EXHIBIT 4.5

                                                                  Execution Copy


                                WARRANT AGREEMENT

         THIS  WARRANT  AGREEMENT  (as may be  amended  from time to time,  this
"Agreement"),  is dated and  effective  this 20th day of October,  2000,  by and
between TALK.COM INC., a Delaware  corporation (the "Company"),  and MCG FINANCE
CORPORATION,  a Delaware corporation (the "Warrant Holder" or "MCG Finance"), as
agent for itself and the other lenders (collectively,  the "Lenders") under that
certain  Credit  Facility  Agreement,  dated as of the date hereof (the  "Credit
Agreement"),   among  Talk.com  Holding  Corp.  ("Talk  Holding"),   Access  One
Communications  Corp.  ("Access  One") and  certain  affiliates  and  direct and
indirect  subsidiaries  of Talk Holding and Access One, on the one hand, and MCG
Finance and the Lenders, on the other.

                                   WITNESSETH:

         WHEREAS, pursuant to Section 1.7.6 of the Credit Agreement, the Warrant
Holder is entitled to the issuance by the Company of warrants in accordance with
the terms hereof (the "Warrants") to purchase shares of Common Stock (as defined
below) of the Company and to receive such other securities, rights and interests
as and to the extent provided in this Agreement; and

         WHEREAS,  the  Company  desires  to set forth the terms and  conditions
relating  to  the  issuance  and  transfer  of the  Warrants,  the  issuance  of
certificates  representing the Warrants,  the exercise of the Warrants,  and the
rights of the holders thereof.

         NOW,  THEREFORE,  in  consideration  of the  premises  and  the  mutual
agreements  hereinafter  set forth and for the purpose of defining the terms and
provisions of the Warrants and the  certificates  representing  the Warrants and
the respective rights and obligations  thereunder of the Company and the Warrant
Holder, the parties hereto agree as follows:

         1.  Definitions.  As used herein,  the  following  terms shall have the
following  meanings,  unless the  context  shall  otherwise  require  (all other
capitalized  terms used herein and not otherwise  defined  herein shall have the
respective meanings ascribed to them in the Credit Agreement):

         (a) "Common  Stock" shall mean the common stock of the Company,  $ 0.01
par value per share;  provided,  however, that the shares issuable upon exercise
of the Warrants  shall  include (i) only shares of such class  designated in the
Company's  Certificate of  Incorporation as Common Stock, or (ii) in the case of
any reclassification,  change, consolidation,  merger, sale or conveyance of the
character referred to in Section 8(c) hereof, the stock,  securities or property
provided for in such section;  or (iii) in the case of any  reclassification  or
change in the  outstanding  shares of Common Stock issuable upon exercise of the
Warrants as a result of a subdivision  or  combination or a change in par value,
or from par  value to no par  value,  or from no par  value to par  value,  such
shares of Common Stock as so reclassified or changed.

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         (b) "Corporate Office" shall mean the office of the Company at which at
any particular time its principal  business shall be administered,  which office
is located at the date hereof at 6805 Route 202, New Hope,  PA 18938,  but which
may be changed by the Company at any time and from time to time for  purposes of
this  Agreement.  The Company  shall provide  written  notice of any such change
within thirty (30) days thereafter to the Warrant Holder  (provided that failure
to furnish such notice  shall not  constitute a default or breach by the Company
hereunder).

         (c)  "EBITDA"  shall have the meaning  ascribed to such term in Section
9.1.32 of the Credit Agreement; provided, however, that the calculation therefor
shall relate only to the  Borrowers'  fiscal quarter ending on December 31, 2000
or March 31, 2001, as the case may be, and not on a rolling  four-quarter  basis
as set forth in such Section.

         (d) "Exercise Date" (if applicable)  shall mean as to any Warrant,  the
date on which the Company shall have  received both (i) the Warrant  Certificate
representing  such Warrant,  with the exercise form thereon duly executed by the
Registered  Holder (as defined below) thereof or by its attorney duly authorized
in writing, and (ii) either (1) payment in cash, by wire transfer or by official
bank or  certified  check made  payable to the  Company,  of an amount in lawful
money of the United States of America equal to the applicable Purchase Price (as
defined below) or (2) a written  election  executed by the Registered  Holder to
effect a "cashless  exercise" in  accordance  with the terms  hereof;  provided,
however,  that  the  Exercise  Date  shall be on or after  the  Initial  Warrant
Exercise Date, if applicable.

         (e) "Initial Warrant  Exercise Date" (if applicable)  shall mean, as to
any Warrant, the date on which such Warrant shall have vested in accordance with
Section 4(b) hereof.

         (f) "Purchase Price" (if applicable)  shall mean the purchase price per
share to be paid upon  exercise  of each  Warrant in  accordance  with the terms
hereof,  which  price  shall be $4.36  per  share of Common  Stock,  subject  to
adjustment  from time to time pursuant to the terms and  provisions of Section 8
hereof  and  subject  to the right of a  Registered  Holder to elect to effect a
"cashless exercise" with respect thereto.

         (g)  "Registered  Holder"  shall mean as to any  Warrant  and as of any
particular  date,  the person in whose  name the  certificate  representing  the
Warrant shall be registered on that date on the books  maintained by the Company
pursuant  to Section 6 hereof.  As of the date  hereof,  and until  modified  in
accordance with the terms hereof, the Registered Holder is the Warrant Holder.

         (h) "Transfer Agent" shall mean the Company or, if applicable,  a third
party stock transfer agent and registrar retained by the Company.

         (i)  "Warrants"  has the  meaning  as set  forth in the  First  Recital
hereof.

         (j) "Warrant  Certificate" has the meaning as set forth in Section 2(b)
hereof.

         (k) "Warrant Expiration Date" shall mean, as to any Warrant, 5:00 P. M.
(New York time) on (i) the five-year  anniversary  date of the date on which the
applicable Warrant vests in accordance with Section 4(b) hereof or (ii) the date
on which the Company has met the EBITDA  requirements  set forth in Section 4(b)
hereof;  provided  that if such date shall in the State of New York be a holiday
or a day on which banks are  authorized  or  required to close,  then 5:00 P. M.

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(New York time) on the next following day that in the State of New York is not a
holiday or a day on which banks are authorized or required to close. Upon thirty
(30) calendar days' written notice to the Warrant Holder, the Company shall have
the right to extend the Warrant Expiration Date.

         (k)  "Warrant  Share"  has the  meaning  as set forth in  Section  2(a)
hereof.

         2. Warrants and Issuance of Warrant Certificates.


         (a) Each Warrant  initially shall entitle the Registered  Holder of the
Warrant  Certificate  representing  such Warrant to purchase one share of Common
Stock upon the  exercise  thereof  (sometimes  referred to  collectively  as the
"Warrant  Shares") in accordance with the terms hereof,  subject to modification
and adjustment as provided in Section 8.

         (b) Upon execution of this Agreement,  warrant  certificates  ("Warrant
Certificates")   substantially   in  the  form  of  Exhibit  A  annexed   hereto
representing,  in the aggregate,  One-Hundred Fifty Thousand  (150,000) Warrants
shall be executed by the Company and delivered to the Warrant Holder. Additional
and/or replacement Warrant Certificates shall be issued,  executed and delivered
from time to time in accordance with the terms hereof.

         (c) From time to time, up to the Warrant  Expiration Date, the Transfer
Agent shall countersign and deliver stock  certificates in required whole number
denominations  representing the shares of Common Stock (and any other applicable
securities,   rights  and/or  interests)  issuable,  subject  to  adjustment  as
described  herein,  upon the  exercise  of  Warrants  in  accordance  with  this
Agreement.

         (d) From time to time, up to the Warrant  Expiration  Date, the Company
shall  countersign  and deliver  Warrant  Certificates  in required whole number
denominations to the persons entitled thereto in connection with any transfer or
exchange permitted under this Agreement;  provided that no Warrant  Certificates
shall be issued except (i) those initially issued  hereunder,  (ii) those issued
on or after the Initial  Warrant  Exercise Date, upon the exercise of fewer than
all Warrants represented by any Warrant Certificate, to evidence any unexercised
Warrants held by the  exercising  Registered  Holder,  (iii) those issued on any
transfer  or  exchange  pursuant  to  Section 6  hereof,  (iv)  those  issued in
replacement  of  lost,  stolen,  destroyed  or  mutilated  Warrant  Certificates
pursuant to Section 7 hereof,  and (v) those issued to reflect any adjustment or
change made pursuant to Section 8 hereof in the Purchase  Price or the number of
shares of stock  purchasable  and/or other rights and  interests  receivable  on
exercise of the Warrants.

         3. Form and Execution of Warrant Certificates.


         (a)  The  Warrant  Certificates  shall  be  substantially  in the  form
attached  hereto as Exhibit A (the  provisions of which are hereby  incorporated
herein) and may have such letters,  numbers or other marks of  identification or
designation and such legends, summaries or endorsements printed, lithographed or
engraved thereon as the Company may deem appropriate and as are not inconsistent
with the provisions of this Agreement,  or as may be required to comply with any
law or with any rule or  regulation  made  pursuant  thereto or with any rule or
regulation  of any stock  exchange on which the  Warrants  may be listed,  or to
conform to usage or to the  requirements  of Section  2(b)  hereof.  The Warrant
Certificates  shall be dated the date of

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issuance thereof (whether upon initial issuance,  transfer,  exchange or in lieu
of mutilated,  lost,  stolen or destroyed  Warrant  Certificates)  and issued in
registered form.

         (b) Warrant  Certificates shall be executed on behalf of the Company by
its  President,  or any Vice  President  and by its  Secretary  or an  Assistant
Secretary,  by manual signatures or by facsimile signatures printed thereon, and
shall have  imprinted  thereon a facsimile of the  Company's  seal.  In case any
officer of the Company  who shall have  signed any of the  Warrant  Certificates
shall  cease to be an officer of the  Company or to hold the  particular  office
referenced in the Warrant Certificate before the date of issuance of the Warrant
Certificates, such Warrant Certificates may nevertheless be issued and delivered
with the same force and effect as though  the  person  who signed  such  Warrant
Certificates  had not  ceased to be an  officer  of the  Company or to hold such
office.

         4. Exercise; Vesting.

         (a) Each Warrant may be exercised by the  Registered  Holder thereof at
any time on or after  the  Initial  Warrant  Exercise  Date,  but not  after the
Warrant  Expiration  Date, on the terms and subject to the  conditions set forth
herein and (to the extent not inconsistent  herewith) in the applicable  Warrant
Certificate.  A Warrant shall be deemed to have been exercised immediately prior
to the close of business on the Exercise Date and the person entitled to receive
the securities deliverable on such exercise shall be treated for all purposes as
the holder of those securities on the exercise of the Warrant as of the close of
business on the Exercise Date. Promptly following,  and in any event within five
(5) business days after the date of such exercise, the Company shall cause to be
issued and delivered by the Transfer Agent, to the person or persons entitled to
receive the same, a certificate or certificates  for the securities  deliverable
on such exercise (plus a certificate for any remaining  unexercised  Warrants of
the  Registered  Holder).  In  connection  with any  exercise  of  Warrants by a
Registered  Holder,  in lieu of  paying  all or any  portion  of the  associated
Purchase Price required hereunder,  such Registered Holder shall be entitled (at
its election) to effect a partial or complete "cashless exercise."

         (b) Notwithstanding anything herein to the contrary, the Warrants shall
not vest (and shall not become exercisable) unless (i) EBITDA as of December 31,
2000 is less than  negative  $10,500,000,  in which  event,  50% of the Warrants
shall vest and become  immediately  exercisable;  or (ii) EBITDA as of March 31,
2001 is less than negative  $500,000,  in which event, 50% of the Warrants shall
vest and become immediately exercisable.

         5. Reservation of Shares, Listing Payment of Taxes, etc.

         (a) The Company  covenants  that it will at all times  reserve and keep
available out of its authorized  capital stock,  solely for the purpose of issue
on exercise of  Warrants,  such  number,  series and classes of shares of Common
Stock and, as applicable,  other securities,  rights and interests as shall then
be issuable on the exercise of all outstanding  Warrants.  The Company covenants
that all shares of  capital  stock of the  Company  that  shall be  issuable  on
exercise of the Warrants  shall,  at the time of  delivery,  be duly and validly
issued,  fully paid,  non-assessable  and free from all taxes, liens and charges
with  respect to the issue  thereof  (other  than those that the  Company  shall
promptly pay or discharge) and that, on issuance,  any such shares issued in the
form of Common  Stock shall be listed on each  national  securities  exchange or
eligible for inclusion in each automated  quotation system, if any, on which the
other  shares of  outstanding  Common  Stock of the  Company  are then listed or
eligible for inclusion.

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<PAGE>

         (b) The Company shall pay all  documentary,  stamp or similar taxes and
all other  governmental  charges that may be imposed or incurred with respect to
the issuance of Warrants, or the issuance, listing and/or delivery of any shares
on exercise of the  Warrants;  provided,  however,  that if the shares of Common
Stock are to be delivered in a name other than the name of the Registered Holder
of the Warrant  Certificate  representing any Warrant being  exercised,  then no
such delivery  shall be made unless the person  requesting  the same has paid to
the  Company the amount of transfer  taxes or charges  payable to third  parties
that are incurred by the Company incident thereto, if any.

         6. Exchange and Registration of Transfer.


         (a) Warrant  Certificates and the Warrants evidenced thereby (from time
to time on request of the Registered  Holder thereof) may be exchanged for other
Warrant  Certificates  representing an equal aggregate number of Warrants of the
same class or may be transferred in whole or in part. Warrant Certificates to be
exchanged  shall be surrendered to the Company at its Corporate  Office,  and on
satisfaction  of the terms and  provisions  hereof,  the Company shall  execute,
issue and  deliver in  exchange  therefor  the  Warrant  Certificate  or Warrant
Certificates  (in such amounts and identifying as the Registered  Holder thereof
such persons) that the  Registered  Holder making the exchange shall request and
be entitled to receive.  The Registered  Holder shall pay all transfer taxes, if
any, for any transfer of Warrant  Certificates  (although the Registered  Holder
may  require  reimbursement  thereof  from any  transferee  of any such  Warrant
Certificates and/or Warrants).

         (b) The  Company  shall keep at its  Corporate  Office  books in which,
subject to such  reasonable  regulations as it may prescribe,  it shall register
Warrant  Certificates  and the transfer  thereof in accordance  with its regular
practice.  Upon  request  of the  Registered  Holder  from  time to time and due
presentment for transfer of any Warrant Certificate at the Corporate Office, the
Company  shall  execute,  issue and  deliver  to the  transferee(s)  and/or  the
Registered  Holder  (in such  amounts  and in such  manner as may be  reasonably
requested  by the  Registered  Holder)  a new  Warrant  Certificate  or  Warrant
Certificates representing an equal aggregate number of Warrants.

         (c) With respect to all Warrant Certificates presented for transfer, or
for exchange or exercise,  the  assignment or  subscription  form on the reverse
thereof  (or a  substantially  similar  form)  shall  be  duly  endorsed,  or be
accompanied by a written instrument or instruments of transfer and subscription,
in form reasonably  satisfactory to the Company, duly executed by the Registered
Holder or its attorney-in-fact duly authorized in writing.

         (d) All Warrant  Certificates  surrendered for exercise or for exchange
in case of  mutilated  Warrant  Certificates  shall be promptly  canceled by the
Company  and  thereafter  retained  by the  Company  until  termination  of this
Agreement.

         (e) Prior to due presentment for transfer thereof, the Company may deem
and treat the Registered Holder of any Warrant Certificate as the absolute owner
thereof and of each Warrant represented thereby  (notwithstanding  any notations
of  ownership or writing  thereon  made by anyone  other than a duly  authorized
officer of the Company) for all purposes and shall not be affected by any notice
to the contrary.

         7.  Loss  or  Mutilation.  Upon  receipt  by the  Company  of  evidence
reasonably  satisfactory to it of the ownership of and loss, theft,  destruction
or  mutilation  of any  Warrant


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Certificate  and (in  case of loss,  theft or  destruction)  upon  receipt  of a
customary and commercially reasonable indemnity, and (in the case of mutilation)
upon surrender  thereof,  the Company shall execute (in the absence of notice to
the  Company  that the  Warrant  Certificate  has been  acquired  by a bona fide
purchaser)  and deliver to the  Registered  Holder in lieu thereof a new Warrant
Certificate  or  Warrant  Certificates  of  like  tenor  representing  an  equal
aggregate number of Warrants.  Applicants for a substitute  Warrant  Certificate
shall  comply  with  such  other  reasonable  regulations  and  pay  such  other
reasonable  charges  that  are  payable  by the  Company  to  third  parties  in
connection with such substitution.

         8. Adjustment of Exercise Price and Number of Shares of Common Stock or
Warrants.

         (a) In the event the  Company,  at any time or from time to time  after
the date hereof,  shall issue any shares of Common Stock as a stock  dividend to
the holders of Common  Stock,  or split,  subdivide  or combine the  outstanding
shares of Common Stock into a greater or lesser number of shares of Common Stock
(any such issuance,  subdivision or combination being herein called a "Change of
Shares"),  then, and thereafter upon each further Change of Shares, the Purchase
Price in effect immediately prior to such Change of Shares shall be changed to a
price  (including any applicable  fraction of a cent)  determined by multiplying
(1) the Purchase  Price in effect  immediately  prior thereto by (2) a fraction,
(i) the  numerator  of which  shall be the sum of the number of shares of Common
Stock  outstanding  immediately  prior to the issuance of such additional shares
and the  number  of shares of Common  Stock  which the  aggregate  consideration
received  (determined as provided in subsection  8(f) below) for the issuance of
such  additional  shares of Common Stock would  purchase at such current  market
price per share of Common Stock,  and (ii) the denominator of which shall be the
sum of the number of shares of Common Stock  outstanding  immediately  after the
issuance of such additional  shares.  Such adjustment shall be made successively
whenever such an issuance is made.

                  Upon each  adjustment of the Purchase  Price  pursuant to this
Section  8, the total  number of shares  of Common  Stock  purchasable  upon the
exercise of each Warrant shall (subject to the  provisions  contained in Section
8(b) hereof) be (1) such number of shares  (calculated to the nearest hundredth)
purchasable in accordance  with the terms hereof at the Purchase Price in effect
immediately  prior to such  adjustment  multiplied  by (2) a  fraction,  (i) the
numerator of which shall be the Purchase  Price in effect  immediately  prior to
such adjustment and (ii) the denominator of which shall be the Purchase Price in
effect immediately after such adjustment.

         (b) The Company may elect,  on any  adjustment  of the  Purchase  Price
hereunder,  to  adjust  the  number  of  Warrants  outstanding,  in  lieu of the
adjustment in the number of shares of Common Stock  purchasable  on the exercise
of each Warrant as hereinabove  provided, so that each Warrant outstanding after
such adjustment shall represent the right to purchase one share of Common Stock.
Each Warrant held of record prior to such  adjustment  of the number of Warrants
shall  become  that  number of Warrants  (calculated  to the nearest  hundredth)
determined  by  multiplying  (1)  the  number  one by (2) a  fraction,  (i)  the
numerator of which shall be the Purchase  Price in effect  immediately  prior to
such adjustment and (ii) the denominator of which shall be the Purchase Price in
effect immediately after such adjustment.  Upon each adjustment of the number of
Warrants  pursuant to this Section 8, the Company,  as promptly as  practicable,
shall cause to be distributed to each Registered Holder of Warrant  Certificates
on the date of such  adjustment  Warrant  Certificates  evidencing the number of
additional  Warrants to which such Holder  shall be entitled as a result of such
adjustment  or, at the option of the Company,  cause to be  distributed  to such
Holder in substitution and replacement for the Warrant Certificates held by such
Registered Holder prior to the date of adjustment (and on surrender thereof,  if
required by

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the Company) new Warrant Certificates evidencing the number of Warrants to which
such Registered Holder shall be entitled after such adjustment.

         (c) In case of any  reclassification,  capital  reorganization or other
change of outstanding shares of Common Stock, or in case of any consolidation or
merger  of  the  Company  with  or  into  another   corporation  (other  than  a
consolidation  or merger in which the Company is the continuing  corporation and
that does not result in any  reclassification,  capital  reorganization or other
change  of  outstanding  shares  of  Common  Stock),  or in case of any  sale or
conveyance  to  another  corporation  of the  property  of the  Company  as,  or
substantially  as, an entirety (other than a sale  leaseback,  mortgage or other
financing  transaction),   the  Company  shall  cause  effective  provision  and
adjustment  to each  Warrant  to be made so that each  holder of a Warrant  then
outstanding  shall have the right  thereafter,  by exercising  such Warrant,  to
purchase  and/or  receive  the  kind  and  number  of  shares  of stock or other
securities or property  (including  cash)  receivable on such  reclassification,
capital  reorganization  or  other  change,   consolidation,   merger,  sale  or
conveyance  that such holder of a Warrant would have been issued and/or received
if such holder of a Warrant had exercised such Warrant immediately prior to such
reclassification, capital reorganization or other change, consolidation, merger,
sale or conveyance.  Any such provision shall include  provision for adjustments
that shall be as nearly  equivalent  as may be  practicable  to the  adjustments
provided  for in  this  Section  8.  The  Company  shall  not  effect  any  such
consolidation,  merger  or sale  unless  prior  to or  simultaneously  with  the
consummation  thereof the successor (if other than the Company)  resulting  from
such  consolidation  or merger  or the  corporation  purchasing  assets or other
appropriate  corporation or entity shall assume, by written instrument  executed
and delivered to the Company, and as to which the Registered Holder is expressly
recognized as a third-party  beneficiary,  the obligations under this Agreement,
including the obligation to deliver to the holder of each Warrant such shares of
stock,  securities  or assets as, in accordance  with the foregoing  provisions,
such holders may be entitled to purchase  and/or  receive under this  Agreement.
The foregoing provisions shall similarly apply to successive  reclassifications,
capital  reorganizations and other changes of outstanding shares of Common Stock
and to successive consolidations, mergers, sales or conveyances.

         (d) Irrespective of any adjustments or changes in the Purchase Price or
the number of shares of Common Stock  purchasable  on exercise of the  Warrants,
the Warrant  Certificates  theretofore and thereafter  issued shall,  unless the
Company shall exercise its option to issue new Warrant Certificates  pursuant to
Section  2(d) hereof,  continue to express the Purchase  Price per share and the
number of shares purchasable  thereunder as the Purchase Price per share and the
number of shares purchasable therefor were expressed in the Warrant Certificates
when the same were originally issued.

         (e) After  each  adjustment  of the  Purchase  Price  pursuant  to this
Section  8, the  Company  will  promptly  prepare  a  certificate  signed by the
President or a Vice President, and by the Treasurer or an Assistant Treasurer or
the Secretary or an Assistant  Secretary,  of the Company setting forth: (i) the
Purchase  Price as so  adjusted,  (ii) the  number of  shares  of  Common  Stock
purchasable (and any other securities,  assets,  rights or interests receivable)
on exercise of each Warrant  after such  adjustment,  (iii) if the Company shall
have elected to adjust the number of Warrants,  then also the number of Warrants
to which the Registered Holder of each Warrant shall then be entitled after such
adjustment,  and  (iv) a  brief  statement  of the  facts  accounting  for  such
adjustment. The Company will promptly cause such certificate and a brief summary
of the  associated  transaction  to be sent by ordinary first class mail to each
Registered  Holder of  Warrants  at its last  address as it shall  appear on the
books of the Company.  No failure to mail such notice nor any defect  therein or
in the  mailing  thereof  shall  affect the  validity


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thereof  except as to the  Registered  Holder to whom the Company failed to mail
such notice,  or except as to the Registered  Holder whose notice was defective.
The  affidavit of the  Secretary  or an Assistant  Secretary of the Company that
such  notice has been  mailed,  in the  absence of fraud,  shall be prima  facie
evidence of the facts stated therein.

         (f) For purposes of Section 8(a) and 8(b) hereof,  no adjustment of the
Purchase Price shall be made unless such adjustment would require an increase or
decrease  of at least  Five  Cents  ($0.05)  in such  price;  provided  that any
adjustments  that by reason of this  subsection (ii) are not required to be made
shall be carried  forward and shall be made at the time of and together with the
next subsequent  adjustment  that,  together with any  adjustment(s)  so carried
forward, shall require an increase or decrease of at least Five Cents ($0.05) in
the Purchase Price then in effect hereunder.

         (g) Any determination as to whether an adjustment in the Purchase Price
in effect  hereunder  is required  pursuant to Section 8, or as to the amount of
any such  adjustment,  if  required,  shall be  binding  on the  holders  of the
Warrants  and the Company if made in good faith by the Board of Directors of the
Company.

         (h) If and  whenever  the Company  shall grant to the holders of Common
Stock,  as such,  rights or warrants to  subscribe  for or to  purchase,  or any
options for the purchase  of,  Common Stock or  securities  convertible  into or
exchangeable  for or  carrying  a right,  warrant or option to  purchase  Common
Stock, the Company shall concurrently  therewith grant to each Registered Holder
as of the record date for such transaction of the Warrants then outstanding, the
rights,  warrants  or options to which each  Registered  Holder  would have been
entitled if, on the record date used to determine the  stockholders  entitled to
the rights,  warrants or options  being granted by the Company,  the  Registered
Holder were the holder of record of the number of whole  shares of Common  Stock
then  issuable  on exercise  of his  Warrants.  Such grant by the Company to the
holders of the Warrants shall be in lieu of any adjustment  that otherwise might
be called for pursuant to this Section 8.

         9.  Registration  Rights.  The Warrants and the Warrant Shares have not
been  registered  under  the  Securities  Act as of the date of this  Agreement.
Within a reasonable  period of time following the Initial Warrant Exercise Date,
if applicable,  the Company shall prepare and file a  registration  statement on
Form S-3 (the  "Registration  Statement")  under the  Securities Act of 1933, as
amended  (the  "Securities  Act")  relating to the resale of the Warrant  Shares
issued in the form of Common  Stock  and shall use its  commercially  reasonable
efforts to cause such Registration Statement to become effective for a period of
three (3) years  thereafter or such shorter period that shall terminate (a) when
all the Warrant Shares covered by the  Registration  Statement have been sold or
(b) at any time when the Registered Holders are entitled to sell all the Warrant
Shares covered by the  Registration  Statement under the Securities Act pursuant
to Rule 144 (or any similar rule or regulation)  without any volume limitations.
The  Company  shall  bear all costs and fees  associated  with the  Registration
Statement other than any fees and expenses incurred by any counsel retained by a
Registered  Holder and any selling  costs or expenses  incurred by a  Registered
Holder. Until the Registration  Statement becomes effective,  upon exercise,  in
part or in whole, of this Warrant,  certificates representing any Warrant Shares
shall bear the following legend:

                  These securities have not been registered under the Securities
                  Act of 1933.  Such  securities  may not be sold or offered for
                  sale,  transferred,  hypothecated or otherwise assigned in the
                  absence of

                                       8
<PAGE>

                  an effective registration statement with respect thereto under
                  such Act or an opinion of counsel  reasonably  satisfactory to
                  the Company that an exemption from registration for such sale,
                  offer,   transfer,   hypothecation   or  other  assignment  is
                  available under such Act.

At the request of the Registered  Holder  thereof,  the Company shall remove the
foregoing  legend  from  such  certificates  on  registration  of  the  legended
securities  under the Act (if any) or on receipt by the Company of an opinion of
counsel of the Registered  Holder (secured at the Registered  Holder's sole cost
and  expense)  reasonably  satisfactory  in  substance  to the Company that such
registration is no longer required with respect to such securities.

Each Registered Holder agrees that if requested by the Company,  such Registered
Holder shall not effect any sale of Warrant Shares pursuant to the  Registration
Statement for any period deemed  necessary (i) by the Company or any underwriter
in connection with the offering of shares of the Company's  Common Stock or (ii)
by the Company if the Company is in possession of material  information that has
not been disclosed to the public and the Company  reasonably deems disclosure of
such  information  in a  registration  statement  to be  inadvisable;  provided,
however,  that the  Registered  Holders  shall not be  obligated to refrain from
effecting  sales of Warrant Shares  pursuant to the  Registration  Statement for
more than sixty (60) consecutive days (a "blackout period");  provided, however,
that the  Company  may  impose  no more  than two (2)  blackout  periods  in any
consecutive  six (6) month  period;  and provided,  further,  that if a blackout
period is in effect at the conclusion of the three (3) year term relating to the
effective  period  of the  Registration  Statement  (referred  to  above in this
Section  9), such three (3) year term shall be  extended  for ten (10)  business
days after the end of any such blackout period (or consecutive blackout periods)
that are in effect at the initial expiration of such three (3) year term.

         10. Fractional Warrants and Fractional Shares.


         (a) If the number of shares of Common Stock purchasable on the exercise
of  each  Warrant  is  adjusted  pursuant  to  Section  8  hereof,  the  Company
nevertheless  shall not be required to issue fractions of shares, on exercise of
the  Warrants  or  otherwise,   or  to  distribute  certificates  that  evidence
fractional  shares.  In such event, the Company may at its option elect to round
up the number of shares to which the  Warrant  Holder is entitled to the nearest
whole share or to pay cash in respect of fractional  shares in  accordance  with
the  following:  With  respect  to any  fraction  of a share  called  for on any
exercise  hereof,  the Company shall pay to the Warrant Holder an amount in cash
equal to such fraction multiplied by the current market value of such fractional
share, determined as follows:

                  (i) If the  Common  Stock is listed on a  national  securities
             exchange  or  admitted  to  unlisted  trading  privileges  on  such
             exchange  or listed for  trading on the NASDAQ  Stock  Market,  the
             current  value shall be the last  reported sale price of the Common
             Stock on such  exchange or market on the last business day prior to
             the date of exercise of this Warrant, or if no such sale is made on
             such day,  the  average of the  closing bid and ask prices for such
             day on such exchange or market; or

                  (ii) If the Common Stock is not listed or admitted to unlisted
             trading privileges on a national  securities exchange or listed for
             trading on the NASDAQ

                                       9
<PAGE>

             Stock  Market,  the  current  value  shall  be the mean of the last
             reported  bid and asked prices  reported by the National  Quotation
             Bureau,  Inc.  on the last  business  day  prior to the date of the
             exercise of this Warrant; or

                  (iii) If the  Common  Stock is not so  listed or  admitted  to
             unlisted trading  privileges on a national  securities  exchange or
             listed for  trading on the  NASDAQ  Stock  Market and bid and asked
             prices are not so  reported,  the current  value shall be an amount
             determined  in such  reasonable  manner as may be prescribed by the
             Board of Directors of the Company.

         11. Warrant Holders Not Deemed Stockholders.  No holder of Warrants (in
such capacity and with respect to such Warrants) shall be entitled to vote or to
receive dividends or be deemed the holder of the shares of Common Stock that may
at any time be issuable on exercise of such Warrants for any purpose whatsoever,
nor shall  anything  contained  herein be  construed  to confer on the holder of
Warrants (in such capacity and with respect to such  Warrants) any of the rights
of a  stockholder  of the  Company  or any  right  to vote for the  election  of
directors or on any matter submitted to stockholders at any meeting thereof,  or
to  give  or  withhold   consent  to  any  corporate   action  (whether  on  any
recapitalization,  issue or  reclassification  of stock,  change of par value or
change  of  stock  to no par  value,  consolidation,  merger  or  conveyance  or
otherwise),  or to  receive  notice of  meetings,  or to  receive  dividends  or
subscription  rights,  until  such  Warrant  Holder  shall have  exercised  such
Warrants  and  been  issued  shares  of  Common  Stock  in  accordance  with the
provisions hereof.

         12.  Rights  of  Action.  All  rights of action  with  respect  to this
Agreement are vested in the respective  Registered Holders of the Warrants,  and
any  Registered  Holder  of a  Warrant  may in its  own  behalf  and for its own
benefit,  enforce against the Company such holder's rights under this Agreement,
including  its right to  exercise  its  Warrants  for the  purchase of shares of
Common  Stock in the manner  provided in this  Agreement  and, to the extent not
inconsistent herewith, in the Warrant Certificate.

         13.  Agreement of Warrant  Holders.  Every holder of a Warrant,  by its
acceptance thereof, consents and agrees with the Company, and every other holder
of a Warrant that:

         (a) The Warrants are  transferable  only on the books of the Company by
the  Registered  Holder  thereof  in  person  or by  its  attorney-in-fact  duly
authorized  in writing and only if the Warrant  Certificates  representing  such
Warrants are surrendered at the Corporate  Office of the Company,  duly endorsed
or accompanied by a proper instrument of transfer reasonably satisfactory to the
Company, together with payment of any applicable transfer taxes; and

         (b) The Company may deem and treat the person in whose name the Warrant
Certificate  is registered  as the holder and as the  absolute,  true and lawful
owner of the  Warrants  represented  thereby for all  purposes,  and the Company
shall not be  affected by any notice or  knowledge  to the  contrary,  except as
otherwise expressly provided in Sections 6 and 7 hereof.

         14. Cancellation of Warrant Certificates. If the Company shall purchase
or  acquire  any  Warrant,  the  Warrant  Certificate  or  Warrant  Certificates
evidencing the same shall  thereupon be delivered to the Company and canceled by
it and retired. The Company shall also cancel any Warrant Certificates following
exercise of any of the Warrants Certificates represented thereby or delivered to
it for transfer, split up, combination or exchange.

                                       10
<PAGE>

         15.  Modification  of Agreement.  This Agreement shall not be modified,
supplemented or altered in any respect except with the consent in writing of the
Company and the Registered Holders,  other than such changes as are specifically
prescribed by this  Agreement as  originally  executed or are made in compliance
with applicable law.

         16. Notices. All notices,  requests,  consents and other communications
hereunder  shall be in  writing  and  shall be  deemed  to have  been  made when
delivered or mailed first class registered or certified mail, postage prepaid as
follows:  (a) if to MCG Finance as the Warrant Holder or a Registered Holder, at
1100  Wilson  Boulevard,  Suite  800,  Arlington,  VA 22209,  Attn.:  Investment
Administration,  Chief  Operating  Officer  and  General  Counsel  or such other
address  as MCG  Finance  from time to time may have  notified  the  Company  in
writing; (b) if to any Registered Holder of a Warrant Certificate other than MCG
Finance,  at the address of such holder as shown on the books  maintained by the
Company;  and (c) if to the Company,  6805 Route 202, New Hope, PA 18938 or such
other address as the Company from time to time may have notified the  Registered
Holders in writing.

Notwithstanding any other provision of this Agreement,  in order to provide each
Registered Holder with an adequate  opportunity with respect to distribution and
dividends to be made by the Company, the Company from time to time shall provide
written notice to each  Registered  Holder at least ten (10) business days prior
to the  occurrence  of the record date for  determining  shares of Common  Stock
entitled to receive any dividend,  distribution or issuances of any other rights
(along with a general  description of the dividend,  distribution or issuance of
any other rights to be made). In addition,  the Company shall also  concurrently
provide to each Registered Holder a copy of each notification, communication and
other  information  that the Company  provides to the holders of Common Stock in
connection with such dividend, distribution or issuance of any other right.

         17. Governing Law. This Agreement shall be governed by and construed in
accordance  with  the  laws of the  State  of  Delaware,  without  reference  to
principles of conflict of laws.

         18. Binding Effect. This Agreement shall be binding on and inure to the
benefit  of the  Company  and  the  Registered  Holders,  and  their  respective
successors  and  assigns,   and  the  holders  from  time  to  time  of  Warrant
Certificates.  Nothing in this  Agreement  is intended or shall be  construed to
confer on any other person any right,  remedy or claim,  in equity or at law, or
to impose on any other person any duty, liability or obligation.

         19.  Termination.  This  Agreement  shall  terminate  at the  close  of
business on the Warrant Expiration Date of all the Warrants or such earlier date
on which all Warrants have been exercised.

         20.   Counterparts.   This   Agreement   may  be  executed  in  several
counterparts, which taken together shall constitute a single document.

                           [SIGNATURE PAGE TO FOLLOW]

                                       11
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed on the date first above written.


                            TALK.COM INC. (THE COMPANY)

                            By:_____________________________________
                               Name:  _______________________________
                               Title: _______________________________

                             MCG FINANCE CORPORATION (THE WARRANT HOLDER)



                            By:_____________________________________
                               Name:  ______________________________
                               Title:    ______________________________


                                       12
<PAGE>

                                    EXHIBIT A

         THESE  SECURITIES HAVE NOT BEEN REGISTERED  UNDER THE SECURITIES ACT OF
1933.  SUCH  SECURITIES  MAY NOT BE  SOLD  OR  OFFERED  FOR  SALE,  TRANSFERRED,
HYPOTHECATED OR OTHERWISE  ASSIGNED IN THE ABSENCE OF AN EFFECTIVE  REGISTRATION
STATEMENT  WITH  RESPECT  THERETO  UNDER  SUCH  ACT  OR AN  OPINION  OF  COUNSEL
REASONABLY  SATISFACTORY TO THE COMPANY THAT AN EXEMPTION FROM  REGISTRATION FOR
SUCH SALE, OFFER, TRANSFER, HYPOTHECATION OR OTHER ASSIGNMENT IS AVAILABLE UNDER
SUCH ACT.

No. ____                               150,000
                         Common Stock Purchase Warrants

                VOID AFTER THE EXPIRATION DATE (AS DEFINED BELOW)

         STOCK PURCHASE WARRANT CERTIFICATE FOR PURCHASE OF COMMON STOCK

                                  TALK.COM INC.

                               THIS CERTIFIES THAT

         FOR VALUE RECEIVED,  MCG FINANCE CORPORATION or registered assigns (the
"Registered  Holder")  is the  owner of the  number  of  Common  Stock  Purchase
Warrants  ("Warrants")  specified  above.  Each Warrant  initially  entitles the
Registered Holder to purchase,  subject to the terms and conditions set forth in
this Certificate and the Warrant Agreement (as hereinafter  defined) and (to the
extent not inconsistent  therewith) in this Warrant Certificate,  one fully paid
and non-assessable  share of Common Stock, $0.01 par value ("Common Stock"),  of
TALK.COM INC., a Delaware  corporation (the "Company"),  at any time between the
Initial   Exercise  Date  (as  herein  defined)  and  the  Expiration  Date  (as
hereinafter  defined),  on  the  presentation  and  surrender  of  this  Warrant
Certificate with the Subscription  Form on the reverse hereof duly executed,  at
the Corporate  Office of the Company,  accompanied by payment of _______ Dollars
and ________  Cents  ($____) per share of Common  Stock,  (subject to adjustment
from  time to time  pursuant  to the terms and  provisions  of  Section 8 of the
Warrant  Agreement  and  subject to the  Registered  Holder's  right to effect a
"cashless  exercise" under the Warrant  Agreement) in lawful money of the United
States of America in cash,  by wire  transfer,  or by official bank or certified
check made payable to TALK.COM INC.

         This Warrant Certificate and each Warrant represented hereby are issued
pursuant to and are  subject in all  respects  to the terms and  conditions  set
forth in the Warrant Agreement (the "Warrant Agreement") dated October 20, 2000,
by and between the Company and MCG Finance  Corporation.  Capitalized  terms not
defined  herein  shall  have  the  meanings  assigned  to  them  in the  Warrant
Agreement.

         Each Warrant  represented  hereby is only  exercisable  in the event of
certain contingencies provided for in Section 4(b) of the Warrant Agreement. The
Purchase  Price and/or the number of shares of Common Stock  subject to purchase
on the exercise of each Warrant  represented  hereby are subject to modification
or adjustment, as provided in the Warrant Agreement.

                                      B-1
<PAGE>

         Subject to the Warrant  Agreement,  each Warrant  represented hereby is
exercisable at the option of the Registered  Holder, but no fractional shares of
Common  Stock will be issued.  In the case of the  exercise of less than all the
Warrants  represented  hereby, the Company shall cancel this Warrant Certificate
on the surrender hereof and shall execute and deliver a new Warrant  Certificate
or Warrant  Certificates of like tenor, that the Company shall countersign,  for
the balance of such Warrants.

         The term "Initial Exercise Date" (if applicable) shall mean the date on
which the  Warrant  shall have vested in  accordance  with  Section  4(b) of the
Warrant Agreement.

         The term "Expiration Date" shall mean 5:00 P. M. (New York time) on (i)
the five-year anniversary date of the date on which the applicable Warrant vests
in accordance  with Section 4(b) of the Warrant  Agreement;  or (ii) the date on
which the  Company  has met the EBITDA  requirements  set forth in Section  4(b)
thereof;  provided that if such date shall in the State of New York be a holiday
or a day on which banks are  authorized  or  required to close,  then 5:00 P. M.
(New York time) on the next following day that in the State of New York is not a
holiday or a day on which banks are authorized or required to close.

         This Warrant  Certificate is  exchangeable,  on the surrender hereof by
the Registered Holder at the Corporate Office of the Company,  for a new Warrant
Certificate  or  Warrant  Certificates  of  like  tenor  representing  an  equal
aggregate number of Warrants, each of such new Warrant Certificates to represent
such number of Warrants as shall be designated by such Registered  Holder at the
time of such surrender.  Upon due presentment  with any amounts that are payable
to the  Company  under the  Warrant  Agreement  in  addition to any tax or other
governmental  charge  imposed  in  connection  therewith,  for  registration  of
transfer of this Warrant  Certificate  at the  Corporate  Office,  a new Warrant
Certificate or Warrant  Certificates  representing an equal aggregate  number of
Warrants will be issued to the transferee (and, if applicable, to the Registered
Holder) in exchange therefor, subject to the limitations provided in the Warrant
Agreement.

         Prior to the exercise of any Warrant represented hereby, the Registered
Holder  shall not be entitled  to any rights of a  stockholder  of the  Company,
including,  without  limitation,  the right to vote or to receive  dividends  or
other  distributions,  and shall not be  entitled  to receive  any notice of any
proceedings  of the Company,  except in each instance as provided in the Warrant
Agreement.

         Prior to due presentment for transfer hereof,  the Company may deem and
treat the  Registered  Holder as the  absolute  owner hereof and of each Warrant
represented hereby (notwithstanding any notations of ownership or writing hereon
made by anyone  other than a duly  authorized  officer of the  Company)  for all
purposes and shall not be affected by any notice to the contrary.

         This  Warrant  Certificate  shall  be  governed  by  and  construed  in
accordance with the laws of the State of Delaware.

                      [BALANCE OF PAGE INTENTIONALLY BLANK]

                                      B-2
<PAGE>


         IN WITNESS WHEREOF,  the Company has caused this Warrant Certificate to
be duly  executed,  manually  or in  facsimile  by its  officer  thereunto  duly
authorized and a facsimile of its corporate seal to be imprinted hereon.

                                          TALK.COM INC.

                                          By:___________________________________
                                             Name:  ____________________________
                                             Title:    _________________________




Date:_________________________________

[Seal]


                                      B-3
<PAGE>


                                SUBSCRIPTION FORM

     (To Be Executed by the Registered Holder in Order to Exercise Warrants)

                           --------------------------

     THE UNDERSIGNED REGISTERED HOLDER hereby elects to exercise Warrants
     of TALK.COM INC. represented by this Warrant Certificate, and to
     purchase the securities issuable on the exercise of such Warrants, and
     requests that certificates for such securities shall be issued in the
     name of:

                   ------------------------------------------

            whose taxpayer identification number is: ________________________

            and be delivered to:

                   ------------------------------------------

                   ------------------------------------------

                   ------------------------------------------

                   ------------------------------------------
                     (please print or type name and address)

and if such number of Warrants  shall not be all the Warrants  evidenced by this
Warrant  Certificate,  that a new  Warrant  Certificate  for the balance of such
Warrants be registered in the name of, and delivered to, the  Registered  Holder
at the address stated below:

                   ------------------------------------------

                   ------------------------------------------

                   ------------------------------------------
                                    (Address)

                           ---------------------------
                                     (Date)

                           ---------------------------
                        (Taxpayer Identification Number)


                           ---------------------------
                                   (Signature)

                        SIGNATURE GUARANTEED OR NOTARIZED

                           ---------------------------

         (Bank or trust company having an office or correspondent in the
           United States or a broker or dealer which is a member of a
          registered securities exchange or the National Association of
                            Securities Dealers, Inc.)

                                      B-4
<PAGE>

                                   ASSIGNMENT

      (To Be Executed by the Registered Holder in Order to Assign Warrants)

                           ---------------------------

 FOR VALUE RECEIVED, the undersigned Registered Holder hereby sells, assigns and
 transfers unto

                   ------------------------------------------
                                  (insert name)

whose taxpayer identification or other identifying number is: ______________ and
 whose address is:

                   ------------------------------------------

                   ------------------------------------------

                   ------------------------------------------

                   ------------------------------------------
                         (please print or type address)

the following  number of the Warrants  represented by this Warrant  Certificate:
___________________,   and   hereby   irrevocably   constitutes   and   appoints
___________________  as attorney-in-fact to transfer this Warrant Certificate on
the books of the Company, with full power of substitution in the premises.

                           ---------------------------
                                     (Date)

                           ---------------------------
                                   (Signature)

                        SIGNATURE GUARANTEED OR NOTARIZED

                   ------------------------------------------
         (Bank or trust company having an office or correspondent in the
           United States or a broker or dealer which is a member of a
          registered securities exchange or the National Association of
                            Securities Dealers, Inc.)