
replacement of this Agreement or any provision hereof shall be effective as to
Indemnitee with respect to any action taken or omitted by such Indemnitee in
Indemnitee's position with the Company or an Affiliate or any other entity which
Indemnitee is or was serving at the request of the Company prior to such
amendment, alteration, rescission or replacement.

     13. Duration of Agreement.  This Agreement shall apply to any claim
         ---------------------
asserted and any Losses and Expenses incurred in connection with any claim
asserted on or after the effective date of this Agreement and shall continue
until and terminate upon the later of:  (a) 10 years after Indemnitee has ceased
to occupy any of the positions or have any of the relationships described
herein; or (b) one year after the final termination of all pending or threatened
Proceedings of the kind described herein with respect to Indemnitee.  This
Agreement shall be binding upon the Company and its successors and assigns and
shall inure to the benefit of Indemnitee and Indemnitee's spouse, assigns,
heirs, devisee, executors, administrators or other legal representatives.

     14. Severability.  Should any part, term or condition hereof be declared
         ------------
illegal or unenforceable or in conflict with any other law, the validity of the
remaining portions or provisions of this Agreement shall not be affected
thereby, and the illegal or unenforceable portions of the Agreement shall be and
hereby are redrafted to conform with applicable law, while leaving the remaining
portions of this Agreement intact.

     15. Counterparts.  This Agreement may be executed in several counterparts,
         ------------
each of which shall be deemed an original, but all of which together shall
constitute one and the same document.

     16. Headings.  Section headings are for convenience only and do not control
         --------
or affect meaning or interpretation of any terms or provisions of this
Agreement.
<PAGE>

Page 9

     17. Modification and Waiver.  No supplement, modification or amendment of
         -----------------------
this Agreement shall be binding unless executed in writing by each of the
parties hereto.

     18. No Duplicative Payment.  The Company shall not be liable under this
         ----------------------
Agreement to make any payment of amounts otherwise indemnifiable hereunder if
and to the extent that Indemnitee has otherwise actually received such payment
(net of Expenses incurred in collecting such payment) under this Agreement, any
insurance policy, contract, agreement or otherwise.

     19. Notices.  All notices, requests, demands and other communications
         -------
provided for by this Agreement shall be in writing (including telecopier or
similar writing) and shall be deemed to have been given at the time when mailed
in a registered or certified postpaid envelope in any general or branch office
of the United States Postal Service or Canada Post, or sent by Federal Express
or other similar overnight courier service, addressed to the address of the
parties stated below or to such changed address as such party may have fixed by
notice or, if given by telecopier, when such telecopy is transmitted and the
appropriate answer back is received.

     (a)  If to Indemnitee, to the address appearing on the signature page
          hereof.

     (b)  If to the Company to:

          PC-EPhone, Inc.
          1388 - 885 West Georgia St.
          Vancouver, British Columbia, Canada V6C 3E8
          Attention: Corporate Secretary
          ---------

     20. GOVERNING LAW.  THE PARTIES AGREE THAT THIS AGREEMENT SHALL BE GOVERNED
          -------------
BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE
STATE OF NEVADA WITHOUT GIVING EFFECT TO THE CONFLICTS OF LAWS PRINCIPLES
THEREOF.

     21. Entire Agreement.  Subject to the provisions of Section 12 hereof, this
         ----------------
Agreement constitutes the entire understanding between the parties and
supersedes all proposals, commitments, writings, negotiations and
understandings, oral and written, and all other communications between the
parties relating to the subject matter of this Agreement.  This Agreement may
not be amended or otherwise modified except in writing duly executed by all of
the parties.  A waiver by any party of any breach or violation of this Agreement
shall not be deemed or construed as a waiver of any subsequent breach or
violation thereof.
<PAGE>

Page 10


                          [Signature Page Follows]
<PAGE>

Page 11

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

                                       PC-EPHONE, INC.


                                       By    /s/ Douglas Yee
                                         -----------------------------
                                       Name:     Douglas Yee
                                       Title:    President


                                       INDEMNITEE:


                                       By    /s/ Douglas Yee
                                         -----------------------------
                                       Name:     Douglas Yee
                                       Title:    President
                                       Address:  2505 East 5th Avenue
                                                 Vancouver, BC V5M 1M8

<PAGE>

                                                                    Exhibit 10.2

                            INDEMNIFICATION AGREEMENT
                            -------------------------


     INDEMNIFICATION AGREEMENT, dated as of this 1st day of March, 2001, by and
between PC-EPhone, Inc., a Nevada corporation (the "Company"), and the director
and/or officer whose name appears on the signature page of this Agreement
("Indemnitee").

                                   RECITALS
                                   --------

     A.  Highly competent persons are becoming more reluctant to serve as
directors or officers or in other capacities unless they are provided with
reasonable protection through insurance or indemnification against risks of
claims and actions against them arising out of their service to and activities
on behalf of the corporations.

     B.  The Board of Directors of the Company (the "Board" or the "Board of
Directors") has determined that the Company should act to assure its directors
and officers that there will be increased certainty of such protection in the
future.

     C.  It is reasonable, prudent and necessary for the Company contractually
to obligate itself to indemnify such persons to the fullest extent permitted by
applicable law so that they will serve or continue to serve the Company free
from undue concern that they will not be so indemnified.

     D.  Indemnitee is willing to serve, to continue to serve and to take on
additional service for or on behalf of the Company on the condition that
Indemnitee be so indemnified.

                                  AGREEMENT
                                  ---------

     In consideration of the premises and the covenants contained herein, the
Company and Indemnitee do hereby covenant and agree as follows:

     1.  Definitions.  For purposes of this Agreement:
         -----------

     (a)  "Affiliate" shall mean any corporation, partnership, joint venture,
trust or other enterprise in respect of which the Indemnitee is or was or will
be serving as a director, officer, advisory director or Board Committee member
at the request of the Company, and including, but not limited to, any employee
benefit plan of the Company or any of the foregoing.
<PAGE>

     (b)  "Disinterested Director" shall mean a director of the Company who is
not or was not a party to the Proceeding in respect of which indemnification is
being sought by Indemnitee.

     (c)  "Expenses" shall include all attorneys' fees and costs, retainers,
court costs, transcripts, fees of experts, witness fees, travel expenses,
duplicating costs, printing and binding costs, telephone charges, postage,
delivery service fees and all other disbursements or expenses incurred in
connection with asserting or defending claims.

     (d)  "Independent Counsel" shall mean a law firm or lawyer that neither is
presently nor in the past five years has been retained to represent:  (i) the
Company or Indemnitee in any matter material to any such party or (ii) any other
party to the Proceeding giving rise to a claim for indemnification hereunder.
Notwithstanding the foregoing, the term "Independent Counsel" shall not include
any firm or person who, under the applicable standards of professional conduct
then prevailing, would have a conflict of interest in representing any of the
Company or Indemnitee in an action to determine Indemnitee's right to
indemnification under this Agreement.  All Expenses of the Independent Counsel
incurred in connection with acting pursuant to this Agreement shall be borne by
the Company.

     (e)  "Losses" shall mean all losses, claims, liabilities, judgments, fines,
penalties and amounts paid in settlement in connection with any Proceeding.

     (f)  "Proceeding" includes any action, suit, arbitration, alternate dispute
resolution mechanism, investigation, administrative hearing or any other
proceeding whether civil, criminal, administrative or investigative; provided,
                                                                     --------
however, that the term "Proceeding" shall include any action instituted by an
- -------
Indemnitee (other than an action to enforce indemnification rights under this
Agreement) only if such action is authorized by the Board of Directors.

     2.  Service by Indemnitee.  Indemnitee agrees to begin or continue to serve
            ---------------------
the Company or an Affiliate as a director and/or officer.  Notwithstanding
anything contained herein, this Agreement shall not create a contract of
employment between the Company and Indemnitee, and the termination of
Indemnitee's relationship with the Company or an Affiliate by either party
hereto shall not be restricted by this Agreement.

     3.  Indemnification.  The Company agrees to indemnify Indemnitee for, and
            ---------------
hold Indemnitee harmless from and against, any Losses or Expenses at any time
incurred by or assessed against Indemnitee arising out of or in connection with
the service of Indemnitee as a director, advisory director, Board Committee
member, officer, employee or agent of the Company or of an Affiliate
(collectively referred to as an "Officer or Director of the Company or of an
Affiliate"), whether the basis of such proceeding is alleged action in an

<PAGE>

official capacity or in any other capacity while serving as an Officer or
Director of the Company or of an Affiliate, to the fullest extent permitted by
the laws of the State of Nevada in effect on the date hereof or as such laws may
from time to time hereafter be amended to increase the scope of such permitted
indemnification.  Without diminishing the scope of the indemnification provided
by this Section 3, the rights of indemnification of Indemnitee provided
hereunder shall include but shall not be limited to those rights set forth
hereinafter.

     4.  Action or Proceeding Other Than an Action by or in the Right of the
         -------------------------------------------------------------------
Company.  Indemnitee shall be entitled to the indemnification rights provided
- -------
herein if Indemnitee is a person who was or is made a party or is threatened to
be made a party to any pending, completed or threatened Proceeding, other than
an action by or in the right of the Company, by reason of (a) the fact that
Indemnitee is or was an Officer or Director of the Company or of an Affiliate or
(b) anything done or not done by Indemnitee in any such capacity.  Pursuant to
this Section, Indemnitee shall be indemnified against Losses or Expenses
incurred by Indemnitee or on Indemnitee's behalf in connection with any
Proceeding, if Indemnitee acted in good faith and in a manner Indemnitee
reasonably believed to be in or not opposed to the best interests of the Company
and, with respect to any criminal Proceeding, had no reasonable cause to believe
his conduct was unlawful.

     5.  Actions by or in the Right of the Company. Indemnitee shall be entitled
         -----------------------------------------
to the indemnification rights provided herein if Indemnitee is a person who was
or is made a party or is threatened to be made a party to any pending, completed
or threatened Proceeding brought by or in the right of the Company to procure a
judgment in its favor by reason of (a) the fact that Indemnitee is or was an
Officer or Director of the Company or of an Affiliate or (b) anything done or
not done by Indemnitee in any such capacity.  Pursuant to this Section,
Indemnitee shall be indemnified against Losses or Expenses actually and
reasonably incurred by Indemnitee or on Indemnitee's behalf in connection with
any Proceeding if Indemnitee acted in good faith and in a manner Indemnitee
reasonably believed to be in or not opposed to the best interests of the
Company.  Notwithstanding the foregoing provisions of this Section, no such
indemnification shall be made in respect of any claim, issue or matter as to
which Nevada law expressly prohibits such indemnification by reason of an
adjudication of liability of Indemnitee to the Company; provided, however, that
                                                        --------  -------
in such event such indemnification shall nevertheless be made by the Company to
the extent that the court in which such action or suit was brought shall
determine equitable under the circumstances.

     6.  Indemnification for Losses and Expenses of Party Who is Wholly or
         -----------------------------------------------------------------
Partly Successful.  Notwithstanding any provision of this Agreement, to the
- -----------------
extent that Indemnitee has been wholly successful on the merits or otherwise
absolved in any Proceeding on any claim, issue or matter, Indemnitee shall be
indemnified against all Losses or Expenses actually and reasonably incurred by
Indemnitee or on Indemnitee's behalf in connection therewith.  If Indemnitee is

<PAGE>

not wholly successful in such Proceeding but is successful, on the merits or
otherwise, as to one or more but less than all claims, issues or matters in such
Proceeding, the Company agrees to indemnify Indemnitee, to the maximum extent
permitted by law, against all Losses and Expenses incurred by Indemnitee in
connection with each successfully resolved claim, issue or matter.  In any
review or Proceeding to determine the extent of indemnification, the Company
shall bear the burden of proving any lack of success and which amounts sought in
indemnity are allocable to claims, issues or matters which were not successfully
resolved.  For purposes of this Section and without limitation, the termination
of any such claim, issue or matter by dismissal with or without prejudice shall
be deemed to be a successful resolution as to such claim, issue or matter.

     7.  Payment for Expenses of a Witness.  Notwithstanding any other provision
         ---------------------------------
of this Agreement, to the extent that Indemnitee is, by reason of the fact that
Indemnitee is or was an Officer or Director of the Company or of an Affiliate, a
witness in any Proceeding, the Company agrees to pay to Indemnitee all Expenses
actually and reasonably incurred by Indemnitee or on Indemnitee's behalf in
connection therewith.

     8.  Advancement of Expenses and Costs.  All Expenses incurred by or on
         ---------------------------------
behalf of Indemnitee (or reasonably expected by Indemnitee to be incurred by
Indemnitee within three months) in connection with any Proceeding shall be paid
promptly by the Company, and in any event in advance of the final disposition of
such Proceeding within sixty days after the receipt by the Company of a
statement or statements from Indemnitee requesting from time to time such
advance or advances, whether or not a determination to indemnify has been made
under Section 9.  Such statement or statements shall evidence such Expenses
incurred (or reasonably expected to be incurred) by Indemnitee in connection
therewith and shall include or be accompanied by a written undertaking by or on
behalf of Indemnitee to repay such amount if it shall ultimately be determined
that Indemnitee is not entitled to be indemnified therefor pursuant to the terms
of this Agreement.  The right to indemnification of advances as granted by this
Section 8 shall be enforceable by the director or officer in any court of
competent jurisdiction, if the Company denies such request, in whole or in part,
or if no disposition thereof is made within 60 days.  Such person's costs and
expenses incurred in connection with successfully establishing his/her right to
indemnification, in whole or in part, in any such action shall also be
indemnified by the Company.  It shall be a defense to any such action seeking an
adjudication or award in arbitration pursuant to this Agreement (other than an
action brought to enforce a claim for the advance of costs, charges and expenses
under this Section 8 where the required undertaking, if any, has been received
by the Company) that the claimant has not met the standard of conduct set forth
in the Nevada General Corporation Law, as the same exists or hereafter may be
amended (but, in the case of any such amendment, only to the extent that such
amendment permits the Company to provide broader indemnification rights than

<PAGE>

said law permitted the Company to provide prior to such amendment), but the
burden of proving such defense shall be on the Company.  Neither the failure of
the Company (including its Board of Directors, its independent legal counsel and
its stockholders) to have made a determination prior to the commencement of such
action that indemnification of the claimant is proper in the circumstances
because he/she has met the applicable standard of conduct set forth in the
Nevada General Corporation Law, as the same exists or hereafter may be amended
(but, in the case of any such amendment, only to the extent that such amendment
permits the Company to provide broader indemnification rights that said law
permitted the Company to provide prior to such amendment), nor the fact that
there has been an actual determination by the Company (including its Board of
Directors, its independent legal counsel and its stockholders) that the claimant
has not met such applicable standard of conduct, shall be a defense to the
action or create a presumption that the claimant has not met the applicable
standard of conduct.

     9.  Procedure for Determination of Entitlement to Indemnification.  (a)
         -------------------------------------------------------------
When seeking indemnification under this Agreement (which shall not include in
any case the right of Indemnitee to receive payments pursuant to Section 7 and
Section 8 hereof, which shall not be subject to this Section 9), Indemnitee
shall submit a written request for indemnification to the Company.  Such request
shall include documentation or information which is reasonably necessary for the
Company to make a determination of Indemnitee's entitlement to indemnification
hereunder and which is reasonably available to Indemnitee.  Determination of
Indemnitee's entitlement to indemnification shall be made promptly, but in no
event later than 60 days after receipt by the Company of Indemnitee's written
request for indemnification.  The Secretary of the Company shall, promptly upon
receipt of Indemnitee's request for indemnification, advise the Board that
Indemnitee has made such request for indemnification.

     (b)  The entitlement of Indemnitee to indemnification under this Agreement
in respect of any pending, contemplated or threatened Proceeding shall be
determined in the specific case by (a) the Board of Directors by a majority vote
of a quorum consisting of those directors who were not party to such Proceeding,
or (b) if such qourum is not obtainable, or if a quorum of disinterested
directors so directs, by Independent Counsel in a written opinion, or (c) by the
stockholders.

     (c)  In the event the determination of entitlement is to be made by
Independent Counsel, such Independent Counsel shall be selected by the Board and
approved by Indemnitee.  Upon failure of the Board to so select such Independent
Counsel or upon failure of Indemnitee to so approve of the choice thereof, such
Independent Counsel shall be selected by a neutral third party mutually
agreeable among the Board and the Indemnitee to make such selection.

<PAGE>

     (d)  If the determination made pursuant to Section 9(b) is that Indemnitee
is not entitled to indemnification to the full extent of Indemnitee's request,
Indemnitee shall have the right to seek entitlement to indemnification in
accordance with the procedures set forth in Section 10 hereof.

     (e)  If the person or persons empowered pursuant to Section 9(b) hereof to
make a determination with respect to entitlement to indemnification shall have
failed to make the requested determination within 60 days after receipt by the
Company of such request, the requisite determination of entitlement to
indemnification shall be deemed to have been made and Indemnitee shall be
absolutely entitled to such indemnification, absent (i) misrepresentation by
Indemnitee of a material fact in the request for indemnification or (ii) a final
judicial determination that all or any part of such indemnification is expressly
prohibited by law.

     (f)  The termination of any Proceeding by judgment, order, settlement or
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
                              ---------------
itself, adversely affect the rights of Indemnitee to indemnification hereunder,
except as may be specifically provided herein, or create a presumption that
Indemnitee did not act in good faith and in a manner which Indemnitee reasonably
believed to be in or not opposed to the best interests of the Company or create
a presumption that (with respect to any criminal action or Proceeding)
Indemnitee had reasonable cause to believe that Indemnitee's conduct was
unlawful.

     (g)  For purposes of any determination of good faith hereunder, Indemnitee
shall be deemed to have acted in good faith if in taking an action Indemnitee
relied on the records or books of account of the Company or an Affiliate,
including financial statements, or on information supplied to Indemnitee by the
officers of the Company or an Affiliate in the course of their duties, or on the
advice of legal counsel for the Company or an Affiliate or on information or
records given or reports made to the Company or an Affiliate by an independent
certified public accountant or by an appraiser or other expert selected with
reasonable care by the Company or an Affiliate.  The Company shall have the
burden of establishing the absence of good faith.  The provisions of this
Section 9(g) shall not be deemed to be exclusive or to limit in any way the
other circumstances in which the Indemnitee may be deemed to have met the
applicable standard of conduct set forth in this Agreement.

     (h)  The knowledge and/or actions, or failure to act, of any director,
officer, agent or employee of the Company or an Affiliate shall not be imputed
to Indemnitee for purposes of determining the right to indemnification under
this Agreement.

     10. Remedies in Cases of Determination Not to Indemnify or to Advance
         -----------------------------------------------------------------
Expenses. (a)  In the event that (i) a determination is made that Indemnitee is
- --------

<PAGE>

not entitled to indemnification hereunder, (ii) advances are not made pursuant
to Section 8 hereof or (iii) payment has not been timely made following a
determination of entitlement to indemnification pursuant to Section 9 hereof,
Indemnitee shall be entitled to seek an adjudication in an appropriate court of
the State of Nevada or any other court of competent jurisdiction as to
Indemnitee's entitlement to such indemnification or advance.

     (b)  In the event a determination has been made in accordance with the
procedures set forth in Section 9 hereof, in whole or in part, that Indemnitee
is not entitled to indemnification, any judicial proceeding or arbitration
referred to in paragraph (a) of this Section 10 shall be de novo and Indemnitee
                                                         -- ----
shall not be prejudiced by reason of any such prior determination that
Indemnitee is not entitled to indemnification, and the Company shall bear the
burdens of proof specified in paragraphs 6 and 9 hereof in such proceeding.

     (c)  If a determination is made or deemed to have been made pursuant to
the terms of Section 9 or 10 hereof that Indemnitee is entitled to
indemnification, the Company shall be bound by such determination in any
judicial proceeding or arbitration in the absence of (i) a misrepresentation of
a material fact by Indemnitee or (ii) a final judicial determination that all or
any part of such indemnification is expressly prohibited by law.

     (d)  The Company and Indemnitee agree that they shall be precluded from
asserting that the procedures and presumptions of this Agreement are not valid,
binding and enforceable.  The Company and Indemnitee further agree to stipulate
in any such court that the Company and Indemnitee are bound by all of the
provisions of this Agreement and are precluded from making any assertion to the
contrary.

     (e)  To the extent deemed appropriate by the court, interest shall be paid
by the Company to Indemnitee at a rate equal to the average Federal Funds rate
in effect during the period commencing with the date on which Indemnitee
requested indemnification (or reimbursement or advance of an Expense) and ending
with the date on which such payment is made to Indemnitee by the Company (the
"Interest Period") as published by the Wall Street Journal plus four percent 4%
and shall apply to all amounts for which the Company indemnifies or is obliged
to indemnify the Indemnitee over the duration of the Interest Period.

     11. Expenses Incurred by Indemnitee to Enforce this Agreement.  All
         ---------------------------------------------------------
Expenses incurred by Indemnitee in connection with the preparation and
submission of Indemnitee's request for indemnification hereunder shall be borne
by the Company.  In the event that Indemnitee is a party to or intervenes in any
proceeding in which the validity or enforceability of this Agreement is at issue
or seeks an adjudication to enforce Indemnitee's rights under, or to recover
damages for breach of, this Agreement, Indemnitee, if Indemnitee prevails in

<PAGE>

whole in such action, shall be entitled to recover from the Company, and shall
be indemnified by the Company against, any Expenses incurred by Indemnitee.  If
it is determined that Indemnitee is entitled to indemnification for part (but
not all) of the indemnification so requested, Expenses incurred in seeking
enforcement of such partial indemnification shall be reasonably prorated among
the claims, issues or matters for which the Indemnitee is entitled to
indemnification and for claims, issues or matters for which the Indemnitee is
not so entitled.

     12. Non-Exclusivity.  The rights of indemnification and to receive advances
         ---------------
as provided by this Agreement shall not be deemed exclusive of any other rights
to which Indemnitee may at any time be entitled under or by reason of applicable
law, any certificate of incorporation or by-laws, any agreement, any vote of
stockholders or any resolution of directors or otherwise.  To the extent
Indemnitee would be prejudiced thereby, no amendment, alteration, rescission or
replacement of this Agreement or any provision hereof shall be effective as to
Indemnitee with respect to any action taken or omitted by such Indemnitee in
Indemnitee's position with the Company or an Affiliate or any other entity which
Indemnitee is or was serving at the request of the Company prior to such
amendment, alteration, rescission or replacement.

     13. Duration of Agreement.  This Agreement shall apply to any claim
         ---------------------
asserted and any Losses and Expenses incurred in connection with any claim
asserted on or after the effective date of this Agreement and shall continue
until and terminate upon the later of:  (a) 10 years after Indemnitee has ceased
to occupy any of the positions or have any of the relationships described
herein; or (b) one year after the final termination of all pending or threatened
Proceedings of the kind described herein with respect to Indemnitee.  This
Agreement shall be binding upon the Company and its successors and assigns and
shall inure to the benefit of Indemnitee and Indemnitee's spouse, assigns,
heirs, devisee, executors, administrators or other legal representatives.

     14. Severability.  Should any part, term or condition hereof be declared
         ------------
illegal or unenforceable or in conflict with any other law, the validity of the
remaining portions or provisions of this Agreement shall not be affected
thereby, and the illegal or unenforceable portions of the Agreement shall be and
hereby are redrafted to conform with applicable law, while leaving the remaining
portions of this Agreement intact.

     15. Counterparts.  This Agreement may be executed in several counterparts,
         ------------
each of which shall be deemed an original, but all of which together shall
constitute one and the same document.

     16. Headings.  Section headings are for convenience only and do not control
         --------
or affect meaning or interpretation of any terms or provisions of this
Agreement.

<PAGE>

     17. Modification and Waiver.  No supplement, modification or amendment of
         -----------------------
this Agreement shall be binding unless executed in writing by each of the
parties hereto.

     18. No Duplicative Payment.  The Company shall not be liable under this
         ----------------------
Agreement to make any payment of amounts otherwise indemnifiable hereunder if
and to the extent that Indemnitee has otherwise actually received such payment
(net of Expenses incurred in collecting such payment) under this Agreement, any
insurance policy, contract, agreement or otherwise.

     19. Notices.  All notices, requests, demands and other communications
         -------
provided for by this Agreement shall be in writing (including telecopier or
similar writing) and shall be deemed to have been given at the time when mailed
in a registered or certified postpaid envelope in any general or branch office
of the United States Postal Service or Canada Post, or sent by Federal Express
or other similar overnight courier service, addressed to the address of the
parties stated below or to such changed address as such party may have fixed by
notice or, if given by telecopier, when such telecopy is transmitted and the
appropriate answer back is received.

     (a)  If to Indemnitee, to the address appearing on the signature page
          hereof.

     (b)  If to the Company to:

          PC-EPhone, Inc.
          1388 - 885 West Georgia St.
          Vancouver, British Columbia, Canada V6C 3E8
          Attention: Corporate Secretary
          ---------

     20. GOVERNING LAW.  THE PARTIES AGREE THAT THIS AGREEMENT SHALL BE GOVERNED
          -------------
BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE
STATE OF NEVADA WITHOUT GIVING EFFECT TO THE CONFLICTS OF LAWS PRINCIPLES
THEREOF.

     21. Entire Agreement.  Subject to the provisions of Section 12 hereof, this
         ----------------
Agreement constitutes the entire understanding between the parties and
supersedes all proposals, commitments, writings, negotiations and
understandings, oral and written, and all other communications between the
parties relating to the subject matter of this Agreement.  This Agreement may
not be amended or otherwise modified except in writing duly executed by all of
the parties.  A waiver by any party of any breach or violation of this Agreement
shall not be deemed or construed as a waiver of any subsequent breach or
violation thereof.

<PAGE>

                          [Signature Page Follows]
<PAGE>

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

                                       PC-EPHONE, INC.


                                       By    /s/ Douglas Yee
                                         -----------------------------
                                       Name:     Douglas Yee
                                       Title:    President


                                       INDEMNITEE:


                                       By    /s/ Negar Towfigh
                                         -----------------------------
                                       Name:     Negar Towfigh
                                       Title:    Director, Secretary
                                       Address:  1403 Chippendale Road
                                                 West Vancouver, BC V7S 2N7

<PAGE>

                                                                    Exhibit 10.3


                            INDEMNIFICATION AGREEMENT
                            -------------------------


     INDEMNIFICATION AGREEMENT, dated as of this 1st day of March, 2001, by and
between PC-EPhone, Inc., a Nevada corporation (the "Company"), and the director
and/or officer whose name appears on the signature page of this Agreement
("Indemnitee").

                                   RECITALS
                                   --------

     A.  Highly competent persons are becoming more reluctant to serve as
directors or officers or in other capacities unless they are provided with
reasonable protection through insurance or indemnification against risks of
claims and actions against them arising out of their service to and activities
on behalf of the corporations.

     B.  The Board of Directors of the Company (the "Board" or the "Board of
Directors") has determined that the Company should act to assure its directors
and officers that there will be increased certainty of such protection in the
future.

     C.  It is reasonable, prudent and necessary for the Company contractually
to obligate itself to indemnify such persons to the fullest extent permitted by
applicable law so that they will serve or continue to serve the Company free
from undue concern that they will not be so indemnified.

     D.  Indemnitee is willing to serve, to continue to serve and to take on
additional service for or on behalf of the Company on the condition that
Indemnitee be so indemnified.

                                  AGREEMENT
                                  ---------

     In consideration of the premises and the covenants contained herein, the
Company and Indemnitee do hereby covenant and agree as follows:

     1.  Definitions.  For purposes of this Agreement:
         -----------

     (a)  "Affiliate" shall mean any corporation, partnership, joint venture,
trust or other enterprise in respect of which the Indemnitee is or was or will
be serving as a director, officer, advisory director or Board Committee member
at the request of the Company, and including, but not limited to, any employee
benefit plan of the Company or any of the foregoing.
<PAGE>

     (b)  "Disinterested Director" shall mean a director of the Company who is
not or was not a party to the Proceeding in respect of which indemnification is
being sought by Indemnitee.

     (c)  "Expenses" shall include all attorneys' fees and costs, retainers,
court costs, transcripts, fees of experts, witness fees, travel expenses,
duplicating costs, printing and binding costs, telephone charges, postage,
delivery service fees and all other disbursements or expenses incurred in
connection with asserting or defending claims.

     (d)  "Independent Counsel" shall mean a law firm or lawyer that neither is
presently nor in the past five years has been retained to represent:  (i) the
Company or Indemnitee in any matter material to any such party or (ii) any other
party to the Proceeding giving rise to a claim for indemnification hereunder.
Notwithstanding the foregoing, the term "Independent Counsel" shall not include
any firm or person who, under the applicable standards of professional conduct
then prevailing, would have a conflict of interest in representing any of the
Company or Indemnitee in an action to determine Indemnitee's right to
indemnification under this Agreement.  All Expenses of the Independent Counsel
incurred in connection with acting pursuant to this Agreement shall be borne by
the Company.

     (e)  "Losses" shall mean all losses, claims, liabilities, judgments, fines,
penalties and amounts paid in settlement in connection with any Proceeding.

     (f)  "Proceeding" includes any action, suit, arbitration, alternate dispute
resolution mechanism, investigation, administrative hearing or any other
proceeding whether civil, criminal, administrative or investigative; provided,
                                                                     --------
however, that the term "Proceeding" shall include any action instituted by an
- -------
Indemnitee (other than an action to enforce indemnification rights under this
Agreement) only if such action is authorized by the Board of Directors.

     2.  Service by Indemnitee.  Indemnitee agrees to begin or continue to serve
            ---------------------
the Company or an Affiliate as a director and/or officer.  Notwithstanding
anything contained herein, this Agreement shall not create a contract of
employment between the Company and Indemnitee, and the termination of
Indemnitee's relationship with the Company or an Affiliate by either party
hereto shall not be restricted by this Agreement.

     3.  Indemnification.  The Company agrees to indemnify Indemnitee for, and
            ---------------
hold Indemnitee harmless from and against, any Losses or Expenses at any time
incurred by or assessed against Indemnitee arising out of or in connection with
the service of Indemnitee as a director, advisory director, Board Committee
member, officer, employee or agent of the Company or of an Affiliate
(collectively referred to as an "Officer or Director of the Company or of an
Affiliate"), whether the basis of such proceeding is alleged action in an
<PAGE>

official capacity or in any other capacity while serving as an Officer or
Director of the Company or of an Affiliate, to the fullest extent permitted by
the laws of the State of Nevada in effect on the date hereof or as such laws may
from time to time hereafter be amended to increase the scope of such permitted
indemnification.  Without diminishing the scope of the indemnification provided
by this Section 3, the rights of indemnification of Indemnitee provided
hereunder shall include but shall not be limited to those rights set forth
hereinafter.

     4.  Action or Proceeding Other Than an Action by or in the Right of the
         -------------------------------------------------------------------
Company.  Indemnitee shall be entitled to the indemnification rights provided
- -------
herein if Indemnitee is a person who was or is made a party or is threatened to
be made a party to any pending, completed or threatened Proceeding, other than
an action by or in the right of the Company, by reason of (a) the fact that
Indemnitee is or was an Officer or Director of the Company or of an Affiliate or
(b) anything done or not done by Indemnitee in any such capacity.  Pursuant to
this Section, Indemnitee shall be indemnified against Losses or Expenses
incurred by Indemnitee or on Indemnitee's behalf in connection with any
Proceeding, if Indemnitee acted in good faith and in a manner Indemnitee
reasonably believed to be in or not opposed to the best interests of the Company
and, with respect to any criminal Proceeding, had no reasonable cause to believe
his conduct was unlawful.

     5.  Actions by or in the Right of the Company. Indemnitee shall be entitled
         -----------------------------------------
to the indemnification rights provided herein if Indemnitee is a person who was
or is made a party or is threatened to be made a party to any pending, completed
or threatened Proceeding brought by or in the right of the Company to procure a
judgment in its favor by reason of (a) the fact that Indemnitee is or was an
Officer or Director of the Company or of an Affiliate or (b) anything done or
not done by Indemnitee in any such capacity.  Pursuant to this Section,
Indemnitee shall be indemnified against Losses or Expenses actually and
reasonably incurred by Indemnitee or on Indemnitee's behalf in connection with
any Proceeding if Indemnitee acted in good faith and in a manner Indemnitee
reasonably believed to be in or not opposed to the best interests of the
Company.  Notwithstanding the foregoing provisions of this Section, no such
indemnification shall be made in respect of any claim, issue or matter as to
which Nevada law expressly prohibits such indemnification by reason of an
adjudication of liability of Indemnitee to the Company; provided, however, that
                                                        --------  -------
in such event such indemnification shall nevertheless be made by the Company to
the extent that the court in which such action or suit was brought shall
determine equitable under the circumstances.

     6.  Indemnification for Losses and Expenses of Party Who is Wholly or
         -----------------------------------------------------------------
Partly Successful.  Notwithstanding any provision of this Agreement, to the
- -----------------
extent that Indemnitee has been wholly successful on the merits or otherwise
absolved in any Proceeding on any claim, issue or matter, Indemnitee shall be
indemnified against all Losses or Expenses actually and reasonably incurred by
Indemnitee or on Indemnitee's behalf in connection therewith.  If Indemnitee is
<PAGE>

not wholly successful in such Proceeding but is successful, on the merits or
otherwise, as to one or more but less than all claims, issues or matters in such
Proceeding, the Company agrees to indemnify Indemnitee, to the maximum extent
permitted by law, against all Losses and Expenses incurred by Indemnitee in
connection with each successfully resolved claim, issue or matter.  In any
review or Proceeding to determine the extent of indemnification, the Company
shall bear the burden of proving any lack of success and which amounts sought in
indemnity are allocable to claims, issues or matters which were not successfully
resolved.  For purposes of this Section and without limitation, the termination
of any such claim, issue or matter by dismissal with or without prejudice shall
be deemed to be a successful resolution as to such claim, issue or matter.

     7.  Payment for Expenses of a Witness.  Notwithstanding any other provision
         ---------------------------------
of this Agreement, to the extent that Indemnitee is, by reason of the fact that
Indemnitee is or was an Officer or Director of the Company or of an Affiliate, a
witness in any Proceeding, the Company agrees to pay to Indemnitee all Expenses
actually and reasonably incurred by Indemnitee or on Indemnitee's behalf in
connection therewith.

     8.  Advancement of Expenses and Costs.  All Expenses incurred by or on
         ---------------------------------
behalf of Indemnitee (or reasonably expected by Indemnitee to be incurred by
Indemnitee within three months) in connection with any Proceeding shall be paid
promptly by the Company, and in any event in advance of the final disposition of
such Proceeding within sixty days after the receipt by the Company of a
statement or statements from Indemnitee requesting from time to time such
advance or advances, whether or not a determination to indemnify has been made
under Section 9.  Such statement or statements shall evidence such Expenses
incurred (or reasonably expected to be incurred) by Indemnitee in connection
therewith and shall include or be accompanied by a written undertaking by or on
behalf of Indemnitee to repay such amount if it shall ultimately be determined
that Indemnitee is not entitled to be indemnified therefor pursuant to the terms
of this Agreement.  The right to indemnification of advances as granted by this
Section 8 shall be enforceable by the director or officer in any court of
competent jurisdiction, if the Company denies such request, in whole or in part,
or if no disposition thereof is made within 60 days.  Such person's costs and
expenses incurred in connection with successfully establishing his/her right to
indemnification, in whole or in part, in any such action shall also be
indemnified by the Company.  It shall be a defense to any such action seeking an
adjudication or award in arbitration pursuant to this Agreement (other than an
action brought to enforce a claim for the advance of costs, charges and expenses
under this Section 8 where the required undertaking, if any, has been received
by the Company) that the claimant has not met the standard of conduct set forth
in the Nevada General Corporation Law, as the same exists or hereafter may be
amended (but, in the case of any such amendment, only to the extent that such
amendment permits the Company to provide broader indemnification rights than
<PAGE>

said law permitted the Company to provide prior to such amendment), but the
burden of proving such defense shall be on the Company.  Neither the failure of
the Company (including its Board of Directors, its independent legal counsel and
its stockholders) to have made a determination prior to the commencement of such
action that indemnification of the claimant is proper in the circumstances
because he/she has met the applicable standard of conduct set forth in the
Nevada General Corporation Law, as the same exists or hereafter may be amended
(but, in the case of any such amendment, only to the extent that such amendment
permits the Company to provide broader indemnification rights that said law
permitted the Company to provide prior to such amendment), nor the fact that
there has been an actual determination by the Company (including its Board of
Directors, its independent legal counsel and its stockholders) that the claimant
has not met such applicable standard of conduct, shall be a defense to the
action or create a presumption that the claimant has not met the applicable
standard of conduct.

     9.  Procedure for Determination of Entitlement to Indemnification.  (a)
         -------------------------------------------------------------
When seeking indemnification under this Agreement (which shall not include in
any case the right of Indemnitee to receive payments pursuant to Section 7 and
Section 8 hereof, which shall not be subject to this Section 9), Indemnitee
shall submit a written request for indemnification to the Company.  Such request
shall include documentation or information which is reasonably necessary for the
Company to make a determination of Indemnitee's entitlement to indemnification
hereunder and which is reasonably available to Indemnitee.  Determination of
Indemnitee's entitlement to indemnification shall be made promptly, but in no
event later than 60 days after receipt by the Company of Indemnitee's written
request for indemnification.  The Secretary of the Company shall, promptly upon
receipt of Indemnitee's request for indemnification, advise the Board that
Indemnitee has made such request for indemnification.

     (b)  The entitlement of Indemnitee to indemnification under this Agreement
in respect of any pending, contemplated or threatened Proceeding shall be
determined in the specific case by (a) the Board of Directors by a majority vote
of a quorum consisting of those directors who were not party to such Proceeding,
or (b) if such qourum is not obtainable, or if a quorum of disinterested
directors so directs, by Independent Counsel in a written opinion, or (c) by the
stockholders.

     (c)  In the event the determination of entitlement is to be made by
Independent Counsel, such Independent Counsel shall be selected by the Board and
approved by Indemnitee.  Upon failure of the Board to so select such Independent
Counsel or upon failure of Indemnitee to so approve of the choice thereof, such
Independent Counsel shall be selected by a neutral third party mutually
agreeable among the Board and the Indemnitee to make such selection.
<PAGE>

     (d)  If the determination made pursuant to Section 9(b) is that Indemnitee
is not entitled to indemnification to the full extent of Indemnitee's request,
Indemnitee shall have the right to seek entitlement to indemnification in
accordance with the procedures set forth in Section 10 hereof.

     (e)  If the person or persons empowered pursuant to Section 9(b) hereof to
make a determination with respect to entitlement to indemnification shall have
failed to make the requested determination within 60 days after receipt by the
Company of such request, the requisite determination of entitlement to
indemnification shall be deemed to have been made and Indemnitee shall be
absolutely entitled to such indemnification, absent (i) misrepresentation by
Indemnitee of a material fact in the request for indemnification or (ii) a final
judicial determination that all or any part of such indemnification is expressly
prohibited by law.

     (f)  The termination of any Proceeding by judgment, order, settlement or
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
                              ---------------
itself, adversely affect the rights of Indemnitee to indemnification hereunder,
except as may be specifically provided herein, or create a presumption that
Indemnitee did not act in good faith and in a manner which Indemnitee reasonably
believed to be in or not opposed to the best interests of the Company or create
a presumption that (with respect to any criminal action or Proceeding)
Indemnitee had reasonable cause to believe that Indemnitee's conduct was
unlawful.

     (g)  For purposes of any determination of good faith hereunder, Indemnitee
shall be deemed to have acted in good faith if in taking an action Indemnitee
relied on the records or books of account of the Company or an Affiliate,
including financial statements, or on information supplied to Indemnitee by the
officers of the Company or an Affiliate in the course of their duties, or on the
advice of legal counsel for the Company or an Affiliate or on information or
records given or reports made to the Company or an Affiliate by an independent
certified public accountant or by an appraiser or other expert selected with
reasonable care by the Company or an Affiliate.  The Company shall have the
burden of establishing the absence of good faith.  The provisions of this
Section 9(g) shall not be deemed to be exclusive or to limit in any way the
other circumstances in which the Indemnitee may be deemed to have met the
applicable standard of conduct set forth in this Agreement.

     (h)  The knowledge and/or actions, or failure to act, of any director,
officer, agent or employee of the Company or an Affiliate shall not be imputed
to Indemnitee for purposes of determining the right to indemnification under
this Agreement.

     10. Remedies in Cases of Determination Not to Indemnify or to Advance
         -----------------------------------------------------------------
Expenses. (a)  In the event that (i) a determination is made that Indemnitee is
- --------
<PAGE>

not entitled to indemnification hereunder, (ii) advances are not made pursuant
to Section 8 hereof or (iii) payment has not been timely made following a
determination of entitlement to indemnification pursuant to Section 9 hereof,
Indemnitee shall be entitled to seek an adjudication in an appropriate court of
the State of Nevada or any other court of competent jurisdiction as to
Indemnitee's entitlement to such indemnification or advance.

     (b)  In the event a determination has been made in accordance with the
procedures set forth in Section 9 hereof, in whole or in part, that Indemnitee
is not entitled to indemnification, any judicial proceeding or arbitration
referred to in paragraph (a) of this Section 10 shall be de novo and Indemnitee
                                                         -- ----
shall not be prejudiced by reason of any such prior determination that
Indemnitee is not entitled to indemnification, and the Company shall bear the
burdens of proof specified in paragraphs 6 and 9 hereof in such proceeding.

     (c)  If a determination is made or deemed to have been made pursuant to
the terms of Section 9 or 10 hereof that Indemnitee is entitled to
indemnification, the Company shall be bound by such determination in any
judicial proceeding or arbitration in the absence of (i) a misrepresentation of
a material fact by Indemnitee or (ii) a final judicial determination that all or
any part of such indemnification is expressly prohibited by law.

     (d)  The Company and Indemnitee agree that they shall be precluded from
asserting that the procedures and presumptions of this Agreement are not valid,
binding and enforceable.  The Company and Indemnitee further agree to stipulate
in any such court that the Company and Indemnitee are bound by all of the
provisions of this Agreement and are precluded from making any assertion to the
contrary.

     (e)  To the extent deemed appropriate by the court, interest shall be paid
by the Company to Indemnitee at a rate equal to the average Federal Funds rate
in effect during the period commencing with the date on which Indemnitee
requested indemnification (or reimbursement or advance of an Expense) and ending
with the date on which such payment is made to Indemnitee by the Company (the
"Interest Period") as published by the Wall Street Journal plus four percent 4%
and shall apply to all amounts for which the Company indemnifies or is obliged
to indemnify the Indemnitee over the duration of the Interest Period.

     11. Expenses Incurred by Indemnitee to Enforce this Agreement.  All
         ---------------------------------------------------------
Expenses incurred by Indemnitee in connection with the preparation and
submission of Indemnitee's request for indemnification hereunder shall be borne
by the Company.  In the event that Indemnitee is a party to or intervenes in any
proceeding in which the validity or enforceability of this Agreement is at issue
or seeks an adjudication to enforce Indemnitee's rights under, or to recover
damages for breach of, this Agreement, Indemnitee, if Indemnitee prevails in
<PAGE>

whole in such action, shall be entitled to recover from the Company, and shall
be indemnified by the Company against, any Expenses incurred by Indemnitee.  If
it is determined that Indemnitee is entitled to indemnification for part (but
not all) of the indemnification so requested, Expenses incurred in seeking
enforcement of such partial indemnification shall be reasonably prorated among
the claims, issues or matters for which the Indemnitee is entitled to
indemnification and for claims, issues or matters for which the Indemnitee is
not so entitled.

     12. Non-Exclusivity.  The rights of indemnification and to receive advances
         ---------------
as provided by this Agreement shall not be deemed exclusive of any other rights
to which Indemnitee may at any time be entitled under or by reason of applicable
law, any certificate of incorporation or by-laws, any agreement, any vote of
stockholders or any resolution of directors or otherwise.  To the extent
Indemnitee would be prejudiced thereby, no amendment, alteration, rescission or
replacement of this Agreement or any provision hereof shall be effective as to
Indemnitee with respect to any action taken or omitted by such Indemnitee in
Indemnitee's position with the Company or an Affiliate or any other entity which
Indemnitee is or was serving at the request of the Company prior to such
amendment, alteration, rescission or replacement.

     13. Duration of Agreement.  This Agreement shall apply to any claim
         ---------------------
asserted and any Losses and Expenses incurred in connection with any claim
asserted on or after the effective date of this Agreement and shall continue
until and terminate upon the later of:  (a) 10 years after Indemnitee has ceased
to occupy any of the positions or have any of the relationships described
herein; or (b) one year after the final termination of all pending or threatened
Proceedings of the kind described herein with respect to Indemnitee.  This
Agreement shall be binding upon the Company and its successors and assigns and
shall inure to the benefit of Indemnitee and Indemnitee's spouse, assigns,
heirs, devisee, executors, administrators or other legal representatives.

     14. Severability.  Should any part, term or condition hereof be declared
         ------------
illegal or unenforceable or in conflict with any other law, the validity of the
remaining portions or provisions of this Agreement shall not be affected
thereby, and the illegal or unenforceable portions of the Agreement shall be and
hereby are redrafted to conform with applicable law, while leaving the remaining
portions of this Agreement intact.

     15. Counterparts.  This Agreement may be executed in several counterparts,
         ------------
each of which shall be deemed an original, but all of which together shall
constitute one and the same document.

     16. Headings.  Section headings are for convenience only and do not control
         --------
or affect meaning or interpretation of any terms or provisions of this
Agreement.
<PAGE>

     17. Modification and Waiver.  No supplement, modification or amendment of
         -----------------------
this Agreement shall be binding unless executed in writing by each of the
parties hereto.

     18. No Duplicative Payment.  The Company shall not be liable under this
         ----------------------
Agreement to make any payment of amounts otherwise indemnifiable hereunder if
and to the extent that Indemnitee has otherwise actually received such payment
(net of Expenses incurred in collecting such payment) under this Agreement, any
insurance policy, contract, agreement or otherwise.

     19. Notices.  All notices, requests, demands and other communications
         -------
provided for by this Agreement shall be in writing (including telecopier or
similar writing) and shall be deemed to have been given at the time when mailed
in a registered or certified postpaid envelope in any general or branch office
of the United States Postal Service or Canada Post, or sent by Federal Express
or other similar overnight courier service, addressed to the address of the
parties stated below or to such changed address as such party may have fixed by
notice or, if given by telecopier, when such telecopy is transmitted and the
appropriate answer back is received.

     (a)  If to Indemnitee, to the address appearing on the signature page
          hereof.

     (b)  If to the Company to:

          PC-EPhone, Inc.
          1388 - 885 West Georgia St.
          Vancouver, British Columbia, Canada V6C 3E8
          Attention: Corporate Secretary
          ---------

     20. GOVERNING LAW.  THE PARTIES AGREE THAT THIS AGREEMENT SHALL BE GOVERNED
          -------------
BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE
STATE OF NEVADA WITHOUT GIVING EFFECT TO THE CONFLICTS OF LAWS PRINCIPLES
THEREOF.

     21. Entire Agreement.  Subject to the provisions of Section 12 hereof, this
         ----------------
Agreement constitutes the entire understanding between the parties and
supersedes all proposals, commitments, writings, negotiations and
understandings, oral and written, and all other communications between the
parties relating to the subject matter of this Agreement.  This Agreement may
not be amended or otherwise modified except in writing duly executed by all of
the parties.  A waiver by any party of any breach or violation of this Agreement
shall not be deemed or construed as a waiver of any subsequent breach or
violation thereof.
<PAGE>

                          [Signature Page Follows]
<PAGE>

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

                                       PC-EPHONE, INC.


                                       By    /s/ Douglas Yee
                                         -----------------------------
                                       Name:     Douglas Yee
                                       Title:    President


                                       INDEMNITEE:


                                       By    /s/ Terence E. King
                                         -----------------------------
                                       Name:     Terence E. King
                                       Title:    Director
                                       Address:  1300-1111 West Georgia Street
                                                 Vancouver, BC V6E 4M3

<PAGE>

                                                                    Exhibit 10.4
                            INDEMNIFICATION AGREEMENT
                            -------------------------


     INDEMNIFICATION AGREEMENT, dated as of this 1st day of March, 2001, by and
between PC-EPhone, Inc., a Nevada corporation (the "Company"), and the director
and/or officer whose name appears on the signature page of this Agreement
("Indemnitee").

                                   RECITALS
                                   --------

     A.  Highly competent persons are becoming more reluctant to serve as
directors or officers or in other capacities unless they are provided with
reasonable protection through insurance or indemnification against risks of
claims and actions against them arising out of their service to and activities
on behalf of the corporations.

     B.  The Board of Directors of the Company (the "Board" or the "Board of
Directors") has determined that the Company should act to assure its directors
and officers that there will be increased certainty of such protection in the
future.

     C.  It is reasonable, prudent and necessary for the Company contractually
to obligate itself to indemnify such persons to the fullest extent permitted by
applicable law so that they will serve or continue to serve the Company free
from undue concern that they will not be so indemnified.

     D.  Indemnitee is willing to serve, to continue to serve and to take on
additional service for or on behalf of the Company on the condition that
Indemnitee be so indemnified.

                                  AGREEMENT
                                  ---------

     In consideration of the premises and the covenants contained herein, the
Company and Indemnitee do hereby covenant and agree as follows:

     1.  Definitions.  For purposes of this Agreement:
         -----------

     (a)  "Affiliate" shall mean any corporation, partnership, joint venture,
trust or other enterprise in respect of which the Indemnitee is or was or will
be serving as a director, officer, advisory director or Board Committee member
at the request of the Company, and including, but not limited to, any employee
benefit plan of the Company or any of the foregoing.
<PAGE>

     (b)  "Disinterested Director" shall mean a director of the Company who is
not or was not a party to the Proceeding in respect of which indemnification is
being sought by Indemnitee.

     (c)  "Expenses" shall include all attorneys' fees and costs, retainers,
court costs, transcripts, fees of experts, witness fees, travel expenses,
duplicating costs, printing and binding costs, telephone charges, postage,
delivery service fees and all other disbursements or expenses incurred in
connection with asserting or defending claims.

     (d)  "Independent Counsel" shall mean a law firm or lawyer that neither is
presently nor in the past five years has been retained to represent:  (i) the
Company or Indemnitee in any matter material to any such party or (ii) any other
party to the Proceeding giving rise to a claim for indemnification hereunder.
Notwithstanding the foregoing, the term "Independent Counsel" shall not include
any firm or person who, under the applicable standards of professional conduct
then prevailing, would have a conflict of interest in representing any of the
Company or Indemnitee in an action to determine Indemnitee's right to
indemnification under this Agreement.  All Expenses of the Independent Counsel
incurred in connection with acting pursuant to this Agreement shall be borne by
the Company.

     (e)  "Losses" shall mean all losses, claims, liabilities, judgments, fines,
penalties and amounts paid in settlement in connection with any Proceeding.

     (f)  "Proceeding" includes any action, suit, arbitration, alternate dispute
resolution mechanism, investigation, administrative hearing or any other
proceeding whether civil, criminal, administrative or investigative; provided,
                                                                     --------
however, that the term "Proceeding" shall include any action instituted by an
- -------
Indemnitee (other than an action to enforce indemnification rights under this
Agreement) only if such action is authorized by the Board of Directors.

     2.  Service by Indemnitee.  Indemnitee agrees to begin or continue to serve
            ---------------------
the Company or an Affiliate as a director and/or officer.  Notwithstanding
anything contained herein, this Agreement shall not create a contract of
employment between the Company and Indemnitee, and the termination of
Indemnitee's relationship with the Company or an Affiliate by either party
hereto shall not be restricted by this Agreement.

     3.  Indemnification.  The Company agrees to indemnify Indemnitee for, and
            ---------------
hold Indemnitee harmless from and against, any Losses or Expenses at any time
incurred by or assessed against Indemnitee arising out of or in connection with
the service of Indemnitee as a director, advisory director, Board Committee
member, officer, employee or agent of the Company or of an Affiliate
(collectively referred to as an "Officer or Director of the Company or of an
Affiliate"), whether the basis of such proceeding is alleged action in an
<PAGE>

official capacity or in any other capacity while serving as an Officer or
Director of the Company or of an Affiliate, to the fullest extent permitted by
the laws of the State of Nevada in effect on the date hereof or as such laws may
from time to time hereafter be amended to increase the scope of such permitted
indemnification.  Without diminishing the scope of the indemnification provided
by this Section 3, the rights of indemnification of Indemnitee provided
hereunder shall include but shall not be limited to those rights set forth
hereinafter.

     4.  Action or Proceeding Other Than an Action by or in the Right of the
         -------------------------------------------------------------------
Company.  Indemnitee shall be entitled to the indemnification rights provided
- -------
herein if Indemnitee is a person who was or is made a party or is threatened to
be made a party to any pending, completed or threatened Proceeding, other than
an action by or in the right of the Company, by reason of (a) the fact that
Indemnitee is or was an Officer or Director of the Company or of an Affiliate or
(b) anything done or not done by Indemnitee in any such capacity.  Pursuant to
this Section, Indemnitee shall be indemnified against Losses or Expenses
incurred by Indemnitee or on Indemnitee's behalf in connection with any
Proceeding, if Indemnitee acted in good faith and in a manner Indemnitee
reasonably believed to be in or not opposed to the best interests of the Company
and, with respect to any criminal Proceeding, had no reasonable cause to believe
his conduct was unlawful.

     5.  Actions by or in the Right of the Company. Indemnitee shall be entitled
         -----------------------------------------
to the indemnification rights provided herein if Indemnitee is a person who was
or is made a party or is threatened to be made a party to any pending, completed
or threatened Proceeding brought by or in the right of the Company to procure a
judgment in its favor by reason of (a) the fact that Indemnitee is or was an
Officer or Director of the Company or of an Affiliate or (b) anything done or
not done by Indemnitee in any such capacity.  Pursuant to this Section,
Indemnitee shall be indemnified against Losses or Expenses actually and
reasonably incurred by Indemnitee or on Indemnitee's behalf in connection with
any Proceeding if Indemnitee acted in good faith and in a manner Indemnitee
reasonably believed to be in or not opposed to the best interests of the
Company.  Notwithstanding the foregoing provisions of this Section, no such
indemnification shall be made in respect of any claim, issue or matter as to
which Nevada law expressly prohibits such indemnification by reason of an
adjudication of liability of Indemnitee to the Company; provided, however, that
                                                        --------  -------
in such event such indemnification shall nevertheless be made by the Company to
the extent that the court in which such action or suit was brought shall
determine equitable under the circumstances.

     6.  Indemnification for Losses and Expenses of Party Who is Wholly or
         -----------------------------------------------------------------
Partly Successful.  Notwithstanding any provision of this Agreement, to the
- -----------------
extent that Indemnitee has been wholly successful on the merits or otherwise
absolved in any Proceeding on any claim, issue or matter, Indemnitee shall be
indemnified against all Losses or Expenses actually and reasonably incurred by
Indemnitee or on Indemnitee's behalf in connection therewith.  If Indemnitee is
<PAGE>

not wholly successful in such Proceeding but is successful, on the merits or
otherwise, as to one or more but less than all claims, issues or matters in such
Proceeding, the Company agrees to indemnify Indemnitee, to the maximum extent
permitted by law, against all Losses and Expenses incurred by Indemnitee in
connection with each successfully resolved claim, issue or matter.  In any
review or Proceeding to determine the extent of indemnification, the Company
shall bear the burden of proving any lack of success and which amounts sought in
indemnity are allocable to claims, issues or matters which were not successfully
resolved.  For purposes of this Section and without limitation, the termination
of any such claim, issue or matter by dismissal with or without prejudice shall
be deemed to be a successful resolution as to such claim, issue or matter.

     7.  Payment for Expenses of a Witness.  Notwithstanding any other provision
         ---------------------------------
of this Agreement, to the extent that Indemnitee is, by reason of the fact that
Indemnitee is or was an Officer or Director of the Company or of an Affiliate, a
witness in any Proceeding, the Company agrees to pay to Indemnitee all Expenses
actually and reasonably incurred by Indemnitee or on Indemnitee's behalf in
connection therewith.

     8.  Advancement of Expenses and Costs.  All Expenses incurred by or on
         ---------------------------------
behalf of Indemnitee (or reasonably expected by Indemnitee to be incurred by
Indemnitee within three months) in connection with any Proceeding shall be paid
promptly by the Company, and in any event in advance of the final disposition of
such Proceeding within sixty days after the receipt by the Company of a
statement or statements from Indemnitee requesting from time to time such
advance or advances, whether or not a determination to indemnify has been made
under Section 9.  Such statement or statements shall evidence such Expenses
incurred (or reasonably expected to be incurred) by Indemnitee in connection
therewith and shall include or be accompanied by a written undertaking by or on
behalf of Indemnitee to repay such amount if it shall ultimately be determined
that Indemnitee is not entitled to be indemnified therefor pursuant to the terms
of this Agreement.  The right to indemnification of advances as granted by this
Section 8 shall be enforceable by the director or officer in any court of
competent jurisdiction, if the Company denies such request, in whole or in part,
or if no disposition thereof is made within 60 days.  Such person's costs and
expenses incurred in connection with successfully establishing his/her right to
indemnification, in whole or in part, in any such action shall also be
indemnified by the Company.  It shall be a defense to any such action seeking an
adjudication or award in arbitration pursuant to this Agreement (other than an
action brought to enforce a claim for the advance of costs, charges and expenses
under this Section 8 where the required undertaking, if any, has been received
by the Company) that the claimant has not met the standard of conduct set forth
in the Nevada General Corporation Law, as the same exists or hereafter may be
amended (but, in the case of any such amendment, only to the extent that such
amendment permits the Company to provide broader indemnification rights than
<PAGE>

said law permitted the Company to provide prior to such amendment), but the
burden of proving such defense shall be on the Company.  Neither the failure of
the Company (including its Board of Directors, its independent legal counsel and
its stockholders) to have made a determination prior to the commencement of such
action that indemnification of the claimant is proper in the circumstances
because he/she has met the applicable standard of conduct set forth in the
Nevada General Corporation Law, as the same exists or hereafter may be amended
(but, in the case of any such amendment, only to the extent that such amendment
permits the Company to provide broader indemnification rights that said law
permitted the Company to provide prior to such amendment), nor the fact that
there has been an actual determination by the Company (including its Board of
Directors, its independent legal counsel and its stockholders) that the claimant
has not met such applicable standard of conduct, shall be a defense to the
action or create a presumption that the claimant has not met the applicable
standard of conduct.

     9.  Procedure for Determination of Entitlement to Indemnification.  (a)
         -------------------------------------------------------------
When seeking indemnification under this Agreement (which shall not include in
any case the right of Indemnitee to receive payments pursuant to Section 7 and
Section 8 hereof, which shall not be subject to this Section 9), Indemnitee
shall submit a written request for indemnification to the Company.  Such request
shall include documentation or information which is reasonably necessary for the
Company to make a determination of Indemnitee's entitlement to indemnification
hereunder and which is reasonably available to Indemnitee.  Determination of
Indemnitee's entitlement to indemnification shall be made promptly, but in no
event later than 60 days after receipt by the Company of Indemnitee's written
request for indemnification.  The Secretary of the Company shall, promptly upon
receipt of Indemnitee's request for indemnification, advise the Board that
Indemnitee has made such request for indemnification.

     (b)  The entitlement of Indemnitee to indemnification under this Agreement
in respect of any pending, contemplated or threatened Proceeding shall be
determined in the specific case by (a) the Board of Directors by a majority vote
of a quorum consisting of those directors who were not party to such Proceeding,
or (b) if such qourum is not obtainable, or if a quorum of disinterested
directors so directs, by Independent Counsel in a written opinion, or (c) by the
stockholders.

     (c)  In the event the determination of entitlement is to be made by
Independent Counsel, such Independent Counsel shall be selected by the Board and
approved by Indemnitee.  Upon failure of the Board to so select such Independent
Counsel or upon failure of Indemnitee to so approve of the choice thereof, such
Independent Counsel shall be selected by a neutral third party mutually
agreeable among the Board and the Indemnitee to make such selection.
<PAGE>

     (d)  If the determination made pursuant to Section 9(b) is that Indemnitee
is not entitled to indemnification to the full extent of Indemnitee's request,
Indemnitee shall have the right to seek entitlement to indemnification in
accordance with the procedures set forth in Section 10 hereof.

     (e)  If the person or persons empowered pursuant to Section 9(b) hereof to
make a determination with respect to entitlement to indemnification shall have
failed to make the requested determination within 60 days after receipt by the
Company of such request, the requisite determination of entitlement to
indemnification shall be deemed to have been made and Indemnitee shall be
absolutely entitled to such indemnification, absent (i) misrepresentation by
Indemnitee of a material fact in the request for indemnification or (ii) a final
judicial determination that all or any part of such indemnification is expressly
prohibited by law.

     (f)  The termination of any Proceeding by judgment, order, settlement or
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
                              ---------------
itself, adversely affect the rights of Indemnitee to indemnification hereunder,
except as may be specifically provided herein, or create a presumption that
Indemnitee did not act in good faith and in a manner which Indemnitee reasonably
believed to be in or not opposed to the best interests of the Company or create
a presumption that (with respect to any criminal action or Proceeding)
Indemnitee had reasonable cause to believe that Indemnitee's conduct was
unlawful.

     (g)  For purposes of any determination of good faith hereunder, Indemnitee
shall be deemed to have acted in good faith if in taking an action Indemnitee
relied on the records or books of account of the Company or an Affiliate,
including financial statements, or on information supplied to Indemnitee by the
officers of the Company or an Affiliate in the course of their duties, or on the
advice of legal counsel for the Company or an Affiliate or on information or
records given or reports made to the Company or an Affiliate by an independent
certified public accountant or by an appraiser or other expert selected with
reasonable care by the Company or an Affiliate.  The Company shall have the
burden of establishing the absence of good faith.  The provisions of this
Section 9(g) shall not be deemed to be exclusive or to limit in any way the
other circumstances in which the Indemnitee may be deemed to have met the
applicable standard of conduct set forth in this Agreement.

     (h)  The knowledge and/or actions, or failure to act, of any director,
officer, agent or employee of the Company or an Affiliate shall not be imputed
to Indemnitee for purposes of determining the right to indemnification under
this Agreement.

     10. Remedies in Cases of Determination Not to Indemnify or to Advance
         -----------------------------------------------------------------
Expenses. (a)  In the event that (i) a determination is made that Indemnitee is
- --------
<PAGE>

not entitled to indemnification hereunder, (ii) advances are not made pursuant
to Section 8 hereof or (iii) payment has not been timely made following a
determination of entitlement to indemnification pursuant to Section 9 hereof,
Indemnitee shall be entitled to seek an adjudication in an appropriate court of
the State of Nevada or any other court of competent jurisdiction as to
Indemnitee's entitlement to such indemnification or advance.

     (b)  In the event a determination has been made in accordance with the
procedures set forth in Section 9 hereof, in whole or in part, that Indemnitee
is not entitled to indemnification, any judicial proceeding or arbitration
referred to in paragraph (a) of this Section 10 shall be de novo and Indemnitee
                                                         -- ----
shall not be prejudiced by reason of any such prior determination that
Indemnitee is not entitled to indemnification, and the Company shall bear the
burdens of proof specified in paragraphs 6 and 9 hereof in such proceeding.

     (c)  If a determination is made or deemed to have been made pursuant to
the terms of Section 9 or 10 hereof that Indemnitee is entitled to
indemnification, the Company shall be bound by such determination in any
judicial proceeding or arbitration in the absence of (i) a misrepresentation of
a material fact by Indemnitee or (ii) a final judicial determination that all or
any part of such indemnification is expressly prohibited by law.

     (d)  The Company and Indemnitee agree that they shall be precluded from
asserting that the procedures and presumptions of this Agreement are not valid,
binding and enforceable.  The Company and Indemnitee further agree to stipulate
in any such court that the Company and Indemnitee are bound by all of the
provisions of this Agreement and are precluded from making any assertion to the
contrary.

     (e)  To the extent deemed appropriate by the court, interest shall be paid
by the Company to Indemnitee at a rate equal to the average Federal Funds rate
in effect during the period commencing with the date on which Indemnitee
requested indemnification (or reimbursement or advance of an Expense) and ending
with the date on which such payment is made to Indemnitee by the Company (the
"Interest Period") as published by the Wall Street Journal plus four percent 4%
and shall apply to all amounts for which the Company indemnifies or is obliged
to indemnify the Indemnitee over the duration of the Interest Period.

     11. Expenses Incurred by Indemnitee to Enforce this Agreement.  All
         ---------------------------------------------------------
Expenses incurred by Indemnitee in connection with the preparation and
submission of Indemnitee's request for indemnification hereunder shall be borne
by the Company.  In the event that Indemnitee is a party to or intervenes in any
proceeding in which the validity or enforceability of this Agreement is at issue
or seeks an adjudication to enforce Indemnitee's rights under, or to recover
damages for breach of, this Agreement, Indemnitee, if Indemnitee prevails in
<PAGE>

whole in such action, shall be entitled to recover from the Company, and shall
be indemnified by the Company against, any Expenses incurred by Indemnitee.  If
it is determined that Indemnitee is entitled to indemnification for part (but
not all) of the indemnification so requested, Expenses incurred in seeking
enforcement of such partial indemnification shall be reasonably prorated among
the claims, issues or matters for which the Indemnitee is entitled to
indemnification and for claims, issues or matters for which the Indemnitee is
not so entitled.

     12. Non-Exclusivity.  The rights of indemnification and to receive advances
         ---------------
as provided by this Agreement shall not be deemed exclusive of any other rights
to which Indemnitee may at any time be entitled under or by reason of applicable
law, any certificate of incorporation or by-laws, any agreement, any vote of
stockholders or any resolution of directors or otherwise.  To the extent
Indemnitee would be prejudiced thereby, no amendment, alteration, rescission or
replacement of this Agreement or any provision hereof shall be effective as to
Indemnitee with respect to any action taken or omitted by such Indemnitee in
Indemnitee's position with the Company or an Affiliate or any other entity which
Indemnitee is or was serving at the request of the Company prior to such
amendment, alteration, rescission or replacement.

     13. Duration of Agreement.  This Agreement shall apply to any claim
         ---------------------
asserted and any Losses and Expenses incurred in connection with any claim
asserted on or after the effective date of this Agreement and shall continue
until and terminate upon the later of:  (a) 10 years after Indemnitee has ceased
to occupy any of the positions or have any of the relationships described
herein; or (b) one year after the final termination of all pending or threatened
Proceedings of the kind described herein with respect to Indemnitee.  This
Agreement shall be binding upon the Company and its successors and assigns and
shall inure to the benefit of Indemnitee and Indemnitee's spouse, assigns,
heirs, devisee, executors, administrators or other legal representatives.

     14. Severability.  Should any part, term or condition hereof be declared
         ------------
illegal or unenforceable or in conflict with any other law, the validity of the
remaining portions or provisions of this Agreement shall not be affected
thereby, and the illegal or unenforceable portions of the Agreement shall be and
hereby are redrafted to conform with applicable law, while leaving the remaining
portions of this Agreement intact.

     15. Counterparts.  This Agreement may be executed in several counterparts,
         ------------
each of which shall be deemed an original, but all of which together shall
constitute one and the same document.

     16. Headings.  Section headings are for convenience only and do not control
         --------
or affect meaning or interpretation of any terms or provisions of this
Agreement.
<PAGE>

     17. Modification and Waiver.  No supplement, modification or amendment of
         -----------------------
this Agreement shall be binding unless executed in writing by each of the
parties hereto.

     18. No Duplicative Payment.  The Company shall not be liable under this
         ----------------------
Agreement to make any payment of amounts otherwise indemnifiable hereunder if
and to the extent that Indemnitee has otherwise actually received such payment
(net of Expenses incurred in collecting such payment) under this Agreement, any
insurance policy, contract, agreement or otherwise.

     19. Notices.  All notices, requests, demands and other communications
         -------
provided for by this Agreement shall be in writing (including telecopier or
similar writing) and shall be deemed to have been given at the time when mailed
in a registered or certified postpaid envelope in any general or branch office
of the United States Postal Service or Canada Post, or sent by Federal Express
or other similar overnight courier service, addressed to the address of the
parties stated below or to such changed address as such party may have fixed by
notice or, if given by telecopier, when such telecopy is transmitted and the
appropriate answer back is received.

     (a)  If to Indemnitee, to the address appearing on the signature page
          hereof.

     (b)  If to the Company to:

          PC-EPhone, Inc.
          1388 - 885 West Georgia St.
          Vancouver, British Columbia, Canada V6C 3E8
          Attention: Corporate Secretary
          ---------

     20. GOVERNING LAW.  THE PARTIES AGREE THAT THIS AGREEMENT SHALL BE GOVERNED
          -------------
BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE
STATE OF NEVADA WITHOUT GIVING EFFECT TO THE CONFLICTS OF LAWS PRINCIPLES
THEREOF.

     21. Entire Agreement.  Subject to the provisions of Section 12 hereof, this
         ----------------
Agreement constitutes the entire understanding between the parties and
supersedes all proposals, commitments, writings, negotiations and
understandings, oral and written, and all other communications between the
parties relating to the subject matter of this Agreement.  This Agreement may
not be amended or otherwise modified except in writing duly executed by all of
the parties.  A waiver by any party of any breach or violation of this Agreement
shall not be deemed or construed as a waiver of any subsequent breach or
violation thereof.
<PAGE>

                          [Signature Page Follows]
<PAGE>

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

                                       PC-EPHONE, INC.


                                       By    /s/ Douglas Yee
                                         -----------------------------
                                       Name:     Douglas Yee
                                       Title:    President


                                       INDEMNITEE:


                                             /s/ Alan Crawford
                                         -----------------------------
                                       Name:     Alan Crawford
                                       Title:    Director
                                       Address:  4 - 1609 Balsam Street
                                                 Vancouver, BC V6K 3L9

<PAGE>

                                                                    Exhibit 10.5

                            INDEMNIFICATION AGREEMENT
                            -------------------------


     INDEMNIFICATION AGREEMENT, dated as of this 1st day of March, 2001, by and
between PC-EPhone, Inc., a Nevada corporation (the "Company"), and the director
and/or officer whose name appears on the signature page of this Agreement
("Indemnitee").

                                   RECITALS
                                   --------

     A.  Highly competent persons are becoming more reluctant to serve as
directors or officers or in other capacities unless they are provided with
reasonable protection through insurance or indemnification against risks of
claims and actions against them arising out of their service to and activities
on behalf of the corporations.

     B.  The Board of Directors of the Company (the "Board" or the "Board of
Directors") has determined that the Company should act to assure its directors
and officers that there will be increased certainty of such protection in the
future.

     C.  It is reasonable, prudent and necessary for the Company contractually
to obligate itself to indemnify such persons to the fullest extent permitted by
applicable law so that they will serve or continue to serve the Company free
from undue concern that they will not be so indemnified.

     D.  Indemnitee is willing to serve, to continue to serve and to take on
additional service for or on behalf of the Company on the condition that
Indemnitee be so indemnified.

                                  AGREEMENT
                                  ---------

     In consideration of the premises and the covenants contained herein, the
Company and Indemnitee do hereby covenant and agree as follows:

     1.  Definitions.  For purposes of this Agreement:
         -----------

     (a)  "Affiliate" shall mean any corporation, partnership, joint venture,
trust or other enterprise in respect of which the Indemnitee is or was or will
be serving as a director, officer, advisory director or Board Committee member
at the request of the Company, and including, but not limited to, any employee
benefit plan of the Company or any of the foregoing.
<PAGE>

     (b)  "Disinterested Director" shall mean a director of the Company who is
not or was not a party to the Proceeding in respect of which indemnification is
being sought by Indemnitee.

     (c)  "Expenses" shall include all attorneys' fees and costs, retainers,
court costs, transcripts, fees of experts, witness fees, travel expenses,
duplicating costs, printing and binding costs, telephone charges, postage,
delivery service fees and all other disbursements or expenses incurred in
connection with asserting or defending claims.

     (d)  "Independent Counsel" shall mean a law firm or lawyer that neither is
presently nor in the past five years has been retained to represent:  (i) the
Company or Indemnitee in any matter material to any such party or (ii) any other
party to the Proceeding giving rise to a claim for indemnification hereunder.
Notwithstanding the foregoing, the term "Independent Counsel" shall not include
any firm or person who, under the applicable standards of professional conduct
then prevailing, would have a conflict of interest in representing any of the
Company or Indemnitee in an action to determine Indemnitee's right to
indemnification under this Agreement.  All Expenses of the Independent Counsel
incurred in connection with acting pursuant to this Agreement shall be borne by
the Company.

     (e)  "Losses" shall mean all losses, claims, liabilities, judgments, fines,
penalties and amounts paid in settlement in connection with any Proceeding.

     (f)  "Proceeding" includes any action, suit, arbitration, alternate dispute
resolution mechanism, investigation, administrative hearing or any other
proceeding whether civil, criminal, administrative or investigative; provided,
                                                                     --------
however, that the term "Proceeding" shall include any action instituted by an
- -------
Indemnitee (other than an action to enforce indemnification rights under this
Agreement) only if such action is authorized by the Board of Directors.

     2.  Service by Indemnitee.  Indemnitee agrees to begin or continue to serve
         ---------------------
the Company or an Affiliate as a director and/or officer.  Notwithstanding
anything contained herein, this Agreement shall not create a contract of
employment between the Company and Indemnitee, and the termination of
Indemnitee's relationship with the Company or an Affiliate by either party
hereto shall not be restricted by this Agreement.

     3.  Indemnification.  The Company agrees to indemnify Indemnitee for, and
         ---------------
hold Indemnitee harmless from and against, any Losses or Expenses at any time
incurred by or assessed against Indemnitee arising out of or in connection with
the service of Indemnitee as a director, advisory director, Board Committee
member, officer, employee or agent of the Company or of an Affiliate
(collectively referred to as an "Officer or Director of the Company or of an
Affiliate"), whether the basis of such proceeding is alleged action in an
<PAGE>

official capacity or in any other capacity while serving as an Officer or
Director of the Company or of an Affiliate, to the fullest extent permitted by
the laws of the State of Nevada in effect on the date hereof or as such laws may
from time to time hereafter be amended to increase the scope of such permitted
indemnification.  Without diminishing the scope of the indemnification provided
by this Section 3, the rights of indemnification of Indemnitee provided
hereunder shall include but shall not be limited to those rights set forth
hereinafter.

     4.  Action or Proceeding Other Than an Action by or in the Right of the
         -------------------------------------------------------------------
Company.  Indemnitee shall be entitled to the indemnification rights provided
- -------
herein if Indemnitee is a person who was or is made a party or is threatened to
be made a party to any pending, completed or threatened Proceeding, other than
an action by or in the right of the Company, by reason of (a) the fact that
Indemnitee is or was an Officer or Director of the Company or of an Affiliate or
(b) anything done or not done by Indemnitee in any such capacity.  Pursuant to
this Section, Indemnitee shall be indemnified against Losses or Expenses
incurred by Indemnitee or on Indemnitee's behalf in connection with any
Proceeding, if Indemnitee acted in good faith and in a manner Indemnitee
reasonably believed to be in or not opposed to the best interests of the Company
and, with respect to any criminal Proceeding, had no reasonable cause to believe
his conduct was unlawful.

     5.  Actions by or in the Right of the Company. Indemnitee shall be entitled
         -----------------------------------------
to the indemnification rights provided herein if Indemnitee is a person who was
or is made a party or is threatened to be made a party to any pending, completed
or threatened Proceeding brought by or in the right of the Company to procure a
judgment in its favor by reason of (a) the fact that Indemnitee is or was an
Officer or Director of the Company or of an Affiliate or (b) anything done or
not done by Indemnitee in any such capacity.  Pursuant to this Section,
Indemnitee shall be indemnified against Losses or Expenses actually and
reasonably incurred by Indemnitee or on Indemnitee's behalf in connection with
any Proceeding if Indemnitee acted in good faith and in a manner Indemnitee
reasonably believed to be in or not opposed to the best interests of the
Company.  Notwithstanding the foregoing provisions of this Section, no such
indemnification shall be made in respect of any claim, issue or matter as to
which Nevada law expressly prohibits such indemnification by reason of an
adjudication of liability of Indemnitee to the Company; provided, however, that
                                                        --------  -------
in such event such indemnification shall nevertheless be made by the Company to
the extent that the court in which such action or suit was brought shall
determine equitable under the circumstances.

     6.  Indemnification for Losses and Expenses of Party Who is Wholly or
         -----------------------------------------------------------------
Partly Successful.  Notwithstanding any provision of this Agreement, to the
- -----------------
extent that Indemnitee has been wholly successful on the merits or otherwise
absolved in any Proceeding on any claim, issue or matter, Indemnitee shall be
indemnified against all Losses or Expenses actually and reasonably incurred by
Indemnitee or on Indemnitee's behalf in connection therewith.  If Indemnitee is
<PAGE>

not wholly successful in such Proceeding but is successful, on the merits or
otherwise, as to one or more but less than all claims, issues or matters in such
Proceeding, the Company agrees to indemnify Indemnitee, to the maximum extent
permitted by law, against all Losses and Expenses incurred by Indemnitee in
connection with each successfully resolved claim, issue or matter.  In any
review or Proceeding to determine the extent of indemnification, the Company
shall bear the burden of proving any lack of success and which amounts sought in
indemnity are allocable to claims, issues or matters which were not successfully
resolved.  For purposes of this Section and without limitation, the termination
of any such claim, issue or matter by dismissal with or without prejudice shall
be deemed to be a successful resolution as to such claim, issue or matter.

     7.  Payment for Expenses of a Witness.  Notwithstanding any other provision
         ---------------------------------
of this Agreement, to the extent that Indemnitee is, by reason of the fact that
Indemnitee is or was an Officer or Director of the Company or of an Affiliate, a
witness in any Proceeding, the Company agrees to pay to Indemnitee all Expenses
actually and reasonably incurred by Indemnitee or on Indemnitee's behalf in
connection therewith.

     8.  Advancement of Expenses and Costs.  All Expenses incurred by or on
         ---------------------------------
behalf of Indemnitee (or reasonably expected by Indemnitee to be incurred by
Indemnitee within three months) in connection with any Proceeding shall be paid
promptly by the Company, and in any event in advance of the final disposition of
such Proceeding within sixty days after the receipt by the Company of a
statement or statements from Indemnitee requesting from time to time such
advance or advances, whether or not a determination to indemnify has been made
under Section 9.  Such statement or statements shall evidence such Expenses
incurred (or reasonably expected to be incurred) by Indemnitee in connection
therewith and shall include or be accompanied by a written undertaking by or on
behalf of Indemnitee to repay such amount if it shall ultimately be determined
that Indemnitee is not entitled to be indemnified therefor pursuant to the terms
of this Agreement.  The right to indemnification of advances as granted by this
Section 8 shall be enforceable by the director or officer in any court of
competent jurisdiction, if the Company denies such request, in whole or in part,
or if no disposition thereof is made within 60 days.  Such person's costs and
expenses incurred in connection with successfully establishing his/her right to
indemnification, in whole or in part, in any such action shall also be
indemnified by the Company.  It shall be a defense to any such action seeking an
adjudication or award in arbitration pursuant to this Agreement (other than an
action brought to enforce a claim for the advance of costs, charges and expenses
under this Section 8 where the required undertaking, if any, has been received
by the Company) that the claimant has not met the standard of conduct set forth
in the Nevada General Corporation Law, as the same exists or hereafter may be
amended (but, in the case of any such amendment, only to the extent that such
amendment permits the Company to provide broader indemnification rights than
<PAGE>

said law permitted the Company to provide prior to such amendment), but the
burden of proving such defense shall be on the Company.  Neither the failure of
the Company (including its Board of Directors, its independent legal counsel and
its stockholders) to have made a determination prior to the commencement of such
action that indemnification of the claimant is proper in the circumstances
because he/she has met the applicable standard of conduct set forth in the
Nevada General Corporation Law, as the same exists or hereafter may be amended
(but, in the case of any such amendment, only to the extent that such amendment
permits the Company to provide broader indemnification rights that said law
permitted the Company to provide prior to such amendment), nor the fact that
there has been an actual determination by the Company (including its Board of
Directors, its independent legal counsel and its stockholders) that the claimant
has not met such applicable standard of conduct, shall be a defense to the
action or create a presumption that the claimant has not met the applicable
standard of conduct.

     9.  Procedure for Determination of Entitlement to Indemnification.  (a)
         -------------------------------------------------------------
When seeking indemnification under this Agreement (which shall not include in
any case the right of Indemnitee to receive payments pursuant to Section 7 and
Section 8 hereof, which shall not be subject to this Section 9), Indemnitee
shall submit a written request for indemnification to the Company.  Such request
shall include documentation or information which is reasonably necessary for the
Company to make a determination of Indemnitee's entitlement to indemnification
hereunder and which is reasonably available to Indemnitee.  Determination of
Indemnitee's entitlement to indemnification shall be made promptly, but in no
event later than 60 days after receipt by the Company of Indemnitee's written
request for indemnification.  The Secretary of the Company shall, promptly upon
receipt of Indemnitee's request for indemnification, advise the Board that
Indemnitee has made such request for indemnification.

     (b)  The entitlement of Indemnitee to indemnification under this Agreement
in respect of any pending, contemplated or threatened Proceeding shall be
determined in the specific case by (a) the Board of Directors by a majority vote
of a quorum consisting of those directors who were not party to such Proceeding,
or (b) if such qourum is not obtainable, or if a quorum of disinterested
directors so directs, by Independent Counsel in a written opinion, or (c) by the
stockholders.

     (c)  In the event the determination of entitlement is to be made by
Independent Counsel, such Independent Counsel shall be selected by the Board and
approved by Indemnitee.  Upon failure of the Board to so select such Independent
Counsel or upon failure of Indemnitee to so approve of the choice thereof, such
Independent Counsel shall be selected by a neutral third party mutually
agreeable among the Board and the Indemnitee to make such selection.
<PAGE>

     (d)  If the determination made pursuant to Section 9(b) is that Indemnitee
is not entitled to indemnification to the full extent of Indemnitee's request,
Indemnitee shall have the right to seek entitlement to indemnification in
accordance with the procedures set forth in Section 10 hereof.

     (e)  If the person or persons empowered pursuant to Section 9(b) hereof to
make a determination with respect to entitlement to indemnification shall have
failed to make the requested determination within 60 days after receipt by the
Company of such request, the requisite determination of entitlement to
indemnification shall be deemed to have been made and Indemnitee shall be
absolutely entitled to such indemnification, absent (i) misrepresentation by
Indemnitee of a material fact in the request for indemnification or (ii) a final
judicial determination that all or any part of such indemnification is expressly
prohibited by law.

     (f)  The termination of any Proceeding by judgment, order, settlement or
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
                              ---------------
itself, adversely affect the rights of Indemnitee to indemnification hereunder,
except as may be specifically provided herein, or create a presumption that
Indemnitee did not act in good faith and in a manner which Indemnitee reasonably
believed to be in or not opposed to the best interests of the Company or create
a presumption that (with respect to any criminal action or Proceeding)
Indemnitee had reasonable cause to believe that Indemnitee's conduct was
unlawful.

     (g)  For purposes of any determination of good faith hereunder, Indemnitee
shall be deemed to have acted in good faith if in taking an action Indemnitee
relied on the records or books of account of the Company or an Affiliate,
including financial statements, or on information supplied to Indemnitee by the
officers of the Company or an Affiliate in the course of their duties, or on the
advice of legal counsel for the Company or an Affiliate or on information or
records given or reports made to the Company or an Affiliate by an independent
certified public accountant or by an appraiser or other expert selected with
reasonable care by the Company or an Affiliate.  The Company shall have the
burden of establishing the absence of good faith.  The provisions of this
Section 9(g) shall not be deemed to be exclusive or to limit in any way the
other circumstances in which the Indemnitee may be deemed to have met the
applicable standard of conduct set forth in this Agreement.

     (h)  The knowledge and/or actions, or failure to act, of any director,
officer, agent or employee of the Company or an Affiliate shall not be imputed
to Indemnitee for purposes of determining the right to indemnification under
this Agreement.

     10. Remedies in Cases of Determination Not to Indemnify or to Advance
         -----------------------------------------------------------------
Expenses. (a)  In the event that (i) a determination is made that Indemnitee is
- --------
<PAGE>

not entitled to indemnification hereunder, (ii) advances are not made pursuant
to Section 8 hereof or (iii) payment has not been timely made following a
determination of entitlement to indemnification pursuant to Section 9 hereof,
Indemnitee shall be entitled to seek an adjudication in an appropriate court of
the State of Nevada or any other court of competent jurisdiction as to
Indemnitee's entitlement to such indemnification or advance.

     (b)  In the event a determination has been made in accordance with the
procedures set forth in Section 9 hereof, in whole or in part, that Indemnitee
is not entitled to indemnification, any judicial proceeding or arbitration
referred to in paragraph (a) of this Section 10 shall be de novo and Indemnitee
                                                         -- ----
shall not be prejudiced by reason of any such prior determination that
Indemnitee is not entitled to indemnification, and the Company shall bear the
burdens of proof specified in paragraphs 6 and 9 hereof in such proceeding.

     (c)  If a determination is made or deemed to have been made pursuant to
the terms of Section 9 or 10 hereof that Indemnitee is entitled to
indemnification, the Company shall be bound by such determination in any
judicial proceeding or arbitration in the absence of (i) a misrepresentation of
a material fact by Indemnitee or (ii) a final judicial determination that all or
any part of such indemnification is expressly prohibited by law.

     (d)  The Company and Indemnitee agree that they shall be precluded from
asserting that the procedures and presumptions of this Agreement are not valid,
binding and enforceable.  The Company and Indemnitee further agree to stipulate
in any such court that the Company and Indemnitee are bound by all of the
provisions of this Agreement and are precluded from making any assertion to the
contrary.

     (e)  To the extent deemed appropriate by the court, interest shall be paid
by the Company to Indemnitee at a rate equal to the average Federal Funds rate
in effect during the period commencing with the date on which Indemnitee
requested indemnification (or reimbursement or advance of an Expense) and ending
with the date on which such payment is made to Indemnitee by the Company (the
"Interest Period") as published by the Wall Street Journal plus four percent 4%
and shall apply to all amounts for which the Company indemnifies or is obliged
to indemnify the Indemnitee over the duration of the Interest Period.

     11. Expenses Incurred by Indemnitee to Enforce this Agreement.  All
         ---------------------------------------------------------
Expenses incurred by Indemnitee in connection with the preparation and
submission of Indemnitee's request for indemnification hereunder shall be borne
by the Company.  In the event that Indemnitee is a party to or intervenes in any
proceeding in which the validity or enforceability of this Agreement is at issue
or seeks an adjudication to enforce Indemnitee's rights under, or to recover
damages for breach of, this Agreement, Indemnitee, if Indemnitee prevails in
<PAGE>

whole in such action, shall be entitled to recover from the Company, and shall
be indemnified by the Company against, any Expenses incurred by Indemnitee.  If
it is determined that Indemnitee is entitled to indemnification for part (but
not all) of the indemnification so requested, Expenses incurred in seeking
enforcement of such partial indemnification shall be reasonably prorated among
the claims, issues or matters for which the Indemnitee is entitled to
indemnification and for claims, issues or matters for which the Indemnitee is
not so entitled.

     12. Non-Exclusivity.  The rights of indemnification and to receive advances
         ---------------
as provided by this Agreement shall not be deemed exclusive of any other rights
to which Indemnitee may at any time be entitled under or by reason of applicable
law, any certificate of incorporation or by-laws, any agreement, any vote of
stockholders or any resolution of directors or otherwise.  To the extent
Indemnitee would be prejudiced thereby, no amendment, alteration, rescission or
replacement of this Agreement or any provision hereof shall be effective as to
Indemnitee with respect to any action taken or omitted by such Indemnitee in
Indemnitee's position with the Company or an Affiliate or any other entity which
Indemnitee is or was serving at the request of the Company prior to such
amendment, alteration, rescission or replacement.

     13. Duration of Agreement.  This Agreement shall apply to any claim
         ---------------------
asserted and any Losses and Expenses incurred in connection with any claim
asserted on or after the effective date of this Agreement and shall continue
until and terminate upon the later of:  (a) 10 years after Indemnitee has ceased
to occupy any of the positions or have any of the relationships described
herein; or (b) one year after the final termination of all pending or threatened
Proceedings of the kind described herein with respect to Indemnitee.  This
Agreement shall be binding upon the Company and its successors and assigns and
shall inure to the benefit of Indemnitee and Indemnitee's spouse, assigns,
heirs, devisee, executors, administrators or other legal representatives.

     14. Severability.  Should any part, term or condition hereof be declared
         ------------
illegal or unenforceable or in conflict with any other law, the validity of the
remaining portions or provisions of this Agreement shall not be affected
thereby, and the illegal or unenforceable portions of the Agreement shall be and
hereby are redrafted to conform with applicable law, while leaving the remaining
portions of this Agreement intact.

     15. Counterparts.  This Agreement may be executed in several counterparts,
         ------------
each of which shall be deemed an original, but all of which together shall
constitute one and the same document.

     16. Headings.  Section headings are for convenience only and do not control
         --------
or affect meaning or interpretation of any terms or provisions of this
Agreement.
<PAGE>

     17. Modification and Waiver.  No supplement, modification or amendment of
         -----------------------
this Agreement shall be binding unless executed in writing by each of the
parties hereto.

     18. No Duplicative Payment.  The Company shall not be liable under this
         ----------------------
Agreement to make any payment of amounts otherwise indemnifiable hereunder if
and to the extent that Indemnitee has otherwise actually received such payment
(net of Expenses incurred in collecting such payment) under this Agreement, any
insurance policy, contract, agreement or otherwise.

     19. Notices.  All notices, requests, demands and other communications
         -------
provided for by this Agreement shall be in writing (including telecopier or
similar writing) and shall be deemed to have been given at the time when mailed
in a registered or certified postpaid envelope in any general or branch office
of the United States Postal Service or Canada Post, or sent by Federal Express
or other similar overnight courier service, addressed to the address of the
parties stated below or to such changed address as such party may have fixed by
notice or, if given by telecopier, when such telecopy is transmitted and the
appropriate answer back is received.

     (a)  If to Indemnitee, to the address appearing on the signature page
          hereof.

     (b)  If to the Company to:

          PC-EPhone, Inc.
          1388 - 885 West Georgia St.
          Vancouver, British Columbia, Canada V6C 3E8
          Attention: Corporate Secretary
          ---------

     20. GOVERNING LAW.  THE PARTIES AGREE THAT THIS AGREEMENT SHALL BE GOVERNED
          -------------
BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE
STATE OF NEVADA WITHOUT GIVING EFFECT TO THE CONFLICTS OF LAWS PRINCIPLES
THEREOF.

     21. Entire Agreement.  Subject to the provisions of Section 12 hereof, this
         ----------------
Agreement constitutes the entire understanding between the parties and
supersedes all proposals, commitments, writings, negotiations and
understandings, oral and written, and all other communications between the
parties relating to the subject matter of this Agreement.  This Agreement may
not be amended or otherwise modified except in writing duly executed by all of
the parties.  A waiver by any party of any breach or violation of this Agreement
shall not be deemed or construed as a waiver of any subsequent breach or
violation thereof.
<PAGE>

                          [Signature Page Follows]
<PAGE>

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

                                       PC-EPHONE, INC.


                                       By    /s/ Douglas Yee
                                         -----------------------------
                                       Name:     Douglas Yee
                                       Title:    President


                                       INDEMNITEE:


                                       By    /s/ Greg C. Burnett
                                         -----------------------------
                                       Name:     Greg C. Burnett
                                       Title:    Director
                                       Address:  604 - 750 West Pender Street
                                                 Vancouver, BC V6C 2T7

<PAGE>

                                                                    Exhibit 10.6


                            INDEMNIFICATION AGREEMENT
                            -------------------------


     INDEMNIFICATION AGREEMENT, dated as of this 1st day of March, 2001, by and
between PC-EPhone, Inc., a Nevada corporation (the "Company"), and the director
and/or officer whose name appears on the signature page of this Agreement
("Indemnitee").

                                   RECITALS
                                   --------

     A.  Highly competent persons are becoming more reluctant to serve as
directors or officers or in other capacities unless they are provided with
reasonable protection through insurance or indemnification against risks of
claims and actions against them arising out of their service to and activities
on behalf of the corporations.

     B.  The Board of Directors of the Company (the "Board" or the "Board of
Directors") has determined that the Company should act to assure its directors
and officers that there will be increased certainty of such protection in the
future.

     C.  It is reasonable, prudent and necessary for the Company contractually
to obligate itself to indemnify such persons to the fullest extent permitted by
applicable law so that they will serve or continue to serve the Company free
from undue concern that they will not be so indemnified.

     D.  Indemnitee is willing to serve, to continue to serve and to take on
additional service for or on behalf of the Company on the condition that
Indemnitee be so indemnified.

                                  AGREEMENT
                                  ---------

     In consideration of the premises and the covenants contained herein, the
Company and Indemnitee do hereby covenant and agree as follows:

     1.  Definitions.  For purposes of this Agreement:
         -----------

     (a)  "Affiliate" shall mean any corporation, partnership, joint venture,
trust or other enterprise in respect of which the Indemnitee is or was or will
be serving as a director, officer, advisory director or Board Committee member
at the request of the Company, and including, but not limited to, any employee
benefit plan of the Company or any of the foregoing.
<PAGE>

     (b)  "Disinterested Director" shall mean a director of the Company who is
not or was not a party to the Proceeding in respect of which indemnification is
being sought by Indemnitee.

     (c)  "Expenses" shall include all attorneys' fees and costs, retainers,
court costs, transcripts, fees of experts, witness fees, travel expenses,
duplicating costs, printing and binding costs, telephone charges, postage,
delivery service fees and all other disbursements or expenses incurred in
connection with asserting or defending claims.

     (d)  "Independent Counsel" shall mean a law firm or lawyer that neither is
presently nor in the past five years has been retained to represent:  (i) the
Company or Indemnitee in any matter material to any such party or (ii) any other
party to the Proceeding giving rise to a claim for indemnification hereunder.
Notwithstanding the foregoing, the term "Independent Counsel" shall not include
any firm or person who, under the applicable standards of professional conduct
then prevailing, would have a conflict of interest in representing any of the
Company or Indemnitee in an action to determine Indemnitee's right to
indemnification under this Agreement.  All Expenses of the Independent Counsel
incurred in connection with acting pursuant to this Agreement shall be borne by
the Company.

     (e)  "Losses" shall mean all losses, claims, liabilities, judgments, fines,
penalties and amounts paid in settlement in connection with any Proceeding.

     (f)  "Proceeding" includes any action, suit, arbitration, alternate dispute
resolution mechanism, investigation, administrative hearing or any other
proceeding whether civil, criminal, administrative or investigative; provided,
                                                                     --------
however, that the term "Proceeding" shall include any action instituted by an
- -------
Indemnitee (other than an action to enforce indemnification rights under this
Agreement) only if such action is authorized by the Board of Directors.

     2.  Service by Indemnitee.  Indemnitee agrees to begin or continue to serve
            ---------------------
the Company or an Affiliate as a director and/or officer.  Notwithstanding
anything contained herein, this Agreement shall not create a contract of
employment between the Company and Indemnitee, and the termination of
Indemnitee's relationship with the Company or an Affiliate by either party
hereto shall not be restricted by this Agreement.

     3.  Indemnification.  The Company agrees to indemnify Indemnitee for, and
            ---------------
hold Indemnitee harmless from and against, any Losses or Expenses at any time
incurred by or assessed against Indemnitee arising out of or in connection with
the service of Indemnitee as a director, advisory director, Board Committee
member, officer, employee or agent of the Company or of an Affiliate
(collectively referred to as an "Officer or Director of the Company or of an
Affiliate"), whether the basis of such proceeding is alleged action in an
<PAGE>

official capacity or in any other capacity while serving as an Officer or
Director of the Company or of an Affiliate, to the fullest extent permitted by
the laws of the State of Nevada in effect on the date hereof or as such laws may
from time to time hereafter be amended to increase the scope of such permitted
indemnification.  Without diminishing the scope of the indemnification provided
by this Section 3, the rights of indemnification of Indemnitee provided
hereunder shall include but shall not be limited to those rights set forth
hereinafter.

     4.  Action or Proceeding Other Than an Action by or in the Right of the
         -------------------------------------------------------------------
Company.  Indemnitee shall be entitled to the indemnification rights provided
- -------
herein if Indemnitee is a person who was or is made a party or is threatened to
be made a party to any pending, completed or threatened Proceeding, other than
an action by or in the right of the Company, by reason of (a) the fact that
Indemnitee is or was an Officer or Director of the Company or of an Affiliate or
(b) anything done or not done by Indemnitee in any such capacity.  Pursuant to
this Section, Indemnitee shall be indemnified against Losses or Expenses
incurred by Indemnitee or on Indemnitee's behalf in connection with any
Proceeding, if Indemnitee acted in good faith and in a manner Indemnitee
reasonably believed to be in or not opposed to the best interests of the Company
and, with respect to any criminal Proceeding, had no reasonable cause to believe
his conduct was unlawful.

     5.  Actions by or in the Right of the Company. Indemnitee shall be entitled
         -----------------------------------------
to the indemnification rights provided herein if Indemnitee is a person who was
or is made a party or is threatened to be made a party to any pending, completed
or threatened Proceeding brought by or in the right of the Company to procure a
judgment in its favor by reason of (a) the fact that Indemnitee is or was an
Officer or Director of the Company or of an Affiliate or (b) anything done or
not done by Indemnitee in any such capacity.  Pursuant to this Section,
Indemnitee shall be indemnified against Losses or Expenses actually and
reasonably incurred by Indemnitee or on Indemnitee's behalf in connection with
any Proceeding if Indemnitee acted in good faith and in a manner Indemnitee
reasonably believed to be in or not opposed to the best interests of the
Company.  Notwithstanding the foregoing provisions of this Section, no such
indemnification shall be made in respect of any claim, issue or matter as to
which Nevada law expressly prohibits such indemnification by reason of an
adjudication of liability of Indemnitee to the Company; provided, however, that
                                                        --------  -------
in such event such indemnification shall nevertheless be made by the Company to
the extent that the court in which such action or suit was brought shall
determine equitable under the circumstances.

     6.  Indemnification for Losses and Expenses of Party Who is Wholly or
         -----------------------------------------------------------------
Partly Successful.  Notwithstanding any provision of this Agreement, to the
- -----------------
extent that Indemnitee has been wholly successful on the merits or otherwise
absolved in any Proceeding on any claim, issue or matter, Indemnitee shall be
indemnified against all Losses or Expenses actually and reasonably incurred by
Indemnitee or on Indemnitee's behalf in connection therewith.  If Indemnitee is
<PAGE>

not wholly successful in such Proceeding but is successful, on the merits or
otherwise, as to one or more but less than all claims, issues or matters in such
Proceeding, the Company agrees to indemnify Indemnitee, to the maximum extent
permitted by law, against all Losses and Expenses incurred by Indemnitee in
connection with each successfully resolved claim, issue or matter.  In any
review or Proceeding to determine the extent of indemnification, the Company
shall bear the burden of proving any lack of success and which amounts sought in
indemnity are allocable to claims, issues or matters which were not successfully
resolved.  For purposes of this Section and without limitation, the termination
of any such claim, issue or matter by dismissal with or without prejudice shall
be deemed to be a successful resolution as to such claim, issue or matter.

     7.  Payment for Expenses of a Witness.  Notwithstanding any other provision
         ---------------------------------
of this Agreement, to the extent that Indemnitee is, by reason of the fact that
Indemnitee is or was an Officer or Director of the Company or of an Affiliate, a
witness in any Proceeding, the Company agrees to pay to Indemnitee all Expenses
actually and reasonably incurred by Indemnitee or on Indemnitee's behalf in
connection therewith.

     8.  Advancement of Expenses and Costs.  All Expenses incurred by or on
         ---------------------------------
behalf of Indemnitee (or reasonably expected by Indemnitee to be incurred by
Indemnitee within three months) in connection with any Proceeding shall be paid
promptly by the Company, and in any event in advance of the final disposition of
such Proceeding within sixty days after the receipt by the Company of a
statement or statements from Indemnitee requesting from time to time such
advance or advances, whether or not a determination to indemnify has been made
under Section 9.  Such statement or statements shall evidence such Expenses
incurred (or reasonably expected to be incurred) by Indemnitee in connection
therewith and shall include or be accompanied by a written undertaking by or on
behalf of Indemnitee to repay such amount if it shall ultimately be determined
that Indemnitee is not entitled to be indemnified therefor pursuant to the terms
of this Agreement.  The right to indemnification of advances as granted by this
Section 8 shall be enforceable by the director or officer in any court of
competent jurisdiction, if the Company denies such request, in whole or in part,
or if no disposition thereof is made within 60 days.  Such person's costs and
expenses incurred in connection with successfully establishing his/her right to
indemnification, in whole or in part, in any such action shall also be
indemnified by the Company.  It shall be a defense to any such action seeking an
adjudication or award in arbitration pursuant to this Agreement (other than an
action brought to enforce a claim for the advance of costs, charges and expenses
under this Section 8 where the required undertaking, if any, has been received
by the Company) that the claimant has not met the standard of conduct set forth
in the Nevada General Corporation Law, as the same exists or hereafter may be
amended (but, in the case of any such amendment, only to the extent that such
amendment permits the Company to provide broader indemnification rights than
<PAGE>

said law permitted the Company to provide prior to such amendment), but the
burden of proving such defense shall be on the Company.  Neither the failure of
the Company (including its Board of Directors, its independent legal counsel and
its stockholders) to have made a determination prior to the commencement of such
action that indemnification of the claimant is proper in the circumstances
because he/she has met the applicable standard of conduct set forth in the
Nevada General Corporation Law, as the same exists or hereafter may be amended
(but, in the case of any such amendment, only to the extent that such amendment
permits the Company to provide broader indemnification rights that said law
permitted the Company to provide prior to such amendment), nor the fact that
there has been an actual determination by the Company (including its Board of
Directors, its independent legal counsel and its stockholders) that the claimant
has not met such applicable standard of conduct, shall be a defense to the
action or create a presumption that the claimant has not met the applicable
standard of conduct.

     9.  Procedure for Determination of Entitlement to Indemnification.  (a)
         -------------------------------------------------------------
When seeking indemnification under this Agreement (which shall not include in
any case the right of Indemnitee to receive payments pursuant to Section 7 and
Section 8 hereof, which shall not be subject to this Section 9), Indemnitee
shall submit a written request for indemnification to the Company.  Such request
shall include documentation or information which is reasonably necessary for the
Company to make a determination of Indemnitee's entitlement to indemnification
hereunder and which is reasonably available to Indemnitee.  Determination of
Indemnitee's entitlement to indemnification shall be made promptly, but in no
event later than 60 days after receipt by the Company of Indemnitee's written
request for indemnification.  The Secretary of the Company shall, promptly upon
receipt of Indemnitee's request for indemnification, advise the Board that
Indemnitee has made such request for indemnification.

     (b)  The entitlement of Indemnitee to indemnification under this Agreement
in respect of any pending, contemplated or threatened Proceeding shall be
determined in the specific case by (a) the Board of Directors by a majority vote
of a quorum consisting of those directors who were not party to such Proceeding,
or (b) if such qourum is not obtainable, or if a quorum of disinterested
directors so directs, by Independent Counsel in a written opinion, or (c) by the
stockholders.

     (c)  In the event the determination of entitlement is to be made by
Independent Counsel, such Independent Counsel shall be selected by the Board and
approved by Indemnitee.  Upon failure of the Board to so select such Independent
Counsel or upon failure of Indemnitee to so approve of the choice thereof, such
Independent Counsel shall be selected by a neutral third party mutually
agreeable among the Board and the Indemnitee to make such selection.
<PAGE>

     (d)  If the determination made pursuant to Section 9(b) is that Indemnitee
is not entitled to indemnification to the full extent of Indemnitee's request,
Indemnitee shall have the right to seek entitlement to indemnification in
accordance with the procedures set forth in Section 10 hereof.

     (e)  If the person or persons empowered pursuant to Section 9(b) hereof to
make a determination with respect to entitlement to indemnification shall have
failed to make the requested determination within 60 days after receipt by the
Company of such request, the requisite determination of entitlement to
indemnification shall be deemed to have been made and Indemnitee shall be
absolutely entitled to such indemnification, absent (i) misrepresentation by
Indemnitee of a material fact in the request for indemnification or (ii) a final
judicial determination that all or any part of such indemnification is expressly
prohibited by law.

     (f)  The termination of any Proceeding by judgment, order, settlement or
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
                              ---------------
itself, adversely affect the rights of Indemnitee to indemnification hereunder,
except as may be specifically provided herein, or create a presumption that
Indemnitee did not act in good faith and in a manner which Indemnitee reasonably
believed to be in or not opposed to the best interests of the Company or create
a presumption that (with respect to any criminal action or Proceeding)
Indemnitee had reasonable cause to believe that Indemnitee's conduct was
unlawful.

     (g)  For purposes of any determination of good faith hereunder, Indemnitee
shall be deemed to have acted in good faith if in taking an action Indemnitee
relied on the records or books of account of the Company or an Affiliate,
including financial statements, or on information supplied to Indemnitee by the
officers of the Company or an Affiliate in the course of their duties, or on the
advice of legal counsel for the Company or an Affiliate or on information or
records given or reports made to the Company or an Affiliate by an independent
certified public accountant or by an appraiser or other expert selected with
reasonable care by the Company or an Affiliate.  The Company shall have the
burden of establishing the absence of good faith.  The provisions of this
Section 9(g) shall not be deemed to be exclusive or to limit in any way the
other circumstances in which the Indemnitee may be deemed to have met the
applicable standard of conduct set forth in this Agreement.

     (h)  The knowledge and/or actions, or failure to act, of any director,
officer, agent or employee of the Company or an Affiliate shall not be imputed
to Indemnitee for purposes of determining the right to indemnification under
this Agreement.

     10. Remedies in Cases of Determination Not to Indemnify or to Advance
         -----------------------------------------------------------------
Expenses. (a)  In the event that (i) a determination is made that Indemnitee is
- --------
<PAGE>

not entitled to indemnification hereunder, (ii) advances are not made pursuant
to Section 8 hereof or (iii) payment has not been timely made following a
determination of entitlement to indemnification pursuant to Section 9 hereof,
Indemnitee shall be entitled to seek an adjudication in an appropriate court of
the State of Nevada or any other court of competent jurisdiction as to
Indemnitee's entitlement to such indemnification or advance.

     (b)  In the event a determination has been made in accordance with the
procedures set forth in Section 9 hereof, in whole or in part, that Indemnitee
is not entitled to indemnification, any judicial proceeding or arbitration
referred to in paragraph (a) of this Section 10 shall be de novo and Indemnitee
                                                         -- ----
shall not be prejudiced by reason of any such prior determination that
Indemnitee is not entitled to indemnification, and the Company shall bear the
burdens of proof specified in paragraphs 6 and 9 hereof in such proceeding.

     (c)  If a determination is made or deemed to have been made pursuant to
the terms of Section 9 or 10 hereof that Indemnitee is entitled to
indemnification, the Company shall be bound by such determination in any
judicial proceeding or arbitration in the absence of (i) a misrepresentation of
a material fact by Indemnitee or (ii) a final judicial determination that all or
any part of such indemnification is expressly prohibited by law.

     (d)  The Company and Indemnitee agree that they shall be precluded from
asserting that the procedures and presumptions of this Agreement are not valid,
binding and enforceable.  The Company and Indemnitee further agree to stipulate
in any such court that the Company and Indemnitee are bound by all of the
provisions of this Agreement and are precluded from making any assertion to the
contrary.

     (e)  To the extent deemed appropriate by the court, interest shall be paid
by the Company to Indemnitee at a rate equal to the average Federal Funds rate
in effect during the period commencing with the date on which Indemnitee
requested indemnification (or reimbursement or advance of an Expense) and ending
with the date on which such payment is made to Indemnitee by the Company (the
"Interest Period") as published by the Wall Street Journal plus four percent 4%
and shall apply to all amounts for which the Company indemnifies or is obliged
to indemnify the Indemnitee over the duration of the Interest Period.

     11. Expenses Incurred by Indemnitee to Enforce this Agreement.  All
         ---------------------------------------------------------
Expenses incurred by Indemnitee in connection with the preparation and
submission of Indemnitee's request for indemnification hereunder shall be borne
by the Company.  In the event that Indemnitee is a party to or intervenes in any
proceeding in which the validity or enforceability of this Agreement is at issue
or seeks an adjudication to enforce Indemnitee's rights under, or to recover
damages for breach of, this Agreement, Indemnitee, if Indemnitee prevails in
<PAGE>

whole in such action, shall be entitled to recover from the Company, and shall
be indemnified by the Company against, any Expenses incurred by Indemnitee.  If
it is determined that Indemnitee is entitled to indemnification for part (but
not all) of the indemnification so requested, Expenses incurred in seeking
enforcement of such partial indemnification shall be reasonably prorated among
the claims, issues or matters for which the Indemnitee is entitled to
indemnification and for claims, issues or matters for which the Indemnitee is
not so entitled.

     12. Non-Exclusivity.  The rights of indemnification and to receive advances
         ---------------
as provided by this Agreement shall not be deemed exclusive of any other rights
to which Indemnitee may at any time be entitled under or by reason of applicable
law, any certificate of incorporation or by-laws, any agreement, any vote of
stockholders or any resolution of directors or otherwise.  To the extent
Indemnitee would be prejudiced thereby, no amendment, alteration, rescission or
replacement of this Agreement or any provision hereof shall be effective as to
Indemnitee with respect to any action taken or omitted by such Indemnitee in
Indemnitee's position with the Company or an Affiliate or any other entity which
Indemnitee is or was serving at the request of the Company prior to such
amendment, alteration, rescission or replacement.

     13. Duration of Agreement.  This Agreement shall apply to any claim
         ---------------------
asserted and any Losses and Expenses incurred in connection with any claim
asserted on or after the effective date of this Agreement and shall continue
until and terminate upon the later of:  (a) 10 years after Indemnitee has ceased
to occupy any of the positions or have any of the relationships described
herein; or (b) one year after the final termination of all pending or threatened
Proceedings of the kind described herein with respect to Indemnitee.  This
Agreement shall be binding upon the Company and its successors and assigns and
shall inure to the benefit of Indemnitee and Indemnitee's spouse, assigns,
heirs, devisee, executors, administrators or other legal representatives.

     14. Severability.  Should any part, term or condition hereof be declared
         ------------
illegal or unenforceable or in conflict with any other law, the validity of the
remaining portions or provisions of this Agreement shall not be affected
thereby, and the illegal or unenforceable portions of the Agreement shall be and
hereby are redrafted to conform with applicable law, while leaving the remaining
portions of this Agreement intact.

     15. Counterparts.  This Agreement may be executed in several counterparts,
         ------------
each of which shall be deemed an original, but all of which together shall
constitute one and the same document.

     16. Headings.  Section headings are for convenience only and do not control
         --------
or affect meaning or interpretation of any terms or provisions of this
Agreement.
<PAGE>

     17. Modification and Waiver.  No supplement, modification or amendment of
         -----------------------
this Agreement shall be binding unless executed in writing by each of the
parties hereto.

     18. No Duplicative Payment.  The Company shall not be liable under this
         ----------------------
Agreement to make any payment of amounts otherwise indemnifiable hereunder if
and to the extent that Indemnitee has otherwise actually received such payment
(net of Expenses incurred in collecting such payment) under this Agreement, any
insurance policy, contract, agreement or otherwise.

     19. Notices.  All notices, requests, demands and other communications
         -------
provided for by this Agreement shall be in writing (including telecopier or
similar writing) and shall be deemed to have been given at the time when mailed
in a registered or certified postpaid envelope in any general or branch office
of the United States Postal Service or Canada Post, or sent by Federal Express
or other similar overnight courier service, addressed to the address of the
parties stated below or to such changed address as such party may have fixed by
notice or, if given by telecopier, when such telecopy is transmitted and the
appropriate answer back is received.

     (a)  If to Indemnitee, to the address appearing on the signature page
          hereof.

     (b)  If to the Company to:

          PC-EPhone, Inc.
          1388 - 885 West Georgia St.
          Vancouver, British Columbia, Canada V6C 3E8
          Attention: Corporate Secretary
          ---------

     20. GOVERNING LAW.  THE PARTIES AGREE THAT THIS AGREEMENT SHALL BE GOVERNED
          -------------
BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE
STATE OF NEVADA WITHOUT GIVING EFFECT TO THE CONFLICTS OF LAWS PRINCIPLES
THEREOF.

     21. Entire Agreement.  Subject to the provisions of Section 12 hereof, this
         ----------------
Agreement constitutes the entire understanding between the parties and
supersedes all proposals, commitments, writings, negotiations and
understandings, oral and written, and all other communications between the
parties relating to the subject matter of this Agreement.  This Agreement may
not be amended or otherwise modified except in writing duly executed by all of
the parties.  A waiver by any party of any breach or violation of this Agreement
shall not be deemed or construed as a waiver of any subsequent breach or
violation thereof.
<PAGE>

                          [Signature Page Follows]
<PAGE>

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

                                       PC-EPHONE, INC.


                                       By    /s/ Douglas Yee
                                         -----------------------------
                                       Name:     Douglas Yee
                                       Title:    President


                                       INDEMNITEE:


                                       By    /s/ Jin Lee
                                         -----------------------------
                                       Name:     Jin Lee
                                       Title:    CTO
                                       Address:  1890 - 401 West Georgia Street
                                                 Vancouver, BC V6B 5A1

<PAGE>

                                                                    Exhibit 10.7



                            INDEMNIFICATION AGREEMENT
                            -------------------------


     INDEMNIFICATION AGREEMENT, dated as of this 1st day of March, 2001, by and
between PC-EPhone, Inc., a Nevada corporation (the "Company"), and the director
and/or officer whose name appears on the signature page of this Agreement
("Indemnitee").

                                   RECITALS
                                   --------

     A.  Highly competent persons are becoming more reluctant to serve as
directors or officers or in other capacities unless they are provided with
reasonable protection through insurance or indemnification against risks of
claims and actions against them arising out of their service to and activities
on behalf of the corporations.

     B.  The Board of Directors of the Company (the "Board" or the "Board of
Directors") has determined that the Company should act to assure its directors
and officers that there will be increased certainty of such protection in the
future.

     C.  It is reasonable, prudent and necessary for the Company contractually
to obligate itself to indemnify such persons to the fullest extent permitted by
applicable law so that they will serve or continue to serve the Company free
from undue concern that they will not be so indemnified.

     D.  Indemnitee is willing to serve, to continue to serve and to take on
additional service for or on behalf of the Company on the condition that
Indemnitee be so indemnified.

                                  AGREEMENT
                                  ---------

     In consideration of the premises and the covenants contained herein, the
Company and Indemnitee do hereby covenant and agree as follows:

     1.  Definitions.  For purposes of this Agreement:
         -----------

     (a)  "Affiliate" shall mean any corporation, partnership, joint venture,
trust or other enterprise in respect of which the Indemnitee is or was or will
be serving as a director, officer, advisory director or Board Committee member
at the request of the Company, and including, but not limited to, any employee
benefit plan of the Company or any of the foregoing.
<PAGE>

     (b)  "Disinterested Director" shall mean a director of the Company who is
not or was not a party to the Proceeding in respect of which indemnification is
being sought by Indemnitee.

     (c)  "Expenses" shall include all attorneys' fees and costs, retainers,
court costs, transcripts, fees of experts, witness fees, travel expenses,
duplicating costs, printing and binding costs, telephone charges, postage,
delivery service fees and all other disbursements or expenses incurred in
connection with asserting or defending claims.

     (d)  "Independent Counsel" shall mean a law firm or lawyer that neither is
presently nor in the past five years has been retained to represent:  (i) the
Company or Indemnitee in any matter material to any such party or (ii) any other
party to the Proceeding giving rise to a claim for indemnification hereunder.
Notwithstanding the foregoing, the term "Independent Counsel" shall not include
any firm or person who, under the applicable standards of professional conduct
then prevailing, would have a conflict of interest in representing any of the
Company or Indemnitee in an action to determine Indemnitee's right to
indemnification under this Agreement.  All Expenses of the Independent Counsel
incurred in connection with acting pursuant to this Agreement shall be borne by
the Company.

     (e)  "Losses" shall mean all losses, claims, liabilities, judgments, fines,
penalties and amounts paid in settlement in connection with any Proceeding.

     (f)  "Proceeding" includes any action, suit, arbitration, alternate dispute
resolution mechanism, investigation, administrative hearing or any other
proceeding whether civil, criminal, administrative or investigative; provided,
                                                                     --------
however, that the term "Proceeding" shall include any action instituted by an
- -------
Indemnitee (other than an action to enforce indemnification rights under this
Agreement) only if such action is authorized by the Board of Directors.

     2.  Service by Indemnitee.  Indemnitee agrees to begin or continue to serve
            ---------------------
the Company or an Affiliate as a director and/or officer.  Notwithstanding
anything contained herein, this Agreement shall not create a contract of
employment between the Company and Indemnitee, and the termination of
Indemnitee's relationship with the Company or an Affiliate by either party
hereto shall not be restricted by this Agreement.

     3.  Indemnification.  The Company agrees to indemnify Indemnitee for, and
            ---------------
hold Indemnitee harmless from and against, any Losses or Expenses at any time
incurred by or assessed against Indemnitee arising out of or in connection with
the service of Indemnitee as a director, advisory director, Board Committee
member, officer, employee or agent of the Company or of an Affiliate
(collectively referred to as an "Officer or Director of the Company or of an
Affiliate"), whether the basis of such proceeding is alleged action in an
<PAGE>

official capacity or in any other capacity while serving as an Officer or
Director of the Company or of an Affiliate, to the fullest extent permitted by
the laws of the State of Nevada in effect on the date hereof or as such laws may
from time to time hereafter be amended to increase the scope of such permitted
indemnification.  Without diminishing the scope of the indemnification provided
by this Section 3, the rights of indemnification of Indemnitee provided
hereunder shall include but shall not be limited to those rights set forth
hereinafter.

     4.  Action or Proceeding Other Than an Action by or in the Right of the
         -------------------------------------------------------------------
Company.  Indemnitee shall be entitled to the indemnification rights provided
- -------
herein if Indemnitee is a person who was or is made a party or is threatened to
be made a party to any pending, completed or threatened Proceeding, other than
an action by or in the right of the Company, by reason of (a) the fact that
Indemnitee is or was an Officer or Director of the Company or of an Affiliate or
(b) anything done or not done by Indemnitee in any such capacity.  Pursuant to
this Section, Indemnitee shall be indemnified against Losses or Expenses
incurred by Indemnitee or on Indemnitee's behalf in connection with any
Proceeding, if Indemnitee acted in good faith and in a manner Indemnitee
reasonably believed to be in or not opposed to the best interests of the Company
and, with respect to any criminal Proceeding, had no reasonable cause to believe
his conduct was unlawful.

     5.  Actions by or in the Right of the Company. Indemnitee shall be entitled
         -----------------------------------------
to the indemnification rights provided herein if Indemnitee is a person who was
or is made a party or is threatened to be made a party to any pending, completed
or threatened Proceeding brought by or in the right of the Company to procure a
judgment in its favor by reason of (a) the fact that Indemnitee is or was an
Officer or Director of the Company or of an Affiliate or (b) anything done or
not done by Indemnitee in any such capacity.  Pursuant to this Section,
Indemnitee shall be indemnified against Losses or Expenses actually and
reasonably incurred by Indemnitee or on Indemnitee's behalf in connection with
any Proceeding if Indemnitee acted in good faith and in a manner Indemnitee
reasonably believed to be in or not opposed to the best interests of the
Company.  Notwithstanding the foregoing provisions of this Section, no such
indemnification shall be made in respect of any claim, issue or matter as to
which Nevada law expressly prohibits such indemnification by reason of an
adjudication of liability of Indemnitee to the Company; provided, however, that
                                                        --------  -------
in such event such indemnification shall nevertheless be made by the Company to
the extent that the court in which such action or suit was brought shall
determine equitable under the circumstances.

     6.  Indemnification for Losses and Expenses of Party Who is Wholly or
         -----------------------------------------------------------------
Partly Successful.  Notwithstanding any provision of this Agreement, to the
- -----------------
extent that Indemnitee has been wholly successful on the merits or otherwise
absolved in any Proceeding on any claim, issue or matter, Indemnitee shall be
indemnified against all Losses or Expenses actually and reasonably incurred by
Indemnitee or on Indemnitee's behalf in connection therewith.  If Indemnitee is
<PAGE>

not wholly successful in such Proceeding but is successful, on the merits or
otherwise, as to one or more but less than all claims, issues or matters in such
Proceeding, the Company agrees to indemnify Indemnitee, to the maximum extent
permitted by law, against all Losses and Expenses incurred by Indemnitee in
connection with each successfully resolved claim, issue or matter.  In any
review or Proceeding to determine the extent of indemnification, the Company
shall bear the burden of proving any lack of success and which amounts sought in
indemnity are allocable to claims, issues or matters which were not successfully
resolved.  For purposes of this Section and without limitation, the termination
of any such claim, issue or matter by dismissal with or without prejudice shall
be deemed to be a successful resolution as to such claim, issue or matter.

     7.  Payment for Expenses of a Witness.  Notwithstanding any other provision
         ---------------------------------
of this Agreement, to the extent that Indemnitee is, by reason of the fact that
Indemnitee is or was an Officer or Director of the Company or of an Affiliate, a
witness in any Proceeding, the Company agrees to pay to Indemnitee all Expenses
actually and reasonably incurred by Indemnitee or on Indemnitee's behalf in
connection therewith.

     8.  Advancement of Expenses and Costs.  All Expenses incurred by or on
         ---------------------------------
behalf of Indemnitee (or reasonably expected by Indemnitee to be incurred by
Indemnitee within three months) in connection with any Proceeding shall be paid
promptly by the Company, and in any event in advance of the final disposition of
such Proceeding within sixty days after the receipt by the Company of a
statement or statements from Indemnitee requesting from time to time such
advance or advances, whether or not a determination to indemnify has been made
under Section 9.  Such statement or statements shall evidence such Expenses
incurred (or reasonably expected to be incurred) by Indemnitee in connection
therewith and shall include or be accompanied by a written undertaking by or on
behalf of Indemnitee to repay such amount if it shall ultimately be determined
that Indemnitee is not entitled to be indemnified therefor pursuant to the terms
of this Agreement.  The right to indemnification of advances as granted by this
Section 8 shall be enforceable by the director or officer in any court of
competent jurisdiction, if the Company denies such request, in whole or in part,
or if no disposition thereof is made within 60 days.  Such person's costs and
expenses incurred in connection with successfully establishing his/her right to
indemnification, in whole or in part, in any such action shall also be
indemnified by the Company.  It shall be a defense to any such action seeking an
adjudication or award in arbitration pursuant to this Agreement (other than an
action brought to enforce a claim for the advance of costs, charges and expenses
under this Section 8 where the required undertaking, if any, has been received
by the Company) that the claimant has not met the standard of conduct set forth
in the Nevada General Corporation Law, as the same exists or hereafter may be
amended (but, in the case of any such amendment, only to the extent that such
amendment permits the Company to provide broader indemnification rights than
<PAGE>

said law permitted the Company to provide prior to such amendment), but the
burden of proving such defense shall be on the Company.  Neither the failure of
the Company (including its Board of Directors, its independent legal counsel and
its stockholders) to have made a determination prior to the commencement of such
action that indemnification of the claimant is proper in the circumstances
because he/she has met the applicable standard of conduct set forth in the
Nevada General Corporation Law, as the same exists or hereafter may be amended
(but, in the case of any such amendment, only to the extent that such amendment
permits the Company to provide broader indemnification rights that said law
permitted the Company to provide prior to such amendment), nor the fact that
there has been an actual determination by the Company (including its Board of
Directors, its independent legal counsel and its stockholders) that the claimant
has not met such applicable standard of conduct, shall be a defense to the
action or create a presumption that the claimant has not met the applicable
standard of conduct.

     9.  Procedure for Determination of Entitlement to Indemnification.  (a)
         -------------------------------------------------------------
When seeking indemnification under this Agreement (which shall not include in
any case the right of Indemnitee to receive payments pursuant to Section 7 and
Section 8 hereof, which shall not be subject to this Section 9), Indemnitee
shall submit a written request for indemnification to the Company.  Such request
shall include documentation or information which is reasonably necessary for the
Company to make a determination of Indemnitee's entitlement to indemnification
hereunder and which is reasonably available to Indemnitee.  Determination of
Indemnitee's entitlement to indemnification shall be made promptly, but in no
event later than 60 days after receipt by the Company of Indemnitee's written
request for indemnification.  The Secretary of the Company shall, promptly upon
receipt of Indemnitee's request for indemnification, advise the Board that
Indemnitee has made such request for indemnification.

     (b)  The entitlement of Indemnitee to indemnification under this Agreement
in respect of any pending, contemplated or threatened Proceeding shall be
determined in the specific case by (a) the Board of Directors by a majority vote
of a quorum consisting of those directors who were not party to such Proceeding,
or (b) if such qourum is not obtainable, or if a quorum of disinterested
directors so directs, by Independent Counsel in a written opinion, or (c) by the
stockholders.

     (c)  In the event the determination of entitlement is to be made by
Independent Counsel, such Independent Counsel shall be selected by the Board and
approved by Indemnitee.  Upon failure of the Board to so select such Independent
Counsel or upon failure of Indemnitee to so approve of the choice thereof, such
Independent Counsel shall be selected by a neutral third party mutually
agreeable among the Board and the Indemnitee to make such selection.
<PAGE>

     (d)  If the determination made pursuant to Section 9(b) is that Indemnitee
is not entitled to indemnification to the full extent of Indemnitee's request,
Indemnitee shall have the right to seek entitlement to indemnification in
accordance with the procedures set forth in Section 10 hereof.

     (e)  If the person or persons empowered pursuant to Section 9(b) hereof to
make a determination with respect to entitlement to indemnification shall have
failed to make the requested determination within 60 days after receipt by the
Company of such request, the requisite determination of entitlement to
indemnification shall be deemed to have been made and Indemnitee shall be
absolutely entitled to such indemnification, absent (i) misrepresentation by
Indemnitee of a material fact in the request for indemnification or (ii) a final
judicial determination that all or any part of such indemnification is expressly
prohibited by law.

     (f)  The termination of any Proceeding by judgment, order, settlement or
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
                              ---------------
itself, adversely affect the rights of Indemnitee to indemnification hereunder,
except as may be specifically provided herein, or create a presumption that
Indemnitee did not act in good faith and in a manner which Indemnitee reasonably
believed to be in or not opposed to the best interests of the Company or create
a presumption that (with respect to any criminal action or Proceeding)
Indemnitee had reasonable cause to believe that Indemnitee's conduct was
unlawful.

     (g)  For purposes of any determination of good faith hereunder, Indemnitee
shall be deemed to have acted in good faith if in taking an action Indemnitee
relied on the records or books of account of the Company or an Affiliate,
including financial statements, or on information supplied to Indemnitee by the
officers of the Company or an Affiliate in the course of their duties, or on the
advice of legal counsel for the Company or an Affiliate or on information or
records given or reports made to the Company or an Affiliate by an independent
certified public accountant or by an appraiser or other expert selected with
reasonable care by the Company or an Affiliate.  The Company shall have the
burden of establishing the absence of good faith.  The provisions of this
Section 9(g) shall not be deemed to be exclusive or to limit in any way the
other circumstances in which the Indemnitee may be deemed to have met the
applicable standard of conduct set forth in this Agreement.

     (h)  The knowledge and/or actions, or failure to act, of any director,
officer, agent or employee of the Company or an Affiliate shall not be imputed
to Indemnitee for purposes of determining the right to indemnification under
this Agreement.

     10. Remedies in Cases of Determination Not to Indemnify or to Advance
         -----------------------------------------------------------------
Expenses. (a)  In the event that (i) a determination is made that Indemnitee is
- --------
<PAGE>

not entitled to indemnification hereunder, (ii) advances are not made pursuant
to Section 8 hereof or (iii) payment has not been timely made following a
determination of entitlement to indemnification pursuant to Section 9 hereof,
Indemnitee shall be entitled to seek an adjudication in an appropriate court of
the State of Nevada or any other court of competent jurisdiction as to
Indemnitee's entitlement to such indemnification or advance.

     (b)  In the event a determination has been made in accordance with the
procedures set forth in Section 9 hereof, in whole or in part, that Indemnitee
is not entitled to indemnification, any judicial proceeding or arbitration
referred to in paragraph (a) of this Section 10 shall be de novo and Indemnitee
                                                         -- ----
shall not be prejudiced by reason of any such prior determination that
Indemnitee is not entitled to indemnification, and the Company shall bear the
burdens of proof specified in paragraphs 6 and 9 hereof in such proceeding.

     (c)  If a determination is made or deemed to have been made pursuant to
the terms of Section 9 or 10 hereof that Indemnitee is entitled to
indemnification, the Company shall be bound by such determination in any
judicial proceeding or arbitration in the absence of (i) a misrepresentation of
a material fact by Indemnitee or (ii) a final judicial determination that all or
any part of such indemnification is expressly prohibited by law.

     (d)  The Company and Indemnitee agree that they shall be precluded from
asserting that the procedures and presumptions of this Agreement are not valid,
binding and enforceable.  The Company and Indemnitee further agree to stipulate
in any such court that the Company and Indemnitee are bound by all of the
provisions of this Agreement and are precluded from making any assertion to the
contrary.

     (e)  To the extent deemed appropriate by the court, interest shall be paid
by the Company to Indemnitee at a rate equal to the average Federal Funds rate
in effect during the period commencing with the date on which Indemnitee
requested indemnification (or reimbursement or advance of an Expense) and ending
with the date on which such payment is made to Indemnitee by the Company (the
"Interest Period") as published by the Wall Street Journal plus four percent 4%
and shall apply to all amounts for which the Company indemnifies or is obliged
to indemnify the Indemnitee over the duration of the Interest Period.

     11. Expenses Incurred by Indemnitee to Enforce this Agreement.  All
         ---------------------------------------------------------
Expenses incurred by Indemnitee in connection with the preparation and
submission of Indemnitee's request for indemnification hereunder shall be borne
by the Company.  In the event that Indemnitee is a party to or intervenes in any
proceeding in which the validity or enforceability of this Agreement is at issue
or seeks an adjudication to enforce Indemnitee's rights under, or to recover
damages for breach of, this Agreement, Indemnitee, if Indemnitee prevails in
<PAGE>

whole in such action, shall be entitled to recover from the Company, and shall
be indemnified by the Company against, any Expenses incurred by Indemnitee.  If
it is determined that Indemnitee is entitled to indemnification for part (but
not all) of the indemnification so requested, Expenses incurred in seeking
enforcement of such partial indemnification shall be reasonably prorated among
the claims, issues or matters for which the Indemnitee is entitled to
indemnification and for claims, issues or matters for which the Indemnitee is
not so entitled.

     12. Non-Exclusivity.  The rights of indemnification and to receive advances
         ---------------
as provided by this Agreement shall not be deemed exclusive of any other rights
to which Indemnitee may at any time be entitled under or by reason of applicable
law, any certificate of incorporation or by-laws, any agreement, any vote of
stockholders or any resolution of directors or otherwise.  To the extent
Indemnitee would be prejudiced thereby, no amendment, alteration, rescission or
replacement of this Agreement or any provision hereof shall be effective as to
Indemnitee with respect to any action taken or omitted by such Indemnitee in
Indemnitee's position with the Company or an Affiliate or any other entity which
Indemnitee is or was serving at the request of the Company prior to such
amendment, alteration, rescission or replacement.

     13. Duration of Agreement.  This Agreement shall apply to any claim
         ---------------------
asserted and any Losses and Expenses incurred in connection with any claim
asserted on or after the effective date of this Agreement and shall continue
until and terminate upon the later of:  (a) 10 years after Indemnitee has ceased
to occupy any of the positions or have any of the relationships described
herein; or (b) one year after the final termination of all pending or threatened
Proceedings of the kind described herein with respect to Indemnitee.  This
Agreement shall be binding upon the Company and its successors and assigns and
shall inure to the benefit of Indemnitee and Indemnitee's spouse, assigns,
heirs, devisee, executors, administrators or other legal representatives.

     14. Severability.  Should any part, term or condition hereof be declared
         ------------
illegal or unenforceable or in conflict with any other law, the validity of the
remaining portions or provisions of this Agreement shall not be affected
thereby, and the illegal or unenforceable portions of the Agreement shall be and
hereby are redrafted to conform with applicable law, while leaving the remaining
portions of this Agreement intact.

     15. Counterparts.  This Agreement may be executed in several counterparts,
         ------------
each of which shall be deemed an original, but all of which together shall
constitute one and the same document.

     16. Headings.  Section headings are for convenience only and do not control
         --------
or affect meaning or interpretation of any terms or provisions of this
Agreement.
<PAGE>

     17. Modification and Waiver.  No supplement, modification or amendment of
         -----------------------
this Agreement shall be binding unless executed in writing by each of the
parties hereto.

     18. No Duplicative Payment.  The Company shall not be liable under this
         ----------------------
Agreement to make any payment of amounts otherwise indemnifiable hereunder if
and to the extent that Indemnitee has otherwise actually received such payment
(net of Expenses incurred in collecting such payment) under this Agreement, any
insurance policy, contract, agreement or otherwise.

     19. Notices.  All notices, requests, demands and other communications
         -------
provided for by this Agreement shall be in writing (including telecopier or
similar writing) and shall be deemed to have been given at the time when mailed
in a registered or certified postpaid envelope in any general or branch office
of the United States Postal Service or Canada Post, or sent by Federal Express
or other similar overnight courier service, addressed to the address of the
parties stated below or to such changed address as such party may have fixed by
notice or, if given by telecopier, when such telecopy is transmitted and the
appropriate answer back is received.

     (a)  If to Indemnitee, to the address appearing on the signature page
          hereof.

     (b)  If to the Company to:

          PC-EPhone, Inc.
          1388 - 885 West Georgia St.
          Vancouver, British Columbia, Canada V6C 3E8
          Attention: Corporate Secretary
          ---------

     20. GOVERNING LAW.  THE PARTIES AGREE THAT THIS AGREEMENT SHALL BE GOVERNED
          -------------
BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE
STATE OF NEVADA WITHOUT GIVING EFFECT TO THE CONFLICTS OF LAWS PRINCIPLES
THEREOF.

     21. Entire Agreement.  Subject to the provisions of Section 12 hereof, this
         ----------------
Agreement constitutes the entire understanding between the parties and
supersedes all proposals, commitments, writings, negotiations and
understandings, oral and written, and all other communications between the
parties relating to the subject matter of this Agreement.  This Agreement may
not be amended or otherwise modified except in writing duly executed by all of
the parties.  A waiver by any party of any breach or violation of this Agreement
shall not be deemed or construed as a waiver of any subsequent breach or
violation thereof.
<PAGE>

                          [Signature Page Follows]
<PAGE>

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

                                       PC-EPHONE, INC.


                                       By    /s/ Douglas Yee
                                         -----------------------------
                                       Name:     Douglas Yee
                                       Title:    President


                                       INDEMNITEE:


                                             /s/ Don-gil Park
                                         -----------------------------
                                       Name:     Don-gil Park
                                       Title:    Director
                                       Address:  102 - 1601 Sindonga Apt
                                                 Yongdu-dong, Dongdaemun-gu
                                                 Seoul Korea

<PAGE>

                                                                    EXHIBIT 10.8

                           INDEMNIFICATION AGREEMENT
                           -------------------------


     INDEMNIFICATION AGREEMENT, dated as of this 1st day of March, 2001, by and
between PC-EPhone, Inc., a Nevada corporation (the "Company"), and the director
and/or officer whose name appears on the signature page of this Agreement
("Indemnitee").

                                   RECITALS
                                   --------

     A.  Highly competent persons are becoming more reluctant to serve as
directors or officers or in other capacities unless they are provided with
reasonable protection through insurance or indemnification against risks of
claims and actions against them arising out of their service to and activities
on behalf of the corporations.

     B.  The Board of Directors of the Company (the "Board" or the "Board of
Directors") has determined that the Company should act to assure its directors
and officers that there will be increased certainty of such protection in the
future.

     C.  It is reasonable, prudent and necessary for the Company contractually
to obligate itself to indemnify such persons to the fullest extent permitted by
applicable law so that they will serve or continue to serve the Company free
from undue concern that they will not be so indemnified.

     D.  Indemnitee is willing to serve, to continue to serve and to take on
additional service for or on behalf of the Company on the condition that
Indemnitee be so indemnified.

                                   AGREEMENT
                                   ---------

     In consideration of the premises and the covenants contained herein, the
Company and Indemnitee do hereby covenant and agree as follows:

     1.  Definitions.  For purposes of this Agreement:
         -----------

     (a)  "Affiliate" shall mean any corporation, partnership, joint venture,
trust or other enterprise in respect of which the Indemnitee is or was or will
be serving as a director, officer, advisory director or Board Committee member
at the request of the Company, and including, but not limited to, any employee
benefit plan of the Company or any of the foregoing.
<PAGE>

     (b)  "Disinterested Director" shall mean a director of the Company who is
not or was not a party to the Proceeding in respect of which indemnification is
being sought by Indemnitee.

     (c)  "Expenses" shall include all attorneys' fees and costs, retainers,
court costs, transcripts, fees of experts, witness fees, travel expenses,
duplicating costs, printing and binding costs, telephone charges, postage,
delivery service fees and all other disbursements or expenses incurred in
connection with asserting or defending claims.

     (d)  "Independent Counsel" shall mean a law firm or lawyer that neither is
presently nor in the past five years has been retained to represent:  (i) the
Company or Indemnitee in any matter material to any such party or (ii) any other
party to the Proceeding giving rise to a claim for indemnification hereunder.
Notwithstanding the foregoing, the term "Independent Counsel" shall not include
any firm or person who, under the applicable standards of professional conduct
then prevailing, would have a conflict of interest in representing any of the
Company or Indemnitee in an action to determine Indemnitee's right to
indemnification under this Agreement. All Expenses of the Independent Counsel
incurred in connection with acting pursuant to this Agreement shall be borne by
the Company.

     (e)  "Losses" shall mean all losses, claims, liabilities, judgments, fines,
penalties and amounts paid in settlement in connection with any Proceeding.

     (f)  "Proceeding" includes any action, suit, arbitration, alternate dispute
resolution mechanism, investigation, administrative hearing or any other
proceeding whether civil, criminal, administrative or investigative; provided,
                                                                     --------
however, that the term "Proceeding" shall include any action instituted by an
- -------
Indemnitee (other than an action to enforce indemnification rights under this
Agreement) only if such action is authorized by the Board of Directors.

     2.  Service by Indemnitee.  Indemnitee agrees to begin or continue to serve
         ---------------------
the Company or an Affiliate as a director and/or officer.  Notwithstanding
anything contained herein, this Agreement shall not create a contract of
employment between the Company and Indemnitee, and the termination of
Indemnitee's relationship with the Company or an Affiliate by either party
hereto shall not be restricted by this Agreement.

     3.  Indemnification.  The Company agrees to indemnify Indemnitee for, and
         ---------------
hold Indemnitee harmless from and against, any Losses or Expenses at any time
incurred by or assessed against Indemnitee arising out of or in connection with
the service of Indemnitee as a director, advisory director, Board Committee
member, officer, employee or agent of the Company or of an Affiliate
(collectively referred to as an "Officer or Director of the Company or of an
Affiliate"), whether the basis of such proceeding is alleged action in an
<PAGE>

official capacity or in any other capacity while serving as an Officer or
Director of the Company or of an Affiliate, to the fullest extent permitted by
the laws of the State of Nevada in effect on the date hereof or as such laws may
from time to time hereafter be amended to increase the scope of such permitted
indemnification.  Without diminishing the scope of the indemnification provided
by this Section 3, the rights of indemnification of Indemnitee provided
hereunder shall include but shall not be limited to those rights set forth
hereinafter.

     4.  Action or Proceeding Other Than an Action by or in the Right of the
         -------------------------------------------------------------------
Company.  Indemnitee shall be entitled to the indemnification rights provided
- -------
herein if Indemnitee is a person who was or is made a party or is threatened to
be made a party to any pending, completed or threatened Proceeding, other than
an action by or in the right of the Company, by reason of (a) the fact that
Indemnitee is or was an Officer or Director of the Company or of an Affiliate or
(b) anything done or not done by Indemnitee in any such capacity.  Pursuant to
this Section, Indemnitee shall be indemnified against Losses or Expenses
incurred by Indemnitee or on Indemnitee's behalf in connection with any
Proceeding, if Indemnitee acted in good faith and in a manner Indemnitee
reasonably believed to be in or not opposed to the best interests of the Company
and, with respect to any criminal Proceeding, had no reasonable cause to believe
his conduct was unlawful.

     5.  Actions by or in the Right of the Company. Indemnitee shall be entitled
         -----------------------------------------
to the indemnification rights provided herein if Indemnitee is a person who was
or is made a party or is threatened to be made a party to any pending, completed
or threatened Proceeding brought by or in the right of the Company to procure a
judgment in its favor by reason of (a) the fact that Indemnitee is or was an
Officer or Director of the Company or of an Affiliate or (b) anything done or
not done by Indemnitee in any such capacity.  Pursuant to this Section,
Indemnitee shall be indemnified against Losses or Expenses actually and
reasonably incurred by Indemnitee or on Indemnitee's behalf in connection with
any Proceeding if Indemnitee acted in good faith and in a manner Indemnitee
reasonably believed to be in or not opposed to the best interests of the
Company.  Notwithstanding the foregoing provisions of this Section, no such
indemnification shall be made in respect of any claim, issue or matter as to
which Nevada law expressly prohibits such indemnification by reason of an
adjudication of liability of Indemnitee to the Company; provided, however, that
                                                        --------  -------
in such event such indemnification shall nevertheless be made by the Company to
the extent that the court in which such action or suit was brought shall
determine equitable under the circumstances.

     6.  Indemnification for Losses and Expenses of Party Who is Wholly or
         -----------------------------------------------------------------
Partly Successful.  Notwithstanding any provision of this Agreement, to the
- -----------------
extent that Indemnitee has been wholly successful on the merits or otherwise
absolved in any Proceeding on any claim, issue or matter, Indemnitee shall be
indemnified against all Losses or Expenses actually and reasonably incurred by
Indemnitee or on Indemnitee's behalf in connection therewith.  If Indemnitee is
<PAGE>

not wholly successful in such Proceeding but is successful, on the merits or
otherwise, as to one or more but less than all claims, issues or matters in such
Proceeding, the Company agrees to indemnify Indemnitee, to the maximum extent
permitted by law, against all Losses and Expenses incurred by Indemnitee in
connection with each successfully resolved claim, issue or matter.  In any
review or Proceeding to determine the extent of indemnification, the Company
shall bear the burden of proving any lack of success and which amounts sought in
indemnity are allocable to claims, issues or matters which were not successfully
resolved.  For purposes of this Section and without limitation, the termination
of any such claim, issue or matter by dismissal with or without prejudice shall
be deemed to be a successful resolution as to such claim, issue or matter.

     7.  Payment for Expenses of a Witness.  Notwithstanding any other provision
         ---------------------------------
of this Agreement, to the extent that Indemnitee is, by reason of the fact that
Indemnitee is or was an Officer or Director of the Company or of an Affiliate, a
witness in any Proceeding, the Company agrees to pay to Indemnitee all Expenses
actually and reasonably incurred by Indemnitee or on Indemnitee's behalf in
connection therewith.

     8.  Advancement of Expenses and Costs.  All Expenses incurred by or on
         ---------------------------------
behalf of Indemnitee (or reasonably expected by Indemnitee to be incurred by
Indemnitee within three months) in connection with any Proceeding shall be paid
promptly by the Company, and in any event in advance of the final disposition of
such Proceeding within sixty days after the receipt by the Company of a
statement or statements from Indemnitee requesting from time to time such
advance or advances, whether or not a determination to indemnify has been made
under Section 9.  Such statement or statements shall evidence such Expenses
incurred (or reasonably expected to be incurred) by Indemnitee in connection
therewith and shall include or be accompanied by a written undertaking by or on
behalf of Indemnitee to repay such amount if it shall ultimately be determined
that Indemnitee is not entitled to be indemnified therefor pursuant to the terms
of this Agreement.  The right to indemnification of advances as granted by this
Section 8 shall be enforceable by the director or officer in any court of
competent jurisdiction, if the Company denies such request, in whole or in part,
or if no disposition thereof is made within 60 days.  Such person's costs and
expenses incurred in connection with successfully establishing his/her right to
indemnification, in whole or in part, in any such action shall also be
indemnified by the Company.  It shall be a defense to any such action seeking an
adjudication or award in arbitration pursuant to this Agreement (other than an
action brought to enforce a claim for the advance of costs, charges and expenses
under this Section 8 where the required undertaking, if any, has been received
by the Company) that the claimant has not met the standard of conduct set forth
in the Nevada General Corporation Law, as the same exists or hereafter may be
amended (but, in the case of any such amendment, only to the extent that such
amendment permits the Company to provide broader indemnification rights than
<PAGE>

said law permitted the Company to provide prior to such amendment), but the
burden of proving such defense shall be on the Company.  Neither the failure of
the Company (including its Board of Directors, its independent legal counsel and
its stockholders) to have made a determination prior to the commencement of such
action that indemnification of the claimant is proper in the circumstances
because he/she has met the applicable standard of conduct set forth in the
Nevada General Corporation Law, as the same exists or hereafter may be amended
(but, in the case of any such amendment, only to the extent that such amendment
permits the Company to provide broader indemnification rights that said law
permitted the Company to provide prior to such amendment), nor the fact that
there has been an actual determination by the Company (including its Board of
Directors, its independent legal counsel and its stockholders) that the claimant
has not met such applicable standard of conduct, shall be a defense to the
action or create a presumption that the claimant has not met the applicable
standard of conduct.

     9.  Procedure for Determination of Entitlement to Indemnification.  (a)
         -------------------------------------------------------------
When seeking indemnification under this Agreement (which shall not include in
any case the right of Indemnitee to receive payments pursuant to Section 7 and
Section 8 hereof, which shall not be subject to this Section 9), Indemnitee
shall submit a written request for indemnification to the Company.  Such request
shall include documentation or information which is reasonably necessary for the
Company to make a determination of Indemnitee's entitlement to indemnification
hereunder and which is reasonably available to Indemnitee.  Determination of
Indemnitee's entitlement to indemnification shall be made promptly, but in no
event later than 60 days after receipt by the Company of Indemnitee's written
request for indemnification.  The Secretary of the Company shall, promptly upon
receipt of Indemnitee's request for indemnification, advise the Board that
Indemnitee has made such request for indemnification.

     (b)  The entitlement of Indemnitee to indemnification under this Agreement
in respect of any pending, contemplated or threatened Proceeding shall be
determined in the specific case by (a) the Board of Directors by a majority vote
of a quorum consisting of those directors who were not party to such Proceeding,
or (b) if such qourum is not obtainable, or if a quorum of disinterested
directors so directs, by Independent Counsel in a written opinion, or (c) by the
stockholders.

     (c)  In the event the determination of entitlement is to be made by
Independent Counsel, such Independent Counsel shall be selected by the Board and
approved by Indemnitee.  Upon failure of the Board to so select such Independent
Counsel or upon failure of Indemnitee to so approve of the choice thereof, such
Independent Counsel shall be selected by a neutral third party mutually
agreeable among the Board and the Indemnitee to make such selection.
<PAGE>

     (d)  If the determination made pursuant to Section 9(b) is that Indemnitee
is not entitled to indemnification to the full extent of Indemnitee's request,
Indemnitee shall have the right to seek entitlement to indemnification in
accordance with the procedures set forth in Section 10 hereof.

     (e)  If the person or persons empowered pursuant to Section 9(b) hereof to
make a determination with respect to entitlement to indemnification shall have
failed to make the requested determination within 60 days after receipt by the
Company of such request, the requisite determination of entitlement to
indemnification shall be deemed to have been made and Indemnitee shall be
absolutely entitled to such indemnification, absent (i) misrepresentation by
Indemnitee of a material fact in the request for indemnification or (ii) a final
judicial determination that all or any part of such indemnification is expressly
prohibited by law.

     (f)  The termination of any Proceeding by judgment, order, settlement or
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
                              ---------------
itself, adversely affect the rights of Indemnitee to indemnification hereunder,
except as may be specifically provided herein, or create a presumption that
Indemnitee did not act in good faith and in a manner which Indemnitee reasonably
believed to be in or not opposed to the best interests of the Company or create
a presumption that (with respect to any criminal action or Proceeding)
Indemnitee had reasonable cause to believe that Indemnitee's conduct was
unlawful.

     (g)  For purposes of any determination of good faith hereunder, Indemnitee
shall be deemed to have acted in good faith if in taking an action Indemnitee
relied on the records or books of account of the Company or an Affiliate,
including financial statements, or on information supplied to Indemnitee by the
officers of the Company or an Affiliate in the course of their duties, or on the
advice of legal counsel for the Company or an Affiliate or on information or
records given or reports made to the Company or an Affiliate by an independent
certified public accountant or by an appraiser or other expert selected with
reasonable care by the Company or an Affiliate.  The Company shall have the
burden of establishing the absence of good faith.  The provisions of this
Section 9(g) shall not be deemed to be exclusive or to limit in any way the
other circumstances in which the Indemnitee may be deemed to have met the
applicable standard of conduct set forth in this Agreement.

     (h)  The knowledge and/or actions, or failure to act, of any director,
officer, agent or employee of the Company or an Affiliate shall not be imputed
to Indemnitee for purposes of determining the right to indemnification under
this Agreement.

     10. Remedies in Cases of Determination Not to Indemnify or to Advance
         -----------------------------------------------------------------
Expenses. (a)  In the event that (i) a determination is made that Indemnitee is
- --------
<PAGE>

not entitled to indemnification hereunder, (ii) advances are not made pursuant
to Section 8 hereof or (iii) payment has not been timely made following a
determination of entitlement to indemnification pursuant to Section 9 hereof,
Indemnitee shall be entitled to seek an adjudication in an appropriate court of
the State of Nevada or any other court of competent jurisdiction as to
Indemnitee's entitlement to such indemnification or advance.

     (b)  In the event a determination has been made in accordance with the
procedures set forth in Section 9 hereof, in whole or in part, that Indemnitee
is not entitled to indemnification, any judicial proceeding or arbitration
referred to in paragraph (a) of this Section 10 shall be de novo and Indemnitee
                                                         -- ----
shall not be prejudiced by reason of any such prior determination that
Indemnitee is not entitled to indemnification, and the Company shall bear the
burdens of proof specified in paragraphs 6 and 9 hereof in such proceeding.

     (c)  If a determination is made or deemed to have been made pursuant to
the terms of Section 9 or 10 hereof that Indemnitee is entitled to
indemnification, the Company shall be bound by such determination in any
judicial proceeding or arbitration in the absence of (i) a misrepresentation of
a material fact by Indemnitee or (ii) a final judicial determination that all or
any part of such indemnification is expressly prohibited by law.

     (d)  The Company and Indemnitee agree that they shall be precluded from
asserting that the procedures and presumptions of this Agreement are not valid,
binding and enforceable.  The Company and Indemnitee further agree to stipulate
in any such court that the Company and Indemnitee are bound by all of the
provisions of this Agreement and are precluded from making any assertion to the
contrary.

     (e)  To the extent deemed appropriate by the court, interest shall be paid
by the Company to Indemnitee at a rate equal to the average Federal Funds rate
in effect during the period commencing with the date on which Indemnitee
requested indemnification (or reimbursement or advance of an Expense) and ending
with the date on which such payment is made to Indemnitee by the Company (the
"Interest Period") as published by the Wall Street Journal plus four percent 4%
and shall apply to all amounts for which the Company indemnifies or is obliged
to indemnify the Indemnitee over the duration of the Interest Period.

     11. Expenses Incurred by Indemnitee to Enforce this Agreement.  All
         ---------------------------------------------------------
Expenses incurred by Indemnitee in connection with the preparation and
submission of Indemnitee's request for indemnification hereunder shall be borne
by the Company.  In the event that Indemnitee is a party to or intervenes in any
proceeding in which the validity or enforceability of this Agreement is at issue
or seeks an adjudication to enforce Indemnitee's rights under, or to recover
damages for breach of, this Agreement, Indemnitee, if Indemnitee prevails in
<PAGE>

whole in such action, shall be entitled to recover from the Company, and shall
be indemnified by the Company against, any Expenses incurred by Indemnitee.  If
it is determined that Indemnitee is entitled to indemnification for part (but
not all) of the indemnification so requested, Expenses incurred in seeking
enforcement of such partial indemnification shall be reasonably prorated among
the claims, issues or matters for which the Indemnitee is entitled to
indemnification and for claims, issues or matters for which the Indemnitee is
not so entitled.

     12. Non-Exclusivity.  The rights of indemnification and to receive advances
         ---------------
as provided by this Agreement shall not be deemed exclusive of any other rights
to which Indemnitee may at any time be entitled under or by reason of applicable
law, any certificate of incorporation or by-laws, any agreement, any vote of
stockholders or any resolution of directors or otherwise.  To the extent
Indemnitee would be prejudiced thereby, no amendment, alteration, rescission or
replacement of this Agreement or any provision hereof shall be effective as to
Indemnitee with respect to any action taken or omitted by such Indemnitee in
Indemnitee's position with the Company or an Affiliate or any other entity which
Indemnitee is or was serving at the request of the Company prior to such
amendment, alteration, rescission or replacement.

     13. Duration of Agreement.  This Agreement shall apply to any claim
         ---------------------
asserted and any Losses and Expenses incurred in connection with any claim
asserted on or after the effective date of this Agreement and shall continue
until and terminate upon the later of:  (a) 10 years after Indemnitee has ceased
to occupy any of the positions or have any of the relationships described
herein; or (b) one year after the final termination of all pending or threatened
Proceedings of the kind described herein with respect to Indemnitee.  This
Agreement shall be binding upon the Company and its successors and assigns and
shall inure to the benefit of Indemnitee and Indemnitee's spouse, assigns,
heirs, devisee, executors, administrators or other legal representatives.

     14. Severability.  Should any part, term or condition hereof be declared
         ------------
illegal or unenforceable or in conflict with any other law, the validity of the
remaining portions or provisions of this Agreement shall not be affected
thereby, and the illegal or unenforceable portions of the Agreement shall be and
hereby are redrafted to conform with applicable law, while leaving the remaining
portions of this Agreement intact.

     15. Counterparts.  This Agreement may be executed in several counterparts,
         ------------
each of which shall be deemed an original, but all of which together shall
constitute one and the same document.

     16. Headings.  Section headings are for convenience only and do not control
         --------
or affect meaning or interpretation of any terms or provisions of this
Agreement.
<PAGE>

     17. Modification and Waiver.  No supplement, modification or amendment of
         -----------------------
this Agreement shall be binding unless executed in writing by each of the
parties hereto.

     18. No Duplicative Payment.  The Company shall not be liable under this
         ----------------------
Agreement to make any payment of amounts otherwise indemnifiable hereunder if
and to the extent that Indemnitee has otherwise actually received such payment
(net of Expenses incurred in collecting such payment) under this Agreement, any
insurance policy, contract, agreement or otherwise.

     19. Notices.  All notices, requests, demands and other communications
         -------
provided for by this Agreement shall be in writing (including telecopier or
similar writing) and shall be deemed to have been given at the time when mailed
in a registered or certified postpaid envelope in any general or branch office
of the United States Postal Service or Canada Post, or sent by Federal Express
or other similar overnight courier service, addressed to the address of the
parties stated below or to such changed address as such party may have fixed by
notice or, if given by telecopier, when such telecopy is transmitted and the
appropriate answer back is received.

     (a)  If to Indemnitee, to the address appearing on the signature page
          hereof.

     (b)  If to the Company to:

          PC-EPhone, Inc.
          1388 - 885 West Georgia St.
          Vancouver, British Columbia, Canada V6C 3E8
          Attention: Corporate Secretary
          ---------

     20. GOVERNING LAW.  THE PARTIES AGREE THAT THIS AGREEMENT SHALL BE GOVERNED
          -------------
BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE
STATE OF NEVADA WITHOUT GIVING EFFECT TO THE CONFLICTS OF LAWS PRINCIPLES
THEREOF.

     21. Entire Agreement.  Subject to the provisions of Section 12 hereof, this
         ----------------
Agreement constitutes the entire understanding between the parties and
supersedes all proposals, commitments, writings, negotiations and
understandings, oral and written, and all other communications between the
parties relating to the subject matter of this Agreement.  This Agreement may
not be amended or otherwise modified except in writing duly executed by all of
the parties.  A waiver by any party of any breach or violation of this Agreement
shall not be deemed or construed as a waiver of any subsequent breach or
violation thereof.
<PAGE>

                          [Signature Page Follows]
<PAGE>

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

                                       PC-EPHONE, INC.


                                       By    /s/ Douglas Yee
                                         -----------------------------
                                       Name:     Douglas Yee
                                       Title:    President


                                       INDEMNITEE:


                                       By    /s/ Jaekil Song
                                         -----------------------------
                                       Name:     Jaekil Song
                                       Title:    Director
                                       Address:  109 - 406 Jugong Apt.
                                                 Jungang-dong, Kwachon City
                                                 Kyonggi-do
                                                 Korea

<PAGE>

                                                                    Exhibit 10.9


THIS DEBT SETTLEMENT AGREEMENT made as of the 12th day of July, 2000.

BETWEEN:


          NEXT MILLENNIUM MANAGEMENT LIMITED
          #522-625 Howe Street
          Vancouver, British Columbia  V6C 2T6  CANADA


                      (hereinafter called the "Creditor")

                                                               OF THE FIRST PART

AND:

          NEWLANDS OIL & GAS INC.,
          A company incorporated under the laws of Nevada and with an office in
          British Columbia,
          300 - 750 West Pender Street, Vancouver, British Columbia  V6C 2T7
          CANADA

                      (hereinafter called the "Debtor")

                                                              OF THE SECOND PART

WHEREAS:

A.     As at the date hereof, the Debtor is indebted to the Creditor in the
total amount of US $5,000.

(the "Debt");

B.     The Debtor has agreed to issue to the Creditor a total of 50,000 shares
       (the "Shares") in the capital stock of the Debtor at a deemed price of US
       $0.10 per share.

C.     The Creditor has agreed to accept the said Shares in full satisfaction of
       the Debt;


       NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the
       mutual promises and covenants herein contained, the parties hereto agree
       as follow:

1.     The Creditor hereby agrees to accept from the Debtor the Shares in full
satisfaction of the Debt.
<PAGE>

2.     The Creditor hereby agrees that upon the issuance to it of the Shares,
the Creditor releases and forever discharges the Debtor, its successors and
assigns from all manner of actions, suits, debts due, accounts, bonds,
contracts, claims and demands whatsoever which against the Debtor it ever had,
now has, or which its successors or assigns or any of them hereafter may have by
reason of the Debtor's indebtedness to the Creditor.

3.     This Agreement and the rights of the Creditor under it may not be sold,
conveyed or otherwise assigned by the Creditor without the prior written consent
of the Debtor first having been obtained, which consent shall not be
unreasonably withheld.

4.     No right of a party hereto shall be prejudiced by events beyond a party's
reasonable control including, without limiting the generality of the foregoing,
pressures or delays from outside parties, labour disputes, the exigencies of
nature, governments, regulatory authorities and acts of God, but excluding the
want of funds.  All times herein provided for shall be extended by the period
necessary to cure any such event and the party affected shall use all reasonable
means to do so promptly.

5.     This Agreement shall be governed by and be construed in accordance with
the laws of British Columbia.  The courts of British Columbia shall have sole
jurisdiction to hear and determine all manner of disputes and claims arising out
of or in any way connected with the laws of British Columbia.  The courts of
British Columbia shall have sole jurisdiction to hear and determine all manner
of disputes and claims arising out of or in any way connected with the
construction, breach or alleged, threatened or anticipated breach of this
Agreement and determine all questions as to the validity, existence or
enforceability thereof.

6.     Time shall be of the essence of this Agreement.

7.     This Agreement may be executed in two or more counterparts each of which
shall be deemed an original but all of which together constitute one and the
same instrument.

8.     This Agreement shall enure to the benefit of and be binding upon each of
the parties hereto and their respective successors and permitted assigns.
<PAGE>

       IN WITNESS WHEREOF the parties have executed this Agreement as of the day
and year first above written.



SIGNED, SEALED AND DELIVERED           )
in the presence of:                    )
                                       )
B.Beckett                              )      /s/ Keith W. Balderson
- ----------------------------------            ----------------------------
                                       )     Authorized Signatory
1038 Cloverly Street, North Vancouver  )     Next Millennium Management Limited
- ----------------------------------

                                       )
Reception                              )
- ----------------------------------


SIGNED, SEALED AND DELIVERED           )
in the presence of:                    )
Inez Jesionowski                       )     /s/ Negar Towfigh
- ----------------------------------           -----------------------------
                                       )     Authorized Signatory
928 Richards Street, Vancouver, BC     )     Newlands Oil & Gas Inc.
- ----------------------------------
                                       )
Reception                              )
- ----------------------------------
<PAGE>

            RESOLUTIONS OF THE DIRECTORS OF NEWLANDS OIL & GAS INC.
                   (THE "CORPORATION") PASSED WITHOUT MEETING


BE IT RESOLVED THAT:

1.    The Corporation do allot, issue and deliver to the following persons the
      numbers of shares and at the price per share as set out opposite their
      respective names:


          Name               No. of Common Shares               Price
          ----               --------------------               -----

      Next Millennium                 50,000                    $0.10
      Management Limited



2.    The following Share Certificate representing shares in the capital of the
      Corporation Issued to Next Millennium Management Limited for 50,000 shares
      and the seal of the Corporation be affixed thereto in the presence of any
      one director of the Corporation:


          Name                    No. of Common Shares
          ----                    --------------------

      Next Millennium              50,000 Common Shares
      Management Limited


and that their name and other necessary particulars be entered in the registers
of the Company.




/s/ Negar Towfigh
- -----------------

<PAGE>

                                                                   Exhibit 10.10

THIS DEBT SETTLEMENT AGREEMENT made as of the 12th day of July, 2000.

BETWEEN:


          SHAREHOLDERS,
          which consists of  thirteen entities (attached hereto as Schedule "A")

                      (hereinafter called the "Creditors")

                                                               OF THE FIRST PART

AND:

          NEWLANDS OIL & GAS INC.,
          A company incorporated under the laws of Nevada and with an office in
          British Columbia,
          300 - 750 West Pender Street, Vancouver, British Columbia  V6C 2T7
          CANADA

                      (hereinafter called the "Debtor")

                                                              OF THE SECOND PART

WHEREAS:


A.     As at the date hereof, the Debtor is indebted to the Creditors in the
       total amount of US $86,000.

       (the "Debt");

B.     The Debtor has agreed to issue to the Creditors a total of 860,000 shares
       (the "Shares") in the capital stock of the Debtor at a deemed price of US
       $0.10 per share.

C.     The Creditors have agreed to accept the said Shares in full satisfaction
       of the Debt;

       NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the
       mutual promises and covenants herein contained, the parties hereto agree
       as follow:

1.     The Creditors hereby agree to accept from the Debtor the Shares in full
satisfaction of the Debt.

2.     The Creditors hereby agree that upon the issuance to it of the Shares,
the Creditors release and forever discharge the Debtor, its successors and
<PAGE>

assigns from all manner of actions, suits, debts due, accounts, bonds,
contracts, claims and demands whatsoever which against the Debtor it ever had,
now has, or which its successors or assigns or any of them hereafter may have by
reason of the Debtor's indebtedness to the Creditors.

3.     This Agreement and the rights of the Creditors under it may not be sold,
conveyed or otherwise assigned by the Creditors without the prior written
consent of the Debtor first having been obtained, which consent shall not be
unreasonably withheld.

4.     No right of a party hereto shall be prejudiced by events beyond a party's
reasonable control including, without limiting the generality of the foregoing,
pressures or delays from outside parties, labour disputes, the exigencies of
nature, governments, regulatory authorities and acts of God, but excluding the
want of funds.  All times herein provided for shall be extended by the period
necessary to cure any such event and the party affected shall use all reasonable
means to do so promptly.

5.     This Agreement shall be governed by and be construed in accordance with
the laws of British Columbia.  The courts of British Columbia shall have sole
jurisdiction to hear and determine all manner of disputes and claims arising out
of or in any way connected with the laws of British Columbia.  The courts of
British Columbia shall have sole jurisdiction to hear and determine all manner
of disputes and claims arising out of or in any way connected with the
construction, breach or alleged, threatened or anticipated breach of this
Agreement and determine all questions as to the validity, existence or
enforceability thereof.

6.     Time shall be of the essence of this Agreement.

7.     This Agreement may be executed in two or more counterparts bearing
original or facsimile signatures, each of which shall be deemed an original but
all of which together constitute one and the same instrument.

8.     This Agreement shall enure to the benefit of and be binding upon each of
the parties hereto and their respective successors and permitted assigns.
<PAGE>

       IN WITNESS WHEREOF the parties have executed this Agreement as of the day
and year first above written.

SIGNED, SEALED AND DELIVERED           )
in the presence of:                    )
                                       )
Inez Jesionowski                       )     /s/ Don De Cotiis
- ----------------------------------           -----------------------------
                                       )     Authorized Signatory
928 Richards Street, Vancouver, BC     )     438336 BC Ltd.
- ----------------------------------
                                       )
Reception                              )
- ----------------------------------


SIGNED, SEALED AND DELIVERED           )
in the presence of:                    )
                                       )
Julie Ngyuen                           )     /s/ Nick De Cotiis
- ----------------------------------           -----------------------------
                                       )     Authorized Signatory
4220 Eton Street                       )     Fraser River Bridge Holdings Ltd.
- ----------------------------------
                                       )
Administrative Assistant               )
- ----------------------------------

SIGNED, SEALED AND DELIVERED           )
in the presence of:                    )
                                       )
Inez Jesionowski                       )     /s/ Graeme Sewell
- ----------------------------------           -----------------------------
                                       )     Graeme Sewell
928 Richards Street Vancouver, BC      )
- ----------------------------------
                                       )
Reception                              )
- ----------------------------------

SIGNED, SEALED AND DELIVERED           )
in the presence of:                    )
                                       )
Inez Jesionowski                       )     /s/ Negar Towfigh
- ----------------------------------           -----------------------------
                                       )     Negar Towfigh
928 Richards Street, Vancouver, BC     )
- ----------------------------------
                                       )
Reception                              )
- ----------------------------------

SIGNED, SEALED AND DELIVERED           )
in the presence of:                    )
                                       )
A. Crawford                            )
- ----------------------------------
                                       )     Authorized Signatory
4-1609 Balsam Street                   )     Scottish Holdings Ltd.
- ----------------------------------
                                       )
Vancouver, BC V6R 3C9                  )
- ----------------------------------
<PAGE>

SIGNED, SEALED AND DELIVERED           )
in the presence of:                    )
                                       )
                                       )     /s/ Audley G. Williams - Director
- ----------------------------------           -----------------------------
                                       )     Authorized Signatory
                                       )     Prism Holdings Inc.
- ----------------------------------
                                       )
- ----------------------------------
                                       )

SIGNED, SEALED AND DELIVERED           )
in the presence of:                    )
                                       )
                                       )     /s/ Bradley Rudman
- ----------------------------------           -----------------------------
                                       )     Bradley Rudman
                                       )
- ----------------------------------
                                       )
- ----------------------------------
                                       )

SIGNED, SEALED AND DELIVERED           )
in the presence of:                    )
                                       )
                                       )     /s/ Martin Zalin
- ----------------------------------           -----------------------------
                                       )     Martin Zalin
                                       )
- ----------------------------------
                                       )
- ----------------------------------
                                       )

SIGNED, SEALED AND DELIVERED           )
in the presence of:                    )
                                       )
Inez Jesionowski                       )     /s/ Dorothy De Cotiis
- ----------------------------------           -----------------------------
                                       )     Dorothy De Cotiis
928 Richards Street, Vancouver, BC     )
- ----------------------------------
                                       )
Reception                              )
- ----------------------------------

SIGNED, SEALED AND DELIVERED           )
in the presence of:                    )
                                       )
Inez Jesionowski                       )     /s/ Marianne De Cotiis
- ----------------------------------           -----------------------------
                                       )     Marianne De Cotiis
928 Richards Street, Vancouver, BC     )
- ----------------------------------
                                       )
Reception                              )
- ----------------------------------

SIGNED, SEALED AND DELIVERED           )
in the presence of:                    )
                                       )
Inez Jesionowski                       )     /s/ Richard Masana
- ----------------------------------           -----------------------------
                                       )     Richardo Masana
928 Richards Street, Vancouver, BC     )
- ----------------------------------
                                       )
Reception                              )
- ----------------------------------
<PAGE>

SIGNED, SEALED AND DELIVERED           )
in the presence of:                    )
                                       )
                                       )     /s/ Allan Fabbro
- ----------------------------------           -----------------------------
                                       )     Allan Fabbro
                                       )
- ----------------------------------
                                       )
- ----------------------------------
                                       )

SIGNED, SEALED AND DELIVERED           )
in the presence of:                    )
                                       )
Gayle Nock                             )     /s/ Allen Sewell
- ----------------------------------           -----------------------------
                                       )     Authorized Signatory
                                       )     Brothers Oil & Gas Inc.
- ----------------------------------
                                       )
- ----------------------------------
                                       )



SIGNED, SEALED AND DELIVERED           )
in the presence of:                    )
Inez Jesionowski                       )     /s/ Alan Crawford
- ----------------------------------           -----------------------------
                                       )     Authorized Signatory
928 Richards Street, Vancouver, BC     )     Newlands Oil & Gas Inc.
- ----------------------------------
                                       )
Reception                              )
- ----------------------------------
<PAGE>

                   RESOLUTIONS OF THE DIRECTORS OF NEWLANDS OIL & GAS INC.
                         (THE "CORPORATION") PASSED WITHOUT MEETING

BE IT RESOLVED THAT:

  1.    The Corporation do allot, issue and deliver to the following persons the
        numbers of shares and at the price per share as set out opposite their
        respective names:

         Name                     No. of Common Shares               Price
         ----                     --------------------               -----

        438336 BC Ltd.                     150,000                   $0.10
        Fraser River Bridge Holdings Ltd.   75,000                   $0.10
        Graeme Sewell                       75,000                   $0.10
        Negar Towfigh                       30,000                   $0.10
        Scottish Holdings Ltd.              75,000                   $0.10
        Prism Holdings Inc.                 75,000                   $0.10
        Bradley Rudman                      60,000                   $0.10
        Martin Zalin                        20,000                   $0.10
        Dorothy De Cotiis                   75,000                   $0.10
        Marianne De Cotiis                  37,500                   $0.10
        Richardo Masana                     37,500                   $0.10
        Allan Fabbro                        75,000                   $0.10
        Brothers Oil & Gas Inc.             75,000                   $0.10

2.     The following Share Certificate representing shares in the capital of the
        Corporation Issued to the following entities for a total of 860,000
        shares and the seal of the Corporation be affixed thereto in the
        presence of any one director of the Corporation:

        Name                            No. of Common Shares
        ----                            --------------------

        438336 BC Ltd.                            150,000
        Fraser River Bridge Holdings Ltd.          75,000
        Graeme Sewell                              75,000
        Negar Towfigh                              30,000
        Scottish Holdings Ltd.                     75,000
        Prism Holdings Inc.                        75,000
        Bradley Rudman                             60,000
        Martin Zalin                               20,000
        Dorothy De Cotiis                          75,000
        Marianne De Cotiis                         37,500
        Richardo Masana                            37,500
        Allan Fabbro                               75,000
        Brothers Oil & Gas Inc.                    75,000

and that its name and other necessary particulars be entered in the registers of
the Company.


/s/ Graeme Sewell
- ----------------------------------
<PAGE>

                                  "Schedule A"

                                  Shareholders

Entity                              No. of Newlands Shares Entity is Selling

438336 BC Ltd.                                     150,000
Suite 300, 750 W. Pender St.
Vancouver, BC  V6C 2T7

Fraser River Bridge Holdings Ltd.                   75,000
Suite 300, 750 W. Pender St.
Vancouver, BC  V6C 2T7

Graeme Sewell                                       75,000
5501 Cliffridge Place
North Vancouver, BC  V7R 4S2

Negar Towfigh                                       30,000
1403 Chippendale Road
West Vancouver, BC  V7S 2N7

Scottish Holdings Ltd.                              75,000
#703 -938 Howe Street
Vancouver, BC  V6Z 1N4

Prism Holdings Inc.                                 75,000
PO Box 150 Design House
Providenciales
Turks & Caicos Isles

Bradley Rudman                                      60,000
Suite 1620, 1 Penn Plaza
New York, NY 10119

Martin Zalin                                        20,000
Suite 204, 691 Walt Whitman Road
Melville, NY  11746

Dorothy De Cotiis                                   75,000
1533 Errigal Place
West Vancouver, BC  V7S 3H1

Marianne De Cotiis                                  37,500
1533 Errigal Place
West Vancouver, BC  V7S 3H1
<PAGE>

Entity                             No. of Newlands Shares to be Issued to Entity

Richardo Masana                                     37,500
880 3rd Street
West Vancouver, BC  V7T 2J3

Allan Fabbro                                        75,000
#306 - 8380 Jones Road
Richmond, BC  V6Y 1L6

Brothers Oil & Gas Inc.                             75,000
#1638 - 145 Tyee Drive
Pt. Roberts, WA  98281

<PAGE>

                                                                   Exhibit 10.11

THIS DEBT SETTLEMENT AGREEMENT made as of the 12th day of July, 2000.

BETWEEN:


          ALLEN SEWELL
          101 Church Bay Road
          Saturna Island, British Columbia  V0N 2Y0  CANADA


                      (hereinafter called the "Creditor")

                                                               OF THE FIRST PART

AND:

          NEWLANDS OIL & GAS INC.,
          A company incorporated under the laws of Nevada and with an office in
          British Columbia,
          300 - 750 West Pender Street, Vancouver, British Columbia  V6C 2T7
          CANADA

                      (hereinafter called the "Debtor")

                                                              OF THE SECOND PART

WHEREAS:

A.     As at the date hereof, the Debtor is indebted to the Creditor in the
       total amount of US $55,253.40.

       (the "Debt");

B.     The Debtor has agreed to issue to the Creditor a total of 552,534 shares
       (the "Shares") in the capital stock of the Debtor at a deemed price of US
       $0.10 per share.

C.     The Creditor has agreed to accept the said Shares in full satisfaction of
       the Debt;


       NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the
       mutual promises and covenants herein contained, the parties hereto agree
       as follow:

1.     The Creditor hereby agrees to accept from the Debtor the Shares in full
satisfaction of the Debt.
<PAGE>

2.     The Creditor hereby agrees that upon the issuance to it of the Shares,
the Creditor releases and forever discharges the Debtor, its successors and
assigns from all manner of actions, suits, debts due, accounts, bonds,
contracts, claims and demands whatsoever which against the Debtor it ever had,
now has, or which its successors or assigns or any of them hereafter may have by
reason of the Debtor's indebtedness to the Creditor.

3.     This Agreement and the rights of the Creditor under it may not be sold,
conveyed or otherwise assigned by the Creditor without the prior written consent
of the Debtor first having been obtained, which consent shall not be
unreasonably withheld.

4.     No right of a party hereto shall be prejudiced by events beyond a party's
reasonable control including, without limiting the generality of the foregoing,
pressures or delays from outside parties, labour disputes, the exigencies of
nature, governments, regulatory authorities and acts of God, but excluding the
want of funds.  All times herein provided for shall be extended by the period
necessary to cure any such event and the party affected shall use all reasonable
means to do so promptly.

5.     This Agreement shall be governed by and be construed in accordance with
the laws of British Columbia.  The courts of British Columbia shall have sole
jurisdiction to hear and determine all manner of disputes and claims arising out
of or in any way connected with the laws of British Columbia.  The courts of
British Columbia shall have sole jurisdiction to hear and determine all manner
of disputes and claims arising out of or in any way connected with the
construction, breach or alleged, threatened or anticipated breach of this
Agreement and determine all questions as to the validity, existence or
enforceability thereof.

6.     Time shall be of the essence of this Agreement.

7.     This Agreement may be executed in two or more counterparts each of which
shall be deemed an original but all of which together constitute one and the
same instrument.

8.     This Agreement shall enure to the benefit of and be binding upon each of
the parties hereto and their respective successors and permitted assigns.
<PAGE>

       IN WITNESS WHEREOF the parties have executed this Agreement as of the day
and year first above written.



SIGNED, SEALED AND DELIVERED           )
in the presence of:                    )
                                       )
Suzi Raj                               )     /s/ Allen Sewell
- ----------------------------------           -----------------------------
                                       )     Allen Sewell
204-2050 Nelson Street, Vancouver, BC  )
- ----------------------------------
                                       )
Temp. Receptionist                     )
- ----------------------------------


SIGNED, SEALED AND DELIVERED           )
in the presence of:                    )
Inez Jesionowski                       )     /s/ Negar Towfigh
- ----------------------------------           -----------------------------
                                       )     Authorized Signatory
928 Richards Street, Vancouver, BC     )     Newlands Oil & Gas Inc.
- ----------------------------------
                                       )
Reception                              )
- ----------------------------------
<PAGE>

            RESOLUTIONS OF THE DIRECTORS OF NEWLANDS OIL & GAS INC.
                   (THE "CORPORATION") PASSED WITHOUT MEETING


BE IT RESOLVED THAT:

1.    The Corporation do allot, issue and deliver to the following persons the
      numbers of shares and at the price per share as set out opposite their
      respective names:


          Name               No. of Common Shares               Price
          ----               --------------------               -----

      Allen Sewell                   552,534                    $0.10



2.    The following Share Certificate representing shares in the capital of the
      Corporation Issued to Allen Sewell for 552,534 shares and the seal of the
      Corporation be affixed thereto in the presence of any one director of the
      Corporation:


          Name                    No. of Common Shares
          ----                    --------------------

      Allen Sewell                552,534 Common Shares


and that their name and other necessary particulars be entered in the registers
of the Company.




/s/ Negar Towfigh
- -----------------

<PAGE>

                                                                   Exhibit 10.12


THIS DEBT SETTLEMENT AGREEMENT made as of the 12th day of July, 2000.

BETWEEN:


          AMISANO HANSON CA'S
          #604 - 750 West Pender Street
          Vancouver, British Columbia V6C 2T7  CANADA


                      (hereinafter called the "Creditor")

                                                               OF THE FIRST PART

AND:

          NEWLANDS OIL & GAS INC.,
          A company incorporated under the laws of Nevada and with an office in
          British Columbia,
          300 - 750 West Pender Street, Vancouver, British Columbia  V6C 2T7
          CANADA

                      (hereinafter called the "Debtor")

                                                              OF THE SECOND PART

WHEREAS:

A.     As at the date hereof, the Debtor is indebted to the Creditor in the
total amount of US $10,620.

(the "Debt");

B.     The Debtor has agreed to issue to the Creditor a total of 106,200 shares
       (the "Shares") in the capital stock of the Debtor at a deemed price of US
       $0.10 per share.

C.     The Creditor has agreed to accept the said Shares in full satisfaction of
       the Debt;


       NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the
       mutual promises and covenants herein contained, the parties hereto agree
       as follow:

1.     The Creditor hereby agrees to accept from the Debtor the Shares in full
satisfaction of the Debt.
<PAGE>

2.     The Creditor hereby agrees that upon the issuance to it of the Shares,
the Creditor releases and forever discharges the Debtor, its successors and
assigns from all manner of actions, suits, debts due, accounts, bonds,
contracts, claims and demands whatsoever which against the Debtor it ever had,
now has, or which its successors or assigns or any of them hereafter may have by
reason of the Debtor's indebtedness to the Creditor.

3.     This Agreement and the rights of the Creditor under it may not be sold,
conveyed or otherwise assigned by the Creditor without the prior written consent
of the Debtor first having been obtained, which consent shall not be
unreasonably withheld.

4.     No right of a party hereto shall be prejudiced by events beyond a party's
reasonable control including, without limiting the generality of the foregoing,
pressures or delays from outside parties, labour disputes, the exigencies of
nature, governments, regulatory authorities and acts of God, but excluding the
want of funds.  All times herein provided for shall be extended by the period
necessary to cure any such event and the party affected shall use all reasonable
means to do so promptly.

5.     This Agreement shall be governed by and be construed in accordance with
the laws of British Columbia.  The courts of British Columbia shall have sole
jurisdiction to hear and determine all manner of disputes and claims arising out
of or in any way connected with the laws of British Columbia.  The courts of
British Columbia shall have sole jurisdiction to hear and determine all manner
of disputes and claims arising out of or in any way connected with the
construction, breach or alleged, threatened or anticipated breach of this
Agreement and determine all questions as to the validity, existence or
enforceability thereof.

6.     Time shall be of the essence of this Agreement.

7.     This Agreement may be executed in two or more counterparts each of which
shall be deemed an original but all of which together constitute one and the
same instrument.

8.     This Agreement shall enure to the benefit of and be binding upon each of
the parties hereto and their respective successors and permitted assigns.
<PAGE>

       IN WITNESS WHEREOF the parties have executed this Agreement as of the day
and year first above written.



SIGNED, SEALED AND DELIVERED           )
in the presence of:                    )
                                       )
Stephen Klass                          )     /s/ Amisano Hanson
- ----------------------------------           -----------------------------
                                       )     Authorized Signatory
604-750 West Pender Street             )     Amisano Hanson CA's
- ----------------------------------
                                       )
Vancouver, BC V6C 2T7                  )
- ----------------------------------


SIGNED, SEALED AND DELIVERED           )
in the presence of:                    )
Inez Jesionowski                       )     /s/ Negar Towfigh
- ----------------------------------           -----------------------------
                                       )     Authorized Signatory
928 Richards Street, Vancouver, BC     )     Newlands Oil & Gas Inc.
- ----------------------------------
                                       )
Reception                              )
- ----------------------------------
<PAGE>

            RESOLUTIONS OF THE DIRECTORS OF NEWLANDS OIL & GAS INC.
                   (THE "CORPORATION") PASSED WITHOUT MEETING


BE IT RESOLVED THAT:

1.    The Corporation do allot, issue and deliver to the following persons the
      numbers of shares and at the price per share as set out opposite their
      respective names:


          Name               No. of Common Shares               Price
          ----               --------------------               -----

      Amisano Hanson CA's            106,200                    $0.10



2.    The following Share Certificate representing shares in the capital of the
      Corporation Issued to Amisano Hanson CA's for 106,200 shares and the seal
      of the Corporation be affixed thereto in the presence of any one director
      of the Corporation:


          Name                    No. of Common Shares
          ----                    --------------------

      Amisano Hanson CA's         106,200 Common Shares


and that their name and other necessary particulars be entered in the registers
of the Company.




/s/ Negar Towfigh
- -----------------

<PAGE>

                                                                   Exhibit 10.13

THIS DEBT SETTLEMENT AGREEMENT made as of the 12th day of July, 2000.

BETWEEN:


          Brothers Oil & Gas Inc.
          #1638 - 145 Tyee Drive
          Pt. Roberts, Washington  98281  USA


                      (hereinafter called the "Creditor")

                                                               OF THE FIRST PART

AND:
          NEWLANDS OIL & GAS INC.,
          A company incorporated under the laws of Nevada and with an office in
          British Columbia,
          300 - 750 West Pender Street, Vancouver, British Columbia  V6C 2T7
          CANADA

                      (hereinafter called the "Debtor")

                                                              OF THE SECOND PART

WHEREAS:

A.     As at the date hereof, the Debtor is indebted to the Creditor in the
total amount of US $21,960

(the "Debt");

B.     The Debtor has agreed to issue to the Creditor a total of 219,600 shares
       (the "Shares") in the capital stock of the Debtor at a deemed price of US
       $0.10 per share.

C.     The Creditor has agreed to accept the said Shares in full satisfaction of
       the Debt;


       NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the
       mutual promises and covenants herein contained, the parties hereto agree
       as follow:

1.     The Creditor hereby agrees to accept from the Debtor the Shares in full
satisfaction of the Debt.
<PAGE>

2.     The Creditor hereby agrees that upon the issuance to it of the Shares,
the Creditor releases and forever discharges the Debtor, its successors and
assigns from all manner of actions, suits, debts due, accounts, bonds,
contracts, claims and demands whatsoever which against the Debtor it ever had,
now has, or which its successors or assigns or any of them hereafter may have by
reason of the Debtor's indebtedness to the Creditor.

3.     This Agreement and the rights of the Creditor under it may not be sold,
conveyed or otherwise assigned by the Creditor without the prior written consent
of the Debtor first having been obtained, which consent shall not be
unreasonably withheld.

4.     No right of a party hereto shall be prejudiced by events beyond a party's
reasonable control including, without limiting the generality of the foregoing,
pressures or delays from outside parties, labour disputes, the exigencies of
nature, governments, regulatory authorities and acts of God, but excluding the
want of funds.  All times herein provided for shall be extended by the period
necessary to cure any such event and the party affected shall use all reasonable
means to do so promptly.

5.     This Agreement shall be governed by and be construed in accordance with
the laws of British Columbia.  The courts of British Columbia shall have sole
jurisdiction to hear and determine all manner of disputes and claims arising out
of or in any way connected with the laws of British Columbia.  The courts of
British Columbia shall have sole jurisdiction to hear and determine all manner
of disputes and claims arising out of or in any way connected with the
construction, breach or alleged, threatened or anticipated breach of this
Agreement and determine all questions as to the validity, existence or
enforceability thereof.

6.     Time shall be of the essence of this Agreement.

7.     This Agreement may be executed in two or more counterparts each of which
shall be deemed an original but all of which together constitute one and the
same instrument.

8.     This Agreement shall enure to the benefit of and be binding upon each of
the parties hereto and their respective successors and permitted assigns.
<PAGE>

       IN WITNESS WHEREOF the parties have executed this Agreement as of the day
and year first above written.



SIGNED, SEALED AND DELIVERED           )
in the presence of:                    )
                                       )
Julie Ngyuen                           )     /s/ Allen Sewell
- ----------------------------------           -----------------------------
                                       )     Authorized Signatory
4220 Eton Street                       )     Brothers Oil & Gas Inc.
- ----------------------------------
                                       )
Burnaby, BC                            )
- ----------------------------------


SIGNED, SEALED AND DELIVERED           )
in the presence of:                    )
Julie Ngyuen                           )     /s/ Negar Towfigh
- ----------------------------------           -----------------------------
                                       )     Authorized Signatory
4220 Eton Street                       )     Newlands Oil & Gas Inc.
- ----------------------------------
                                       )
Burnaby, BC                            )
- ----------------------------------
<PAGE>

            RESOLUTIONS OF THE DIRECTORS OF NEWLANDS OIL & GAS INC.
                   (THE "CORPORATION") PASSED WITHOUT MEETING


BE IT RESOLVED THAT:

1.    The Corporation do allot, issue and deliver to the following persons the
      numbers of shares and at the price per share as set out opposite their
      respective names:


          Name               No. of Common Shares               Price
          ----               --------------------               -----

      Brothers Oil & Gas Inc.        219,600                    $0.10



2.    The following Share Certificate representing shares in the capital of the
      Corporation Issued to Brothers Oil & Gas Inc. for 219,600 shares and the
      seal of the Corporation be affixed thereto in the presence of any one
      director of the Corporation:


          Name                    No. of Common Shares
          ----                    --------------------

      Brothers Oil & Gas Inc.     219,600 Common Shares


and that their name and other necessary particulars be entered in the registers
of the Company.




/s/ Negar Towfigh
- -----------------


<PAGE>

                                                                   Exhibit 10.14


THIS DEBT SETTLEMENT AGREEMENT made as of the 12th day of July, 2000.

BETWEEN:


          FIRST PLACE CAPITAL INC.
          #300 - 750 West Pender Street
          Vancouver, British Columbia   V6C 2T7  CANADA


                      (hereinafter called the "Creditor")

                                                               OF THE FIRST PART

AND:

          NEWLANDS OIL & GAS INC.,
          A company incorporated under the laws of Nevada and with an office in
          British Columbia,
          300 - 750 West Pender Street, Vancouver, British Columbia  V6C 2T7
          CANADA

                      (hereinafter called the "Debtor")

                                                              OF THE SECOND PART

WHEREAS:

A.     As at the date hereof, the Debtor is indebted to the Creditor in the
total amount of US $4,666.

(the "Debt");

B.     The Debtor has agreed to issue to the Creditor a total of 46,666 shares
       (the "Shares") in the capital stock of the Debtor at a deemed price of US
       $0.10 per share.

C.     The Creditor has agreed to accept the said Shares in full satisfaction of
       the Debt;


       NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the
       mutual promises and covenants herein contained, the parties hereto agree
       as follow:

1.     The Creditor hereby agrees to accept from the Debtor the Shares in full
satisfaction of the Debt.
<PAGE>

2.     The Creditor hereby agrees that upon the issuance to it of the Shares,
the Creditor releases and forever discharges the Debtor, its successors and
assigns from all manner of actions, suits, debts due, accounts, bonds,
contracts, claims and demands whatsoever which against the Debtor it ever had,
now has, or which its successors or assigns or any of them hereafter may have by
reason of the Debtor's indebtedness to the Creditor.

3.     This Agreement and the rights of the Creditor under it may not be sold,
conveyed or otherwise assigned by the Creditor without the prior written consent
of the Debtor first having been obtained, which consent shall not be
unreasonably withheld.

4.     No right of a party hereto shall be prejudiced by events beyond a party's
reasonable control including, without limiting the generality of the foregoing,
pressures or delays from outside parties, labour disputes, the exigencies of
nature, governments, regulatory authorities and acts of God, but excluding the
want of funds.  All times herein provided for shall be extended by the period
necessary to cure any such event and the party affected shall use all reasonable
means to do so promptly.

5.     This Agreement shall be governed by and be construed in accordance with
the laws of British Columbia.  The courts of British Columbia shall have sole
jurisdiction to hear and determine all manner of disputes and claims arising out
of or in any way connected with the laws of British Columbia.  The courts of
British Columbia shall have sole jurisdiction to hear and determine all manner
of disputes and claims arising out of or in any way connected with the
construction, breach or alleged, threatened or anticipated breach of this
Agreement and determine all questions as to the validity, existence or
enforceability thereof.

6.     Time shall be of the essence of this Agreement.

7.     This Agreement may be executed in two or more counterparts each of which
shall be deemed an original but all of which together constitute one and the
same instrument.

8.     This Agreement shall enure to the benefit of and be binding upon each of
the parties hereto and their respective successors and permitted assigns.
<PAGE>

       IN WITNESS WHEREOF the parties have executed this Agreement as of the day
and year first above written.



SIGNED, SEALED AND DELIVERED           )
in the presence of:                    )
                                       )
Jason Gigliotti                        )     /s/ Graeme Sewell
- ----------------------------------           -----------------------------
                                       )     Authorized Signatory
603-145 St. George's Ave.              )     First Place Capital Inc.
- ----------------------------------
                                       )
North Vancouver, BC                    )
- ----------------------------------


SIGNED, SEALED AND DELIVERED           )
in the presence of:                    )
Inez Jesionowski                       )     /s/ Negar Towfigh
- ----------------------------------           -----------------------------
                                       )     Authorized Signatory
928 Richards Street, Vancouver, BC     )     Newlands Oil & Gas Inc.
- ----------------------------------
                                       )
Reception                              )
- ----------------------------------
<PAGE>

            RESOLUTIONS OF THE DIRECTORS OF NEWLANDS OIL & GAS INC.
                   (THE "CORPORATION") PASSED WITHOUT MEETING


BE IT RESOLVED THAT:

1.    The Corporation do allot, issue and deliver to the following persons the
      numbers of shares and at the price per share as set out opposite their
      respective names:


          Name               No. of Common Shares               Price
          ----               --------------------               -----

      First Place Capital Inc.        46,666                    $0.10



2.    The following Share Certificate representing shares in the capital of the
      Corporation Issued to First Place Capital Inc. for 46,666 shares and the
      seal of the Corporation be affixed thereto in the presence of any one
      director of the Corporation:


          Name                    No. of Common Shares
          ----                    --------------------

      First Place Capital Inc.     46,666 Common Shares


and that their name and other necessary particulars be entered in the registers
of the Company.




/s/ Negar Towfigh
- -----------------


<PAGE>

                                                                   Exhibit 10.15

THIS DEBT SETTLEMENT AGREEMENT made as of the 12th day of July, 2000.

BETWEEN:


          463563 BC LTD.
          5501 Cliffridge Place
          North Vancouver, BC  V7R 4S2  CANADA

                      (hereinafter called the "Creditor")

                                                               OF THE FIRST PART

AND:

          NEWLANDS OIL & GAS INC.,
          A company incorporated under the laws of Nevada and with an office in
          British Columbia,
          300 - 750 West Pender Street, Vancouver, British Columbia  V6C 2T7
          CANADA

                      (hereinafter called the "Debtor")

                                                              OF THE SECOND PART

WHEREAS:

A.     As at the date hereof, the Debtor is indebted to the Creditor in the
total amount of US $41,500.

(the "Debt");

B.     The Debtor has agreed to issue to the Creditor a total of 415,000 shares
       (the "Shares") in the capital stock of the Debtor at a deemed price of US
       $0.10 per share.

C.     The Creditor has agreed to accept the said Shares in full satisfaction of
       the Debt;

       NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the
       mutual promises and covenants herein contained, the parties hereto agree
       as follow:

1.     The Creditor hereby agrees to accept from the Debtor the Shares in full
satisfaction of the Debt.
<PAGE>

2.     The Creditor hereby agrees that upon the issuance to it of the Shares,
the Creditor releases and forever discharges the Debtor, its successors and
assigns from all manner of actions, suits, debts due, accounts, bonds,
contracts, claims and demands whatsoever which against the Debtor it ever had,
now has, or which its successors or assigns or any of them hereafter may have by
reason of the Debtor's indebtedness to the Creditor.

3.     This Agreement and the rights of the Creditor under it may not be sold,
conveyed or otherwise assigned by the Creditor without the prior written consent
of the Debtor first having been obtained, which consent shall not be
unreasonably withheld.

4.     No right of a party hereto shall be prejudiced by events beyond a party's
reasonable control including, without limiting the generality of the foregoing,
pressures or delays from outside parties, labour disputes, the exigencies of
nature, governments, regulatory authorities and acts of God, but excluding the
want of funds.  All times herein provided for shall be extended by the period
necessary to cure any such event and the party affected shall use all reasonable
means to do so promptly.

5.     This Agreement shall be governed by and be construed in accordance with
the laws of British Columbia.  The courts of British Columbia shall have sole
jurisdiction to hear and determine all manner of disputes and claims arising out
of or in any way connected with the laws of British Columbia.  The courts of
British Columbia shall have sole jurisdiction to hear and determine all manner
of disputes and claims arising out of or in any way connected with the
construction, breach or alleged, threatened or anticipated breach of this
Agreement and determine all questions as to the validity, existence or
enforceability thereof.

6.     Time shall be of the essence of this Agreement.

7.     This Agreement may be executed in two or more counterparts each of which
shall be deemed an original but all of which together constitute one and the
same instrument.

8.     This Agreement shall enure to the benefit of and be binding upon each of
the parties hereto and their respective successors and permitted assigns.
<PAGE>

       IN WITNESS WHEREOF the parties have executed this Agreement as of the day
and year first above written.



SIGNED, SEALED AND DELIVERED           )
in the presence of:                    )
                                       )
Suzi Raj                               )     /s/ Graeme Sewell
- ----------------------------------           -----------------------------
                                       )     Authorized Signatory
204-2050 Nelson Street Vancouver, BC   )     463563 BC Ltd.
- ----------------------------------
                                       )
Temp Receptionist                      )
- ----------------------------------


SIGNED, SEALED AND DELIVERED           )
in the presence of:                    )
Suzi Raj                               )     /s/ Negar Towfigh
- ----------------------------------           -----------------------------
                                       )     Authorized Signatory
204-2050 Nelson Street, Vancouver, BC  )     Newlands Oil & Gas Inc.
- ----------------------------------
                                       )
Temp Receptionist                      )
- ----------------------------------
<PAGE>

            RESOLUTIONS OF THE DIRECTORS OF NEWLANDS OIL & GAS INC.
                   (THE "CORPORATION") PASSED WITHOUT MEETING


BE IT RESOLVED THAT:

1.    The Corporation do allot, issue and deliver to the following persons the
      numbers of shares and at the price per share as set out opposite their
      respective names:


          Name               No. of Common Shares               Price
          ----               --------------------               -----

      463563 BC Ltd.                 415,000                    $0.10



2.    The following Share Certificate representing shares in the capital of the
      Corporation Issued to 463563 BC Ltd. for 415,000 shares and the seal of
      the Corporation be affixed thereto in the presence of any one director of
      the Corporation:


          Name                    No. of Common Shares
          ----                    --------------------

      463563 BC Ltd.              415,000 Common Shares


and that their name and other necessary particulars be entered in the registers
of the Company.




/s/ Negar Towfigh
- -----------------


<PAGE>

                                                                   EXHIBIT 10.16

THIS DEBT SETTLEMENT AGREEMENT made as of the 12th day of July, 2000.

BETWEEN:


          MORTON & CO.
          #1750 - 750     West Pender Street
          Vancouver, British Columbia   V6C 2T7  CANADA


                      (hereinafter called the "Creditor")

                                                               OF THE FIRST PART

AND:

          NEWLANDS OIL & GAS INC.,
          A company incorporated under the laws of Nevada and with an office in
          British Columbia,
          300 - 750 West Pender Street, Vancouver, British Columbia  V6C 2T7
          CANADA

                      (hereinafter called the "Debtor")

                                                              OF THE SECOND PART

WHEREAS:

A.     As at the date hereof, the Debtor is indebted to the Creditor in the
       total amount of US $25,000.

       (the "Debt");

B.     The Debtor has agreed to issue to the Creditor a total of 250,000 shares
       (the "Shares") in the capital stock of the Debtor at a deemed price of US
       $0.10 per share.

C.     The Creditor has agreed to accept the said Shares in full satisfaction of
       the Debt;


       NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the
       mutual promises and covenants herein contained, the parties hereto agree
       as follow:

1.     The Creditor hereby agrees to accept from the Debtor the Shares in full
satisfaction of the Debt.
<PAGE>

2.     The Creditor hereby agrees that upon the issuance to it of the Shares,
the Creditor releases and forever discharges the Debtor, its successors and
assigns from all manner of actions, suits, debts due, accounts, bonds,
contracts, claims and demands whatsoever which against the Debtor it ever had,
now has, or which its successors or assigns or any of them hereafter may have by
reason of the Debtor's indebtedness to the Creditor.

3.     This Agreement and the rights of the Creditor under it may not be sold,
conveyed or otherwise assigned by the Creditor without the prior written consent
of the Debtor first having been obtained, which consent shall not be
unreasonably withheld.

4.     No right of a party hereto shall be prejudiced by events beyond a party's
reasonable control including, without limiting the generality of the foregoing,
pressures or delays from outside parties, labour disputes, the exigencies of
nature, governments, regulatory authorities and acts of God, but excluding the
want of funds.  All times herein provided for shall be extended by the period
necessary to cure any such event and the party affected shall use all reasonable
means to do so promptly.

5.     This Agreement shall be governed by and be construed in accordance with
the laws of British Columbia.  The courts of British Columbia shall have sole
jurisdiction to hear and determine all manner of disputes and claims arising out
of or in any way connected with the laws of British Columbia.  The courts of
British Columbia shall have sole jurisdiction to hear and determine all manner
of disputes and claims arising out of or in any way connected with the
construction, breach or alleged, threatened or anticipated breach of this
Agreement and determine all questions as to the validity, existence or
enforceability thereof.

6.     Time shall be of the essence of this Agreement.

7.     This Agreement may be executed in two or more counterparts each of which
shall be deemed an original but all of which together constitute one and the
same instrument.

8.     This Agreement shall enure to the benefit of and be binding upon each of
the parties hereto and their respective successors and permitted assigns.
<PAGE>

       IN WITNESS WHEREOF the parties have executed this Agreement as of the day
and year first above written.



SIGNED, SEALED AND DELIVERED           )
in the presence of:                    )
                                       )
Raymond Ong                            )     /s/ Jed Hops
- ----------------------------------           -----------------------------
                                       )     Authorized Signatory
205-7800 St. Albans Road               )     Morton & Co.
- ----------------------------------
                                       )
Richmond, BC V6Y 3Y5                   )
- ----------------------------------


SIGNED, SEALED AND DELIVERED           )
in the presence of:                    )
Julie Ngyuen                           )     /s/ Negar Towfigh
- ----------------------------------           -----------------------------
                                       )     Authorized Signatory
4220 Eton Street                       )     Newlands Oil & Gas Inc.
- ----------------------------------
                                       )
Burnaby, BC                            )
- ----------------------------------
<PAGE>

            RESOLUTIONS OF THE DIRECTORS OF NEWLANDS OIL & GAS INC.
                   (THE "CORPORATION") PASSED WITHOUT MEETING


BE IT RESOLVED THAT:

1.    The Corporation do allot, issue and deliver to the following persons the
      numbers of shares and at the price per share as set out opposite their
      respective names:


          Name               No. of Common Shares               Price
          ----               --------------------               -----

      Morton & Co.                   250,000                    $0.10



2.    The following Share Certificate representing shares in the capital of the
      Corporation Issued to Morton & Co. for 250,000 shares and the seal of the
      Corporation be affixed thereto in the presence of any one director of the
      Corporation:


          Name                    No. of Common Shares
          ----                    --------------------

      Morton & Co.                250,000 Common Shares


and that their name and other necessary particulars be entered in the registers
of the Company.




/s/ Negar Towfigh
- -----------------


<PAGE>

                                                                   Exhibit 10.17

                            DISTRIBUTION AGREEMENT

This Distribution Agreement (the "Agreement") dated for reference the 6th of
November, 2000.

BETWEEN:

            CYBERBANK CORP.
            ----------------
            a Korean Corporation having its head office
            at 18th Floor. Mirae Bldg., 1306-6
            Seocho-dong, Seocho-gu, Seoul, Korea 137-070
            Fax: 82-2-3483-4600

            (the "Company")

OF THE FIRST PART

AND:

            PC-EPHONE  LTD., a
            ---------------
            Bermuda Corporation having its head office
            at 129 Front Street
            Hamilton, Bermuda  HM12
            Fax:  (604) 688-8371

            (the "Distributor")

OF THE SECOND PART

WHEREAS:

A.     The Company has developed a handheld device/terminal that can be used to
       perform multiple functions on a CDMA, GSM or other wireless application
       protocol system (the "Multipalm").

B.     The Distributor wishes to acquire the United States and Canada rights to
       market and distribute the Multipalm on a sole and exclusive basis on the
       terms and conditions contained herein.

C.     The Distributor wishes to acquire the worldwide (other than the United
       States and Canada) rights to market and distribute the Multipalm on a
       non-exclusive basis on the terms and conditions contained herein.


NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the mutual
covenants and agreements contained herein, the parties hereto agree as follows:

1.     DEFINITIONS

In this Agreement, the following words and phrases shall have the following
meanings:

(A)    "Confidential Information of the Company" means all business plans,
       trade secrets, design concepts, knowledge, information, production
       technology, processes, know how, business projections, customer lists
       and intellectual property concerning or relating to the business of the

* CONFIDENTIAL TREATMENT REQUESTED BY PC-EPHONE, INC.
<PAGE>

       Company and the Products, including the Manufacturing Information, which
       may be communicated to, acquired by, or learned of by the Distributor
       from the Company, whether or not such information is subject to
       proprietary protection at law;

(B)    "Confidential Information of the Distributor" means all customer lists,
       sales marketing contacts and information, business plans, trade secrets,
       knowledge, information, know how, business projections, computer software
       programs and intellectual property concerning or relating to the business
       of the Distributor which may be communicated to, acquired by, or learned
       of by the Company from the Distributor, whether or not such information
       is subject to proprietary protection at law;

(C)    "Exclusive Territory" means the United States of America and Canada;

(D)    "Future Products" means any future products developed by the Company of a
       similar or like nature, or using the same technology as the Multipalm
       (including accessories);

(E)    "Manufacturing Information" means all information, technology, data and
       trade secrets relating to the manufacture of the Products;

(F)    "Non-exclusive Territory" has the meaning assigned to it by section 2.3;

(G)    "Patents" means any patents underlying the Products which are owned or
       may be owned by the Company or licensed or which may be licensed to the
       Company;

(H)    "Products" means the personal digital assistant products marketed by the
       Company under the current trade name "Multipalm" (including all necessary
       accessories to maintain the functionality of the Product including, but
       not limited to, a Bluetooth stylus, a battery charger, and an adaptor).

(I)    "Reference Date" means the later of (a) December 31, 2001 and (b) one
       year after approval of the Products by the US FCC;

(J)    "Term" has the meaning described in Section 12.1 of this Agreement;

(K)    "Trade Name" means the trade name "Multipalm", or any other trade name
       for the Product or Future Products, and the trademark "Multipalm", or any
       other trademark for the Product or Future Products, in the event that the
       Company is granted trademark protection by the United States Patent and
       Trademark Office.

2.     Exclusive Distribution Rights and Non-exclusive Distribution Rights
       -------------------------------------------------------------------

2.1    Subject to the terms and conditions of this Agreement, the Company
hereby grants to the Distributor the exclusive right to market, distribute and
sell the Products within the Exclusive Territory (the "Distribution Rights").
The Distribution Rights will include the following rights:

(A)    the right to market, distribute and sell the Products;

(B)    the right and license to use the Trade Name in connection with the
       marketing, distribution and sale of the Products.

* CONFIDENTIAL TREATMENT REQUESTED BY PC-EPHONE, INC.
<PAGE>

2.2    The Distribution Rights will extend to the right and license to use the
trademark "Multipalm" or any other trademark relating to the Products or Future
Products in the event that the Company's application to the United States Patent
and Trademark Office for the registration of "Multipalm" or any other trademark,
if any, is approved.  The Distributor acknowledges that there is no assurance
that trademark protection will be granted by the United States Patent and
Trademark Office.

2.3    The Distributor will, from time to time, deliver notice to the Company
that requests non-exclusive distribution rights for certain territories outside
of the Exclusive Territory (the "Non-exclusive Territory").  The Company and the
Distributor shall have fifteen (15) days to discuss and reach an agreement on
such request.  Failure to reach an agreement on such a request shall be deemed
to be a rejection of such request by the Company.  If granted, such non-
exclusive distribution rights shall be for a period of one year from the date of
delivery of the request by the Distributor to the Company.  The terms and
conditions of such non-exclusive distribution rights shall be governed by the
terms and conditions of this Agreement but may be modified or amended subject to
a separate agreement by the Company and the Distributor.

2.4    In consideration of the Company granting the Distribution Rights to the
Distributor, the Distributor agrees to issue to the Company 3,500,000 common
shares of Newlands Oil & Gas Inc. (PC-EPhone, Inc.) for no additional charge
within 20 days from signing the Distribution Agreement.

3.     Product Prices, Payment and Minimum Purchase Amounts
       ----------------------------------------------------

3.1    The prices to be paid by the Distributor to the Company for the Products
(the "Product Prices") shall:

       (A)    until {............*............}, not be less than
              US${............*............} per unit
              {............*............}and shall not be greater than
              {............*............}; and

       (B)    after {............*............}, not be greater than
              {............*............}.

3.2    At the time of giving the purchase order, the Distributor will open an
irrevocable and confirmed letter of credit without recourse in favour of the
Company for the aggregate price for all of the Products ordered at the Product
Prices ordered (the "Order Price").  In addition, the letter of credit will be
transferable and negotiable by the Company.  Such letter of credit shall be
arranged with a financial institution satisfactory to the Company.  Such letter
of credit shall be granted on the basis that payment will be made upon
presentation of adequate documentation by the Company but will not be paid any
earlier than the due date as described in section 3.3 below.

3.3    The Company will invoice the Distributor for all Products delivered to
the Distributor at the Product Prices.  The Order Price shall be paid
{............*............} days after presentation of documents but, for
greater certainty, may be paid in partial amounts for partial shipments.

3.4    The Distributor shall have the right to establish its own selling prices
for the Products within the Exclusive Territory and the Non-exclusive Territory.

* CONFIDENTIAL TREATMENT REQUESTED BY PC-EPHONE, INC.
<PAGE>

3.5    The determination of sales, marketing strategies, and selling prices for
the Products within the Exclusive Territory and the Non-exclusive Territory will
be the sole responsibility of the Distributor.

3.6    All references to money or currency herein contained shall mean lawful
money of the United States of America.

3.7    Each order placed by the Distributor for the purchase of any Products
shall be subject to the terms and conditions of this Agreement.

3.8    The Company will deliver all Products to the Distributor
{............*............} but at a location in {............*............}
that is a reasonable distance from a major shipping location which includes, but
is not limited to, {............*............}.

3.9    As a condition of maintaining the Distribution Rights, during the
period from the effective date of this Agreement to the Reference Date, the
Distributor must purchase from the Company a  minimum of 500,000 units of the
Products  at the prices provided for by this Agreement.  For each successive
year after the Reference Date, the Distributor must purchase from the Company a
minimum of 500,000 units of the Products (the "Annual Minimum Purchase
Requirement") at the prices provided for by this Agreement.  The failure of the
Distributor to achieve the Annual Minimum Purchase Requirements will be deemed
to be a default of this Agreement entitling the Company to terminate in
accordance with Section 12.2 of this Agreement. It is understood and agreed that
the only remedy of the Company against the Distributor for failure to meet
Annual Minimum Purchase Requirements will be to terminate this Agreement in
accordance with Section 12.2 herein.  The Company shall not have any claim or
demand against the Distributor to make payment for any Annual Minimum Purchase
Requirements.  Notwithstanding the above, the Distributor shall not be held
responsible for not achieving the Annual Minimum Purchase Requirements if the
Products are not completely delivered, are not delivered on a timely basis,
and/or not delivered in a functioning format for North American use.

3.10   For the initial two orders, the Distributor agrees to issue binding
purchase orders to the Company in a form that is substantially similar in terms
and conditions as attached in Appendix 3.10.

3.11   To help the Company to establish manufacturing and marketing plans, the
Distributor shall submit to the Company a quarterly forecasting purchase plan
for {............*............}at least  {............*............}-days prior
to the beginning of each quarter.

4.     Limitations on the Distribution Rights
       --------------------------------------

4.1    The Distributor shall not knowingly distribute or sell any Products for
re-sale to any person or company in any market outside: (a) the Exclusive
Territory and (b) the Non-exclusive Territory where the Distributor has
non-exclusive rights as granted by virtue of section 2.3.

4.2    The Distributor will not, directly or indirectly, sell, assign or grant
to any other person, firm or corporation, the right to sell, or distribute the
Products within the Exclusive Territory and the Non-exclusive Territory, except
as set forth in Article 5.

* CONFIDENTIAL TREATMENT REQUESTED BY PC-EPHONE, INC.
<PAGE>

4.3    The Distributor will not market, distribute or sell any products similar
to or competitive with the Products during the Term of this Agreement without
the written consent of the Company.

4.4    Nothing in this Agreement shall be deemed in any way to constitute any
transfer or assignment by the Company of any Patents, Trade Name or Confidential
Information to the Distributor or to give the Distributor any right, title or
interest in or to any Patents, Trade Name or Confidential Information.  The
Distributor acknowledges that all patents pertaining to the Products or
Confidential Information are and shall remain the exclusive property of the
Company.

4.5    The Distributor will not purchase Products from any person other than
the Company.


5.     Sub-Distributors
       ----------------

5.1    The Distributor will have the right to appoint sub-distributors within
the Exclusive Territory and the Non-exclusive Territory, provided that each
sub-distributor is appointed on the following terms and conditions:

    a)   each sub-distributor will enter into a sub-distributorship agreement
         with the Distributor on terms and conditions acceptable to the Company
         and which will bind the sub-distributor to the terms and conditions set
         forth in this Agreement, except that section 4.3 of this Agreement
         shall not be applicable to the sub-distributor; and

    b)   the Distributor shall provide the Company a copy of each executed sub-
         distributorship agreement within 10 days of execution in order that the
         Company can verify compliance of the sub-distributorship agreement with
         the terms and conditions of this Agreement.

5.2    In the event of restructuring of the Distributor so that separate
companies are used to sell Products in different countries within the Exclusive
Territory and the Non-exclusive Territory, such separate companies shall
collectively be considered to be parties to this Agreement in place and stead of
the Distributor named herein, without the necessity of any further
documentation, except that section 4.3 of this Agreement shall not be
applicable.

6.     Additional Covenants of the Distributor
       ---------------------------------------

6.1    The Distributor will throughout the term of this Agreement:

(A)    purchase and maintain a sufficient liability insurance policy with
       reputable insurance companies in those jurisdictions in which the
       Distributor markets, distributes and sells the Products;

(B)    ensure that any advertising or promotional efforts undertaken by the
       Distributor will be conducted in compliance with advertising and
       marketing guidelines established by the Company in order to ensure a
       consistent marketing and brand recognition of the Products;

(C)    comply with all applicable laws and regulations regarding the
       distribution, marketing and sale of the Products within the Exclusive
       Territory and the Non-exclusive Territory.

* CONFIDENTIAL TREATMENT REQUESTED BY PC-EPHONE, INC.
<PAGE>

(D)    The Distributor will not enter into any business that is unrelated to
       telecommunications without the prior written consent of the Company.

(E)    The Distributor shall not  represent itself as an agent and/or legal
       representative of the Company.

(F)    The Distributor shall not challenge the Company for the Company's
       Patents, Trade Name and/or other intellectual properties.

(G)    The Distributor shall not give information on and guarantee the
       performance and efficiency of the Products and Future Products unless
       otherwise confirmed by the Company's written consent.

6.2    Execution and delivery of this Agreement by the Distributor has been
duly authorized.  The person executing this Agreement on behalf of the
Distributor has full and proper authorization to execute same, and this
Agreement is a valid and binding agreement of the Distributor and is enforceable
against the Distributor in accordance with its terms.

7.     Additional Covenants of the Company
       -----------------------------------

7.1    The Company will during the term of this Agreement:

(A)    provide the Distributor with such information as the Company considers
       appropriate in order to assist the Distributor in the preparation of
       sales promotion material and shall provide the Distributor with its sales
       promotional material relating to the Products in order to facilitate
       advertising of the Products within the Exclusive Territory and the Non-
       exclusive Territory;

(B)    ensure all the Products meet the Company's specifications for the
       applicable Products;

(C)    ensure that in addition to any warranty requirements pursuant to the
       terms of this Agreement, all Products supplied by the Company and its
       manufacturers shall meet any and all U.S. governmental standards
       applicable to such Products.  The Distributor shall have the right,
       through its duly appointed representative, to examine, inspect and/or
       test any and all of the Products supplied by the Company, and the
       production lines, production facilities and storage facilities.  The
       Company warrants that the goods delivered in accordance with this
       Agreement shall measure up to the same standard as the sample Products
       previously submitted to Distributor.

(D)    permit the Distributor and its sub-distributors to hold themselves out as
       authorized distributors of the Products within the Exclusive Territory
       and the Non-exclusive Territory;

(E)    assist the Distributor in obtaining all applicable US FCC and Industry
       Canada approvals in order that the Products can be distributed in the
       Exclusive Territory and the Non-exclusive Territory.

(F)    furnish to the Distributor in a timely manner product information
       regarding the Products, which product information shall accurately

* CONFIDENTIAL TREATMENT REQUESTED BY PC-EPHONE, INC.
<PAGE>

       describe the nature, character and prescribed use of the Products, which
       information shall be appropriate for distribution to consumers in the
       discretion of the Distributor.  The product information shall not
       misrepresent or in any way internationally mislead Distributor, or
       consumers with respect to the products.  Distributor may incorporate such
       product information in its sales and advertising and promotional
       literature and materials (the "Sales Materials").  Said product
       information utilized shall not be deemed as Confidential Information as
       set forth in this Agreement.

(G)    ensure that the Company has the right to supply and distribute the
       Products and all components thereof, and the Products shall not and do
       not, constitute any known infringement of any license, trademark,
       copyright, patent or similar proprietary interest of any third party.

(H)    The Company will not directly, or indirectly, sell Products to any
       customers in the Exclusive Territory and, furthermore, will refer those
       customers to the Distributor.

(I)    The Company will not directly, or indirectly, sell Products to any
       customers in the Non-exclusive Territory where the Distributor has non-
       exclusive distribution rights and, furthermore, will refer those
       customers to the Distributor.

7.2    The Company represents it has the capability to supply the Products
necessary to meet the anticipated sales of the Distributor for the duration of
this Agreement.

7.3    Execution and delivery of this Agreement by the Company has been duly
authorized.  The person executing this Agreement on behalf of the Company has
full and proper authorization to execute same, and this Agreement is a valid and
binding agreement of the Company and is enforceable against the Company in
accordance with its terms.


8.     Indemnification
       ---------------

8.1    Each of the parties agrees to indemnify and hold harmless the other
party from any liability arising out of the act or omission of the indemnifying
party, its servants, agents and representatives.

8.2    The Company shall not be responsible for any claim and loss arising out
of the marketing, sales and distribution process of the Distributor and the
sub-distributors.

8.3    The Distributor shall be responsible for the losses and claims arising
out of the Distributor's and the sub-distributors' conduct, non-performance and
misrepresentations.  Furthermore, the Distributor shall defend itself and shall
indemnify and hold harmless the Company from any liability arising therefrom.

8.4    The maximum liability of the Company arising out of and relating to the
Distribution Agreement shall not exceed the Order Price of the Products
delivered.


9.     Right of First Refusal for Future Products
       ------------------------------------------

9.1    The Distributor will have a right of first refusal to acquire the
marketing, distribution and sales rights for (a) Future Products on an exclusive
basis for the Exclusive Territory and (b) Future Products on a non-exclusive
basis for the Non-exclusive Territory where non-exclusive distribution rights
have been granted pursuant to section 2.3.

* CONFIDENTIAL TREATMENT REQUESTED BY PC-EPHONE, INC.
<PAGE>

10.    Confidential Information
       ------------------------

10.1   The Company acknowledges that the Confidential Information of the
Distributor is the property of the Distributor and the success, profitability
and competitive position of the Distributor requires that the Confidential
Information of the Distributor be maintained in confidence by the Company.
Accordingly, the Company covenants and agrees with the Distributor, subject to
Sections 10.2 and 10.3 of this Agreement, that:

(A)    the Company will at all times keep all Confidential Information in the
       strictest confidence;

(B)    the Company will not use the Confidential Information for any purpose
       other than for performing its obligations pursuant to this Agreement;

(C)    the Company will not at any time publish or in any way participate or
       assist in the publishing of any Confidential Information;

(D)    the Company will not disclose or assist in the disclosure of any
       Confidential Information to any person, firm, corporation or other
       entity.

10.2   The Company may disclose the Confidential Information of the
Distributor in confidence to its lawyers, accountants and other professional
advisors in connection with the performance of the business arrangements between
the Company and the Distributor, each of whom shall be advised of the
confidential nature of such confidential information.

10.3   The Company may disclose the Confidential Information of the
Distributor only to the extent necessary in order that the Company may comply
with all applicable laws and regulations.

10.4   The Distributor acknowledges that the Confidential Information of the
Company is the property of the Company and the success, profitability and
competitive position of the Company requires that the Confidential Information
of the Company be maintained in confidence by the Distributor. Accordingly, the
Distributor covenants and agrees with the Company, subject to Sections 10.5 and
10.6 of this Agreement, that:

(A)    the Distributor will at all times keep all Confidential Information in
       the strictest confidence;

(B)    the Distributor will not use the Confidential Information for any
       purpose other than for performing its obligations pursuant to this
       Agreement;

(C)    the Distributor will not at any time publish or in any way participate
       or assist in the publishing of any Confidential Information;

(D)    the Distributor will not disclose or assist in the disclosure of any
       Confidential Information to any person, firm, corporation or other
       entity.

10.5   The Distributor may disclose the Confidential Information of the
Company in confidence to its lawyers, accountants and other professional
advisors in connection with the performance of the business arrangements between
the Company and the Distributor.

* CONFIDENTIAL TREATMENT REQUESTED BY PC-EPHONE, INC.
<PAGE>

10.6   The Distributor may disclose the Confidential Information of the
Company only to the extent necessary in order that the Distributor may comply
with all applicable laws and regulations, including compliance with the
Distributor's obligations as a reporting issuer under the United States
Securities Exchange Act of 1934.
- -------------------------------

10.7   No waiver by either party of its rights pursuant to the confidentiality
agreements or any consent to any release of confidential information shall be
effective unless expressed in writing, and no such waiver or consent shall apply
beyond the specific facts in respect of which the waiver of consent was given.

10.8   This confidentiality agreement of each party does not apply to
information that is or becomes publicly available or is lawfully received by the
other party other than by breach of this confidentiality agreement.


11.    Modifications
       -------------

11.1   The Distributor will not make any modifications to any Products or in
any way vary or change the specifications or content of the Products purchased
from the Company.  The Distributor will use its reasonable efforts to ensure
that its sub-distributors, dealers, agents, or customers do not make any
modifications to, or in any way vary, the specifications or content of any
Products.


12.    Term and Termination
       --------------------

12.1   The term of this Agreement (the "Term") will commence on the date of
signing of this Agreement and will continue until the earlier of December 31,
2007 or until the date on which this Agreement is terminated in accordance with
the provisions of this Agreement.  However, the Term of this Agreement will
automatically renew from year to year after the initial Term provided the
Company has not given 60 days advance notice of termination in writing.

12.2   Each of the Distributor and the Company shall have the right to
terminate this Agreement upon the occurrence of any of the following events,
such termination to be effective immediately upon the receipt or deemed receipt
by the other party of notice to that effect and the expiry of any applicable
period for remedy of the default:

(A)    if a party is in default of any of the material terms or conditions of
       this Agreement and fails to remedy such default within 60 days of
       written notice thereof from the other party;

(B)    if the other party becomes bankrupt or insolvent, makes an assignment
       for the benefit of its creditors or attempts to avail itself of any
       applicable statute relating to insolvent debtors;

(C)    if the other party winds-up, dissolves, liquidates or takes steps to do
       so or otherwise ceases to function as a going concern or is prevented
       from reasonably performing its duties hereunder; or

(D)    if a receiver or other custodian (interim or permanent) of any of the
       assets of the other party is appointed by private instrument or by court
       order or if any execution or other similar process of any court becomes

* CONFIDENTIAL TREATMENT REQUESTED BY PC-EPHONE, INC.
<PAGE>

       enforceable against the other party or its assets or if distress is made
       against the other party's assets or any part thereof.

12.3   It is a condition of this Agreement that nominees of the Company will
have been appointed to the board of directors of PC-EPhone, Inc. by no later
than February 28, 2001 and that the nominees will represent a minimum of forty
percent (40%) of the directors on the board of directors of PC-EPhone, Inc. upon
appointment and throughout the Term of this Agreement.  In the event that the
Company's nominees on PC-EPhone Inc.'s board of directors constitute less than
the minimum of forty percent (40%) of PC-EPhone Inc.'s board of directors, other
than by reason of resignation of the Company's nominees or the failure of the
Company to provide nominees, for a continuous period of more than sixty (60)
days during the period from February 28, 2001 to the end of the term of this
Agreement, then the Company will be entitled to terminate this Agreement upon
written notice to the Distributor.  The Company will throughout the term of this
Agreement vote all shares in PC-EPhone, Inc. owned by the Company, including the
shares issued pursuant to this Agreement, in favour of the nominees proposed by
the Company as directors of the Distributor.  In the event that the Company does
not vote its shares in PC-EPhone, Inc. in accordance with the terms of this
Agreement, then the Company will have no rights to terminate this Agreement
pursuant to this section 12.3.

12.4   Upon termination of this Agreement for any reason whatsoever, the
following shall apply:


(A)    those rights and obligations of each of the Company and the Distributor
       which are expressly stated to survive termination of this Agreement will
       survive termination and will continue in full force and effect;
(B)    all rights and privileges granted by the Company to the Distributor
       pursuant to this Agreement, including the rights to market, distribute
       and sell Products, will immediately terminate and be relinquished by the
       Distributor, and thereafter the Distributor shall take no action that
       would make it appear to the public that the Distributor is still
       supplying Products;
(C)    the Distributor shall return to the Company all advertising,
       informational or technical material given to the Distributor by the
       Company;
(D)    the Distributor shall cease using the Trade Names and thereafter refrain
       from holding itself out as an authorized distributor of the Products;
(E)    the Distributor will retain in confidence all information regarding the
       business and property of the Company and the Products;
(F)    all sub-distributorship agreements entered into by the Distributor will
       terminate.

The provisions of this Section 12.4 will survive the termination of this
Agreement.

13.    Assignment
       ----------

13.1   Except as provided by Section 5 of this Agreement, the rights granted
by this Agreement may not be sold, assigned, sub-licensed or otherwise
transferred by the Distributor without the prior written consent of the Company,
which consent may not be unreasonably withheld by the Company.


14.    After-sales Support
       -------------------

14.1   The Company shall be responsible for the cost of all warranties,
repairs and similar claims by customers of the Products.  The Distributor shall
be responsible for customer and call-center support services.  However, the
Company shall provide training and technical assistance to the Distributor in
the United States and Canada for a period of three (3) months after the date of
this Agreement in order to facilitate customer and call-center support services.

* CONFIDENTIAL TREATMENT REQUESTED BY PC-EPHONE, INC.
<PAGE>

15.    Miscellaneous Provisions
       ------------------------

15.1   Entire Agreement
       ----------------

This Agreement constitutes the entire agreement between the parties with respect
to all matters herein contained, and its execution has not been induced by, nor
do any of the parties hereto rely upon or regard as material, any
representations or writings whatsoever not incorporated herein and made a part
hereof.  This Agreement shall not be amended, altered or qualified except by an
instrument in writing, signed by all parties hereto and any amendments,
alterations or qualifications hereof shall not be binding upon or affect the
rights of any party who has not given its consent in writing.

15.2   Interpretation
       --------------

The division of this Agreement into articles and sections is for convenience of
reference only and shall not affect the interpretation or construction of this
Agreement.

15.3   Severability
       ------------

In the event that any of the covenants herein contained shall be held
unenforceable or declared invalid for any reason whatsoever, such
unenforceability or invalidity shall not affect the enforceability or validity
of the remaining provisions of this Agreement and such unenforceable or invalid
portion shall be severable from the remainder of this Agreement.

15.4   Force Majeure
       -------------

In the event of an inability or failure by the Company to manufacture, supply or
ship any of the Products herein by reason of any fire, explosion, war, riot,
strike, walk-out, labour controversy, flood, shortage of water, power, labour
transportation facilities or necessary materials or supplies, default or power
failure of carriers, breakdown in or the loss of production or anticipated
production from plant or equipment, act of God or public enemy, any law, act or
order of any court, board, government or other authority of competent
jurisdiction, or any other direct cause (whether or not of the same character as
the foregoing) beyond the reasonable control of the Company, then the Company
shall not be liable to the Distributor and will not be deemed to be in default
during the period and to the extent of such inability or failure.  Deliveries
omitted in whole or in part while such inability remains in effect shall be
canceled.

15.5   Notices
       -------

Any notice required or permitted to be given hereunder shall be in writing and
shall be effectively given if:

   (a)   Delivered personally;
   (b)   Sent by prepaid courier service or mail; or
   (c)   Sent prepaid by telecopiers, fax telex or other similar means of
         electronic communication

addressed to the "President" at the address/fax number shown for the Distributor
or the Company, as the case may be, at the beginning of this Agreement.

* CONFIDENTIAL TREATMENT REQUESTED BY PC-EPHONE, INC.
<PAGE>

Any notice so given shall be deemed conclusively to have been given and received
when so personally delivered or, if sent by telex, fax, telecopier or other
electronic communication (other than e-mail), on the first business day
thereafter, or if sent by courier on the third business day thereafter or if
sent by mail on the tenth business day thereafter. Any party may change any
particulars of its address/fax number for notice by giving notice to the other
party in the manner above described.

For determining the date on which any notice shall have been received, the date
of delivery will be the date in Los Angeles, California at the time of delivery.

15.6   Time of the Essence
       -------------------

Time shall be of the essence.

15.7   Further Assurances
       ------------------

The parties agree to sign such other instruments, cause such meetings to be
held, resolutions passed and by-laws enacted, exercise their vote and influence,
do and perform and cause to be done and performed such further and other acts
and things as may be necessary or desirable in order to give full effect to this
Agreement.

15.8   Successors and Assigns
       ----------------------

This Agreement shall enure to the benefit of and be binding upon the parties
hereto and their respective successors and permitted assigns.

15.9   Non-Waiver
       ----------

No waiver by any party of any breach by any other party of any of its covenants,
obligations and agreements hereunder shall be a waiver of any subsequent breach
of any other covenant, obligation or agreement, nor shall any forbearance to
seek a remedy for any breach be a waiver of any rights and remedies with respect
to such or any subsequent breach.

15.10  Arbitration
       -----------

All disputes in relation to this Agreement, other than a dispute regarding the
non-payment of any monetary amount required by this Agreement, be referred to
and finally resolved by Arbitration, under the rules of the British Columbia
International Commercial Arbitration Center (the "Rules"), which Rules are
deemed to be incorporated by reference into this Article. The tribunal shall
consist of One (1) Arbitrator.  The Parties will endeavour within twenty-one
(21) days of the matter being referred to Arbitration to agree upon an
Arbitrator, failing which the Arbitrator shall be appointed in accordance with
the Rules.  The place of Arbitration shall be Surrey, British Columbia.  The
language of the Arbitration shall be English.  The parties agree that the
Arbitrator shall be requested to make his award within sixty (60) days following
the later of the conclusion of the Arbitration hearings or any exchange of final
written submissions by the Parties and further agree that the word of the
Arbitrator shall be final and binding and without appeal.

15.11  Governing Law
       -------------

This Agreement shall be governed by and construed in accordance with the laws of
the Province of British Columbia.

* CONFIDENTIAL TREATMENT REQUESTED BY PC-EPHONE, INC.
<PAGE>

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

CYBERBANK CORP.
by its authorized signatory


  /s/ Y.S. Cho
- ---------------------------------------
Signature of Authorized Signatory


Y.S. Cho
- ---------------------------------------
Name of Authorized Signatory


President/CEO
- ---------------------------------------
Position of Authorized Signatory


PC-EPHONE LTD.
by its authorized signatory


  /s/ Douglas Yee
- ---------------------------------------
Signature of Authorized Signatory


Douglas Yee
- ---------------------------------------
Name of Authorized Signatory


President
- ---------------------------------------
Position of Authorized Signatory

* CONFIDENTIAL TREATMENT REQUESTED BY PC-EPHONE, INC.
<PAGE>

                                   Appendix 3.10
                       Terms and Conditions of Initial Orders
                       --------------------------------------

* CONFIDENTIAL TREATMENT REQUESTED BY PC-EPHONE, INC.
<PAGE>

Cyberbank Corp.
{............*............}
- ---------------------------
Seoul, Korea  {............*............}
              ---------------------------
Attention:  Mr. {............*............}
- -------------------------------------------

Dear Mr. {............*............}:
         ---------------------------

Order
- -----

As exclusive Distributor of the Multipalm product for Canada and the United
States, we hereby irrevocably order 1,000 units of the Product (as defined in
the Distribution Agreement) (without stylus) at a price of not greater than
US${............*............} per unit for a total purchase price of not
greater than US${............*............} (the "Order").


Delivery
- --------

Delivery schedule shall be as follows:

         Delivery Date                          Number of Units
         -------------                          ---------------

         {............*............}                 1,000
         ---------------------------

Payment
- -------

An irrevocable, confirmed, transferable and negotiable letter of credit will be
granted for the value of the Order, payable immediately upon presentation of
documents evidencing shipment.

All other terms and conditions of this purchase order shall be governed, to the
extent applicable, by the Distribution Agreement between the two parties.  If
you have any questions regarding the above, please contact the undersigned at
{............*............}.



Yours truly,
NEWLANDS OIL & GAS INC.

**DRAFT**

* CONFIDENTIAL TREATMENT REQUESTED BY PC-EPHONE, INC.
<PAGE>

Cyberbank Corp.
- ---------------
{............*............},
- ---------------------------
Seoul, Korea  {............*............}

Attention:  Mr. {............*............}
- -------------------------------------------

Dear Mr. {............*............}:

Order
- -----

As exclusive Distributor of the Multipalm product for Canada and the United
States, we hereby irrevocably order 35,000 units of the Product (as defined in
the Distribution Agreement) (without stylus) at a price of not greater than
US${............*............} per unit for a total purchase price of not
greater than US${............*............} (the "Order").


Delivery
- --------

Delivery schedule shall be as follows:

              Delivery Date                     Number of Units
              -------------                     ---------------
              {............*............}       {......*......}
              ---------------------------       ---------------
              {............*............}       {......*......}
              ---------------------------       ---------------
              {............*............}       {......*......}
              ---------------------------       ---------------

Payment
- -------

{............*............}U.S. dollars (US${............*............}) will be
paid at the time of placing the Order.  Within {............*............} days
after passing CDG2 Test, an irrevocable, confirmed, transferable and negotiable
letter of credit will be granted for the remaining value of the Order and may be
paid in whole or in part, for partial shipments, but final payment (whether
whole or part) is not due until {............*............} days after
presentation of documents evidencing shipment.

All other terms and conditions of this purchase order shall be governed, to the
extent applicable, by the Distribution Agreement between the two parties.  If
you have any questions regarding the above, please contact the undersigned at
{............*............}.

Yours truly,
NEWLANDS OIL & GAS INC.

**DRAFT**

* CONFIDENTIAL TREATMENT REQUESTED BY PC-EPHONE, INC.


<PAGE>

                                                                   Exhibit 10.18



                            WARRANTS AGREEMENT



                                   between



                           NEWLANDS OIL & GAS INC.

                                 ("Newlands")


                                      and


                                CYBERBANK CORP.

                                 ("Cyberbank")
<PAGE>

                               WARRANTS AGREEMENT
                               ------------------


THIS AGREEMENT (the "Agreement") is entered into effective the 6th of November
2000, by and between NEWLANDS OIL & GAS INC., a Nevada corporation (hereinafter
referred to as "Newlands"), and CYBERBANK CORP., a Korea corporation
(hereinafter referred to as "Cyberbank").


                                 R E C I T A L S
                                 ---------------

    WHEREAS, Newlands wishes to grant warrants to Cyberbank to allow Cyberbank
to purchase common shares of Newlands; and

    WHEREAS, Cyberbank wishes to acquire warrants to purchase common shares of
Newlands; and

    WHEREAS, Cyberbank wishes to grant warrants to Newlands to allow Newlands to
purchase common shares of Cyberbank; and

    WHEREAS, Newlands wishes to acquire warrants to purchase common shares of
Cyberbank,

    NOW, THEREFORE, in consideration of the premises and mutual covenants
contained in this Agreement and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties, intending
to be legally bound hereby, agree as follows:

                             ARTICLE I -- DEFINITIONS
                             ------------------------

1.01    In this Agreement, the following terms shall have the meanings set forth
below:

(a)     "Average Trading Price" means the average trading price of the common
        stock of Newlands, having $0.001 par value, for the twenty trading days
        prior to November 1, 2001 determined based on the closing price on each
        trading day.  For the purposes of this calculation, the closing price
        shall be that closing price that is quoted only from the Over-the-
        Counter Bulletin Board in the United States or NASDAQ;

(b)     "Exercise Period" means the period of time between November 1, 2001 and
        December 31, 2001, subject to amendment by section 3.05.

1.02   Currency.   All dollar amounts referred to in this agreement are in
       --------
United States funds.
<PAGE>

                   ARTICLE II -- GRANT OF WARRANTS TO CYBERBANK
                   --------------------------------------------

2.01   Newlands hereby agrees to grant to Cyberbank warrants to purchase
2,500,000 common shares, having $0.001 par value, of Newlands at an exercise
price of $3.20 per share (the "Newlands Warrants").

2.02   The Newlands Warrants shall be exercisable any time during the Exercise
Period.

2.03   The Newlands Warrants are subject to approval by the board of directors
of Newlands and  by the US Securities and Exchange Commission (the "SEC"), such
approval to be sought and received by Newlands as soon as practicable but not
later than March 31, 2001.

2.04   The Newlands Warrants may not be assigned, transferred or sold in any
manner whatsoever.


                  ARTICLE III -- GRANT OF WARRANTS TO NEWLANDS
                  --------------------------------------------

3.01   Cyberbank hereby agrees to grant to Newlands warrants to purchase that
number of common shares, having Korean Won 5,000 par value, of Cyberbank as
determined by section 3.02 at an exercise price of $223.54 per share (the
"Cyberbank Warrants").

3.02   For the purpose of section 3.01, the number of common shares of
Cyberbank that is subject to warrants shall be:

   (A)    If the Average Trading Price is greater than or equal to $6.00 per
          share, 35,789;

   (B)    If the Average Trading Price is less than $6.00 per share, then the
          number shall be determined as follows:

          Number of Warrants = 35,789 Warrants x (Average Trading Price/$6.00
          per Share)

3.03   The Cyberbank Warrants shall be exercisable any time during the Exercise
Period.

3.04   The Cyberbank Warrants are subject to approval by the board of directors
of Cyberbank, such approval to be sought and received by Cyberbank as soon as
practicable but not later than March 31, 2001.

3.05   Newlands shall calculate the Average Trading Price and deliver such
calculation to Cyberbank on or before November 6, 2001.  Cyberbank shall have
until November 12, 2001 to deliver notice of dispute of the calculation of the
Average Trading Price.  If there is a dispute regarding the calculation of the
Average Trading Price, the parties agree to be bound by the decision of an
arbitrator who has been mutually determined by the parties.  In case of dispute,
<PAGE>

the Exercise Period shall be increased by the number of days between November
1, 2001 and the date of the arbitrator's decision.

3.06   The Cyberbank Warrants may not be assigned, transferred or sold in any
manner whatsoever.

                         ARTICLE IV -- MISCELLANEOUS
                         ---------------------------

4.01   Other Expenses.  Except as otherwise provided in this Agreement, each
       --------------
party will pay all of its expenses in connection with the negotiation,
execution, and implementation of the transaction contemplated under this
Agreement.

4.02   Notices.  All notices, requests, demands, waivers and other
       -------
communications required or permitted to be given under this Agreement will
be in writing and will be deemed to have been duly given: (a) if delivered
personally or sent by facsimile, on the date received, (b) if delivered by
overnight courier, on the second day after delivery to the overnight courier,
and (c) if mailed, ten days after mailing with first-class, postage prepaid. Any
such notice will be sent as follows:

                   TO CYBERBANK:
                   -------------

                   Cyberbank Corp.
                   18th Floor, Mirae Bldg., 1306-6
                   Seocho-dong, Seocho-gu
                   Seoul, Korea 137-855

                   Facsimile: 82-2-3483-4600

                   TO NEWLANDS
                   -----------

                   Newlands Oil & Gas, Inc.
                   #1388 - 885 West Georgia Street
                   Vancouver, BC
                   CANADA V6C 3E8

                   Fax: (604) 642-0247

For determining the date on which any notice shall have been received, the date
of delivery will be the date in Los Angeles, California at the time of delivery.

4.03   Controlling Law.  This Agreement will be construed, interpreted and
       ---------------
enforced in accordance with the substantive laws of the State of Nevada, without
giving effect to its conflicts of laws provisions.
<PAGE>

4.04   Headings.  Any table of contents and Section headings in this Agreement
       --------
are for convenience of reference only and will not be considered or referred to
in resolving questions of interpretation.

4.05   Benefit.  This Agreement will be binding upon and will inure to the
       -------
exclusive benefit of the parties hereto and their respective heirs, legal
representatives, successors and assigns.  No party hereto may assign any rights
or delegate any duties hereunder without the prior written consent of the other
parties hereto and any prohibited assignment or delegation will be deemed null
and void.

4.06   Partial Invalidity.  The invalidity or unenforceability of any particular
       ------------------
provision of this Agreement will not affect the other provisions hereof, and
this Agreement will be construed in all respects as if such invalid or
unenforceable provisions were omitted.  Further, there will be automatically
substituted for such invalid or unenforceable provision a provision as similar
as possible which is valid and enforceable.

4.07   Counterparts and Facsimiles.  This Agreement may be executed
       ---------------------------
simultaneously in two (2) or more counterparts each of which will be deemed an
original and all of which together will constitute but one and the same
instrument.  The signature page to this Agreement and all other documents
required to be executed at Closing may be delivered by facsimile and the
signatures thereon will be deemed effective upon receipt by the intended
receiving party.

4.08   Interpretation.  All pronouns and any variation thereof will be deemed
       --------------
to refer to the masculine, feminine, neuter, singular or plural as the identity
of the person or entity, or the context, may require.  Further, it is
acknowledged by the parties that this Agreement has undergone several drafts
with the negotiated suggestions of both; and, therefore, no presumptions will
arise favoring either party by virtue of the authorship of any of its provisions
or the changes made through revisions.

4.09   Entire Agreement; Waivers.  This Agreement constitutes the entire
       -------------------------
agreement between the parties hereto with regard to the matters contained herein
and it is understood and agreed that all previous undertakings, negotiations,
letter of intent and agreements between the parties are merged herein.  The
failure of any party to this Agreement to assert any of its rights under this
Agreement or otherwise will not constitute a waiver of such rights.  Neither the
failure nor any delay on the part of any party hereto in exercising any rights,
power or remedy hereunder will operate as a waiver thereof or of any right,
power or remedy; nor will any single or partial exercise of any right, power or
remedy preclude any further or other exercise thereof, or the exercise of any
other right, power or remedy.
<PAGE>

4.10  Legal Fees and Costs.  In the event any party hereto incurs legal expenses
      --------------------
to interpret and enforce any provision of this Agreement, the prevailing party
will be entitled to recover such legal expenses, including, without limitation,
attorney's fees, costs and disbursements, in addition to any other relief to
which such party will be entitled.

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

                                                CYBERBANK CORP.


                                                By:     /s/ Y.S. Cho
                                                   -----------------------------


                                                Title:  President
                                                      --------------------------


                                                NEWLANDS OIL & GAS, INC.


                                                By:     /s/ Douglas Yee
                                                   -----------------------------


                                                Title:  President
                                                      --------------------------

<PAGE>

                                                                   Exhibit 10.19

                            SUBDISTRIBUTOR AGREEMENT

This Subdistributor Agreement (the "Agreement") effective the 15th day of
November, 2000.

BETWEEN:


              PC-EPhone.com Ltd., a
              Bermuda Corporation having its corporate office
              at #129 Front Street
              Hamilton, BM HM11
              Fax: (604) 688-8371

              (herein the "Distributor")

                                                               OF THE FIRST PART

AND:

              FUTURECOM GLOBAL, INC.,
              a Nevada corporation having an office
              at 15690 N. 83rd Way, Suite B
              Scottsdale, Arizona  85260
              Fax:  (480) 368-1467

              (herein "FutureCom")

                                                              OF THE SECOND PART

WHEREAS:

A.   The Distributor is party to a Distribution Agreement (the "Distribution
     Agreement") with CYBERBANK CORP., a Korean corporation (the "Company") with
     its head office in Seoul, Korea.

B.   The Company has developed a handheld device/terminal that can be used to
     perform multiple functions on a CDMA, GSM or other wireless application
     protocol system (the "Multipalm").

C.   The Distributor has acquired from the Company the United States and
     Canada rights to market and distribute the Multipalm on a sole and
     exclusive basis on the terms and conditions contained in the Distribution
     Agreement.

D.   The Distributor may have the right to acquire from the Company the
     worldwide (other than the United States and Canada) rights to market and
     distribute the Multipalm on a non-exclusive basis on the terms and
     conditions contained in the Distribution Agreement.

E.   The Distributor is desirous of developing and accelerating its marketing
     strategy to exploit any and all business opportunities with respect to the
     aforementioned product; and

F.   FutureCom is desirous of participating with the Distributor in the
     implementation of the foregoing marketing strategy in the manner
     hereinafter described.

* CONFIDENTIAL TREATMENT REQUESTED BY PC-EPHONE, INC.
<PAGE>

NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the mutual
covenants and agreements contained herein, the parties hereto agree as follows:


1.   DEFINITIONS

In this Agreement, the following words and phrases shall have the following
meanings:


(A)  "Company" means CYBERBANK CORP., a Korean corporation and its successors
     and  assigns;

(B)  "Confidential Information of the Company" means all business plans, trade
     secrets, design concepts, knowledge, information, production technology,
     processes, know how, business projections, customer lists and intellectual
     property concerning or relating to the business of the Company and the
     Products, including the Manufacturing Information, which may be
     communicated to, acquired by, or learned of by the Distributor from the
     Company, whether or not such information is subject to proprietary
     protection at law;

(C)  "Confidential Information of the Distributor" means all customer lists,
     sales marketing contacts and information, business plans, trade secrets,
     knowledge, information, know how, business projections, computer software
     programs and intellectual property concerning or relating to the business
     of the Distributor which may be communicated to, acquired by, or learned of
     by the Company from the Distributor, whether or not such information is
     subject to proprietary protection at law;

(D)  "Distribution Agreement" means that certain Distribution Agreement dated
     November 6, 2000 between the Company and the Distributor;

(E)  "Exclusive Territory" means the United States of America (50 states) and
     Canada;

(F)  "Future Products" means any future products developed by the Company of a
     similar or like nature as the Multipalm which is primarily a PC/PDA/
     wireless telecommunication device.

(G)  "Manufacturing Information" means all information, technology, data and
     trade secrets relating to the manufacture of the Products;

(H)  "Non-exclusive Territory" has the meaning assigned to it by Section 2.3;

(I)  "Patents" means any patents underlying the Products which are owned or may
     be owned by the Company or licensed or which may be licensed to the
     Company;

(J)  "Products" means the personal digital assistant products marketed by the
     Company under the current trade name "Multipalm" (including all necessary
     accessories included in the Multipalm retail package to maintain the
     functionality of the Product including, but not limited to a battery,
     battery charger, adaptor, and non-phone stylus).

(K)  "Reference Date" means the later of (a) December 31, 2001 and (b) one year
     after approval of the Products by the US FCC;

(L)  "Term" has the meaning described in Section 12.1 of this Agreement;

* CONFIDENTIAL TREATMENT REQUESTED BY PC-EPHONE, INC.
<PAGE>

(M)  "Trade Name" means the trade name "Multipalm", or any other trade name for
     the Product or Future Products, and the trademark "Multipalm", or any other
     trademark for the Product or Future Products, in the event that the Company
     is granted trademark protection by the United States Patent and Trademark
     Office.

2.    Exclusive Distribution Rights and Non-exclusive Distribution Rights
      -------------------------------------------------------------------

2.1   Subject to the terms and conditions of this Agreement and the Distribution
Agreement, the Distributor hereby grants to FutureCom the exclusive right to
market, distribute and sell the Products within the Exclusive Territory (the
"Distribution Rights"). The Distribution Rights will include the following
rights:

(A)   the right to market, distribute and sell the Products;

(B)   the right and license to use the Trade Name in connection with the
      marketing, distribution and sale of the Products.

2.2   The Distribution Rights will extend to the right and license to use the
trademark "Multipalm" or any other trademark relating to the Products or Future
Products in the event that the Company's application to the United States Patent
and Trademark Office for the registration of "Multipalm" or any other trademark,
if any, is approved.  FutureCom acknowledges that there is no assurance that
trademark protection will be granted by the United States Patent and Trademark
Office.

2.3   FutureCom may, from time to time, deliver notice to the Distributor that
requests non-exclusive distribution rights for certain territories outside of
the Exclusive Territory (the "Non-exclusive Territory").  FutureCom and the
Distributor shall have fifteen (15) days to discuss and reach an agreement on
such request.  Failure to reach an agreement on such a request shall be deemed
to be a rejection of such request by the Distributor.  If granted, such
non-exclusive distribution rights shall be for a period of one year from the
date of delivery of the request by FutureCom to the Distributor.  Provided
however, FutureCom shall be entitled to deal with and sell to existing customers
and contacts of FutureCom at the 2000 Las Vegas Comdex Show for markets outside
the exclusive Territory but shall always be governed by the terms and conditions
of the Distribution Agreement.  The terms and conditions of such non-exclusive
distribution rights may be modified or amended subject to a separate agreement
by FutureCom and the Distributor but shall always be governed by the terms and
conditions of the Distribution Agreement .

2.4   The Distributor agrees FutureCom shall endeavor to add Mexico as an
exclusive market at the earliest possible date but makes no representation that
such exclusivity can or will be obtained.

2.5   FutureCom acknowledges that the rights granted to Distributor pursuant to
this Agreement are expressly subject to the terms and conditions of the
Distributor Agreement which contains consent/approval requirements, limits and
thresholds as to the period of exclusivity, volume requirements, and similar
conditions.  FutureCom further acknowledges that the rights granted to it
hereunder shall be subject to the conditions and limitations contained in the
Distribution Agreement including, but not limited to, methods of payment, and
payment security requirements

2.6   FutureCom and its affiliates covenant that it will not contact the
Company directly or indirectly without the express written consent of
Distributor during the term of the Distribution Agreement.

* CONFIDENTIAL TREATMENT REQUESTED BY PC-EPHONE, INC.
<PAGE>

2.7     Notwithstanding any other term or terms of this Agreement, any sales
orders and/or sales contracts for Products to third parties made before
execution of a final formal distribution agreement and all profits resulting
therefrom shall be for the sole benefit of Distributor.  Upon execution of this
Agreement, Distributor shall submit a list of such third parties which the
Distributor may be closing sales orders with, prior to the date hereof.  Any
sales made by Distributor to a verifiable party on the aforementioned list shall
be excluded from the application of this Agreement.  It is agreed that the
number of potential purchasers on said list shall not exceed five (5).

3.  Product Prices, Payment and Minimum Purchase Amounts
    ----------------------------------------------------

3.1  The prices to be paid by FutureCom to the Distributor for the Products (the
"Product Prices") shall:

     (A)  until December 31, 2001, not be less than
          US${............*............} per unit {............*............}
          and shall not be greater than {............*............}; and

     (B)  after December 31, 2001, not be greater than the
          {............*............}.

Plus {............*............} as more particularly set forth in clause
3.10(d).

3.2  At the time of giving the purchase order, FutureCom will open an
irrevocable and confirmed letter of credit without recourse in favour of the
Company and the Distributor for the aggregate price for all of the Products
ordered at the Product Prices ordered (the "Order Price").  In addition, the
letter of credit will be transferable and negotiable by the Company and the
Distributor.  Such letter of credit shall be arranged with a financial
institution satisfactory to the Company and Distributor.  Such letter of credit
shall be granted on the basis that payment will be made upon presentation of
adequate documentation by the Company and the Distributor, but the Order Price
for each delivery of Products will not be paid any earlier than the due date as
described in section 3.3 below.

3.3  The Distributor will invoice FutureCom for all Products delivered to
FutureCom at the Product Prices.  The Order Price shall be paid
{............*............} days after presentation of documents as relate to
each delivery of Products but, for greater certainty, may be paid in partial
amounts for partial shipments.

3.4  FutureCom shall have the right to establish its own selling prices for the
Products within the Exclusive Territory and the Non-exclusive Territory, where
non-exclusive distribution rights have been granted to FutureCom by the
Distributor.

3.5  The determination of sales and marketing strategies for the Products within
the Exclusive Territory and the Non-exclusive Territory, where non-exclusive
distribution rights have been granted to FutureCom by the Distributor, will be
the sole responsibility of FutureCom.

3.6  All references to money or currency herein contained shall mean lawful
money of the United States of America.

3.7  Each order placed by FutureCom for the purchase of any Products shall be
subject to the terms and conditions of this Agreement.

* CONFIDENTIAL TREATMENT REQUESTED BY PC-EPHONE, INC.
<PAGE>

3.8  The Distributor will cause to the Company to deliver all Products to
FutureCom {............*............} but at a location in
{............*............} that is a reasonable distance from a major shipping
location which includes, but is not limited to, {............*............}.

3.9  As a condition of maintaining the Distribution Rights, during the period
from the effective date of this Agreement to the Reference Date, FutureCom must
purchase from the Company a  minimum of units of the Products as specified in
Section 3.10 at the prices provided for by this Agreement.  Notwithstanding the
above, FutureCom shall not be held responsible for not achieving the minimum
purchase requirements if the Products are not completely delivered, are not
delivered on a timely basis, and/or not delivered in a functioning format for
North American use.

3.10  FutureCom agrees to issue binding purchase orders to the Distributor for
the purchase of Products in a form that is substantially similar in terms and
conditions as attached in Appendix 3.10 and additionally as follows:

     a)  Purchase {............*............} units of the current model Product
         which purchase order shall be made with Distributor
         {............*............};

     b)  Purchase {............*............} units of future generation
         Products to be delivered over {............*............} with the
         first purchase order and deliverable to be a minimum of
         {............*............};

     c)  Purchase a minimum of {............*............} units of the Products
         for each {............*............} thereafter. Any purchases by
         FutureCom in excess of {............*............} units for a
         particular {............*............} shall be carried forward to the
         next {............*............} as a credit towards the next
         {............*............} minimum purchase requirement, except that
         no carry forward is permitted beyond {............*............} of
         each {............*............};

     d)  Pay Distributor a purchase price equal to the Distributor's actual cost
         price plus {............*............} calculated on each order (which
         may include Product options and/or accessories). Distributor's actual
         purchase price shall be the contracted bona fide arm's-length price
         charged by the Company to the Distributor. FutureCom shall be entitled
         to documented verification of the foregoing purchase price. Distributor
         shall, on a best efforts basis, endeavour to obtain on going
         competitive pricing from the Company to maintain the market advantage
         of the Product;

     e)  Pay Distributor a fee of {............*............} on received
         payments on all sales of Product accessories made by FutureCom,
         calculated and payable monthly by the third business day of the
         following month, it being understood that such fee is only in respect
         of Product accessories developed and/or manufactured for or by
         FutureCom. FutureCom shall not develop or have manufactured any Product
         option or accessory presently marketed by the Company.

3.11  To help the Company and Distributor to establish manufacturing and
marketing plans, FutureCom shall submit to the Distributor a
{............*............} forecasting purchase plan for
{............*............} at least {............*............} days prior to
the beginning of each quarter.

3.12  All Canadian and U.S. (50 states) purchase inquiries received by the
Distributor shall be

* CONFIDENTIAL TREATMENT REQUESTED BY PC-EPHONE, INC.
<PAGE>

referred to FutureCom for further handling, PROVIDED HOWEVER, in the event a
customer insists upon dealing with and purchasing from Distributor, then in such
event only, Distributor shall be entitled to deal with such customer at its own
effort and cost. Distributor shall provide written notice to FutureCom of all
such sales. The sale price charged to such customer by Distributor shall be no
less than the lowest price charged by FutureCom to its preferred customers.
Distributor shall upon receipt of the sales proceeds from said customer, pay
FutureCom an amount equal to Distributor's cost plus
{............*............}, it being the intent of the parties to implement
reciprocal arrangements with respect to amounts paid on sales of the Products.
Distributor shall not promote or seek, directly or indirectly, any sales of the
Products within the U.S. (50 states) and Canadian markets.

3.13   Any returns of defective units of Products in excess of
{............*............} points shall be considered a "catastrophic event",
and FutureCom may elect to suspend or terminate its obligations under this
Agreement.

3.14  Distributor shall provide at cost to FutureCom one (1) functional unit of
Product (PC-Ephone) upon execution hereof, and shall provide at cost a further
fifteen (15) units for carrier testing purposes. Distributor shall attempt, on a
best efforts basis, to obtain the foregoing units on a timely manner to permit
carrier testing to commence at the earliest possible date.

4.    Limitations on the Distribution Rights
      --------------------------------------

4.1   FutureCom shall not knowingly distribute or sell any Products for
re-sale to any person or company in any market outside: (a) the Exclusive
Territory and (b) the Non-exclusive Territory where FutureCom has non-exclusive
rights as granted by virtue of section 2.3.

4.2   FutureCom will not, directly or indirectly, sell, assign or grant to any
other person, firm or corporation, the right to sell, or distribute the Products
within the Exclusive Territory and the Non-exclusive Territory, where non-
exclusive distribution rights have been granted to FutureCom by the Distributor,
except as set forth in Article 5.

4.3   Paragraph Intentionally Deleted.

4.4   Nothing in this Agreement shall be deemed in any way to constitute any
transfer or assignment by the Company or Distributor of any Patents, Trade Name
or Confidential Information to FutureCom or to give FutureCom any right, title
or interest in or to any Patents, Trade Name or Confidential Information.
FutureCom acknowledges that all patents pertaining to the Products or
Confidential Information are and shall remain the exclusive property of the
Company.

4.5   FutureCom will not purchase Products from any person other than through
Distributor.


5.    Sub-Assignees
      -------------

* CONFIDENTIAL TREATMENT REQUESTED BY PC-EPHONE, INC.
<PAGE>

5.1   FutureCom will have the right to appoint marketing representatives
within the Exclusive Territory and the Non-exclusive Territory, where
non-exclusive rights have been granted to FutureCom by the Distributor, provided
that each marketing representative is appointed on the following terms and
conditions:

   a)   each marketing representative will enter into a restrictive agreement
        with FutureCom on terms and conditions acceptable to the Distributor
        which will fully bind the marketing representative to the terms and
        conditions set forth in this Agreement; and

   b)   FutureCom shall provide the Distributor a copy of each executed
        marketing representative agreement within 10 days of execution in order
        that the Distributor can verify compliance of the marketing
        representative agreement with the terms and conditions of this
        Agreement.

5.2   In the event of restructuring of FutureCom so that separate companies are
used to sell Products in different countries within the Exclusive Territory and
the Non-exclusive Territory, such separate companies shall collectively be
considered to be parties to this Agreement in place and stead of FutureCom named
herein, without the necessity of any further documentation.

6.    Additional Covenants of FutureCom
      ---------------------------------

6.1   FutureCom will throughout the term of this Agreement:

(A)   purchase and maintain a sufficient liability insurance policy with
      reputable insurance companies in those jurisdictions in which FutureCom
      markets, distributes and sells the Products;

(B)   ensure that any advertising or promotional efforts undertaken by
      FutureCom will be conducted in compliance with advertising and marketing
      guidelines established by the Company or the Distributor in order to
      ensure a consistent marketing and brand recognition of the Products;

(C)   comply with all applicable laws and regulations regarding the
      distribution, marketing and sale of the Products within the Exclusive
      Territory and the Non-exclusive Territory, where non-exclusive
      distribution rights have been granted to FutureCom by the Distributor.

(D)   FutureCom will not enter into any business that is unrelated to
      telecommunications without the prior written consent of the Company.

(E)   FutureCom shall not represent itself as an agent and/or legal
      representative of the Company or Distributor.

(F)   FutureCom shall not challenge the Company or Distributor for the Company's
      Patents, Trade Name and/or other intellectual properties.

(G)   FutureCom shall not give information on and guarantee the performance and
      efficiency of the Products and Future Products unless otherwise confirmed

* CONFIDENTIAL TREATMENT REQUESTED BY PC-EPHONE, INC.
<PAGE>

      by written consent of the Company or Distributor.

6.2   Execution and delivery of this Agreement by FutureCom has been duly
authorized.  The person executing this Agreement on behalf of FutureCom has full
and proper authorization to execute same, and this Agreement is a valid and
binding agreement of FutureCom and is enforceable against FutureCom in
accordance with its terms.


7.    Additional Covenants of the Distributor
      ---------------------------------------

7.1   The Distributor will during the term of this Agreement:

(A)   provide FutureCom with all such information as received by Distributor
      from the Company, or as the Distributor considers appropriate, in order to
      assist FutureCom in the preparation of sales promotion material and
      Distributor shall provide FutureCom with all sales promotional material
      relating to the Products in order to facilitate advertising of the
      Products within the Exclusive Territory and the Non-exclusive Territory,
      where non-exclusive distribution rights have been granted to FutureCom by
      the Distributor;

(B)   to the greatest extent of Distributor's ability to do so, ensure all the
      Products meet the Company's specifications for the applicable Products;

(C)   to the greatest extent of Distiributor's ability to do so, ensure that in
      addition to any warranty requirements pursuant to the terms of this
      Agreement, all Products supplied to FutureCom by the Company, its
      manufacturers or Distributor shall meet any and all U.S. governmental
      standards applicable to such Products.  FutureCom shall have the right,
      through its duly appointed representative, to examine, inspect and/or test
      any and all of the Products supplied by the Company through the
      Distributor, and to the extent possible, the production lines, production
      facilities and storage facilities.  The Distributor warrants to the
      fullest extent in favor of FutureCom and its customers all available
      Company warranties that the goods delivered in accordance with this
      Agreement shall measure up to the same standard as the sample Products
      previously submitted to FutureCom.

(D)   permit FutureCom and its marketing representatives, if any, to hold
      themselves out as authorized distributors of the Products within the
      Exclusive Territory and the Non-exclusive Territory, where non-exclusive
      distribution rights have been granted to FutureCom by the Distributor;

(E)   assist FutureCom in obtaining all applicable US FCC and Industry Canada
      approvals in order that the Products can be distributed in the Exclusive
      Territory and the Non-exclusive Territory, where non-exclusive
      distribution rights have been granted to FutureCom by the Distributor.

* CONFIDENTIAL TREATMENT REQUESTED BY PC-EPHONE, INC.
<PAGE>

(F)   furnish to FutureCom in a timely manner all available product information
      regarding the Products, which product information shall accurately
      describe the nature, character and prescribed use of the Products, which
      information shall be appropriate for distribution to consumers in the
      discretion of FutureCom.  The product information shall not misrepresent
      or in any way intentionally mislead FutureCom, or consumers with respect
      to the Products.  FutureCom may incorporate such product information in
      its sales and advertising and promotional literature and materials (the
      "Sales Materials").  Said product information utilized shall not be deemed
      as Confidential Information as set forth in this Agreement.

(G)   To the greatest extent of the Distributor's ability to do so, ensure that
      the Distributor has the right to supply and distribute the Products and
      all components thereof, and the Products shall not and do not, constitute
      any known infringement of any license, trademark, copyright, patent or
      similar proprietary interest of any third party.

(H)   Except as expressly otherwise agreed in this Agreement, the Distributor
      will not directly, or indirectly, sell Products to any customers in the
      Exclusive Territory and, furthermore, will refer those customers to
      FutureCom.

(I)   Except as expressly otherwise agreed in this Agreement, the Distributor
      will not directly, or indirectly, sell Products to any customers in the
      Non-exclusive Territory where FutureCom has been granted non-exclusive
      distribution rights by the Distributor and, furthermore, will refer those
      customers to FutureCom.

7.2   To its best knowledge the Distributor represents the Company has the
capability to supply the Products necessary to meet the anticipated sales of
FutureCom for the duration of this Agreement.

7.3   Execution and delivery of this Agreement by the Distributor has been duly
authorized.  The person executing this Agreement on behalf of the Distributor
has full and proper authorization to execute same, and this Agreement is a valid
and binding agreement of the Distributor and is enforceable against the
Distributor in accordance with its terms.

8.    Indemnification
      ---------------

8.1   Each of the parties agrees to indemnify, defend and hold harmless the
other party from any liability arising out of the act or omission of the
indemnifying party, its servants, agents and representatives.

8.2   Distributor shall not be responsible for any claim and loss arising out of
the marketing, sales and distribution process of  FutureCom and/or its marketing
representatives.

8.3   FutureCom shall be responsible for the losses and claims arising out of
the conduct, non-performance and misrepresentations of FutureCom and its
marketing representatives, if any. Furthermore, FutureCom shall defend itself
and shall indemnify and hold harmless the Company and the Distributor from any
liability arising therefrom.

8.4   The maximum liability of the Distributor arising out of and relating to
this Agreement shall not exceed the Order Price of the Products delivered.

* CONFIDENTIAL TREATMENT REQUESTED BY PC-EPHONE, INC.
<PAGE>

9.   Right of First Refusal for Future Products
     ------------------------------------------

9.1   FutureCom will have a right of first refusal to acquire the marketing,
distribution and sales rights for (a) Future Products on an exclusive basis for
the Exclusive Territory and (b) Future Products on a non-exclusive basis for the
Non-exclusive Territory where non-exclusive distribution rights have been
granted pursuant to section 2.3.


10.  Confidential Information
     -------------------------

10.1   The Distributor acknowledges that the Confidential Information of
FutureCom is the property of FutureCom and the success, profitability and
competitive position of FutureCom requires that the Confidential Information of
FutureCom be maintained in confidence by the Distributor.  Accordingly, the
Distributor covenants and agrees with FutureCom, subject to Sections 10.2 and
10.3 of this Agreement, that:

(A)   the Distributor will at all times keep all Confidential Information of
      FutureCom in the strictest confidence;

(B)   the Distributor will not use the Confidential Information of FutureCom for
      any purpose other than for performing its obligations pursuant to this
      Agreement;

(C)   the Distributor will not at any time publish or in any way participate or
      assist in the publishing of any Confidential Information of FutureCom;

(D)   the Distributor will not disclose or assist in the disclosure of any
      Confidential Information of FutureCom to any person, firm, corporation or
      other entity.

10.2  The Distributor may disclose the Confidential Information of FutureCom in
confidence to the Company and the lawyers, accountants and other professional
advisors of the Company and Distributor in connection with the performance of
the business arrangements between FutureCom and the Distributor, each of whom
shall be advised of the confidential nature of and requirement to maintain such
confidential information.

10.3  The Distributor may disclose the Confidential Information of FutureCom
only to the extent necessary in order that the Distributor may comply with all
applicable laws and regulations, including compliance with Distributor's
obligations as a reporting issuer under the United States Securities Exchange
Act of 1934.  Any press releases making reference to a party shall require the
consent  of that party.  The Parties shall endeavor to consult one with the
other with respect to any press releases or similar dissemination of
information.

10.4  FutureCom acknowledges that the Confidential Information of the Company or
the Distributor is the property of the Company or the Distributor and the
success, profitability and competitive position of the Company or the
Distributor requires that the Confidential Information of the Company or the
Distributor be maintained in confidence by FutureCom.  Accordingly, FutureCom
covenants and agrees with the Distributor, subject to Sections 10.5 and 10.6 of
this Agreement, that:

(A)   FutureCom will at all times keep all Confidential Information of the
      Distributor in the strictest confidence;

* CONFIDENTIAL TREATMENT REQUESTED BY PC-EPHONE, INC.
<PAGE>

(B)   FutureCom will not use the Confidential Information of the Distributor for
      any purpose other than for performing its obligations pursuant to this
      Agreement;

(C)   FutureCom will not at any time publish or in any way participate or
      assist in the publishing of any Confidential Information of the
      Distributor;

(D)   FutureCom will not disclose or assist in the disclosure of any
      Confidential Information of the Distributor to any person, firm,
      corporation or other entity.

10.5  FutureCom may disclose the Confidential Information of the Company or
Distributor in confidence to the lawyers, accountants and other professional
advisors of FutureCom in connection with the performance of the business
arrangements between the Distributor and FutureCom each of whom shall be advised
and required to maintain the confidential nature of each confidential
information.

10.6  FutureCom may disclose the Confidential Information of the Company or the
Distributor only to the extent necessary in order that FutureCom may comply with
all applicable laws and regulations, including compliance with FutureCom's
obligations as a reporting issuer under the United States Securities Exchange
Act of 1934.  Any press releases making reference to a party shall require the
consent  of that party.  The Parties shall endeavor to consult one with the
other with respect to any press releases or similar dissemination of
information.

10.7   No waiver by either party of its rights pursuant to the confidentiality
agreements or any consent to any release of Confidential Information shall be
effective unless expressed in writing, and no such waiver or consent shall apply
beyond the specific facts in respect of which the waiver of consent was given.

10.8   This confidentiality agreement of each party does not apply to
information that is or becomes publicly available or is lawfully received by the
other party other than by breach of this confidentiality agreement.

11.   Modifications
      -------------

11.1  FutureCom will not make any modifications to any Products or in any way
vary or change the specifications or content of the Products purchased from or
through the  Distributor.  FutureCom will use its reasonable efforts to ensure
that its marketing representatives, dealers, agents, or customers do not make
any modifications to, or in any way vary, the specifications or content of any
Products.

11.2  FutureCom shall be entitled to name or brand the Products in whichever
manner FutureCom deems necessary for marketing purposes, and shall be further
entitled to offer private labeling to its customers at its cost; PROVIDED
HOWEVER FutureCom may be required to include the name and/or trademark, if any,
of the Distributor and/or the Company on all units of the Products, in a manner
satisfactory to the Distributor, and at Distributor's cost.

* CONFIDENTIAL TREATMENT REQUESTED BY PC-EPHONE, INC.
<PAGE>

12.   Term and Termination
      --------------------

12.1  The term of this Agreement (the "Term") will commence on the date of
signing of this Agreement and will continue until (i) the earlier of December
31, 2007, (ii) the date on which this Agreement is terminated in accordance with
the provisions of this Agreement, or (iii) the date on which the Distribution
Agreement is terminated.  However, the Term of this Agreement will automatically
renew from year to year after the initial Term provided the Company or
Distributor has not given 60 days advance notice of termination in writing.

12.2  Each of FutureCom and the Distributor shall have the right to terminate
this Agreement upon the occurrence of any of the following events, such
termination to be effective immediately upon the receipt or deemed receipt by
the other party of notice to that effect and the expiry of any applicable period
for remedy of the default:

(A)   if a party is in default of any of the material terms or conditions of
      this Agreement and fails to remedy such default within seven (7) days of
      written notice thereof from the other party unless the non-defaulting
      party agrees to extend such seven (7) day period;

(B)   if the other party becomes bankrupt or insolvent, makes an assignment for
      the benefit of its creditors or attempts to avail itself of any applicable
      statute relating to insolvent debtors;

(C)   if the other party winds-up, dissolves, liquidates or takes steps to do
      so or otherwise ceases to function as a going concern or is prevented from
      reasonably performing its duties hereunder; or

(D)   if a receiver or other custodian (interim or permanent) of any of the
      assets of the other party is appointed by private instrument or by court
      order or if any execution or other similar process of any court becomes
      enforceable against the other party or its assets or if distress is made
      against the other party's assets or any part thereof.

12.3  Notwithstanding anything in this Agreement to the contrary, in the event
that the Distributor shall be given notice from the Company that there has
occurred any event pursuant to which the Company has or may have the right to
terminate the Distribution Agreement, then Distributor represents and agrees to
immediately give written notice to FutureCom of said event, as well as related
information with respect to action to be taken by Distributor to remedy any
claim of default as asserted by the Company.

     In the event Distributor shall be unable to remedy the claim of default by
the Company, Distributor agrees to utilize its best commercial efforts to assist
FutureCom to directly contract with the Company for the continued purchase of
the Products by FutureCom and to otherwise enable FutureCom to continue to
receive, to the maximum extent commercially feasible, the benefits of this
Agreement.  In the event so required, as may pertain to the claim of default by
the Company which is not remedied by the Distributor to the satisfaction of the
Company, the Distributor agrees to not unreasonably withhold its consent to a
request by FutureCom of an assignment of the Distribution Agreement to FutureCom
under which FutureCom would assume all of the rights, duties and obligations of
the Distributor pursuant to the Distribution Agreement, subject to such terms
and conditions as may then be imposed by the Company as a condition to obtaining
the consent of the Company to an assignment of the Distribution Agreement by
Distributor to FutureCom.

* CONFIDENTIAL TREATMENT REQUESTED BY PC-EPHONE, INC.
<PAGE>

12.4  Upon termination of this Agreement for any reason whatsoever, the
following shall apply:

(A)   those rights and obligations of each of the Distributor and FutureCom
      which are expressly stated to survive termination of this Agreement will
      survive termination and will continue in full force and effect;
(B)   all rights and privileges granted by the Distributor to FutureCom pursuant
      to this Agreement, including the rights to market, distribute and sell
      Products, will immediately terminate and be relinquished by FutureCom, and
      thereafter FutureCom shall take no action that would make it appear to the
      public that the Distributor is still supplying Products;
(C)   FutureCom shall return to the Distributor all advertising, informational
      or technical material given to FutureCom by the Company or Distributor;
(D)   FutureCom shall cease using the Trade Names and thereafter refrain from
      holding itself out as an authorized distributor of the Products;
(E)   FutureCom will retain in confidence all information regarding the business
      and property of the Company, the Distributors and the Products;
(F)   all marketing agreements entered into by FutureCom will terminate.

The provisions of this Section 12.4 will survive the termination of this
Agreement.

12.5  The obligations of FutureCom hereunder shall be subject to the Products
receiving all requisite {..........*..........} units of the Products. The
Distributor shall cause the filing of the requisite regulatory approvals in a
timely and expeditious manner, it being anticipated that such approvals may be
obtained in January, 2001.

12.6  Except for the first {..........*..........}, the obligations of FutureCom
hereunder shall be further subject to receipt of carrier approval from Sprint,
AT&T, Verizon, Telus, or any other carrier deemed necessary by FutureCom for
implementation of its marketing plan for the Products. FutureCom undertakes to
obtain such approval at its cost immediately upon receipt of the fifteen (15)
units referred to in Section 3.14. This condition shall terminate at the end of
twenty-two (22) days after the passing of and completion of CDG Level 2 testing.

12.7   In the event the Distributor shall determine or become advised the
Company or Distributor does not intend to renew the Distribution Agreement,
immediate written notice thereof shall be given by the Distributor to FutureCom.

13.   Assignment
      ----------

13.1  Except as provided by Section 5 of this Agreement, the rights granted
by this Agreement may not be sold, assigned, sub-licensed or otherwise
transferred by FutureCom without the prior written consent of the Distributor,
which consent may not be unreasonably withheld by the Distributor.

13.2  In the event the Distributor proposes to make an assignment of all or any
portion of its rights pursuant to the Distribution Agreement.  Distributor
agrees to promptly give notice thereof to FutureCom and to permit FutureCom
reasonable opportunity to discuss the proposed assignment with Distributor.
Provided, however, FutureCom acknowledges it does not have a right of first
refusal enforceable against Distributor.

* CONFIDENTIAL TREATMENT REQUESTED BY PC-EPHONE, INC.
<PAGE>

14.   After-sales Support; Marketing
      ------------------------------

14.1  The Distributor shall use its highest and best efforts to make all
manufacturer warranties directly available to customers of the Products and to
otherwise enforce warranty covenants against the manufacturers of the Product
for the benefit of FutureCom or its customers.  FutureCom shall be responsible
for customer and call-center support services as shall pertain to all sales
originated by FutureCom.  However, the Distributor shall provide or make
available through the Company to the greatest extent feasible, training and
technical assistance to FutureCom in the United States and Canada for a period
of three (3) months after the date of this Agreement in order to facilitate
FutureCom's customer and call-center support services.

14.2  FutureCom shall expend One Million Dollars ($1,000,000) to Five Million
Dollars ($5,000,000) on advertising and promotion related to the Product, which
without limiting the generality of the foregoing. shall include media
advertising, co-op advertising schemes, trade show attendances, product
literature, and similar promotional efforts.


15.   Miscellaneous Provisions
      ------------------------

15.1  Entire Agreement
      ----------------

This Agreement constitutes the entire agreement between the parties with respect
to all matters herein contained, and its execution has not been induced by, nor
do any of the parties hereto rely upon or regard as material, any
representations or writings whatsoever not incorporated herein and made a part
hereof.  This Agreement shall not be amended, altered or qualified except by an
instrument in writing, signed by all parties hereto and any amendments,
alterations or qualifications hereof shall not be binding upon or affect the
rights of any party who has not given its consent in writing.

15.2  Interpretation
      --------------

The division of this Agreement into articles and sections is for convenience of
reference only and shall not affect the interpretation or construction of this
Agreement.

15.3  Severability
      ------------

In the event that any of the covenants herein contained shall be held
unenforceable or declared invalid for any reason whatsoever, such
unenforceability or invalidity shall not affect the enforceability or validity
of the remaining provisions of this Agreement and such unenforceable or invalid
portion shall be severable from the remainder of this Agreement.

15.4  Force Majeure
      -------------

In the event of an inability or failure by the Company to manufacture, supply or
ship any of the Products herein by reason of any fire, explosion, war, riot,
strike, walk-out, labour controversy, flood, shortage of water, power, labour
transportation facilities or necessary materials or supplies, default or power
failure of carriers, breakdown in or the loss of production or anticipated
production from plant or equipment, act of God or public enemy, any law, act or
order of any court, board, government or other authority of competent

* CONFIDENTIAL TREATMENT REQUESTED BY PC-EPHONE, INC.
<PAGE>

jurisdiction, or any other direct cause (whether or not of the same character as
the foregoing) beyond the reasonable control of the Company, then the
Distributor shall not be liable to FutureCom and will not be deemed to be in
default during the period and to the extent of such inability or failure.
Deliveries omitted in whole or in part while such inability remains in effect
shall be canceled.

15.5  Notices
      -------

Any notice required or permitted to be given hereunder shall be in writing and
shall be effectively given if:

     (a)  Delivered personally;
     (b)  Sent by prepaid courier service or mail; or
     (c)  Sent prepaid by telecopiers, fax telex or other similar means of
          electronic communication

addressed to the "President" at the address/fax number(s) shown for FutureCom or
the Distributor, as the case may be, at the beginning of this Agreement.

Any notice so given shall be deemed conclusively to have been given and received
when so personally delivered or, if sent by telex, fax, telecopier or other
electronic communication (other than e-mail), on the first business day
thereafter, or if sent by courier on the third business day thereafter or if
sent by mail on the tenth business day thereafter. Any party may change any
particulars of its address/fax number for notice by giving notice to the other
party in the manner above described.

For determining the date on which any notice shall have been received, the date
of delivery will be the date in Los Angeles, California at the time of delivery.

15.6  Time of the Essence
      -------------------

Time shall be of the essence.

15.7  Further Assurances
      ------------------

The parties agree to sign such other instruments, cause such meetings to be
held, resolutions passed and by-laws enacted, exercise their vote and influence,
do and perform and cause to be done and performed such further and other acts
and things as may be necessary or desirable in order to give full effect to this
Agreement.

15.8  Successors and Assigns
      ----------------------

This Agreement shall enure to the benefit of and be binding upon the parties
hereto and their respective successors and permitted assigns.

15.9  Non-Waiver
      ----------

No waiver by any party of any breach by any other party of any of its covenants,
obligations and agreements hereunder shall be a waiver of any subsequent breach
of any other covenant, obligation or agreement, nor shall any forbearance to
seek a remedy for any breach be a waiver of any rights and remedies with respect
to such or any subsequent breach.

15.10 Arbitration
      -----------

* CONFIDENTIAL TREATMENT REQUESTED BY PC-EPHONE, INC.
<PAGE>

All disputes in relation to this Agreement, other than a dispute regarding the
non-payment of any monetary amount required by this Agreement, be referred to
and finally resolved by Arbitration, under the rules of the British Columbia
International Commercial Arbitration Center (the "Rules"), which Rules are
deemed to be incorporated by reference into this Article.  The tribunal shall
consist of One (1) Arbitrator.  The Parties will endeavour within twenty-one
(21) days of the matter being referred to Arbitration to agree upon an
Arbitrator, failing which the Arbitrator shall be appointed in accordance with
the Rules.  The place of Arbitration shall be Surrey, British Columbia.  The
language of the Arbitration shall be English.  The parties agree that the
Arbitrator shall be requested to make his award within sixty (60) days following
the later of the conclusion of the Arbitration hearings or any exchange of final
written submissions by the parties and further agree that the word of the
Arbitrator shall be final and binding and without appeal.

15.11 Governing Law
      -------------

This Agreement shall be governed by and construed in accordance with the laws of
the Province of British Columbia.

15.12 No Conflicts
      ------------

This Agreement shall supersede any and all previous agreements made between the
parties in connection with the subject matter of this Agreement except for any
non-disclosure or non-circumvention agreements entered into between the parties.

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

FUTURECOM GLOBAL, INC.                     PC-EPhone.com Ltd.
By its authorized signatory                by its authorized signatory


/s/ Ronald R. Kelly                        /s/ Douglas Yee
- ------------------------------------       -----------------------------------
Signature of Authorized Signatory               Signature of Authorized
Signatory

Ronald R. Kelly                            Douglas Yee
- ------------------------------------       -----------------------------------
Name of Authorized Signatory               Name of Authorized Signatory

CEO / President                            Director
- ------------------------------------       -----------------------------------
Position of Authorized Signatory           Position of Authorized Signatory

* CONFIDENTIAL TREATMENT REQUESTED BY PC-EPHONE, INC.
<PAGE>

                                   Appendix 3.10
                       Terms and Conditions of Initial Orders
                       --------------------------------------

* CONFIDENTIAL TREATMENT REQUESTED BY PC-EPHONE, INC.
<PAGE>


Newlands Oil & Gas Inc.
401 West Georgia Street
Suite 1890
Vancouver, B.C. V6B 5A1

Attention:  Mr. Douglas Yee
- ---------------------------

Dear Mr. Yee:

Order
- -----

As exclusive Subdistributor of the Multipalm product for Canada and the United
States (50 states), we hereby irrevocably order {..........*..........} units of
the Product (as defined in the Subdistributor Agreement) (without stylus) at a
price of not greater than US${............*............} per unit for a total
purchase price of not greater than US${............*............} (the "Order").


Delivery
- --------

Delivery schedule shall be as follows:

          Delivery Date                             Number of Units
          -------------                             ---------------

   {............*............}                       {......*......}


Payment
- -------

An irrevocable, confirmed, transferable and negotiable letter of credit will be
granted for the value of the Order, payable immediately upon presentation of
documents evidencing shipment.

All other terms and conditions of this purchase order shall be governed, to the
extent applicable, by the Subdistributor Agreement between the two parties.  If
you have any questions regarding the above, please contact the undersigned at
{............*............}.



Yours truly,
FUTURECOM GLOBAL, INC.

**DRAFT**

By:
   ---------------------------------
           Ron Kelly, CEO

* CONFIDENTIAL TREATMENT REQUESTED BY PC-EPHONE, INC.
<PAGE>



Newlands Oil & Gas Inc.
401 West Georgia Street
Suite 1890
Vancouver, B.C. V6B 5A1

Attention:  Mr. Douglas Yee
- ---------------------------

Dear Mr. Yee:

Order
- -----

As exclusive Subdistributor of the Multipalm product for Canada and the United
States (50 states), we hereby irrevocably order {............*............}
units of the Product (as defined in the Subdistributor Agreement) (without
stylus) at a price of not greater than US${............*............} per unit
for a total purchase price of not greater than US${............*............}
(the "Order").

Delivery
- --------

Delivery schedule shall be as follows:

           Delivery Date                              Number of Units
           -------------                              ---------------

    {............*............}                       {......*......}
    {............*............}                       {......*......}
    {............*............}                       {......*......}

Payment
- -------

{............*............}U.S. dollars (US${............*............}) will be
paid at the time of placing the Order.  Within {............*............}days
after passing CDG2 Test, an irrevocable, confirmed, transferable and negotiable
letter of credit will be granted for the remaining value of the Order and may be
paid in whole or in part, for partial shipments, but final payment (whether
whole or part) is not due until {............*............} days after
presentation of documents evidencing shipment.

All other terms and conditions of this purchase order shall be governed, to the
extent applicable, by the Subdistributor Agreement between the two parties.  If
you have any questions regarding the above, please contact the undersigned at
{............*............}.

Yours truly,
FUTURECOM GLOBAL, INC.

**DRAFT**

By:
   ---------------------------
        Ron Kelly, CEO

* CONFIDENTIAL TREATMENT REQUESTED BY PC-EPHONE, INC.

<PAGE>

                                                                   Exhibit 10.20

8 February 2001


PC-EPhone, Inc.
885 West Georgia Street, Suite 1388
Vancouver, BC  V6C 3E8


Gentleman

Reference is made to the Distribution Agreement (the "Agreement") between
Cyberbank Corp., a Korean corporation ("we" or "us") and PC-EPhone, Inc., a
Nevada Corporation formerly known as Newlands Oil & Gas Inc. ("you") dated
November 6, 2000 pursuant to which we grant to you the right to distribute our
handheld device/terminal that can be used to perform multiple functions on a
CDMA, GSM or other wireless application protocol system (the "Product").

The Agreement contemplates that you are to place a purchase order with us for
35,000 units of the Product at price not less than U${..........*..........} per
unit and pay us therewith U${..........*...........} (the "Purchase Order") in 7
days after receipt of shipment of 1,000 units, which were shipped on 25 November
2000.

This requirement of placing the Purchase Order constitutes a substantial
prerequisite to maintain the Agreement in effect and validity.  So far you did
not fulfill the requirement of making the Purchase Order.

In this regard, we hereby waive the requirement under the terms and conditions
as follows:

1.     PC-EPhone, Inc. shall place the Purchase Order (being the 35,000 unit
purchase order with the U${..........*..........}) payment within
{..........*..........} business days subsequent to the date upon which
Cyberbank receives final, written confirmation of the approval of the Product by
the U.S. Federal Communications Commission and forwards a copy to PC-EPhone,
Inc. of such confirmation and approval.

2.     PC-EPhone, Inc. acknowledges that Cyberbank is using PC-EPhone as the
brand name in the Korean market and agrees that Cyberbank is the legal owner of
the brand name in Korea.  PC-EPhone, Inc. shall allow Cyberbank Corp. to use the

* Confidential Treatment Requested by PC-EPhone, Inc.
<PAGE>

trademark "PC-EPhone" as a co-owner of the brand name.  PC-EPhone, Inc. shall
immediately take all necessary legal steps to register Cyberbank Corp. as a
co-owner of the brand name.

3.     Cyberbank is considering to strengthen PC-EPhone, Inc.'s role in
marketing and R&D to support PC-EPhone, Inc.'s listing in NASDAQ.  For this
purpose and during the process of raising capital, PC-EPhone, Inc. agrees to
accept investors recommended by Cyberbank and cooperate closely with Cyberbank,
in advance, in the process of raising capital from other investors.


No waiver by us of any breach of any of your obligation shall be a waiver of any
subsequent breach of any other covenant, obligation or agreement, nor shall any
forbearance to seek a remedy for any breach be a waiver of any rights and
remedies with respect to such or any subsequent breach.

PC-EPhone, Inc. acknowledges that we reserve the right to terminate the
Agreement in such a case of non-fulfilling any one of the foregoing terms and
conditions.

Sincerely yours,

/s/ Young Sun Cho
- ------------------------------------
Cho, Young Sun
President
CYBERBANK Corp.


Agreed and acknowledged on this 8th day of February, 2001.


/s/ Douglas Yee
- ------------------------------------
Douglas Yee
President
PC-EPhone, Inc.

* Confidential Treatment Requested by PC-EPhone, Inc.

<PAGE>

                                                                   Exhibit 10.21


                              TRI-PARTY AGREEMENT
                               -------------------

Dated this 9th day of February, 2001:

This Agreement is entered into among:

                      CYBERBANK CORP., a Korean corporation
                         18th Floor, Mirae Bldg. 1306-6
                             Seocho-dong, Seocho-gu
                             Seoul, Korea   137-855

                            (hereinafter "Cyberbank")

                                       AND

                      PC-EPHONE, INC., a Nevada corporation
                            #515, 3440 Wilshire Blvd.
                             Los Angeles, California

                               (hereinafter "PCE")

                                       AND

                  FUTURECOM GLOBAL, INC., a Nevada corporation
                               15690 N. 83rd Way,
                           Scottsdale, Arizona  85260

                               (hereinafter "FCG")

                   (collectively referred to as the "Parties")


WHEREAS Cyberbank and PCE are parties to a Distribution Agreement dated November
6, 2000 whereby Cyberbank granted to PCE, inter alia, the exclusive marketing
rights to the United States and Canada for the PC-EPhone convergence device also
referred to in the agreement as the Multipalm (hereinafter referred to as
"PC-EPhone"); and

WHEREAS PCE and FCG have entered into a Subdistribution Agreement dated November
15, 2000 whereby PCE granted to FCG the exclusive rights for the PC-EPhone to
the United States and Canadian markets; and

WHEREAS the Parties hereto wish to enter into this Agreement to confirm, clarify
and supplement certain matters pertaining to the aforementioned agreements.

NOW THEREFORE the Parties agree as follows:

1.   FCG shall have a first priority in terms of production capacity and
     deliverables supported by a purchase order of FCG issued by FCG.

2.   FCG shall have a right of first refusal with respect to excess capacity.
     The terms and conditions of purchase shall be in accordance with the
     Subdistribution Agreement.

3.   Cyberbank shall provide to PCE and FCG a schedule detailing the first 3
     months production. Cyberbank shall deliver 35,000 units by
     {............*............} or earlier and a further
     {............*............} units by {............*............} or
     earlier. Partial shipments shall be allowed.

* Confidential Treatment Requested by PC-EPhone, Inc.
<PAGE>

4.   A purchase order supported by a Standby Letter of Credit shall be issued
     at least {............*............} prior to the shipment date.

5.   Cyberbank shall, on a best efforts basis, provide assistance to FCG with
     respect to obtaining carrier approval from Verizon which, without limiting
     the generality of the foregoing, shall include providing loaner test units,
     or financial assistance with respect to the supply of such test units.

6.   Cyberbank shall within the next three (3) weeks upgrade the 1,000 units of
     PC-EPhone by providing new software, fixes for the roaming problem as well
     as ensuring the functionality of the said units.

7.   To secure payment under the purchase orders, FCG shall provide a one-year
     Standby Letter of Credit or Standby Letters of Credit providing for a
     {............*............}-day term or drawdown. FCG shall provide, for
     the initial orders, a Standby Letter of Credit in the amount of
     US${............*............}on or before {............*............}.


8.   The first 35,000 units of PC-EPhone shall be at a price to PCE of US$
     {............*............} per unit. The price for future volumes shall be
     as follows:


          Historical Units                            Price Per Unit
           Manufactured                                (US dollars)
          ----------------                            --------------

    {............*............}                  {............*...........}

    {............*............}                  {............*...........}

    {............*............}                  {............*...........}

    {............*............}                  {............*...........}

    {............*............}                  {............*...........}

    {............*............}                  {............*...........}

    {............*............}                  {............*...........}

    {............*............}                  {............*...........}

    {............*............}                  {............*...........}

    {............*............}                  {............*...........}

    {............*............}                  {............*...........}


9.   In the event of a conflict between a provision in this Agreement and the
     two agreements referred to in the recitals, this Agreement shall prevail.

10.  The Parties hereto shall execute all other agreements and shall do all
     things necessary to give effect to the intent of the Parties hereto.




/s/ Young-sun Cho
- ------------------------------------------------------------------------------
Young-sun Cho, President and CEO, Cyberbank Corp.



/s/ Ronald R. Kelly
- ------------------------------------------------------------------------------
Ronald R. Kelly, President and CEO, FutureCom Global, Inc.



/s/ Douglas Yee
- ------------------------------------------------------------------------------
Douglas Yee, President, PC-EPhone, Inc.

* Confidential Treatment Requested by PC-EPhone, Inc.


<PAGE>

                                                                   Exhibit 10.22

          THIS AGREEMENT made as of the 1st day of October, 2000,

BETWEEN:

          NEWLANDS OIL & GAS INC., a company duly incorporated under
          the laws of the State of Nevada and having its Head Office
          at #1388 - 888 West Georgia Street, Vancouver, BC  V6C 3E8

          (the "Company")

                                                               OF THE FIRST PART

AND:

          ALL SEASONS CONSULTING INC. (beneficial owner - Negar
          Towfigh), a company duly incorporated under the laws of
          British Columbia and having its Head Office at 1403
          Chippendale Road, West Vancouver, BC  V7S 2N7

          (the "Representative")

                                                              OF THE SECOND PART

WHEREAS:

A.     The Company is desirous of retaining the management services of the
Representative on a continuing basis and the Representative has agreed to
provide such services to the Company upon the terms and conditions hereinafter
set forth;

WITNESS THAT in consideration of the mutual agreements and covenants contained
herein and other valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, it is agreed as follows:

1.   The Company engages the Representative for a term of 1-year commencing
October 1, 2000, unless extended or terminated earlier as hereinafter provided
(the "Term").

2.   This Agreement may be terminated at any time by either party on 30 days'
prior written notice to the other party.

3.   During the Term, the Representative shall serve the Company (and/or such
subsidiary or subsidiaries as the Company may from time to time require) in such
senior management and/or Representative capacity or capacities as may from time
to time be determined by the Board of Directors of the Company (the "Board") and
shall perform such duties and exercise such powers as may from time to time be
determined by the Board, Company, or of any such subsidiary.

4.   The Representative shall well and faithfully serve the Company and/or any
subsidiary as aforesaid during the continuance of the Representative's
engagement hereunder, shall devote the time, effort and ability to the Company's
affairs and business necessary for the Representative to perform her duties
under this Agreement and shall perform the Representative's duties hereunder in
<PAGE>

an efficient, trustworthy and businesslike manner to the advantage and benefit
of the Company. The Representative's duties shall include the managing of the
daily operations and required personnel.

5.   The Company is aware that the Representative has now and will continue to
have obligations to and financial interests in other companies and businesses
and the Company recognizes that these companies and businesses will require a
certain portion of the Representative's time.  The Company agrees that the
Representative may continue to devote time to such outside interests, provided
that such interests do not conflict with the time required for the
Representative to perform the Representative's duties under this Agreement.

6.   The Representative shall not, either during the Term or at any time
thereafter, disclose the private affairs of the Company and/or its subsidiary or
subsidiaries, or any secrets of the Company and/or its subsidiary or
subsidiaries to any person other than the directors of the Company and/or its
subsidiary or subsidiaries or for the Company's purposes and shall not (either
during the Term or at any time thereafter) use for the Representative's own
purposes or for any purposes other than those of the Company, any information
the Representative may acquire in relation to the business and affairs of the
Company and/or its subsidiary or subsidiaries.

7.   The terms "subsidiary" and "subsidiaries" as used herein mean any
corporation or company of which more than 50% of the outstanding shares carrying
voting rights at all times (provided that the ownership of such shares confers
the right at all times to elect at least a majority of the board of directors of
such corporation or company) are for the time being owned by or held for the
Company and/or any other corporation or company in like relation to the Company
and include any corporation or company in like relation to a subsidiary.

8.   The basic fee for the Representative's services hereunder shall be at the
rate of US THIRTYSIX THOUSAND DOLLARS (US$36,000) per year, payable in equal
monthly installments of US THREE THOUSAND DOLLARS (US$3,000).

9.   The Representative may be compensated for special projects at the
discretion of the Board and shall be reimbursed for all travel and other
reasonable expenses actually and properly incurred by the Representative in
connection with his duties hereunder.  For all such expenses the Representative
shall furnish to the Company statements and vouchers as and when required by it.

10.  This Agreement may be terminated forthwith by the Company without prior
notice if at any time:

(a)  the Representative shall commit any breach of any of the provisions herein
     contained; or

(b)  the Representative shall be guilty of any misconduct or neglect in the
     discharge of his duties hereunder;

(c)  the Representative shall become bankrupt or make any arrangements or
     composition with his creditors; or

(d)  the Representative shall be convicted of any criminal offense other than an
     offense which, in the reasonable opinion of the Board, does not affect his
     position with the Company.
<PAGE>

11.  In the event this Agreement is terminated by reason of default on the part
of the Representative, then, at the request of the Board, the Representative
shall forthwith resign any position or office which she then holds with the
Company or any subsidiary.

12.  The services to be performed by the Representative pursuant hereto are
personal in character, and neither this Agreement nor any rights or benefits
arising thereunder are assignable by the Representative without the prior
written consent of the Company.

13.  If any provision, word or clause of this Agreement shall be held to be
illegal, invalid or unenforceable for any reason, such illegality, invalidity or
unenforceability shall not affect the remaining provisions which shall be fully
severable, and this Agreement shall be construed and enforced without regard to
such illegal, invalid or unenforceable provision.

14.  This Agreement contains the entire agreement of the parties in respect of
the subject matter hereof and can be modified only by an agreement in writing,
signed by the party against whom or which enforcement of any waiver, change,
modification or discharge is sought, and supersedes any other oral or written
agreements of the parties in respect of the subject matter hereof.  Any and all
previous agreements, written or oral, between the parties hereto or on their
behalf relating to the engagement of the Representative by the Company are
hereby terminated and cancelled and each of the parties hereby releases and
forever discharges the other party of and from all manner of actions, causes of
action, claims, suits and demands whatsoever under or in respect of any such
agreement.

15.  Any notice required or permitted to be given under this Agreement shall be
delivered personally, sent by courier or mailed by registered mail, postage
prepaid, to the address of the respective party set out on the first page hereof
and any such notice personally delivered or sent by courier as aforesaid shall
be deemed to have been given on the date of delivery and any such notice mailed
as aforesaid shall be deemed to have been given on the second business day
following the date of mailing.  Any address for the giving of notices hereunder
may be changed by notice in writing given hereunder.

16.  The provisions of this Agreement shall enure to the benefit of and be
binding upon the legal personal representatives of the Representative and the
successors and assigns of the Company.  For this purpose, the terms "successors"
and "assigns" shall include any person, firm or corporation or other entity
which at any time, whether by merger, purchase or otherwise, shall acquire all
or substantially all of the assets or business of the Company.

17.  This Agreement is being delivered and is intended to be performed in the
Province of British Columbia and shall be construed and enforced in accordance
with, and the rights of the parties shall be governed by and interpreted in
accordance with, the laws of such Province.
<PAGE>

IN WITNESS WHEREOF this Agreement has been executed as of the day, month and
year first above written.

NEWLANDS OIL & GAS INC.

By:     /s/ Douglas Yee
Name:   Douglas Yee
Title:  President


ALL SEASONS CONSULTING INC.

By:     /s/ Negar Towfigh
Name:   Negar Towfigh
Title:  President

<PAGE>