EXHIBIT 10.1

CONSULTING AGREEMENT

THIS CONSULTING AGREEMENT ("Agreement") is made and entered into as of the 1st
day of January, 2005 among Talk America Holdings, Inc., a Delaware corporation
(the “Company”) and Gabriel Battista ("Consultant") .

WHEREAS, Consultant has been a valuable Consultant of Company, serving Company
in the past as Chief Executive Officer and Chairman of the Board of Directors
and recently as Executive Chairman of the Board of Directors;

WHEREAS, Company desires to engage Consultant to provide Company with the
services provided in this Agreement and Consultant desires to be engaged by
Company as provided in this Agreement; and

WHEREAS, Company and Consultant desire to enter into this Agreement that sets
forth the terms and conditions of said engagement.

NOW THEREFORE, in consideration of the foregoing, the mutual covenants set forth
herein and other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the undersigned hereby agree as follows:

1.     Engagement.

1.1    Company agrees to engage Consultant to provide to Company the “Consulting
Services” as defined below, and Consultant accepts such engagement and agrees to
provide to Company the Consulting Services as set forth below, on the terms and
conditions set forth herein. Except as otherwise specifically provided herein,
Consultant’s engagement shall be subject to the policies and practices of
Company in effect from time to time during the term of Consultant’s engagement
hereunder (including, without limitation, its practices as to tax reporting and
withholding).

1.2    Consultant agrees during the Term to monitor, advise and consult with
Company on certain regulatory and operational matters at the request of and as
reasonably requested by Company’s Chief Executive Officer (“Consulting
Services”). Company and Consultant estimate that Consultant shall provide fifty
hours per month of Consulting Services or an aggregate of six hundred (600)
hours during the Term under this Agreement, at times reasonably requested by
Company and reasonably convenient to Consultant.

1.3    Consultant shall perform his duties and responsibilities to the best of
his abilities hereunder in a diligent manner. Consultant agrees that during the
Term (as defined below) he will not enter into any agreement, understanding or
relationship that would prohibit the performance of the Consulting Services by
him or that would create a conflict of interest with regard to the performance
of the Consulting Services.

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2.     Term of Agreement. The term of this Agreement shall commence January 1,
2005 and continue in effect until December 31, 2005, except as hereinafter
provided (the "Term").     

3.     Compensation and Related Matters.

3.1    Compensation. During the Term, Company shall pay to Consultant a monthly
fee of twenty-five thousand dollars ($25,000) (“Consulting Fee”).
 
3.2    Health and Medical Benefit Plans and Arrangements. Consultant shall be
entitled to participate in and to receive health and medical benefits under
Company's Employee benefit plans and arrangements as are made available to the
Company's senior executive officers during the Term, which health and medical
benefit plans and arrangements may be altered from time to time at the
discretion of the Board of Directors of Company (the “Benefits”).
 
3.3    Expenses. Company shall promptly reimburse Consultant for all
out-of-pocket expenses related to Company's business that are actually paid or
incurred by him in the performance of his services under this Agreement and that
are incurred, reported and documented in accordance with Company's policies.

3.4    Office. Company shall provide Consultant with an office and
administrative support located at Company’s headquarters in Reston, Virginia.
 
4.     Termination. The Term of Consultant's engagement hereunder may be
terminated under the following circumstances:

4.1     Death. The Term of Consultant's engagement hereunder shall terminate
upon his death.

4.2     Disability. If Consultant becomes physically or mentally disabled during
the term hereof so that he is unable to perform services required of him
pursuant to this Agreement for an aggregate of six (6) months in any twelve (12)
month period (a ‘Disability”), Company, at its option, may terminate
Consultant’s employment hereunder.

4.3     Cause. Upon written notice, Company may terminate Consultant's
engagement hereunder for Cause (as defined below). For purposes of this
Agreement, Company shall have "Cause" to terminate Consultant's engagement
hereunder upon: (a) a material breach by Consultant of any material provision of
this Agreement if Consultant fails to cure such breach in the 30 day period
following written notice specifying in reasonable detail the nature of the
breach, (b) willful misconduct by Consultant as a consultant of Company in
connection with misappropriating any funds or property of Company, (c)
attempting to willfully obtain any personal profit from any transaction in which
Consultant has an interest that is adverse to the interests of Company without
disclosure thereof to, and consent from, the Board, or (d) Consultant’s gross
neglect in the performance of the duties required to be performed by Consultant
under this Agreement if Consultant fails to eliminate such neglect in the 30 day
period following written notice specifying in reasonable detail the nature of
the gross neglect.

4.4     By Consultant. Consultant may terminate his engagement hereunder:

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(a)     Upon forty-five (45) days’ prior written notice to Company, provided
that, upon the giving of such notice by Consultant, Company may establish an
earlier date for such termination under this Section 4.4 (a).

(b)     For Good Reason (as defined below) immediately and with notice to
Company. "Good Reason" for termination by Consultant shall include, but is not
limited to, material breach of any provision of this Agreement by Company, which
breach shall not have been cured by Company within fifteen (15) days of receipt
of written notice of said material breach.
 
4.5    Without Cause. Company may otherwise terminate the Term of Consultant's
engagement at any time upon written notice to Consultant.

5.    Compensation In the Event of Termination. In the event that Consultant's
employment hereunder terminates prior to the end of the Term, Company shall make
payments to Consultant as set forth below:

5.1    By Consultant for Good Reason; By Company Without Cause. In the event
that Consultant's engagement hereunder is terminated by Company without Cause or
by Consultant for Good Reason, then the Company shall: (a) continue to pay to
Consultant the Consulting Fee and Benefits to which Consultant would be entitled
hereunder in the manner provided for herein for the period of time ending on the
date when the Term would otherwise have expired in accordance with Section 2
hereof, and (b) reimburse Consultant for expenses that may have been incurred,
but which have not been paid as of the date of termination, subject to the
requirements of Section 3.3 hereof.

5.2    By Company for Cause; By Consultant Without Good Reason. In the event
that Company shall terminate Consultant's engagement hereunder for Cause
pursuant to Section 4.3 hereof or Consultant shall terminate his engagement
hereunder without Good Reason, all compensation and Benefits, as specified in
Section 3 of this Agreement, theretofore payable or provided to Consultant shall
cease to be payable or provided, except for reimbursement of expenses that may
have been incurred, but which have not been paid as of the date of termination,
subject to the requirements of Section 3.3 hereof.

5.3    Death. In the event of Consultant's death, Company shall not be obligated
to pay Consultant or his estate or beneficiaries any compensation except for
reimbursement of expenses that may have been incurred, but which have not been
paid as of the date of death, subject to the requirements of Section 3.3 hereof.

5.4    Disability. In the event of Consultant's Disability, the Company shall
not be obligated to pay Consultant or his estate or beneficiaries any additional
compensation except for any reimbursement for expenses that may have been
incurred but which have not been paid as of the date of Disability, subject to
the requirements of Section 3.3 hereof.

6.    Unauthorized Disclosure. Consultant shall not, without the prior written
consent of Company, disclose or use in any way, either during the Consultant’s
employment with Company or thereafter, except as required in the course of such
engagement, any confidential business or technical information or trade secret
acquired in the course of such employment (including, without limitation of the
generality of the foregoing, any and all information referred to in

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Section 8 hereof), whether or not conceived of or prepared by him, that is
related to the actual or anticipated business, services, research and
development of Company or any of its Affiliates or to existing or future
products or services of Company or any of its Affiliates; provided, that the
foregoing shall not apply to (i) information that is not unique to Company or
that is generally known to the industry or the public other than as a result of
Consultant’s breach of this covenant, (ii) information known to the Consultant
prior to the date he first became an Consultant of Company or any of its
Affiliates (except insofar as it is part of the information that is the
exclusive property of Company as provided in Section 8), or (iii) information
that Consultant is required to disclose to or by any governmental or judicial
authority; provided, however, if Consultant should be required in the course of
judicial or administrative proceedings to disclose any information, Consultant
shall give Company prompt written notice thereof so that Company may seek an
appropriate protective order and/or waive in writing compliance with the
confidentiality provisions of this Agreement. If, in the absence of a protective
order or the receipt of a waiver by Company, Consultant is nonetheless, in the
written opinion of its counsel, compelled to disclose information to a court or
tribunal or otherwise stand liable for contempt or suffer other serious censure
or penalty, Consultant may disclose such information to such court or tribunal
without liability to any other party hereto.

7.    Tangible Items. All files, records, documents, manuals, books, forms,
reports, memoranda, studies, data, calculations, recordings and correspondence,
in whatever form they may exist, and all copies, abstracts and summaries of the
foregoing and all physical items related to the business of Company and its
affiliates, other than merely personal items, whether of a public nature or not,
and whether prepared by Consultant or not, and which are received by Consultant
from, or on behalf of Company or an Affiliate in the course of his employment
hereunder are and shall remain the exclusive property of Company and any such
Affiliate and shall not be removed from premises of the Company or such
Affiliate, as the case may be, except as required in the course of Consultant’s
engagement hereunder, without the prior written consent of the Board, and the
same shall be promptly returned by Consultant upon the termination of
Consultant's engagement with Company or at any time prior thereto upon the
request of the Board.

8.    Inventions and Patents. Consultant agrees that all inventions,
innovations, ideas, concepts, improvements, developments, methods, designs,
analyses, drawings, reports, and all similar or related information that relates
to the actual or anticipated business, services, research and development of
Company or any of its Affiliates or existing or future products or services of
Company or any of its Affiliates, tangible or intangible, and that are
conceived, developed or made by or at the direction of Consultant while engaged
by Company, and all rights to the results and proceeds of any thereof and all
now known and hereafter existing rights of every kind and nature throughout the
universe, in perpetuity and in all languages, pertaining to such results and
proceeds and all elements thereof for all now known and hereafter existing uses,
media and form will be owned exclusively by Company; and the foregoing is
inclusive of a full irrevocable and perpetual assignment to Company. Consultant
acknowledges that there are, and may be, new uses, media, means and forms of
exploitation throughout the universe employing current and/or future technology
yet to be developed, and the parties specifically intend the foregoing full,
irrevocable and perpetual grant of rights to Company to include all such now
known and unknown uses, media and form of exploitation, throughout the universe.
Consultant agrees to execute at any time upon the Company’s request such further
documents or do such other acts (whether before, during or after the Term) as
may be

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required to evidence and/or confirm the Company’s ownership of any or all of the
foregoing. The termination, completion or breach of this Agreement for any
reason and by either party shall not affect the Company’s exclusive ownership of
any or all of the foregoing.

9.    Certain Restrictive Covenants. During the Term, and for a period ending
twelve (12) months after the earlier of Consultant's termination of the
consulting services hereunder and the end of the Term, Consultant agrees that he
will not act, either directly or indirectly, as a partner, officer, director,
substantial stockholder or Consultant of, or render advisory or other services
for, or in connection with, or become interested in, or make any substantial
financial investment in any firm, corporation, business entity or business
enterprise that competes with the business of Company (each, a “Competitor”),
except with the express written consent of the Board. Consultant further agrees
that in the event of the termination of his employment under Section 4 hereof,
for a period of twelve (12) months thereafter, he will not employ or offer to
employ, actively interfere with the relationship of Company or an Affiliate
with, any Consultant of Company or any Consultant of any Affiliate.

10.    Consultant Representations. Consultant hereby represents and warrants to
Company that: (a) the execution, delivery and performance of this Agreement by
Consultant does not and will not conflict with, breach, violate or cause a
default under any employment, noncompetition or confidentiality contract or
agreement; instrument; order, judgment or decree to which Consultant is a party
or by which he is bound, and (b) upon the execution and delivery of this
Agreement by Company, this Agreement shall be the valid and binding obligation
of Consultant, enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency and similar laws affecting the rights of creditor
generally.

11.    Company Representations. Company represents and warrants (a) that it is
duly authorized and empowered to enter into this Agreement, (b) the execution,
delivery and performance of this Agreement by Company does not and will not
conflict with, breach, violate or cause a default under any contract, agreement,
instrument, order, judgment or decree to which Company is a party or by which it
is bound, and (c) upon the execution and delivery of this Agreement by
Consultant, this Agreement shall be the valid and binding obligation of Company,
enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency and similar laws affecting the rights of creditor generally.

12    Remedies. Consultant acknowledges that the restrictions and agreements
contained in this Agreement are reasonable and necessary to protect the
legitimate interests of Company, and that any violation of this Agreement will
cause substantial and irreparable injury to Company that would not be
quantifiable and for which no adequate remedy would exist at law and agrees that
injunctive relief, in addition to all other remedies, shall be available
therefor.

13.    Severability. It is the intent and understanding of the parties hereto
that if, in any action before any court or other tribunal of competent
jurisdiction legally empowered to enforce this Agreement, any term, restriction,
covenant, or promise is held to be unenforceable as a result of being
unreasonable or for any other reason, then such term, restriction, covenant, or
promise shall not thereby be terminated, but, that it shall be deemed modified
to the extent necessary to make it enforceable by such court or other tribunal
and, if it cannot be so modified, that it shall be deemed amended to delete
therefrom such provision or portion adjudicated to be invalid or unenforceable,
and this agreement shall be deemed to be in full force and effect as so modified
and such

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modification or amendment in any event shall apply only with respect to the
operation of this Agreement in the particular jurisdiction in which such
adjudication is made.

14    Notices. For the purposes of this Agreement, notices, demands and all
other communications provided for in the Agreement shall be in writing and shall
be deemed to have been duly given when received if delivered in person or by
overnight courier or if mailed by United States registered mail, return receipt
requested, postage prepaid, to the following addresses:

If to Consultant:   Gabriel Battista
12428 Bacall Lane
Potomac, MD 20854
Fax No.: (301) 963-2062

If to Company:    Talk America Holdings, Inc.
6805 Route 202
New Hope, Pennsylvania 18938
Attn: EVP - General Counsel
Fax No.: (215) 862-1960

Either party may change its address for notices by written notice to the other
party in accordance with this Section.

15.    Waiver. No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in a
writing executed by Consultant and Company. No waiver by any party hereto at any
time of any breach by another party hereto of, or compliance with, any condition
or provision of this Agreement to be performed by such other party shall be
deemed a waiver of similar or dissimilar provisions or conditions at the same or
at any prior or subsequent time.

16.    Governing Law. The validity, interpretation, construction and performance
of this Agreement shall be governed by the laws of Pennsylvania relating to
contracts made and to be performed entirely therein.

18.    Headings. The headings in this Agreement are inserted for convenience
only and shall have no significance in the interpretation of this Agreement.

19.    Successors.  Company may not assign any of its rights or obligations
under this Agreement hereunder. Consultant may assign his rights, but not his
obligations, hereunder and all of Consultant's rights hereunder shall inure to
the benefit of his estate, personal representatives, designees or other legal
representatives. All of the rights of Company hereunder shall inure to the
benefit of, and be enforceable by the successors of Company. Any person, firm or
corporation succeeding to the business of Company by merger, purchase,
consolidation or otherwise shall be deemed to have assumed the obligations of
Company hereunder; provided, however, that Company shall, notwithstanding such
assumption by a successor, remain primarily liable and responsible for the
fulfillment of its obligations under this Agreement.

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

21.    Certain Words. As used in this Agreement, the words “herein,”
“hereunder,” “hereof” and similar words shall be deemed to refer to this
Agreement in its entirety, and not to any particular provision of this Agreement
unless the context clearly requires otherwise.

IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement as of
the day and year first written above.

Talk America Holdings, Inc.

By:  /s/ Aloysius T. Lawn IV     
       Aloysius T. Lawn IV
       EVP - General Counsel

/s/ Gabriel Battista        
Gabriel Battista

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