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                                                                   EXHIBIT 10.20

                  AMENDMENT NO. 1 TO THE INVESTMENT AGREEMENT

     THIS AMENDMENT NO. 1 TO THE INVESTMENT AGREEMENT ("Amendment No. 1") is
entered into effective as of this 30th day of June, 2000, by and among Capsule
Communications, Inc. (the "Company"), Gold & Appel Transfer, S.A. ("G&A") and
Foundation for the International Non-governmental Development of Space ("FINDS"
and, together with G&A, the "Investors").

                                  Background
                                  ----------

     A. The Company and the Investors entered into that certain Investment
Agreement dated May 19, 2000, pursuant to which the Investors jointly and
severally agreed to purchase from the Company additional shares of the Company's
common stock ("Common Stock") in two installments for an aggregate purchase
price of $3.0 million (the "Agreement").

     B. The Company and the Investors desire to amend the terms and conditions
of the Agreement to provide for a modified installment payment schedule, as set
forth below.

     NOW, THEREFORE, in consideration of the premises, the mutual covenants and
promises contained herein, and other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties, intending to
be legally bound, hereby agree as follows:

                                   Agreement
                                   ---------

1.   Section 2 of the Agreement is amended in its entirety to read as follows:

     2.   Investors jointly and severally agree to purchase from the Company
additional shares of Common Stock in installments for an aggregate purchase
price of $3.0 million, as follows:

          a.   On or before each of July 10, 2000, July 31, 2000, August 15,
     2000, September 15, 2000, and September 29, 2000, the Investors will wire
     to the Company the aggregate sum of $300,000, and in exchange therefor the
     Company will issue to the Investors, in such proportions as the Investors
     may specify, a number of shares of Common Stock equal to the quotient
     (rounded so as to avoid fractional shares) that results from dividing
     $300,000 by the higher of (i) the 30-trading day average closing sale price
     of the Common Stock for the period ending at the close of business on the
     day prior to each investment and (ii) $1.25.

          b.   On or before each of October 31, 2000, November 30, 2000, and
     December 29, 2000, the Investors will wire to the Company the aggregate sum
     of $500,000, and in exchange therefor the Company will issue to the
     Investors, in such
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          proportions as the Investors may specify, a number of shares of Common
          Stock equal to the quotient (rounded so as to avoid fractional shares)
          that results from dividing $500,000 by the higher of (i) the 30-
          trading day average closing sale price of the Common Stock for the
          period ending at the close of business on the day prior to each
          investment and (ii) $1.25.

     2.   Except as amended hereby, the Agreement shall remain in full force and
          effect.

          [The remainder of this page was intentionally left blank.]<PAGE>
                                                                   EXHIBIT 10.21

                             Investment Agreement

          The undersigned, Gold & Appel Transfer, S.A. ("G&A"), hereby agrees to
loan to Capsule Communications, Inc. ("Capsule"), the sum of up to $900,000 (the
"Maximum Amount"), G&A will invest funds on the following schedule: $300,000 on
March 13, 2001 and $300,000 on May 1, 2001 and $300,000 on June 15, 2001 or
later if requested by the president of Capsule. The foregoing agreement of G&A
shall be on, and subject to, the following conditions:

          1.     References below to the "Company" shall deem Capsule as the
borrower of sums from G&A.

          2.     This loan shall be due and payable on or before June 15, 2002.

          3.     At the option of G&A the loan can be converted at any time
during the loan period to shares of Capsule at the average trading price of the
Capsule share during the preceding 20 trading days.

          4. The amounts loaned by G&A to the Company shall accrue interest from
the date(s) made at the rate of 12% per annum calculated and accrued monthly on
the outstanding balance, and all amounts so loaned, together with accrued
interest thereon, and shall become due and payable upon any acquisition, merger
or sale of Capsule or the sale of more than 20% of the companies equity to any
party of Capsule.

          5.     G&A acknowledges its understanding that any shares of Company
common stock issued to it pursuant to paragraph 3 will constitute "restricted
securities" and will not be eligible for resale unless registered under the
Securities Act of 1933 or unless an exemption from such registration
requirements is applicable, and represents and warrants that it is acquiring any
such shares for its own account without a view to distribution. G&A shall have
the right to demand registration of all the restricted shares which it holds in
Capsule at any time. G&A will agree to pay any legal fees involving such
registration.

          6.     The loan may be prepaid at any time without any penalty.

          7.     Upon approval from Wells Fargo Business Credit, which the
Company will make its best effort to receive, the Company will assign, pledge,
and grant G&A a continuing subordinated security interest in the Company's
DEX600E Megahub switch located at 401 North Broad Street in Philadelphia,
Pennsylvania and any other assets which are not now secured to any other lender
and in the case of any asset or assets now secured to other lenders, G&A will be
given a security interest 2nd to the other lenders.

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                             Investment Agreement

          8.     This agreement will be construed under the laws of the state of
Delaware.

                                          Gold & Appel Transfer, S.A.
                                          ---------------------------

                                          Signature: /s/ Walt Anderson
                                                    ------------------
                                                     Walt Anderson
                                                     Gold & Appel Transfer, S.A.

                                          Capsule Communications, Inc.
                                          ----------------------------

                                          Signature: /s/ David B. Hurwitz
                                                    ---------------------
                                                     David B. Hurwitz
                                                     President & CEO

                                          Date:      03/20/01
                                               -----------------------<PAGE>
                                                                   EXHIBIT 10.22

                            STOCK OPTION AGREEMENT

     Stock Option Agreement made as of the 1st day of May, 2000 (the "Grant
Date), between US WATS, Inc. (the "Company"), and DAVE HURWITZ ("Optionee").

     WHEREAS, the Company desires to afford the Optionee an opportunity to
purchase shares of common stock of the Company ("Common Shares") as hereinafter
provided.

     NOW, THEREFORE, in consideration of the mutual covenants hereinafter set
forth and for other good and valuable consideration the legal sufficiency of
which is hereby acknowledged, the parties hereto, intending to be legally bound
hereunder, agree as follows:

     1.   Grant of Option.  The Company hereby grants to the Optionee the right
          ---------------
          and option (the "Option") to purchase all or any part of an aggregate
          of 500 Common Shares.

     2.   Purchase Price.  The purchase price per share of the Common Shares
          --------------
          covered by the Option shall be $1.25

     3.   Term.  Unless earlier terminated pursuant to any provision of the Plan
          ----
          or this Option Agreement, this Option shall expire on May 1, 2003 (the
          "Expiration Date").

     3.   Exercise of Option.  The Options are exercisable as follows:
          ------------------

               Number of Shares                   Date Exercisable
               ----------------                   ----------------

               500                                May 1, 2001

               The Options shall remain exercisable, subject to the provision of
               this Option Agreement, until the expiration of the term of this
               Option as set forth in Paragraph 3 or until other termination of
               the option.
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5.   Method of Exercising Option. Subject to the terms and conditions of this
     ---------------------------
     Option Agreement, the Option may be exercised upon written notice to the
     Company, at its principal office, which is located at 3331 Street Road, 2
     Greenwood Square, Suite 275, Bensalem, Pennsylvania 19020. Such notice (a
     suggested form of which is attached as Exhibit A) shall state the election
     to exercise the Option and the number of shares with respect to which it is
     being exercised; shall be signed by the Optionee; shall, if the Company so
     requests, be accompanied by the investment certificate referred to in
     Paragraph 6 hereof; and shall be accompanied by payment of the full Option
     price of such shares.

     The Option price shall be paid to the Company in cash.

     Upon receipt of such notice and payment, the Company, as promptly as
     practicable, shall deliver or cause to be delivered a certificate or
     certificates representing the shares with respect to which the Option is so
     exercised. The certificate or certificates for the shares as to which the
     Option shall been so exercised shall be registered in the name of the
     Optionee and shall be delivered as provided above to or upon the written
     order of the Optionee. All shares that shall be purchased upon the exercise
     of the Option as provided herein shall be fully paid and non-assessable by
     the Company.

6.   Shares to be Purchased for Investment. Unless the Company has heretofore
     -------------------------------------
     notified the Optionee that a registration statement covering the shares to
     be acquired upon the exercise of the Option has become effective under the
     Securities Act 1993 and the Company has not thereafter notified the
     Optionee that such registration is no longer effective, it shall be a
     condition to any exercise of this Option that the shares acquired upon such
     exercise be acquired for investment and not with a view of distribution,
     and the person effecting such exercise shall submit to the Company a
     certificate of such investment intent, together with such other

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          evidence supporting the same as the Company may request. The Company
          shall be entitled to restrict the transferability of the shares issued
          upon any such exercise to the extent necessary to avoid a risk of
          violation of the Securities Act of 1933 (or of any rules or
          regulations promulgated thereunder) or of any state laws or
          regulations. Such restrictions may, at the option of the Company, be
          noted or set forth in full on the share certificates.

 7.       Non-Transferability of Option. This Option is not assignable or
          -----------------------------
          transferable, in whole or in part, by the Optionee.

 8.       Corporate Transactions. In the event of a corporate transaction ( as
          ---------------------
          that term is described in section 424(a) of the Internal Revenue Code
          of 1986, as amended and the Treasury Regulations issued thereunder, as
          for example, a merger, consolidation, acquisition of property of
          stock, separation, reorganization or liquidation), each outstanding
          Option shall be assumed by the surviving or successor corporation. The
          Corporation's Board of Directors, in its discretion, may accelerate,
          in whole or in part, the date on which any outstanding Options become
          exercisable. The Board of Directors also, may, in its discretion,
          change the terms of any outstanding Option to reflect any such
          corporate transaction.

 9.       Withholding of Taxes. The obligation of the Company to deliver Common
          --------------------
          Shares upon the exercise of the Option shall be subject to applicable
          federal, state and local tax withholdings requirements.

10.       Determinations. The Optionee hereby agrees to accept as binding,
          --------------
          conclusive and final all decisions and interpretations of the Board
          and the Committee as to any questions arising under the Options
          Agreement.

11.       Governing Law. This Option Agreement shall be construed in accordance
          -------------
          with, and its interpretation shall be governed by applicable federal
          law, and otherwise by the laws of the State of New York.

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12. Financial Information. The Company will comply with Section 240.140.46 of
    ---------------------
    Title 10, California Administrative Code, which requires the Company to
    deliver financial statements at least annually to the OPtionee.

IN WITNESS WHEREOF, the Company has caused this Stock Option Agreement to be
duly executed by its officers thereunto duly authorized, and the Optionee has
hereunto set his hand and seal, as of the date below signed.

[Corporate Seal]                              US WATS, Inc.

Attest:__________________________             By:___________________________
                                                    Michael McAnulty
                                                    Chief Financial Officer
                                                    Date: 5/1/00

                                              OPTIONEE

                                                    RBHL
_________________________________             --------------------------------
Witness                                             Date: 05-12-00

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