Document:

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EXHIBIT 10.1

                        YAK COMMUNICATIONS (USA), INC.
                            1999 STOCK OPTION PLAN
                           (EFFECTIVE JUNE 30, 1999)

     1.  DEFINITIONS: Wherever used herein, the following terms shall have the
following meanings:

     (a) "Plan" shall mean this Stock Option Plan.

     (b) "Corporation" or "Company" shall mean Yak Communications (USA), Inc., a
Florida corporation, or any successor thereof.

     (c) "Committee" shall mean the administrative stock option committee
designated by the Board of Directors of the Corporation, or, if none is
designated, the Board of Directors itself.

     (d) "Participant" shall mean any individual designated by the Committee
under Paragraph 4 hereof for participation in the Plan.

     (e) "Non-Employee Director" shall mean a director who is not an officer of
the Company (as defined in Rule 16b-1(f) under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), or any subsequently amended definition
therein) or of any subsidiary, is not otherwise currently employed by the
Company or any subsidiary, and is not otherwise excluded from being a non-
employee director under Rule 16b-3 under the Exchange Act.

     (f) "Nonqualified Option" shall mean an option to purchase Common Stock of
the Corporation which meets the requirements set forth in the Plan but does not
meet the definition of an incentive stock option set forth in Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code").

     (g) "Incentive Option" shall mean an option to purchase Common Stock of the
Corporation which meets the requirements set forth in the Plan and also meets
the definition of incentive stock option set forth in Section 422 of the Code
and which is granted to an individual subject to having personal income taxed
under the Code.

     (h) "Reload Option" shall mean an option granted to a Participant equal to
the number of shares of already owned Common Stock delivered by the Participant
to pay for exercise of an option, as more fully described in Section 8, below.

     2.  ADMINISTRATION: The Plan shall be administered by the Committee which,
if the Company is a reporting company under the Exchange Act, shall consist
solely of at least two Non- Employee Directors. Subject to the provisions of the
Plan, the Committee is authorized to interpret the Plan, to promulgate, amend
and rescind rules and regulations relating to the Plan and to make all other
determinations necessary or advisable for its administration. Interpretation and
construction of any provision of the Plan by the Committee shall be final and
conclusive. The foregoing provisions of this Section 2 to the contrary
notwithstanding, the Board of Directors may also exercise any power given to the
Committee under the Plan.

     3.  MAXIMUM NUMBER OF SHARES SUBJECT TO PLAN: The Committee may from time
to time provide for the option and sale of up to but not exceeding an aggregate
of 3,200,000 shares of Common Stock, no par value per share, of the Corporation
which may consist in whole or in part of the authorized and unissued or
reacquired Common Stock of the Corporation. The Committee and the Board of
Directors may issue Nonqualified Options and Incentive Options, as well as both
of such options. Shares covered by canceled or expired options under the Plan
shall again be available for option and sale. Shares which are issued upon
exercise of options or which are withheld in payment of income tax withholding
shall again be available for reservation for the issuance of options but only to
the extent Reload Options are granted in such transaction.

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     In the event that the outstanding Common Stock of the Corporation shall be
increased by a stock dividend or changed into or exchanged for a different
number or kind of shares of stock or other securities of the Corporation or of
another corporation, whether by reason of merger, consolidation,
recapitalization, reclassification, split-up, combination of shares or
otherwise, the number, price and kind of shares available for option and the
shares subject to any option shall be appropriately and equitably adjusted in
such manner as the Committee or the Board of Directors shall, in its discretion,
determine. The Committee or the Board of Directors shall have the power under
such conditions to accelerate the exercisability of any outstanding options.

     4. PARTICIPANTS: The Committee or the Board of Directors shall determine
and designate from time to time, in its discretion, those directors and key
management employees of the Corporation (or of any subsidiary in which the
Corporation owns more than 50% of the total combined voting power of all classes
of stock) to whom options are to be granted and who thereby become Participants
under the Plan. The term "key management employees" shall be construed to
include any and all key personnel (whether or not officers of the Corporation)
who may be so designated by the Committee for participation in the Plan.

     5. ALLOTMENT OF SHARES: The Committee or the Board of Directors shall
determine and fix the number of shares of stock to be offered to each
Participant; provided, that no Incentive Option may be granted under the Plan to
any one Participant which would result in his being able to exercise, for the
first time in any calendar year, an aggregate fair market value, determined as
of the date the option is granted, of underlying stock, which amount of
underlying stock includes all incentive stock options granted to that
Participant under any incentive stock option plan maintained by the Corporation,
exceeding $100,000.

     6. OPTION PRICE: The option price per share for options granted under the
Plan shall be determined by the Committee or the Board of Directors, as the case
may be, but shall not be less than: (i) with respect to an Incentive Option, the
fair market value of the stock on the date on which such option is granted;
provided, that with respect to an Incentive Option grant to an employee who at
the time of the grant owns (after applying the attribution rules of Section 424
of the Code) more than 10% of the total combined voting stock of the Corporation
or of any parent or subsidiary, the option price shall not be less than 110% of
the fair market value of the stock subject to the Incentive Option on the date
such option is granted; and (ii) with respect to a Nonqualified Option, such
percent of the fair market value of the stock on the date on which such option
is granted as shall be determined from time to time by the Committee or the
Board of Directors, as the case may be. Fair market value of a share shall be
determined by the Committee or the Board of Directors, as the case may be, and
shall mean, if the stock is publicly traded, the most recent quoted selling
price of the Corporation's stock on such date or if there are no sales, the
closing bid and asked prices of the Corporation's stock on such date, or if
there are no sales or reported bid and asked prices of the Corporation's Common
Stock on such date, on the next following day on which there are sales or quoted
prices.

     7. GRANTING AND EXERCISE OF OPTION: The granting of options hereunder shall
be effected in accordance with determinations made by the Committee or the Board
of Directors, as the case may be, pursuant to the provisions of the Plan, by
execution of instruments in writing in form approved by the Committee.

     At the time the option is granted, the Committee or the Board of Directors,
as the case may be, shall determine the date or dates upon which the option may
be exercised. Except as provided in Paragraphs 10 and 11, options may be
exercised only while the Participant is an employee or director, as the case may
be, of the Corporation or a subsidiary.

     Each option granted hereunder shall expire not more than 20 years from the
date of the granting thereof (10 years for Incentive Options); provided, that
with respect to an Incentive Option grant to an employee who at the time of the
grant owns (after applying the attribution rules of Section 424 of the Code)
more than 10% of the total combined voting stock of all classes of stock of the
Corporation or of any parent or subsidiary, such option shall expire not more
than five years after the date of granting thereof.

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     8.  PAYMENT OF OPTION PRICE:

     (a) At the time of the exercise in whole or in part of any option granted
hereunder, payment in full in cash or, with the consent of the Committee or the
Board of Directors, in Common Stock of the Corporation, shall be made by the
Participant for all shares so purchased. No Participant shall have any of the
rights of a shareholder of the Corporation under any such option until the
actual issuance thereunder of shares to said Participant. The Committee or the
Board of Directors may, in its discretion, authorize the Corporation to lend
funds to a grantee in order to enable him to exercise his options. The terms of
the loan shall be in the discretion of the Committee.

     (b) Whenever a Participant holding any option outstanding under this Plan
(including Reload Options previously granted under this Section 8) exercises the
option and makes payment of the exercise price pursuant to this Section 8, in
whole or in part, by tendering Common Stock previously held by the Participant,
then the Corporation shall, in the sole discretion of the Board of Directors or
the Committee, grant to the Participant a Reload Option for the number of shares
of Common Stock that is equal to the number of shares tendered by the
Participant on payment of the exercise price of the option being exercised.

     (c) Subject to Section 6, above, the Reload Option exercise price per share
shall be an amount equal to the fair market value per share of the Corporation's
Common Stock, determined under Section 6, above, as of the date of receipt by
the Corporation of the notice by the Participant to exercise the option.

     (d) Subject to Section 6, above, the exercise period of the Reload Option
shall expire, and the Reload Option shall no longer be exercisable, on the later
to occur of (i) the expiration date of the originally surrendered option or (ii)
one year from the date of grant of the Reload Option.

     (e) Any Reload Option granted under this Section 8 shall vest immediately
upon grant under Section 8 (b), above.

     (f) All other terms of the Reload Options granted hereunder shall be
identical to the terms and conditions of the original option, the exercise of
which gave rise to the grant of the Reload Option.

     9.  NONTRANSFERABILITY OF OPTION: No option granted under the Plan to a
Participant shall be transferable by him otherwise than by will or the laws of
descent and distribution, and such option shall be exercisable during the
lifetime of the Participant only by the Participant or by his guardian or legal
representative in the event of disability. For purposes of this Paragraph 9,
"disability" shall mean mental or physical inability to carry out the option
holder's duties as an employee or director of the Corporation, as determined by
the Committee or the Board of Directors in its sole discretion. The Board of
Directors or the Committee may in its discretion waive the provisions of this
Section 9 to the extent permitted by the Code or the regulations promulgated
under Section 16(b) of the Exchange Act.

     10. DEATH OF PARTICIPANT: With regard to Incentive Options, in the event
that the employment of the Participant by the Corporation, or a subsidiary
thereof, is terminated by the death of the Participant, or in the event of the
death of the Participant within three months of the termination of his
employment, his option, to the extent that is exercisable by the Participant at
the date of his death, may be exercised within 12 months after the date of his
death, but in no event subsequent to the expiration date of the option, by the
legal representative of the Participant or the person or persons to whom the
rights of the Participant shall pass by will or by the laws of descent and
distribution.

     11. RETIREMENT OF PARTICIPANT: With respect to Incentive Options, unless
the Committee or the Board of Directors shall otherwise decide at the time of
his termination or in the terms of the grant, or the Code shall otherwise permit
for Incentive Options, in the event that a Participant shall cease to be
employed by the Corporation without having fully exercised any option, such
Participant shall have the right for a period of three months following the date
of such cessation of employment, but in no event subsequent to the expiration
date of the option, to exercise that portion of the option, if any, which is
exercisable by him at the date of the termination of his employment. Any options
not exercisable on such date of cessation of employment shall be extinguished
unless the

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Committee or the Board of Directors shall otherwise decide at the time of such
termination, or the grant of the option shall have otherwise provided.

     12. CONTINUANCE OF EMPLOYMENT: The Committee or the Board of Directors may
require that any Participant under the Plan to whom an option shall be granted
shall agree in writing as a condition of the granting of such option to remain
in the employ of the Corporation or a subsidiary for a period of two years from
the date of the granting of such option, or for such other period as shall be
fixed by the Committee or the Board of Directors.

     Nothing contained in the Plan or in any option granted pursuant to the
Plan, nor any action taken by the Committee hereunder shall confer upon any
Participant any right with respect to continuation of employment by the
Corporation or a subsidiary nor interfere in any way with the right of the
Corporation or a subsidiary to terminate his employment at any time.

     13. SECURITIES ACT OF 1933: Unless a registration statement covering the
stock offered pursuant to the Plan is in effect under the Securities Act of
1933, as amended, all stock purchased upon the exercise of an option granted
hereunder shall be acquired for investment and not with a view to or for sale in
connection with any distribution thereof and each notice of the exercise of such
option shall be accompanied by a representation in writing signed by the
Participant or any other person exercising an option granted hereunder to the
effect in form satisfactory to the Committee. The Corporation may place a legend
upon any certificate representing shares purchased pursuant to exercise of an
option granted hereunder noting that the transfer of such shares may be
restricted under the Securities Act of 1933.

     14. WITHHOLDING PAYMENTS:

     (a) If upon the exercise of any option there shall be payable by the
Corporation any amount for income tax withholding, either the Participant shall
pay such amount to the Corporation in cash or the number of shares of Common
Stock delivered by the Corporation upon exercise of the Nonqualified Option
shall be appropriately reduced to reimburse the Corporation for payment. The
Committee or the Board of Directors shall have the authority to accept other
payment arrangements in its sole discretion.

     (b) Whenever shares of Common Stock instead of cash are used to pay income
tax withholding under Section 14(a), above, the Board of Directors or the
Committee in its sole discretion may grant Reload Options for the number of
withheld shares in accordance with the provisions of Sections 8(c) to 8(f),
above, applicable as appropriate to this Section 14(b).

     15. BOARD APPROVAL: No option granted under the Plan shall be exercisable
unless and until the Plan shall have been approved by the Board of Directors of
the Corporation as permitted under the laws of Florida.

     16. INTERPRETATION:

     (a) This Plan shall be administered and interpreted so that all Incentive
Stock Options granted under this Plan will qualify as Incentive Stock Options
under Section 422 of the Code. If any provision of this Plan should be held
invalid for the granting of Incentive Stock Options or illegal for any reason,
such determination shall not affect the remaining provisions hereof, and this
Plan shall be construed and enforced as if such provision had never been
included in this Plan.

     (b) With respect to persons subject to Section 16 of the Exchange Act,
transactions under this Plan are intended to comply with all applicable
conditions of Rule 16b-3 or its successors under the Exchange Act. To the extent
any term or provision of this Plan or any act or action by the Committee or the
Board of Directors fails to so comply, it shall be deemed null and void and of
no force or effect, to the extent deemed advisable by the Committee or the Board
of Directors. Moreover, in the event this Plan does not include a term or
provision required by Rule 16b-3 to be stated herein, such term or provision
(other than one relating to eligibility requirements, or the price and amount of
awards) shall be deemed automatically to be incorporated by reference into this
Plan insofar as participants subject to Section 16 of the Exchange Act are
concerned.

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     (c) This Plan shall be governed by the laws of the State of Florida.

     (d) Headings contained in this Plan are for convenience only and shall in
no manner be construed as part of this Plan or affect the meaning or
interpretation of any part of this Plan.

     (e) Any reference to the masculine, feminine, or neuter gender shall be a
reference to such other gender as is appropriate.

     17. DURATION AND TERMINATION OF PLAN: No options may be granted hereunder
after June 30, 2009. The Plan may be abandoned or terminated at any time by the
Board of directors of the Corporation except with respect to any option
outstanding under the Plan upon the effective date of such termination.

     18. AMENDMENT: For the purpose of conforming to any changes in applicable
law or governmental regulations or for any other purpose which at the time may
be permitted by law, the Board of Directors of the Corporation, may, from time
to time, amend or revise the terms of this Plan, providing that no such
amendment or revision shall increase the maximum number of shares in the
aggregate which may be sold pursuant to Incentive Options granted under the
Plan, or change the minimum option prices set forth in Paragraph 6, or without
the consent of the holder thereof alter or impair any option previously granted
under the Plan.

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EXHIBIT 10.2

                         June 14, 1999

DELIVERED

Yak Communications (USA), Inc.
Yak Communications (Canada) Inc.
55 Town Centre Drive
Suite 506
Toronto, Ontario M1P 4X4

Attention:  Charles Zwebner, President

Dear Sirs:

Re:  Credit facility by 1054311 Ontario Limited to Yak Communications (USA),
     Inc. and Yak Communications (Canada) Inc.

     The purpose of this letter is to set out the following terms and conditions
upon which the Lender is prepared to offer you a revolving credit facility to
provide working capital for the Borrower:

Lender:         At the Lender's option, either:

A.   1054311 Ontario Limited as agent for itself and/or other participants,
and/or its assignees (collectively referred to herein as the "Lender") subject
to the terms and conditions set forth herein; or

B.   A third party (the "Third Party Lender") which may include a financial
institution or other financier. If the Lender provides a guarantee or indemnity
to such Third Party Lender in support of the facility provided by it to the
Borrower, then the terms of such facility shall not exceed the amount set forth
below and be on terms which do not present any risk to the Lender which is
greater than the risk represented if the Lender makes advances to the Borrower
on the terms set forth herein. A credit facility which may be provided to the
Borrower by such a Third Party Lender shall be referred to as the "Third Party
Facility".

Borrower:       Yak Communications (Canada) Inc. (the "Borrower").

Guarantor:      Yak Communications (USA), Inc. (the "Guarantor"), which owns all
                of the Borrower's issued and outstanding capital stock.

Facility:       A revolving facility to be advanced against the Borrower's
                accounts receivables (referred to herein as the "Accounts
                Receivables"), as more particularly set out herein (the "Credit
                Facility").

Availment:      Provided all conditions set forth herein have been satisfied and
                no Event of Default (as hereinafter defined) has occurred or is
                occurring, the Credit Facility shall be made available to the
                Borrower within 45 days from the date of acceptance of the
                agreement formed by this letter (the "Credit Agreement").

Amount:         Subject to the terms and advance rates set out herein, up to sum
                of $640,000 Cdn.

Term/Maturity:  All advances under the Credit Facility together with all
                interest, fees and other amounts which may be owing by the
                Borrower to the Lender shall become due and payable on the
                earlier of:

                a.  March 15, 2006; and
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                b.  the occurrence of an Event of Default.

Interest Rate:  Interest on the principal amount outstanding under the Credit
                Facility and on any overdue interest, and any other amounts
                payable by the borrower hereunder shall be calculated and
                compounded monthly commencing from the date of advances as well
                after as before maturity, default and/or judgment at the rate of
                12% per annum; provided however, if:

                A. No Event of Default has occurred, the lender shall waive
                payment of all interest; and

                B. If advances are made to the Borrower pursuant to the Third
                Party Facility, then the interest rate applicable shall be a
                variable rate not to exceed the prime rate of interest for
                commercial loans made in Canada by a Canadian Schedule A
                chartered bank as determined by the Lender plus 1.5% per annum.

Set-Up Fee:     The Borrower shall pay to the Lender a set-up fee of $10,000
                plus any and all applicable taxes, including goods and services
                tax ("GST") upon the execution of this Credit Agreement.

Facility  Fee:  The Borrower shall pay to the Lender a facility fee (the
                "Facility Fee") of $10,000 plus applicable taxes, including GST,
                on each anniversary date of the Credit Facility during which
                time any amounts remaining owing by the Borrower to the Lender.
                If advances to the Borrower are made pursuant to a Third Party
                Facility and the Lender has provided its support therefor,
                whether by way of guarantee, indemnity or otherwise, then the
                Facility Fee shall remain payable to the Lender as set forth
                above.

Advance Rates:  Provided that no Event of Default has occurred or is occurring
                and the Borrower and the Guarantor are in compliance with the
                terms and conditions set forth herein, upon receipt of a written
                request for an advance by the Borrower in the form contemplated
                hereby, the Lender shall advance (up to the maximum amount of
                the Credit Facility) to the Borrower up to 100% of the net
                amount of each invoice (or other evidence satisfactory to the
                Lender of the amounts owed to the Borrower by its customers for
                services rendered or provided) issued (an "Invoice") by the
                Borrower to third party customer which are acceptable to the
                Lender acting reasonably and which form part of the Accounts
                Receivables less:

                A. All amounts (the "Preferred Claims") which rank in priority
                to the Lender's security interest in and to all of the
                Guarantor's Accounts Receivables, including without restriction
                and among others, all amounts due and owing for employee
                deductions, sales tax, excise tax, overdue rents or taxes and
                statutory preferred claims;

                B. Any amounts which comprise Accounts Receivables against which
                the Lender has made prior advances to the Borrower and which may
                be in dispute or in arrears;

                C. Any discounts, deductions, contra accounts or otherwise which
                may be deducted by from an Invoice or Accounts Receivable by an
                account debtor; and

                D. Any other amounts or obligations which may be owing to the
                Lender by the Borrower or the Guarantor at the time that the
                Borrower requests an advance under the Credit Facility.

Security:       As further and continuing collateral security for all of the
                Borrower's indebtedness, liabilities to the Lender, howsoever
                and wheresoever incurred (the "Indebtedness"), including without
                limitation all amounts payable in connection with the Credit
                Facility (including all fees payable to the Lender hereunder) as
                well as any and all obligations under any other agreements
                between the Borrower or the Guarantor and the Lender, the
                Borrower shall deliver or cause to be delivered the following
                (the "Security"):
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     A.       A general assignment of all of the Borrower's accounts receivable
     which shall constitute a first charge on the same (subject to the terms
     hereof);

     B.       A general security agreement charging all of the Borrower's
     present and after acquired property, assets and undertaking subject only to
     a prior ranking charge in respect of the Borrower's present and after
     acquired equipment in favour of a third party financier and other assets
     save for the Accounts Receivable;

     C.       Assignment of satisfactory insurance policies by the Borrower with
     the Lender's interest duly noted thereon;

     D.       Assignment to the Lender as soon as practicable of term life
     insurance, to be arranged, (provided that the Borrower and Charles Zwebner
     shall demonstrate that they have used their reasonable best efforts to
     obtain such life insurance) in the amount of not less than $750,000 on the
     life of Charles Zwebner; and

     E.       A full liability guarantee and postponement of claim from the
     Guarantor pursuant to which it shall guarantee payment to the Lender of all
     of the Indebtedness.

Conditions Precedent:   The Lender's obligation to make advances under the
                        Credit Facility shall be subject to the following
                        conditions precedent, each of which may be waived by the
                        Lender in is sole and unfettered discretion:

     A.       For each advance under the Credit Facility, the Borrower shall
     deliver to the Lender a copy of the Invoice(s) in respect of which such
     advance is being requested together with a certificate in the form attached
     hereto as Schedule "A." The Lender shall make advances to the Borrower not
     more than twice each month at specified dates to be determined by the
     Borrower and the Lender;

     B.       Prior to making any advances to the Borrower, the Borrower shall
     deliver to the Lender a report of all collections received by the Borrower
     for the month prior which report shall include the name of the customer,
     amount collected, particulars of the Invoice against which payment was made
     (including date, number and amount) and the number of days such Invoice
     remained outstanding as well as any other information which may reasonably
     be required by the Lender;

     C.       Execution and delivery to the Lender of all such agreements,
     acknowledgments, undertakings and other documentation as may be
     contemplated hereunder;

     D.       The Borrower and the Guarantor are in compliance with all of their
     respective indebtedness, liabilities and obligations to the Lender or the
     Third Party Lender (as the case may be) and all of its other material
     creditors and lenders howsoever and wheresoever incurred;

     E.       No Event of Default has occurred or is occurring;

     F.       For each of the Borrower's account debtors, the Borrower execute
     and deliver to the Lender a letter in the form annexed hereto as Schedule
     "B" which letter may only be released by the Lender upon the occurrence of
     an Event of Default. The Borrower and the Guarantor confirm to the Lender
     that release of such letter shall not constitute or be deemed to constitute
     enforcement of any of the Security held by the Lender; and

               i.   the Borrower shall be responsible for all of the Lender's
               expenses with regard to such Audit; and

               ii.  the Borrower shall be deemed to have committed an Event of
               Default.

<PAGE>

                    G.   Such other and further reasonable covenants as the
                   Lender may reasonably require and request of the Borrower and
                   the Guarantor subsequent to the execution of this Credit
                   Agreement, including without limitation, matters relating to
                   capital expenditures, executive and key man
                   compensation/remuneration and expense or cost reduction or
                   containment.

Other Credit Facility:   If the Borrower obtains financing from a third party
                         lender (the `Conventional Lender") which does not
                         require the support of the Lender, whether by way of
                         guarantee, indemnity or otherwise, then subject to a
                         satisfactory review and determination by the Lender of
                         the advance rates offered by the Conventional Lender,
                         the security required by it, the terms and conditions
                         of the facility to be provided by it and the impact on
                         the Credit Facility, then:

                              A.   the Lender shall postpone its interest in the
                              Accounts Receivable to the Conventional Lender
                              only to the extent that the Lender has not
                              advanced any monies to the Borrower in respect of
                              same; and

                              B.   the Lender shall make advances to the
                              Borrower in respect of approved Accounts
                              Receivable in excess of the amount advanced by the
                              Conventional Lender to the Borrower against such
                              Accounts Receivable. For the sake of clarity, the
                              amounts to be advanced by the Lender in these
                              circumstances shall only be determined once the
                              terms and conditions of the transaction between
                              the Conventional Lender and the Borrower have been
                              finalized.

Events of Default:       All of the Indebtedness shall, at the Lender's option,
                         become due and payable and the Lender shall be entitled
                         to exercise its rights hereunder, including enforcement
                         of the Security upon the occurrence of all or any of
                         the following (collectively, the "Events of Default");

                              A.   The Borrower or the Guarantor defaults in the
                              payment or performance of any of their
                              indebtedness, liabilities to the Lender, the Third
                              Party Lender or the Conventional Lender howsoever
                              and wheresoever incurred;

                              B.   There is a material adverse change in the
                              Borrower's or the Guarantor's business and affairs
                              as determined by the Lender acting reasonably;

                              C.   Any certificates, statements, reports or
                              other information provided by the Borrower or the
                              Guarantor to the Lender is materially incorrect or
                              misleading.

                              The Borrower or the Guarantor makes an assignment
                              in bankruptcy under the BANKRUPTCY AND INSOLVENCY
                              ACT (Canada) (the "BIA") or such other applicable
                              insolvency legislation or a receiving order is
                              made against any one of them under the BIA or such
                              other applicable insolvency legislation; or

                              E.  If the Third Party Lender or the Conventional
                              Lender or other encumbrances demands payment or is
                              otherwise in a position to enforce its rights
                              against the Borrower or the Guarantor.

Costs and Expenses:      The Borrower and the Guarantor shall be jointly and
                         severally liable for all of the Lender's reasonable
                         third party legal, professional and other fees and
                         expenses incurred by it in respect of the Credit
                         Facility and the transactions contemplated hereby all
                         of which shall form part of the Indebtedness and shall
                         be subject to the Security.

<PAGE>

General:                  1.   The Credit Agreement and the agreements,
                          documents and matters contemplated hereby supersedes
                          all prior agreements, arrangements and understandings
                          related to the subject matter hereof.

                          2.   The Credit Agreement shall be governed by the
                          laws of Ontario and the laws of Canada applicable
                          therein.

                          3.   The Credit Agreement shall enure to the benefit
                          of and shall be binding upon the parties hereto and
                          their respective heirs, executors, administrators,
                          successors and assigns, as the case may be.

                          4.   The parties hereby undertake and agree with each
                          other to execute and deliver such other documents,
                          papers, matters, waivers, assignments and assurances
                          that the other party(ies) may reasonably require or
                          request in connection with the transactions herein
                          contemplated for the purposes of effectually carrying
                          out the transactions contained in and contemplated by
                          the Credit Agreement.

                          5.   The Credit Agreement formed by this letter may be
                          executed in several counterparts, each of which shall
                          be deemed to be an original and such counterparts
                          together shall constitute one and the same agreement
                          and notwithstanding the date of execution shall be
                          deemed to be executed on the date hereof.

                          6.   The provisions of the Credit Agreement are
                          intended to survive completion of the transactions
                          contemplated herein.

                          7.   Failure or delay by the Lender in exercising,
                          including a single or partial exercise of, any power
                          or right hereunder shall not operate as a waiver
                          thereof or of any other power or right or preclude any
                          other or future exercise of that or any other power or
                          right. A waiver of any power or right hereunder shall
                          be in writing, shall be limited to the specific
                          instance, and shall not be deemed a waiver of such
                          power or right in the future or a waiver of any other
                          power or right.

Please indicate your agreement with the terms and conditions set forth above by
executing in the space provided for below and returning duplicate counterpart(s)
of this letter to us as soon as possible.

Yours very truly,
1054311 ONTARIO LIMITED

/S/ ANTHONY HELLER
-------------------------
Anthony Heller, President

<PAGE>

                                   AGREEMENT

FOR VALUE RECEIVED, the receipt and sufficiency of which is acknowledged, the
undersigned agree with the terms and conditions set forth above.

Dated this 14th day of June, 1999.

YAK COMMUNICATIONS (CANADA) INC.
/S/ CHARLES ZWEBNER
--------------------------
Charles Zwebner, President

YAK COMMUNICATIONS (USA), INC.
/S/ CHARLES ZWEBNER
--------------------------
Charles Zwebner, President

<PAGE>

                                  SCHEDULE "A"

                              REQUEST FOR ADVANCE

TO:  1054311 Ontario Limited (the "Lender")

Re:  Facility letter (the "Credit Agreement") from the Lender to Yak
     Communications (USA), Inc. and Yak Communications (Canada) Inc. (the
     "Borrower") dated June 14, 1999

------------------------------
     In accordance with the Facility Letter, we hereby request an advance in
connection with the invoice (the "Invoice") issued by the Borrower attached
hereto as follows:

Invoice Amount:                                $
                                               ------
Less:

The Preferred Claims (as defined
in Credit Agreement) as at the date hereof:    $
                                               ------
Accounts Receivables against which
the Lender has made advances to the
Borrower and which may be in dispute
or in arrears as of the date hereof:           $
                                               ------
Discounts, deductions, contra accounts
or otherwise which may be deducted
by from the Invoice:                           $
                                               ------
Amounts owing to Lender by Borrower
or Guarantor                                   $
                                               -------

NET ADVANCE TO BORROWER                        $
                                               -------

CERTIFIED TRUE and correct this   day of  , 1999.

YAK COMMUNICATIONS (CANADA) INC.
Per:

-----------------------------------
Charles Zwebner, President

<PAGE>

                                  SCHEDULE "B"

                           [INSERT ON YAK LETTERHEAD]

[Insert Date]

To Account Debtor

Dear Accounts Payable Manager:

Re:      Yak Communications (Canada) Inc. ("Yak")

We have retained the services of 1054311 Ontario Limited (the "Lender") to
provide funding to us by processing our accounts receivables. In that regard, we
wish to inform you, and irrevocably direct you to make all payments in respect
of invoices issued by or otherwise owing by you to Yak directly to:

              1054311 Ontario Limited
              3845 Bathurst Street
                 Suite 202
               Toronto, Ontario
                 M3H 2N2

If you have any questions or require further information, please do not hesitate
to contact Yak at (416) 296-9111 or the Lender at (416) 630-5555 ext. 202.

This notice of assignment and the within instructions are irrevocable, shall
constitute your good and sufficient authority with regard to the matters set
forth above and shall remain in full force and effect until you are notified by
the Lender in writing to the contrary.

Yours very truly,

Yak Communications (Canada) Inc.
Per:

----------------------------------
Charles Zwebner, President

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