Document:

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                                                                   EXHIBIT 10.40

                                                     PRIVILEGED AND CONFIDENTIAL

                      COOPERATION AND DEVELOPMENT AGREEMENT

         This Cooperation and Development Agreement (this "AGREEMENT") is
entered into and effective as of June 2, 2000, (the "EFFECTIVE DATE"), by and
between MICROSOFT CORPORATION, a Washington corporation located at One Microsoft
Way, Redmond, Washington, 98052 ("MICROSOFT"), and NET2PHONE, INC., a Delaware
corporation located at 171 Main Street, Hackensack, New Jersey, 07601
("NET2PHONE"). In this Agreement, Microsoft and Net2Phone are sometimes referred
to collectively as the "PARTIES" and individually as a "PARTY".

                                    RECITALS

         WHEREAS, Microsoft desires to include PC-to-PC and PC-to-Phone voice
capabilities in its MSN Messenger Service and other MS Products;

         WHEREAS, Net2Phone has developed N2P Deliverables and provides services
technology and equipment necessary for PC-to-PC and PC-to-Phone voice
transmission and delivery over the Internet, N2P Managed Network and other
public networks; and

         WHEREAS, the Parties desire to enter into a relationship to (a)
integrate the N2P Deliverables into the MSN Messenger Service in order to
provide MSN Messenger Service with voice transmission and receipt capabilities
for inclusion in a new version of the MSN Messenger Service (referred to herein
as the MSN Messenger 3.0) to be released on the Target Launch Date and (b)
permit Microsoft to integrate and distribute the N2P Deliverables in other MS
Products.

         NOW THEREFORE, in consideration of the premises and mutual covenants
set forth herein, the adequacy of which is hereby acknowledged, the Parties
agree as follows:

                                    AGREEMENT

1.       DEFINITIONS AND OBJECTIVES

         1.1 Definitions. Capitalized terms used in this Agreement shall have
the meanings ascribed to them in this Agreement or in Exhibit A hereto, as the
case may be.

         1.2 Objectives. In accordance with the terms and conditions of this
Agreement, Microsoft and Net2Phone desire to provide End Users of the MSN
Messenger Service with the ability to make and receive PC-to-PC and PC-to-Phone
voice transmissions. Microsoft currently owns and operates the MSN Messenger
Service. Net2Phone has developed, owns or has licensed from third parties N2P
Deliverables and will provide Microsoft with rights specified herein to
integrate, use, debug and distribute such N2P Deliverables in conjunction with
the MSN Messenger Service and other MS Products. Net2Phone will provide the N2P
Deliverables to Microsoft for integration into the MSN Messenger Service and
other MS Products. Microsoft will integrate the N2P Deliverables into the MSN
Messenger Service and endeavor to release such functionality as MSN Messenger
3.0 on the Target Launch Date. Other than the N2P Deliverables integrated
therein, Microsoft shall be solely responsible for the development, design,
implementation and launch of the MSN Messenger 3.0. Microsoft may, in its sole
discretion, debug the [****], but Microsoft shall have no other rights to use or
modify the [****]
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                                                     PRIVILEGED AND CONFIDENTIAL

and Net2Phone shall own all bug fixes, including those, if any, made by
Microsoft to the [****]. Along with delivering the N2P Deliverables, Net2Phone
shall, in accordance with the terms of this Agreement, (a) transmit and deliver
voice communications over the Internet, the N2P Managed Network and other public
networks; (b) maintain and service the N2P Deliverables and the N2P Managed
Network; (c) provide second tier customer support to End Users; and (d) host and
maintain web pages in order to provide billing services to End Users.

2.       DEVELOPMENT COOPERATION

         2.1 General. Microsoft and Net2Phone shall each assign appropriate
resources and use commercially reasonable efforts to cooperate in the
development and release, on the Target Launch Date, of the MSN Messenger Service
with PC-to-PC and PC-to-Phone voice capabilities in accordance with the
specifications attached hereto as Exhibit B (the "MS VOICE SPECIFICATIONS").

         2.2 Microsoft Development Obligations. Microsoft shall (a) develop,
code, and build the MSN Messenger Service to contain all of the user interface
necessary for voice transmissions using the N2P Deliverables; (b) develop, code
and build the user interface design, including the layout and other features of
the MSN Dial-Up Window, to allow End Users to utilize voice functionality on the
MSN Messenger Service; and (c) develop, code and build all set-up programs
required to install and operate the N2P Deliverables on the MSN Messenger
Service.

         2.3 Net2Phone Deliverables. Net2Phone shall deliver the N2P
Deliverables to Microsoft in accordance with the schedule set forth in Exhibit
C. Microsoft will only use the N2P Deliverables in accordance with the terms and
conditions of this Agreement.

         2.4 Updates

             2.4.1 As used herein [****] means an [****].

             2.4.2 As used herein [****] means each [****].

             2.4.3 Net2Phone shall offer all [****] to Microsoft, and Microsoft,
in its sole discretion, may accept and/or implement any [****]. In the event
that Microsoft implements any [****], then such [****] will be deemed part of
the N2P Deliverables licensed to Microsoft pursuant to Article 3.

         2.5 Updated Schedules. The Parties from time to time may agree on
updated schedules for the N2P Deliverables. These updated schedules shall take
into account the desire to launch the MSN Messenger 3.0 by the Target Launch
Date, the availability of components, the Parties' internal development
schedules and the timing of development activities to test deployment.

         2.6 Control of Software. Microsoft shall use the N2P Deliverables only
as specifically licensed in Article 3. In all cases, Microsoft shall treat all
Net2Phone object and source code as Confidential Information and with respect to
the [****], shall comply with the additional procedures set forth in Exhibit P
related to source code control. Microsoft shall use and modify the [****] only
as specifically licensed to do so in Section 3.2.

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                                                     PRIVILEGED AND CONFIDENTIAL

3.       LICENSE GRANTS

         3.1 N2P Deliverables. During the Term of this Agreement, except for the
[****], Net2Phone hereby grants to Microsoft a worldwide, non-exclusive and
[****] right and license to use, distribute and sublicense the N2P Deliverables
in object code form integrated into the MSN Messenger Service and/or, subject to
Section 6.2.3, any other MS Product.

         3.2 [****]. During the Term of this Agreement, Net2Phone hereby grants
to Microsoft a worldwide, non-exclusive [****] right and license to use the
[****] solely for the purposes of debugging the N2P Deliverables integrated into
the MSN Messenger Service and/or, subject to Section 6.2.3, any other MS
Product. Microsoft shall provide Net2Phone with all Bug Fixes and any such Bug
Fixes shall be owned by Net2Phone. Net2Phone hereby grants Microsoft a
world-wide, non-exclusive and [****] right and license to use, modify and
develop any Bug Fixes and to distribute and sublicense, in object code form as
integrated into the N2P Deliverables, any Bug Fixes.

         3.3 Modification. Microsoft shall not modify, disassemble, or reverse
compile any object code provided as part of the N2P Deliverables.

         3.4 Sublicense Terms. Any sublicense of the N2P Deliverables to End
Users shall be made by Microsoft only pursuant to the end-user license terms
listed in Exhibit N.

         3.5 Proprietary Notices. Microsoft shall not remove or grant any third
party permission to remove any copyright or other proprietary rights notices
from any of the N2P Deliverables.

         3.6 Distribution Without MS Product. Microsoft shall not sell, lease or
otherwise distribute the N2P Deliverables as a standalone software program or as
a component or components of a software program, except as part of the MSN
Messenger Service or other MS Product.

4.       ONSITE COOPERATION

         4.1 Cooperation.

             4.1.1   To accomplish the development objectives under this
Agreement, Microsoft may determine it is desirable and request Net2Phone to send
Net2Phone developers to the Microsoft Premises on a temporary basis not to
exceed two (2) weeks during each month for the duration of the Term of this
Agreement. Net2Phone agrees to so provide Net2Phone employees for development
purposes in reasonable numbers upon any request made by Microsoft under this
Agreement.

             4.1.2   Microsoft shall allocate and provide, as deemed necessary
in Microsoft's sole discretion, Microsoft developers to develop the MSN
Messenger Service to allow integration of the N2P Deliverables. Microsoft shall
not modify the N2P Deliverables, but may request Net2Phone developers to make
modifications to the N2P Deliverables to facilitate integration of the N2P
Deliverables into the MSN Messenger Service.

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                                                     PRIVILEGED AND CONFIDENTIAL

         4.2 Onsite Requirements. In the event the Net2Phone developers are
located at the Microsoft Premises, Net2Phone is not authorized to use, and
agrees that it shall not use its location on the Microsoft Premises, or its
access to Microsoft employees or facilities, to obtain information or materials
from sources at Microsoft, other than as expressly authorized by Microsoft. For
example, although a Net2Phone employee may be given security card access to
select facilities at Microsoft, it is Microsoft's intent to grant access to only
the office space allocated to Net2Phone and such other spaces as may be
designated by Microsoft from time to time. It is not Microsoft's intent to grant
Net2Phone employees full access to all areas of the Microsoft Premises
accessible by security card or to other floors of such premises. Net2Phone
agrees to direct its employees not to access areas of the Microsoft Premises
other than those specifically designated by Microsoft. Net2Phone's employees
shall abide by all Microsoft rules, regulations, and security measures while
present at the Microsoft Premises, provided that in the event of any
inconsistency between such rules, regulations and security measures and this
Agreement, this Agreement shall prevail with respect to confidentiality and
ownership of and rights to Intellectual Property.

         4.3 Personnel. Each Party shall ensure that all members (including, in
the case of Microsoft, all developers that have access to the [****]) of its
development team working on the integration of the N2P Deliverables into the MSN
Messenger Service and other MS Products, shall execute and return to the other
Party a copy of the Programmer Confidentiality Agreement attached hereto as
Exhibit Q and, in the case of Microsoft developers that have access to the
[****], comply with the Source Code Control Procedures set forth in Exhibit P.

5.       MSN MESSENGER 3.0 COMMITMENTS

         5.1 Net2Phone Commitment. Net2Phone hereby covenants that it will
provide development, voice transmission and delivery, customer support and other
services in the Territory as set forth in this Agreement so that Microsoft may
release MSN Messenger 3.0, which operates in accordance with the MS Voice
Specifications, to the general public on the Target Launch Date.

         5.2 Microsoft Commitment. Microsoft intends to release MSN Messenger
3.0 with the N2P Deliverables to the general public on or before the Target
Launch Date. However, Microsoft reserves the right to delay the release of MSN
Messenger 3.0 or not to release MSN Messenger 3.0 due to Net2Phone's failure or
inability to provide N2P Deliverables or services in accordance with the terms
and conditions of this Agreement. Microsoft shall not release MSN Messenger 3.0
on or before the Target Launch Date with any technology (other than the N2P
Deliverables) that performs similar functions to the N2P Deliverables.

         5.3 No Obligation. After the Launch Date and notwithstanding any other
provision in this Agreement, Microsoft shall have no obligation to market, sell
or otherwise distribute the N2P Deliverables in any MS Product, including, but
not limited to the MSN Messenger Service. Other than as expressly provided for
in Section 5.2, nothing in this Agreement shall be construed as restricting
Microsoft's ability to acquire, license, develop, manufacture or distribute for
itself, or have others acquire, license, develop, manufacture or distribute for
Microsoft, independent of the technology provided by Net2Phone, similar
technology performing the same or similar

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                                                     PRIVILEGED AND CONFIDENTIAL

functions as the technology contemplated by this Agreement or to market and
distribute such similar technology in addition to, or in lieu of, the technology
contemplated by this Agreement.

         5.4 [****]

6.       FUTURE OPPORTUNITIES

         6.1 Future Cooperation. At Microsoft's request and subject to further
agreement by the Parties, the Parties agree to use [****] to cooperate in the
development of additional voice features for the MSN Messenger Service and to
explore opportunities to include PC-to-PC and PC-to-Phone voice functionality in
other MS Products such as "MSN Communities/Chat", "Yellow Pages" and "Hotmail".

         6.2 Paid Calls.

             6.2.1 Microsoft shall use [****] to release a new version of the
MSN Messenger Service with capabilities for making paid PC-to-Phone voice
transmissions using the N2P Deliverables ("PAID CALL CAPABILITY") on or before
[****]. Upon such a new release of the MSN Messenger Service with Paid Call
Capability and for the [****] thereafter, Microsoft shall cause [****] of the
paid PC-to-Phone voice traffic generated by such MSN Messenger Service to be
directed to Net2Phone's transmission and delivery services; provided, that
Net2Phone is able to provide such transmission and delivery services in
accordance with the terms and conditions set forth in Article 7.

             6.2.2 In the event that Microsoft does not release a new version of
the MSN Messenger Service with Paid Call Capability on or before [****], then,
beginning on [****] and on the first day of each month thereafter during such
time as a new version of the MSN Messenger Service with Paid Call Capability has
not been released by Microsoft, (a) the number of months termination notice
required to be given by (i) Microsoft pursuant to Section 18.2.1 shall be
increased by [****]; provided, that the notice period for Microsoft may not be
increased to a period greater than [****]; and (ii) the number of months
termination notice required to be given by Net2Phone pursuant to Section 18.3.1
shall be decreased by [****]; provided, that the notice period for Net2Phone may
not be decreased to a period of less than [****]; and (b) the number of months
of dedicated paid PC-to-Phone traffic specified in Section 6.2.1 shall be
increased by [****]. The provisions of the preceding sentence shall not apply in
the event that the release of the MSN Messenger Service with Paid Call
Capability results from Net2Phone's inability to deliver in a timely manner any
development assistance, software, modifications and/or services which may be
necessary to release the MSN Messenger Service with Paid Call Capability in
conformance with such specifications and standards as may be required by
Microsoft, except where such inability to deliver results from Microsoft's
failure to notify Net2Phone of such requirements on or before [****]. At such
time as Microsoft releases a new version of the MSN Messenger Service with Paid
Call Capability, the notice periods required under Sections 18.2.1 and 18.3.1
shall revert back to the original periods set forth in this Agreement.

             6.2.3 [****]

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                                                     PRIVILEGED AND CONFIDENTIAL

         6.3 Additional MS Products. The Parties acknowledge and agree that
Microsoft, at its sole discretion, may integrate the N2P Deliverables into other
MS Products and release such MS Products under this Agreement. Microsoft shall
provide reasonable notice to Net2Phone regarding the release of any such
additional MS Products with N2P Deliverables. Subject to the limitations set
forth in Section 7.2.3, Net2Phone shall provide voice transmission and delivery
services for such additional MS Products that include the N2P Deliverables in
accordance with the terms and conditions of Article 7.

7.       VOICE TRANSMISSION AND DELIVERY

         7.1 Net2Phone Responsibilities. As between Microsoft and Net2Phone and
subject to Section 23.5, Net2Phone shall be solely responsible for the
transmission and completion over the Internet, the N2P Managed Network and other
public networks of PC-to-Phone and PC-to-PC voice transmissions in the Territory
generated from the N2P Deliverables included in the MSN Messenger 3.0, and,
subject to the limitations set forth in Section 7.2.3, any other MS Product.

             7.1.1 Net2Phone shall provide such voice transmission and delivery
services as are set forth in the N2P Quality of Service Level Agreement attached
hereto as Exhibit D.

             7.1.2 In order to transmit and complete PC-to-PC and PC-to-Phone
voice transmissions pursuant to this Agreement, Net2Phone shall (a) develop,
provide and maintain all necessary equipment; (b) enter into and maintain any
agreements with third parties, including, but not limited to, telecommunication
providers and internet service providers, necessary to transmit and deliver
voice transmissions; (c) subject to Section 7.6, obtain and keep in effect any
and all Governmental Authorizations necessary to fulfill its responsibilities
under this Article 7; and (d) be solely responsible for any and all costs and
expenses incurred in maintaining, operating and transmitting voice
communications under this Agreement.

         7.2 Voice Traffic Requirements.

             7.2.1 In order to assist Net2Phone with planning for anticipated
voice traffic requirements, Microsoft shall provide Net2Phone with [****]
setting forth Microsoft's "base" and "aggressive" projections with respect to
the aggregate amount of End Users using voice features of MS Products and the
aggregate amount of minutes of voice traffic ("VOICE TRAFFIC") that Microsoft
anticipates will require transmission and delivery services from Net2Phone
during [****]. Microsoft shall prepare such projections in good faith and using
its best efforts. Exhibit R sets forth Microsoft's Voice Traffic projections for
[****].

             7.2.2 Net2Phone shall ensure that at all times, its voice
transmission and delivery services are able to accommodate, carry and complete
the minimum amount of voice transmissions equal to the Minimum Service Level.
"MINIMUM SERVICE LEVEL" shall mean for any given month [****].

             7.2.3 In the event that Microsoft desires to release additional MS
Products with the N2P Deliverables, then, provided that the additional voice
traffic projected by the release of such additional MS Product does not exceed
the Minimum Service Level (as modified in accordance with Section 7.2.1 from
time to time) then Net2Phone shall provide voice transmission and delivery
services for such MS Products in accordance with Article 7. In the

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                                                     PRIVILEGED AND CONFIDENTIAL

event that a proposed release of additional MS Products with the N2P
Deliverables would, in the good faith opinion of Net2Phone, increase the voice
traffic beyond the applicable Minimum Service Level, then the Parties hereto
shall enter into good faith negotiations to determine a commercially reasonable
solution for releasing such additional MS Products. In the event that the
Parties are not able to mutually agree upon terms and conditions for Net2Phone
transmitting and delivering the increased voice traffic above the Minimum
Service Level projected by additional MS Products, then the N2P Deliverables
shall not be incorporated into such other MS Products and Net2Phone shall not be
obligated to provide voice transmission and delivery services for calls created
by such additional MS Products.

         7.3 Quality. Net2Phone shall ensure that, at all times, the quality of
the voice transmission and delivery for PC-to-Phone and PC-to-PC voice
transmissions using the N2P Deliverables in the MSN Messenger 3.0 and/or other
MS Products: (a) meets or exceeds the requirements and standards set forth in
the Quality of Service Level Agreement; and [****].

         7.4 Fees.

             7.4.1 [****]

             7.4.2 [****]

             7.4.3 [****]

             7.4.4 [****]

             7.4.5 [****] The rates which shall be charged to End Users for paid
PC-to-Phone voice transmissions shall be mutually agreed upon by the Parties,
and shall be in accordance with the terms and conditions of Sections 6.2.1 and
7.4.6. [****]

             7.4.6 [****]

         7.5 [****]

         7.6 Limitation of Responsibilities.

             7.6.1 During the Term of this Agreement, in the event that in any
country within the Territory for which voice transmission services are provided
by Net2Phone pursuant to this Agreement, Net2Phone or the services provided by
Net2Phone become subject to regulation by the United States Federal
Communications Commission ("FCC") or any other domestic or foreign Governmental
Body, either as a telecommunications carrier under the Communications Act of
1934 (47 U.S.C. 151 et seq.) as amended, and the rules and regulations
promulgated by the FCC thereunder, or under any similar foreign law, rule or
regulation, or any other regulation that has, or would have, a materially
adverse effect on the business interests of Net2Phone under this Agreement or
materially increases, or would materially increase, Net2Phone's costs associated
with providing such services in a country of the Territory (collectively, a
"REGULATED ENTITY EVENT"), Net2Phone shall promptly so notify Microsoft in
writing. Microsoft agrees to work together in good faith with Net2Phone to amend
this Agreement to ensure that Net2Phone is not materially adversely impacted as
a result of such

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                                                     PRIVILEGED AND CONFIDENTIAL

Regulated Entity Event. If Net2Phone and Microsoft are unable to agree in good
faith to amend this Agreement within fifteen (15) business days of such notice
(or such shorter time period as may be required to avoid violating such law,
rule or regulation, or to mitigate any damages or penalties that may be incurred
as a result of any actual or prospective violation), Net2Phone shall have the
right to terminate services which it provides pursuant to this Agreement for
such country upon fifteen (15) days prior written notice to Microsoft (or such
shorter time period as may be agreed upon by the Parties to avoid violating such
law, rule or regulation, or to mitigate any damages or penalties that may be
incurred as a result of any actual or prospective violation), and upon the
effective date of such notice, such country shall no longer be considered part
of the Territory. Discontinuation of services in any country pursuant to this
Section 7.6.1 shall not relieve Net2Phone of any of its obligations to provide
services under this Article 7 to the remainder of the Territory.

             7.6.2 Net2Phone shall use reasonable efforts to monitor whether any
Governmental Body has adopted or proposes to adopt any laws, rules or regulation
which may adversely affect Net2Phone or its services, or any End User of any MS
Product which incorporates the N2P Deliverables. Net2Phone shall promptly inform
Microsoft about any such adopted or proposed law, rule or regulation of which it
becomes aware.

8.       NET2PHONE SUPPORT SERVICES

         8.1 Maintenance and Quality Fix Engineering Support. Microsoft shall be
responsible for supporting and maintaining the MSN Messenger Service.
Notwithstanding the foregoing, during the Term of this Agreement, Net2Phone
shall be solely responsible for the maintenance and quality fix engineering
support of the N2P Deliverables, including fixing any defects, inefficiencies or
bugs that are related to the [****], including its interaction with any
Microsoft software, in order to ensure that the N2P Deliverables conform in all
material respects to the functional specifications set forth in the MS Voice
Specifications and any agreed upon amendments thereto. Net2Phone shall provide
such maintenance and support services as are specified in Exhibit E.

         8.2 Second Tier Support. Net2Phone shall be solely responsible for
providing second tier customer support ("SECOND TIER SUPPORT") to End Users for
the PC-to-PC and PC-to-Phone services in connection with the MSN Messenger 3.0.
Net2Phone shall provide such Second Tier Support Services as are specified in
Exhibit F.

         8.3 Billing Services. If and when future releases of MSN Messenger 3.0
and/or other MS Products provide Paid Call Capability, Net2Phone shall create,
develop, implement and maintain, through the Co-Branded Pages, billing services
for all paid calls using the Net2Phone voice features of the MSN Messenger 3.0
and, if applicable, other MS Products, in accordance with Article 9.

9.       MSN/N2P WEB SITE; BILLING SERVICES; PRIVACY

         9.1 MSN/N2P Web Site. Microsoft and Net2Phone shall develop and
implement a co-branded Web site (the "MSN/N2P WEB SITE") which initially will
provide End Users of the PC-to-PC and PC-to-Phone features of the MSN Messenger
3.0 with pertinent information

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                                                     PRIVILEGED AND CONFIDENTIAL

regarding the MSN Messenger 3.0 voice capabilities. The Parties shall develop
and implement the MSN/N2P Web Site concurrently with the release of MSN
Messenger 3.0 in accordance with this Section 9.1.

             9.1.1 Microsoft shall be solely responsible for hosting and
maintaining the MSN/N2P Web Site and shall retain all ownership rights to the
MSN/N2P Web Site, except that Microsoft shall not have any rights in the N2P
Deliverables or any Net2Phone Licensed Marks, other than those rights explicitly
granted herein.

             9.1.2 The MSN/N2P Web Site will be co-branded by Microsoft and
Net2Phone. Microsoft shall have sole discretion with respect to the design,
content, layout and features, including the size and positioning of any
trademarks or other references to Microsoft and Net2Phone on the MSN/N2P Web
Site and the Web Pages contained therein.

             9.1.3 Microsoft shall use reasonable efforts to accommodate
Net2Phone's requests regarding the layout and content of the MSN/N2P Web Site;
provided, however, that in the event that the Parties are not able to agree on
any matters regarding the layout or content of the MSN/N2P Web Site, Microsoft's
decision with respect to the layout and content of the MSN/N2P Web Site shall be
final. Microsoft shall supply Net2Phone with suitable specimens of use of the
Net2Phone Licensed Marks in connection with the MSN/N2P Website, as and when
requested by Net2Phone. Microsoft shall cooperate fully with Net2Phone to
facilitate periodic reviews of Microsoft's use of the Net2Phone Licensed Marks
and of Microsoft's compliance with the quality standards described herein.

         9.2 Web Site Billing Services. If and when future releases of the MSN
Messenger 3.0 and/or other MS Products provide Paid Call Capability, Net2Phone
shall host pages ("CO-BRANDED PAGES") co-branded with the Microsoft Licensed
Marks on its Web Site (the "NET2PHONE WEB SITE") to enable billing of End Users.
The Co-Branded Pages shall provide End Users with the ability to access and use
on line support, billing and account management features, including the ability
to see a history of their calls, to place money on their account, to see their
updated balances and to provide additional information or purchase additional
services.

             9.2.1 Net2Phone shall be solely responsible for the billing of End
Users and collection of fees including through the Co-Branded Pages in
accordance with this Section 9.2.

             9.2.2 Net2Phone shall be solely responsible for hosting and
maintaining the Co-Branded Pages and agrees, at all times, to maintain the
Co-Branded Pages at a level that is at least commensurate with the quality of
the MSN/N2P Web Site.

             9.2.3 The Co-Branded Pages will be co-branded by Microsoft and
Net2Phone. Microsoft and Net2Phone shall mutually agree with respect to the
design, content, layout and features, including the size and positioning of any
trademarks or other references to Microsoft and Net2Phone on the Co-Branded
Pages and the Web Pages contained therein.

             9.2.4 Net2Phone shall supply Microsoft with suitable specimens of
use of the Microsoft Licensed Marks in connection with the Co-Branded Pages, as
and when requested by Microsoft. Net2Phone shall cooperate fully with Microsoft
to facilitate periodic reviews of

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Net2Phone's use of the Microsoft Licensed Marks and of Net2Phone's compliance
with the quality standards described herein.

             9.2.5 Net2Phone shall incorporate Microsoft's Passport and Wallet
into its billing system on the Co-Branded Pages. Microsoft shall provide
Net2Phone with such information and assistance as may be necessary for Net2Phone
to incorporate Microsoft's Passport and Wallet into the Net2Phone billing
system. Net2Phone shall not be prevented from offering other third-party wallet
services on the Net2Phone Web Site; provided, however, that no other third party
wallet services may be advertised on, offered by, or linked to the Co-Branded
Pages or the MSN/N2P Web Site.

             9.2.6 Prior to incorporating the Passport and Wallet on the
Co-Branded Pages, Net2Phone agrees to enter into a Passport and Wallet License
Agreement, each in substantially the form attached hereto as Exhibit G;
provided, however, that Microsoft shall modify the terms of the Passport and
Wallet License Agreement with respect to Net2Phone's collection, receipt,
distribution and use of User Information to the extent necessary to make such
terms consistent with the terms of this Agreement. Net2Phone shall use the
Passport and Wallet only in accordance with the terms set forth in the Passport
and Wallet License Agreement, the MS Privacy Policies (as defined below), and
other policies as may be provided by Microsoft, in its sole discretion, to
Net2Phone from time to time.

         9.3 Privacy. The Parties shall post privacy policies on the MSN/N2P Web
Site and the Co-Branded Pages which accurately reflect both Net2Phone's and
Microsoft's privacy policies attached hereto as Exhibit H, as may be amended
from time to time by Microsoft ("MS PRIVACY POLICIES") and Exhibit O, as may be
amended from time to time by Net2Phone ("N2P PRIVACY POLICIES"), and conform
with then current industry recognized privacy standards and privacy legislation.
Such posted policies (a) must be readily accessible to any End User from a Link
on the MSN/N2P Web Site, the Co-Branded Pages and any other site from where
Personal Information about End Users may be collected by either Net2Phone or
Microsoft; and (b) must include, without limitation, notices to End Users
regarding: (i) what Personal Information is collected; (ii) what organization is
collecting the Personal Information; (iii) how the Personal Information is used;
(iv) with whom the Personal Information may be shared; (v) what choices are
available to End Users regarding the collection, use and distribution of the
Personal Information; (vi) what kind of security procedures are in place to
protect the loss, misuse or alteration of Personal Information; (vii) how an End
User may correct any inaccuracies in his or her Personal Information; and (viii)
how an End User may choose to consent to the use and sharing of the End User's
Personal Information. Net2Phone and Microsoft will collaborate to obtain Trust-E
or other similar approval for such privacy policies.

10.      ADVERTISING

         10.1 General. The Parties shall permit advertising on or in conjunction
with the MSN Dial-Up Window during PC-to-Phone voice sessions and allocate fees
and revenues in accordance with this Article 10 throughout the Term of this
Agreement. No advertising shall be sold for any PC-to-PC voice sessions without
the prior written consent of each Party. Except as set forth in this Article 10
[****].

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                                                     PRIVILEGED AND CONFIDENTIAL

         10.2 Reviews of Advertising Procedures. Microsoft and Net2Phone agree
to review, on a monthly basis, the advertising products, performance (including
"CPM" and "sell out" rates) process, pricing, and advertiser exclusions with the
goal of mutually maximizing financial benefits and, if necessary, to
periodically update upon the mutual agreement of the Parties, the terms and
conditions of this Article 10.

         10.3 Microsoft Exclusive Ad Sales.

             10.3.1 During the period commencing on the Effective Date and
terminating on February 1, 2001 [****].

             10.3.2 In the event that [****] has unsold Advertising Inventory
during an exclusive period, [****] may request to sell a portion of such unsold
Advertising Inventory. [****] shall not unreasonably withhold its consent for
[****] to sell such unsold Advertising Inventory; provided, however, that (a)
[****] only may receive the right to sell unsold Advertising Inventory which
shall expire within [****]; (b) in the event that [****] sells any Advertising
Inventory for the same advertising medium as [****], any Advertising Inventory
sold by [****] shall receive a pre-emptive priority right with respect to
placement; provided, that the Advertising Inventory sold by [****] has a CPM
rate not less than the CPM rate of the Advertising Inventory sold by [****],
and, further provided, that the Parties may mutually agree on other criteria in
considering whether to pre-empt any [****] Advertising Inventory with [****]
Advertising Inventory; and (c) any Advertising Inventory may be sold by [****]
only as a part of the [****] and not exclusively for the MSN Dial-Up Window.

         10.4 Joint Advertising Sales. If [****] does not exceed the Minimum
Billing during any applicable term, then [****] shall have the option to sell up
to [****] of the Advertising Inventory. [****] shall provide [****] with [****]
written notice of its desire to sell Advertising Inventory pursuant to this
Section, whereupon the Parties shall mutually agree upon the terms and
conditions regarding the joint sale of Advertising Inventory. Such terms and
conditions shall include the following: (a) Advertising Inventory may be sold by
[****] only as part of the [****] Network and not exclusively for the MSN
Dial-Up Window; (b) without prior approval from the other Party, neither Party
may discount Advertising Inventory by more than [****] from the rate card prices
mutually agreed upon by the Parties; (c) provided that a Party has sold [****]
of the Advertising Inventory allocated to such Party, such Party may request
from the other Party the right to sell additional Advertising Inventory in
excess of its [****] Advertising Inventory allocation and the other Party shall
not unreasonably withhold approval for such request.

         10.5 Net2Phone Sales Force. The Parties acknowledge that Net2Phone
initially will use third party contractors to place Advertising Inventory across
the Net2Phone Affiliate Advertising Network and will use commercially reasonable
efforts to develop its own sales force for such advertising sales. Any third
party contractors only may sell such Advertising Inventory permitted to be sold
by Net2Phone pursuant to Article 10, and only in accordance with the terms and
conditions set forth under Articles 10 and 11. Net2Phone shall promptly notify
Microsoft of any agreements to place Advertising Inventory entered into with
such third party contractors and shall provide Microsoft with copies or
summaries of all information provided by Net2Phone to such third party
contractor and related to the Advertising Inventory. Net2Phone shall ensure that
such third party contractors are made aware of and agree, in writing, to abide
by the terms of

                                      -11-
<PAGE>   12
                                                     PRIVILEGED AND CONFIDENTIAL

Articles 10 and 11, including all Microsoft privacy requirements. Net2Phone
shall remain primarily liable for any damages, losses, expenses, fees or other
costs resulting from or in connection with the acts and/or omissions of such
third party contractors.

         10.6 Prohibited Ad Sales. Except as otherwise expressly permitted
herein, during such time that Microsoft will be the exclusive seller of
Advertising Inventory, Net2Phone shall not sell any Advertising Inventory as
part of the Net2Phone Affiliate Advertising Network. In no event shall Net2Phone
be permitted to sell Advertising Inventory on the MSN Dial-Up Window as a
stand-alone site separate from the Net2Phone Affiliate Advertising Network.

         10.7 Advertising Products.

             10.7.1 Advertising Inventory shall initially be limited to a 234 x
60 pixel Banner displayed on the MSN Dial-Up Window, to be served at a frequency
of no more than three times per minute. Microsoft, in its sole discretion, may
modify the frequency of permitted Banner advertising and shall determine the
permitted size and placement of all advertising on the MSN Dial-Up Window.
Subject to the terms and conditions in this Agreement, the Parties will work
together to determine the products, pricing and terms for all Advertising
Inventory. Advertising Inventory specifications shall be in accordance with
standard Internet Advertising Bureau and Microsoft advertising specifications.

             10.7.2 The Parties acknowledge their mutual desire to include audio
advertisements in the MSN Messenger Service. At such time as the Parties
mutually agree that they are mutually able to support and sell audio
advertisements, [****] audio advertisement shall be played during each call
set-up time. The terms and conditions regarding the sale, support and play of
such audio advertisements shall be mutually agreed upon by the Parties.

             10.7.3 Microsoft shall include in the release of the MSN Messenger
3.0, the ability to advertise on a "leave behind" advertising unit which would
appear once and for a limited duration to an End User at such time as the End
User disengages from the MSN Dial-Up Window. Such "leave behind" advertising
units shall not be smaller than 240 x 240 pixels. Advertising Inventory for such
"leave behind" advertising units shall be sold in accordance with the terms and
conditions set forth in this Article 10; provided, however, that either Party
reserves the right, at any time, to request that such "leave behind" advertising
units be terminated in the event that it receives, in the reasonable discretion
of such Party and using such standards as are utilized by such Party in its
ordinary course of business to measure customer satisfaction, a material amount
of negative feedback from its End Users, and upon such termination request, both
Parties shall cooperate in removing such "leave behind" impression feature from
the MSN Messenger 3.0 as soon as reasonably practicable.

         10.8 Ad Serving. Microsoft shall serve all of the Advertising
Inventory. Advertising Inventory sold by Net2Phone shall be served by Microsoft
via a redirect to a third party ad serving solution sourced by Net2Phone.
Net2Phone shall be responsible for all tracking, reporting, and billing
requirements for such third party ad serving solution. The Parties shall
mutually define and implement operational processes, which shall include, but
not be limited to, insertion/order entry and issue escalation. In the event that
the Parties mutually and reasonably

                                      -12-
<PAGE>   13
                                                     PRIVILEGED AND CONFIDENTIAL

agree that Microsoft's advertising serving solution is inadequate, then the
Parties shall develop an alternative advertising serving solution mutually
agreeable to both Parties.

         10.9 Marketing and Training. Each Party shall ensure that all
Advertising Inventory is accurately represented in its marketing material. Each
Party shall provide the other Party with copies of all marketing materials which
in any way reference the other Party and each Party shall have the right to
approve any reference to its company or its products or services before any such
material is distributed to any third party. In addition, Net2Phone shall from
time to time provide Microsoft with Net2Phone Affiliate Advertising Network
information regarding products, performance, effectiveness and best practices.

         10.10 Prohibited Advertisers. No Advertising Inventory shall be sold by
either Party to any prohibited advertiser listed on Exhibit K. The list is
subject to continual change, and will be updated every month. Each Party
reserves the right to once a month remove, or add a reasonable amount of
additional names to Exhibit K and shall provide written notification to the
other Party of any such modification in accordance with the notice
specifications set forth in this Section 10. If, within [****] days after
receiving additional names of prohibited advertisers, a Party delivers to the
Party designating such additional prohibited advertisers a signed, unconditional
and binding advertising agreement with a newly prohibited advertiser, then such
newly prohibited advertiser shall nevertheless be permitted to display or play
its Advertising Inventory for the duration of the term of such agreement;
provided, that if a Party notifies the other Party that an advertising exclusion
is a high priority, then the other Party shall use reasonable efforts to
discontinue any previous commitment as soon as possible. The Parties agree to
comply with other advertising policies and limitations adopted by either Party
from time to time (including but not limited to prohibitions on advertising
tobacco, alcohol, or nudity).

         10.11 Collection and Distribution of Advertising Revenue. During the
Term of this Agreement, all Revenues shall be collected and distributed in the
following manner:

               10.11.1 Each Party shall bill and collect all Revenues from
advertising sold by such Party.

               10.11.2 Each Party, within [****] days after the end of each
calendar quarter, shall remit a Carriage Fee for such quarter to a joint account
established by Net2Phone.

               10.11.3 [****]

               10.11.4 [****]

               10.11.5 Along with each payment, each Party shall deliver to the
other Party for the period to which the payment relates a statement which sets
forth the Revenues, Carriage Fees and N2P Network Costs, as applicable, and the
calculation of the advertising payment due for such quarter. Such documents
shall be certified by an authorized financial officer of such Party or his
designee to be true and accurate in all material respects, subject to normal
year-end adjustments.

               10.11.6 Receipt or acceptance by either Party of any reports
furnished pursuant to this Agreement or any sums paid hereunder shall not
preclude such Party from questioning the

                                      -13-
<PAGE>   14
correctness thereof at any time, up to [****] after receipt of any report or
payment. In the event that any mistake is discovered in any such report or
payment, the other Party shall immediately rectify the mistake.

         10.12 Net2Phone Promotion.

               10.12.1 Upon written consent of Microsoft, Net2Phone may display
advertisements promoting Net2Phone or its services during such periods for which
no Advertising Inventory is sold; provided, however, that [****]. Microsoft
shall respond to any Net2Phone request to advertise under this Section 10.11.1
within [****] days after receipt of any such request and shall not unreasonably
withhold its consent. Microsoft reserves the right withdraw its consent for the
advertising of any Net2Phone advertisement if Microsoft intends to release a
[****] within [****] days and Net2Phone shall promptly cease advertising any
services for which such consent is withdrawn.

               10.12.2 Microsoft shall include Net2Phone brand attribution in
the MSN Dial-Up Window for PC-to-Phone voice transmissions made using the N2P
Deliverables; provided, however, that Microsoft shall only be required to
include such brand attribution only at and during such time that Microsoft is
able to confirm that a voice transmission is being transmitted and delivered by
Net2Phone. Such Net2Phone brand attribution shall consist of the statement
"Powered by Net2Phone" being displayed in the lower right hand portion of the
MSN Dial-Up Window. Microsoft shall consult with Net2Phone regarding the size,
color, font and other design characteristics of the brand attribution, provided,
that in the event of a dispute with respect to the size, color, font or other
design characteristics, the decision of Microsoft shall be final.

         10.13 Records; Audit. During the Term of this Agreement and for [****]
thereafter, each Party agrees to keep all usual and proper records and books of
account and all usual and proper entries relating to the computation, collection
and distribution of the advertising and other revenues, if any, under this
Agreement. During the Term and for a period of [****] thereafter, each Party
(the "AUDITING PARTY") shall have the right to cause an audit and/or inspection
to be made of the applicable records and facilities of the other Party (the
"AUDITED PARTY") in order to verify statements issued by the Audited Party and
the Audited Party's compliance with the terms of this Agreement. Any such audit
shall be conducted by an independent certified public accountant selected by the
Auditing Party. Any audit and/or inspection shall be conducted during regular
business hours at the Audited Party's facilities with or without notice. The
Audited Party agrees to provide the Auditing Party's designated audit or
inspection team access to the relevant records and facilities. Such audits shall
be made no more often than [****]. If an audit reveals that the Audited Party
has under-paid the Audited Party by [****] or more of the amounts due for any
audited period of time, the Audited Party shall make immediate payment to the
Auditing Party of all amounts due, plus interest for any period when such
amounts were originally due and not paid, calculated using the [****] during
such time when any payment was due [****], and shall pay the Auditing Party all
costs and expenses incurred by the auditing party in conducting such audit and
collecting such payments, including, but not limited to, any amounts paid to any
outside auditor or attorney.

                                      -14-
<PAGE>   15
                                                     PRIVILEGED AND CONFIDENTIAL

         10.14 Notices Regarding Advertising Issues. All notices, requests,
demands or other communications which are required or may be given pursuant to
this Article 10 shall be made in writing via electronic mail and deemed
delivered on the date of transmission when sent during normal business hours
with electronic, written or telephone confirmation of receipt and addressed to
the representatives of the Parties listed below, or to such other representative
as may designated by a Party from time to time:

         If to Microsoft: Charles Frizelle -- cfriz@microsoft.com

         If to Net2Phone: Will Margiloff -- wmargiloff@net2phone.com

11.      USER INFORMATION

         11.1 Aggregate Information. Microsoft agrees that Net2Phone may track,
use and store in aggregate form Aggregate Information solely as necessary to
perform the Net2Phone services under Article 7. The categories of data shall
include total telephony minutes, total number of End Users, total inbound,
outbound and PC-to-Phone and PC-to-PC minutes, domestic vs. international
telephony minutes, geographical tracking and time-of-day/day-of-week traffic
data. Net2Phone acknowledges and agrees that the data described in the preceding
sentence shall be solely owned by Microsoft and Microsoft hereby grants
Net2Phone a non-exclusive, non-transferable, [****] license to use such data
internally, solely to provide and to improve the performance and functionality
of the Net2Phone services delivered to Microsoft and its End Users; provided,
however, that Net2Phone will not sell, transfer or otherwise disclose such data
to third parties except as may be required to perform its obligations under this
Agreement, including billing and sales of Advertising Inventory.

         11.2 Collection, Disclosure and Use of User Information.

              11.2.1 Except as described in Section 11.2.2 and except for End
Users who are or become customers of Net2Phone or its other licensees
independent of this Agreement, Net2Phone shall not collect any User Information
from any End User without the prior written consent of Microsoft.

              11.2.2 At such time as Paid Call Capability is offered, Net2Phone
shall have the right to collect User Information from End Users in connection
with billing services provided by Net2Phone through the Co-Branded Pages;
provided, that any User Information is collected only with the consent of the
End User.

              11.2.3 Any collection, disclosure or use of User Information
collected or received by Net2Phone shall be subject to the End User's consent,
any Wallet and Passport policies, Microsoft's and Net2Phone's business practices
and the MS Privacy Policies and the N2P Privacy Policies, and, in all cases, in
compliance with any applicable laws governing the collection, dissemination and
use thereof.

              11.2.4 Notwithstanding anything contained in this Agreement to
the contrary, Net2Phone agrees that, unless it has received Microsoft's prior
written consent, it will not sell, license or otherwise transfer to any third
party any User Information collected or received pursuant to this Agreement, nor
use any User Information to target promotions of any third

                                      -15-
<PAGE>   16
party's goods or services to End Users, except that Net2Phone may communicate
with End Users of the paid PC-to-Phone voice services; provided, that such End
Users have consented to such communication and that such communication is in
accordance with all MS Privacy Policies and applicable laws.

              11.2.5 Microsoft reserves the right in its sole discretion, to
restrict or prohibit Net2Phone from collecting or using any User Information in
the event that Net2Phone breaches any of the terms of this Agreement or MS
Privacy Policies, or in the event that changes to any of the MS Privacy Policies
or any laws prohibit or restrict the use of User Information.

         11.3 Ownership.

              11.3.1 Except as specified in Section 11.3.2, and except for
information collected by Net2Phone from End Users who are or become customers of
Net2Phone or its other licensees independent of this Agreement, Microsoft shall
solely own all User Information collected by Microsoft or Net2Phone from End
Users during their use of PC-to-PC and PC-to-Phone voice functions of the MSN
Messenger 3.0, the MSN/N2P Web Site and/or any other MS Product, during the Term
of this Agreement. Any and all User Information owned by Microsoft shall be
considered Confidential Information of Microsoft.

              11.3.2 Any User Information collected by Net2Phone through the
Co-Branded Pages shall be jointly owned by Microsoft and Net2Phone.

         11.4 Profile Data for Advertising Targets. Upon the release of MSN
Messenger 3.0 and for the sole purpose of targeting advertising to End Users of
the MSN Messenger 3.0, Microsoft, shall, to the extent permitted by MS Privacy
Policies, provide Net2Phone with Personal Information obtained by Microsoft from
its End Users' Passport profiles for the following [****]. Microsoft shall, to
the extent permitted by MS Privacy Policies, provide Net2Phone with additional
information collected from its End Users' Passport profiles at such time as the
standard features of its MSN Messenger Service makes it technically feasible to
provide such information; provided, however, that upon the next release of the
MSN Messenger Service after the Launch Date, Microsoft shall use commercially
reasonable efforts to ensure that it is able to provide Net2Phone with all
demographic information from its End Users' Passport profiles.

              11.4.1 Net2Phone may use any User Information provided by
Microsoft for targeting advertising only in accordance with the MS Privacy
Policies, the terms of this Agreement and applicable law. In no event shall
Net2Phone be permitted to sell advertising on behalf of Net2Phone or use any
User Information provided by Microsoft to contact such End User without the
prior written consent of Microsoft.

              11.4.2 Microsoft shall not in any way be liable for the
completeness or accuracy of any User Information provided to Net2Phone under
this Agreement.

              11.4.3 Microsoft reserves the right, in its sole discretion, to
withhold or to request the return or destruction of any and all User Information
in the event that Net2Phone breaches any of the terms of this Agreement or MS
Privacy Policies, or in the event that changes to the MS Privacy Policies or any
laws prohibit or restrict the use of User Information.

                                      -16-
<PAGE>   17
                                                     PRIVILEGED AND CONFIDENTIAL

              11.4.4 Microsoft shall remain the sole and exclusive owner of all
rights to any and all User Information provided by Microsoft to Net2Phone
pursuant to this Agreement.

12.      THIRD-PARTY DISTRIBUTION

         12.1 Third-Party Distribution. The Parties acknowledge and agree that
Microsoft may distribute the MSN Messenger Service and other MS Products through
third parties. In the event that Microsoft distributes MSN Messenger Service or
other MS Products with voice transmission capabilities through third parties,
then Microsoft will use reasonable commercial efforts to include the N2P
Deliverables in the MSN Messenger Service and/or other MS Products. However,
Microsoft reserves the sole and exclusive right, in its sole discretion, to
remove the N2P Deliverables from the MSN Messenger Service and/or other MS
Products, and either to distribute through third parties the MSN Messenger
Service and/or other MS Products without any voice communication capabilities,
or to distribute the MSN Messenger Service and/or other MS Products with voice
capabilities developed by another party.

         12.2 Advertising Rights. In the event that the N2P Deliverables are
included in any MSN Messenger Service distributed by third parties, then the
Parties shall retain the right to sell and serve advertisements in accordance
with the terms of Article 10. [****] Upon distribution of MSN Messenger Service
through third parties, each Party reserves the right to add additional names of
prohibited advertisers to the list specified in Section 10.10.

13.      CONTRACT ADMINISTRATION AND REPORTING OBLIGATIONS

         13.1 General Communications and Approvals. The Parties shall
communicate directly with one another in the administration of this Agreement,
and each Party shall designate at least one (1) authorized person to be the
primary contact for purposes of coordinating or granting approvals and consents
required hereunder. Such representatives shall not necessarily be devoted
exclusively to the administration of this Agreement. Informal and multiple lines
of communication between the Parties are encouraged; provided, that in
circumstances in which one Party seeks to rely on instructions or advice of the
other, each Party's designated representative shall be contacted.

         13.2 Update Meetings. The Parties shall be represented by authorized
personnel directly responsible for performance hereunder at a service update
meeting to be held quarterly, alternating between the Microsoft Premises and the
Net2Phone Premises. At such quarterly meetings, the representatives of the
Parties shall review the performance of the Parties under this Agreement for the
preceding [****]. The Parties shall bear their own expenses with respect to such
meetings.

         13.3 Reporting. Within [****] following the commencement of each
calendar quarter during the Term, Net2Phone shall provide Microsoft with a
quarterly report which shall provide, for the preceding quarter, the information
listed in Exhibit I.

                                      -17-
<PAGE>   18
                                                     PRIVILEGED AND CONFIDENTIAL

14.      INTELLECTUAL PROPERTY

         14.1 Ownership. Any Confidential Information, User Information and
Intellectual Property rights existing as of the Effective Date shall remain the
property of the Party owning such Confidential Information, User Information or
Intellectual Property rights.

         14.2 No Joint Development.

              14.2.1 Except as specifically set forth in Section 3.2, only
Net2Phone shall modify and improve the N2P Deliverables. Net2Phone shall be
entitled to any and all Intellectual Property rights in and to any
modifications, improvements or derivative works of or to the N2P Deliverables.
Only Microsoft shall modify and improve the MSN Messenger Service, MSN Messenger
3.0, Passport and Wallet, MSN/N2P Web Site or any other MS Product and Microsoft
shall be entitled to any and all Intellectual Property rights in and to any
modification, improvement or derivative works of to the MSN Messenger Service,
MSN Messenger 3.0, Passport and Wallet, MSN/N2P Web Site or any other MS Product
(excluding Net2Phone's or its licensors' underlying rights in the N2P
Deliverables).

              14.2.2 In the event that the Parties agree to jointly develop any
Intellectual Property under this Agreement, then such Intellectual Property
shall be jointly owned by the Parties, with each Party owning an undivided one
half interest. The Parties agree that each Party shall be free to use and
commercially exploit their interest in any joint development and that there
shall be no obligation of payment or accounting to the other therefor.

         14.3 Intellectual Property. As between the Parties, Net2Phone
acknowledges Microsoft's sole ownership of the MSN Messenger Service, MSN
Messenger 3.0, Passport and Wallet, the MSN/N2P Web Site and other MS Products
worldwide and all associated goodwill and Microsoft acknowledges Net2Phone's
sole ownership of the N2P Deliverables worldwide and all associated goodwill.
Net2Phone hereby assigns and shall assign in the future to Microsoft all rights
related to Intellectual Property that it may acquire by operation of law or
otherwise in the performance of this Agreement, in or to the MSN Messenger
Service, MSN Messenger 3.0, Passport and Wallet, the MSN/N2P Web Site or any
other MS Product, including all applications or registrations therefor along
with the goodwill associated therewith. Except for any rights expressly granted
under this Agreement, Microsoft hereby assigns and shall assign in the future to
Net2Phone all rights related to Intellectual Property that it may acquire by
operation of law or otherwise in the performance of this Agreement, in or to the
N2P Deliverables, including all applications or registrations therefor along
with the goodwill associated therewith.

              14.3.1 Net2Phone is authorized to use the MSN Messenger Service,
MSN Messenger 3.0, Passport and Wallet, MSN/N2P Web Site and other MS Products
only in accordance with the terms of this Agreement or as approved in writing by
Microsoft. Microsoft is authorized to use the N2P Deliverables only in
accordance with the terms of this Agreement or as approved in writing by
Net2Phone. Each Party shall fully and promptly correct and remedy any
deficiencies in its use of, in the case of Net2Phone, the MSN Messenger Service,
MSN Messenger 3.0, Passport and Wallet, MSN/N2P Web Site or any other MS
Product, or, in the case of Microsoft, the N2P Deliverables, upon notice from
the other Party.

                                      -18-
<PAGE>   19
                                                     PRIVILEGED AND CONFIDENTIAL

              14.3.2 Each Party shall have the sole right to and in its sole
discretion may commence, prosecute or defend, and control any action concerning,
in the case of Microsoft, the MSN Messenger Service, MSN Messenger 3.0, Passport
and Wallet, MSN/N2P Web Site, MS Products and/or other Microsoft Intellectual
Property, and in the case of Net2Phone, the N2P Deliverables, in the Territory.
Neither Party shall, during the Term of this Agreement, contest the validity of,
by act or omission jeopardize, or take any action inconsistent with, in the case
of Net2Phone, Microsoft's rights or goodwill in the MSN Messenger Service, MSN
Messenger 3.0, Passport and Wallet, MSN/N2P Web Site, MS Products and/or other
Microsoft Intellectual Property, and in the case of Microsoft, Net2Phone's
rights or goodwill in the N2P Deliverables in any country.

         14.4 Notification of Claims. Each Party shall promptly notify the other
in writing of any acts, claims, demands or causes of action of which it learns,
based upon, relating to, or arising from any attempt by any other Person to use
the other Party's Intellectual Property or any colorable imitations thereof, in
any unauthorized manner of which either Party becomes aware.

15.      TRADEMARKS

         15.1 Microsoft Trademark License

              15.1.1 Microsoft hereby grants to Net2Phone for the Term of this
Agreement and subject to and expressly conditioned upon compliance with the
terms and conditions of this Agreement, a non-exclusive, non-assignable,
non-transferable, [****], worldwide license to use the Microsoft Licensed Marks
solely in conjunction with the Co-Branded Pages in the manner described in the
Branding Specifications attached as Exhibit J hereto (the "BRANDING
SPECIFICATIONS"), including the right to include the MSN trademark in the URL
for the Co-Branded Pages, and otherwise as provided in this Agreement or
specified in writing by Microsoft from time to time. Except as expressly
provided in this trademark license in this Section 15.1.1, this Agreement does
not grant Net2Phone any right, title, interest, or license in or to any of
Microsoft's names, logos, trade dress, designs or other trademarks and under no
circumstances shall anything in this Agreement be construed as granting by
implication, estoppel or otherwise, a license to any Microsoft technology or
proprietary right other than the permitted use of Microsoft Licensed Marks. Use
of the Microsoft Licensed Marks shall be solely as expressly specified in this
Agreement or as authorized by Microsoft in writing from time to time.

              15.1.2 Net2Phone acknowledges Microsoft's sole ownership of the
Microsoft Licensed Marks worldwide and all associated goodwill. All uses
hereunder of the Microsoft Licensed Marks shall inure solely to the benefit of
Microsoft. Net2Phone hereby assigns and shall assign in the future to Microsoft
all rights it may acquire by operation of law or otherwise in the Microsoft
Licensed Marks, including all applications or registrations therefore, along
with the goodwill associated therewith.

              15.1.3 Net2Phone is authorized to use the Microsoft Licensed Marks
only as affixed to the Co-Branded Pages and certain marketing materials in
accordance with the terms of this Agreement and as may be approved in writing by
Microsoft. Net2Phone shall use the Microsoft Licensed Marks in a manner that
does not derogate from Microsoft's rights in the Microsoft Licensed Marks and
will take no action that will interfere with or diminish Microsoft's

                                      -19-
<PAGE>   20
                                                     PRIVILEGED AND CONFIDENTIAL

rights to the Microsoft Licensed Marks. Net2Phone shall not adopt, use or
register any corporate name, trade name, domain name (except as provided
herein), trademark, service mark or certification mark, or other designation
similar to containing, in whole or in part, the Microsoft Licensed Marks.
Net2Phone shall not use the Microsoft Licensed Marks in any way as an
endorsement or sponsorship of Net2Phone by Microsoft. Net2Phone shall fully and
promptly correct and remedy any deficiencies in its use of the Microsoft
Licensed Marks, upon reasonable notice from Microsoft.

              15.1.4 Microsoft shall have the sole right to and in its sole
discretion may commence, prosecute or defend, and control any action concerning
the Microsoft Licensed Marks in the Territory. Net2Phone shall not contest the
validity of, by act or omission jeopardize, or take any action inconsistent
with, Microsoft's rights or goodwill in the Microsoft Licensed Marks in any
country, including attempted registration of the Microsoft Licensed Marks, or
use or attempted registration of any mark confusingly similar thereto.

         15.2 Net2Phone Trademark License.

              15.2.1 Net2Phone hereby grants to Microsoft for the Term of this
Agreement and subject to and expressly conditioned upon compliance with the
terms and conditions of this Agreement, a non-exclusive, non-assignable,
non-transferable, [****], worldwide license to use the Net2Phone logo as
depicted in Exhibit L hereto (the "NET2PHONE MARK") in conjunction with the
MSN/N2P Web Site Pages in the manner described in the Branding Specifications
attached as Exhibit M hereto (the "N2P BRANDING SPECIFICATIONS"), including the
right to include the Net2Phone trademark in the URL for the MSN/N2P Web Site,
and otherwise as provided in this Agreement or specified in writing by Net2Phone
from time to time. Except as expressly provided in this trademark license in
this Section 15.1.1, this Agreement does not grant Microsoft any right, title,
interest, or license in or to any of Net2Phone names, logos, trade dress,
designs or other trademarks and under no circumstances shall anything in this
Agreement be construed as granting by implication, estoppel or otherwise, a
license to any Net2Phone technology or proprietary right other than the
permitted use of Net2Phone Mark. Use of the Net2Phone Mark shall be solely as
expressly specified in this Agreement or as authorized by Net2Phone in writing
from time to time.

              15.2.2 Microsoft acknowledges Net2Phone's sole ownership of the
Net2Phone Mark worldwide and all associated goodwill. All uses hereunder of the
Net2Phone Mark shall inure solely to the benefit of Net2Phone. Microsoft hereby
assigns and shall assign in the future to Net2Phone all rights it may acquire by
operation of law or otherwise in the Net2Phone Mark, including all applications
or registrations therefore, along with the goodwill associated therewith.

              15.2.3 Microsoft is authorized to use the Net2Phone Mark only as
affixed to the MSN/Net2Phone Web Site Pages and certain marketing materials in
accordance with the terms of this Agreement and as may be approved in writing by
Net2Phone. Microsoft shall use the Net2Phone Mark in a manner that does not
derogate from Net2Phone's rights in the Net2Phone Mark and will take no action
that will interfere with or diminish Net2Phone's rights to the Net2Phone Mark.
Microsoft shall not adopt, use or register any corporate name, trade name,
domain name (except as provided herein), trademark, service mark or
certification mark, or other designation similar to containing, in whole or in
part, the Net2Phone Mark. Microsoft shall not

                                      -20-
<PAGE>   21
                                                     PRIVILEGED AND CONFIDENTIAL

use the Net2Phone Mark in any way as an endorsement or sponsorship of Microsoft
by Net2Phone. Microsoft shall fully and promptly correct and remedy any
deficiencies in its use of the Net2Phone Mark, upon reasonable notice from
Net2Phone.

              15.2.4 Net2Phone shall have the sole right to and in its sole
discretion may commence, prosecute or defend, and control any action concerning
the Net2Phone Mark in the Territory. Microsoft shall not contest the validity
of, by act or omission jeopardize, or take any action inconsistent with,
Net2Phone's rights or goodwill in the Net2Phone Mark in any country, including
attempted registration of the Net2Phone Mark, or use or attempted registration
of any mark confusingly similar thereto.

16.      CONFIDENTIALITY; PRESS RELEASES

         16.1 NDA. The Parties acknowledge and agree that the terms and
conditions of the Microsoft Corporation Non-Disclosure Agreement (the "NDA")
entered into by the Parties, on November 30, 1999 with respect to Microsoft and
on December 2, 1999 with respect to Net2Phone, are incorporated into this
Agreement. In the event that any of the incorporated terms of the NDA are
inconsistent with or conflict with this Agreement, then the terms of this
Agreement shall control.

         16.2 Injunctive and Equitable Relief. Each Party acknowledges that
monetary damages may not be a sufficient remedy for unauthorized disclosure or
use of Confidential Information and that each Party may seek, without waiving
any other rights or remedies, such injunctive or equitable relief as may be
deemed proper by a court of competent jurisdiction.

         16.3 Press Releases. Subject to compliance with the rules and
regulations of the United States Securities and Exchange Commission and any
applicable stock exchanges, neither Party shall issue any press release or make
any similar public announcement(s) relating in any way whatsoever to this
Agreement or the relationship established by this Agreement without the express
prior written consent of the other Party and the Parties agree that any
announcements of the product and relationship set forth in this Agreement shall
not be disclosed until such time as MSN Messenger 3.0 is launched. Without
limitation to the foregoing, the Parties shall jointly determine the terms,
context, format, and text of any announcement relating to this Agreement and the
implementation of the provisions and requirements contained herein. Subject to
compliance with the rules and regulation of the United States Securities and
Exchange Commission and any applicable stock exchanges, on the Launch Date,
Microsoft will include in any press release related to the launch of MSN
Messenger 3.0 the fact that Net2Phone is the current provider of PC-to-Phone and
PC-to-PC voice services for the MSN Messenger Service.

17.      REPRESENTATIONS, WARRANTIES AND ADDITIONAL COVENANTS

         17.1 Microsoft. Microsoft represents, warrants and further covenants
that:

              17.1.1 Microsoft has the power and authority to enter into this
Agreement and to perform fully its obligations hereunder; and

              17.1.2 Microsoft has obtained, and shall maintain in full force
during the Term hereof, such Governmental Authorizations as are necessary to
operate and to otherwise perform

                                      -21-
<PAGE>   22
                                                     PRIVILEGED AND CONFIDENTIAL

its obligations under this Agreement, and will be in compliance with all
applicable laws and regulations governing such performance.

         17.2 Net2Phone. Net2Phone represents, warrants and further covenants
that:

              17.2.1 Net2Phone has the power and authority to enter into this
Agreement and to perform fully its obligations hereunder;

              17.2.2 The execution of this Agreement by Net2Phone and the
performance of its obligations hereunder does not and will not violate or
conflict with the terms and conditions of any other agreements, arrangements or
understanding entered into by Net2Phone;

              17.2.3 Net2Phone has obtained, and shall maintain in full force
during the Term of this Agreement, such Governmental Authorizations or other
licenses or other third party arrangements as are necessary to operate and to
otherwise perform its obligations under this Agreement in the Territory
(collectively, "PERMISSIONS"), at standards at least consistent with those
commonly observed in the industry, and shall comply with all applicable laws and
regulations governing such performance.

              17.2.4 Neither Net2Phone nor any of its business operations are
regulated by the FCC either as a telecommunications carrier under the
Communications Act of 1934 (47 U.S.C. 151 et seq.), as amended, and the rules
and regulations promulgated by the FCC thereunder, or otherwise, as of the
Effective Date hereof, or under any similar foreign law, rule or regulation
promulgated by any foreign Governmental Body in any country within the
Territory, except to the extent Net2Phone has the relevant Permissions; and the
services that Net2Phone provides are not regulated by the FCC as
telecommunications services or as any other type of regulated service, or by any
foreign Governmental Body in any country within the Territory under any similar
foreign law, rule or regulation, except to the extent that Net2Phone has the
relevant Permissions. Without Microsoft's consent, Net2Phone shall not provide
any services to Microsoft under this Agreement that shall cause Microsoft or its
End Users to be regulated by the FCC or any foreign Governmental Body in any
country within the Territory, or that shall cause any services provided by
Microsoft under this Agreement to be regulated by the FCC or any foreign
Governmental Body in any country within the Territory as telecommunications
services or any other type of regulated service.

              17.2.5 As between the Parties, in the event that Net2Phone is or
anticipates being in violation of the representations and warranties of Section
17.2.3 or Section 17.2.4, Net2Phone shall be considered the sole provider of
telecommunications services or other regulated services, as the case may be, and
Net2Phone shall either (a) take any and all actions that are required to ensure
compliance with such representations and warranties, including without
limitation the payment of any applicable taxes, fees and assessments, or (b) if
the terms of Section 7.6.1 are applicable, provide notice to Microsoft as
provided therein.

              17.2.6 Net2Phone represents and warrants that it will at no time
intentionally impair the operation of the MSN Messenger 3.0, the MSN/N2P Web
Site, the Co-Branded Pages or any other MS Product that utilizes the N2P
Deliverables and that its services and materials will not knowingly contain any
feature that prevents or interrupts its use, including but not

                                      -22-
<PAGE>   23
                                                     PRIVILEGED AND CONFIDENTIAL

limited to any computer virus, worm, lock, drop-dead device, Trojan-horse
routine, trap door, time bomb, or any other code or instruction that may be used
to access, modify, delete, damage, or disable the functionality of the MSN
Messenger 3.0, the MSN/N2P Web Site, the Co-Branded Pages or any other MS
Product that utilizes the N2P Deliverables or prevent or impede the access or
use thereof by End Users; provided, however, that Net2Phone makes no
representation or warranty that access to or use of the N2P Deliverables or any
product that incorporates that N2P Deliverables will be uninterrupted or
error-free; and

              17.2.7 Exhibits and all other attachments, schedules, information,
reports and status reports provided by one Party to the other Party pursuant to
this Agreement shall be accurate and complete in all material respects.

         17.3 Limitation of Representations. Should this Agreement be terminated
with respect to any country in the Territory pursuant to Section 7.6.1, the
representations and warranties of Section 17.2.4 shall also immediately
terminate with respect to such country as of the date of termination of services
to that country.

         17.4 LIMITATION. EXCEPT AS EXPRESSLY PROVIDED IN THIS ARTICLE 17, ALL
PRODUCTS OR SERVICES DELIVERED UNDER THE TERMS OF THIS AGREEMENT SHALL BE "AS
IS" WITHOUT WARRANTY OR CONDITION OF ANY KIND. FOR SUCH PRODUCTS AND SERVICES,
THE ENTIRE RISK AS TO THE RESULTS AND PERFORMANCE THEREOF IS ASSUMED BY THE
RECEIVING PARTY AND ITS CUSTOMERS, END USERS, AND LICENSEES, IF ANY. THE
REPRESENTATIONS AND WARRANTIES SET FORTH IN THIS ARTICLE 17 ARE THE ONLY
REPRESENTATIONS AND WARRANTIES MADE BY THE PARTIES. EACH PARTY DISCLAIMS ANY AND
ALL OTHER WARRANTIES OR REPRESENTATIONS, EXPRESS OR IMPLIED, INCLUDING, BUT NOT
LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY, TITLE, AND FITNESS FOR A
PARTICULAR PURPOSE. MICROSOFT EXPRESSLY DISCLAIMS ANY WARRANTIES RELATING TO THE
MSN MESSENGER SERVICE, MSN MESSENGER 3.0, OR ANY OTHER MS PRODUCT, INCLUDING ALL
WARRANTIES OF NON-INFRINGEMENT, COMPATIBILITY, ACCURACY, SECURITY, OR THAT
ACCESS TO OR USE THEREOF WILL BE UNINTERRUPTED OR ERROR-FREE. EXCEPT AS
OTHERWISE EXPRESSLY PROVIDED FOR IN THIS ARTICLE 17, NET2PHONE EXPRESSLY
DISCLAIMS ANY WARRANTIES RELATING TO THE N2P DELIVERABLES OR ANY OTHER NET2PHONE
PRODUCT, INCLUDING ALL WARRANTIES OF NON-INFRINGEMENT, COMPATIBILITY, ACCURACY,
SECURITY, OR THAT ACCESS TO OR USE THEREOF WILL BE UNINTERRUPTED OR ERROR-FREE.

18.      TERM AND TERMINATION

         18.1 Term and Renewal Terms. Subject to the other provisions of this
Article 18, this Agreement shall commence on the Effective Date and shall have
an initial term terminating on the date [****] after the Launch Date (the
"INITIAL TERM"). The Agreement thereafter shall be automatically renewed for
successive terms of [****] (each such term shall be referred to herein as a
"RENEWAL TERM") unless one Party gives the other Party written notice of its
intention not to automatically renew this Agreement at least thirty (30) days
prior to the scheduled expiration of

                                      -23-
<PAGE>   24
                                                     PRIVILEGED AND CONFIDENTIAL

the Initial Term or any subsequent Renewal Term. The Initial Term and all
Renewal Terms shall be referred to herein as the "TERM."

         18.2 Right of Termination by Microsoft.

              18.2.1 Convenience. Microsoft may terminate this Agreement at any
time and for any reason upon providing Net2Phone with not less than [****]
written notice of its intention to terminate this Agreement; provided, however,
that such notice period may be modified in accordance with Section 6.2.2.

              18.2.2 [****]

              18.2.3 Termination for Change of Control of Net2Phone.

              (a) Net2Phone shall notify Microsoft of any agreement, arrangement
or understanding that requires or otherwise contemplates a Change of Control of
Net2Phone no later than [****] following the execution thereof (a "TRANSFER
NOTICE"). Such Transfer Notice shall disclose in reasonable detail (i) the
identity of the acquiring Person or Persons; (ii) the financial and other
material terms and conditions of the agreement contemplating the Change of
Control; and (iii) the proposed consummation date of the Change of Control of
Net2Phone. Net2Phone shall promptly notify Microsoft of any material changes to
the information set forth in the Transfer Notice. Net2Phone shall also notify
Microsoft in writing of the consummation of any Change in Control within [****]
after the completion thereof.

              (b) Except where the Change of Control is a result of the
acquisition of capital or voting stock by AT&T Corporation, British Telecom
and/or Liberty Mutual, Microsoft shall have the right to notify Net2Phone at any
time after the date of the Transfer Notice, of its desire to terminate this
Agreement. If Microsoft provides such notice of termination to Net2Phone, this
Agreement shall terminate either immediately or on the date immediately
preceding the date when the Change of Control will take effect, in either case
as set forth by Microsoft in its notice of termination.

         18.3 Right of Termination by Net2Phone.

              18.3.1 Termination for Convenience. Net2Phone may terminate this
Agreement at any time and for any reason upon providing Microsoft with not less
than [****] written notice of its intention to terminate this Agreement;
provided, however, that such notice period may be modified in accordance with
Section 6.2.2. Microsoft, upon receipt of such termination notice, shall review
whether it is commercially feasible to terminate this Agreement at an earlier
date. If Microsoft, in its sole discretion, determines that it may accommodate
an earlier termination of this Agreement, then the Parties may agree to
terminate this Agreement at such earlier date.

              18.3.2 Failure to Release. Net2Phone may terminate this Agreement
immediately upon written notice to Microsoft if the Launch Date does not occur
on or before [****].

                                      -24-
<PAGE>   25
                                                     PRIVILEGED AND CONFIDENTIAL

         18.4 Termination for Cause. In addition to any other rights or remedies
that a Party may have under the circumstances, all of which are expressly
reserved, a Party may terminate this Agreement with immediate effect at any time
if:

              18.4.1 The other Party becomes insolvent or makes any assignment
for the benefit of creditors or similar transfer evidencing insolvency; or
suffers or permits the commencement of any form of insolvency or receivership
proceeding; or has any petition under any bankruptcy law filed against it, which
termination pursuant to this Section 18.4.1 shall be effective immediately upon
written notice or as otherwise specified herein;

              18.4.2 The other Party is in material breach of any warranty,
representation, term, condition or covenant of this Agreement, and fails to cure
that breach within thirty (30) days after written notice thereof; or

              18.4.3 The other Party is in breach of any of the confidentiality
provisions of this Agreement.

         18.5 Continuing Obligations Upon Certain Termination. In the event that
this Agreement is terminated by Microsoft pursuant to Section 18.2 or 18.4
hereunder, then:

              18.5.1 For a period of [****] after the effective date of
termination, Net2Phone shall continue to provide services to End Users pursuant
to Article 7 hereunder to support PC-to-PC and PC-to-Phone voice functionality
of any MS Product utilizing the N2P Deliverables;

              18.5.2 Microsoft shall, within fourteen (14) days of providing a
termination notice, provide Net2Phone with a good faith estimate of its service
level requirements for the [****] period specified in Section 18.5.1, along with
a good faith estimate of the percentage of voice traffic which Microsoft shall
provide Net2Phone in relation to any other providers of voice transmission and
delivery services. During the [****] period specified in Section 18.5.1,
Microsoft shall provide Net2Phone with priority over other service providers
with respect to any voice traffic directed from its MS Products in order to meet
its estimate of the percentage of traffic which Net2Phone is projected to
receive during the [****] period;

              18.5.3 All sublicenses of the N2P Deliverables granted by
Microsoft to End Users shall continue in full force and effect for the period
set forth in Section 18.5.1 for the limited purpose of allowing the End Users to
utilize the voice functionality of the MS Product for such period; and

              18.5.4 For a period of [****] after the effective date of
termination, the Parties shall (i) use commercially reasonable efforts to
fulfill any commitments made to third parties with respect to advertising and
(ii) collect and distribute Revenues, Carriage Fees and Net Revenues in
accordance with the procedures set forth in Article 10 and, within [****] after
the effective date of termination, each Party shall provide a final accounting
with respect to all amounts collected and distributed pursuant to this Agreement
and make any applicable outstanding payments required under the terms of Article
10.

                                      -25-
<PAGE>   26
                                                     PRIVILEGED AND CONFIDENTIAL

         18.6 Effect of Termination.

              18.6.1 The termination or expiration of this Agreement shall not
release any Party from any obligations that have previously accrued or are
expressly required to survive the termination of this Agreement hereunder.

              18.6.2 Upon termination or expiration of this Agreement each Party
shall, at the other Party's direction, return or certify destruction of
Confidential Information of such other Party. No Party shall be liable to the
other for damages of any sort resulting solely from terminating this Agreement
in accordance with its terms.

              18.6.3 Immediately upon termination or expiration of this
Agreement for any reason, Microsoft shall return to Net2Phone all source code
provided by Net2Phone pursuant to this Agreement. In addition, except to the
extent required to carry out any continuing obligations under Section 18.5, each
Party shall immediately cease all use of all trademarks of the other Party
licensed hereunder, and Microsoft shall cease all use of the N2P Deliverables.

         18.7 Survival. The following Articles and Sections shall survive the
termination and expiration of this Agreement: Articles 11, 14, 16, 19, 20 and
21; Sections 15.1.2, 15.1.4, 15.2.4, 15.2.2 and 23.2; and, Section 3.2 solely to
the extent related to Net2Phone's ownership of Bug Fixes; and to the extent
limited by Section 18.5, Articles 7 and 10, and Sections 3.1; 3.2; 8.1; 8.2;
9.3; 15.1.1;15.1.3; 15.2.1; and 15.2.3.

19.      INDEMNIFICATION

         19.1 Indemnification of Claims. A Party (the "INDEMNIFYING PARTY")
shall, at its expense and the request of the other Party, defend any third-party
claim or action, (a "CLAIM") brought against such Party, or its Affiliates,
directors, officers, employees, licensees, agents and independent contractors
(the "INDEMNIFIED PARTIES"), to the extent (a) such Claim is based upon a claim
that, if true, would constitute a breach of a warranty, representation or
covenant of the Indemnifying Party set forth in this Agreement; or [****].

         19.2 Procedures. The Indemnified Party shall promptly notify the
Indemnifying Party in writing, specifying the nature of the action and the total
monetary amount sought or other such relief as is sought therein. The
Indemnified Party shall cooperate with the Indemnifying Party at the
Indemnifying Party's expense in all reasonable respects in connection with the
defense of any such action. The Indemnifying Party may upon written notice to
the Indemnified Party undertake to control and conduct all proceedings or
negotiations in connection therewith, assume and control the defense thereof,
and if it so undertakes, it shall also undertake all other required steps or
proceedings to settle or defend any such action, including the employment of
counsel which shall be reasonably satisfactory to the Indemnified Party, and
payment of all reasonably incurred expenses. The Indemnified Party shall have
the right to employ separate counsel to provide input into the defense, at the
Indemnified Party's own cost. The Indemnifying Party shall reimburse the
Indemnified Party upon demand for any payments made or loss suffered by it at
any time after the date of tender, based upon the judgment of any court of
competent jurisdiction or pursuant to a bona fide compromise or settlement of
claims, demands, or actions, in respect to any damages to which the foregoing
relates. The Indemnifying Party shall not settle

                                      -26-
<PAGE>   27
                                                     PRIVILEGED AND CONFIDENTIAL

any claim or action under this Article 19 on the Indemnified Party's behalf
without first obtaining the Indemnified Party's written permission, which
permission shall not be unreasonably withheld, and the Indemnifying Party shall
indemnify and hold the Indemnified Party harmless from and against any costs,
damages and fees reasonably incurred by the Indemnified Party, including fees of
attorneys and other professionals, that are attributable to such Indemnified
Claims. The Indemnifying Party shall not be responsible for any indemnification
obligations arising hereunder pursuant to the terms and conditions of any
settlement of an Indemnified Claim by the Indemnified Party unless such
settlement was approved by the Indemnifying Party (which approval shall not be
unreasonably withheld).

         19.3 [****].

20.      INSURANCE

         20.1 Minimum Coverage. During the Term and for a period of [****] after
Net2Phone is obligated to provide any services under this Agreement, Net2Phone
shall procure and maintain insurance reasonably adequate to cover any and all
liability that Net2Phone may incur as a result of the performance of its
obligations under this Agreement. Such insurance shall be in a form and with
insurers reasonably acceptable to Microsoft and shall consist of policies that
comply with the following minimum requirements:

         (a) commercial general liability insurance, with policy limits of not
less than (i) [****] for each occurrence of bodily injury or property damage,
and (ii) [****] personal and advertising injury limits;

         (b) umbrella policy with minimum limits of [****]; and

         (c) professional liability and errors and omissions liability insurance
with policy limits of not less than [****] for each claim with a deductible of
not more than [****]. In the event that Net2Phone's deductible is greater than
[****], then, within ten (10) days after the Effective Date, Net2Phone shall
deposit with an escrow agent and pursuant to escrow terms mutually agreed upon
by the Parties, an amount equal to the difference of the deductible and [****]
and shall hold such amounts in escrow for such time as Net2Phone's obligations
pursuant to this Section 20 are in effect or until such time as the deductible
is not greater than [****].

         20.2 Maintenance. Net2Phone's insurance policy shall: (a) provide
professional liability and errors and omissions liability insurance coverage
from a date which is not later than the date at which Net2Phone began providing
services related to or in conjunction with this Agreement; (b) provide that no
cancellation, material reduction in amount, or material change in coverage shall
be effective until at least thirty (30) days after receipt by Microsoft of
written notice thereof; (c) provide for losses payable to Microsoft as its
interests may appear; and (d) be reasonably satisfactory in all other respects
to Microsoft. Net2Phone shall deliver to Microsoft a current certificate of
insurance and certifications of renewal of the insurance policies and a report
of a reputable insurance broker with respect to such insurance policies at least
once during each calendar year during such time as the insurance is in effect
and such other supplemental reports with respect thereto as Microsoft may
reasonably request from time to time. In the event that Net2Phone's certificates
and reports evidence coverage which Microsoft reasonably determines

                                      -27-
<PAGE>   28
                                                     PRIVILEGED AND CONFIDENTIAL

to be less than that required to meet Net2Phone's obligations under this
Agreement, then Net2Phone agrees that it shall promptly acquire such coverage
and inform Microsoft in writing thereof. Failure by Net2Phone to furnish
certificates of insurance or failure by Microsoft to request same shall not
constitute a waiver by Microsoft of any of the insurance requirements set forth
herein. Net2Phone shall notify Microsoft in writing at least thirty (30) days in
advance if Net2Phone's insurance coverage is to be canceled or materially
altered so as to no longer comply with the requirements of this Section 20.2.

21.      LIMITATION OF LIABILITIES

         NO PARTY SHALL BE LIABLE TO ANY OTHER FOR ANY INDIRECT, INCIDENTAL,
CONSEQUENTIAL, PUNITIVE OR SPECIAL DAMAGES, ARISING OUT OF OR RELATED TO THIS
AGREEMENT INCLUDING DAMAGES FOR LOSS OF BUSINESS PROFITS, BUSINESS INTERRUPTION,
LOSS OF BUSINESS INFORMATION, AND THE LIKE, EVEN IF SUCH PARTY HAS BEEN ADVISED
OF THE POSSIBILITY OF SUCH DAMAGES. THIS SECTION SHALL NOT APPLY TO A PARTY'S
(A) ABILITY TO OBTAIN INJUNCTIVE OR OTHER EQUITABLE RELIEF; (B) CONFIDENTIALITY
OBLIGATIONS, INCLUDING THOSE RELATING TO SOURCE CODE; AND/OR (C) INDEMNIFICATION
OBLIGATIONS AS TO THIRD PARTY DAMAGES ASSESSED AGAINST THE INDEMNIFIED PARTY IN
CONNECTION WITH INDEMNIFIED CLAIMS UNDER ARTICLE 19.

22.      NOTICES

         All notices, requests, demands and other communications which are
required or may be given pursuant to the terms of this Agreement shall be in
writing and shall be deemed deliver (a) on the date of delivery when delivered
by hand; (b) on the date of transmission when sent by facsimile transmission
during normal business hours with telephone confirmation of receipt; provided,
an original also is sent the same day in accordance with (d), below; (c) one day
after dispatch when sent by reputable overnight courier maintaining records of
receipt; or (d) three days after dispatch when sent by registered mail, postage
prepaid, return-receipt requested, all addressed as provided below:

         If to Microsoft:    Microsoft Corporation
                             One Microsoft Way
                             Redmond, WA 98052-6399
                             Attention:  Steve Liffick
                             Facsimile:  (425) 986-7329
                             Telephone:  (425) 936-4179

         With a copy to:     Microsoft Corporation
                             One Microsoft Way
                             Redmond, WA 98052-6399
                             Attention:  Yuki Ishizuka
                             Facsimile:  (425) 986-7329
                             Telephone:  (425) 705-7010

                                      -28-
<PAGE>   29
                                                     PRIVILEGED AND CONFIDENTIAL

         If to Net2Phone:    Net2Phone, Inc.
                             171 Main Street
                             Hackensack, NY 07601
                             Attention:  Jonathan Fram
                             Facsimile:  (201) 287-8423
                             Telephone: (201) 287-8422

         With a copy to:     Net2Phone, Inc.
                             171 Main Street
                             Hackensack, NY 07601
                             Attention:  Glenn Williams, General Counsel
                             Facsimile:  (201) 530-4159
                             Telephone:  (201) 692-3438

23.      GENERAL PROVISIONS

         23.1 Independent Contractors. The Parties are independent contractors
with respect to each other hereunder, and nothing in this Agreement shall be
construed as creating an employer-employee relationship, a partnership, agency
relationship or a joint venture between the Parties. Notwithstanding anything
contained in this Agreement to the contrary, each Party shall be solely
responsible for the performance of its obligations hereunder, no Party shall be
liable for any breach by any other Party, and nothing contained in this
Agreement shall be deemed to constitute a guarantee by any Party of performance
of any of the obligations of the other Party. Nothing in this Agreement shall be
construed as creating an employer-employee relationship between Microsoft and
Net2Phone's employees, on the one hand, or Net2Phone and Microsoft's employees,
on the other hand. Each party shall bear sole responsibility for any and all
compensation, benefits, withholding and other taxes, living expenses, travel
costs, and other applicable costs relating to its employees, except as otherwise
provided in this Agreement.

         23.2 Governing Law. This Agreement shall be governed by the laws of the
State of Washington. In any action or suit to enforce any right or remedy under
this Agreement or to interpret any provision of this Agreement, the prevailing
Party shall be entitled to recover its costs, including reasonable attorneys'
fees and court costs. The Parties hereby irrevocably consent to the exclusive
jurisdiction of, and venue in the state and federal courts sitting in King
County of the State of Washington in connection with any and all claims brought
by Net2Phone arising out of or in connection with this Agreement and to the
exclusive jurisdiction of, and venue in the state and federal courts sitting in
Bergen County in the State of New Jersey in connection with any and all claims
brought by Microsoft arising out of or in connection with this Agreement.

         23.3 Assignment. Except as expressly provided herein, neither Party may
assign this Agreement (whether directly or indirectly by sale or merger), in
whole or in part, without the other Party's written consent. Notwithstanding the
foregoing, neither party need obtain consent of the other Party to assign this
Agreement (a) to an Affiliate of the assigning Party, or (b) to the surviving
entity of a merger or consolidation, or to any entity that acquires all or
substantially all of the assets or shares of such Party; provided, that
Microsoft has not exercised its termination

                                      -29-
<PAGE>   30
                                                     PRIVILEGED AND CONFIDENTIAL

rights pursuant to Section 18.4. With respect to assignment to an Affiliate, the
assignor shall remain primarily liable for performance under this Agreement by
its Affiliate. This Agreement shall be fully binding upon, inure to the benefit
of and be enforceable by the Parties hereto and their respective permitted
successors and assigns.

         23.4 Construction. In the event that any provision of this Agreement
conflicts with governing law or if any provision is held to be null, void or
otherwise ineffective or invalid by a court of competent jurisdiction, (a) such
provision shall be deemed to be restated to reflect as nearly as possible the
original intentions of the Parties in accordance with applicable law, and (b)
the remaining terms, provisions, covenants and restrictions of this Agreement
shall remain in full force and effect. This Agreement has been negotiated by the
Parties and their respective counsel and shall be interpreted fairly in
accordance with its terms and without any strict construction in favor of or
against either Party. In all instances, the terms "include" and "including"
shall be construed to mean "including without limitation".

         23.5 Excusal of Performance. No Party shall be responsible for, or be
in breach of this Agreement, if its performance is delayed for up to thirty (30)
days as a result of any act of God, war, fire, earthquake, sickness, accident,
civil commotion, act of government, or any other cause wholly beyond its
control, and not due to its own negligence or that of its contractors or
representatives, and which cannot be overcome by the exercise of due diligence.
Without limitation of the foregoing, a subcontractor's bankruptcy, inability or
failure to pay its obligations as they come due, assignment of its assets for
the benefit of creditors, institution of bankruptcy or receivership proceedings
against it, or appointment of a trustee, conservator or receiver or other
liquidating officer for it or its assets or other financial deficiency shall not
be deemed to excuse performance of this Agreement by the Party responsible for
such subcontractor's performance.

         23.6 Non-Waiver. No delay or failure by either Party to exercise any
right under this Agreement and no partial exercise of any right under the
Agreement shall constitute a waiver of that right or any other right. No waiver
of any breach of any provision of this Agreement shall constitute a waiver of
any prior, concurrent or subsequent breach of the same or any other provisions
hereof, and no waiver shall be effective unless made in writing and signed by an
authorized representative of the waiving Party.

         23.7 Headings; References. Headings in this Agreement are for
convenience only and shall not be used to interpret or construe its provisions.
Unless otherwise expressly provided herein, any references to a "Section",
"Article" or "Exhibit" shall mean a "Section", "Article" or "Exhibit" of or to
this Agreement.

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

         23.9 Entire Agreement. This Agreement, all Exhibits, schedules, and
appendices hereto and the NDA constitutes the entire agreement between the
Parties with respect to the subject matter hereof and supersedes all prior and
contemporaneous agreements or communications. This Agreement shall not be
modified except by a written agreement dated subsequent to the date of this
Agreement and signed on behalf of the Parties by their respective

                                      -30-
<PAGE>   31
                                                     PRIVILEGED AND CONFIDENTIAL

duly authorized representatives. The Parties agree to review the Exhibits to
this Agreement from time to time and may amend such Exhibits by mutual
agreement.

         23.10 Not An Offer. This document does not constitute an offer by any
Party to any other Party. This Agreement shall not be effective unless and until
signed by both Parties.

         23.11 Expenses. Each Party shall be solely responsible for its own
costs and expenses incurred in the preparation, negotiation and implementation
of the Agreement.

         23.12 Limitation on Cooperation and Assistance. Notwithstanding
anything herein to the contrary, in no event shall either party's assistance or
cooperation afforded under this Agreement be read, interpreted or otherwise
construed to mean financial assistance as such assistance or cooperation shall
be limited to advice, recommendations and/or information only.

23.13 Export Control. Each Party agrees to comply with all applicable laws that
apply to the import or export of their respective products and services,
including the U.S. Export Administration Regulations, as well as end-user,
end-use and destination restrictions issued by the United States or foreign
countries.

24.      EXHIBITS. The following Exhibits form an integral part of this
         Agreement:

         Exhibit A  --  Definitions

         Exhibit B  --  MS Voice Specifications

         Exhibit C  --  N2P Deliverables

         Exhibit D  --  N2P Quality of Service Level Agreement

         Exhibit E  --  N2P Maintenance and Quality Fix Engineering Support

         Exhibit F  --  N2P Second Tier Support Services

         Exhibit G  --  Passport License Agreement and Wallet License Agreement

         Exhibit H  --  MS Privacy Policies

         Exhibit I  --  Quarterly Reporting Requirements

         Exhibit J  --  Branding Specifications

         Exhibit K  --  Prohibited Advertisers

         Exhibit L  --  Net2Phone Mark

         Exhibit M -- N2P Branding Specifications

                                      -31-
<PAGE>   32
                                                     PRIVILEGED AND CONFIDENTIAL

         Exhibit N -- Microsoft End-User License Agreement Terms

         Exhibit O -- N2P Privacy Policies

         Exhibit P -- Source Code Control Procedures

         Exhibit Q - Programmer Confidentiality Agreement

         Exhibit R - Initial Aggressive and Base Case Traffic Estimates

         Exhibit S - Restricted Countries

         [The remainder of this page intentionally has been left blank.
                           Signature page to follow.]

                                      -32-
<PAGE>   33
                                                     PRIVILEGED AND CONFIDENTIAL

         The Parties have caused this Agreement to be executed by their duly
authorized representatives as of the dates set forth below.

MICROSOFT CORPORATION                      NET2PHONE, INC.

By: /s/ Blake Irving                       By: /s/ Jonathan Fram
    ----------------                           -----------------
    Blake Irving                               Jonathan Fram
    Vice President MSN Communications          President

             [Signature Page to Microsoft and Net2Phone Cooperation
                           and Development Agreement]

                                      -33-
<PAGE>   34
                                                     PRIVILEGED AND CONFIDENTIAL

                             EXHIBIT A - DEFINITIONS

         "ADVERTISING INVENTORY" shall mean any advertising including, but not
limited to Banners, audio advertisements, "leave behind" advertisements and
sponsorship placements played or displayed to End Users on or in conjunction
with the MSN Dial-Up Window.

         "AFFILIATE" shall mean with respect to any Person, any other Person
that directly or indirectly Controls, is Controlled by, or is under common
Control with such Person.

         "BANNER" shall mean an advertising banner in a Web Page that contains a
link to the advertisers Web Site.

         "BUG FIXES" shall mean all bug fixes which modify the code of [****]
Source Code and which are developed by Microsoft.

         "CARRIAGE FEES" shall mean [****]

         "CHANGE IN CONTROL" shall mean a situation where (A) any Person or
group of Persons acting as a group other than those Persons who Control a party
as of the date hereof shall obtain Control of such party or (B) where a party
(i) fails to maintain its corporate existence; (ii) dissolves or otherwise
disposes of all or substantially all of its assets other than to an Affiliate
(whether in a single transaction or series of transactions); (iii) consolidates
with or merges with another Person, except that no Change in Control shall have
occurred if such party consolidates with or merges with another Person so long
as such party is the surviving entity of any such consolidation or merger; or
(iv) makes a public announcement of the impending occurrence of any of the
foregoing.

         "CONFIDENTIAL INFORMATION" shall have the meaning set forth in the NDA.

         "CONTROL" including its various tenses and derivatives (such as
"CONTROLLED") shall mean, with respect to any Person, the presence of the
following: (1) the legal, beneficial or equitable ownership, directly or
indirectly, of more than [****] of the capital or voting stock (or other
ownership or voting interest, if not a corporation) of such Person, or (2) the
ability, directly or indirectly, to direct the voting of a majority of the
directors of such Person's board of directors, or if the Person does not have a
board of directors, a majority of the positions on any similar body, whether
through appointment, voting agreement or otherwise.

         "DOMAIN" shall mean the Internet protocol address of a network
connection and the corresponding "domain name", including all relevant URLs,
which identifies the owner of the address and establishes an address for a
network connection.

         "END USER" shall mean any individual who uses the MSN Messenger
Service, MSN Messenger 3.0 or any other MS Product.

         "GOVERNMENTAL AUTHORIZATION" shall mean any approval, consent, license,
permit, waiver, or other authorization issued, granted, given or otherwise made
available by or under the authority of any Governmental Body.

                                      A-1
<PAGE>   35
                                                     PRIVILEGED AND CONFIDENTIAL

         "GOVERNMENTAL BODY" shall mean any (a) nation, state, county, city,
town, village, district, or other jurisdiction of any nature; (b) federal,
state, local, municipal, foreign, or other government; (c) governmental or
quasi-governmental authority of any nature (including any governmental agency,
branch, department, official, or entity and any court or other tribunal); or (d)
body exercising, or entitled to exercise, any legislative, police, regulatory,
or taxing authority or power of any nature.

         "INTELLECTUAL PROPERTY" shall mean any copyrights, patents (including
patent improvements), patent applications, patent rights, trademarks, trade
names, service marks, trade secrets, or other intellectual property rights under
applicable law.

         "LAUNCH DATE" shall mean the date when MSN Messenger 3.0 with voice
functionality provided by the N2P Deliverables generally is made commercially
available (other than in Beta form).

         "LINK" shall mean an embedded icon, object, graphic or text within a
Web Page that consists of a hypertext pointer to the URL address of a Web Page.

         "MICROSOFT LICENSED MARKS" shall mean, collectively, the mark "MSN" and
the MSN Logo.

         "MICROSOFT PREMISES" shall mean the Microsoft campus, located at One
Microsoft Way, Redmond, Washington and any other Microsoft premises owned or
leased by Microsoft.

         "MS PRODUCT" shall mean any software, hardware or other product or
service owned by Microsoft or its Affiliates, which shall include, but not be
limited to products or services co-branded with and or distributed by third
parties.

         "MSN DIAL-UP WINDOW" shall mean the dialog window appearing on the
screen of an End User's PC when the End User chooses to make a PC-to-Phone call
from the MSN Messenger Service or from any other MS Product or Service.

         "MSN MESSENGER SERVICE" shall mean that service currently referred to
as the MSN Messenger Service operated by Microsoft and any upgrades thereto or
subsequent releases thereof independent of nomenclature.

         "MSN MESSENGER 3.0" shall mean the Microsoft Messenger Service with PC
to PC and PC to Phone voice communication capabilities in accordance with the MS
Voice Specifications and any upgrades thereto or subsequent releases thereof
independent of nomenclature.

         "N2P NETWORK COSTS" shall mean [****].

         "N2P DELIVERABLES" shall mean the deliverables identified in Exhibit C,
along with any additions, modifications or enhancements thereto which may be
provided to Microsoft from time to time pursuant to this Agreement.

         "N2P MANAGED NETWORK" shall mean the network managed by Net2Phone that
provides connectivity between the Internet and local telephone networks.

                                      A-2
<PAGE>   36
                                                     PRIVILEGED AND CONFIDENTIAL

         "NET2PHONE AFFILIATE ADVERTISING NETWORK" shall mean those other
service properties belonging to, associated with or represented by Net2Phone,
which are offered by Net2Phone or its agents, representatives or affiliates to
advertisers as an aggregate package of potential advertising platforms.

         [****].

         "NET2PHONE PREMISES" shall mean any premises owned or leased by
Net2Phone.

         "NET REVENUES" shall mean [****] for any corresponding period during
the Term of this Agreement.

         "PASSPORT" shall mean that service currently referred to as the
Microsoft Passport Single Sign-in Service operated by Microsoft that enables
consumers to select a single user name and password for use across a network of
participant sites and allows consumers to store limited demographic and personal
information in a file stored on a Microsoft service and pass such information on
to web sites that have elected to accept such information.

         "PC" shall mean any internet-enabled device, including, without
limitation, a laptop or desktop computer which contains a central processing
unit, a smart-phone, certain television devices, web terminals and personalized
digital assistants.

         "PC-TO-PC" shall mean any voice transmission between any two PCs.

         "PC-TO-PHONE" shall mean any voice transmission between a PC and a
Phone.

         "PERSON" shall mean a natural person, a corporation, a limited
liability company, a partnership, a trust, a joint venture, a governmental
authority, or any other entity or organization.

         "PHONE" shall mean any type of telephonic device used primarily for
voice transmission, including but not limited telephones, cellular phones and
mobile phones.

         "REVENUES" shall mean all [****] during any relevant period for the
display or play of any [****].

         "SECOND TIER SUPPORT" shall mean the services described in Exhibit F.

         "TARGET LAUNCH DATE" shall mean [****].

         "TERRITORY" shall mean the entire world, except for those countries set
forth in Exhibit S and such other countries as may identified pursuant to
Section 7.6.1.

         "UNITED STATES" shall mean the United States of America and all of its
territories and possessions.

         "URL" shall mean a uniform resource locator which serves as the address
of a Web Page.

         "USER INFORMATION" shall mean both Aggregate Information and Personal
Information pertaining to an End User. "AGGREGATE INFORMATION" shall mean
information that describes the

                                      A-3
<PAGE>   37
                                                     PRIVILEGED AND CONFIDENTIAL

habits, usage patterns and/or demographics of users as a group but does not
indicate the identity of any particular End User, and information about an
individual End User presented in a form distinguishable from the information
relating to other End Users but not in a form that enables the recipient to
personally identify such individual End User. "PERSONAL INFORMATION" shall mean
information about a user permitting such End User to be specifically identified
and may include, but not be limited to, user name, user address, the user's
calling patterns, calling times, paid usage and other personally identifying
transaction data.

         "WALLET" shall mean that consumer service operated by Microsoft
currently referred to as the Microsoft Passport Wallet Service which enables
consumers to store various information commonly utilized in e-commerce
transactions in a file stored on a secured server controlled by Microsoft.

         "WEB PAGE" shall mean content in the World Wide Web portion of the
Internet accessed via a single URL, and excluding content on other Web Pages
accessed via Links in such content.

         "WEB SITE" shall mean a collection of Web Pages related in some manner
and interconnected via Links within a specific Domain.

                                      A-4
<PAGE>   38
                                                     PRIVILEGED AND CONFIDENTIAL

                          EXHIBIT C - N2P DELIVERABLES

1.       [****] - delivered on or before the Effective Date.

2.       [****] - delivered on or before the Effective Date.

3.       [****] - to be delivered on or before [****].

4.       [****] - delivered on or before the Effective Date.

                                      C-1
<PAGE>   39
                                                     PRIVILEGED AND CONFIDENTIAL

               EXHIBIT D -- N2P QUALITY OF SERVICE LEVEL AGREEMENT

A.       WEB AVAILABILITY AND SERVICES

         Net2Phone will provide support for the N2P Managed Network and the MSN
Messenger Service in accordance with the minimum service level performance
requirements set forth in this Exhibit D.

     -   PC-TO-PHONE. Net2Phone will maintain [****] termination switch
         availability at service launch with [****] availability within [****]
         days of service introduction. Such availability will be calculated
         independent of the Internet availability, connection and quality and
         outages induced by local-exchange-carrier ("LEC"). Net2Phone will
         maintain a [****] availability for the N2P Managed Network. Such
         availability is independent of outages induced by [****].

     -   Net2Phone will notify Microsoft about planned system downtime at least
         [****] in advance. Turn-around time for resolution of any unplanned
         system downtime shall be within [****] of such downtime being reported;
         provided, however, that if the problem is a Severity 1 Problem or
         Severity 2 Problem (as defined herein), the turn-around time shall be
         within [****]. If turn-around time for resolution exceeds the times
         specified herein, escalation as set forth below shall be necessary.

     -   All Web Pages (including images) shall load correctly, all Links work
         and data shall be delivered at least [****] of the time.

     -   ACCOUNT MANAGEMENT. Net2Phone shall maintain accessibility to web-based
         billing information and account management information [****] of the
         time to Microsoft users. Such billing and account management
         information shall include, without limitation, date and time of calls,
         duration of calls, rate and total cost of each call made.

     -   SECURITY. Net2Phone shall use security features standard in the
         industry. Credit card transactions shall be protected by
         industry-standard encryption methods.

B.       SEVERITY PROBLEM REPORTING, RESPONSE TIMES AND SUPPORT

         (a)      A Severity 1 Problem or Severity 2 Problem shall be reported
                  to Net2Phone by telephone to one of Net2Phone Technical
                  Contacts (as set forth below). If a Severity 1 Problem or
                  Severity 2 Problem is not reported in such manner, the
                  response times set forth in the table below shall not be valid
                  and Net2Phone shall be entitled to additional response time
                  based upon the reporting delay.

         (b)      Severity 3 Problems may be reported by telephone, fax or
                  e-mail to one of Net2Phone Technical Contact.

     -   SEVERITY PROBLEM NOTICE. If a Severity 1 Problem or Severity 2 Problem
         occurs, Net2Phone will transmit to Microsoft an explanatory message to
         be posted on the MSN/N2P Web Site to the extent technically feasible.

                                      D-1
<PAGE>   40
                                                     PRIVILEGED AND CONFIDENTIAL

     -   SUPPORT. Net2Phone will maintain a Network Operations Center manned
         twenty-four hour per day, seven days per week. Net2Phone will also
         provide Microsoft with a Technical Contact and a back-up Technical
         Contact, each with a telephone number and an e-mail address. Net2Phone
         will resolve each significant problem by providing either a reasonable
         workaround, a hardware fix, an object code patch, or a specific action
         plan as to how Net2Phone will address the problem and an estimate of
         how long it will take to rectify the problem. Net2Phone will work with
         Microsoft to provide a workaround to Severity 1 Problems and Severity 2
         Problems that Microsoft identifies, classifies and reports; and
         Net2Phone will use reasonable commercial efforts to respond to other
         problems within the time frames set forth below.

<TABLE>
<CAPTION>
---------------------------------------------------------------------------
     LEVEL OF                                      TARGET TIMES FOR PATCH,
     SEVERITY                                      WORKAROUND, OR TEMPORARY
     PROBLEM             RESPONSE TIME                       FIX
---------------------------------------------------------------------------
<S>             <C>                                <C>
        1                   [****]                         [****]
---------------------------------------------------------------------------
        2         [****] having been alerted               [****]
---------------------------------------------------------------------------
        3         [****] having been alerted               [****]
---------------------------------------------------------------------------
      Other     [****] from having been alerted            [****]
---------------------------------------------------------------------------
</TABLE>

     -   ESCALATION FOR UNRESOLVED PROBLEMS WITHIN EXPECTED RESPONSE TIMES.
         Net2Phone shall provide an executive contact for escalation of problems
         that extend beyond the expected resolution time.

C.       REPORTS

     -   REPORTS. Net2Phone will provide Microsoft with monthly reports of N2P
         Managed Network outages within [****] after the end of the month. Such
         reports shall include time of outage, length of outage, affected areas,
         reason for outage, Microsoft contact notified (if any), average
         response time and remedy to prevent outage reoccurrence (if any)

D.       CUSTOMER SERVICE

         Net2Phone will provide customer service to Microsoft users under this
Agreement, in accordance with the minimum service level performance requirements
set forth below.

     -   Net2Phone shall answer [****] of all customer calls within [****] or
         less.

     -   Net2Phone shall maintain an abandonment rate of [****] or less for the
         month.

                                      D-2
<PAGE>   41
                                                     PRIVILEGED AND CONFIDENTIAL

     -   Net2Phone shall answer emails from users relating to billing services
         provided by Net2Phone to Microsoft users under this Agreement within
         [****] of receipt of such emails from Microsoft users

     -   Net2Phone shall answer emails relating to free services provided by
         Net2Phone to Microsoft users under this Agreement within [****] of
         receipt from Microsoft users.

E.       TECHNICAL CONTACTS

NET2PHONE TECHNICAL CONTACTS

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------
NAME               EMAIL                    PHONE NUMBER
-----------------------------------------------------------------------------
<S>                <C>                      <C>                <C>
Net2Phone NOC      n2pnoc@net2phone.com     201-692-3339       N/A
-----------------------------------------------------------------------------
Golan Ben-Oni      golan@net2phone.com      201-938-4357       800-225-0256 -
                                                               PIN 6030166
-----------------------------------------------------------------------------
</TABLE>

MICROSOFT TECHNICAL CONTACTS

<TABLE>
<CAPTION>
-------------------------------------------------------------------------
NAME                  EMAIL                    PHONE NUMBER        PAGER
-------------------------------------------------------------------------
<S>                   <C>                      <C>                 <C>
Howie Dickerman       howied@microsoft.com     425-936-9664
-------------------------------------------------------------------------

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

F.       DEFINITIONS

"SEVERITY 1 PROBLEMS" shall mean problems with respect to any N2P Managed
Network that halt or materially disrupt service execution, cause a major loss of
the material functionality of the MSN Messenger Service or otherwise create an
emergency which will cause significant financial or reputation loss or other
significant loss or business disruption to the provider of such MSN Messenger
Service.

"SEVERITY 2 PROBLEMS" shall mean problems with any N2P Managed Network that are
not Severity 1 Problems but that materially reduce the core functionality of the
MSN Messenger Service cause data corruption or damage, or otherwise require
prompt correction to maintain material use of the core functionality of the MSN
Messenger Service (such as, for example, a consistently reproducible problem
resulting in system crash or loss of core or material functionality, but which
can be avoided through a workaround without undue disruption).

"SEVERITY 3 PROBLEMS" shall mean problems with respect to the N2P Managed
Network, including bugs, that are not Severity 1 Problems or Severity 2
Problems, and all problems with the MSN Messenger Service related to the N2P
Deliverables.

                                      D-3
<PAGE>   42
                                                     PRIVILEGED AND CONFIDENTIAL

        EXHIBIT E -- N2P MAINTENANCE AND QUALITY FIX ENGINEERING SUPPORT

This table represents a framework for the severity of bugs and QFE issues, and
Net2Phone's commitments to resolve the errors.

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------
Priority (Defined by     Examples of Issues of     Time for Net2Phone     Best Efforts to
Microsoft)               this Priority             Response               Resolve Within
-----------------------------------------------------------------------------------------
<S>                      <C>                       <C>                    <C>
1                        System crash, end user    [****]                 [****]
                         data loss, application
                         crash, High-profile
                         security issue
-----------------------------------------------------------------------------------------
2                        Potential end user data   [****]                 [****]
                         loss, major
                         functionality loss,
                         potential security issue
-----------------------------------------------------------------------------------------
3                        Support issue, minor      [****]                 [****]
                         functionality
                         impairment, incorrect
                         visuals/text
-----------------------------------------------------------------------------------------
</TABLE>

                                      E-1
<PAGE>   43
                                                     PRIVILEGED AND CONFIDENTIAL

                  EXHIBIT F -- N2P SECOND TIER SUPPORT SERVICES

Net2Phone will provide customer support to Microsoft End Users as follows:

The Net2Phone web help site will be available to all Microsoft End Users to
support all PC-to- PC and free PC-to-Phone calls.

Net2Phone customer service will be available to Microsoft End Users for any paid
PC-to-Phone calls. In addition, the Net2Phone web help site will be available to
all Microsoft End Users to support any paid PC-to-Phone calls.

                                      F-1
<PAGE>   44
                                                     PRIVILEGED AND CONFIDENTIAL

                  EXHIBIT I -- QUARTERLY REPORTING REQUIREMENTS

         Net2Phone shall provide Microsoft with quarterly reports which set
forth monthly totals for:

         1.  Number of unique users.

         2.  Number of minutes used per user.

         3.  Total minutes.

         4.  Total [****] costs for quarter -- for both free and paid calls.

         5.  Revenues generated by Net2Phone.

                                      I-1
<PAGE>   45
                                                     PRIVILEGED AND CONFIDENTIAL

                     EXHIBIT J - MSN BRANDING SPECIFICATIONS

-    Net2Phone shall use the Microsoft Licensed Marks in conjunction with, and
     solely in connection with, the Co-Branded Pages, in accordance with the
     terms of this Agreement (which shall include the Cooperation and
     Development Agreement and all Exhibits thereto) and subject to Microsoft's
     prior review and written approval.

-    Net2Phone shall use the MSN Logo only as provided by Microsoft
     electronically. Net2Phone may not alter the MSN Logo in any manner,
     including size, proportions, colors, elements, etc., or animate, morph or
     otherwise distort its perspective or two-dimensional appearance.

-    Microsoft Licensed Marks may not be used in any manner that expresses or
     might imply Microsoft's affiliation, sponsorship, endorsement,
     certification, or approval, other than as contemplated by this Agreement.

-    Net2Phone shall not use Microsoft Licensed Marks in association with any
     third party trademarks in any manner that might suggest co-branding or
     otherwise create potential confusion as to source or sponsorship of the
     Co-Branded Pages or ownership of the Microsoft Licensed Marks.

-    Microsoft Licensed Marks may not be included in any third party trade or
     business name, domain name (except as specified in this Agreement), product
     or service name, logo, trade dress, design, slogan, or other trademarks.

-    Except as expressly provided in this Agreement, Microsoft Licensed Marks
     may not be combined with any other symbols, including words, logos, icons,
     graphics, photos, slogans, numbers, or other design elements.

-    Microsoft Licensed Marks (including but not limited to MSN's logos,
     logotypes, trade dress, and other elements of product packaging and
     websites) may not be imitated in any manner in Net2Phone's products,
     product packaging, websites, or other materials.

-    Microsoft Licensed Marks shall include the appropriate (R) or (TM) symbol
     at least at the first and most prominent mention on each
     visually-distinguishable page of material.

-    References to Microsoft or MSN in plain text may not be more prominent than
     surrounding text, e.g., boldface, italics, larger type size, different
     fonts, etc.

-    The Licensed Marks may not be translated or otherwise localized in any
     other language. Any localized versions of the Marks must be provided by
     Microsoft.

-    The Licensed Marks shall be attributed to its owner in all materials where
     it is used, with the attribution clause: "MSN is a trademark of Microsoft
     Corporation in the U.S. and other countries."

                                      J-1
<PAGE>   46
                                                     PRIVILEGED AND CONFIDENTIAL

                       EXHIBIT K -- PROHIBITED ADVERTISERS

Net2Phone Prohibited Advertisers

[****]
[****]
[****]
[****]

                                      K-1
<PAGE>   47
                                                     PRIVILEGED AND CONFIDENTIAL

                           EXHIBIT L -- NET2PHONE MARK

                                   [ATTACHED]

                                      L-1
<PAGE>   48
                                                     PRIVILEGED AND CONFIDENTIAL

                    EXHIBIT M -- N2P BRANDING SPECIFICATIONS

-    Microsoft shall use the Net2Phone Mark in conjunction with, and solely in
     connection with, the MSN/N2P Web Site Pages, in accordance with the terms
     of this Agreement (which shall include the Cooperation and Development
     Agreement and all Exhibits thereto) and subject to Net2Phone's prior review
     and written approval.

-    Microsoft shall use the Net2Phone Mark only as provided by Net2Phone
     electronically and Microsoft's use of the Net2Phone mark shall be
     consistent with Net2Phone's own use. Microsoft may not alter the Net2Phone
     Mark in any manner, including size, proportions, colors, elements, etc., or
     animate, morph or otherwise distort its perspective or two-dimensional
     appearance.

-    The Net2Phone Mark may not be used in any manner that expresses or might
     imply Net2Phone's affiliation, sponsorship, endorsement, certification, or
     approval, other than as contemplated by this Agreement.

-    Microsoft shall not use the Net2Phone Mark in association with any third
     party trademarks in any manner that might suggest co-branding or otherwise
     create potential confusion as to source or sponsorship of the MSN/N2P Web
     Site Pages or ownership of the Net2Phone Mark.

-    The Net2Phone Mark may not be included in any third party trade or business
     name, domain name (except as specified in this Agreement), product or
     service name, logo, trade dress, design, slogan, or other trademarks.

-    Except as expressly provided in this Agreement, the Net2Phone Mark may not
     be combined with any other symbols, including words, logos, icons,
     graphics, photos, slogans, numbers, or other design elements.

-    The Net2Phone Mark (including but not limited to MSN's logos, logotypes,
     trade dress, and other elements of product packaging and websites) may not
     be imitated in any manner in Microsoft's products, product packaging,
     websites, or other materials.

-    The Net2Phone Mark shall include the appropriate (R) or (TM) symbol at
     least at the first and most prominent mention on each
     visually-distinguishable page of material.

-    References to Net2Phone or N2P in plain text may not be more prominent than
     surrounding text, e.g., boldface, italics, larger type size, different
     fonts, etc.

-    The Net2Phone Marks may not be translated or otherwise localized in any
     other language. Any localized versions of the Net2Phone Mark must be
     provided by Net2Phone.

-    Net2Phone will provide Microsoft with the "Net2Phone Style Guide" which
     lists guidelines for the size, typeface, colors and other graphical
     characteristics of the Net2Phone Mark, which upon delivery to Microsoft
     will be deemed incorporated into these guidelines.

The Net2Phone Marks shall be attributed to its owner in all materials where it
is used, with the attribution clause: "Net2Phone is a trademark of Net2Phone,
Inc. in the U.S. and other countries."

                                      M-1
<PAGE>   49
                                                     PRIVILEGED AND CONFIDENTIAL

                 EXHIBIT N -- MICROSOFT END-USER AGREEMENT TERMS

End users must agree:

-    Not to modify, disassemble or reverse compile any software provided by
     Microsoft related to the N2P Deliverables.

-    To exclusions of liability and protection of Net2Phone licensors and
     licensees as required in Net2Phone's standard end-user license agreement.

-    That they have received and been granted no ownership interest in the N2P
     Deliverables.

-    To comply with the export control restrictions of the United States and any
     applicable foreign jurisdictions.

                                      N- 1
<PAGE>   50
                                                     PRIVILEGED AND CONFIDENTIAL

                   EXHIBIT P -- SOURCE CODE CONTROL PROCEDURES

         This Security Addendum describes the security obligations which
Microsoft ("Licensee") must perform in accordance with this Agreement between
Licensee and Net2Phone ("Licensor"). Licensee's executive responsible for
ensuring compliance with this Security Addendum is:

                      Name:    Steve Liffick
              Phone Number:    (425) 936-4179

or such other executive as Licensee may designate to Licensor pursuant to
Section 22 of the Agreement.

A.       Software and Documentation

         Licensee shall store all source code solely on the machine provided by
Licensor (the "Licensor Machine"), which shall be configured so that the
operating system is Windows 2000 or Windows NT, and shall include the proper
build environment for all source code. Licensee shall also store the source code
along with any documentation, and all tangible embodiments thereof, in whatever
form or medium, in a location or locations protected by cipher locks or key
locks (the "Secured Library"). Licensee shall provide cipher lock combinations
or keys to the Secured Library, as applicable, only to those employees of
Licensee who require access to the source code and documentation to perform
their duties in connection with this Agreement (the "Authorized Software
Personnel").

         Licensee shall not disclose, directly or indirectly, the source code
and documentation to any person other than Authorized Software Personnel.
Licensee shall not allow any person other than Authorized Software Personnel to
remove the source code and documentation from the Secured Library. Licensee
shall require Authorized Software Personnel who remove MSS Software and
Documentation from the Secured Library to record the date upon which such
Authorized Software Personnel remove the source code and documentation from the
Secured Library and the date of return of same, along with all locations to
which such Authorized Software Personnel remove the source code and
documentation. Licensee shall report to Licensor any disclosure of the source
code and documentation not permitted by the License Agreement or this Section A
to Licensor immediately upon Licensee's receipt of knowledge of same.

B.       Personnel

         Licensee shall instruct all Authorized Software Personnel concerning
all procedures necessary to limit access to the source code and the
documentation and to protect the confidentiality of the source code and
documentation.

                                      P-1
<PAGE>   51
                                                     PRIVILEGED AND CONFIDENTIAL

         Prior to receiving access to any source code, each Authorized Software
Personnel of Licensee that has access to the Licensor Machine or the source code
shall sign an agreement with Licensor that protects the confidential nature of
all source code and documentation in the form of Exhibit Q.

         Licensee shall not allow more than three (3) programmers to be
considered Authorized Software Personnel at any given time.

C.       Audit

         Licensee shall diligently monitor and record Licensee's efforts to
comply with this Security Addendum. Licensee shall at all times maintain a list
of all Authorized Software Personnel. Upon request from Licensor, Licensee shall
provide Licensor with access to the location at which the source code and
documentation are stored and any records of Licensee necessary to audit
Licensee's compliance with this Security Addendum.

D.       Logical Access

         Licensee shall protect logical access to the source code with logical
access protection procedures and protections. Licensee shall control access to
the Licensor Machine and the source code and documentation via password
protection schemes and/or restricted access terminal rooms. Each system log-on
password must be randomly selected, not obvious or trivial, and at least six
numeric, five alpha, or four alphanumeric characters in length, and must be
changed at least once every month. Once terminal access has been established,
the terminal must not be left unattended until the terminal access is
terminated. Licensee shall not connect the Licensor Machine to any private or
public network, including the Internet or the N2P Managed Network, except that
Licensee may connect the Licensor Machine to Licensee's Ethernet network to
build the proper object code, provided that the Licensor Machine is configured
so that it may only receive files from such network and that it may not be
accessed from users on such network.

The provisions of this Exhibit P shall be in addition to the provisions of
Section 4.3 and the other provisions of this Agreement.

                                      P-2
<PAGE>   52
                                                     PRIVILEGED AND CONFIDENTIAL

                                    EXHIBIT Q
                      PROGRAMMER CONFIDENTIALITY AGREEMENT

         This Confidentiality Agreement (the "Agreement") is made and entered
into between [MICROSOFT CORPORATION/NET2PHONE INC.] (the "Company") and [OTHER
COMPANY'S EMPLOYEE] (the "Programmer") as of the ____ day of _______, 2000.

         WHEREAS, the Company has disclosed and will disclose certain
information that is proprietary to the business of Company to the Programmer on
the basis that the Programmer will maintain the confidentiality thereof; and,

         WHEREAS, the Programmer understands that such information may be
protected under the intellectual property laws of the United States and various
foreign countries;

         NOW, THEREFORE, for good and valuable consideration, receipt and
sufficiency of which are hereby acknowledged, it is agreed as follows:

1.   "Proprietary Information" shall mean all information (whether technical,
     marketing, business or otherwise, and including without limitation source
     code and object code), in whatever form (whether tangible, orally
     communicated, physically communicated or disclosed in writing,
     electronically or otherwise, including without limitation information
     disclosed by samples or demonstrations of processes, techniques or
     equipment) which is disclosed by the Company to the Programmer prior to or
     subsequent to the date of this Agreement and which relates in any way to
     its technology and its business, including without limitation any documents
     or other information prepared or generated by or at the request of any
     third party from such information.

2.   Notwithstanding Section 1 above, "Proprietary Information" shall not
     include:

         a.       information that can be shown by the Programmer to be in the
                  public domain (provided that information in the public domain
                  has not or does not come into the public domain as the result
                  of disclosure by the Programmer);

         b.       information that is or was known to the Programmer prior to
                  disclosure hereunder and can be shown by the Programmer to
                  have been known to the Programmer prior to such disclosure;

         c.       information that becomes available to the Programmer on a
                  non-confidential basis from a source other than the Company
                  (provided that such source is not known to the Programmer to
                  be bound by a confidentiality agreement with the Company); or,

         d.       information that is independently developed by Programmer
                  without reference to or reliance upon any Proprietary
                  Information.

                                      Q-1
<PAGE>   53
                                                     PRIVILEGED AND CONFIDENTIAL

3.   The Programmer hereby agrees that, for the duration of the Cooperation
     Agreement and a period of one (1) year thereafter, the Programmer shall (i)
     not make any use of the Proprietary Information of the Company other than
     for the purposes of the Cooperation Agreement between the parties or
     further transactions relating thereto or make any copies, except for such
     purpose; (ii) maintain the Proprietary Information in strict confidence and
     refrain from disclosing any part of the Proprietary Information to any
     person or entity (other than to Programmers whose duties justify the need
     to know such Proprietary Information in connection with such purpose and
     who have previously agreed in writing to keep such information confidential
     in terms substantially similar to the terms contained in this Agreement);
     (iii) take all appropriate steps to protect the Proprietary Information
     against disclosure, misuse, espionage, loss and theft, and (iv) comply with
     the provisions of Section 2.6 and Exhibit P of the Cooperation and
     Development Agreement entered into between Microsoft Corporation and
     Net2Phone Inc. as of the 1st day of June, 2000 (the "Cooperation
     Agreement").

4.   In the event that the Programmer shall become legally compelled to disclose
     any Proprietary Information, Programmer shall promptly notify the Company
     of any legal request for disclosure so that the Company may take action to
     safeguard its interests, and the Programmer shall cooperate with the
     Company to preserve the confidentiality of the Proprietary Information.

5.   The obligations of confidentiality set forth in this Agreement shall
     survive any termination of this Agreement.

6.   No other right to the Proprietary Information or to any of the Company's
     patents, copyrights, trademarks or other proprietary rights is granted
     hereby and nothing contained in this Agreement shall be construed as
     creating an express or implied license to use the Proprietary Information
     or such patents, copyrights, trademarks or other proprietary rights for any
     purposes other than those specifically set forth herein, except such
     licenses granted pursuant to the Cooperation Agreement.

7.   It is agreed between the parties that: (a) no failure or delay by the
     Company in exercising any right, power or privilege hereunder shall operate
     as a waiver thereof, nor shall any single or partial exercise thereof
     preclude any other or future exercise thereof or the exercise of any right,
     power or privilege hereunder; (b) the provisions of this Agreement shall be
     severable and the illegality or invalidity of any provision shall not
     affect the legality or validity of any other provision, and each provision
     found illegal or invalid shall be judicially modified in any proceeding
     brought to enforce such provision so as to be enforceable to the maximum
     extent permissible under applicable law; and (c) any amendment of any
     provision of this Agreement shall only be effective if in writing and
     signed by all parties hereto.

8.   This Agreement shall be governed by and construed in accordance with the
     laws of the State of Washington.

                                      Q-2
<PAGE>   54
                                                     PRIVILEGED AND CONFIDENTIAL

9.   The parties acknowledge and agree that in the event of any breach hereof by
     a party receiving Proprietary Information, the Company will suffer
     irreparable and immediate harm for which money damages alone could not
     compensate it. Accordingly, the Company shall be entitled to all available
     equitable relief, including injunction without the posting of any bond or
     other security or proof of damage, as well as to its other legal remedies.

10.  Each party represents and warrants to the other party that it has the right
     to enter into this Agreement and receive the Proprietary Information and
     that it is not a party to any other agreement, or under any obligation to
     any third party, which would prevent it from entering into this Agreement
     and performing its obligations hereunder.

11.  This Agreement may be executed by the parties hereto individually or in any
     combination, in one or more counterparts, each of which shall be an
     original and all of which shall together constitute one and the same
     agreement.

12.  This Agreement shall inure to the benefit of the Company's successors and
     assigns.

                                    * * * * *

        IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the day and year first above written.

[MICROSOFT CORPORATION/NET2PHONE INC.]:       [PROGRAMMER]:

_________________________________             __________________________________

By:  _____________________________            By:  _____________________________

Name:  ___________________________            Name:  ___________________________

                                      Q-3
<PAGE>   55
                                                     PRIVILEGED AND CONFIDENTIAL

                                    EXHIBIT R
               INITIAL AGGRESSIVE AND BASE CASE TRAFFIC ESTIMATES

                                     [****]

                                      R-1
<PAGE>   56
                                                     PRIVILEGED AND CONFIDENTIAL

                                    EXHIBIT S
                              RESTRICTED COUNTRIES

[****]

                                       S-1<PAGE>   1
                                                                   EXHIBIT 10.41

                                                               EXECUTION VERSION

                                  CONFIDENTIAL
     IP TELEPHONY SERVICES DISTRIBUTION AND INTERACTIVE MARKETING AGREEMENT

         This IP Telephony Services Distribution and Interactive Marketing
Agreement (this "Agreement"), dated as of November 19, 1999 (the "Effective
Date"), is between AOL, Inc., a Delaware corporation, with offices at 22000 AOL
Way, Dulles, Virginia 20166 ("AOL"), and Net2Phone, Inc. ("N2P"), a Delaware
corporation, with offices at 171 Main Street, Hackensack, NJ 07601. AOL and N2P
may be referred to individually as a "Party" and collectively as the "Parties."

                                  INTRODUCTION

         AOL is a provider of online communication services, including the AIM
Service. N2P is a provider of various IP Telephony services. The Parties wish
for N2P to develop and provide to AOL a customized version of certain N2P
Services that can be distributed through the AIM Service so as to enable AIM
Members to send and receive free, or low cost, Internet-enabled telephony
communications. This relationship is further described below and is subject to
the terms and conditions set forth in this Agreement. Defined terms used but not
defined in the body of the Agreement shall have the meanings ascribed to such
terms in Exhibit A hereto.

                                      TERMS

1.       AIM IP TELEPHONY SERVICES GENERALLY

1.1               Description of AIM IP Telephony Services. The N2P Services to
                  be offered collectively as the customized AIM IP Telephony
                  Services shall be comprised of the following:

                           1.1.1. PC-to-Fax Service. A PC-to-fax calling service
                  whereby AIM Members may send faxes from their PCs to a
                  facsimile machine of a third party.

                           1.1.2 Fax-to-PC Service. A fax-to-PC calling service
                  whereby AIM Members may receive faxes through their PCs from a
                  facsimile machine of a third party.

                           1.1.3. PC-to-Phone Service. A PC-to-telephone calling
                  service, which shall allow any AIM Member to originate a voice
                  conversation on an Internet-enabled PC (through use of the AOL
                  IP Telephony Software as distributed through the AIM Service
                  in accordance with the terms of this Agreement) and terminate
                  such conversation on a telephone located virtually anywhere in
                  the world (the "PC-to-Phone Service").

                           1.1.4. Phone-to-PC Service. A telephone-to-PC calling
                  service, which shall allow any AIM Member to originate a voice
                  conversation from a telephone and terminate such voice
                  conversation on an Internet-enabled PC (through use of the AOL
                  IP Telephony Software as distributed through the AIM Service
                  in accordance with the terms of this Agreement) (the
                  "Phone-to-PC Service"). Such calls shall be initiated by any
                  such AIM Member by dialing a local and/or toll-free N2P access
                  number (i.e., a local POP) and entering any such AIM Member's
                  account number and PIN, and then the number of the receiving
                  party. The Phone-to-PC Service generally shall enable
                  telephone conversations with any AIM Member online even if
                  such AIM Member is also using his or her only telephone line
                  for online access.

                           1.1.5. Phone-to-Phone Calling Card Service. A
                  telephone-to-telephone calling card service using IP
                  Telephony, which shall allow any AIM Member to call a third
                  party

                                       1
<PAGE>   2
                                                               EXECUTION VERSION

                  by dialing a local and/or toll-free N2P access number (i.e.,
                  local POP) and entering the AIM Member's account number and
                  PIN, and then dialing the phone number of the person whom such
                  AIM Member is calling (the "PTP Calling Card Service"). The
                  PTP Calling Card Service shall use the AIM Card (as defined in
                  Section 4.3). For the avoidance of doubt, the Parties
                  acknowledge that the PTP Calling Card Service shall include
                  fax-to-fax service.

                           1.1.6. Conference Calling Service. A conference
                  calling service, which shall allow conference calls initiated
                  from a combination of phones and/or Internet-enabled PCs (the
                  "Conference Calling Service").

                           1.1.7. Fax-to-Fax Service. A fax-to-fax service using
                  IP Telephony which shall allow any AIM Member to fax a third
                  party by dialing a local and/or toll-free N2P access number
                  (i.e., local POP) and entering the AIM Member's account number
                  and PIN, and then dialing the fax number of the person to whom
                  such AIM Member is sending a fax, which uses the AIM Card,
                  pursuant to Section 1.1.5.

                           1.1.8. Optional Services.

                                    (a) AOL shall provide N2P with a [****] with
                           respect to the provision of the following additional
                           services as additional AIM IP Telephony Services:
                           [****] the AIM Client or the Worldwide Web; (iv)
                           [****] (the [****] aforementioned services,
                           collectively, the "Optional Services" and each, an
                           "Optional Service"). [****]

                                    (b) At any point during the Term, AOL shall
                           have the option, but not the obligation, in AOL's
                           sole discretion to include the PC-to-PC Service as
                           part of the AIM IP Telephony Services. In such event,
                           AOL agrees that N2P shall provide such PC-to-PC
                           service, and such PC-to-PC Service shall constitute
                           an additional Core Premium Service, according to the
                           terms and conditions set forth in this Agreement
                           pursuant to such Core Premium Services.
                            Such PC to PC Service shall be provided to AIM
                           Members without a per minute or other similar charge.

                                    (c) In addition to the foregoing, if during
                           Year One or Year Two AOL develops and implements
                           third party AIM talk functionality into a directory
                           for AIM Members within the AIM Service, and such
                           directory is fully-owned or controlled by AOL and
                           does not link to any third party site (excluding any
                           third party data source), and AOL elects, in its sole
                           discretion, to include IP Telephony Services in such
                           directory (the "Click to Talk Service"), then N2P
                           shall provide such Click To Talk Service, and such
                           Click To Talk Service shall constitute an additional
                           Core Premium Service, according to the terms and
                           conditions set forth in this Agreement, at no charge
                           to AOL or AIM Members.

                                    (d) Notwithstanding the foregoing, the
                           provision of such PC to PC Service or any other Core
                           Premium Service by N2P shall not be designed to
                           compromise the [****].

         N2P acknowledges, for the avoidance of doubt, that the right to access
         the AIM IP Telephony Services initially [****] to AIM Members, provided
         that N2P reserves the right [****] consistent with its obligations
         under Sections 3.1 and 3.3. In addition to the foregoing services, N2P
         shall (i) provide APIs, or SDKs, as the case may be, and (ii) to the
         extent commercially reasonable (a) provide connection for AOL to N2P's
         local equipment and (b) assist finding space for AOL and its Affiliates
         to locate equipment along with or near N2P's local equipment to enable
         AOL and its partners to link into aspects or features of the AOL IP
         Telephony System to provide related services (e.g., voice messaging);
         provided, however, that any such arrangement shall be subject

                                       2
<PAGE>   3
                                                               EXECUTION VERSION

         to the mutual agreement of the Parties as to the reasonable terms and
         conditions for such arrangement.

         1.2      Performance. Each Party shall cause all aspects of the AIM IP
                  Telephony Services within its control, including customer
                  service and billing, network coverage and performance and
                  fraud detection, to comply in all material respects with the
                  applicable standards set forth on Exhibits B, C and D.

         1.3      Launch Cutoff

                           1.3.1 Cutoff Dates. N2P shall cause (i) the PTP
                  Calling Card Service to be fully prepared for launch on the
                  AIM Service within [****] following the Effective Date; and
                  (ii) each of the Secondary AIM IP Telephony Services to be
                  fully prepared for launch on the AIM Service by the respective
                  cutoff dates therefor set forth on Exhibit I to this Agreement
                  (each such date in clauses (i) and (ii) above, a "Cutoff
                  Date," and collectively, the "Cutoff Dates"). If any Core
                  Premium Service is not fully prepared for launch by the
                  applicable Cutoff Date in any particular country, AOL shall
                  have the right to terminate the exclusivity (as set forth in
                  Section 9 of this Agreement) with respect to such Core Premium
                  Service in that country, and thereby enter into an agreement
                  with any third party (including a N2P Competitor) with respect
                  to such Core Premium Service in such country(s); provided,
                  however, that in the event any such Core Premium Service is
                  not fully prepared for launch by the applicable Cutoff Date in
                  the United States, then AOL shall have the right to terminate
                  the exclusivity worldwide (as set forth in Section 9 of this
                  Agreement) with respect to such Core Premium Service(s) that
                  is or are not fully prepared for launch by the applicable
                  Cutoff Date , and thereby enter into an agreement with any
                  third party (including a N2P Competitor) with respect to such
                  Core Premium Service(s).

                           1.3.2 AOL Assistance. To the extent that it shall be
                  reasonably necessary for AOL to undertake any activities
                  within AOL's reasonable control (including providing
                  information or materials) reasonably requested by N2P in order
                  to enable N2P to fulfill its development and deployment
                  obligations and meet any Cutoff Date, AOL shall undertake any
                  such activities in a timely manner.

                           1.3.3 Excusable Delays. Each applicable Cutoff Date
                  and N2P's obligation to provide the Core Premium Services
                  thereafter (together with any rights of AOL related thereto,
                  including, without limitation, any right to terminate this
                  Agreement or any exclusivity hereunder) shall be deemed
                  extended, subject to the remainder of this Section 1.3.3, to
                  the extent (and only for the duration in which): (i) AOL fails
                  to undertake the reasonably requested and reasonably necessary
                  activities described in Section 1.3.2 with respect to any Core
                  Premium Service, and N2P has provided AOL with reasonable
                  informal notice (e.g., by e-mail message to the AOL Technical
                  Liaison or through discussion at the quarterly meetings
                  described in Section 2.8) of such failure and of its causal
                  effect on N2P's ability to meet any such Cutoff Date (an "AOL
                  Delay"); (ii) there is (or is reasonably expected to be) a
                  U.S. or other regulation which would prevent N2P from offering
                  a Core Premium Service (or which such regulation would make it
                  commercially unreasonable for N2P to offer any such Core
                  Premium Service (in such country)) (collectively, a
                  "Regulatory Event"); or (iii) any other Force Majeure Event
                  occurs. The Parties, through the Management Committee, shall
                  determine in good faith the period by which the Cutoff Date is
                  to be extended (or any other obligations or criteria that are
                  to be affected), if at all, by any of the events described in
                  this Section 1.3.3; provided, however, that, unless otherwise
                  agreed by the Parties, the extension of any Cutoff Date
                  resulting from any Regulatory Event or Force Majeure Event
                  shall not exceed [****] in the aggregate. In the event that a
                  Regulatory Event or Force Majeure Event affects N2P
                  Competitors generally with respect to the provision of the PTP
                  Calling Card Service, then AOL shall discuss with N2P in good
                  faith extending the Cutoff Date beyond such [****] period. For
                  the avoidance of doubt, any extension of a Cutoff Date

                                       3
<PAGE>   4
                                                               EXECUTION VERSION

                  due to an AOL Delay shall be as mutually agreed upon in
                  writing by the Parties.

         1.4      Launch Dates. The Parties shall record the date on which each
                  AIM IP Telephony Service is launched (each such date, a
                  "Launch Date") in a written instrument signed by both Parties
                  promptly following any such Launch Date; provided, however,
                  that in the event that the Parties cannot agree as to the
                  definitive Launch Date with respect to a particular AIM IP
                  Telephony Service, the Parties shall submit such Dispute to
                  the dispute resolution provisions set forth in Section 17 of
                  this Agreement.

2.       DEVELOPMENT OBLIGATIONS

         2.1      Initial Version. The initial version of each of the AIM IP
                  Telephony Services shall be developed by N2P, by customizing
                  each of the existing N2P Services as set forth in Sections
                  1.1.1 through 1.1.7 to conform to the product specifications
                  set forth in Exhibit B to this Agreement (collectively,
                  together with such modifications thereto or any such
                  additional specifications as may be agreed to in writing by
                  the Parties after the Effective Date, the "Specifications").
                  As part of such customization, the N2P Services shall be
                  developed to function in an integrated manner with the
                  operation of the AIM Client to the extent set forth in the
                  Specifications or elsewhere in this Agreement (including, but
                  not limited to, the provision of SDKs to AOL in connection
                  with Section 10.1.2). Without limiting the foregoing,
                  throughout the Term, N2P shall support on the AIM Service
                  (i.e., through integration of voice over IP ("VOIP")
                  applications) any AOL or third party communications platform
                  that AOL reasonably requests (i.e., considering the time
                  necessary for N2P to deliver and the technological
                  capabilities of N2P or its contractors) from N2P and/or adopts
                  for the AIM Service, including unified messaging, voice
                  messaging, audio, video, etc. (the "Platform Support").
                  [****]. N2P shall cooperate with AOL in documenting and
                  perfecting all of AOL's rights with respect to such
                  development, including executing any necessary assignments,
                  applications or documentation with respect to such
                  development. Such Platform Support shall include, without
                  limitation, providing AOL with APIs, SDKs, or other necessary
                  tool kits to Seamlessly Integrate the AIM IP Telephony
                  Service(s) into such other AOL platforms and/or communications
                  functionality as designated by AOL, and shall not constitute
                  an Additional AOL Modification pursuant to Section 2.3 below.
                  Notwithstanding the foregoing, in the event that N2P fails to
                  provide AOL with such Platform Support as set forth in this
                  Section 2.1, then N2P shall provide AOL with any and all
                  functionality necessary for AOL (or its contractors) to
                  perform such Platform Support, in accordance with the Limited
                  Source Code License set forth in Section 10.2.2.

                  To the extent that any material conflict exists between (i)
                  Exhibit B to this Agreement and (ii) the provisions of the
                  principal body of this Agreement, the principal body of this
                  Agreement (i.e., Sections 1 through 18 hereof) shall govern.

         2.2      Updates.

                           2.2.1 Notification of Updates. If, during the Term,
                  N2P develops any Update of any N2P Service that is generally
                  commercially available to users of the N2P Services, N2P
                  shall, in each such case, (i) promptly notify AOL of such
                  Update and (ii) promptly (i.e., in the shortest commercially
                  reasonable time period) include such Update (provided that
                  such Update complies with the Specifications or the terms of
                  this Agreement) in the applicable AIM IP Telephony Service.

                           2.2.2 No Notification Required. N2P shall not be
                  obligated to notify AOL of or to provide to AOL any
                  modification, improvement, addition, deletion, feature or
                  functionality

                                       4
<PAGE>   5
                                                               EXECUTION VERSION

                  of the N2P Services provided by N2P to another customer if
                  such modification, improvement, addition, deletion, feature or
                  functionality is subject to contractual restrictions that
                  would prohibit N2P from providing it to AOL hereunder. For the
                  avoidance of doubt, the Parties acknowledge that N2P shall not
                  be required to notify AOL of or provide to AOL any
                  modification, improvement, addition, deletion, feature or
                  functionality of any Optional Service, Expanded Service or
                  other IP Telephony Service (apart from any Core Premium
                  Service) unless the Parties have agreed to the provision by
                  N2P to AIM Members of any such service pursuant to the terms
                  of this Agreement.

                           2.2.3 Disagreement. In the event of any disagreement
                  between the Parties regarding the provision by N2P of any such
                  Updates to AOL (e.g., as to whether any such Update is
                  generally commercially available, the length of the time
                  period in which any such Update is to be implemented, etc.),
                  such disagreement shall be submitted to the Management
                  Committee pursuant to Section 17 of this Agreement.

         2.3      Additional AOL Modifications.

                           2.3.1 Definition. AOL may in its discretion, from
                  time to time during the Initial Term, request that N2P, to the
                  extent commercially reasonable, (i) add new functionality or
                  features to any AIM IP Telephony Service(s), (ii) modify
                  elements related to the AOL GUI (but not elements of the AOL
                  GUI itself), and/or (iii) modify the AIM IP Telephony Services
                  in connection with modifications of the AIM Client and AIM
                  Service (which modifications shall be subject to Section 2.7
                  and which modifications AOL estimates will occur at least
                  twice a year), (each of (i), (ii) and (iii) above, an
                  "Additional AOL Modification"). The Parties agree that any
                  features, functionality, additions, deletions or other
                  modifications necessary to be carried out by N2P in order for
                  N2P to comply with its obligations under Section 3 of this
                  Agreement (collectively, the "Necessary Modifications") shall
                  not constitute Additional AOL Modifications and that [****].

                           2.3.2 Request for Non-Substantial Modification. In
                  the event that AOL requests Additional AOL Modifications that
                  N2P reasonably believes would not involve (i) a substantial
                  cost or expense to N2P (i.e., [****] in the aggregate during
                  any Year of this Agreement) or (ii) a substantial commitment
                  of N2P personnel, N2P shall develop the Additional AOL
                  Modifications in cooperation with AOL on a schedule to be
                  mutually agreed upon by the Parties. Each Party shall allocate
                  development resources on a high priority basis to complete
                  such Additional AOL Modifications in accordance with such
                  schedule.
                  [****].

                           2.3.3 Request for Substantial Modification. In the
                  event that AOL requests an Additional AOL Modification that
                  N2P reasonably believes would involve a substantial cost or
                  expense to N2P, or a substantial commitment of N2P personnel,
                  the Parties shall negotiate in good faith regarding the
                  request for such Additional AOL Modification, including,
                  without limitation, the appropriate schedule for development
                  and deployment, rights to the results of the development,
                  interoperability requirements, and the relevant business terms
                  (e.g., amount of any payments for the development, the revenue
                  model for the features or functions, etc.). If and when the
                  Parties reach agreement on the terms and conditions for such
                  Additional AOL Modification, N2P shall develop the Additional
                  AOL Modification in cooperation with AOL, and each Party shall
                  allocate development resources on a high priority basis to
                  complete such Additional AOL Modification in accordance with
                  such schedule.

                           2.3.4 Commissioned Works. Notwithstanding the
                  foregoing, in the event that the Parties are unable to agree
                  as to the development or deployment of any Additional AOL
                  Modification in accordance with Section 2.3.3, AOL shall have
                  the right during the Initial

                                       5
<PAGE>   6
                                                               EXECUTION VERSION

                  Term to require N2P to assist AOL in securing a mutually
                  agreed-upon third party to develop any such Additional AOL
                  Modifications for AOL; provided, however, that either N2P or
                  (at AOL's option) AOL may perform such development. In the
                  event that a third party is secured to perform such
                  development, N2P will use commercially reasonable efforts to
                  assist such third party in performing such development. Any
                  development by any such third parties shall not be considered
                  the responsibility of N2P, and such third parties shall not be
                  considered contractors of N2P. To the extent that portions of
                  such Additional AOL Modifications (including intellectual
                  property rights therein) are developed by N2P specifically for
                  AOL pursuant to this Section 2.3.4, such portions shall be
                  considered "Commissioned Works," but "Commissioned Works"
                  shall exclude, any software, modules, routines or subroutines,
                  documentation or other materials, and any methods, processes,
                  techniques or inventions, that were (i) developed by or for
                  N2P prior to such development for AOL or (ii) developed
                  independently by or for N2P (i.e., independent of the
                  development carried out for AOL under this Section 2.3.4 by
                  N2P). To the extent that (a) N2P develops any Commissioned
                  Works pursuant to this Section 2.3.4 without requiring that
                  AOL pay for such Commissioned Works (in cash or such other
                  consideration as may be agreed to by the Parties), then N2P
                  shall own all right, title and interest in and to such
                  Commissioned Works (provided, however, that in such case, AOL
                  shall have a fully paid-up, [****], non-exclusive,
                  non-transferable and worldwide license for the Term to use,
                  reproduce, directly and indirectly distribute, transmit,
                  display, perform, sublicense and adapt such Commissioned
                  Works), (b) [****] for any such Commissioned Works pursuant to
                  this Section 2.3.4, then AOL shall own all right, title and
                  interest in and to such Commissioned Works, and (c) the
                  Parties so agree, the Parties shall co-own all right, title
                  and interest in and to such Commissioned Works, which shall be
                  treated as Joint Work Product for purposes of this Agreement.
                  Each Party shall cooperate with the other Party in documenting
                  and perfecting all rights with respect to the Commissioned
                  Works, including executing any necessary assignments,
                  applications or other documentation with respect to the
                  Commissioned Works.

                           2.3.5 Disagreement. In the event that the Parties
                  disagree as to the development or deployment of any Additional
                  AOL Modification, including any disagreement as to the terms
                  and conditions for the development or deployment thereof, the
                  Parties shall submit such Dispute to the Management Committee
                  in accordance with the terms of Section 17 of this Agreement.

         2.4      Expansion to Cover Other Services and Platforms of AOL.

                           2.4.1 Request by AOL to Encompass Expanded Service
                  Within an AOL Telephony Service. AOL may in its discretion,
                  from time to time during the Initial Term, seek to expand any
                  AIM IP Telephony Service(s) to provide service through any and
                  all platforms and services hereafter offered by AOL or an
                  Affiliate of AOL (other than the AIM Service) (the "Expanded
                  Services"). In such event, AOL may in its discretion request
                  that N2P develop or deploy or assist with the development or
                  deployment of any such Expanded Services. Upon the receipt of
                  any such request, and before any development or deployment of
                  any Expanded Services, the Parties shall negotiate in good
                  faith regarding the request for any such Expanded Services,
                  including, without limitation, with respect to the appropriate
                  schedule for any development and deployment, and the relevant
                  business terms (e.g., the amount of any payments for any
                  development, the revenue model for the Expanded Services,
                  etc.). If and when the Parties reach agreement on the terms
                  and conditions related to the development and deployment of
                  such Expanded Services, each Party shall allocate development
                  and deployment resources on a high priority basis towards the
                  development and deployment of an updated version of the
                  applicable AOL IP Telephony Software to support such Expanded
                  Services in accordance with the terms and conditions agreed
                  upon by the Parties.

                           2.4.2 Failure to Agree. In the event that the Parties
                  disagree as to the development or deployment of any Expanded
                  Service, including any disagreement as to

                                       6
<PAGE>   7
                                                               EXECUTION VERSION

                  the terms and conditions for the development or deployment
                  thereof, the Parties shall submit such Dispute to the
                  Management Committee in accordance with the terms of Section
                  17 of this Agreement; provided, however, that in the event
                  that the Management Committee is unable to agree as to the
                  terms and conditions regarding such development and
                  deployment, such Expanded Service shall not constitute an AIM
                  IP Telephony Service for purposes of this Agreement, and N2P
                  shall not have any rights or obligations with respect to such
                  Expanded Service.

                           2.4.3 Agreement. Nonetheless, if the Parties agree to
                  add an Expanded Service to this Agreement, such Expanded
                  Service, for all purposes hereof, shall be considered part of
                  the AIM IP Telephony Services, and all rights and obligations
                  of AOL and N2P hereunder shall apply to such Expanded Service
                  and users of such services shall be considered AIM Members for
                  purposes of this Agreement. For purposes of calculating the
                  Revenue Share and the Revenue Threshold hereunder, any such
                  agreed-upon Expanded Service shall be aggregated with the AIM
                  IP Telephony Services as if only one service existed (unless
                  otherwise agreed upon by the Parties).

                             2.4.4 Migration. Throughout the Term, AOL shall
                  have the right, in its sole discretion, to require N2P,
                  [****], to migrate and/or route any and all voice over IP
                  traffic in connection with the PC-to-PC Service (as
                  applicable), the PC-to-Phone Service, or any and all other
                  Core Premium Services, as applicable, to servers, protocols,
                  or platforms in connection with standards designated by AOL,
                  provided that: (i) such migration shall not affect N2P's right
                  to revenues pursuant to Section 7 of this Agreement; and (ii)
                  the quality of the AIM IP Telephony Services is not materially
                  degraded below generally recognized industry standards
                  accepted by AOL for VOIP services, resulting solely from the
                  fault of AOL in connection with such migration. In such event,
                  N2P shall provide AOL, or any third party designated by AOL,
                  with a peering agreement from the AOL designated server(s) to
                  N2P's network, on terms to be mutually agreed to by the
                  Parties, in connection with any and all such traffic (e.g.,
                  for termination or pass-through purposes). AOL acknowledges
                  that N2P shall not be deemed in breach for its failure to meet
                  its performance obligations set forth in Sections 3.2 and 3.3
                  if such failure is due solely to N2P's compliance with the
                  requirements of this Section 2.4.4.

         2.5      Delivery and Acceptance.

                           2.5.1 Initial Versions. Following the completion of
                  the development and internal testing of each initial version
                  of the Core Premium Services, N2P shall deliver each such
                  initial version to AOL for evaluation and acceptance in
                  accordance with the delivery dates set forth on Exhibit I
                  hereto. AOL shall have thirty (30) days following such
                  delivery by N2P to evaluate whether each such initial version
                  functions in accordance with the Specifications and without
                  any Severity 1 or Severity 2 Problems. If AOL reasonably
                  determines that any such initial version of any Core Premium
                  Service does not function in material conformity with the
                  Specifications and/or without Severity 1 or Severity 2
                  Problems, AOL may reject such version by providing N2P with
                  written notice within such thirty (30) day period specifying
                  in detail the reason for rejection. Any initial version of the
                  Core Premium Services that has not been so rejected within
                  such thirty (30) day period shall be deemed accepted. If AOL
                  rejects any initial version of any Core Premium Service, then
                  following such rejection, N2P shall use commercially
                  reasonable efforts to correct (as promptly as commercially
                  possible but in any case by the applicable Cutoff Date) in all
                  material respects, the deficiencies in such initial version
                  that were specified in AOL's notice of rejection. If the
                  deficiencies specified in any such AOL notice of rejection
                  have not been remedied in all material respects by such Cutoff
                  Date, AOL shall have the right to terminate the exclusivity
                  (as set forth in Section 9 of this Agreement) with respect to
                  such Core Premium Service and thereby enter into an agreement
                  with any third party (including a N2P Competitor) with respect
                  to such Core Premium Service.

                                       7
<PAGE>   8
                                                               EXECUTION VERSION

                           2.5.2 Subsequent Versions. Following the completion
                  of the development and internal testing of each subsequent
                  version (i.e., subsequent to the initial version) of any Core
                  Premium Service (or any initial version of any Optional
                  Service, Expanded Service or other IP Telephony service
                  mutually agreed upon by the Parties to be provided by N2P
                  hereunder) (each, a "Subsequent Version"), N2P shall deliver
                  each such Subsequent Version to AOL for evaluation and
                  acceptance. AOL shall have thirty (30) days following such
                  delivery by N2P to evaluate whether such Subsequent Version
                  functions in accordance with the Specifications and without
                  any Severity 1 or Severity 2 Problems. If AOL reasonably
                  determines that any such Subsequent Version does not function
                  in material conformity with the Specifications and without
                  Severity 1 or Severity 2 Problems, AOL may reject such
                  Subsequent Version by providing N2P with written notice within
                  such thirty (30) day period specifying in detail the reason
                  for rejection. Any Subsequent Version that has not been so
                  rejected within such thirty (30) day period shall be deemed
                  accepted.

                           2.5.3 Acceptance Process. The acceptance criteria set
                  forth in Sections 2.5.1 and Section 2.5.2 of this Agreement
                  shall not include as factors the Core AOL Obligations, and AOL
                  shall not withhold any such acceptance due to its failure to
                  comply with the Core AOL Obligations.

         2.6      Assistance from AOL. AOL shall provide N2P with reasonable
                  consultative assistance in connection with the development
                  obligations of N2P as set forth in this Section 2. In
                  addition, during the Term, AOL agrees to notify N2P in advance
                  of any modifications and/or changes to the AIM Service that
                  AOL believes may result in incompatibility between the
                  Parties' respective systems or interruptions in the AIM IP
                  Telephony Services (including without limitation, network
                  configuration changes and system maintenance). The Parties
                  shall work together to resolve any such potential or actual
                  incompatibility, or interruptions, in connection with AOL's
                  implementation of any such change and/or modification.

         2.7      Other Modifications. AOL reserves the right to redesign and/or
                  modify the organization, structure, "look and feel,"
                  navigation, features and other elements of the AIM Client, the
                  AIM Service and the AIM IP Telephony Services (subject to (i)
                  the technical limitations and design requirements of the N2P
                  Services and N2P System (which shall themselves remain subject
                  to the Specifications) and (ii) the requirement that such AIM
                  Service and AIM IP Telephony Services remain in compliance
                  with the terms and conditions of this Agreement. AOL shall
                  provide N2P with reasonable notice of any material proposed
                  redesign and/or modification in advance of developing such
                  redesign or modification, and the Parties shall consult in
                  good faith on how to avoid any adverse effect on the AOL
                  Telephony Services (including, without limitation, any adverse
                  effect on the functionality or performance thereof) as a
                  result of such redesign and/or modification. Such notice shall
                  be sufficiently in advance of the proposed redesign or
                  modification such that the Parties will have a reasonable
                  opportunity to complete the process, and avoid the adverse
                  effect on the AIM IP Telephony Services, as contemplated by
                  this Section 2.7.

         2.8      Meetings. In furtherance of the rights and obligations of the
                  Parties under this Agreement, the Parties shall meet, in
                  person on a quarterly basis (the "Quarterly Meetings") and by
                  telephone on a monthly basis (the "Telephone Meetings"). With
                  respect to the four (4) Quarterly Meetings to take place
                  during each Year of the Initial Term, two (2) such Quarterly
                  Meetings shall take place in Virginia (at AOL headquarters or
                  such other location as mutually agreed upon by the Parties)
                  and the other two (2) such Quarterly Meetings shall take place
                  in the United States (at N2P headquarters or such other
                  location as mutually agreed upon by the Parties). The
                  Quarterly Meetings shall be used to discuss, inter alia,
                  long-term planning, strategic and development issues, and
                  marketplace and performance information regarding the
                  obligations and criteria applicable to the Parties hereunder
                  (including the obligations and criteria under Section

                                       8
<PAGE>   9
                                                               EXECUTION VERSION

                  3), and shall be attended by the Technical Liaisons and
                  appropriate senior development and management personnel. The
                  Parties anticipate that the first such Quarterly Meeting shall
                  occur as promptly as possible following the Effective Date but
                  in no event later than two (2) months following the Effective
                  Date. The Telephone Meetings shall be used to discuss, among
                  other things, the activities and relationship contemplated by
                  this Agreement, including the proposed implementation and/or
                  progress of any Updates or Additional AOL Modifications,
                  changes to the operating standards set forth on Exhibit B,
                  Exhibit C or Exhibit D hereto, AOL Exclusive Offers to be
                  provided during the subsequent quarter, and the redesign or
                  modification of elements of the AIM Service or AIM IP
                  Telephony Services.

         2.9      No Support for AOL Modifications. The Parties acknowledge that
                  any modifications or additions to the AIM IP Telephony
                  Services that are carried out by AOL (or carried out for AOL
                  by a third party not contracted or subcontracted by N2P) shall
                  not affect the determination of whether N2P has met its
                  obligations or the criteria set forth in Sections 1.3 or 3 of
                  this Agreement.

3.       N2P PERFORMANCE

         3.1      Pricing and Terms. [****]

         3.2      Operating Standards.

                  3.2.1 Compliance. During the Term, N2P will cause the AIM IP
                  Telephony Services to comply in all material respects with the
                  standards set forth in each of Exhibit B, Exhibit C and
                  Exhibit D. To the extent standards are not established in
                  Exhibits B, C or D with respect to any aspect of the AIM IP
                  Telephony Services, N2P will use commercially reasonable
                  efforts to provide such aspect at a level of quality,
                  completeness or timeliness which meets or exceeds prevailing
                  standards in the IP Telephony industry. Without limiting the
                  generality of the foregoing, N2P will use commercially
                  reasonable efforts to provide all hardware, software,
                  telecommunications lines and other infrastructure necessary to
                  meet traffic and usage demands on the AIM Service in
                  connection with the offering of the AIM IP Telephony Services.

                  3.2.2    N2P Technical Problem.

                                    (a) Occurrence; Cure Period. In the event of
                  any material technical problem (over which N2P exercises
                  control) affecting the use by AIM Members of any AIM IP
                  Telephony Service and constituting a Severity 1 Problem or
                  Severity 2 Problem (an "N2P Technical Problem"), AOL shall
                  have the right to suspend (i) distribution of such AIM IP
                  Telephony Service, (ii) any of AOL's promotional obligations
                  hereunder related specifically to such AIM IP Telephony
                  Service, and/or (iii) any Listings related specifically to the
                  such AIM IP Telephony Service until such time as N2P corrects
                  such N2P Technical Problem. Prior to suspending any such
                  distribution of any particular AIM IP Telephony Service,
                  related promotional obligations of AOL or related Listings
                  hereunder, AOL shall provide N2P with notice and an
                  opportunity to cure, as provided below, unless, in its
                  reasonable discretion, AOL will be materially and adversely
                  affected in a substantial manner by failing to act immediately
                  or at some subsequent time prior to the completion of the
                  notice and cure period. Any such notice shall be in writing
                  and shall contain a reasonably detailed explanation for AOL's
                  intention to suspend (and, in reasonable detail, the reasons
                  for suspending) access to the particular AIM IP Telephony
                  Service and related promotional obligations and Listings due
                  to the occurrence of the N2P Technical Problem. Upon receipt
                  of such notice, N2P will have at least [****] to cure the
                  applicable N2P Technical Problem to AOL's reasonable
                  satisfaction and, if cured, AOL shall not suspend the affected
                  AIM IP Telephony Service(s) and/or related promotional
                  obligations

                                       9
<PAGE>   10
                                                               EXECUTION VERSION

                  or Listings. AOL will make good faith efforts to facilitate
                  N2P's cure efforts and to extend the cure period as
                  appropriate, so long as AOL, in its reasonable discretion, is
                  not materially adversely affected by any such extension. In
                  the event AOL suspends distribution of any AIM IP Telephony
                  Service, any AOL promotional obligations and/or any Listings
                  due to the occurrence of any such N2P Technical Problem, AOL
                  will notify N2P in writing within [****] of such decision,
                  setting forth in reasonable detail the explanation therefor.

                                    (b) Cure; Resumption of Distribution. When
                  and if the cure to an N2P Technical Problem is demonstrated to
                  AOL's reasonable satisfaction, which satisfaction shall not be
                  unreasonably withheld, AOL shall resume distribution of the
                  affected AIM IP Telephony Service, promotional obligations and
                  Listings as soon as commercially practical; provided, however,
                  that (in addition to any other remedies available to AOL in
                  this Agreement, including, without limitation, in Section 16.6
                  hereof) in the event that N2P shall fail to cure any such N2P
                  Technical Problem within thirty (30) days following notice
                  thereof by AOL to N2P, then AOL shall have the right to
                  terminate the exclusivity (as set forth in Section 9 of this
                  Agreement) with respect to the Core Premium Service(s)
                  affected by such N2P Technical Problem and thereby enter into
                  an agreement with any third party (including any N2P
                  Competitor) to promote (or offer the services of) such third
                  party with respect to such Core Premium Service(s).

         3.3      Competitive Performance Standards. [****]

         3.4      [****] AOL. For the avoidance of doubt, the Parties
                  acknowledge that AOL [****] connection with any modification,
                  addition, deletion, feature or functionality or other
                  improvement required to be provided by N2P in order for N2P to
                  comply with its obligations under Section 3 of this Agreement.

         3.5      N2P Not Responsible for Core AOL Obligations. The Parties
                  acknowledge that the Core AOL Obligations shall not affect the
                  determination as to whether N2P has satisfied the criteria and
                  obligations set forth in Section 3 of this Agreement. The
                  Parties also acknowledge that the determination of whether N2P
                  has satisfied the criteria and obligations set forth in
                  Sections 3.1, 3.2 or 3.3 of this Agreement shall not be
                  affected by features or functionality that N2P offers to AOL
                  and that AOL (a) declines to implement or support or (b)
                  cannot (e.g., due to technological or operational constraints
                  within the control of AOL) reasonably implement or support,
                  provided that (i) in either such case, N2P provides AOL with
                  reasonable prior, informal, written notice (e.g., by e-mail)
                  of the anticipated effects of AOL's not implementing or
                  supporting the features or functions on the AIM IP Telephony
                  Services and (ii) in the case of technological or operational
                  constraints within AOL's control, N2P provides AOL with
                  reasonable prior informal notice of such constraints.

         3.6      Restrictions.

                  3.6.1 N2P will not integrate, or enter into an agreement to
                  integrate into any of the AIM IP Telephony Services or the N2P
                  IP Telephony Software, or in any other products or services
                  developed by or on behalf of N2P, instant messaging protocols,
                  components or other technology that use or access the AIM
                  Service, the AOL Service, or any other AOL-branded product or
                  service (e.g., ICQ, CompuServe) in a manner not expressly
                  authorized by AOL, or that AOL contends in good faith is not
                  expressly authorized, or distribute, market or promote any
                  products or services containing instant messaging protocols or
                  components or other technology that use or accesses the AIM
                  Service, or solicits, encourages or promotes end-users to use
                  or access the AIM Service, in a manner not expressly
                  authorized by AOL or that AOL contends in good faith is not
                  expressly authorized.

                                       10
<PAGE>   11
                                                               EXECUTION VERSION

                  3.6.2 Except as expressly provided herein, N2P shall not have
                  any right to (i) adapt, alter, copy, modify, translate or
                  create derivative works of the AIM Client, or (ii) reverse
                  engineer, decompile, disassemble, or otherwise attempt to
                  reconstruct the source code of, those portions of any AOL
                  software (e.g., the AIM Client) provided to N2P, as
                  applicable. N2P acknowledges that it obtains no intellectual
                  property rights or licenses by this Agreement except for those
                  licenses expressly granted, and that, except as otherwise
                  provided herein, AOL hereby expressly retains all of its
                  rights in and to the AIM Service, the AOL Namespace, the AOL
                  Service, and the AIM Client.

4.       DISTRIBUTION AND PROMOTION

         4.1      Distribution and Promotion Requirements. During the Term,
                  subject to the terms and conditions herein, the Parties agree
                  to the following:

                  4.1.1.   Access to AIM IP Telephony Services. AOL shall
                           distribute the AIM IP Telephony Services through the
                           AIM Service, provided that AOL shall determine in its
                           reasonable discretion (upon consultation with N2P)
                           the manner in which such distribution occurs (e.g.,
                           through the bundling with the AIM Client of the
                           AOL-customized N2P IP Telephony Software, through a
                           "plug-in" of such software, etc., or through
                           distribution of the AIM Client or a separate AIM
                           application which includes certain functionality or
                           services from N2P using the SDK provided to AOL
                           pursuant to Section 10.1.2).

                  4.1.2    Distribution of AOL IP Telephony Software.

                                    (a) PTP Calling Card Service. Promptly upon
                           the acceptance by AOL of the initial version of the
                           PTP Calling Card Service (including any Updates
                           thereto), AOL shall promote and distribute such
                           initial version as part of the AIM Service subject to
                           the remainder of this Section 4.1.2.

                                    (b) Secondary AIM IP Telephony Services.
                           Following the acceptance by AOL of the initial
                           version of any Secondary AIM IP Telephony Service
                           (including any Updates thereto) and subject to the
                           remainder of this Section 4.1.2, AOL shall promote
                           and distribute such accepted Secondary AIM IP
                           Telephony Service as part of the AIM Client and
                           related version of the AIM Service. AOL shall launch
                           (i.e., make generally commercially available) such
                           AIM Client and version of the AIM Service no later
                           than [****]; provided, however, that in the event
                           that AOL shall not have launched the AIM Client and
                           related version of the AIM Service by [****] (as
                           N2P's sole and exclusive remedy hereunder), the
                           Initial Term shall be extended by one day for each
                           day beyond [****] that AOL fails to launch the AIM
                           Client and related version of the AIM Service.
                           Notwithstanding the foregoing, in the event AOL's
                           failure to distribute such accepted Secondary AIM IP
                           Telephony Service(s) by [****] due solely to AOL's
                           inability to integrate N2P's functionality or
                           services using the SDK (without fault of N2P), then
                           AOL shall distribute such AIM IP Telephony Service
                           through bundling the AOL IP Telephony Software with
                           the AIM Client or through integration using the SDK
                           no later than [****], provided that N2P shall have
                           delivered the SDK to AOL in accordance with Section
                           10.1.2.

                                    (c) Subsequent Versions. Following the
                           acceptance by AOL of any Subsequent Version, AOL will
                           distribute such Subsequent Version with the AIM
                           Service within a time period [****] to be determined
                           by AOL in its reasonable discretion (e.g., taking
                           into account such factors as the imminence of the
                           launch of a new version of the AIM Client, etc.),
                           upon consultation with N2P.

                                       11
<PAGE>   12
                                                               EXECUTION VERSION

                  4.1.3    Educational Promotions of AIM IP Telephony Services.
                           Upon the Launch Date of any of the AIM IP Telephony
                           Services, AOL will use good faith efforts, in AOL's
                           sole discretion, to educate AIM Members, through the
                           AIM controlled properties, of how to access and use
                           such AIM IP Telephony Service(s).

                  4.1.4    N2P Listing and Promotion. AOL shall feature, offer
                           and promote the AIM IP Telephony Services prominently
                           in the AIM Service.

                                    (a) In furtherance and as part of the
                           foregoing, the initial implementation of such
                           promotional requirement shall include, where
                           feasible, at AOL's sole discretion, the following
                           (and any future implementation shall be consistent in
                           terms of prominence (e.g., in terms of size,
                           location, appearance and the like) with the
                           following):

                                            (i) Each AIM IP Telephony Service
                           will be "sub-branded" with the name "Net2Phone,"
                           "N2P" or any other N2P Mark designated by N2P,
                           subject to the approval of AOL not to be unreasonably
                           withheld (the "N2P Name"). "Sub-branding" means that
                           each AIM IP Telephony Service will be labeled and
                           marketed with the name [****] or such other AOL name
                           as AOL designates (the "AOL Name"), but that each
                           such AIM IP Telephony Service shall, where feasible
                           and to the extent not inconsistent with the AOL Look
                           and Feel, have a prominent tag line such as [****] or
                           [****] and a N2P Mark. The N2P tag line and Mark (the
                           "Brandings") will be included prominently in (and
                           where feasible, will be placed within reasonable
                           proximity to the AOL brandings in) the (A) areas
                           which provide information regarding the use of and
                           enable AIM Members to launch the AIM IP Telephony
                           Service (collectively, the "Support Area"), (B) other
                           areas within the AIM Service that relate principally
                           to the AIM IP Telephony Services (e.g., [****]), and
                           (C) the AOL IP Telephony Software or areas within the
                           AIM Client that relate principally to an AIM IP
                           Telephony Service (the "Branded Areas").

                                            (ii) The Brandings will also appear
                           prominently in advertising, promotional, public
                           relations and marketing material relating principally
                           to the AIM IP Telephony Services.

                                            (iii) There will be links (evidenced
                           by the AOL Name or a graphical image of a telephone,
                           or such other link as AOL selects) to the
                           PC-originated AIM IP Telephony Services (initially,
                           the PC-to-Phone Service) throughout the AIM Service
                           in areas providing AIM Members with the ability to
                           perform communication functions (e.g., [****])
                           (collectively, the "Links"). The Links will launch
                           the AIM IP Telephony Services.

                                    (b) The name, design and "look and feel" of
                           the Branded Areas, the Brandings and the Links
                           (collectively, the "Listings") will be determined by
                           AOL in its reasonable discretion in consultation with
                           N2P. The Listings will properly convey the
                           functionality of the AIM IP Telephony Services.

                                    (c) AOL generally will provide to N2P
                           branding, marking and promotion that are no less
                           prominent, in terms of size, placement, appearance
                           and the like, than those accorded to [****]. In the
                           event that AOL begins to sell advertising inventory
                           on [****] of the AIM Client, AOL shall provide N2P
                           with an opportunity to bid on the purchase of a
                           placement within such inventory.

                                    (d) Subject to the other requirements of
                           this Section 4.1.4, Section 9.1.1, and the other
                           provisions of this Agreement, the foregoing will not
                           preclude users from linking to another such provider
                           from the AIM Service, provided that the link to such
                           other provider is limited to [****] that is no more
                           prominent than any similar reference to N2P. Nothing
                           in this Agreement shall prevent AOL from offering
                           (whether through buttons, icons or otherwise) an AOL
                           PC-to-PC communication function on the AOL Service or
                           the AIM Service.

                                       12
<PAGE>   13
                                                               EXECUTION VERSION

                  4.1.5    Promotion of AIM Service. N2P shall promote AOL or
                           the AIM Service to its customers and partners, and
                           shall use reasonable efforts to encourage such
                           customers and partners to adopt the AIM Service as an
                           integrated component of the IP Telephony products and
                           services provided to such customers and partners by
                           N2P, as and to the extent set forth in Exhibit E. All
                           promotion of the AIM Service by N2P hereunder,
                           including, without limitation, any and all such
                           promotional materials distributed by or authorized by
                           N2P shall be subject to AOL's prior written consent.
                           AOL shall assist N2P, as reasonably requested by N2P,
                           in such promotional efforts. In addition to the
                           foregoing, all promotion of the N2P Services by AOL
                           hereunder, including, without limitation, any and all
                           such promotional materials distributed by or
                           authorized by AOL shall be subject to N2P's prior
                           written consent.

         4.2      General Conditions to Distribution and Promotional
                  Obligations. Notwithstanding anything contained in this
                  Section 4, AOL shall have no obligation to promote a
                  particular version of the AIM IP Telephony Services, to
                  distribute to AIM Members a particular version of the AIM IP
                  Telephony Services or to provide any Listing therefor to the
                  extent that and for so long as:

                           (i) AOL has received notice (whether written or
                  verbal) of, and reasonably believes, that the reproduction,
                  use or distribution of such version of the AIM IP Telephony
                  Services in accordance with this Agreement infringes or
                  misappropriates the intellectual property rights of any third
                  party, provided that AOL may not promote or offer access to
                  any other similar IP Telephony product unless AOL reasonably
                  believes that it raises a lesser risk of infringement or
                  misappropriation; or

                           (ii) An aspect of any such version of the AIM IP
                  Telephony Service exists, other than an acknowledged security
                  risk that a corporation/user accepts by opening up holes in
                  its firewall to enable use of any such AIM IP Telephony
                  Service (and other than security risks ordinarily associated
                  with Web-based communications products), that could be
                  exploited in a manner that AOL reasonably believes (a) would
                  expose AIM Members to potential efforts to invade their
                  privacy or damage or modify data, software or hardware in an
                  unauthorized manner or (b) would otherwise result in
                  meaningful and serious claims that any such AIM IP Telephony
                  Service presents a security risk to its users, provided that
                  AOL may not promote or offer access to any other similar IP
                  Telephony product unless AOL reasonably believes that it
                  raises a lesser security risk.

         4.3      Exclusive Offers/AIM Member Benefits. N2P shall offer through
                  the AIM Service on a regular and consistent basis (but no less
                  than once per quarter) special offers comparable to those
                  available through Additional N2P Channels (e.g., preferred
                  rates to specific termination points to be offered
                  periodically, raffle or sweepstakes conducted from time to
                  time, etc.), which such special offers shall be exclusively
                  available to AIM Members (the "AOL Exclusive Offers"). Each
                  AOL Exclusive Offer made available by N2P shall provide a
                  substantial member benefit to AIM Members, either by virtue of
                  a meaningful price discount, product enhancement, unique
                  service benefit or other special feature. N2P will provide AOL
                  with reasonable prior notice of AOL Exclusive Offers so that
                  AOL can market the availability of such AOL Exclusive Offers
                  in the manner AOL deems appropriate in its reasonable
                  discretion; provided that AOL shall consult with N2P regarding
                  the marketing of the AOL Exclusive Offers. In addition to the
                  foregoing, the Parties shall create a virtual and/or physical
                  debit card to be used in connection with the AIM IP Telephony
                  Services and/or any other products or services as determined
                  by AOL in its sole discretion (the "AIM Card").

         4.4      Limited Waiver. To the extent that any of N2P's obligations
                  under this Agreement are expressly inconsistent with N2P's
                  obligations to ICQ, Inc. ("ICQ") (pursuant to N2P's July 15,
                  1999 agreement with ICQ, Inc.), CompuServe Interactive
                  Services, Inc. ("CompuServe") (pursuant to CompuServe's
                  agreement with N2P dated as of November 19, 1999) or any other
                  agreement with any other AOL Affiliate existing as of the
                  Effective Date (collectively,

                                       13
<PAGE>   14
                                                               EXECUTION VERSION

                  the "Inconsistent Obligations"), and to the extent that such
                  Inconsistent Obligations may reasonably restrict N2P from
                  materially performing its obligations under this Agreement,
                  then N2P shall provide notice to AOL immediately upon its
                  discovery of such Inconsistent Obligations. Promptly after
                  AOL's receipt of such notice from N2P, AOL and N2P shall work
                  together in good faith to work around or obtain a waiver from
                  ICQ, CompuServe or such other AOL Affiliates of such
                  Inconsistent Obligations. To the extent that the Parties
                  cannot or do not obtain relief in connection with such
                  Inconsistent Obligations, then AOL shall have the option, in
                  its sole discretion, to: (a) waive such inconsistency in this
                  Agreement and instruct N2P to perform all of its obligations
                  under this Agreement and such other agreement(s), including
                  any and all such Inconsistent Obligations; or (b) elect under
                  which of the applicable agreements for N2P to perform such
                  Inconsistent Obligations. Notwithstanding the foregoing,
                  nothing contained in this Section 4.4 shall be construed in
                  any manner whatsoever to provide N2P with an excuse for
                  non-performance under this Agreement, and except as expressly
                  provided herein, AOL reserves any and all of its rights in
                  connection with N2P's failure to perform under this Agreement.

5.       AIM MEMBER REGISTRATION AND INFORMATION

         5.1      Ownership of Assets and Customer Relationships. In addition to
                  the provisions of Section 12.1, AOL shall own all tangible and
                  intangible assets (and all personal and intellectual property)
                  provided by AOL in developing the AIM IP Telephony Services
                  (except as otherwise expressly set forth herein) and the
                  Support Area, including all materials provided by AOL to N2P
                  for the purpose of branding the AIM IP Telephony Service and
                  the Support Area ("AOL Branding Materials"), and the
                  relationship with AIM Members, including, without limitation,
                  all aspects of such relationship specified in this Section 5.
                  AOL shall own any and all rights in the call detail records
                  generated in providing the AIM IP Telephony Services which
                  shall be treated as Confidential Information for purposes of
                  this Agreement (collectively, the "Call Detail Records"). AOL
                  hereby grants N2P a non-exclusive, non-transferable,
                  worldwide, [****] license to use the Call Detail Records only
                  to the extent necessary to provide the AIM IP Telephony
                  Services to be provided by N2P hereunder (including any
                  related planning and development). Such license shall continue
                  through the end of the Term, but shall survive expiration of
                  the Term with respect to the provision by N2P of the PTP
                  Calling Card Service. Without limiting the foregoing, N2P
                  acknowledges and agrees that AOL may, in its sole discretion,
                  promote, distribute and/or use the AIM Card (in accordance
                  with applicable law) as an electronic debit card throughout
                  the Term in connection with any other products and services
                  offered by AOL and/or its partners, in AOL's sole discretion,
                  [****] be mutually agreed upon by the Parties. N2P shall
                  perform any and all reasonably requested development services
                  (i.e., considering available technology, regulatory
                  requirements, and time required) for such use, and [****] in
                  connection with material, incremental development and/or
                  customization required for such use by AOL after the Effective
                  Date, subject to AOL's prior written consent.

         5.2      AIM Member Relationship.

                  5.2.1 Registration Information. In order to use the Surcharged
                  AIM IP Telephony Services, an AIM Member will be required to
                  register for such AIM IP Telephony Services. The Parties shall
                  determine by mutual agreement the terms and conditions of use
                  to be agreed to by such AIM Members (including, without
                  limitation, with respect to any special access codes to be
                  used by such AIM Members in connection with the AIM IP
                  Telephony Services, provided, that neither Party shall
                  unreasonably withhold such agreement with respect to the use
                  of such special access codes), and AOL shall determine both
                  (i) the information to be collected from the AIM Members as
                  part of the registration process (provided that such
                  information shall in any event include information that N2P
                  reasonably requests in connection with the provision of the
                  AIM IP Telephony Services, including, without limitation, any
                  Personal Identification Numbers (PINs) for use by AIM Members
                  in connection with the AIM IP Telephony Services) and (ii) any
                  domain names, unique identifier

                                       14
<PAGE>   15
                                                               EXECUTION VERSION

                  numbers, e-mail addresses and passwords to be assigned and/or
                  used by such AIM Members in connection with such AIM IP
                  Telephony Services. Registration for the AIM IP Telephony
                  Services shall take place at the Support Area or at such other
                  location as may be mutually agreed upon by the Parties. AOL
                  shall use reasonable efforts to build into the end of the
                  registration process for the AIM Service (the "AOL
                  Registration Process") a sub-routine for the registration for
                  the AIM IP Telephony Services. Notwithstanding the foregoing,
                  in the event that any AIM Members shall not have registered
                  for the Surcharged AOL IP Telephone Services prior to
                  attempting to use any such service, AOL shall cause any such
                  AIM Member to register for the Surcharged AIM IP Telephony
                  Services prior to the use thereof. N2P shall determine the
                  pricing for the Core Premium Services and other AIM IP
                  Telephony Services to be provided by N2P hereunder. In
                  addition, N2P shall handle the assignment of applicable phone
                  numbers to AIM Members (using the AIM Member unique identifier
                  number as an identifier and provided that such phone numbers
                  and special access codes (unless otherwise agreed upon in
                  writing by the Parties) shall be different from any phone
                  numbers and access numbers used in connection with any N2P
                  Services), and shall handle the billing and collection of any
                  fees or other amounts to be charged to AIM Members from time
                  to time in connection with the AIM IP Telephony Services
                  (collectively, the "IPT Fees"); provided, however that, unless
                  otherwise expressly consented to in writing by AOL, N2P shall
                  not directly contact or communicate with any AIM Members other
                  than in connection with the billing and collection of the IPT
                  Fees, or in connection with maintenance and customer support
                  for the AIM IP Telephony Services; provided, further, that
                  such communications shall be limited to obtaining billing
                  information, providing pricing information related to the AIM
                  IP Telephony Services and ensuring collection of the IPT Fees
                  or providing maintenance or customer support, and shall not be
                  used by N2P as a platform to sell, market, advertise or
                  promote any products or services other than the AIM IP
                  Telephony Services.

                  5.2.2 Billing Transition. Notwithstanding the foregoing, at
                  any time during the Term and at AOL's sole discretion, AOL
                  shall have the right to assume responsibility for the
                  aforementioned billing and collection obligations with respect
                  to the IPT Fees (collectively, the "Billing Transition");
                  provided, however, that (i) AOL shall give N2P reasonable
                  advance notice of any such Billing Transition; (ii) the
                  Billing Transition shall be subject to agreement of the
                  Parties on arrangements (a) for N2P to receive the same
                  portion of revenue from the AIM IP Telephony Services as it
                  would have received before the Billing Transition (and on
                  procedures to verify the proper payment of such revenue), (b)
                  for handling fraud, and (c) for the handling of the billing
                  for the PTP Calling Card Service after the Initial Term, and
                  (iii) AOL shall be responsible for all costs and out-of-pocket
                  expenses incurred by N2P in connection with such Billing
                  Transition. In the event of such Billing Transition, N2P
                  hereby agrees to provide AOL with reasonable assistance (and
                  to otherwise cooperate with AOL), [****], regarding such
                  Billing Transition, and following such Billing Transition, AOL
                  shall use commercially reasonable efforts to ensure that the
                  billing services comply in all material respects with the
                  standards set forth in Exhibits B and C of this Agreement.

         5.3      AIM Member Information and Solicitation.

                           5.3.1 Ownership of AIM Member Information. AOL shall
                  own any and all information collected from AIM Members in
                  connection with the AIM IP Telephony Services, including,
                  without limitation, information collected during the
                  registration processes for the AIM Service and/or any AIM IP
                  Telephony Service, respectively, and information then or
                  subsequently obtained from any use of the AIM Service and/or
                  any AIM IP Telephony Services, including without limitation
                  [****] (collectively, "User Information"). All User
                  Information shall be deemed Confidential Information of AOL.
                  N2P agrees, both during and after the Term, not to (i) use any
                  User Information for any purpose other than in connection with
                  the operation of the AIM IP Telephony Services or (ii)
                  disclose any such information to any third party without the
                  prior written consent of AOL, which consent may be granted or
                  withheld in AOL's sole and absolute discretion; provided,
                  however, that N2P may disclose

                                       15
<PAGE>   16
                                                               EXECUTION VERSION

                  User Information solely as necessary (and only to the extent
                  necessary) to comply with applicable laws, regulations and
                  government orders or requests; provided, further, that N2P
                  shall use all reasonable efforts to limit any such disclosure
                  to the maximum extent possible and to provide AOL with as much
                  advance written notice of N2P's intended use or disclosure as
                  is practicable. N2P agrees to comply with the AOL Privacy
                  Policy to the same extent as AOL, as such policy exists on the
                  Effective Date (i.e., the AOL Privacy Policy), as the same may
                  be modified by AOL and notified to N2P from time to time. N2P
                  shall not sell, license, rent or otherwise transfer any AIM
                  Member Information or any list of AIM Members for any purpose
                  whatsoever, without AOL's prior written consent.
                  Notwithstanding the foregoing, N2P shall have the right to use
                  User Information to the extent necessary to provide the PTP
                  Calling Card Service to then-existing AIM Member customers
                  following the expiration of the Initial Term, and AOL shall
                  provide N2P with the customer records and other information to
                  the extent necessary for N2P to continue providing the PTP
                  Calling Card Service to such customers for the [****] period
                  immediately following the expiration of the Initial Term,
                  subject to Section 5.3.2 and 5.3.3 of this Agreement and
                  prohibitions, if any, under applicable law.

                           5.3.2 No Competitive Solicitation. [****].

                           5.3.3 No Communication. During the Term and for the
                  [****] period following the expiration or termination of this
                  Agreement (and without limiting any other provision of this
                  Agreement, including Section 5.3.1), N2P agrees not to send
                  any AIM Member any messages or communications on or through
                  the Qualified AIM Services for any commercial purpose, unless
                  N2P has an Independent Business Relationship with such AIM
                  Member. Any commercial e-mail communications (i.e., e-mail
                  communications offering products or services) to AIM Members
                  on or through the AIM Service or the AIM IP Telephony Services
                  which are otherwise permitted hereunder (i.e., permitted as
                  exceptions to general prohibitions included in this Agreement)
                  shall include a prominent and easy means to "opt-out" of
                  receiving any future commercial e-mail communications from
                  N2P. The Parties acknowledge that any incidental (i.e., de
                  minimis) failure by N2P to comply with the terms of this
                  provision shall not be deemed a material breach of this
                  Agreement; provided, however, that N2P shall take appropriate
                  steps to prevent any further failure to comply with the terms
                  of this Section 5.3.3.

6.       TECHNICAL SUPPORT

                  N2P shall provide all frontline technical and customer support
                  to AIM Members as set forth in Exhibit B, including, without
                  limitation, technical and customer support for AIM Members who
                  have problems with, or questions concerning, the installation,
                  use, operation or maintenance of the AIM IP Telephony Service
                  (collectively, the "Frontline Support"). The Parties
                  acknowledge that N2P may provide such Frontline Support using
                  e-mail and/or telephone support, at N2P's option. N2P shall,
                  [****], provide to AOL the back-end support regarding the AIM
                  IP Telephony Service specified on Exhibit D. During the Term,
                  each Party will designate one (1) internal technical contact
                  (each such contact, a "Technical Liaison") and will conduct
                  technical communication activities as may be necessary for the
                  optimization of the integration of the AIM IP Telephony
                  Services into the AIM Service. AOL will use commercially
                  reasonable efforts to provide technical and marketing
                  assistance, including facilitating the maintenance of regular
                  communication channels between relevant personnel, for the
                  purpose of assisting both Parties in abiding by their
                  respective obligations under this Agreement. The initial
                  Technical Liaison for N2P shall be [****], and the initial
                  Technical Liaison for AOL shall be [****], unless otherwise
                  designated from time to time by the Parties. Each Party may
                  change its Technical Liaison from time to time, in its sole
                  discretion. Unless otherwise agreed upon by the Parties, N2P
                  shall not be obligated to provide support for any
                  modifications or

                                       16
<PAGE>   17
                                                               EXECUTION VERSION

                  additions to the AIM IP Telephony Services carried out by AOL
                  (or carried out for AOL by a third party not contracted or
                  subcontracted by or on behalf of N2P); provided, however, that
                  where not required to provide such support pursuant to the
                  terms of this Section 6, N2P shall assist in the support of
                  such work to the extent necessary for either Party to comply
                  with its obligations under this Agreement.

7.       PAYMENT AND REVENUE PROVISIONS

         7.1      Guaranteed Payments; Refund. In partial consideration for
                  [****] marketing of the AIM IP Telephony Services, [****]. In
                  the event of any termination of this Agreement before
                  expiration of the Initial Term in accordance with (i) Section
                  16.2 due to a material breach by AOL of this Agreement, (ii)
                  Section 16.3 due to a Change of Control of AOL by a N2P
                  Competitor or a Parent Company Competitor or (iii) Section
                  16.5 due to the occurrence of a Regulated Entity Event, [****]
                  shall refund to [****] (e.g., if such termination occurs on
                  the [****] anniversary of the Effective Date, and [****] has
                  paid [****] in guaranteed payments as required by the terms of
                  this Agreement, [****] shall refund to [****] of such
                  guaranteed payments, [****]. In the event of any termination
                  of this Agreement before the expiration of the Initial Term in
                  accordance with Section 16.6(i)(c) or Section 16.6(i)(d), then
                  [****] shall refund to [****] of the pro rata portion (based
                  on a [****]) of any guaranteed payments made by [****] prior
                  to the date of such early termination. In partial
                  consideration for such guaranteed payments, [****] shall
                  provide [****] during the Initial Term with promotional
                  placements (on areas of the [****] Service or other Web
                  properties solely controlled by [****], to be determined by in
                  its reasonable discretion as further set forth in Section
                  4.1.4) with a value of [****] in Year [****] (based on amounts
                  for comparable Advertisements set forth on [****] then-current
                  advertising rate card).

         7.2      Net Advertising Revenue for IP Telephony Services.

                           7.2.1 Advertising Sales. AOL shall have the right to
                  license or sell promotions, advertisements, links,
                  sponsorships, pointers or similar services or rights
                  ("Advertisements") through the AOL Service and the AIM
                  Service, subject to AOL's then-applicable advertising
                  policies.

                  7.2.2    Revenue Sharing.

                           (a) Net Advertising Revenue. As partial consideration
                  for its marketing efforts hereunder, [****] shall retain
                  [****] of the Net Advertising Revenue. [****] shall pay
                  [****], within [****] following the end of each quarter during
                  the Term, the remaining [****] of the Net Advertising Revenue
                  that is actually collected by [****] or any Affiliate of AOL
                  (collectively, the "Advertising Revenue Share").

                           (b) Net Button Advertising Revenue. In the event that
                  [****] sells (which such decision to sell shall be in [****]
                  sole discretion) any buttons that appear on the [****] IP
                  Telephony client (the "Special Buttons"), (i) [****] shall
                  receive (1) [****] of the Net Button Advertising Revenue
                  generated from the sale (without N2P participation or support)
                  of any such Special Button or (2) [****] of the Net Button
                  Advertising Revenue generated from the sale (with [****]
                  participation or support) of any such Special Button, and (ii)
                  [****] shall retain the remainder of such Net Button
                  Advertising Revenue (clauses (i) and (ii) above, collectively,
                  the "Net Button Advertising Revenue Share"). Notwithstanding
                  the foregoing, in no event shall the total portion of the Net
                  Button Advertising Revenue received by [****] during the Term
                  exceed [****] (i.e., after the receipt by [****] in Net Button
                  Advertising Revenue, [****] shall retain [****] of such Net
                  Button Advertising Revenue), except as otherwise mutually
                  agreed to by the Parties in writing. In the event that [****]
                  utilizes such

                                       17
<PAGE>   18
                                                               EXECUTION VERSION

                  Special Buttons to promote any [****] or other commercial
                  products or services, [****] shall utilize a portion of such
                  Special Buttons (i.e., at least one such Special Button) to
                  promote the [****] IP Telephony Services.

                  7.2.3 Definition of Net Advertising Revenue. For purposes of
                  this Agreement, "Net Advertising Revenue" shall mean, for any
                  calendar quarter, [****] (or, if no such commissions were
                  incurred, [****] of the gross revenues received by AOL for
                  such Advertisements). If Advertisements in the Designated
                  Advertising Areas are sold or otherwise made available to a
                  party that also purchases or obtains Advertisements through
                  one or more other areas or media of AOL or an Affiliate
                  (collectively, a "Combined Sale"), the revenue from the
                  Combined Sale shall be allocated [****] between such
                  Designated Advertising Areas and such other areas or media
                  (based on list prices for such Designated Advertising Areas
                  and other areas or media). For the avoidance of doubt, [****].

                  7.2.4 Ownership of Advertising. The right of N2P to
                  participate in the Net Advertising Revenue pursuant to the
                  provisions of this Section 7.2 shall in no way create any
                  ownership interest in N2P with respect to AOL advertising
                  inventory. AOL owns all right, title and interest in and to
                  the Advertisements and promotional spaces within the AIM
                  Service, including the Support Area and the AIM Client, and
                  AOL has the sole authority to market and sell such
                  Advertisements; provided, however, that AOL agrees that,
                  during the Initial Term within the Designated Advertising
                  Areas, AOL shall not include any Advertisements for (or sell
                  any advertising inventory to) N2P Competitors with respect to
                  (i) the Core Premium Services (to the extent that N2P enjoys
                  exclusivity with respect thereto under this Agreement) and
                  (ii) any Optional Service(s) or Expanded Service(s) which the
                  Parties mutually agree from time to time shall be exclusive to
                  N2P). Further, AOL shall be responsible for all obligations,
                  liabilities and duties under any and all agreements that AOL
                  has with third parties and otherwise with regard to such
                  Advertisements, including serving such advertisements, subject
                  to Section 15 of this Agreement.

                  7.3      Transaction Revenues Sharing Arrangement.

                  7.3.1 Revenue Threshold. If at any time during each of Years
                  One through Three or the Renewal Term of this Agreement the
                  amount of Transaction Revenues received by N2P during such
                  Year exceeds [****] (for each such Year, the "Revenue
                  Threshold"), then N2P will pay AOL, in partial consideration
                  for AOL's marketing and distribution efforts hereunder,
                  [****]. N2P will pay all of the foregoing amounts within
                  [****] following the end of the Year in which the applicable
                  Transaction Revenues were received. At the end of each such
                  Year, the calculation of Transaction Revenues for purposes of
                  this Section 7.3.1 shall recommence. N2P shall have the right
                  to collect and retain all [****] other than the [****] paid to
                  or retained by AOL. To the extent mutually agreed upon by the
                  Parties in writing in connection with any Billing Transition,
                  AOL shall be responsible (following any such Billing
                  Transition) for calculating the [****] and for paying N2P its
                  portion of such [****] as contemplated by this Section 7.3.1.

                  7.3.2 Revenue Share. The "Revenue Share" shall mean the
                  amounts to be paid to AOL (in each case, determined as a
                  percentage of Incremental Transaction Revenues) set forth on
                  Exhibit H hereto.

                  7.3.3 [****] Users. To the extent that N2P is required to
                  share revenue with [****] (pursuant to agreements in full
                  force and effect on the Effective Date) for transaction
                  revenues generated with respect to the Core Premium Services,
                  any Transaction Revenue received by N2P [****] with respect to
                  the Core Premium Services shall not constitute Transaction
                  Revenues for purposes of this Section.

                                       18
<PAGE>   19
                                                               EXECUTION VERSION

         7.4      No Other Revenue Sharing. Except as expressly provided in this
                  Section 7 and on Exhibit H, neither Party shall be entitled to
                  any revenues derived from, or related to, the activities of
                  the other Party.

         7.5      Alternative Revenue Streams. In the event that N2P receives or
                  desires to receive (directly or indirectly) any compensation
                  in connection with the AIM Service from the sale of any
                  Products other than the AIM IP Telephony Services or as
                  otherwise agreed to by the Parties (an "Alternative Revenue
                  Stream"), N2P will promptly inform AOL in writing, and the
                  Parties will negotiate in good faith regarding whether N2P
                  will be allowed to market the Products producing such
                  Alternative Revenue Stream (the "Alternative Products")
                  through the AIM Service, and if so, the equitable portion of
                  revenues from such Alternative Revenue Stream (if applicable)
                  that will be shared with AOL.

         7.6      Reports and Payments. Each Party (the "Paying Party") shall
                  comply with the following requirements in connection with its
                  payment obligations to the other Party (the "Payee Party")
                  under this Agreement: Within [****] following the end of each
                  payment period, the Paying Party shall provide the Payee Party
                  with a report that contains information detailing the amount
                  payable for such payment period. Such report shall, with
                  reasonable detail, explain the basis upon which such payment
                  has been determined and shall be accompanied by payment in
                  full of all amounts indicated on such report as due for such
                  period. Each such report shall constitute Confidential
                  Information of the Paying Party. Without limiting the
                  generality of the foregoing:

                           7.6.1 Reports on Transaction Revenues. N2P will
                  provide AOL with a report in a mutually agreed-upon format,
                  detailing the following activity in such period (and any other
                  information mutually agreed upon by the Parties as required
                  for measuring Transaction Revenues): [****] AOL will be
                  entitled to use the Sales Reports only in its internal
                  business operations, subject to the terms of this Agreement.
                  The report will also contain information which supports the
                  payment based on Transaction Revenues, including information
                  identifying [****].

                  7.6.2 Reports on Advertising Revenue Share. AOL will provide
                  N2P with a quarterly report in a mutually agreed-upon format,
                  detailing the following in such quarter (and any other
                  information mutually agreed upon by the Parties as required
                  for measuring Advertising Revenues): [****].

         7.7      Late Payments; Wired Payments. All amounts owed hereunder not
                  paid when due and payable will bear interest from the date
                  such amounts are due and payable at the prime rate in effect
                  at such time. All payments required to be paid to AOL
                  hereunder will be paid in immediately available,
                  non-refundable U.S. funds wired to the "America Online"
                  account, Account Number [****]. All payments required to be
                  paid to N2P hereunder will be paid in immediately available,
                  non-refundable U.S. funds wired to an account to be designated
                  by N2P (within thirty (30) days following the Effective Date)
                  in a written notification to AOL.

         7.8      Audit Rights. Each Party (as Paying Party) will maintain
                  complete, clear and accurate records of the information
                  required to determine the amounts of payments made hereunder.
                  For the sole purpose of ensuring compliance with the payment
                  obligations of this Agreement, either Party (as Payee Party)
                  will have the right to request that an independent certified
                  accountant selected by the Parties (and which accountant
                  enters into a confidentiality agreement mutually agreed to by
                  the Parties) conduct (no more than twice per calendar year of
                  this Agreement) a reasonable and necessary inspection of
                  portions of such books and records as are necessary to verify
                  the correctness of the payments made hereunder. Any such audit
                  may be conducted after twenty (20) business days prior written
                  notice to the Paying Party. The Payee Party shall bear the
                  expense of any audit conducted

                                       19
<PAGE>   20
                                                               EXECUTION VERSION

                  pursuant to this Section 7.8 unless such audit shows an error
                  in the Payee Party's favor amounting to a deficiency in excess
                  of [****] of the actual amounts payable to the Payee Party
                  hereunder, in which event the Paying Party shall bear the
                  reasonable costs and expenses incurred in connection with such
                  audit. The Paying Party shall pay the Payee Party the amount
                  of any deficiency discovered by the Payee Party within [****]
                  after receipt of notice thereof from the Payee Party, except
                  to the extent disputed in good faith by the Paying Party.

         7.9      Taxes. Each Party will collect and pay, and indemnify and hold
                  harmless the other Party from, any sales, use, excise, import
                  or export value added or similar tax or duty required to be
                  collected and paid by such Party, including any penalties and
                  interest, as well as any costs associated with the collection
                  or withholding thereof, including attorneys' fees
                  (collectively, the "Taxes").

         7.10     Fraudulent Transactions. To the extent permitted by applicable
                  law, N2P will (i) provide AOL with prompt notice of any
                  fraudulent order (a "Fraudulent Order"), including the date,
                  screen name or e-mail address and amount associated with such
                  order, promptly following N2P obtaining knowledge that the
                  order is, in fact, fraudulent and (ii) as promptly as possible
                  following the occurrence of any such Fraudulent Order (but in
                  no event later than one (1) month after the occurrence
                  thereof), provide AOL with a report regarding any such order
                  and the steps taken by N2P with respect thereto.

         7.11     [****]

8.       STOCK WARRANTS

         Attached hereto as Exhibit G is a form of amended and restated common
         stock warrant to be executed by N2P on behalf of AOL, or, if AOL so
         directs N2P in writing, any parent, subsidiary or affiliate entity of
         AOL). In the event that AOL directs N2P to issue such warrant to such
         other entity, the Parties agree that such entity shall have the right
         to enforce the terms of such warrant against N2P.

9.       EXCLUSIVITY

         9.1      Scope.

                           9.1.1 N2P Exclusivity. Subject to the provisions of
                  Section 1.1.8 (with respect to other AOL or third party PC to
                  PC communications products), and Section 4.14(d), and except
                  to the extent that AOL is expressly relieved of its
                  exclusivity obligations under this Agreement, N2P shall be the
                  exclusive provider of the Core Premium Services on the AIM
                  Service for the period of [****] immediately following the
                  Effective Date (the "N2P Exclusivity"); [****]. Provided that
                  N2P retains exclusivity hereunder with respect to any Core
                  Premium Service, AOL will not promote on the AIM Service any
                  IP Telephony service which is comparable to such Core Premium
                  Service. The Parties hereby acknowledge and agree that the N2P
                  Exclusivity may be terminated with respect to particular AIM
                  IP Telephony Services in accordance with the terms of this
                  Agreement.

                           9.1.2    [****].

         9.2      Optional Services. With respect to all other IP Telephony
                  services not expressly contemplated by this Agreement, [****]
                  with respect to the offering of such additional services
                  through the AIM Service. In the event that the Parties cannot
                  agree, within such time period, to the terms and conditions
                  regarding the provision of any such additional service to AIM
                  Members through the AIM Service, AOL shall have the right to
                  offer such additional service(s) to AIM Members through any
                  third party (including, without limitation, [****].

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<PAGE>   21
                                                               EXECUTION VERSION

         9.3      Termination of Exclusivity. In the event that [****] is
                  entitled to relief from the [****] as to a particular Core
                  Premium Service and/or country in accordance with the express
                  terms and conditions of this Agreement, then only the [****]
                  with respect to such Core Premium Service and/or country (as
                  the case may be and subject to Section 16 hereof) shall
                  terminate.

         9.4      Exception to Exclusivity. For the avoidance of doubt, the
                  Parties acknowledge that the N2P Exclusivity does not preclude
                  the listing of N2P Competitors or any AOL PC-to-PC
                  communication function in any whites pages, yellow pages or
                  other online search or directory service, subject to Section
                  4.1.4 and Section 7.2.4.

10.      LICENSE FROM N2P

         10.1     Licenses.

                           10.1.1 Software License. Subject to all the terms and
                  conditions of this Agreement, N2P hereby grants to AOL a
                  worldwide, non-exclusive, non-transferable, [****] license for
                  the Term to use, reproduce, distribute directly and
                  indirectly, transmit, display, perform and sublicense (i.e.,
                  grant to end-users the right to use) and adapt the AOL IP
                  Telephony Software, including any and all components (e.g.,
                  APIs, and the reference implementations for the SDK and APIs)
                  contained in the AOL IP Telephony Software necessary to
                  effectuate the provision of the AIM IP Telephony Services to
                  AIM users, and the use by end-users of the AIM IP Telephony
                  Services, in each case, in object code form only (except as
                  provided in Sections 10.1.2 and 10.2) in accordance with the
                  terms of this Agreement. To the extent reasonably requested by
                  AOL, N2P shall deliver the AOL IP Telephony Software
                  electronically to AOL.

                           10.1.2 SDK License. Within thirty (30) days from the
                  Effective Date, N2P shall provide AOL [****] with a software
                  development kit ("SDK"), and updates thereto during the Term,
                  which shall contain such object code (and/or source code, if
                  necessary) and/or other applicable technology, relating to the
                  AOL IP Telephony Software or otherwise, to the extent
                  reasonably necessary for AOL to integrate all of the Core
                  Premium Services within the AIM Client, and perform any and
                  all of its other obligations and exercise its rights under
                  this Agreement. Without limiting the provisions of Section
                  10.1.1, N2P agrees that AOL shall have the right to use, adapt
                  and copy, in any manner whatsoever, the components contained
                  in the SDK provided by N2P (e.g., object code) in connection
                  therewith. Notwithstanding the foregoing, in the event that
                  N2P does not provide AOL with such SDK within [****] of the
                  Effective Date, in addition to any other remedies AOL may
                  have, AOL shall have the right to terminate the exclusivity
                  with respect to all of the Core Premium Services. In addition
                  to the foregoing, AOL shall have the right to request, from
                  time to time during the Term, that N2P provide AOL with
                  additional SDKs which shall contain such source code (as
                  necessary), object code, and/or other applicable technology
                  necessary to allow AOL to integrate any and all additional AIM
                  IP Telephony Services (e.g., the Optional Services, and/or the
                  Expanded Services ) designated by AOL within the AIM Client.
                  In such event, N2P shall provide AOL with such additional
                  SDK(s) as the necessary technology becomes generally available
                  (following such request from AOL, which request shall contain
                  reasonable specificity of the technology needed from N2P by
                  AOL for such integration), and such additional SDK(s), and the
                  technology contained therein, shall be deemed through this
                  reference incorporated within the licenses granted to AOL in
                  this Section 10.1.2 and in Section 10.1.1.

                           10.1.3 Purpose of License. The foregoing license is
                  expressly intended to permit (and limited to permitting) AOL
                  to effectuate all of its rights and conduct all of the
                  business expressly contemplated hereunder, including
                  distributing the AIM IP Telephony Services

                                       21
<PAGE>   22
                                                               EXECUTION VERSION

                  pursuant to the terms and conditions of this Agreement. Except
                  as set forth in this Section 10.1, Sections 10.2 and 12.1 or
                  as otherwise set forth in this Agreement (including, without
                  limitation, with respect to the AOL GUI), AOL acknowledges and
                  agrees that N2P and its licensors retain all rights, title and
                  interest in and to the AOL IP Telephony Software in both
                  object and source code forms, and, except pursuant to the
                  Source Code Escrow Agreement, or as otherwise set forth in
                  this Agreement, AOL shall not have any rights to use such code
                  licensed hereunder following termination of this Agreement
                  without N2P's consent. AOL shall not have any right under any
                  circumstances, or authorize any third party (which, for
                  avoidance of doubt, includes any Affiliate of AOL), to (i)
                  [****] the AOL IP Telephony Software (other than adaptation in
                  accordance with Sections 10.1.1, 10.1.2, or in connection with
                  AOL's integration obligations hereunder, or as otherwise
                  authorized by the Source Code Escrow Agreement or license
                  described in Section 10.2), (ii) [****], or otherwise [****]
                  the source code for or underlying algorithms, processes or
                  methods of the AOL IP Telephony Software that is provided in
                  object code form, or (iii) [****] the AOL IP Telephony
                  Software to any third party (other than as expressly provided
                  in this Agreement). All copies of the AOL IP Telephony
                  Software made hereunder shall include all proprietary notices
                  included on the copy provided by N2P, and AOL shall not
                  remove, deface or obscure or authorize to be removed, defaced
                  or obscured any of N2P's or its licensors' proprietary rights
                  notices on or in the AOL IP Telephony Software or on output
                  generated by the software; provided that the placement of such
                  notices, if any, in the AOL IP Telephony Software that are
                  visible in the user interface of such software shall be
                  subject to AOL's prior written approval, which approval will
                  not be unreasonably withheld. AOL agrees that any and all
                  copies of the AOL IP Telephony Software distributed to third
                  parties shall be pursuant to binding license agreements no
                  less restrictive or protective of N2P's rights than this
                  Section 10.1. AOL agrees that any material violation of this
                  Section 10.1 by AOL that is not cured by AOL within [****]
                  shall constitute a material breach of this Agreement. N2P
                  agrees to provide the AOL IP Telephony Software in object code
                  form (except as set forth in Sections 10.1.1, 10.1.2, 10.2 or
                  otherwise), including all required Documentation, to AOL as
                  and when needed for AOL to exercise its rights under this
                  Agreement. For the avoidance of doubt, the Parties acknowledge
                  that the AOL IP Telephony Software, may not be provided by N2P
                  to any third party.

         10.2     Source Code License and Escrow.

                           10.2.1 Escrow Agreement. N2P and AOL will enter into
                  an escrow agreement (the "Source Code Escrow Agreement"),
                  containing terms and conditions subject to the mutual
                  agreement of the Parties, for the limited use by AOL of the
                  AOL IP Telephony Software in source code form (the "Source
                  Code") solely for the purposes of undertaking any activity
                  which N2P is obligated to perform or undertake hereunder and
                  fails to perform or undertake as required hereunder. The
                  Source Code Escrow Agreement shall provide that AOL shall be
                  entitled to a copy of the Source Code only upon the occurrence
                  of all of the following four (4) events (collectively, the
                  "Release Conditions"): (i) N2P's material breach of its
                  material obligations hereunder to provide, maintain or support
                  the AOL IP Telephony Software, which breach materially
                  adversely affects the AIM IP Telephony Services; (ii) AOL's
                  written notice to N2P detailing such material breach; and
                  (iii) N2P fails to cure such material breach within ninety
                  (90) days of receipt of such notice; or (iv) N2P's failure to
                  provide the SDK to AOL to AOL's reasonable satisfaction,
                  pursuant to Section 10.1.2. The license will not include any
                  right to [****] the Source Code to any third party without
                  N2P's prior written consent, and the Source Code Escrow
                  Agreement will contain provisions, reflective of the
                  sensitivity of the Source Code, to preclude the unauthorized
                  use or disclosure of the Source Code or information derived
                  therefrom. Promptly after execution of this Agreement, and in
                  any event within [****], N2P and AOL shall negotiate and enter
                  into the Source Code Escrow Agreement with Data Securities
                  International or another escrow holder acceptable to each
                  Party. The Source Code Escrow Agreement will contain
                  provisions for N2P to provide AOL with reasonable assistance
                  in understanding and using the Source Code upon occurrence of
                  the Release Conditions.

                                       22
<PAGE>   23
                           10.2.2 Limited Source Code License. To the extent
                  reasonably necessary for AOL to modify, develop, add, delete
                  or use any functionality or features of the AIM IP Telephony
                  Services in connection with the development of any Additional
                  AOL Modifications pursuant to Section 2.3.4, N2P shall provide
                  to AOL APIs or SDKs to the AOL IP Telephony Software so that
                  such Additional Modifications or other obligations under this
                  Agreement (e.g., Section 2.1) (whether developed by N2P, AOL
                  or any third party) can interoperate with (including use of
                  the principal functions of) the AOL IP Telephony Software;
                  provided, however, that, to the extent that such APIs or SDKs
                  are insufficient to enable such interoperability, N2P shall
                  either (i) modify, as promptly as commercially practicable,
                  the APIs or SDKs [****], the AOL IP Telephony Software or the
                  Additional Modifications to enable such interoperability, or
                  (ii) in the event that (a) N2P does not perform the work
                  described in clause (i) of this Section 10.2.2 as promptly as
                  commercially practicable or (b) elects not to perform such
                  work, provide to AOL portions of the Source Code for the AOL
                  IP Telephony Software (and grant a license) necessary to
                  permit AOL to modify the APIs, SDKs, or AOL IP Telephony
                  Software to enable such interoperability. If N2P elects to do
                  the modifications, it shall make the modifications as promptly
                  as is commercially reasonable. AOL's use of the Source Code
                  pursuant to this Section 10.2.2 will not include any right to
                  sublicense, transfer, assign, disclose or distribute the
                  Source Code to any third party without N2P's prior written
                  consent, and will be subject to mutually agreed provisions,
                  reflective of the sensitivity of the Source Code, to preclude
                  the unauthorized use or disclosure of the Source Code or
                  information derived therefrom.

                           10.2.3 Limits on Use. AOL's use of the Source Code
                  shall not exceed the narrow purpose set forth in Section
                  10.2.1 or Section 10.2.2.

         10.3     Trademark License. Subject to the terms and conditions of this
                  Agreement, N2P will be entitled to use the following trade
                  names, trademarks, and service marks of AOL: the "AOL(TM)"
                  trademark and service mark and other trademarks and service
                  marks relating specifically to one or more of the AIM IP
                  Telephony Services, provided that AOL has approved in writing
                  the use of each such other trademarks or service marks
                  (collectively, the "AOL Marks"). Subject to the terms and
                  conditions of this Agreement, AOL will be entitled to use the
                  trademarks and service marks of N2P set forth on Exhibit J
                  hereto and other trademarks and service marks relating
                  specifically to one or more of the N2P IP Telephony Services,
                  provided that N2P has approved in writing the use of such
                  other trademarks or service marks (collectively, the "N2P
                  Marks") (collectively, together with the AOL Marks, the
                  "Marks"); provided that: (i) each Party does not create a
                  unitary composite mark involving a Mark of the other Party
                  without the prior written approval of such other Party; (ii)
                  each Party displays symbols and notices clearly and
                  sufficiently indicating the trademark status and ownership of
                  the other Party's Marks in accordance with applicable
                  trademark law and practice; and (iii) all such uses of the
                  other Party's Marks shall be subject to the quality standards
                  set forth in Section 10.5 of this Agreement, and the granting
                  Party's prior written approval.

         10.4     Ownership of Trademarks. Each Party acknowledges the ownership
                  right of the other Party in the Marks of the other Party and
                  agrees that all use of the other Party's Marks will inure to
                  the benefit, and be on behalf, of the other Party. Each Party
                  acknowledges that its utilization of the other Party's Marks
                  will not create in it, nor will it represent it has, any
                  right, title, or interest in or to such Marks other than the
                  licenses expressly granted herein. Each Party agrees not to do
                  anything contesting or impairing the rights of the other Party
                  in such other Party's Marks.

         10.5     Quality Standards. Each Party agrees that the nature and
                  quality of its products and services supplied in connection
                  with the other Party's Marks will conform to quality standards
                  set by the other Party. Each Party agrees to supply the other
                  Party, upon

                                       23
<PAGE>   24
                  request, with a reasonable number of samples of any materials
                  publicly disseminated by such Party which utilize the other
                  Party's Marks. Each Party will comply with all applicable
                  laws, regulations, and customs and obtain any required
                  government approvals pertaining to use of the other Party's
                  Marks.

         10.6     Infringement Proceedings.

                           10.6.1 Notification. Each Party agrees to promptly
                  notify the other Party of any third party's unauthorized use
                  of the other Party's Marks or other intellectual property
                  rights (including, without limitation, those set forth in
                  Section 12) of which it has actual knowledge. Each Party will
                  have the sole right and discretion to bring proceedings
                  alleging infringement of its Marks and other intellectual
                  property rights; provided, however, that each Party agrees to
                  provide the other Party with its reasonable cooperation and
                  assistance with respect to any such infringement proceedings.

                         10.6.2 Infringement Claims. In addition to the remedies
                  set forth in Sections 16.2 and 16.7 of this Agreement, in the
                  event that during the Initial Term, one (1) or more
                  infringement actions, claims or proceedings are brought
                  against either Party concerning (i) [****] (each, an
                  "Infringement Claim" and collectively, "Infringement Claims"),
                  and such Infringement Claim or Infringement Claims result(s)
                  in the issuance of a preliminary or permanent injunction
                  prohibiting the promotion, distribution or use of [****]
                  during the Initial Term, and which last (with respect to each
                  such service) [****] following the issuance thereof, AOL shall
                  have the following rights and remedies with respect to N2P:

                           (a) AOL may immediately terminate its exclusivity
                  obligations with respect to such preliminarily or permanently
                  enjoined Core Premium Services upon delivery of notice to N2P;
                  and

                           (b) AOL shall be entitled to immediately terminate
                  this Agreement in the event that (a) an injunction or
                  injunctions (whether preliminary or permanent) is or are
                  issued with respect to any Core Premium Service or Core
                  Premium Services, and (b) any such injunction or injunctions
                  lasts or last, in the aggregate, for a period of [****].

11.      PUBLICITY

         11.1     Press Releases. After execution of this Agreement, N2P may
                  issue an initial press release, with terms to be mutually
                  agreed by the Parties, regarding this Agreement and the
                  relationship between the Parties established hereby. The
                  Parties will mutually agree on the appropriate timing of each
                  such release and any other public announcement of the
                  relationship. Each Party agrees that it shall not issue any
                  other press release or make any public announcement regarding
                  this Agreement, including AOL or the AIM IP Telephony
                  Services, without the prior written consent of the other
                  Party; provided, however, that each Party shall be permitted,
                  without the other Party's prior consent, merely to list the
                  other Party's as one of its industry partners and to repeat
                  factual information or statements contained in any mutually
                  agreed-upon press release.

         11.2     Statements to Third Parties. Neither Party shall make,
                  publish, or otherwise communicate, or cause to be made,
                  published, or otherwise communicated, any deleterious remarks
                  whatsoever to any third parties concerning the other Party or
                  its affiliates, directors, officers, employees or agents,
                  including without limitation, the other Party's products,
                  services, business projects, business capabilities,
                  performance of duties and services or financial position.

                                       24
<PAGE>   25
12.      OWNERSHIP

         12.1     AOL Properties. As between the Parties, AOL owns all
                  copyrights, patents, trade secrets, trademarks, trade name
                  rights, other intellectual property rights, and all other
                  right, title and interest, in and to (i) the components of the
                  AIM Client and the AIM Service, and any Updates thereto,
                  including, but not limited to the AOL GUI, that (in each case)
                  are developed or supplied by AOL; (ii) the Commissioned Works
                  (but excluding the Joint Work Product), subject to the rights
                  expressly granted to N2P as set forth in this Agreement; (iii)
                  the AOL Service; (iv) the AOL Marks; and (v) the AOL
                  Namespace. Without limiting the generality of the foregoing,
                  all right, title and interest in and to all servers and
                  server-based technology related to the AIM Service developed
                  or supplied by AOL (including, without limitation, protocols,
                  parameters, designs, specifications and user identification
                  algorithms and technology underlying such algorithms) shall be
                  owned by AOL. Except as expressly authorized in this
                  Agreement, N2P will not access or use in any manner the AOL
                  Namespace or any portion thereof. Without limiting the
                  foregoing, N2P shall not use, substitute or assign aliases in
                  place of names assigned by the AOL Registration Process to
                  users of the AIM IP Telephony Services.

         12.2     N2P Properties. As between the Parties, N2P owns all
                  copyrights, patents, trade secrets, trademarks, trade name
                  rights, other intellectual property rights, and all other
                  right, title and interest, in and to the N2P System, the N2P
                  Services (including, but not limited to, the elements of
                  graphics, design, organization, presentation, layout,
                  navigation and stylistic convention (including the digital
                  implementations thereof) of the graphical user interface
                  generally associated with online areas contained within the
                  N2P System and the N2P Services), the N2P IP Telephony
                  Software, the AOL IP Telephony Software and the AIM IP
                  Telephony Services (including, in each case, Updates thereto)
                  that (in each case) are developed or supplied by N2P (but
                  excluding the AOL GUI, the AOL Look and Feel (and any other
                  AOL Properties set forth in Section 12.1 above) the Joint Work
                  Product and the Commissioned Works), subject to the rights
                  expressly granted to AOL as set forth in this Agreement.
                  Without limiting the generality of the foregoing, all right,
                  title and interest in and to all servers and server-based
                  technology related to the N2P System and the N2P Services
                  developed or supplied by N2P, including, without limitation,
                  protocols, parameters, designs, specifications and user
                  identification algorithms and technology underlying such
                  algorithms, shall be owned by N2P.

         12.3     Co-Development. Any works, including without limitation,
                  software or other copyrightable materials, as to which both
                  Parties (or their employees, contractors or agents) are joint
                  authors, and any patents as to which both Parties (or their
                  employees, contractors, or agents) are co-inventors
                  (collectively, the "Joint Work Product") shall be jointly
                  owned by the Parties (with each Party having the right to use
                  and exploit, or authorize the use or exploitation by others of
                  such Joint Work Product, provided that such use or
                  exploitation is not in breach of this Agreement), without an
                  obligation to obtain the consent of, or to account to, the
                  other Party and subject to N2P's and AOL's respective
                  proprietary rights in any underlying software, works, or
                  technology to the extent incorporated or included in such
                  Joint Work Product. Notwithstanding the foregoing, to the
                  extent that with respect to any co-developed works created
                  under this Agreement, the Parties shall not constitute
                  co-authors or co-inventors, and N2P owns such works or
                  inventions as a matter of law, any and all such works or
                  inventions shall be deemed included in the license set forth
                  in Section 10.1, and AOL shall be deemed by this reference to
                  have a fully paid-up, royalty-free, non-exclusive,
                  non-transferable and worldwide license for the Term to use,
                  reproduce, distribute (directly and indirectly), transmit,
                  display, perform, sublicense and adapt such works as set forth
                  in Section 10.1 of this Agreement. Each Party shall cooperate
                  with the other Party in documenting and perfecting all rights
                  with respect to the Joint Work Product, including executing
                  any necessary assignments, applications or other documentation
                  with respect to

                                       25
<PAGE>   26
                  the Joint Work Product.

13.      CONFIDENTIAL INFORMATION

         Each Party acknowledges that Confidential Information may be disclosed
         to the other Party during the course of this Agreement. Each Party
         agrees that it will take reasonable steps, at least substantially
         equivalent to the steps it takes to protect its own proprietary
         information (and, in no event, with less than the exercise of
         reasonable care), during the Term, and for a period of [****] following
         expiration or termination of this Agreement, to prevent the duplication
         or disclosure of Confidential Information of the other Party, other
         than by or to its employees or agents who must have access to such
         Confidential Information to perform such Party's obligations hereunder,
         each of whom shall agree to comply with this Section. Notwithstanding
         the foregoing, either Party may disclose Confidential Information
         without the consent of the other Party, [****]. Furthermore, in the
         event that such disclosure is required of either Party under the laws,
         [****] or any other applicable governing body, such Party will (i)
         redact portions of this Agreement [****] to the fullest extent
         permitted under applicable laws, rules and regulations and (ii) submit
         a request to such governing body that such portions and other
         provisions of this Agreement receive confidential treatment under the
         laws, rules and regulations of the governing body or otherwise be held
         in the strictest confidence to the fullest extent permitted under such
         laws, rules and regulations.

14.      REPRESENTATIONS AND WARRANTIES; INDEMNITIES

         14.1     Joint. Each Party represents and warrants to the other Party
                  that: (i) such Party has the full corporate right, power and
                  authority to enter into this Agreement, to grant the licenses
                  granted hereunder and to perform the acts required of it
                  hereunder; (ii) the execution of this Agreement by such Party,
                  and the performance by such Party of its obligations and
                  duties hereunder, do not and shall not violate any agreement
                  to which such Party is a party or by which it is otherwise
                  bound or any applicable law; (iii) when executed and delivered
                  by such Party, this Agreement shall constitute the legal,
                  valid and binding obligation of such Party, enforceable
                  against such Party in accordance with its terms; and (iv) to
                  the best of its knowledge after due inquiry, the N2P
                  Indemnified Properties (in the case of N2P) and the AOL
                  Indemnified Properties (in the case of AOL) do not infringe,
                  misappropriate or violate any patents, copyrights, trade
                  secrets, trademarks or other proprietary rights of any third
                  parties. Additionally, N2P hereby represents, to the best of
                  its knowledge and after due inquiry, that it possesses (and
                  warrants that it will obtain during the Term) all
                  authorizations, approvals, consents, licenses, permits,
                  certificates and all other rights and permissions necessary
                  for it to (a) perform under this Agreement or (b) to offer the
                  AOL IP Telephony Software and the AIM IP Telephony Services
                  hereunder (including, without limitation, the N2P Services and
                  N2P IP Telephony Software offered as part thereof).

         14.2     Intellectual Property Indemnity. Each Party (the "IP
                  Indemnifying Party") shall, at its sole cost and expense,
                  indemnify, hold harmless and defend the other Party, and such
                  other Party's officers, directors, agents, affiliates,
                  distributors, franchisees and employees (the "IP Indemnified
                  Party"), from any and all claims, demands, liabilities, costs
                  or expenses of third parties (including, without limitation,
                  reasonable attorney's fees) (collectively, the "Liabilities")
                  arising from or in connection with a third-party claim that
                  the N2P Indemnified Properties (in the case of N2P) or the AOL
                  Indemnified Properties (in the case of AOL) infringes upon any
                  patents, copyrights, trade secrets, trademarks or other
                  proprietary rights of such third party. The IP Indemnifying
                  Party shall pay any damages (including costs and attorneys'
                  fees) finally awarded against the IP Indemnified Party by a
                  court of competent jurisdiction as a result of such claim (or
                  pay any settlement of such claim agreed to by the IP
                  Indemnifying Party). The foregoing obligation of the
                  Indemnifying Party shall not apply to any such claim to the
                  extent that it is based on or arises out of

                                       26
<PAGE>   27
                  services, software, materials or rights specifically granted
                  pursuant to this Agreement by the IP Indemnified Party. The IP
                  Indemnified Party shall promptly notify the IP Indemnifying
                  Party in writing of any indemnifiable claim after the IP
                  Indemnified Party first learns of such claim, and shall
                  provide the Indemnifying Party with such assistance and
                  cooperation as the IP Indemnifying Party may reasonably
                  request from time to time in connection with the defense or
                  settlement thereof. The IP Indemnified Party shall have the
                  right to employ separate counsel and to participate in the
                  defense of any such claim at its own expense. If any
                  settlement requires a material affirmative obligation of,
                  results in any material ongoing liability to, or prejudices or
                  detrimentally impacts in any material way, the IP Indemnified
                  Party, then such settlement shall require the IP Indemnified
                  Party's written consent, which shall not be unreasonably
                  withheld. If the IP Indemnified Party is enjoined or
                  restrained from exercising any of its rights under this
                  Agreement as a result of an infringement claim, or if any such
                  claim is brought or threatened, the IP Indemnifying Party
                  shall have the right, at its option, to (i) obtain a license
                  at no cost to the IP Indemnified Party permitting continued
                  use of the software or other materials that are the subject of
                  such claim on terms and conditions consistent with the rights
                  granted to the IP Indemnified Party hereunder, (ii) modify the
                  software or other materials that are the subject of such claim
                  to perform their intended function without infringing third
                  party rights and without materially affecting the
                  functionality or performance of such software or other
                  materials, (iii) substitute software or other materials that
                  are the subject of such claim with items of comparable
                  functionality and performance, or (iv) if none of the
                  foregoing is reasonably practicable, terminate this Agreement.

         14.3     Indemnity. Each Party (the "Indemnifying Party") shall, at its
                  sole cost and expense, indemnify, hold harmless and defend the
                  other Party, and its officers, directors, agents, affiliates,
                  distributors, franchisees and employees (the "Indemnified
                  Party"), from any and all Liabilities arising from or in
                  connection with a third-party claim based upon the
                  Indemnifying Party's material breach of any duty,
                  representation or warranty contained in this Agreement, and
                  shall pay any damages (including costs and attorneys' fees)
                  finally awarded against the Indemnified Party by a court of
                  competent jurisdiction as a result of such claim (or pay any
                  settlement of such claim agreed to by the Indemnifying Party).
                  The foregoing obligation of the Indemnifying Party shall not
                  apply to any such claim to the extent that it is based on or
                  results from services, software, materials, information or
                  rights provided by the Indemnified Party. The Indemnified
                  Party shall promptly notify the Indemnifying Party in writing
                  of any indemnifiable claim after the Indemnified Party first
                  learns of such claim, and shall provide the Indemnifying Party
                  with such assistance and cooperation as the Indemnifying Party
                  may reasonably request from time to time in connection with
                  the defense or settlement thereof. The Indemnified Party shall
                  have the right to employ separate counsel and to participate
                  in the defense of any such claim at its own expense. If any
                  settlement requires a material affirmative obligation of,
                  results in any material ongoing liability to, or prejudices or
                  detrimentally impacts the Indemnified Party in any material
                  way, then such settlement shall require the Indemnified
                  Party's written consent, which shall not be unreasonably
                  withheld.

15.      LIMITATION ON LIABILITY; DISCLAIMER

         15.1     LIABILITY. UNDER NO CIRCUMSTANCES WILL EITHER PARTY BE LIABLE
                  TO THE OTHER PARTY FOR INDIRECT, INCIDENTAL, CONSEQUENTIAL,
                  SPECIAL OR EXEMPLARY DAMAGES (EVEN IF THAT PARTY HAS BEEN
                  ADVISED OF THE POSSIBILITY OF SUCH DAMAGES), ARISING FROM
                  BREACH OF OR OTHERWISE RELATING TO THIS AGREEMENT OR THE
                  SUBJECT MATTER HEREOF, INCLUDING, WITHOUT LIMITATION, THE SALE
                  OF PRODUCTS, THE USE OR INABILITY TO USE THE AIM SERVICE, THE
                  AIM CLIENT, THE AIM IP TELEPHONY SERVICES, THE SUPPORT AREA,
                  THE AOL IP TELEPHONY SOFTWARE, THE N2P

                                       27
<PAGE>   28
                  SYSTEM, OR THE N2P IP TELEPHONY SOFTWARE, INCLUDING, BUT NOT
                  LIMITED TO, LOSS OF REVENUE OR ANTICIPATED PROFITS OR LOST
                  BUSINESS (COLLECTIVELY, "DISCLAIMED DAMAGES"); PROVIDED THAT
                  EACH PARTY WILL REMAIN LIABLE TO THE OTHER PARTY TO THE EXTENT
                  ANY DISCLAIMED DAMAGES ARE PAYABLE TO A THIRD PARTY AND ARE
                  SUBJECT TO INDEMNIFICATION PURSUANT TO SECTION 14.2 OR 14.3.
                  EXCEPT FOR SUCH LIABILITY UNDER SECTIONS 14.2 AND 14.3, (I)
                  LIABILITY ARISING UNDER THIS AGREEMENT WILL BE LIMITED TO
                  DIRECT, OBJECTIVELY MEASURABLE DAMAGES, AND (II) THE MAXIMUM
                  LIABILITY OF ONE PARTY TO THE OTHER FOR ANY CLAIMS ARISING IN
                  CONNECTION WITH THIS AGREEMENT WILL NOT EXCEED (EXCLUSIVE OF
                  AMOUNTS ALREADY PAID BY EITHER PARTY TO THE OTHER PARTY
                  HEREUNDER) [****]; PROVIDED THAT EACH PARTY WILL REMAIN LIABLE
                  FOR THE AGGREGATE AMOUNT OF ANY PAYMENT OBLIGATIONS DUE AND
                  PAYABLE TO THE OTHER PARTY PURSUANT TO THE AGREEMENT.

         15.2     NO ADDITIONAL WARRANTIES. EXCEPT AS EXPRESSLY SET FORTH IN
                  THIS AGREEMENT, NEITHER PARTY MAKES, AND EACH PARTY HEREBY
                  SPECIFICALLY DISCLAIMS, ANY REPRESENTATIONS OR WARRANTIES,
                  EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED WARRANTY OF
                  MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE AND
                  IMPLIED WARRANTIES ARISING FROM COURSE OF DEALING OR COURSE OF
                  PERFORMANCE. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING,
                  EACH PARTY SPECIFICALLY DISCLAIMS ANY WARRANTY REGARDING THE
                  REVENUE FROM OR SUCCESS OF THE AIM IP TELEPHONY SERVICES.

         16.      TERM AND TERMINATION

                  16.1     Term.

                           16.1.1 Initial Term. Unless earlier terminated as set
                  forth herein, the initial term of this Agreement (the "Initial
                  Term") shall be the lesser of [****].

                           16.1.2 Extension Periods. Upon the expiration of the
                  Initial Term, AOL may elect, in its sole discretion, to extend
                  the term of this Agreement for an additional period [****] on
                  the same terms and conditions as the Initial Term (the
                  "Renewal Term"), and for [****] each thereafter (each, an
                  "Extension Period"), up to an aggregate maximum of [****] (the
                  Initial Term, together with the Renewal Term and any Extension
                  Periods, collectively referred to herein as the "Term"). AOL
                  shall be deemed to have exercised its option for the Renewal
                  Term, or any Extension Period unless, at least [****] prior to
                  the expiration of the Initial Term, or the Renewal Term (in
                  the case of the first Extension Period) (or, as to the second
                  Extension Period, at least [****] prior to the end of the
                  first Extension Period), AOL provides written notice to N2P
                  that AOL does not wish to exercise its option for the
                  forthcoming Extension Period. During any Extension Period, the
                  obligations of the Parties with respect to exclusivity,
                  development, and , promotions [] shall not apply. Without
                  limitation of the generality of the foregoing, during any
                  Extension Period, (i) the Parties will not be subject to the
                  obligations of Sections [****] of this Agreement; (ii) [****]
                  with respect to all [****] generated during the Renewal Term
                  and/or any Extension Period and [****] set forth in Section
                  7.2.2 of this Agreement.

         16.2      Termination for Breach. Except as expressly provided
                   elsewhere in this Agreement, either Party may terminate this
                   Agreement at any time in the event of a material breach of
                   the Agreement by the other Party which remains uncured after
                   thirty (30) days written

                                       28
<PAGE>   29
                  notice thereof to the other Party (or such other period as may
                  be expressly specified elsewhere in this Agreement); provided
                  that the cure period with respect to any scheduled payment
                  shall be thirty (30) days following receipt by the Party owing
                  such payment of written notice of the failure to make such
                  payment. For avoidance of doubt, the Parties acknowledge that,
                  if a particular provision of this Agreement includes a right
                  to terminate this Agreement due to breach of such provision
                  after a cure period set forth in such provision, only such
                  other cure period shall apply, and the thirty (30) day cure
                  period set forth in this Section 16.2 shall not be in addition
                  to such other cure period.

         16.3     Termination on Change of Control. Promptly upon undergoing any
                  Change of Control, each Party shall provide the other Party
                  with written notice thereof. In the event of (i) a Change of
                  Control of N2P resulting in Control of N2P by an AOL
                  Competitor or AOL Competitor or (ii) in the event that N2P is
                  (at the time of such Change of Control) Controlled by the
                  Parent Company, any Change of Control of the Parent Company
                  resulting in Control of the Parent Company by any AOL
                  Competitor , AOL shall have the right to terminate this
                  Agreement by providing thirty (30) days' prior written notice
                  of such intent to terminate. In the event of (i) a Change of
                  Control of AOL resulting in Control of AOL by an N2P
                  Competitor or Parent Company Competitor or (ii) if AOL is (at
                  the time of such Change of Control) Controlled by AOL, any
                  Change of Control of AOL resulting in Control of AOL by any
                  N2P Competitor or Parent Company Competitor, N2P may terminate
                  this Agreement by providing thirty (30) days' prior written
                  notice of such intent to terminate. Notwithstanding anything
                  to the contrary, each Party's termination right under this
                  Section 16.3 shall be exercised no later than thirty (30) days
                  following such Party's receipt of written notice of the Change
                  of Control triggering such termination right, and shall expire
                  if not exercised within such thirty (30) day period.

                           16.3.1 AOL Buyout Right. Notwithstanding the
                  provisions of the Section 16.3, if during the Initial Term,
                  AOL is acquired by or acquires a telecommunications company
                  with a market capitalization in excess of the Buyout
                  Threshold, AOL shall have the right to terminate this
                  Agreement by providing thirty (30) days prior written notice
                  to N2P and AOL shall refund to N2P an amount equal to [****].

         16.4     Termination for Bankruptcy/Insolvency. Either Party may
                  terminate this Agreement immediately following written notice
                  to the other party if the other party (i) ceases to do
                  business in the normal course, (ii) becomes or is declared
                  insolvent or bankrupt, (iii) is the subject of any proceeding
                  related to its liquidation or insolvency (whether voluntary or
                  involuntary) which is not dismissed within ninety (90)
                  calendar days or (iv) makes an assignment for the benefit of
                  creditors.

         16.5     Termination for Regulated Entity Event.

                           16.5.1 United States. The Parties acknowledge that in
                  undertaking the obligations set forth herein, AOL is not
                  offering services as a reseller of telecommunications services
                  or as a provider of telecommunications services. It is
                  understood and agreed that if, during the Term, the Federal
                  Communications Commission or any other relevant United States
                  federal regulatory body issues (or is reasonably likely to
                  issue) a ruling that subjects (or is reasonably likely to
                  subject, as the case may be) AOL to regulation as a reseller
                  or provider of telecommunications services (or similar
                  regulation) (collectively, a "Regulated Entity Event"), the
                  Parties agree to work together in good faith to amend this
                  Agreement to ensure that AOL can secure the benefit of the
                  bargain under this Agreement without being subject to
                  telecommunications related regulation in the United States as
                  a telecommunications reseller or provider (or

                                       29
<PAGE>   30
                  similar status). If the Parties are unable to agree upon such
                  amendments within ninety (90) days of AOL's notification of
                  the Regulatory Entity Event, AOL may terminate this Agreement
                  without liability by providing written notice of its intention
                  to terminate.

                           16.5.2 International. In the event that during the
                  Term any non-US regulatory body issues (or is reasonably
                  likely to issue) a ruling that subjects (or is reasonably
                  likely to subject, as the case may be) AOL to a
                  telecommunications or similar regulation that could prevent
                  AOL from obtaining the benefit of the bargain under this
                  Agreement (e.g., regulation as a reseller or provider of
                  telecommunications services (or similar status)), the Parties
                  shall work together in good faith to amend this Agreement to
                  ensure that AOL can secure the benefit of the bargain under
                  this Agreement without being subject to telecommunications
                  related or similar regulation in such country. If the Parties
                  are unable to agree upon such amendments within ninety (90)
                  days of AOL's notification of the regulatory event likely to
                  cause AOL to be subjected to any such regulation, AOL may
                  terminate this Agreement with respect to the country (or
                  countries) in which such regulatory event applies without
                  liability, upon delivery of written notice.

         16.6     Termination for Non-Competitiveness. At any time following the
                  [****] anniversary of the Effective Date, (i) AOL shall have
                  the right to terminate this Agreement, in the event that:

                           (a) [****] or more of the Core Premium Services do
                  not satisfy the requirements of Section 3.1 of this Agreement;

                           (b) [****] or more of the Core Premium Services do
                  not satisfy the requirements of Section 3.2 of this Agreement;

                           (c) [****] or more of the Core Premium Services are
                  [****]

                           (d) [****]

                           (e) N2P shall have missed the Cutoff Dates for [****]
                  or more Core Premium Services in accordance with and subject
                  to Section 1.3 of this Agreement;

                  unless (ii) N2P cures such failure within the applicable cure
                  periods set forth in Section 3.1 (in the case of clause (a)
                  above), Section 3.2 (in the case of clause (b) above), Section
                  3.3 (in the case of clauses (c) and (d) above) or Section 1.3
                  and Exhibit I (in the case of clause (e) above), respectively.

         16.7     AOL IP Termination Right. At any time during the Term, in the
                  event that any Infringement Claim(s) materially adversely
                  affect the integration, distribution, promotion or offering of
                  the AOL IP Telephony Software or any AIM IP Telephony Service,
                  then AOL shall have the right to terminate this Agreement upon
                  thirty (30) days prior written notice to N2P, and without any
                  refund to N2P (collectively, the "IP Termination Right").

         16.8     Termination for Strategic Relationship. If at any time after
                  the [****] anniversary of the Effective Date, AOL enters into
                  a broad-ranging, strategic relationship with (i) any major
                  national or international telecommunications company [****],
                  (ii) any [****] or (iii) any major wireless carrier (e.g.,
                  [****]) for the distribution of telecommunication services
                  across substantially all of the properties of AOL and its
                  Affiliates as in existence on the Effective Date
                  (collectively, the "New Strategic Relationship"), then AOL
                  shall have the right to terminate this Agreement; provided,
                  however, that AOL shall use commercially

                                       30
<PAGE>   31
                  reasonable efforts to have such company enter into an
                  agreement with N2P to distribute or otherwise offer the Core
                  Premium Services in connection with such New Strategic
                  Relationship on terms and conditions comparable to those
                  contained herein (including those with respect to promotion,
                  distribution, exclusivity for N2P and revenue share to N2P,
                  but specifically excluding any warrants or similar rights). In
                  the event of any such termination of this Agreement pursuant
                  to this Section 16.8, [****]; provided, however, that (a) if,
                  before the expiration of such [****], such company and N2P
                  have entered into such an agreement to distribute or otherwise
                  offer some but not all of the Core Premium Services in
                  connection with such New Strategic Relationship, then [****]
                  or (b) if, before the expiration of such [****] period, such
                  company and N2P have entered into such an agreement to
                  distribute or otherwise offer all of the Core Premium Services
                  in connection with such New Strategic Relationship, then AOL
                  shall have no obligation to pay any such termination fee to
                  N2P. The Parties acknowledge and agree that the payment
                  contemplated by this Section 16.8 is solely a termination fee
                  agreed to by the Parties, and shall not be used to determine
                  any damages payable by either Party to the other Party
                  hereunder, which shall be determined in accordance with the
                  remainder of this Agreement (including, without limitation,
                  Section 15.1 hereof) and applicable law.

         16.9     Transition Assistance. In the event of any termination of this
                  Agreement other than pursuant to Sections 16.1, 16.4 or 16.5,
                  each Party will provide to the other Party the dedicated,
                  full-time services of one (1) qualified engineer for a period
                  of ninety (90) days to assist the other Party in effecting an
                  orderly termination of this Agreement, including minimizing
                  disruption for customers of the AIM IP Telephony Services. In
                  the event of termination due to an AOL material breach of this
                  Agreement pursuant to Section 16.2, or a Change of Control of
                  AOL under Section 16.3, or the occurrence of a Regulated
                  Entity Event under Section 16.5, AOL shall pay N2P the actual,
                  reasonable, fully-allocated costs incurred in connection with
                  N2P's assistance in the migration or transition. In the event
                  of termination due to a N2P material breach of this Agreement
                  pursuant to Section 16.2, a Change of Control of N2P under
                  Section 16.3, or the exercise by AOL of its IP Termination
                  Right under Section 16.7 of this Agreement, N2P shall pay for
                  the actual, reasonable, fully-allocated costs incurred in
                  connection with AOL's assistance in the migration or
                  transition. In the event of any other termination of this
                  Agreement, [****]. For the avoidance of doubt, such migration
                  or transition assistance shall not include development
                  obligations. At AOL's request, at the end of the Initial Term,
                  N2P shall use commercially reasonable efforts to transfer to
                  AOL the phone numbers and special access codes referred to in
                  Section 5.2.1 of this Agreement unless such phone numbers are
                  used for N2P Services other than the AIM IP Telephony
                  Services.

         16.10    Transition Period. For a period of up to [****] following the
                  termination or expiration of this Agreement (the duration of
                  which, up to [****], shall be determined by AOL and notified
                  to N2P) (the "Transition Period"), the Parties shall cooperate
                  to effect an orderly termination of this Agreement, including
                  minimizing disruption for customers of the AIM IP Telephony
                  Services. During the Transition Period, each of AOL and N2P
                  shall have all of the rights and obligations set forth in this
                  Agreement (including, without limitation, with respect to the
                  AIM IP Telephony Services) that they had prior to the date of
                  termination or expiration (including, in the case of AOL, all
                  rights necessary to enable AOL to transition the AIM IP
                  Telephony Services (other than PTP Calling Card Services) to
                  another system without interruption of service).
                  Notwithstanding the foregoing, during the Transition Period,
                  N2P shall be entitled to Transaction Revenues to the same
                  extent as before such termination or expiration, but the
                  Parties shall not be subject to the obligations and criteria
                  in this Agreement with respect to exclusivity, promotions,
                  development, delivery, performance and Updates. During the
                  Transition Period, N2P shall remain obligated to provide to
                  AOL the support services described in Section 6. Also, during
                  the Transition Period, N2P shall provide AOL with reasonable
                  assistance in migrating or transitioning the AIM IP Telephony
                  Services (other than PTP Calling Card

                                       31
<PAGE>   32
                  Services) to another provider. Each Party shall be entitled to
                  seek injunctive relief such as specific performance in the
                  event the other Party fails to comply with its transition
                  obligations under this Section 16.10; provided, however, that,
                  following any termination or expiration of this Agreement, in
                  the event either Party fails to comply with its transition
                  obligations under this Section 16.10, the Parties shall
                  attempt to resolve such failure to the satisfaction of both
                  Parties through the Management Committee, and in the event
                  that the Parties are unable to do so, AOL shall be entitled to
                  seek injunctive relief in accordance with this Section 16.10.
                  Notwithstanding the foregoing, all end-user sublicenses of the
                  AOL IP Telephony Software shall survive the termination or
                  expiration of this Agreement pursuant to the terms of such end
                  user license agreement as provided herein.

         16.11    Return of Information. Upon the expiration or termination of
                  this Agreement, each Party shall, upon the written request of
                  the other Party, return or destroy (at the option of the party
                  receiving the request) all Confidential Information of the
                  other Party.

         16.12    Survival. Notwithstanding anything to the contrary contained
                  herein, the provisions of Sections 7.1, 7.2, 7.3 and 7.6 (as
                  to amounts accrued but unpaid), 7.7, 7.8, 7.9, 10.2, 12, 13,
                  14, 15, 16.8, 16.9, 16.10, 16.11, 16.12, 17, 18.1, 18.3, 18.5
                  and 18.14 shall survive the termination, cancellation or
                  expiration of this Agreement. In addition, all payment terms
                  of this Agreement and any provision which, by its nature, must
                  survive the expiration, termination or cancellation of this
                  Agreement, shall survive the expiration, termination or
                  cancellation of this Agreement. All licenses granted by either
                  Party to the other pursuant to this Agreement shall terminate
                  upon termination or expiration of this Agreement except as
                  otherwise expressly set forth herein with respect to the
                  Transition Period.

17.      DISPUTE RESOLUTION

         17.1     Management Committee. The Parties will act in good faith and
                  use commercially reasonable efforts to promptly resolve any
                  claim, dispute, controversy or disagreement between the
                  Parties or any of their respective Affiliates, successors and
                  assigns under or related to this Agreement (including, without
                  limitation) any document executed pursuant to this Agreement
                  or any of the transactions contemplated hereby or any rights
                  or obligations hereunder (each, a "Dispute"). If the Parties
                  cannot resolve any such Dispute within ten (10) business days,
                  such Dispute will be submitted to the Management Committee for
                  resolution. For ten (10) days following submission of the
                  Dispute to the Management Committee, the Management Committee
                  will have the exclusive right to resolve such Dispute;
                  provided, further, that the Management Committee will have the
                  final and exclusive right to resolve Disputes arising from any
                  provision of the Agreement which expressly or implicitly
                  provides for the Parties to reach mutual agreement as to
                  certain terms. If the Management Committee is unable to
                  amicably resolve the Dispute during the ten (10) day period,
                  then such Dispute shall be subject to the resolution
                  mechanisms described below. Neither Party shall seek, nor
                  shall be entitled to seek, binding outside resolution of the
                  Dispute unless and until the Parties have been unable amicably
                  to resolve the Dispute as set forth in this Section 17.1 and
                  then, only in compliance with the procedures set forth in this
                  Section 17. For the avoidance of doubt, neither Party shall be
                  required to submit any Dispute to the Management Committee or
                  to arbitration prior to issuing any notice of suspension or
                  termination under Sections 3, 4, 9 or 16 of this Agreement. In
                  addition, the submission of any Dispute to the Management
                  Committee or to arbitration hereunder shall not affect either
                  Party's right to exercise any such suspension or termination
                  right under this Agreement, except as otherwise determined,
                  pursuant to a binding decision or order, by a court of
                  competent jurisdiction (in accordance with Section 17.4 of
                  this Agreement) or an arbitral panel (in accordance with
                  Section 17.2 of this Agreement).

                                       32
<PAGE>   33
         17.2     Arbitration.

                           17.2.1 Arbitration. Any Dispute not resolved by
                  amicable resolution as set forth in Section 17.1 shall be
                  governed exclusively and finally by arbitration conducted by
                  the American Arbitration Association ("AAA") in New York, New
                  York in accordance with the Commercial Arbitration Rules
                  ("Commercial Rules") of the AAA, including the AAA
                  Supplementary procedures for Large Complex Commercial Disputes
                  ("Complex Procedures"), as such rules shall be in effect on
                  the date of delivery of a demand for arbitration ("Demand"),
                  except to the extent that such rules are inconsistent with the
                  provisions set forth herein. Notwithstanding the foregoing,
                  the Parties may agree in good faith that the Complex
                  Procedures shall not apply in order to promote the efficient
                  arbitration of Disputes where the nature of the Dispute,
                  including without limitation the amount in controversy, does
                  not justify the application of such procedures.

                           17.2.2 Selection of Arbitrators. The arbitration
                  panel shall consist of three (3) arbitrators. Each Party shall
                  name one (1) arbitrator within ten (10) days after the
                  delivery of the Demand, and the two Party-appointed
                  arbitrators shall appoint the third arbitrator. The third
                  arbitrator shall be a neutral participant, with no prior
                  working relationship with either Party. If the two arbitrators
                  are unable to select a third arbitrator within ten (10) days,
                  a third neutral arbitrator shall be appointed by the AAA from
                  the panel of commercial arbitrators of any of the AAA Large
                  and Complex Resolution Programs.

                           17.2.3 Arbitral Rules. The Federal Arbitration Act, 9
                  U.S.C. Secs. 1-16, and not state law, shall govern the
                  arbitrability of all Disputes. The arbitrators shall allow
                  such discovery as is appropriate to the purposes of
                  arbitration in accomplishing a fair, speedy and cost-effective
                  resolution of the Disputes. The arbitrators shall reference
                  the Federal Rules of Civil Procedure then in effect in setting
                  the scope and timing of discovery.

                           17.2.4 Arbitration Awards. The arbitrators shall have
                  the authority to award compensatory damages only. Any award by
                  the arbitrators shall be accompanied by a written opinion
                  setting forth the findings of fact and conclusions of law
                  relied upon in reaching the decision. The award rendered by
                  the arbitrators shall be final, binding and non-appealable,
                  and judgment upon such award may be entered by any court of
                  competent jurisdiction. The Parties agree that the existence,
                  conduct and content of any arbitration shall be kept
                  confidential and no Party shall disclose to any person any
                  information about such arbitration, except as may be required
                  by law or by any governmental authority or for financial
                  reporting purposes in each Party's financial statements.

                           17.2.5 Arbitration Expenses. Each Party shall pay the
                  fees of its own attorneys, expenses of witnesses and all other
                  expenses and costs in connection with the presentation of such
                  Party's case (collectively, "Attorneys' Fees"). The remaining
                  costs of the arbitration, including without limitation, fees
                  of the arbitrators, costs of records or transcripts and
                  administrative fees (collectively, "Arbitration Costs") shall
                  be borne equally by the Parties. Notwithstanding the
                  foregoing, the arbitrators may modify the allocation of
                  Arbitration Costs and award Attorneys' Fees in those cases
                  where fairness dictates a different allocation of Arbitration
                  Costs between the Parties and an award of Attorneys' Fees to
                  the prevailing Party as determined by the arbitrators.

         17.3     Governing Law. This Agreement shall be governed by and
                  interpreted under the laws of the State of New York, without
                  reference to New York's choice of law rules.

         17.4     Limited Interim Injunctive Relief; Consent to Jurisdiction.
                  Notwithstanding the foregoing, the Parties hereby acknowledge
                  and agree that the Parties may seek interim injunctive

                                       33
<PAGE>   34
                  relief with respect to any Disputes arising under Sections
                  5.3, 10.3 and 13 of this Agreement. In connection with any
                  such Disputes, each of AOL and N2P: (i) irrevocably consents
                  to the exclusive jurisdiction of any state or Federal court
                  located in the Borough of Manhattan, City of New York, State
                  of New York over any and all such interim injunctive relief;
                  (ii) waives personal service of any and all process upon it in
                  connection with such interim injunctive relief; (iii) consents
                  that any such service of process in connection therewith shall
                  be made by registered mail directed to AOL or N2P (as the case
                  may be), and that such service shall be deemed to have been
                  completed on the date determined in accordance with Section
                  18.3 of this Agreement; and (iv) waives any objection based
                  upon forum non conveniens and any objection to venue in
                  connection with any such interim injunctive relief.

18.      GENERAL PROVISIONS

         18.1     Acknowledgment. AOL AND N2P EACH ACKNOWLEDGE THAT THE
                  PROVISIONS OF THIS AGREEMENT WERE NEGOTIATED TO REFLECT AN
                  INFORMED, VOLUNTARY ALLOCATION BETWEEN THEM OF ALL RISKS (BOTH
                  KNOWN AND UNKNOWN) ASSOCIATED WITH THE TRANSACTIONS
                  CONTEMPLATED HEREUNDER. THE LIMITATIONS AND DISCLAIMERS
                  RELATED TO WARRANTIES AND LIABILITY CONTAINED IN THIS
                  AGREEMENT ARE INTENDED TO LIMIT THE CIRCUMSTANCES AND EXTENT
                  OF LIABILITY. THE PROVISIONS OF THIS SECTION 18.1 SHALL BE
                  ENFORCEABLE INDEPENDENT OF AND SEVERABLE FROM ANY OTHER
                  ENFORCEABLE OR UNENFORCEABLE PROVISION OF THIS AGREEMENT.

         18.2     Independent Contractors. The Parties to this Agreement are
                  independent contractors. Neither Party is an agent,
                  representative, or partner of the other Party. Neither Party
                  shall have any right, power or authority to enter into any
                  agreement for or on behalf of, or incur any obligation or
                  liability of, or to otherwise bind, the other Party. This
                  Agreement shall not be interpreted or construed to create an
                  association, agency, joint venture or partnership between the
                  parties or to impose any liability attributable to such a
                  relationship upon either Party.

         18.3     Notice. Any formal notice under this Agreement will be given
                  in writing and will be deemed to have been delivered and given
                  for all purposes (i) on the delivery date if delivered by
                  confirmed facsimile; (ii) on the delivery date if delivered
                  personally to the Party to whom the same is directed; (iii)
                  one (1) business day after deposit with a commercial overnight
                  carrier, with written verification of receipt; or (iv) five
                  (5) business days after the mailing date, whether or not
                  actually received, if sent by U.S. mail, return receipt
                  requested, postage and charges prepaid, or any other means of
                  rapid mail delivery for which a receipt is available.

                    To AOL:                      To N2P:

                    AOL, Inc.                    Net2Phone Inc.
                    22000 AOL Way                171 Main Street
                    Dulles, Virginia  20166      Hackensack, NJ  07601
                    Attention:  David Gang       Attention:   Jonathan Reich
                    Phone:  (703) 265-3677       Phone:  (201) 928-4438
                    Fax:  (703) 265-3921         Fax:  (201) 928-2970
                    E-mail:  Dgang@aol.com       E-mail:  jreich@net2phone.com

                  In the case of AOL, such notice also will be provided to both
                  the Senior Vice President

                                       34
<PAGE>   35
                  for Business Affairs (fax no. 703-265-1206 and the Deputy
                  General Counsel (fax no. 703-265-1105), each at the address
                  set forth above. In the case of N2P, such notice also will be
                  provided to the General Counsel at the address and fax number
                  set forth above.

         18.4     No Waiver. The failure of either Party to insist upon or
                  enforce strict performance by the other Party of any provision
                  of this Agreement or to exercise any right under this
                  Agreement shall not be construed as a waiver or relinquishment
                  to any extent of such Party's right to assert or rely upon any
                  such provision or right in that or any other instance; rather,
                  the same shall be and remain in full force and effect.

         18.5     Entire Agreement. This Agreement sets forth the entire
                  agreement, and supersedes any and all prior and
                  contemporaneous agreements of the Parties with respect to the
                  transactions set forth herein. Neither Party shall be bound
                  by, and each Party specifically objects to, any term,
                  condition or other provision which is different from or in
                  addition to the provisions of this Agreement (whether or not
                  it would materially alter this Agreement) and which is
                  proffered by the other Party in any correspondence or other
                  document, unless the party to be bound thereby specifically
                  agrees to such provision in writing.

         18.6     Amendment. No change, amendment or modification of any
                  provision of this Agreement will be valid unless set forth in
                  a written instrument signed by each Party by an executive or
                  officer authorized to bind such Party.

         18.7     Assignment. Neither Party may assign any of its rights,
                  interest or benefits or delegate any of its duties under this
                  Agreement, or otherwise transfer this Agreement without the
                  prior written consent of the other Party; provided that either
                  party may assign this Agreement as part of a reincorporation,
                  change of domicile or merger of a Party with or into, or sale
                  of all or substantially all of the assets of a Party to
                  another entity that is not a competitor of the non-assigning
                  Party (i.e., an AOL Competitor or AOL Competitor if AOL is the
                  non-assigning Party or an N2P Competitor or Parent Company
                  Competitor if N2P is the non-assigning Party) if, in any such
                  event, the assignee (and any successor entity) agrees to be
                  bound by this Agreement to the same extent as the assigning
                  Party. Subject to the foregoing, this Agreement shall be fully
                  binding upon, inure to the benefit of and be enforceable by
                  the Parties hereto and their respective successors and
                  assigns.

         18.8     Construction. In the event that any provision of this
                  Agreement conflicts with the law under which this Agreement is
                  to be construed or if any such provision is held invalid by a
                  court with jurisdiction over the parties to this Agreement,
                  (i) such provision shall be deemed to be restated to reflect
                  as nearly as possible the original intentions of the Parties
                  in accordance with applicable law, and (ii) the remaining
                  terms, provisions, covenants and restrictions of this
                  Agreement shall remain in full force and effect.

         18.9     Export Controls. With respect to their activities under this
                  Agreement, both Parties shall adhere to all applicable laws,
                  regulations and rules relating to the export of technical data
                  and shall not export or re-export any technical data, any
                  products received from the other Party or the direct product
                  of such technical data to any proscribed country listed in
                  such applicable laws, regulations and rules unless properly
                  authorized.

                                       35
<PAGE>   36
         18.10    Headings. The captions and headings used in this Agreement are
                  inserted for convenience only and shall not affect the meaning
                  or interpretation of this Agreement.

         18.11    Counterparts. This Agreement may be executed in counterparts,
                  each of which shall be deemed an original and all of which
                  together shall constitute one and the same document. This
                  Agreement may also be signed by facsimile transmission and any
                  signature sent or received via facsimile transmission shall
                  constitute an original signature.

         18.12    Force Majeure. N2P shall not be responsible for (any delays,
                  errors, failures to perform, interruptions or disruptions
                  caused by or resulting from any acts of God, strikes,
                  lockouts, riots, acts of war, fire, power failure,
                  earthquakes, severe weather, floods or other natural disaster
                  or from any other unforeseeable events outside of N2P's
                  reasonable control (not including any subcontractor of
                  services provided by N2P hereunder) that prevents N2P from
                  complying with any of its material obligations under this
                  Agreement (each, a "Force Majeure Event"). The foregoing shall
                  not relieve N2P from responsibility to the extent that
                  reasonable actions or actions normally undertaken in the
                  industry would have made such events within N2P's reasonable
                  control or prevented any such delays, errors, failures,
                  interruptions or disruptions. In addition, in no event will a
                  Force Majeure Event permit any delay, error, failure,
                  interruption or disruption for longer than a commercially
                  reasonable time considering the event (or beyond any
                  applicable cure period expressly set forth in this Agreement),
                  and after such reasonable time period (or express cure period,
                  as the case may be), the Force Majeure Event shall no longer
                  be deemed to exist or apply.

         18.13    Insurance. N2P, at its cost and expense, shall secure and
                  maintain adequate insurance coverage as is necessary for N2P
                  to bear all of its obligations under this Agreement.
                  Maintenance of such insurance shall not be deemed to relieve
                  or limit N2P of any responsibility or obligation hereunder
                  whatsoever. N2P assumes full and complete liability for all
                  injuries to, or death of, any person or for any damages to
                  property arising from its acts or omissions. N2P will add AOL
                  as an additional insured on all appropriate insurance
                  policies, including all liability policies, with endorsements
                  that require thirty (30) days notice of AOL of any
                  cancellation of such policies, and shall promptly provide AOL
                  with copies of such policies and endorsements and any changes
                  thereto from time to time. N2P's insurance shall be primary as
                  to any other insurance AOL may have.

         18.14    Remedies. Except where otherwise specified, the rights and
                  remedies granted to a Party under this Agreement are
                  cumulative and in addition to, and not in lieu of, any other
                  rights or remedies which the Party may possess at law or in
                  equity; provided that, in connection with any dispute
                  hereunder, neither Party will be entitled to offset any
                  amounts that it claims to be due and payable from the other
                  Party against amounts otherwise payable by such Party to the
                  other Party.

         18.15    Disclaimers. Each AIM IP Telephony Service shall contain an
                  appropriate disclaimer (the specific form and substance to be
                  mutually agreed upon by the Parties).

                                       36
<PAGE>   37
         IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as
of the date first above written.

AOL, INC.                                   NET2PHONE INC.

By:  /s/ David M. Colburn                   By: /s/ Clifford M. Sobel
Print Name: David M. Colburn                Print Name: Clifford M. Sobel
Title: President, Business Affairs          Title: Chairman

                                       37
<PAGE>   38
                                    EXHIBIT A

                                   DEFINITIONS

ADDITIONAL N2P CHANNEL. Any other distribution channel (e.g., an Interactive
Service other than AOL) through which N2P makes available an offering comparable
in nature to the offerings on the AIM Service.

AFFILIATE. As to a Party, any entity that Controls, is Controlled by or under
common Control with such Party. "Affiliate" means, with respect to any Party,
any entity controlling, controlled by, or under common control with, such Party;
it being understood that [****] or greater voting, equity or equivalent interest
in the controlled entity shall be deemed "CONTROL".

AIM CLIENT. "AIM Client" means the Win 32 version of the client software (United
States version 3.0) (or any successor version thereof designated by AOL)
developed and distributed by AOL that enables end-users to access and use the
AIM Service. The AIM Client shall not include (a) any discrete applications
providing substantially different services, regardless of any shared use of the
AIM Service backend (e.g., presence engine, directory server, etc.), (b) any
desktop search application, AOL desktop information "ticker," AOL mail client or
AOL co-browser, (c) any version of the AIM Client that is co-branded with an
unaffiliated third party other than the Qualified N2P Competitors listed on
Exhibit K hereto (provided that (1) the Parties may mutually agree from time to
time to expand such list of Qualified N2P Competitors (such agreement not to be
unreasonably withheld by either Party) or (2) plug-ins to other clients (e.g.,
browser plug-ins), provided that AOL shall use reasonable efforts to include the
AIM IP Telephony Services in such plug-ins.

AIM IP TELEPHONY SERVICES. The N2P Services customized by N2P to be distributed
by AOL on the AIM Service in accordance with this Agreement, utilizing the
services of N2P hereunder and consisting of: (i) the PTP Calling Card Service,
the Secondary AIM IP Telephony Services and the Conference Calling Service
(including, in each case, any Updates thereto); and (ii) any other IP Telephony
Services (including Optional or Expanded Services) that the Parties agree to add
to this Agreement.

AIM MEMBER. Any registered user of the AIM Service (including any registered
user of any AIM IP Telephony Service).

AIM SCREEN NAME. A unique identifier assigned to each AIM Member that enables
such AIM Member to send and receive instant messages and communicate with others
on the AIM Service.

AIM SERVICE. "AIM Service" means the standard, narrow-band AOL-branded service,
currently available through the Internet, that enables end-users of such service
to exchange, in real-time, private, personalized messages with, and to monitor
the online status of, other end-users of such service through use of the AIM
Client, and any upgrades or enhancements thereto during the Term, excluding: (i)
such service(s) or similar services available on the AOL Service; and (ii) any
other version of an AIM service which is materially different from the standard
narrow-band U.S. version of the AIM brand service, by virtue of its branding,
distribution, functionality, Content or services, including, without limitation,
any co-branded version of the service or any version distributed through or
designed for any broadband distribution platform or through any platform or
device other than a desktop personal computer (e.g., a service designed
primarily for distribution to a hand-held, wireless personal digital assistant
(e.g., a Palm VII PDA)).

AOL COMPETITOR. "AOL Competitor" shall mean an entity offering one or more of
the following: (i) online or Internet connectivity services (e.g., an Internet
service provider); (ii) an interactive site or service featuring a broad
selection of aggregated third party interactive content (or navigation thereto)
(e.g., an online service or search and directory service) and/or marketing a
broad selection of products and/or services across numerous interactive commerce
categories (e.g., an online mall or other leading online commerce site); and
(iii) communications software capable of serving as the principal means through
which a user creates, sends and receives electronic mail or real time online
messages.

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<PAGE>   39
AOL DISTRIBUTION OBLIGATION. The obligations under this Agreement of AOL to
distribute the Core Premium Services (and other AIM IP Telephony Services which
have been accepted by AOL pursuant to the terms of this Agreement), in
accordance with and subject to Section 4.1.2 of this Agreement.

AOL GUI. The elements of graphics, design, organization, presentation, layout,
navigation, sound and stylistic convention (including the digital
implementations thereof) of the graphical user interface generally associated
with online areas contained within the AIM Service, the AIM Client and the AIM
IP Telephony Services.

AOL INDEMNIFIED PROPERTIES. (a) The elements of the AIM Service, the AIM Client
and the AOL GUI (including, in each case, any Updates thereto), that are
supplied or developed (as between the Parties) by AOL or by third parties for or
on behalf of AOL, and (b) the AOL Marks, the AOL Distribution Obligation and the
Advertisements.

AOL IP TELEPHONY SOFTWARE. The customized version(s) of the N2P IP Telephony
Software developed or supplied by N2P pursuant to this Agreement, including,
without limitation, the SDKs, APIs, all Documentation therefor and all Updates
thereto.

AOL LOOK AND FEEL. The elements of graphics, design, sound, organization,
presentation, layout, user interface, navigation and stylistic convention
(including the digital implementations thereof) which are generally associated
with the AIM Service, or the AIM Client.

AOL NAMESPACE. "AOL Namespace" means the AOL database of users of the AIM
Service and their AIM Screen Names, the algorithms, and the server complex used
by AOL to implement and support the AIM Service.

AOL SERVICE. The standard narrow-band U.S. version of the America Online(R)
brand service, specifically excluding the AIM Service. N2P acknowledges that in
connection with this Agreement, N2P obtains no distribution rights whatsoever of
the AIM IP Telephony Services on the AOL Service.

AOL USER.  Any registered user of the AOL Service.

[****]

CHANGE OF CONTROL. Change of Control shall mean either (a) the consummation of a
reorganization, merger or consolidation or sale or other disposition of
substantially all of the assets of a party or (b) the acquisition by any
individual, entity or group (within the meaning of Section 13d-3 or 14(d)(2) of
the Securities Exchange Act of 1934, as amended) of beneficial ownership (within
the meaning of Rule 13d-3 promulgated under such Act) of more than [****] of
either (i) the then outstanding shares of common stock of such party; or (ii)
the combined voting power of the then outstanding voting securities of such
party entitled to vote generally in the election of directors.

CO-BRANDED SITE. "Co-Branded Site" shall have the meaning set forth in Exhibit B
to this Agreement.

CONTENT. Text, images, video, audio (including, without limitation, music used
in synchronism or timed relation with visual displays) and other data, Products,
Advertisements, promotions, links, pointers and software, including any
modifications, upgrades, updates, enhancements and related documentation.

CONTROL. "Control" (including the terms "controlling", "controlled by" or "under
common control with") as to any person shall mean beneficial ownership (within
the meaning of Rule 13d-3 issued under the Securities Exchange Act of 1934, as
amended) promulgated under the Securities and Exchange Act of 1934, as amended)
of more than [****] of either (i) the then outstanding shares of common stock of
such person or (ii) the combined voting power of the then outstanding voting
securities of such person entitled to vote generally in the election of
directors.

                                       39
<PAGE>   40
CONFIDENTIAL INFORMATION. Any information relating to or disclosed in the course
of the negotiation or performance of this Agreement which is, or should be
reasonably understood to be, confidential or proprietary to the disclosing
party, including, but not limited to, the existence and material terms of this
Agreement, User Information or other information about AIM Members, AOL Users,
technical processes and formulas, other technical information and materials,
product designs, sales, cost and other unpublished financial information,
product and business plans, projections and marketing data. Without limiting the
generality of the foregoing, all protocols, parameters, designs, specifications
and user identification algorithms relating to the AOL Service, the AIM Service
and/or the N2P IP Telephony Services are Confidential Information of AOL and
N2P, respectively. "Confidential Information" shall not include information that
the receiving party can establish is (a) already lawfully known to or
independently developed by the receiving party, (b) generally known to the
public, or (c) lawfully obtained from any third party. In addition a Party may
disclose Confidential Information to the extent required to be disclosed by law,
or permitted to be disclosed pursuant to the terms of this Agreement.

CORE AOL OBLIGATIONS. The AOL GUI, the AOL Distribution Obligation and any other
obligations that the Parties mutually agree (in a written instrument signed by
an executive or officer of such Party authorized to bind such Party) shall be
AOL's primary responsibility under this Agreement.

CORE PREMIUM SERVICES. The PC-to-Fax Service, the Fax-to-PC Service, the
PC-to-Phone Service, the Phone-to-PC Service and the PTP Calling Card Service,
the Fax-to-Fax Service, the Conference Calling Service, together (to the extent
mutually agreed upon in writing by the Parties) with all Updates thereto. From
time to time during the Term, the Parties may, by mutual agreement, designate
additional N2P Services as "Core Premium Services" or may remove certain N2P
Services from the definition of "Core Premium Services."

DOCUMENTATION. Documentation, as to any software or service, means all
documentation relating to the software or service provided to or used by end
users. Documentation as to the source code form of software also includes all
technical documentation and source code notations used or created by the
creating party or provided to or used by any support or other technical
personnel.

INDEPENDENT BUSINESS RELATIONSHIP. A commercial relationship between N2P and an
AIM Member whereby the AIM Member has either (i) purchased products or services
from N2P other than through the AIM Service (including, without limitation,
through the AIM IP Telephony Services), or (ii) voluntarily provided information
to N2P through a contest, registration, or other communication, which included
clear and conspicuous notice to the AIM Member that the information provided by
the AIM Member could result in a message or communication being sent to that AIM
Member by N2P or its agents

INITIAL TERM. "Initial Term" shall have the meaning set forth in Section 16.1.1
of this Agreement. The Parties acknowledge for avoidance of doubt that the
Initial Term ends upon expiration or earlier termination of this Agreement.

INTERACTIVE SERVICE. An entity offering one or more of the following: (i) online
or Internet connectivity services generally to the public (e.g., an Internet
service provider); (ii) an online interactive site or service featuring a broad
selection of aggregated third party interactive content (or navigation thereto)
(e.g., a "portal" or an online search and directory service) and/or marketing a
broad selection of products and/or services across numerous interactive commerce
categories (e.g., an online mall); (iii) a persistent desktop client offering
Internet or online connectivity services; and (iv) communications software
capable of serving as the principal means through which a user creates, sends
and receives electronic mail or real time or "instant" online messages (whether
by telephone, computer, PDA or other wireless mobile devices), including without
limitation greeting cards.

INTERACTIVE SITE. Any interactive site or area, including, by way of example and
without limitation, (i) a site on the World Wide Web portion of the Internet or
(ii) a channel or area delivered through a "push" product such as the Pointcast
Network or interactive environment such as Microsoft's Active Desktop.

                                       40
<PAGE>   41
IP TELEPHONY. Voice, video or facsimile service provided over one or more data
networks using an Internet Protocol (whether through one or more data networks
only or through one or more data networks interfacing with a public switched
telephone network).

MANAGEMENT COMMITTEE. A committee comprised of one senior executive from each of
AOL and N2P, formed for the purpose of resolving certain Disputes under this
Agreement (or related to the terms hereof) as set forth in Sections 17.1 of this
Agreement and generally overseeing the relationship between the Parties as
contemplated by this Agreement.

NET BUTTON ADVERTISING REVENUE. For any calendar quarter, (i) the [****]
(including cash and the value of any non-cash consideration) received by AOL, or
any Affiliate of AOL, from the sale of any Special Buttons, [****] in connection
with the sale of such Special Buttons (or, if no such commissions were incurred,
[****].

N2P COMPETITOR. A third party that provides IP Telephony services, provided that
such services constitute a significant portion of such competitor's business or
such competitor is a major participant in the business of providing IP Telephony
services.

N2P INDEMNIFIED PROPERTIES. (a) The elements of the N2P Services, the N2P
System, the AIM IP Telephony Services, the N2P Telephony Software and the AOL IP
Telephony Software (including, in each case, any Updates thereto) that are
supplied or developed (as between the Parties) by N2P or by third parties for or
on behalf of N2P and (b) the N2P Marks and the Products.

N2P INTERACTIVE SITE. Any Interactive Site which is managed, maintained, owned
or controlled by N2P or its agents.

N2P IP TELEPHONY SOFTWARE. The standard suite of client software products
distributed by N2P that enables the provision of IP Telephony services
comparable to the AIM IP Telephony Services (including any Updates thereto).

N2P SERVICES. IP Telephony services generally provided by N2P.

N2P SYSTEM. The software and related systems pursuant to which N2P provides the
N2P Services.

PARENT COMPANY. IDTCorp., a Delaware corporation with its principal office at
190 Main Street, Hackensack, NJ 07601.

PARENT COMPANY COMPETITOR. A third party that provides telecommunications
services generally to the public, provided that such services constitute a
significant portion of such competitor's business or such competitor is a major
participant in the business of providing telecommunications services.

PC OR PERSONAL COMPUTER. A multimedia-enabled, Internet-connected personal
computer that meets the minimum system requirements of each Party (including
those with respect to peripheral devices and Internet connectivity) and that
does not contain software or hardware which disables or adversely affects the
functionality of the Parties' services and software.

PC-TO-PC SERVICE. A PC-to-PC calling service, which shall allow any AIM Member
(through use of the AOL IP Telephony Software as distributed through the AIM
Service in accordance with the terms of this Agreement) to originate a voice
conversation on an Internet enabled PC and to terminate such conversation on
another Internet-enabled PC.

PRODUCT. Any product, good or service (other than carriage sold to commercial
carriers) which N2P (or others acting on its behalf) sells, provides,
distributes or licenses to AIM Members (or for which N2P recharges AIM Members
(e.g., in connection with the PTP Calling Card Service)) through (i) the AIM
Service, (ii) any other electronic means directed at AIM Members (e.g., e-mail
offers), or (iii) an "offline" means (e.g., toll-free number) for receiving
orders related to specific offers within any AIM IP Telephony

                                       41
<PAGE>   42
Service requiring purchasers to reference a specific promotional identifier or
tracking code, including, without limitation, electronically transmitted
products sold through surcharged downloads (to the extent expressly permitted
hereunder). A product, good or service shall constitute a Product only if
actually sold, provided, distributed or licensed through one of the foregoing
means, and shall not constitute a Product if sold, provided, distributed or
licensed through another means (e.g., through an alternative distribution
channel) to a person who also happens to be an AIM Member.

QUALIFIED AIM SERVICES. (i) The AIM Service, (ii) the AIM Client, and (iii) any
other Product or service which is owned or operated by AOL or any AOL Affiliate
or which is distributed by or through the AIM Service.

QUALIFIED INTERACTIVE SERVICES. Any entity offering (i) an interactive site or
service featuring a broad selection of aggregated third party interactive
content (or navigation thereto) (e.g., an online service or search and directory
service)and/or marketing a broad selection of products and/or services across
numerous interactive commerce categories (e.g., an online mall or other leading
online commerce site); (ii) a persistent desktop client; and (iii)
communications software capable of serving as the principal means through which
a user creates, sends and receives electronic mail or real time or "instant"
online messages (whether by telephone, computer or other means), including
without limitation greeting cards.

SEAMLESSLY INTEGRATE. Achieved by AOL, to the extent possible, using the N2P
provided toolkit to fully integrate the AIM IP Telephony Services (e.g.,
PC-to-Phone Service, PC-to-Fax Service) into the AIM Client such that the N2P
client software is not needed to run as a separate program in connection with
the provision of such AIM IP Telephony Services because the key functions are
integrated into the AIM Client.

SECONDARY AIM IP TELEPHONY SERVICES. The PC-to-Fax Service, the Fax-to-PC
Service, the Fax-to-Fax Service, the Conference Calling Service, the PC-to-Phone
Service and the Phone-to-PC Service.

SEVERITY 1 PROBLEMS. Problems with respect to any AIM IP Telephony Service that
halt or materially disrupt service execution, cause a major loss of the material
functionality of such AIM IP Telephony Service or otherwise create an emergency
which will cause significant financial or reputation loss or other significant
loss or business disruption to the provider of such AIM IP Telephony Service.

SEVERITY 2 PROBLEMS. Problems with any AIM IP Telephony Service that are not
Severity 1 Problems but that materially reduce the core functionality of such
AIM IP Telephony Service cause data corruption or damage, or otherwise require
prompt correction to maintain material use of the core functionality of such AIM
IP Telephony Service (such as, for example, a consistently reproducible problem
resulting in system crash or loss of core or material functionality, but which
can be avoided through a workaround without undue disruption).

SEVERITY 3 PROBLEMS. Problems with respect to any AIM IP Telephony Service,
including bugs, that are not Severity 1 Problems or Severity 2 Problems.

SPECIFICATIONS. "Specifications" shall have the meaning set forth in Section 2.1
of this Agreement. "Specifications" as to any AIM IP Telephony Service shall
mean the Specifications applicable thereto.

SURCHARGED AIM IP TELEPHONY SERVICES. The Core Premium Services and any other
AIM IP Telephony Service for which N2P charges a flat-rate, pre-minute or other
user fee or charge in accordance with the terms of this Agreement.

TERM. "Term" shall have the meaning set forth in Section 16.1.2 of this
Agreement. The Parties acknowledge for avoidance of doubt that the Term ends
upon expiration or earlier termination of this Agreement.

TRANSACTION REVENUES. Aggregate amounts actually paid by AIM Members to N2P and
its Affiliates for the purchase or other acquisition of any Products,
specifically including any recharges on the PTP Calling

                                       42
<PAGE>   43
Card Service, [****].

UPDATES. As to any product or service, all subsequent releases thereof including
maintenance releases and services patches, error corrections, upgrades,
enhancements, additions, improvements, extensions, modifications and new,
replacement or successor versions, products or service, and all related
Documentation.

YEAR. Each of Year One, Year Two, and Year Three. Such definition shall not
include the lowercase term "year", as the same is used in this Agreement.

YEAR ONE. The period commencing on the Effective Date and ending on the earlier
of (a) the fifteen (15) month anniversary of the Effective Date; or (b) one (1)
year from the launch of any of the Core Premium Services.

YEAR TWO. The period commencing on the day immediately following the end of Year
One and ending on the one (1) year anniversary thereof.

YEAR THREE. The period commencing on the day immediately following the end of
Year Two and ending on the one (1) year anniversary thereof.

                                       43
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                                    EXHIBIT C

                N2P HOSTING AND IP TELEPHONY SUPPORT OBLIGATIONS

N2P will host a Co-Branded Site as outlined in Exhibit B (unless and until AOL
decides to assume operational control of such Co-Branded Site). Such Co-Branded
Site shall perform according to the following standards:

BRANDING OF SITE: AIM will be the lead brand on the site with a powered by N2P
tag line.

DESIGN OF SITE: AOL will retain creative and graphical control of the look and
feel and overall design of the site to maintain close ties and linkages with AIM
web properties and cohesive user experience throughout.

DOMAIN OF SITE: Domain name must be AOL.com root (e.g., N2P.aim.aol.com).

PURPOSE OF SITE: To sell AIM Cards and promote AIM. AOL, in its sole discretion,
may also provide an outlet for AIM-driven retail purchases using the AIM Card as
currency. The site must include, without limitation, a store-front, merchant
retail tracking and services, shopping cart and checkout facilities, and retail
item cataloging, checking of balances, changing of account information, gift
purchases.

MERCHANT SERVICES: Enable AOL to promote and sell hard goods and services that
it markets through partnerships and other agreements.

CARD USAGE ON PARTNER SITES: If AOL elects, in its sole discretion, to provide
check out services for AIM partners that agree to accept the AIM Card as
currency for retail transactions, [****]. AOL will provide N2P with an approved
list of partner sites.

LAUNCH: The Co-Branded Site will be available upon launch of the first Core
Premium Service, and will in each period reflect the AIM IP Telephony Service
offerings available for use by AIM Members at such time.

WEB BACKEND AVAILABILITY AND SERVICE RESPONSE: Minimum acceptability [****]
uptime, including scheduled and unscheduled updates, maintenance, etc. Planned
system downtime should be communicated to AOL with at least [****] lead time.
There must be a turn around time for resolution within [****] of reporting the
problem; provided that if the problem is a Severity One or Severity Two Problem,
the turn around time must be within [****]. An escalation provided shall be
necessary if the such times are exceeded (e.g., call tree). Web pages load,
links work, data delivered at least [****] of the time. All pages should
completely load (including images).

WEB CONTENT: N2P will provide AOL access to Content to make editorial
refinements that bring AOL's voice to basic content pages, but will not be
required to provide AOL access to the N2P server for such purposes. Such changes
will not include pricing and promotional offers.

ACCOUNT MANAGEMENT: AIM Members will be able to access web-based billing
information and account management services [****] of the time. In the event
that the system is down, AIM Members will see a screen announcing technical
difficulties except in the case where the server is down.

SECURITY AND BILLING: Security features will be generally reliable. Credit card
transactions will be protected by industry standard encryption methods such as
SSL Billing system to be [****] accurate.

REPORTING: N2P to provide monthly reports identifying traffic to each major
section and page, including number of page views. Reports should be delivered
within [****] after the end of each month, and reports should be [****]
accurate.

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AD SERVING: In the event that N2P and AOL agree to deliver Advertisements on the
Co-Branded Site, N2P will work with AOL to add enabler pages for the serving of
any such Advertisements by AOL.

CUSTOMER SERVICE INBOUND PHONE CALLS: N2P will support all end user
issues/problems for the Phone-to-Phone, PC-to-Phone (as applicable), PC-to-Fax,
Fax-to-PC, and Phone-to-PC Services via telephone, after reasonable e-mail and
web-based support efforts have failed. For such telephone calls, [****] of such
calls will be answered within [****] during standard business hours (9am - 5pm
EST), and abandoned calls will be less than 8%. Phone messages that are taken
will be answered within [****], except in the case of any holidays (which such
holidays will not exceed [****] during [****] period), during which N2P will use
commercially reasonable efforts to respond to such phone messages within [****].

CUSTOMER SERVICE INBOUND E-MAILS: N2P will acknowledge [****] of e-mails within
[****], and respond to [****] of e-mails within [****]. Answers will be accurate
90% of the time. 95% of problems will be resolved within [****], except in the
case of any holidays (which such holidays will not exceed [****] during any
[****], during which N2P will use commercially reasonable efforts to respond to
such phone messages within [****].

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                                    EXHIBIT E

                                 CROSS-PROMOTION

         Net2Phone shall prominently promote AOL or the AIM Service, provided
that the manner of such promotion shall be determined by N2P in its reasonable
discretion upon prior consultation with AOL. The initial promotions of the AIM
Service shall be as follows (and each subsequent promotion during the Initial
Term shall be consistent with the following requirements):

A.       Within each N2P Interactive Site other than any N2P Interactive Site
         (including, without limitation, the N2P client and any N2P web
         properties hosted by N2P or any N2P Affiliate) that is co-branded with
         another Qualified Interactive Service (the "Cross-Promo N2P Interactive
         Sites"), N2P shall include the following (collectively, the "AOL
         Promos"): (i) a prominent promotional banner or button (at least 90 x
         30 pixels or 70 x 70 pixels in size) appearing (A) "above the fold" on
         the first screen of the N2P Interactive Site located at
         www.net2phonedirect.com and (B) on any other N2P Interactive Site, in
         the most prominent, commercially reasonable location (whether "above
         the fold" on the first screen thereof or otherwise), in each case to
         promote the AIM Service; or (ii) a prominent "Try AOL" feature (at
         least 90 x 30 pixels or 70 x 70 pixels in size) through which users can
         obtain promotional information about AOL products or services
         designated by AOL (and approved by N2P) and, at AOL's option, download
         either the then-current version of the AIM Client or such other
         AOL-branded software or, as determined by AOL in its reasonable
         discretion, the then-current version of the appropriate localized AIM
         client or such other AOL-branded software. AOL will provide the
         creative content to be used in the AOL Promos (including designation of
         links from such content to other content pages). N2P shall promptly
         post (or update, as the case may be) the creative content supplied by
         AOL within the spaces for the AOL Promos, and in no event later than
         ten (10) business days following its receipt of such content from AOL.
         Without limiting any other reporting obligations of the Parties
         contained herein, N2P shall provide AOL with monthly written reports
         specifying the number of impressions to the pages containing the AOL
         Promos during the prior month. In the event that AOL elects to serve
         the AOL Promos to the Cross-Promo N2P Interactive Sites from an ad
         server controlled by AOL or its agent, N2P shall take all reasonable
         operational steps necessary to facilitate such ad serving arrangement
         including, without limitation, inserting HTML code designated by AOL on
         the pages of the Cross-Promo N2P Interactive Sites on which the AOL
         Promos will appear.

B.       In N2P's television, print and "out of home" (e.g., buses and
         billboards) advertisements and in any publications, programs, features
         or other forms of non-interactive media (excluding radio) (i) over
         which N2P exercises at least significant editorial control, (ii) which
         are not co-branded with another Qualified Interactive Service (unless
         otherwise agreed upon by the Parties) and (iii) which relate to IP
         Telephony products or services, N2P will include specific, prominent
         references or mentions (verbally where possible) to the AIM Service or
         other AOL-branded product or service (as designated by AOL) (by way of
         site name, related company name or otherwise) (i.e., N2P shall promote
         [****] of the time, and [****] of the time, as designated by AOL).
         Without limiting the generality of the foregoing, N2P's listing of the
         "URL" for any N2P Interactive Site which is not co-branded with any
         Qualified Interactive Service may be accompanied by a prominent listing
         of the "search keyword" term on AOL (or other AOL properties) for the
         AIM IP Telephony Services (except in the event that such URL is the
         most prominent feature of any such advertisement or promotion, in which
         case the AOL "search keyword" shall not be required to be of equal
         prominence). N2P shall not be required to include such references or
         mentions in those instances in which, in its reasonable discretion,
         such promotion is economically prohibitive.

C.       In the event that N2P places buttons on a version of the N2P client
         that is not co-branded with any Qualified Interactive Service to
         promote N2P or other products or services, N2P shall utilize a

                                       50
<PAGE>   47
         portion of such buttons (i.e., at least one (1) such button) to launch
         or promote the AIM Service, or such other AOL-branded product or
         service, designated by AOL.

D.       In the event that N2P sends correspondence that is not co-branded with
         any Qualified Interactive Service (e.g., account fulfillment, customer
         service mailings, etc.) to its customers via regular mail, N2P shall
         utilize a portion of such correspondence to promote the AIM Service
         and/or such other AOL-branded product or service, as designated by AOL.

E.       AOL shall have the [****] for a period of [****] from the Effective
         Date to sell N2P buttons or other advertisements based upon N2P
         advertising standards (including, N2P's available technology, pricing,
         third party serving capacity, etc.). After such [****] period, the
         continuation of such [****] period shall be subject to the mutual
         agreement of the Parties.

F.       Net2Phone shall provide to AOL promotional AIM Cards with a pre-paid
         balance at no charge. The parties shall mutually agree upon the number
         of cards to be provided to AOL and the amount of the pre-paid balance
         on such cards.

                                       51
<PAGE>   48
                                                               EXECUTION VERSION

                                    EXHIBIT I

                         DELIVERY DATES AND CUTOFF DATES

<TABLE>
<CAPTION>
--------------------------  ---------------------  ----------  ------------  -----------
CORE PREMIUM                DELIVERY DATE          MAXIMUM     MAXIMUM       CUTOFF DATE
SERVICE                     TO AOL                 AOL REVIEW  CURE PERIOD
                                                   PERIOD
<S>                         <C>                    <C>         <C>           <C>
--------------------------  ---------------------  ----------  ------------  -----------

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

--------------------------  ---------------------  ----------  ------------  -----------
Phone-to-Phone              No later than          [****]      Period until  [****]
                            [****] from the                    Cutoff Date
                            Effective Date
--------------------------  ---------------------  ----------  ------------  -----------
PC-to-Phone                 No later than          [****]      Period until  [****]
                            [****] from the                    Cutoff Date
                            Effective Date
--------------------------  ---------------------  ----------  ------------  -----------
PC-to-Fax, Fax-to-PC        No later than          [****]      Period until  [****]
                            [****] from the                    Cutoff Date
                            Effective Date
--------------------------  ---------------------  ----------  ------------  -----------
Phone-to-PC                 No later than          [****]      Period until  [****]
                            [****] from the                    Cutoff Date
                            Effective Date
--------------------------  ---------------------  ----------  ------------  -----------
Conference Calling Service  No later than [****]   [****]      Period until  [****]
                                                               Cutoff Date
--------------------------  ---------------------  ----------  ------------  -----------
</TABLE>

                                       54
<PAGE>   49
                                                               EXECUTION VERSION

                                    EXHIBIT J

                                    N2P MARKS

                                        Net2Phone

                                [NET2PHONE LOGO]

                              POWERED BY NET2PHONE

                                [NET2PHONE LOGO]

                                       55
<PAGE>   50
                                                               EXECUTION VERSION

                                    EXHIBIT K

                            QUALIFIED N2P COMPETITORS

                                     [****]

                                       56

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