EXHIBIT 10.1

                              EMPLOYMENT AGREEMENT

         THIS EMPLOYMENT AGREEMENT  ("Agreement") is made and entered into as of
the  7th day of  August,  2000  among  Talk.com  Inc.,  a  Delaware  corporation
("Talk.com") and Talk.com Holding Corp., a Pennsylvania corporation and a wholly
owned   subsidiary  of  Talk.com  Inc.  (the  "Company")  and  Thomas  M.  Walsh
("Employee").


         WHEREAS,  Talk.com  and  Company  desires  to employ  Employee  as Vice
President-Finance  of Talk.com and the Company and in certain other  capacities,
and Employee desires to be employed by Talk.com and Company; and

         WHEREAS,  Talk.com and Company and  Employee  desire to enter into this
Agreement that sets forth the terms and conditions of said employment.

         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. EMPLOYMENT.  Company agrees to employ Employee, and Employee accepts
such  employment  and agrees to serve  Company,  on the terms and conditions set
forth  herein.  Except as otherwise  specifically  provided  herein,  Employee's
employment shall be subject to the employment  policies and practices of Company
in effect from time to time during the term of Employee's  employment  hereunder
(including,   without  limitation,   its  practices  as  to  tax  reporting  and
withholding).

         2. TERM OF AGREEMENT. The term of Employee's employment hereunder shall
commence on September 4, 2000 (the  "Commencement  Date") and shall  continue in
effect for a period of five years  thereafter,  except as  hereinafter  provided
(the "Term").  Employee  agrees to and shall  present  herself at the offices of
Company in New Hope,  Pennsylvania  prepared to commence  performing  her duties
hereunder on or before the Commencement Date.

         3. POSITIONS AND DUTIES.

         3.1 OFFICER  POSITIONS.  Except as may otherwise be agreed upon between
Company  and  Employee,  Employee  shall  perform  such  duties  and  have  such
responsibilities   as  Vice   President-Finance   and  such  other   duties  and
responsibilities  consistent with the foregoing duties and  responsibilities  as
may be  reasonably  assigned or  delegated to him from time to time by Company's
Chief  Executive   Officer  or  Company's  Board  of  Directors  (the  "Board"),
including,  without limitation,  service as an employee,  officer or director of
affiliates  (as that term is  defined  in Rule 405 under the  Securities  Act of
1933, as amended (the "Act"))  (hereinafter,  "Affiliates") of Company,  without

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additional  compensation.  References in this Agreement to Employee's employment
with Company shall be deemed to refer to employment with Company and/or,  as the
case may be, an Affiliate,  as the context requires.  Employee shall perform his
duties  and  responsibilities  to the  best  of  his  abilities  hereunder  in a
diligent, trustworthy,  businesslike and efficient manner. Employee shall devote
substantially all of his working time and efforts to the business and affairs of
Company;  provided,  however,  that  nothing in this  Agreement  shall  preclude
Employee from (a) engaging in charitable  activities and community affairs,  and
(b) managing his personal investments and affairs (subject to the limitations in
Section 10 hereof.

         4. COMPENSATION AND RELATED MATTERS.

         4.1 BASE SALARY.  During the Term, Company shall pay to Employee a base
salary  ("Base  Salary")  at the  rate of One  Hundred  Sixty  Thousand  Dollars
($160,000)  per year,  which Base Salary shall be paid to Employee in accordance
with Company's usual and customary payroll practices.

         4.2  BENEFIT  PLANS AND  ARRANGEMENTS.  Employee  shall be  entitled to
participate in and to receive  benefits under Company's  employee  benefit plans
and  arrangements  (including,  but not  limited  to,  bonus  plans) as are made
available to the Company's  senior  executive  officers  during the Term,  which
employee  benefit plans and arrangements may be altered from time to time at the
discretion of the Board (the "Benefits").  Employee acknowledges and agrees that
bonuses,  annual or otherwise,  are performance based and discretionary with the
Board of Directors or a Committee thereof.

         4.3 PERQUISITES. During the Term, Employee shall be entitled to receive
fringe benefits as are made available to Company's senior executive officers.

         4.4  EXPENSES.  Company  shall  promptly  reimburse  Employee  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,
including but not limited to continuing  education with respect to accounting as
required by applicable rules. In addition, during the Term, Company will provide
Employee  with an  automobile  or an  automobile  allowance,  as  Company  shall
determine, and if the Company determines to provide Employee with an automobile,
Company shall keep such  automobile  fully insured in accordance  with Company's
practices for similarly situated employees.

         4.5 STOCK OPTIONS.

         (a) GRANT OF OPTIONS.  Effective on the date hereof,  Employee shall be
granted an award of an option to  purchase  160,000  shares of the Common  Stock
(the "Option") in accordance with the stock option agreement in substantially in
the form thereof attached hereto as Exhibit A. The Option shall have an exercise
price  equal to  $4-5/8,  which is equal to the fair  market  value (as  defined
below) of the Common Stock on the date hereof.  The Option  expires on the tenth
anniversary of the date hereof and


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<PAGE>

shall vest and become  exercisable,  subject to accelerated vesting in the event
of a Change in Control  (defined as provided below) of Company in  installments,
as follows: (i) options with respect to 53,334 shares of Common Stock shall vest
and become exercisable on the first anniversary of the date hereof; (ii) options
with respect to 53,333 shares of Common Stock shall vest and become  exercisable
on the second  anniversary  of the date hereof and (iii) options with respect to
53,333  shares of Common  Stock shall vest and become  exercisable  on the third
anniversary of the date hereof.  In the event of a Change in Control of Company,
all of the  options  issued  under  the  Option  which are not then  vested  and
exercisable  shall  immediately  become vested and exercisable.  The fair market
value of  Common  Stock  for  purposes  of this  Agreement  shall  mean the last
reported sale price of a share of the Common Stock on the Nasdaq National Market
System preceding the date in question or if no sale took place on such day, such
last reported sale price on the then next preceding date on which such sale took
place. For the purposes of this Agreement, a "Change of Control" shall be deemed
to have occurred if:

              (i)    any  Person  (as  defined  in  Section  3(a)(9)  under  the
                     Securities  Exchange Act of 1934, as amended (the "Exchange
                     Act")),  other than the  Company,  becomes  the  Beneficial
                     Owner (as  defined in Rule 13d-3  under the  Exchange  Act;
                     provided,   that  a  Person  shall  be  deemed  to  be  the
                     Beneficial Owner of all shares that any such Person has the
                     right to acquire  pursuant to any agreement or  arrangement
                     or upon exercise of conversion rights, warrants, options or
                     otherwise,  without regard to the 60 day period referred to
                     in  Rule  13d-3  under  the  Exchange  Act),   directly  or
                     indirectly, of securities of the Company or any Significant
                     Subsidiary (as defined below)  representing  50% or more of
                     the  combined  voting  power  of  the  Company's,  or  such
                     subsidiary's,   as  the  case  may  be,  then   outstanding
                     securities;

              (ii)   during  any  period of two  years,  individuals  who at the
                     beginning of such period  constitute  the Board and any new
                     director (other than a director  designated by a person who
                     has entered into an agreement  with the Company to effect a
                     transaction  described  in clauses (i),  (iii),  or (iv) of
                     this  Section   2(a))  whose   election  by  the  Board  or
                     nomination for election by  stockholders  was approved by a
                     vote of at least  two-thirds  (2/3) of the  directors  then
                     still in office who either were  directors at the beginning
                     of the two-year  period or whose election or nomination for
                     election was previously so approved, but excluding for this
                     purpose any such new director  whose initial  assumption of
                     office occurs as a result of either an actual or threatened
                     election contest or other actual or threatened solicitation
                     of proxies or  consents  by or on behalf of an  individual,
                     corporation,


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<PAGE>

                     partnership,  group, association or other entity other than
                     the Board,  cease for any reason to  constitute  at least a
                     majority  of  the  Board  of  either  or the  Company  or a
                     Significant Subsidiary;

              (iii)  the  consummation  of a  merger  or  consolidation  of  the
                     Company or any subsidiary of the Company owning directly or
                     indirectly  all or  substantially  all of the  consolidated
                     assets of the Company (a "Significant Subsidiary") with any
                     other entity,  other than a merger or  consolidation  which
                     would result in the voting  securities  of the Company or a
                     Significant   Subsidiary   outstanding   immediately  prior
                     thereto  continuing  to represent  more than fifty  percent
                     (50%) of the  combined  voting  power of the  surviving  or
                     resulting entity outstanding  immediately after such merger
                     or consolidation;

              (v)    (iv) the  shareholders  of the  Company  approve  a plan or
                     agreement  for the sale or  disposition  of  fifty  percent
                     (50%) or more of the consolidated  assets of the Company in
                     which case the Board shall  determine the effective date of
                     the Change of Control resulting therefrom; and

              (vi)   any other event occurs which the Board  determines,  in its
                     discretion,  would  materially  alter, the structure of the
                     Company or its ownership.

         (b) REGISTRATION  STATEMENT.  Company will file with the Securities and
Exchange Commission and any applicable state securities regulatory authorities a
Registration  Statement  on the  applicable  form to register  the resale of the
Award and Form S-8 (or if unavailable,  a registration statement on Form S-3) to
register the shares  issuable  upon exercise of the Option under the Act and any
applicable state securities or "Blue Sky" laws as soon as practicable  after the
date  hereof.  Notwithstanding  the  foregoing,  Company  shall be  entitled  to
postpone for a reasonable period of time the filing or the effectiveness of such
registration  statement  if the Board  shall  determine  in good faith that such
filing  or  effectiveness  would  be  materially  detrimental  to the  Company's
business interests.

         5.  TERMINATION.  The Term of  Employee's  employment  hereunder may be
terminated under the following circumstances:


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<PAGE>

         5.1 DEATH. The Term of Employee's  employment hereunder shall terminate
upon his death.

         5.2 DISABILITY.  If Employee  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 Employee's
employment hereunder.

         5.3 CAUSE.  Upon  written  notice,  Company  may  terminate  Employee's
employment  hereunder  for  Cause  (as  defined  below).  For  purposes  of this
Agreement,  Company  shall  have  "Cause"  to  terminate  Employee's  employment
hereunder  upon (a) a material  breach by Employee of any material  provision of
this  Agreement,   (b)  willful   misconduct  by  Employee  in  connection  with
misappropriating  any funds or property of Company, (c) attempting to obtain any
personal  profit from any  transaction in which Employee has an interest that is
adverse to the interests of Company without prior written  disclosure thereof to
the Board or (d)  Employee's  gross  neglect  in the  performance  of the duties
required to be performed by Employee under this Agreement.

         5.4 BY EMPLOYEE. Employee may terminate his employment hereunder:

         (a) Upon sixty (60) days' prior  written  notice to  Company,  provided
that,  upon the giving of such  notice by  Employee,  Company may  establish  an
earlier date for such termination under this Section 5.4 (a).

         (b) For Good Reason (as defined below)  immediately  and with notice to
Company.  "Good Reason" for  termination by Employee  shall include,  but is not
limited to, the following:

              (i)    Material  breach  of any  provision  of this  Agreement  by
                     Company,  which breach shall not have been cured by Company
                     within  thirty  (30) days of receipt  of written  notice of
                     said material breach;

              (ii)   Failure  by  Company  to  maintain  Employee  in a position
                     commensurate  with that  referred  to in  Section 3 of this
                     Agreement; or

              (iii)  The assignment to Employee of any duties  inconsistent with
                     Employee's position,  authority, duties or responsibilities
                     as  contemplated by Section 3 hereof or any other action by
                     Company  that  results in a  diminution  of such  position,
                     authority, duties or responsibilities.

         5.5  WITHOUT  CAUSE.  Company  may  otherwise  terminate  the  Term  of
Employee's employment at any time upon written notice to Employee.


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<PAGE>

         6.  COMPENSATION  IN  THE  EVENT  OF  TERMINATION.  In the  event  that
Employee's employment hereunder terminates prior to the end of the Term, Company
shall make payments to Employee as set forth below:

         6.1 BY EMPLOYEE FOR GOOD REASON; BY COMPANY WITHOUT CAUSE. In the event
that Employee's  employment  hereunder is terminated by Company without Cause or
by Employee  for Good  Reason,  then the Company  shall (a) pay to Employee  all
amounts due to Employee pursuant to any bonus that was due to Employee as of the
date of such  termination,  pursuant to the terms of such bonus (a "Due Bonus"),
(b) continue to pay to Employee  the Base Salary and Benefits to which  Employee
would be entitled  hereunder in the manner provided for herein for the period of
time  ending on the  earlier  of the date  when the Term  would  otherwise  have
expired in accordance  with Section 2 hereof and the second  anniversary  of the
date of such termination, (c) reimburse Employee 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 4.4 hereof and (d) one hundred percent (100%) of the
outstanding  stock  options  granted to the  Employee  that are  unvested  shall
immediately vest and become exercisable.

         6.2 BY COMPANY FOR CAUSE; BY EMPLOYEE WITHOUT GOOD REASON. In the event
that Company shall terminate Employee's  employment hereunder for Cause pursuant
to Section 5.3 hereof or  Employee  shall  terminate  his  employment  hereunder
without Good Reason, all compensation and Benefits, as specified in Section 4 of
this  Agreement,  theretofore  payable or provided to Employee shall cease to be
payable or  provided,  except for any Due Bonus and any  Benefits  that may have
been due and payable  but that have not been paid as of the date of  termination
and  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
4.4 hereof.

         6.3  DEATH.  In the event of  Employee's  death,  Company  shall not be
obligated to pay Employee or his estate or beneficiaries any compensation except
for (a) any Due Bonus or any Benefits  that may have been earned and are due and
payable  as of the date of death,  but which have not been paid as of such date,
(b)  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 4.4
hereof,  and (c) all  outstanding  stock  options  granted to Employee  that are
unvested shall immediately vest and become  exercisable and Employee's estate or
beneficiaries,  as the case may be, shall have the right to exercise any of such
stock  options  during the period  commencing on the date of death and ending on
the second  anniversary of the date of such  termination or for the remainder of
the  period  set  forth in the  option  agreement  applicable  to the  option in
question (the "Exercise Period'), if less.

         6.4 DISABILITY.  In the event of Employee's  Disability,  Company shall
not be obligated to pay Employee or his estate or  beneficiaries  any additional
compensation  except  for:  (a) any Due  Bonus and  Benefits  that may have been
earned and are due and payable as of the date of such Disability, but which have
not been paid as of such date, and (b)  reimbursement for expenses that may have
been incurred but which have not been


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<PAGE>

paid as of the date of Disability,  subject to the  requirements  of Section 4.4
hereof.  Upon  termination  due  to  Disability,  fifty  percent  (50%)  of  the
outstanding   stock  options   granted  to  Employee  that  are  unvested  shall
immediately  vest  and  become   exercisable  and  Employee  or  his  estate  or
beneficiaries,  as the case may be, shall have the right to exercise any of such
stock options during the period  commencing on the date of Disability and ending
on the second  anniversary of the date of the Disability or for the remainder of
Exercise Period, if less.

         6.5 NO MITIGATION.  In the event of any termination of employment under
Section  5  hereof,  Employee  shall  be  under  no  obligation  to  seek  other
employment;  provided;  however,  that to the extent that  Employee  does obtain
other  employment   subsequent  to  the  termination  of  Employee's  employment
hereunder,  the  obligations  of  Company to pay  Benefits  (which is defined in
Section 4.2 of this Agreement and the term  "Benefits"  does not include Options
granted  pursuant to Section 4.5 of this  Agreement for purposes of this Section
6.5) under this Agreement from and after the date of  commencement of such other
employment shall terminate.

         7.  UNAUTHORIZED  DISCLOSURE.  Employee  shall not,  without  the prior
written consent of Company, disclose or use in any way, either during Employee's
employment with Company or thereafter,  except as required in the course of such
employment,  any confidential  business or technical information or trade secret
acquired  in the  course of such  employment,  whether  or not  conceived  of or
prepared  by him,  which is related to any service or business of Company or any
Affiliate;  provided,  however,  that  the  foregoing  shall  not  apply  to (a)
information  that is not unique to the Company or that is generally known to the
industry  or the  public  other  than as a result of  Employee's  breach of this
covenant, (b) information known to Employee other than from information provided
by Company or (c)  information  that Employee is required to disclose to, or by,
any governmental or judicial authority; provided, however, if Employee should be
required in the course of judicial or other governmental proceedings to disclose
any  information,  Employee  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, Employee is
compelled  to disclose  information  to, or pursuant to the  requirements  of, a
court or other governmental authority, Employee may disclose such information to
such court or other governmental  authority without liability to any other party
hereto.

         8. 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 Employee or not,  and which are
received by Employee 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 the premises of the
Company or such Affiliate,  as the case may be, except as required in the course
of


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<PAGE>

Employee's  employment  hereunder,  without  the prior  written  consent  of the
Company's Chief Executive  Officer or the Board,  and the same shall be promptly
returned by Employee upon the termination of Employee's  employment with Company
or at any time prior thereto upon the request of the Company's  Chief  Executive
Officer or the Board.

         9.  INVENTIONS  AND  PATENTS.  Employee  agrees  that  all  inventions,
innovations,  improvements,  developments, methods, designs, analyses, drawings,
reports, and all similar or related information that relates to Company's actual
or anticipated business, research and development or existing or future products
or services and that are conceived,  developed or made by or at the direction of
Employee  while  Employee  is  employed  by  Company  will be owned by  Company.
Employee  also  agrees to  promptly  perform,  at the  expense of  Company,  all
reasonable  actions  (whether  before,  during or after the Term)  necessary  to
establish and confirm such ownership.

         10. CERTAIN  RESTRICTIVE  COVENANTS.  During the Term, and for a period
ending  twelve  (12)  months  after the  earlier of  Employee's  termination  of
employment  hereunder,  Employee agrees that he will not act, either directly or
indirectly, as a partner, officer, director,  substantial stockholder (an equity
interest of 5% or more) or  employee  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 is a provider of  telecommunication  services that competes with
Employer (each, a "Competitor"),  except with the express written consent of the
Board which shall not be unreasonably withheld.  Employee further agrees that in
the event of the  termination  of his employment  under Section 5 hereof,  for a
period of twelve (12) months  thereafter,  she will not, directly or indirectly,
employ,  offer to employ, or actively interfere with the relationship of Company
or an Affiliate with, any employee of Company or any employee of any Affiliate.


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         11. EMPLOYEE REPRESENTATIONS AND COVENANTS. Employee hereby represents,
warrants  and  covenants  to  Company  that  (a)  the  execution,  delivery  and
performance  of this  Agreement by Employee does not and will not conflict with,
breach,  violate or cause a default  under any  employment,  non-competition  or
confidentiality contract or agreement,  instrument; order, judgment or decree to
which Employee is a party or by which he is bound;  (b) Employee,  in performing
this Agreement and the duties of Employee's  employment  with Company,  will not
disclose or utilize any trade secrets of a former employer,  unless Employee has
first obtained express written  authorization  from any such former employer for
their  disclosure  or use; (c)  Employee has not brought,  and will not bring to
Company,  any documents,  records,  information  or other  materials of a former
employer that are not  generally  available to the public,  unless  Employee has
first obtained express written  authorization  from any such former employer for
their  possession  and use;  and (d) upon the  execution  and  delivery  of this
Agreement by Company,  this Agreement shall be the valid and binding  obligation
of Employee,  enforceable  in accordance  with its terms,  subject to applicable
bankruptcy,  insolvency  and  similar  laws  affecting  the rights of  creditors
generally.

         12. 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  Employee,  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.

         13.  INDEMNIFICATION.  Prior  to the  Commencement  Date,  Company  and
Employee  shall  enter  into an  indemnification  agreement  in a form  mutually
acceptable  to Company and Employee and  containing  terms no less  favorable to
Employee  than those  contained  in any  indemnification  or  similar  agreement
currently in effect between Company and any of its officers.

         14.  REMEDIES.   Employee   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.

         15.  EFFECT OF  AGREEMENT  ON OTHER  BENEFITS.  Except as  specifically
provided  in this  Agreement,  the  existence  of this  Agreement  shall  not be
interpreted to preclude,  prohibit or restrict  Employee's  participation in any
other  employee  benefit  plan or other plans or programs  provided to officers,
directors or employees of Company.


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<PAGE>

         16. RIGHTS OF EMPLOYEE'S  ESTATE. If Employee dies prior to the payment
of all  amounts  due and owing to him under  the terms of this  Agreement,  such
amounts shall be paid to such  beneficiary or beneficiaries as Employee may have
last  designated  in writing filed with the Secretary of Company or, if Employee
has made no  beneficiary  designation,  to Employee's  estate.  Such  designated
beneficiary  or the  executor  of  Employee's  estate,  as the case may be,  may
exercise all of Employee's  rights hereunder.  If any beneficiary  designated by
Employee shall predecease Employee, the designation of such beneficiary shall be
deemed  revoked,  and  any  amounts  which  would  have  been  payable  to  such
beneficiary shall be paid to Employee's  estate.  If any designated  beneficiary
survives  Employee,  but dies before payment of all amounts due hereunder,  such
payments  shall,  unless  Employee  has  designated  otherwise,  be made to such
beneficiary's estate. In the event of Employee's death or judicial determination
of his  incompetence,  reference in this  Agreement to Employee  shall be deemed
where  appropriate,  to  refer  to  his  beneficiary,   estate  or  other  legal
representative.

         17.  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 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.

         18. NOTICES.  Any notices or demands given in connection herewith shall
be in  writing  and  deemed  given when (a)  personally  delivered,  (b) sent by
facsimile  transmission  to a number  provided in writing by the addressee and a
confirmation  of the  transmission is received by the sender or (c) two (2) days
after being deposited for delivery with a recognized overnight courier,  such as
Federal  Express,  and  addressed or sent, as the case may be, to the address or
facsimile number set forth below or to such other address or facsimile number as
such party may in writing designate:

         If to Employee:   Thomas M. Walsh
                           313 Heatherfield Drive
                           Souderton, PA 18964

         If to Company:    Talk.com Inc.
                           12020 Sunrise Valley Drive
                           Suite 250
                           Reston, VA  20190
                           Attn: General Counsel
                           Fax No.:  (703) 391-7525


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<PAGE>

Either  party may change its address for notices by written  notice to the other
party in accordance with this Section 17.

         19. 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 Employee 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.

         20.  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.

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

         22. SUCCESSORS. Company may not assign any of its rights or obligations
under this  Agreement  hereunder.  Employee  may assign his rights,  but not his
obligations, hereunder and all of Employee'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.

         23.  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.

         24.  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.


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<PAGE>

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

Talk.com Inc.                               Talk.com Holding Corp.



By:                                         By:
    -----------------------------------         --------------------------------
    Name:                                       Name:
    Title:                                      Title:


---------------------------------------
Thomas M. Walsh


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