EXHIBIT 10.1

                                January 17, 2003



America  Online,  Inc.
22000  AOL  Way
Dulles,  Virginia  20166
Attention:  General  Counsel

       Re:     Amendment to Waiver of Rights under Restructuring Agreement
               -----------------------------------------------------------

Ladies  and  Gentlemen:

     This  letter agreement sets forth our agreement and understanding regarding
the  waiver  of  certain  rights  by  America  Online,  Inc.  ("AOL")  under the
Restructuring  and  Note Agreement, dated September 19, 2001 (the "Restructuring
Agreement"),  between  AOL  and  Talk  America  Holdings  Inc.  ("Talk") as that
agreement  was  amended  pursuant to a letter agreement dated December 23, 2002,
regarding  the Amendment and Waiver of Rights under Restructuring Agreement (the
"Prior  Waiver").

     A.  WAIVERS
     --  -------

     From  and  after  the  date  of  this  letter  agreement,

     (i)  the  definition of "Stock Buy Back" in Section B.1 shall be amended to
     read  in  its  entirety  as  follows:

          "Stock  Buy  Back"  means  the  purchase  or other acquisition by Talk
          (other than purchases or acquisitions from AOL) with cash of shares of
          the  common  stock  (the  "Common  Stock") of Talk, in either the open
          market  or  privately.

     (ii)  the  waiver  set forth in Section B.2 of the Prior Waiver shall be as
     set  forth  below:

          2.   Section  5.11.  Pursuant  to  Section  5.11  of the Restructuring
               Agreement, subject to certain exceptions, Talk is prohibited from
               declaring  or making any payment or distribution of any kind with
               respect  to  any  of its equity interests, whether as a dividend,
               return  of  capital,  redemption,  repurchase  or  otherwise. AOL
               hereby  agrees to waive until September 30, 2003 this prohibition
               solely  with respect to the Stock Buy Back provided that (i) Talk
               purchases  the Common Stock at or below the market price for such
               Common  Stock,  (ii)  the  aggregate cash payment amounts made by
               Talk  with  respect  to  both  the  Note  Buy

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               Back  and  the  Stock Buy Back together do not exceed $10,000,000
               and  (iii)  for  every  share  of  Common Stock purchased by Talk
               through  the Stock Buy Back, Talk shall promptly, but in no event
               later  than 3 business days following such Stock Buy Back, (x) if
               AOL  holds  shares  of Common Stock at the time of any such Stock
               Buy  Back,  purchase  one  share  of Common Stock from AOL at the
               greater of the price per share paid in the Stock Buy Back and the
               closing  price  on  NASDAQ on the previous day as reported by The
               Wall  Street  Journal  or  (y) if AOL does not hold any shares of
               Common  Stock  at  the time of any such Stock Buy Back, for every
               dollar  paid  by  Talk to purchase Common Stock through the Stock
               Buy  Back,  Talk  shall  promptly,  but  in no event later than 3
               business  days following such Stock Buy Back, prepay $1.00 of the
               principal  amount of the outstanding Convertible Notes. AOL shall
               determine  in  its  sole  discretion which shares of Common Stock
               shall  be  purchased  from AOL pursuant to clause (iii)(x) of the
               previous  sentence.

     B.  OTHER  AGREEMENTS.
     --  -----------------

          1.  Limited  Effect.  Except  as  expressly  set  forth  herein,  the
          execution,  delivery  and effectiveness of this letter agreement shall
          not (a) operate as a waiver of any right, power or remedy of AOL under
          any  Transaction Document (as defined in the Restructuring Agreement),
          (b)  constitute  a  waiver  or  amendment  of  any  provisions  of any
          Transaction  Document  or  (c) operate as a waiver or amendment of any
          right,  power  or  remedy  of  AOL  under  the Prior Waiver. Except as
          expressly  modified herein, all of the provisions and covenants of the
          Transaction  Documents  and the Prior Waiver are and shall continue to
          remain  in  full force and effect in accordance with the terms thereof
          and  are hereby in all respects ratified and confirmed. Any waivers by
          AOL are limited to the circumstances described in this letter and will
          not  be  deemed  to  be  a  waiver  of  any  other  provision  of  the
          Restructuring  Agreement  or  the  Prior  Waiver, or a waiver of AOL's
          rights  under  Section  5.3  or  Section  5.11  under  any  other
          circumstances.  The Company hereby expressly acknowledges that failure
          by  AOL to enforce its rights under Section 5.3 or Section 5.11 of the
          Restructuring  Agreement  in  this  instance  or  in the past does not
          entitle the Company to any such waiver under this or any other section
          of  the  Restructuring  Agreement  in  the  future.

          3. Representations and Warranties. Talk hereby represents and warrants
          that no Default or Event of Default exists as of the date hereof, both
          before  and  after  giving  effect  to  the  provisions  hereof.

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     If  you  are  in agreement with the foregoing, please so confirm by signing
the enclosed copy of this letter as provided below and returning the signed copy
to  us, whereupon this letter agreement shall be a binding agreement between us.
This  letter  may  be executed in counterparts, each of which shall be deemed an
original  with the same effect as if the signatures were on the same instrument.


                              Very  truly  yours,

                              TALK  AMERICA  HOLDINGS,  INC.


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


     The  undersigned,  America  Online, Inc., hereby acknowledges the foregoing
letter  and  consents  and  agrees  to  its  terms.

AMERICA  ONLINE,  INC.


By:    /s/  Lynda  Clarizio
       ----------------------
Name:  Lynda  Clarizio
Title: Senior  Vice  President
Date:  January  17,  2003

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