EXHIBIT 10.22



          "***"  indicates  that  material  has been  deleted  to  maintain  the
confidentiality of business terms


                                 AMENDMENT NO. 3

         This  AMENDMENT  NO. 3 (this  "Amendment"),  effective as of October 1,
1998, by and among  Tel-Save,  Inc.  ("TS"),  a  Pennsylvania  corporation,  and
Tel-Save.com,  Inc. (formerly,  Tel-Save Holdings, Inc.), a Delaware corporation
("Holdings"),  with  their  principal  offices  at 6805  Route  202,  New  Hope,
Pennsylvania  18938,  on the one hand,  and  America  Online,  Inc.,  a Delaware
corporation with its principal offices at 22000 AOL Way, Dulles,  Virginia 20166
("AOL"), on the other hand (each a "party" and, collectively, the "parties").

                                  INTRODUCTION

         TS,  Holdings and AOL are parties to the  Telecommunications  Marketing
Agreement, dated as of February 22, 1997, as heretofore corrected and amended by
letter,  dated April 23, 1997,  and amended by an Amendment No. 1, dated January
25,  1998,  and an  Amendment  No. 2, dated May 14,  1998 (as so  corrected  and
amended to the date hereof,  but without  giving effect to this  Amendment,  the
"Agreement").  Capitalized terms used in this Amendment without other definition
are defined as in the  Agreement.  In light of both parties'  desire to increase
the number of End Users of the Services, the parties hereby agree as follows:

                                      TERMS

1. The Agreement is amended to provide that references in the Agreement to "this
Agreement"  or  "the   Agreement"   (including   indirect   references  such  as
"hereunder,"  "hereby,"  "herein" and "hereof") shall be deemed to be references
to the Agreement as amended hereby.

2. Section I.A. of the Agreement is amended as follows:

         a. Section  I.A.7.  of the Agreement is amended to read in its entirety
as  follows:  "'AOL  Marks'  means,  collectively,  the AOL LD Marks and the AOL
Wireless Marks.  `AOL LD Marks' means the service mark `AOL Long Distance' owned
by AOL under which the LD Services may be marketed and operated  under the terms
of this Agreement during the LD Exclusivity  Period.  `AOL Wireless Marks' means
any service  mark,  which will be owned by AOL, that includes a reference to the
AOL name  therein and which may be used in the  marketing  of Wireless  Services
under the terms of this Agreement, during the Wireless Exclusivity Period, which
service  marks,  if any,  shall be mutually  agreed to in writing by the parties
prior  to  or  simultaneous   with  the  parties   entering  into  the  Wireless
Arrangement."

         b. Section I.A.9 of the Agreement is amended to read in its entirety as
follows:
<PAGE>

         "AOL  Service"  means AOL's  online  service  provided  to  subscribers
(including, without limitation, individuals and businesses) in the United States
under  the  America  Online(R)  brand  name,   including,   without  limitation,
electronic mail, conferencing,  news, sports, weather and stock quotes, accessed
by consumers through computers using AOL's proprietary software, as it exists on
the  Effective  Date  and  any  online  service  provided  by  AOL or any of its
affiliates  that  is a  successor  thereto  or  substitute  therefor;  provided,
however, that the AOL Service shall expressly exclude,  without limitation,  (i)
the CompuServe(R)  brand service and any other CompuServe  products or services,
(ii)  Netscape  Netcenter  and any other  Netscape  products or services,  (iii)
"ICQ(TM)," "Digital City(TM)," "Netmail," Yellow pages, white pages,  classified
or other search or directory or review  services;  (iv) any  property,  feature,
product or service  which AOL or its  affiliates  may acquire  subsequent to the
Effective Date, except insofar as such property,  feature, product or service is
a successor to, or substitute for, the then existing AOL Service;  and (v) PDAs,
palmtops  and  other  hand-held  devices  and AOL TV,  provided  that  each uses
separate client software and separate (from a personal computer) hardware.

         Section  I.A.13.   is  amended  to  change  the  reference  therein  to
"Services" to "LD Services".

         c. Section I.A.39 is amended to read in its entirety as follows:

         "Services"  means  the  telecommunications   services,   including  the
Restricted Services,  provided, from time to time, pursuant to this Agreement by
TS, as the  carrier in the case of LD  Services,  and  marketed by AOL as herein
provided  under  the AOL  Marks or other  brand  names  as  permitted  by and in
accordance with Section III.E.1;  provided,  however,  that "Services" shall not
include (a) Internet Telephony (except for the communications components of such
telephony which are other Services; e.g., a private line) or (b) paging services
not offered in conjunction with another Commercial Mobile Radio Service.

         d.  Section  I.A.41.  of the  Agreement  is amended in its  entirety as
follows:  "'Term'  means the period  commencing on the date hereof and ending on
the last to occur of the last day of any Period hereunder, unless such period is
sooner terminated  pursuant to the terms of this Agreement,  in which event such
period shall end at such earlier termination date."

         e. The following definitions are added in alphabetical order:

         "Amendment No. 3" means Amendment No. 3 to this Agreement, effective as
of October 1, 1998.

         "Amendment 3 Effective Date" means October 1, 1998.

         "AOL  Election"  means the  election by AOL, if no TS Election has been
made by the 30th day before the  termination or expiration of the LD

                                       2

<PAGE>
Exclusivity  Period,  by written  notice to TS at least ten (10) days before the
termination or expiration of the LD Exclusivity Period, to provide the marketing
and  promotions  that  would be  required  to be  provided  by the terms of this
Agreement  from and after the  termination  or expiration of the LD  Exclusivity
Period if an Election has been made, subject to the terms of this Agreement.

         "Election"  means both an AOL Election and a TS Election.

         "Exclusivity  Periods" means,  collectively,  the LD Exclusivity Period
and the Wireless Exclusivity Period, and each, an "Exclusivity Period".

         "Initial  Wireless  Expiration Date" means the earlier of June 30, 2003
and the calendar  quarter end that is fourteen full calendar  quarters after the
Wireless Launch Date.

         "Interactive  Service Provider" means an entity offering one or more of
the  following  (each,  an  "Interactive  Service"):   (i)  online  or  Internet
connectivity  services,  whether  narrow band or  broadband  (e.g.,  an Internet
service provider);  (ii) a broad selection of aggregated third party interactive
content (or navigation thereto) (e.g., an online service or search and directory
service)  and/or  marketing a broad selection of products and/or services across
numerous  interactive commerce categories (e.g., an online mall or other leading
online commerce site); and (iii)  communications  software capable of serving as
the principal means through which a user creates,  sends and receives electronic
mail or real time online messages.

         "LD  Services"  means the  Services  provided  hereunder  that are Long
Distance Telecommunications Services.

         "LD End User" means an End User of the LD Services.

         "LD Exclusivity Period" means the period commencing on the date of this
Agreement  and ending on June 30, 2003,  subject to extension by AOL as provided
in Section X.B.1., in which case the LD Exclusivity Period shall mean the period
ending on such later date to which it may have been so extended,  and subject to
termination of such Period by AOL as provided in Section VII.A.2. or VII.A.9. or
Article X (and it is understood and agreed that the LD Exclusivity  Period shall
terminate  upon any  termination of this Agreement (or the Term) pursuant to the
terms of this Agreement) in which case the LD Exclusivity  Period shall mean the
period ending on such earlier termination date.

         "LD Marginable  Revenue" for any calendar  quarter shall mean the total
billings  during such quarter by TS (a) to LD End Users  (other than  Unbillable
End  Users) for the  provision  (whether  provisioned  under the AOL LD Marks or
under another brand in accordance  with Section  III.E.1.) of LD Services  under
this  Agreement and (b) to End Users (other than  Unbillable  End Users) for the
provision of Local Services under this Agreement with respect to whom AOL is not
paid an override  pursuant to Section  VII.A.3,  but in any case, less taxes and
fees  imposed by  federal,  state and local  authorities  that TS is required to
collect from End Users, less billings by TS for directory  assistance




                                       3
<PAGE>

charges to End Users less bad debt,  determined  in  accordance  with  generally
accepted  accounting  principals,  but not greater  than ***,  and less all PICC
charges and excluding credits and other adjustments.

         "LD Mark"  means a service  mark  (including  the AOL LD Marks) that is
used in the marketing of LD Services  under the terms of this  Agreement,  which
service  mark is the AOL LD Marks to the  extent  required  pursuant  to Section
III.E.1  and,  to the extent not so  required,  shall be  another  service  mark
mutually  agreed  to in  writing  by the  parties  hereto  prior to their use in
connection  with  the  provision  of  LD  Services  hereunder,   provided  that,
notwithstanding the foregoing,  the use of any service mark that is set forth on
Schedule X hereto is agreed to by AOL, subject to the terms of Section III.E.1.

         "LD Non-Exclusive  Period" means the period commencing on the first day
after the last day of the LD  Exclusivity  Period and  ending on June 30,  2003,
subject to extension by AOL as provided in Section X.B.2.,  in which case the LD
Non-Exclusive Period shall mean the period ending on such later date to which it
may have been so extended,  and subject to  termination of such Period by AOL as
provided in Article X (and it is understood and agreed that the LD Non-Exclusive
Period shall  terminate  upon any  termination  of this  Agreement (or the Term)
pursuant  to the terms of this  Agreement),  in which case the LD  Non-Exclusive
Period shall mean the period ending on such earlier termination date.

         "Long  Distance  Residual"  shall have the meaning set forth in Section
V.B.II.(e).

         "Local  Non-Exclusive  Period"  means  the  period  commencing  on  the
Amendment 3 Effective  Date and ending on June 30, 2003,  subject to termination
of such Period by AOL as provided in Section Article X (and it is understood and
agreed that the Local Non-Exclusive  Period shall terminate upon any termination
of this  Agreement (or the Term)  pursuant to the terms of this  Agreement),  in
which case the Local  Non-Exclusive  Period shall mean the period ending on such
earlier termination date.

         "Local Services" means the Services  provided  hereunder that are Local
Telecommunications Services.

         "Non-Exclusive  Periods"  means,  collectively,  the  LD  Non-Exclusive
Period, the Local Non-Exclusive  Period and the Wireless  Non-Exclusive  Period,
and each, a "Non-Exclusive Period".

         "Periods"  means,   collectively,   the  Exclusivity  Periods  and  the
Non-Exclusive Periods, and, each, a "Period".

         "TS  Election"  means the  election by TS, by written  notice to AOL at
least  thirty  (30)  days  before  the  termination  or  expiration  of  the  LD
Exclusivity  Period, to require AOL to provide the marketing and promotions that
would be required to be provided by the terms of this  Agreement  from and after
the  termination or expiration of the LD  Exclusivity  Period if an Election has
been made, subject to the terms of this Agreement.


                                       4
<PAGE>
         "Unbillable  End User" means any End User or subscriber with respect to
whom the  credit  card,  debit  card or  checking  account,  as the case may be,
on-file  information  provided  to TS by AOL upon  such  End User or  subscriber
subscribing to the Services was not provided or was inaccurate by reason of such
End User or  subscriber  having  cancelled  his or her  subscription  to the AOL
Service.

         "Wireless  Arrangement"  shall  have the  meaning  set forth in Section
II.F.

         "Wireless  Services"  means the Services  provided  hereunder  that are
Commercial Mobile Radio Services.

         "Wireless  Exclusivity  Period"  means  the  period  commencing  on the
Amendment 3 Effective Date and ending on the Initial  Wireless  Expiration Date,
subject to  extension  by AOL as provided in Section  X.B.1.,  in which case the
Wireless  Exclusivity  Period shall mean the period ending on such later date to
which it may have been so extended, and subject to termination of such Period by
AOL as provided in Section  VII.A.2.  or X (and it is understood and agreed that
the Wireless  Exclusivity  Period shall  terminate upon any  termination of this
Agreement (or the Term)  pursuant to the terms of this  Agreement) in which case
the Wireless  Exclusivity  Period  shall mean the period  ending on such earlier
termination date .

         "Wireless  Launch Date" means the date on which the  Wireless  Services
are first made generally available to subscribers of the AOL Service, which date
shall be agreed to in writing by the parties  (provided  that if the parties are
unable to agree on a date, the date shall be the date after the execution of the
Wireless  Arrangement  on which the  Wireless  Services  have been offered to at
least *** of the  subscribers  to the AOL Service,  as certified in a writing by
AOL to TS).

         "Wireless  Mark" means any service  mark  (including  the AOL  Wireless
Mark) that is used in the marketing of Wireless Services under the terms of this
Agreement,  which service marks,  if any, shall be mutually agreed to in writing
by the parties hereto prior to or simultaneous  with the parties'  entering into
the Wireless  Arrangement  and provided  that,  during the Wireless  Exclusivity
Period,  the Wireless  Mark shall be the AOL Wireless Mark if AOL shall so elect
on or before the parties' entering into the Wireless Agreement.

         "Wireless  Non-Exclusive  Period"  means the period  commencing  on the
first day after the last day of the  Wireless  Exclusivity  Period and ending on
June 30, 2003,  subject to extension  by AOL as provided in Section  X.B.2.,  in
which case the Wireless  Non-Exclusive  Period  shall mean the period  ending on
such  later  date  to  which  it may  have  been so  extended,  and  subject  to
termination of such Period by AOL as provided in Article X (and it is understood
and  agreed  that the  Wireless  Exclusivity  Period  shall  terminate  upon any
termination  of this  Agreement  (or the  Term)  pursuant  to the  terms of this
Agreement),  in which  case the  Wireless  Non-Exclusive  Period  shall mean the
period ending on such earlier termination date.

                                       5
<PAGE>
3. Section II.F. is amended by adding the following at the end thereof:

         "TS and AOL shall  jointly  explore  opportunities  and  offerings  for
Commercial Mobile Radio Services to be provided by a private label service on an
agency or resold basis. Each party shall be given reasonable  advance notice of,
and an opportunity to attend,  all meetings with prospective  service  providers
and the parties shall keep each other reasonably informed of their progress. The
service  offering and provider shall be selected by mutual  agreement of AOL and
TS; provided,  however,  that AOL shall not be required to consider any offering
if (a) the offering of any such Services to End Users is not  competitive (as to
End Users) with other  generally  available  offerings  of such  Services to End
Users by other  providers,  (b) the  inclusion of such  offering in the Services
would, in and of itself, be materially  detrimental to AOL's business or (c) the
provider of such offering does not agree to meet the requirements  regarding AOL
wireless  data  services set forth on Schedule Y in  accordance  with a schedule
reasonably acceptable to AOL.  Notwithstanding  anything herein, it is expressly
understood and agreed that the data services required to be included in Wireless
Services  need not be included in any  marketing  under,  or otherwise  marketed
through,  any of the  marketing  provided by AOL  hereunder.  Neither AOL nor TS
shall unreasonably delay informing the other of whether a particular provider is
acceptable  to such  party,  and each  party  agrees  that * * * are  acceptable
providers, provided the offering of such provider complies with clauses (a), (b)
and (c) of the immediately  preceding  sentence and subject to acceptable  terms
and  conditions on which such service will be offered.  If the parties  mutually
agree upon an  offering  and  provider  for  Commercial  Mobile  Radio  Services
hereunder,  then the parties shall  mutually agree upon the terms and conditions
upon which the Commercial Mobile Radio Services shall be offered and the rollout
and performance lists applicable to the provision thereof, and the parties shall
enter into an arrangement with such provider to so provision  Commercial  Mobile
Radio  Services  to be  marketed  by AOL under the  Wireless  Marks over the AOL
Service (the foregoing arrangement, the "Wireless Arrangement") with a term that
extends  until the  expiration  or  termination  of the  Wireless  Non-Exclusive
Period,  as such term may be  extended  pursuant to Section  X.B.2.  The parties
shall use their  commercially  reasonable  best  efforts  to cause the  Wireless
Launch Date to occur as soon as reasonably  practicable but at least by April 1,
1999,  provided  that neither the failure to reach  agreement  with a Commercial
Mobile Radio  Services  provider as provided above nor the failure to launch the
Wireless Services shall permit AOL to terminate the Wireless  Exclusivity Period
prior to June 30, 2000. During the Wireless Exclusivity Period, AOL and TS shall
each  receive *** percent *** of all  proceeds  from the  provision  of Wireless
Services not retained by the service  provider  under the Wireless  Arrangement,
other than cost reimbursements and other similar payments ("Wireless Proceeds"),
provided that AOL shall first receive,  but only during the Wireless Exclusivity
Period,  at least a mutually  agreed upon guaranteed  quarterly  minimum payment
from the Wireless  Arrangement  and TS shall then  receive,  but only during the
Wireless Exclusivity Period, at least a mutually agreed-upon  per-subscriber fee
for  each  subscriber  to  such  Wireless  Services.  After  the  expiration  or
termination of the Wireless  Exclusivity Period and during the Term, TS shall no
longer receive the foregoing per-subscriber fee, AOL shall no longer receive the
foregoing guaranteed quarterly minimum

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<PAGE>
payments,  and AOL's share of the Wireless Proceeds shall be fifty percent (50%)
for the first year of the Wireless Non-Exclusive Period, forty percent (40%) for
the second year thereof, thirty percent (30%) for the third year thereof, twenty
percent  (20%) for the fourth year  thereof and ten percent  (10%) for the fifth
year thereof;  provided,  however,  that if AOL either (x) enters into,  without
TS's prior  written  consent,  any other  arrangement  with the  provider of the
Commercial  Mobile  Radio  Services  under the Wireless  Arrangement  to provide
Commercial  Mobile Radio  Services on the AOL Service (other than an arrangement
permitted pursuant by Section VII.A.1.) or (y) does not make available to TS the
marketing required to be provided by AOL pursuant to Sections III.A.1,  then AOL
shall be entitled to no further share of Wireless Proceeds. It is understood and
agreed  that  the Data  Requirements  shall  apply  to,  and TS and any  service
provider for Wireless  Services  shall  comply with the Data  Requirements  with
respect to, any  offering of Wireless  Services  hereunder,  whether  during the
Wireless Exclusivity Period or the Wireless Non-Exclusive Period.

4. The Agreement is amended to delete Schedule X in its entirety and to add as a
new Schedule X thereto the Schedule X attached to this  Amendment  and to add as
Schedule Y thereto the Schedule Y attached to this Amendment.

5. Sections  III.A.1.(a) - (e), III.A.2,  III.A.4.  and III.A.5 of the Agreement
are  deleted in their  entirety  and the parties  acknowledge  that all of AOL's
obligations  thereunder have been fully discharged and AOL shall have no further
liability or obligation thereunder.

6. The following new  subsections  (a) - (e) are added to Section III.A.1 of the
Agreement:

              [MARKETING AND PROMOTIONAL SERVICES TO BE DELIVERED]

                                       ***

7. A new Section III.A.1(h) is added to the Agreement as follows:

         "(h)  Except as  expressly  provided  in Section  III.  A.1 and Section
III.A.7,  the marketing provided by AOL under this Section III.A.1.  and Section
III.A.7. may be used by TS so long as such marketing is so provided, but only to
promote the  Services  then  offered by TS under this  Agreement,  whether on an
unbundled basis or bundled with any other Services then offered by TS under this
Agreement  or on an  exclusive  or  non-exclusive  basis  (provided  that  Local
Services shall be promoted solely on a bundled basis with the LD Services during
the LD Exclusivity Period), except that TS may utilize the marketing provided by
AOL under Section *** that is not dedicated to promotion of Wireless Services to
promote  products or  services  of AOL or AOL's  Partners  (which  products  and
services  shall  be  limited  to  products  and  services  that  are the same in
substance as the primary  products  and services  marketed by *** under its ***)
subject  to the  terms of this  Section,  provided  that any  such  products  or
services of an *** and the content of any marketing

                                       7
<PAGE>

and  promotion  thereof  shall  be  approved  by AOL,  said  approval  not to be
unreasonably  withheld.  ***  shall  mean a ***  with  whom *** has *** a *** in
connection with *** conducted over the ***, which  agreement  includes *** based
on *** or other  measure of *** of *** or *** of ***  thereunder or provides the
*** with any *** or *** with  respect to *** or the ***.  Any such  marketing of
*** products or services  shall  utilize  solely the marketing  commitments  set
forth in Sections *** that is not  dedicated  to promotion of Wireless  Services
and shall comply with all AOL's then standard policies  governing such marketing
and AOL's exclusivities and other contractual  preferences to third parties. Any
***  products or services so marketed by TS  hereunder  shall be on an *** basis
(i.e. *** or *** basis)  pursuant to a *** with *** and TS shall not re-sell any
of the marketing  commitments  hereunder to a *** or any ***. If TS utilizes any
of the  marketing  provided  by AOL  pursuant  to Section  *** *** to market ***
products or services, the product or service being offered shall be offered as a
bundle with LD Services or,  during the Wireless  Exclusivity  Period and to the
extent  mutually  agreed upon by the parties and the service  provider under the
Wireless Arrangement,  Wireless Services (provided that this provision shall not
preclude the bundling of other services  permitted to be offered  hereunder with
LD  Services  or  Wireless  Services),  as a special  offer in  connection  with
subscribing to such Services.  Any *** services  utilized by TS to promote a ***
products  or  services  shall  utilize  TS's *** *** and shall be subject to all
other terms and  conditions of this  Agreement,  including  payment of ***. As a
condition  to TS being  permitted  to utilize any  marketing  provided by AOL to
market a ***  products or  services,  such *** shall  agree in writing  that (i)
sales of such *** products or services utilizing such marketing shall be counted
toward all *** and *** contained in such *** with *** and such *** shall pay ***
in accordance with such *** with *** for all such sales once such *** or *** are
met (or if such  agreement  does  not  contain  *** or ***)  and  (ii)  all such
marketing  shall count against *** *** commitments to such *** contained in such
*** with ***.  To the extent TS desires to enter into  arrangements  with *** to
utilize the marketing commitments set forth in Sections *** or to advertise such
*** products or services  within the Dedicated  Area pursuant to Section ***, TS
shall  notify  AOL of *** TS desires  to enter  into such  arrangements  and the
specific products and/or services that TS desires to market or advertise. To the
extent there is more than one *** ***  providing  the products  and/or  services
that TS desires to advertise or market,  then TS may determine with which *** it
will  enter into an  arrangement,  provided  that TS shall have  offered in good
faith  such  opportunity  to all such ***.  TS shall  provide  AOL with a 30-day
marketing plan for  advertising or marketing the products and/or services of any
*** at least  thirty (30) days in advance of the period to which such  marketing
plan  applies.  *** TS shall  jointly  solicit  any *** with which TS desires to
enter into such an arrangement;  provided, however, that if *** participation in
such  solicitations  is having a detrimental  effect on  solicitations of a ***,
then TS may solicit such *** without *** participation after giving


                                       8
<PAGE>

*** at least one (1) business day's prior notice of such detrimental  effect and
an opportunity to correct the actions by *** that give rise to such  detrimental
effect.  AOL shall be given reasonable advance notice prior to any solicitations
of *** by TS and such  solicitations  during any period of time shall be limited
to a reasonable  number given the parties'  respective  availability  to conduct
such solicitations.  Notwithstanding any of the foregoing,  nothing herein gives
TS the right to use any of the *** of any of the ***."

9.  A new Section III.A.1(i) is added to the Agreement as follows:

                                      ***

10. A new Section III.A.1(j) is added to the Agreement as follows:

         "In  connection  with the marketing and promotion  efforts  provided in
this Agreement,  including those provided in this Section ***, AOL will continue
to make *** to the AOL Service  subscriber  base available to the  telemarketing
vendors and/or verification agents but only to the extent, for the purposes, and
to the vendors,  that *** is provided by AOL in  connection  with  marketing and
promotions provided to TS as of December 31, 1998; provided,  however,  that all
***  shall be  subject  to  AOL's  then  current  policies,  including,  without
limitation,  the Terms of Service for  subscribers  to the AOL Service and AOL's
privacy  policies,  and  subject  to  the  confidentiality  provisions  of  this
Agreement."

11. Sections III.A.2.,  III.A.4. and III.A.5 of the Agreement shall each read in
their entirety "Intentionally Deleted."

12. Section III. A.3. of the Agreement is amended to apply to Commercial  Mobile
Radio Services and Local  Telecommunications  Services, to the extent offered by
TS on the AOL Service, in addition to Long Distance Telecommunications Services.

13.  Section  III.  A.7. of the  Agreement is amended to read in its entirety as
follows:

         "AOL commits to provide, in connection with its activities described in
Sections  III.A.1.,  III.A.6.,  III.C.  and III.D  hereof,  keywords  on the AOL
Service  (which  shall be at least (i) any  keyword  that TS has  linking to the
Dedicated Area as of the Amendment 3 Effective  Date,  which keywords shall link
to an area on which TS has a presence,  (ii) any other keyword that is listed on
Schedule X hereto and is non-generic, which keywords shall link to the Dedicated
Area or other mutually agreed upon area, and (iii) any keyword  approved by AOL)
or  hyperlinks  on the AOL Service to a dedicated  area on the AOL Service  (the
"Dedicated  Area") in order to  facilitate  ease of  location  and access to the
Dedicated Area for End Users and prospective  customers.  From and after October
1, 1998 and during the LD Exclusivity Period, (i) ***  (except that  in no event
shall ***
                                       9

<PAGE>

except on a bundled  basis with LD Services  or, if the parties  mutually  agree
with the service provider under the Wireless Arrangement, Wireless Services. AOL
may sell advertising  within the Dedicated Area, subject to TS's approval in its
sole discretion.  TS may enter into arrangements with any third party (including
***, but subject,  in any case, to any applicable  exclusivities  or contractual
preferences granted by AOL of which AOL shall have advised TS) to advertise such
party's  products or services  within the Dedicated Area during the Term,  which
advertising shall be subject to AOL's then standard advertising policies and the
terms of Section III.A.1(h).  Revenues from such advertising (net of third party
commissions  and, in the case of  advertising  sold directly by AOL, *** percent
***,  and, in the case of  advertising  sold  directly by TS, *** percent  ***),
shall be divided evenly between TS and AOL."

14. Section III.B.1 is amended by adding the following at the end thereof:

         "In satisfaction of its obligations  under this Section  III.B.2.,  AOL
shall continue to provide (to the extent it is currently providing such reports)
the  following:  monthly  reports  of total  *** and  numbers  of ***  provided,
however,  that  within  sixty  (60) days  after the end of any  period for which
payment is to be made  pursuant to Section  III.A.7.,  AOL shall deliver to TS a
statement of the advertising  revenues for such period,  and the amount, if any,
payable to TS with  respect to such  period,  showing the manner in which it was
determined,  and such  statement  shall be  accompanied by a payment of any such
amount.  To the  extent  AOL is not  currently  providing  any of the  foregoing
information,  AOL shall use  commercially  reasonable  best efforts to do so, so
long as such  information  is relevant to AOL's then current  obligations  under
this Agreement.

15. The first  sentence of Section  III.B.2 is deleted in its  entirety  and the
following is inserted in lieu thereof:

"AOL  shall keep for two (2) years  from the date of each  marketing  service or
promotion  provided  pursuant to Section  III.A.1  above  complete  and accurate
records in  sufficient  detail to allow TS to  determine if AOL has provided the
marketing and promotions required thereunder."

16.  Section  III.B.3.  is amended in its  entirety as  follows:  "Intentionally
Deleted."

17. Section III.E.1. is amended by adding the following at the end thereof:

"Notwithstanding anything to the contrary in this Section III.E. or elsewhere in
this Agreement:

(a)  Until  the  later  to occur of  December  31,  1999 and the end of the last
     period as to which AOL exercises its option under paragraph (b) below,  the
     LD Services shall be offered under the AOL LD Mark; provided, however, that
     TS may display with the AOL LD Mark,  subject to the terms of this Section,
     a TS owned brand name approved by AOL in writing (the "TS Co-Brand"), which
     approval shall not be 

                                       10

<PAGE>

     unreasonably withheld; provided, further, that the brand names appearing on
     Schedule X are hereby  approved by AOL. If TS elects to use the TS Co-Brand
     with the AOL LD Mark,  the TS Co-Brand  shall be  displayed  as  ingredient
     branding and not as the primary  brand,  i.e., the AOL LD Mark shall always
     be displayed first and *** more prominently and appear more frequently than
     the TS  Co-Brand,  the TS  Co-Brand  shall  always  appear  with the phrase
     "powered by",  "service(s)  provided by", "service(s) by", "as an agent of"
     or "agent of" or with another  similar  phrase  approved by AOL in writing,
     which  approval  shall not be  unreasonably  withheld.  TS  represents  and
     warrants  that the TS Co-Brand,  including  those brand names  appearing on
     Schedule X, does not and will not  infringe  on AOL's or any third  party's
     rights of which TS has notice or violate any applicable law.

(b)  At any time  during a year that TS is  required  to offer  the LD  Services
     under the AOL Mark pursuant to paragraph (a) above,  AOL may elect,  at its
     option,  by giving TS  written  notice of such  election,  to require TS to
     continue  to offer the LD  Services  under the AOL Mark  during the one (1)
     year period beginning (x) January 1, 2000,  provided that, upon making such
     election, AOL shall not be permitted to terminate the LD Exclusivity Period
     pursuant to Section  VII.A.2  prior to June 30, 2001,  (y) January 1, 2001,
     provided  that,  upon making such  election,  AOL shall not be permitted to
     terminate the LD Exclusivity  Period  pursuant to Section  VII.A.2 prior to
     June 30, 2003,  and (z) January 1, 2002,  provided  that,  upon making such
     election, AOL shall not be permitted to terminate the LD Exclusivity Period
     pursuant to Section VII.A.2 prior to June 30, 2003.

(c)  From and after the later to occur of January  1, 2000 and  January 1 of any
     year as to which AOL did not exercise its option  pursuant to paragraph (b)
     above and during the LD Exclusivity  Period,  the LD Services may, but need
     not be, offered under the AOL LD Mark,  provided that TS may elect to offer
     LD  Services  under  any LD Mark  other  than  the AOL LD  Mark,  including
     simultaneously  with the offering thereof under the AOL LD Mark. An LD Mark
     that is not the AOL Mark may be co-branded with the primary provider of the
     resold services underlying the LD Services, provided that the brand of such
     service  provider shall be displayed as ingredient  branding and not as the
     primary brand,  i.e.,  the LD Mark shall always be displayed  first and ***
     more  prominently and appear more  frequently  than the service  provider's
     brand,  the service  provider's  brand shall always  appear with the phrase
     "powered  by",  "service  provided  by",  "service by", "as an agent of" or
     "agent of" or with another similar phrase approved in writing by AOL, which
     approval  shall not be  unreasonably  withheld,  and it shall be clear from
     such  branding that the LD Services are offered by TS;  provided,  further,
     that TS shall not in any event use the brand name of an Interactive Service
     Provider that is the brand name of an Interactive Service (e.g., *** in the
     case of  ***) or a brand  name  that  is in any  way  false,  deceptive  or
     misleading.  TS represents and warrants that any LD Mark that is not an AOL
     Mark, including any co-branding

                                       11

<PAGE>

     with a service  provider,  does not and will not  infringe  on AOL's or any
     third party's rights of which TS has notice or violate applicable law.

(d)  Notwithstanding  the  foregoing,  if  the LD  Exclusivity  Period  has  not
     terminated,  AOL shall have the right to  terminate  TS's rights to use the
     AOL LD Mark as of or after June 30,  2000,  by giving TS written  notice of
     such  election  at  least  180 days  prior to the date of such  termination
     (including,  without  limitation,  with respect to End Users existing as of
     the date of  termination  or  expiration),  in which event TS shall have no
     further  rights  to use of the AOL LD Mark  from and after the date of such
     termination.  In addition,  if TS ceases to offer the LD Services under the
     AOL LD Mark for a period of ten (10)  consecutive  days,  AOL may terminate
     TS's  rights  to use the AOL LD Mark at any time  thereafter  upon  written
     notice to TS thereof, in which event TS shall have no further rights to use
     of the AOL LD Mark from and after  the date of such  termination  (provided
     that such rights shall  continue until June 30, 2000 solely with respect to
     billing,  provisioning  and servicing the Services to End Users existing at
     the date of such termination). From and after the expiration or termination
     of the LD Exclusivity Period, TS shall have no further rights to use of the
     AOL LD Mark  from and  after  the date of such  expiration  or  termination
     (including,  without  limitation,  with respect to End Users existing as of
     the date of expiration or termination).  From and after termination of TS's
     rights to use of the AOL LD Mark pursuant to any of the  foregoing,  during
     the  remainder  of the Term,  TS shall offer LD Services  under any LD Mark
     other than the AOL LD Mark,  subject to and in accordance with the terms of
     paragraph (c) above relating to an LD Mark that is not the AOL LD Mark.

(e)  During the Local Non-Exclusive  Period, the Local Services shall be offered
     under  either (i) an LD Mark  (including  the AOL LD Mark so long as TS has
     the right to use the AOL LD Marks  pursuant to this Section  III.E.1)  when
     Local  Services are offered on a bundled  basis with LD  Services,  or (ii)
     under a TS owned  brand  name  approved  by AOL in  writing  (the "TS Local
     Brand"),  which  approval  shall not be  unreasonably  withheld;  provided,
     however,  that the brand names appearing on Schedule X are approved by AOL.
     The TS Local  Brand may be  co-branded  with the  primary  provider  of the
     agented or resold services underlying the Local Services, provided that the
     brand of such service  provider  shall be displayed as ingredient  branding
     and not as the primary  brand,  i.e.,  the TS Local  Brand shall  always be
     displayed  first and *** more  prominently  and appear more frequently than
     the service  provider's  brand,  the service  provider's brand shall always
     appear with the phrase  "powered by" "service  provided by",  "service by",
     "as an agent of" or "agent of" or with a similar phrase approved in writing
     by AOL, which approval shall not be unreasonably  withheld, and it shall be
     clear  from  such  branding  that the Local  Services  are  offered  by TS;
     provided,  further, that TS shall not in any event use the brand name of an
     Interactive  Service  Provider  that is the  brand  name of an  Interactive
     Service  (e.g.,  *** in the case of ***) or a brand name that is in any way
     false, deceptive or misleading. TS represents and


                                       12
<PAGE>

     warrants that the TS Local Brand  (including any co-branding with a service
     provider)  does not and will not  infringe  on AOL's or any  third  party's
     rights of which TS has notice or violate applicable law.

(f)  During the Term, the Wireless  Services shall be offered under the Wireless
     Marks and the  parties  shall  mutually  agree upon the  Wireless  Marks in
     connection with entering into the Wireless Arrangement;  provided, however,
     that, at AOL's option,  the Wireless  Marks shall be the AOL Wireless Marks
     during the Wireless  Exclusivity  Period.  If AOL does not elect to use the
     AOL Wireless Marks for the Wireless Services as provided in the immediately
     preceding  sentence,  and in any case  from and after  the  termination  or
     expiration  of the Wireless  Exclusivity  Period,  TS shall have no further
     rights to use of the AOL Wireless  Marks  (including,  without  limitation,
     with  respect  to End  Users  existing  as of the  date of  termination  or
     expiration).  If the Wireless  Mark is not an AOL Wireless  Mark,  then the
     Wireless Mark shall be a TS owned brand  approved in writing by AOL,  which
     approval shall not be unreasonably  withheld;  provided,  however, that the
     brand names  appearing on Schedule X are hereby approved by AOL. A Wireless
     Mark that is not an AOL Wireless  Mark may be  co-branded  with the primary
     provider of the resold services underlying the Wireless Services,  provided
     that the brand of such service  provider  shall be displayed as  ingredient
     branding and not as the primary brand, i.e., the Wireless Mark shall always
     be displayed first and *** more prominently and appear more frequently than
     the service  provider's  brand,  the service  provider's brand shall always
     appear with the phrase "powered by",  "service  provided by", "service by",
     "as an agent of" or "agent of" or with a similar phrase approved in writing
     by AOL, which approval shall not be unreasonably  withheld, and it shall be
     clear from such branding that the LD Services are offered by TS;  provided,
     further,  that  TS  shall  not  in any  event  use  the  brand  name  of an
     Interactive  Service  Provider  that is the  brand  name of an  Interactive
     Service  (e.g.,  *** in the case of ***) or a brand name that is in any way
     false,  deceptive  or  misleading.  TS  represents  and  warrants  that any
     Wireless Mark that is not an AOL Wireless Mark  (including any  co-branding
     with a service  provider)  does not and will not  infringe  on AOL's or any
     third party's rights of which TS has notice or violate applicable law.

(g)  In  connection  with any change in the branding of a Service that may occur
     hereunder,  TS shall work together  with AOL to avoid  confusion of the End
     Users and  subscribers  to the AOL Service  with  respect to such change in
     brands.

18. The last  sentence  of Section  IV.A.1 is  deleted in its  entirety  and the
following is inserted in lieu thereof:

"Subject  to the terms of this  Agreement,  the  Services  to be  provided by TS
hereunder  are  expanded  to  include  Local  Telecommunications   Services  and
Commercial Mobile Radio Services as and to the extent offered by TS."

                                       13
<PAGE>

19. Section IV.C.1.  is deleted in its entirety and the following is inserted in
lieu thereof:

"As and to the  extent  described  in,  and  subject  to the terms  of,  Section
III.E.1, the Services will be offered by TS (in the case of the LD Services,  as
the  carrier)  under the AOL Marks or other  brand  names as  permitted  by this
Agreement."

20. Each of Section V.B.1.a. and Section V.B.1.b. is deleted and amended to read
in its entirety as follows: "Intentionally Deleted", and the parties acknowledge
that all of TS's obligations  thereunder have been fully discharged and TS shall
have  no  further  liability  or  obligation   thereunder.   The  following  new
subsections c., d., e. and f. are added to Section V.B.1. of the Agreement:

         (c) TS  shall  pay AOL  during  (but  only  until  the  termination  or
expiration of) the LD Exclusivity Period as follows:

          (i)                 For the  calendar  quarter  beginning  October  1,
                         1998,  TS  shall  pay AOL  the  amount  of Six  Million
                         Dollars ($6,000,000), which payment shall be made on or
                         before January 15, 1999.

         (ii)                 For  each  of  the  calendar  quarters   beginning
                         January  1,  1999,  April  1,  1999,  July 1,  1999 and
                         October 1, 1999,  TS shall pay to AOL the amount of Ten
                         Million Dollars ($10,000,000).

        (iii)                 For  each  of  the  calendar  quarters   beginning
                         January 1, 2000 and April 1, 2000,  TS shall pay to AOL
                         the amount of Twelve Million Dollars ($12,000,000).

         (iv)                 For each of the calendar  quarters  beginning July
                         1, 2000,  October 1, 2000, January 1, 2001 and April 1,
                         2001,  TS shall pay to AOL (x) the  amount  of  Fifteen
                         Million Dollars  ($15,000,000),  or (y), if AOL, in its
                         sole discretion,  actually allocates to the *** vendors
                         for the TS Services  substantially  all *** during such
                         quarter  (subject  to the  terms  of  Section  *** with
                         respect to ***), the amount of Nineteen Million Dollars
                         ($19,000,000).

          (v)                 For each of the calendar quarters  beginning on or
                         after July 1, 2001, TS shall pay to AOL an amount equal
                         to (a) 5% of the LD Marginable Revenue for such quarter
                         plus (b) twenty-five percent (25%) of any mark-up by TS
                         on directory assistance or PICC charges included in the
                         billings for LD Services or Local Services but excluded
                         from LD Marginable Revenue by the definition thereof.

         (d) Beginning  January 1, 1999 and until the  termination or expiration
of the LD Exclusivity  Period, TS shall pay AOL One Dollar ($1.00) per month for
each LD End 

                                       14
<PAGE>

User in excess of two million  (2,000,000) LD End Users. Each such payment shall
be made within  thirty (30) days  following  the end of the month for which such
payment  is due and  shall be  calculated  based on the  number  of LD End Users
existing as of the last day of such month."

         (e) After the  termination or expiration of the LD  Exclusivity  Period
and during the LD  Non-Exclusive  Period and provided  that an Election has been
made and that, during any of the following  periods,  including those that occur
after June 30, 2003,  AOL shall be making  available,  during such  period,  the
marketing and promotions  required to be provided  pursuant to Section  III.A.1.
during the LD Non-Exclusive  Period, TS shall pay AOL as follows  (collectively,
the "Long Distance Residuals"):

          (i)                 For each of the  calendar  quarters  in the  first
                         year after such  expiration or  termination,  an amount
                         equal to (a) 5% of the LD  Marginable  Revenue for such
                         quarter  plus  (b)  twenty-five  percent  (25%)  of any
                         mark-up by TS on directory  assistance  or PICC charges
                         included  in the  billings  for LD  Services  or  Local
                         Services but excluded from LD Marginable Revenue by the
                         definition thereof.

         (ii)                 For each of the  calendar  quarters  in the second
                         year after such  expiration or  termination,  an amount
                         equal to (a) 4% of the LD  Marginable  Revenue for such
                         quarter  plus  (b)  twenty-five  percent  (25%)  of any
                         mark-up by TS on directory  assistance  or PICC charges
                         included  in the  billings  for LD  Services  or  Local
                         Services but excluded from LD Marginable Revenue by the
                         definition thereof.

        (iii)                 For each of the  calendar  quarters  in the  third
                         year after such  expiration or  termination,  an amount
                         equal to (a) 3% of the LD  Marginable  Revenue for such
                         quarter  plus  (b)  twenty-five  percent  (25%)  of any
                         mark-up by TS on directory  assistance  or PICC charges
                         included  in the  billings  for LD  Services  or  Local
                         Services but excluded from LD Marginable Revenue by the
                         definition thereof.

         (iv)                 For each of the  calendar  quarters  in the fourth
                         year after such  expiration or  termination,  an amount
                         equal to (a) 2% of the LD  Marginable  Revenue for such
                         quarter  plus  (b)  twenty-five  percent  (25%)  of any
                         mark-up by TS on directory  assistance  or PICC charges
                         included  in the  billings  for LD  Services  or  Local
                         Services but excluded from LD Marginable Revenue by the
                         definition thereof.

          (v)                 For each of the calendar quarters in the fifth and
                         subsequent  years after such expiration or termination,
                         an amount equal to (a) 1% of the LD Marginable  Revenue
                         for such quarter plus (b) twenty-five  percent (25%) of
                         any  mark-up  by TS on  directory  assistance  or  PICC
                         charges  included  in the  billings  for LD Services or
                         Local Services but excluded from LD Marginable  Revenue
                         by the definition thereof.


                                       15
<PAGE>

         (f) The payment  pursuant to the foregoing clause (c) for each calendar
quarter  beginning on or after  January 1, 1999 and before July 1, 2001 shall be
paid in three (3)  equal  monthly  installments  prior to the end of each of the
calendar months falling within such calendar quarter;  provided,  however,  that
the quarterly  payments for each calendar  quarter after any calendar quarter in
which  Holdings and its  subsidiaries  (including  TS), have at least *** in ***
and/or *** of all *** and other ***, on a GAAP consolidated  balance sheet basis
(the "Cash Threshold"),  shall be payable to AOL in advance on or before the end
of the fifth (5th)  business day of such quarter;  provided,  however,  that the
quarterly  payment for the first calendar  quarter after the calendar quarter in
which  the Cash  Threshold  is met  shall be paid  prior to the end of the first
month of such  calendar  quarter.  For each  calendar  quarter  for  which TS is
required to pay AOL an amount based on the LD Marginable  Revenue,  TS shall pay
such amount to AOL within thirty (30) days after the end of the calendar quarter
for which such amount is due. All amounts paid by TS to AOL,  including  amounts
paid prior to October 1, 1998, shall be non-refundable  and shall not be subject
to offset except as expressly set forth in this Agreement.

21. The reference in Section V.B.2. to "Articles X and XI" is amended to read as
follows: "Article XI".

22. The first  sentence of Section  V.B.3.  of the  Agreement  is deleted in its
entirety and the following is inserted in lieu thereof:

"Within  thirty  (30) days  (sixty (60) days in the case of a payment to be made
pursuant to Section III.A.7) after the end of any period for which payment is to
be made pursuant to Section  II.F.,  III.A.7.,  V.B.1,  or VII.A.3.  hereof,  TS
shall,  to the  extent  any such  payment  is based  thereon,  deliver  to AOL a
statement  of the LD  Marginable  Revenue  for such  period  and the  components
thereof,  End Users,  and relevant  revenue,  profit and End User information in
connection with payments due in respect of the Wireless Services for such period
and the amounts  payable to AOL with respect to such period,  showing the manner
in which they were  determined  and certified as correct by the Chief  Financial
Officer of TS."

23. The first two  sentences of Section  V.B.4.  of the Agreement are deleted in
their entirety and the following is inserted in lieu thereof:

                                       16
<PAGE>

         "TS shall keep for two (2) years  from the date of each  payment to AOL
         pursuant to Section II.F.,  Section III. A.7,  Section V.B.1 or Section
         VII.A.3 for any period after the Amendment 3 Effective  Date,  complete
         and accurate records in sufficient  detail to allow AOL to determine if
         TS has  computed LD  Marginable  Revenue and  components  thereof,  End
         Users,  relevant  revenue,  profit and Wireless End User information in
         connection  with  payments  due in  respect  of the  Wireless  Services
         accurately;  provided, however, that nothing herein shall require TS to
         maintain  records as to any of LD  Marginable  Revenue or the  Wireless
         Services information with respect to any period prior to the time TS is
         required to make payments based on LD Marginal  Revenue or the Wireless
         Services information.  AOL shall have the right for a period of two (2)
         years after  receiving any report or statement  with respect to payment
         due to inspect such records."

24. Sections V.B.7. and V.C. of the Agreement are deleted in their entirety, and
the  following  is inserted in lieu  thereof:  "Intentionally  Deleted"  and the
parties  acknowledge  that all of TS's  obligations  thereunder  have been fully
discharged and TS shall have no further liability or obligations thereunder.

25.  Section V.D. of the Agreement is amended by adding the following at the end
thereof:

"Notwithstanding the foregoing,  during the period commencing on October 1, 1998
and ending on the earlier of June 30, 2001 and the date of termination of the LD
Exclusivity Period:

          (i)                 TS shall  not be  required  to pay  Estimated  ***
                         Costs in advance.

         (ii)                AOL  shall  for  each  calendar  quarter  pay  (or
                         reimburse  TS  for  the  payment  of)  Covered  Offline
                         Marketing  Costs (as defined  below) in such quarter in
                         an amount up to the  applicable  AOL Cost  Contribution
                         Amount  (as  defined  below) for such  quarter,  and TS
                         shall  not be  required  to pay  such  Covered  Offline
                         Marketing Costs,  provided that TS shall continue to be
                         responsible,  to the extent  provided  in this  Section
                         V.D., for the payment of all Offline Marketing Costs in
                         any  quarter in excess of such  amounts  required to be
                         paid by AOL.

        (iii)                 "Covered  Offline  Marketing  Costs"  in a quarter
                         means  and  includes  the  actual  cost  (to TS) of all
                         Subscriber  Incentives  in the  form of  "AOL  Rewards"
                         points  purchased  by TS to be  provided  to End  Users
                         subscribing  to the  Services  during such quarter as a
                         result  of  the  ***  services   provided   under  this
                         Agreement,  and all Offline Marketing Costs incurred by
                         AOL  in  such  quarter  and  for  which,   absent  this
                         provision,  TS would be responsible for reimbursing AOL
                         for the payment or incurrence  of, as provided above in
                         this Section V.D., including,  without limitation,  (w)
                         the actual cost of *** services  incurred in connection
                         with  ***  services,  (x) the  actual  cost  (to TS) of
                         Subscriber Incentives in the form of

                                       17
<PAGE>


                         *** points or *** of AOL  Service to be provided to End
                         Users  subscribing to the Services  during such quarter
                         as a result of the ***  services  provided  under  this
                         Agreement,    (y)   Rep   Incentives   to   AOL's   ***
                         representatives  for  *** to the  ***  vendors  for the
                         Services and (z) payments to vendors  contracted by AOL
                         to  perform  the  ***  services  provided  for in  this
                         Agreement.

         (iv)                 "AOL Cost Contribution  Amount" shall mean (A) for
                         the calendar  quarter  beginning  October 1, 1998, Four
                         Million Five  Hundred  Thousand  Dollars  ($4,500,000);
                         (ii) for each calendar quarter  thereafter,  either (x)
                         Four Million Dollars  ($4,000,000);  or (y), if TS pays
                         AOL  $19,000,000  pursuant to Section  V.B.1.a for such
                         quarter, Six Million Dollars ($6,000,000).

          (v)                 If  in  any   quarter  AOL  funds  less  than  the
                         applicable  AOL  Cost  Contribution   Amount  for  such
                         quarter in Offline Marketing Costs, AOL shall pay to TS
                         the   amount   by  which   the   applicable   AOL  Cost
                         Contribution  Amount  exceeds  the  amount  of  Offline
                         Marketing Costs so funded by AOL in such quarter but in
                         no event more than Two Million Dollars ($2,000,000) (or
                         Six  Million  Dollars  ($6,000,000)  if  the  AOL  Cost
                         Contribution Amount for such quarter was $6,000,000).

         (vi)                 AOL shall use commercially  reasonable  efforts to
                         reduce  telecommunications  costs  associated  with the
                         Transfer Plus program.

26. Sections V.F.1,  V.F.2, V.F.3, V.F.4 and V.F.5 are deleted in their entirety
and the following new Section V.E. is added to the Agreement:

"E. TS and Holdings entered into a written agreement with CompuServe Interactive
Services,  Inc.  ("CompuServe")  with respect to the exclusive marketing of TS's
telecommunications  services by CompuServe (the  "CompuServe  Agreement") on the
CompuServe Service (as defined in the CompuServe Agreement). TS hereby expressly
acknowledges  and agrees that neither the  CompuServe  online  service  (however
defined in this Agreement or the CompuServe Agreement) nor the end users thereof
(including,  without  limitation,  "End  Users"  as  defined  in the  CompuServe
Agreement)  are or shall be  deemed to be  within  the  scope of this  Agreement
(including,  without limitation, the exclusivity provisions set forth in Article
VII.  hereof),  (i) by  reason  of the  consummation  of  AOL's  acquisition  of
CompuServe (or the fact of such acquisition) or (ii) based on the facts known to
TS  existing  as  of  the  Amendment  3  Effective  Date.  No  user  of  the  TS
telecommunications  services  marketed  thereunder  pursuant  to the  CompuServe
Agreement (the "TS/CS Services") shall for any purposes of this Agreement be, or
be deemed to be, an "End User" as defined and used  herein,  the TS/CS  Services
shall not be, or be deemed to be,  "Services"  as defined  and used  herein,  no
revenues  generated under or by reason of the CompuServe  Agreement shall form a
part of, or in any respect be included  in, "LD  Marginable  Revenue" as defined
and used herein,  and TS's  exclusivity  rights set forth in Article VII. herein
shall not apply in any manner to  CompuServe's 


                                       18
<PAGE>

marketing  of the TS/CS  Services.  AOL  hereby  consents  to TS' and  Holdings'
entering into, and performing  under, the CompuServe  Agreement and agrees that,
in and of itself,  such conduct shall not  constitute a breach by TS or Holdings
of Section  VII.A.6 of this  Agreement  or require the  payment of any  override
pursuant thereto."

27. Sections VII.A.1, VII.A.2, VII.A.3, VII.A.4 and VII.A.5 of the Agreement are
deleted  in  their  entirety  and the  parties  acknowledge  that  all of  AOL's
obligations  thereunder have been fully discharged and AOL shall have no further
liability or obligation thereunder. The following new Sections VII.A.1, VII.A.2,
VII.A.3, VII.A.4 and VII.A.5. are inserted in lieu thereof:

1. (a) Except as otherwise  specifically provided in this Agreement,  during the
LD  Exclusivity  Period,  TS shall be the  exclusive  provider of Long  Distance
Telecommunications  Services  marketed by AOL (or its affiliates,  provided that
this reference to affiliates shall not be deemed to provide TS rights under this
Agreement  with respect to any site,  location or property that is not otherwise
part of the AOL  Service)  on the AOL  Service to the AOL  Service  subscribers.
Except as otherwise specifically provided in this Agreement, during the Wireless
Exclusivity  Period,  TS shall be the exclusive  provider of  Commercial  Mobile
Radio Services marketed by AOL (or its affiliates,  provided that this reference
to affiliates shall not be deemed to provide TS rights under this Agreement with
respect to any site,  location or property that is not otherwise part of the AOL
Service) on the AOL Service to the AOL Service  subscribers.  In  addition,  AOL
shall not provide to any other providers of telecommunications  services (i) any
*** of  subscribers  to the AOL  Service  from the *** for  purposes  of *** any
telecommunications  services, or (ii) *** of *** to the AOL Service for purposes
of *** or *** of any telecommunications services, in each case as to which TS is
then the exclusive provider under this Agreement;  provided, however, that, such
restrictions  shall not apply  with  respect  to the *** of  Broadband  Services
permitted  to be marketed  by AOL  pursuant  to Section  VII.A.1(b)  except with
respect to *** prior to ***.  Notwithstanding  the  foregoing or anything to the
contrary in this Agreement,  and without limiting any actions which may be taken
by AOL without violation of TS's rights hereunder, (a) AOL shall be permitted to
enter into  arrangements  to market Bundled Online Services and offer and market
Broadband  Services  (each an "Excepted  Service" and,  collectively,  "Excepted
Services") in accordance  with Section  VII.A.1(b)  without  compensation  to TS
other than as expressly provided below.

(b) (1) AOL  shall  be  permitted  to  enter  into any  arrangement  with  other
provider(s) of telecommunications services (each, an "Other Provider") to market
a  Bundled  Online  Service;  provided  that  AOL may  not  enter  into  such an
arrangement  with  ***  prior to *** with  respect  to Local  Telecommunications
Services or  Commercial  Mobile Radio  Services and prior to *** with respect to
Long Distance  Telecommunications  Services. "Bundled Online Service" shall mean
the  AOL  Service   co-marketed  in  conjunction  with  any   telecommunications
service(s) or in conjunction  with the brand of any Other Provider.  Any Bundled
Online Service may be co-branded

                                       19
<PAGE>

with an Other Provider and may also be a Broadband  Service.  AOL's  exclusivity
and marketing obligations (including,  without limitation, any obligation of AOL
to include links, key words, a dedicated area or any other presence or materials
on the AOL Service) under this Agreement  shall not extend to any Bundled Online
Service; provided, however, that during the LD Exclusivity Period, (X) AOL shall
continue to include  Switched  Subscribers in the offline  marketing  subscriber
pool made available to TS and (Y) no Long Distance  Telecommunications  Services
shall be promoted on any Bundled Online Service that is not a Broadband Service,
by any Other Provider or by AOL, except that (i) AOL may, at its option, promote
the LD Services on such  Bundled  Online  Service and  operational,  billing and
other  non-promotional  functions  related to Long  Distance  Telecommunications
Services  may be  included  on such  Bundled  Online  Service and (ii) the Other
Provider  shall  be  permitted  to  offer  on its own  web  site  Long  Distance
Telecommunications  Services which may be promoted  through links on the Bundled
Online Service.  Notwithstanding  the foregoing,  prior to July 31, 1999, (I) no
links  to the  area  on the  Other  Provider's  web  site  where  Long  Distance
Telecommunications  Services are offered  shall be promoted  through the Bundled
Online  Service to Switched  Subscribers,  and (II) the Other  Provider for such
Bundled  Online  Service  shall not be permitted to target  market Long Distance
Telecommunications  Services to  Switched  Subscribers.  "Switched  Subscribers"
shall mean any  subscriber  to the Bundled  Online  Service who  switched  their
subscription from the AOL Service to the Bundled Online Service.  As a condition
to AOL entry into such  arrangement,  to the extent TS is unable to  continue to
bill a  Switched  Subscriber  who is an End  User as a result  of such  Switched
Subscriber switching its subscription from the AOL Service to the Bundled Online
Service,  AOL shall ensure that the Other Provider  provides to TS  satisfactory
billing of LD Services  provided by TS to any Switched  Subscriber who is an End
User at a cost to TS no  greater  than the cost to it of billing  such  Services
through a credit card and shall provide,  if TS shall so request,  standard call
detail on such bills at no additional expense.  AOL shall not be required to pay
TS an override  under  Section  VII.A.3 with respect to any  subscriber to Local
Telecommunications  Services billed through any Bundled Online  Service.  During
the LD  Exclusivity  Period,  AOL shall not be  permitted  to market any Bundled
Online Service that is not a Broadband Service over the AOL Service or use AOL's
Transfer Plus, telemarketing, direct mail Service or other marketing channels to
target market any Bundled Online Service to subscribers to the AOL Service.

(2) AOL shall be permitted to offer to subscribers to the AOL Service  broadband
(i.e., 128k or more in either direction)  version(s) of the AOL Service (each, a
"Broadband  Service") and AOL may market Broadband Services over the AOL Service
and  otherwise  target  market  Broadband  Services  to  subscribers  to the AOL
Service.  Any  Broadband  Service(s)  may be co-branded  with an Other  Provider
(other   than,   prior  to  January  1,  2000,   AT&T  if  bundled   with  Local
Telecommunications Services or Commercial Mobile Radio Services) and may also be
a Bundled Service. AOL's marketing and exclusivity  obligations shall not extend
to  any  Broadband   Service.   AOL's  marketing  and  exclusivity   obligations
(including, without limitation any obligation of AOL to include links, keywords,
a dedicated  area or any presence or  materials  on the AOL Service)  under this
Agreement shall not extend to any Broadband Services;  provided,  however,  that
during 

                                       20

<PAGE>

the LD  Exclusivity  Period,  AOL's  online  marketing  obligations  (including,
without limitation any obligation of AOL to include links, keywords, a dedicated
area or any presence or materials on the AOL Service)  under this Agreement and,
with  respect to Switched  Subscribers  until June 30, 1999,  AOL's  exclusivity
obligations  with respect to Long  Distance  Telecommunications  Services  shall
extend to any Broadband Service that is not a Bundled Service. AOL's exclusivity
obligations  (including,  without  limitation  any  obligation of AOL to include
links,  keywords,  a  dedicated  area or any  presence or  materials  on the AOL
Service) with respect to Commercial  Mobile Radio  Services  shall not extend to
Broadband  Services;  provided that Commercial Mobile Radio Services provided by
an Other  Provider and promoted  over a Broadband  Service that is not a Bundled
Service  shall  not be billed on the bill for such  Broadband  Service  or using
on-file billing  information  provided by AOL to charge the credit or debit card
or checking  account,  as the case may be, used for the bill for such  Broadband
Service , other  than  through  AOL's *** or ***  service or other  similar  ***
methods;  provided however, that, prior to ***, AOL shall not provide its *** or
*** services to subscribers  to such  Broadband  Service for purposes of billing
Commercial  Mobile  Radio  Services of an Other  Provider  unless AOL shall have
first provided TS with the opportunity to ***.

(3) During the LD  Exclusivity  Period,  AOL shall pay to TS an  override in the
amount of *** per month for each  subscriber  (A) in excess of *** to any single
Excepted Service bundled with any  telecommunications  services in the nature of
any of the Services and (B) in excess of *** in the  aggregate  for all Excepted
Services  bundled  with  tele-communications  services  in  the  nature  of  the
Services; provided, however, that any overrides to which TS is entitled pursuant
to clause (B) of this sentence  shall be reduced by any  overrides  paid for the
same period  pursuant  to clause (A) of this  sentence.  Each of such  threshold
amounts  shall be increased on each ***,  commencing  ***, by an amount equal to
the product of (a) the then threshold  (without  giving effect to such increase)
times (b) *** the  percentage  increase  in the  number of the *** the *** as of
such date over the number of such *** on the next  preceding  *** provided  that
such  threshold  amounts on and after *** shall be at least *** with  respect to
any  single  Excepted  Service  and at least *** with  respect  to all  Excepted
Services in the aggregate.  Notwithstanding the foregoing,  no override shall be
payable pursuant to this Section  VII.A.1(b) if, within *** following the end of
a  month  in  which  an  applicable  threshold  is  exceeded  either  (i) the LD
Exclusivity  Period  terminates or expires or (ii) the number of  subscribers to
the  Excepted  Service or Excepted  Services  that  exceeded the  threshold  has
declined below the threshold that was exceeded; provided, that if, at the end of
such *** month period,  neither of such  conditions  has been met, AOL shall pay
such  override  for each  month  thereafter  at the end of which  the  number of
subscribers  to  such  Excepted   Service   exceeds  an  applicable   threshold.
Notwithstanding  the foregoing,  with respect to any Bundled Online Service that
is bundled with Local Telecommunication  Services, AOL may elect, at its option,
to pay TS an override in accordance with SectionVII.A.3.  for each subscriber to
such Bundled  Online  Service,  in which event such Bundled Online Service shall
not be counted  against any of the  thresholds  set forth in this  Section.  For
purposes of clause (A) of the preceding sentence, (1) any Bundled Online Service


                                       21
<PAGE>

shall not be counted as a Broadband  Service,  (2) Bundled  Online  Services are
considered  separately  from  Broadband  Services and (3) any  Excepted  Service
bundled  with or promoting  telecommunications  services in the nature of any of
the Services is considered  separately from another Excepted  Service  promoting
different  telecommunications  services or the same telecommunications  services
offered by a different Other Provider. For purposes of this Section, subscribers
to each  separate  Excepted  Service  shall  be  counted  on the  basis  of paid
subscribers existing as of the end of each applicable calendar month.

         "2. As of June 30, 2000, or as of any subsequent  anniversary  thereof,
AOL may,  at its option but  subject to any  election  made  pursuant to Section
III.E.1.,  terminate the LD  Exclusivity  Period by giving TS written  notice of
such election at least sixty (60) days prior to the date of such termination. In
addition,  as of (i) the earlier to occur of (a) the date that is eighteen  (18)
months  after the  Wireless  Launch Date and (b) June 30,  2000 if the  Wireless
Launch Date shall not have  occurred  and  September  30,  2000 if the  Wireless
Launch  Date  shall have  occurred  and (iii)  June 30,  2001 or any  subsequent
anniversary thereof, AOL may, at its option,  terminate the Wireless Exclusivity
Period by giving TS written  notice of such  election  at least  sixty (60) days
prior to the date of such termination.  However,  notwithstanding termination of
the LD Exclusivity Period, AOL shall not commence any marketing of Long Distance
Telecommunications  Services under any AT&T brand on the AOL Service  (including
bundled with any Excepted Service) prior to June 30, 2000.

         "3.  Notwithstanding  anything in this  Agreement to the contrary,  AOL
shall have no exclusivity  obligations with respect to Local  Telecommunications
Services.   TS  shall   have   the   right  to   offer   (and   promote)   Local
Telecommunications  Services on the AOL Service  during the Local  Non-Exclusive
Period solely  utilizing the marketing  hereunder,  subject to the terms of this
Agreement,  including, without limitation,  Sections II, III.E. and IV and shall
have the rights  with  respect to such Local  Services  as are  provided in this
Agreement;  provided,  however,  that, during the LD Exclusivity  Period,  Local
Services  shall be offered  solely on a bundled  basis with LD  Services  (i.e.,
offered  as  ancillary  additional  service  for  use  in  conjunction  with  LD
Services);   provided,   further,   that   if   TS   is   not   offering   Local
Telecommunications Services on the AOL Service to subscribers of the AOL Service
as of the date of any termination of the LD Exclusivity  Period,  then the Local
Non-Exclusive Period shall terminate and all TS's rights under this Agreement to
offer  (and  utilize  the  marketing   provided   hereunder  to  promote)  Local
Telecommunications  Services on the AOL Service shall  terminate as of such date
of   termination.   If  AOL  enters  into  any   arrangement   to  market  Local
Telecommunications  Services  on the AOL Service  (other than with  respect to a
Bundled  Service),  then AOL shall pay TS an  override  in the amount of One and
50/100   Dollars   ($1.50)  per  month  for  each   subscriber   to  such  Local
Telecommunications  Services who is billed  using  on-file  billing  information
provided by AOL to charge the credit or debit card or checking  account,  as the
case may be, or billed on the same bill as the AOL  Service  and who  subscribes
prior to June 30, 2000, for so long as AOL is receiving  revenue from such


                                       22
<PAGE>

Local  Telecommunications  Services in respect of such  subscriber but not later
than  June  30,  2005;  provided,  however,  that if  such  marketing  of  Local
Telecommunications  Services  is under any AT&T  brand,  then the amount of such
override  shall be Three Dollars  ($3.00) and such  override  shall be paid with
respect to each  subscriber  to such Local  Telecommunications  Services  who is
billed using on-file billing information provided by AOL to charge the credit or
debit card or checking  account,  as the case may be, or billed on the same bill
as the AOL Service and who subscribes  prior to June 30, 2000 for so long as AOL
is receiving revenue from such Local  Telecommunications  Services in respect of
such  subscriber,  but not later than June 30, 2005. If TS offers or enters into
any arrangement to offer Local  Telecommunications  Services on the AOL Service,
TS shall pay AOL an override in the amount of One and 50/100 Dollars ($1.50) per
month for each  subscriber  (other  than an  Unbillable  End User) to such Local
Telecommunications  Services who subscribes  prior to June 30, 2000, for so long
as such subscribers are End Users of Local Services, but not later than June 30,
2005; provided, however, that if such offer of Local Telecommunications Services
is under any AT&T brand, then the amount of such override shall be Three Dollars
($3.00) and such override shall be paid with respect to each  subscriber to such
Local  Telecommunications  Services  (other  than an  Unbillable  End  User) who
subscribes  prior to June 30, 2000 for so long as such subscribers are End Users
of Local Services,  but not later than June 30, 2005. In addition,  AOL will use
all reasonable efforts to convince the provider of such Local Telecommunications
Services to use TS's billing services in connection therewith, provided that AOL
shall  have no  liability  hereunder  if such  provider  elects  not to use TS's
billing services.

         "4. Nothing  contained in this Agreement shall prohibit or restrict AOL
in any manner from selling  online  advertising  to  telecommunications  service
providers  other  than TS,  provided,  however,  that AOL shall not sell  online
advertising on the AOL Service  (other than on a Bundled  Service or a Broadband
Service) to market any Broadband Service as permitted under Section  VII.A.1(b))
(i) for Long Distance  Telecommunications  Services to any other provider during
the LD Exclusivity  Period or (ii) for  Commercial  Mobile Radio Services to any
other provider during the Wireless Exclusivity Period;  provided,  however, that
AOL shall not be deemed in breach of this Section as a result of any advertising
as to which AOL has not  received  written  notice  from TS  provided  AOL shall
comply with its obligations under Section VII.A.11.

         "5. Except as otherwise  specifically provided in this Section VII.A.5,
during and after the Term,  AOL shall have the exclusive  right to target market
products and services, including the Services, to subscribers to the AOL Service
and to End Users and TS shall not, directly or indirectly (through subsidiaries,
affiliates or otherwise), knowingly target market subscribers to the AOL Service
or the End Users.  Notwithstanding the foregoing, AOL shall not target market to
LD End Users (i) prior to ***, (ii) more than *** per calendar year for any year
after  ***  during  the  Term,  or  (iii)  for the  promotion  of Long  Distance
Telecommunications   Services,   Commercial   Mobile  Radio  Services  or  Local
Telecommunications  Services ***; provided,  however, that in no event shall AOL
be restricted from target marketing


                                       23
<PAGE>

to the "buyers" category of subscribers to the AOL Service  notwithstanding that
such buyers may also be LD End Users. Notwithstanding the foregoing, TS shall be
permitted to target  market to End Users solely by utilizing  the  telemarketing
commitments set forth in Section *** or the *** commitments set forth in Section
***,  other  than those  commitments  dedicated  to the  promotion  of  Wireless
Services;  provided,  that any such target  marketing  shall promote  solely the
Services or products  and  services  permitted to be promoted by TS pursuant to,
and shall be subject to the terms of, Section ***; provided,  further, that this
provision  does  not  provide  TS  with  any  additional  marketing  commitments
hereunder  and any  marketing  commitments  utilized to target  market End Users
shall  count  toward   satisfying   AOL's   marketing   obligations   hereunder.
Notwithstanding  the  foregoing,  nothing shall prevent TS, (i) during and after
the  Term,  from  communicating  with End  Users,  by e-mail  or  otherwise,  in
connection with provisioning,  operating and billing the Services; provided that
no such communications  shall contain any promotional,  marketing or advertising
materials  or  messages  of any nature  with  respect to any product or service,
including,  without limitation, the Services, and shall not request or encourage
End Users to take any action  inconsistent  with the  purpose of this  Agreement
(e.g., without limitation,  purchasing  telecommunications  in the nature of the
Services  at a  different  location  or site  than the AOL  Service);  provided,
further,  that any such  communications  shall  comply with AOL's then  standard
policies,  including without limitation,  its privacy policies, Terms of Service
for the AOL  Service  and  policies  regarding  unsolicited  or bulk  e-mail (as
applicable), and (ii) after the Term, target marketing *** to the End Users."

28. The second sentence of Section VII.A.6.  of the Agreement is amended to read
in its entirety as follows:

"After  such first  anniversary  date and during  the Term,  TS may so  contract
without paying AOL any override or other compensation;  provided,  however, that
if such  services  are then being  offered by TS on the AOL  Service  under this
Agreement  on an  exclusive  basis,  TS must first offer AOL the right to market
such services under the AOL Marks. If AOL exercises such right, then the parties
shall  mutually agree upon  compensation  to AOL and the terms and conditions of
the service offering and use of the AOL Marks in connection therewith; provided,
however,  that if AOL and TS cannot agree on appropriate  compensation  or terms
and conditions after  negotiating in good faith for a reasonable amount of time,
TS may market or provide such services  without paying AOL any override or other
compensation and TS shall not utilize the AOL Marks in connection therewith."

29. Section VII.A.6. is further amended to add the following at the end thereof:

"If TS shall so contract with an AOL competitor with respect to, or offer on its
own behalf, a consumer (non-commercial) offering of telecommunications  services
in the nature of the LD  Services,  TS will offer the LD  Services  to End Users
under this  Agreement  at regular  rates that are better  than or equal to those
offered customers by TS on its own behalf or under such other contract, provided
that, for purposes hereof, such 


                                       24
<PAGE>

regular rates need not reflect any promotions or other like special or temporary
rates  (which  special or  temporary  rates shall be limited in time,  scope and
duration) that may be offered to such customers by TS on its own behalf or under
such other  contract;  provided,  that  subscribers  to the AOL Service  receive
reasonably comparable special or temporary rates during the same time periods."

30. The first sentence of Section  VII.A.9.  of the Agreement is amended to read
in its entirety as follows:

"AOL may elect to terminate the LD  Exclusivity  Period if TS's overall  pricing
for the LD Services exceeds overall prices for such services which are generally
available from major carriers so as to be  non-competitive  with those carriers'
offerings."

31. Section VII.A. is amended to add the following Sections 10 and 11:

         "10.  Notwithstanding  that the *** content area available  through the
America  Online brand service (the ***) is excluded by  definition  from the AOL
Service,  (i) during the *** period beginning on ***, AOL shall not collect more
than *** in advertising  revenues from  advertising sold on the *** to providers
of  telecommunication  services  with  respect to which TS is then  entitled  to
exclusivity  hereunder,  (ii) during the *** month period  beginning on ***, AOL
shall not collect more than *** in advertising revenues from advertising sold on
the *** to providers of  telecommunication  services with respect to which TS is
then entitled to exclusivity hereunder,  (iii) during the LD Exclusivity Period,
AOL  shall  not  sell   advertising   on  the  ***   promoting   Long   Distance
Telecommunications  Services on behalf of any national provider of Long Distance
Telecommunications  Services in connection with a *** (i.e.,  including at least
***  covered by the ***) other than in  connection  with  marketing  a Broadband
Service in compliance  with the provisions of Section  VII.A.1.  and (iv) during
the  Wireless  Exclusivity  Period,  AOL shall not sell  advertising  on the ***
promoting Commercial Mobile Radio Services on behalf of any national provider of
Commercial  Mobile Radio Services in connection  with a *** (i.e.,  including at
least  ***  covered  by the ***)  other  than in  connection  with  marketing  a
Broadband Service. It is understood and agreed that the *** does not include the
*** web site and the *** web site is not limited in any way hereunder.

         11. AOL will use commercially reasonable best efforts,  consistent with
past  practices,  to  encourage  (i) its  significant  partners to observe  TS's
exclusivity  rights  under this  Agreement  in partner  Rainman  areas and other
partner  areas  within the AOL Service but not  controlled  by AOL, and (ii) any
provider of Local  Telecommunications  Services under an arrangement with AOL to
offer Local Telecommunications Services on the AOL Service (other than a Bundled
Online Service or Broadband  Service that is offered pursuant to, and subject to
the terms of,  Section  VII.A.1.),  from  promoting  to  subscribers  to the AOL
Service on such  provider's web site linked directly to from the AOL Service 


                                       25
<PAGE>

(1) Long Distance  Telecommunications  Services during the LD Exclusivity Period
and/or (2)  Commercial  Mobile Radio  Services  during the Wireless  Exclusivity
Period (provided, however, that such provider may provide online billing for any
services,  including any telecommunications  services, on such web site) but AOL
can provide no assurance  that such  partners  will comply and AOL shall have no
liability  hereunder  if such  partners  do not  comply  nor  will  AOL have any
liability  for a failure to encourage in all  instances so long as AOL is acting
on an overall basis in good faith.  AOL shall,  consistent  with past practices,
promptly  remove any advertising or links that violate TS's  exclusivity  rights
under this  Agreement  from areas within the AOL Service that are  controlled by
AOL.

32. Section  X.A.1.  is amended to add the following at the end thereof as a new
sentence: "However,  notwithstanding any provision to the contrary herein, after
the  termination  or  expiration  of the  Term,  TS shall  use all  commercially
reasonable  efforts to transition its billing operations and provisioning of the
Services  off the AOL Service and on to the  Internet  and AOL will provide such
reasonable  assistance  in  effecting  such  transition  as TS shall  reasonably
request,  and, if the  aggregate  number of End Users (using any Service)  shall
thereafter  be fewer than ***, AOL shall have the right,  upon *** prior written
notice to TS, to cease  providing to TS billing  information  regarding such End
Users and all  services  under  Section  III.D.1,  the  Credit  Card  Processing
Services  Agreement and the Electronic  Payment  Processing  Services  Agreement
between the parties."

33. Sections  X.B.1.  and X.B.2. of the Agreement are deleted their entirety and
the following is inserted in lieu thereof:

         "1.  If the LD  Exclusivity  Period  shall  not  previously  have  been
terminated or expired,  AOL shall have the right, by irrevocable  written notice
to TS at least  ninety (90) days prior to the end of such Period (as it may have
been extended  previously),  to extend the term of the LD Exclusivity Period, in
each case for at least one (1) four-calendar-quarter period, for up to three (3)
successive  four-calendar-quarter  periods,  on the terms and conditions  herein
provided.  Furthermore,  if the Wireless Exclusivity Period shall not previously
have been  terminated  or  expired,  AOL shall  have the right,  by  irrevocable
written  notice to TS at least  ninety (90) days prior to the end of such Period
(as it may have been  extended  previously),  to extend the term of the Wireless
Exclusivity  Period,  in each  case for at least  one (1)  four-calendar-quarter
period,  for up to three (3) successive  four-calendar-quarter  periods,  on the
terms and conditions  herein provided.  Each such notice shall be binding on AOL
and TS for all purposes hereof."

         "2.  If the LD  Non-Exclusive  Period  shall not  previously  have been
terminated or expired,  AOL shall have the right, by irrevocable  written notice
to TS at least  ninety (90) days prior to the end of such Period (as it may have
been extended previously), to extend the term of the LD Non-Exclusive Period, in
each  case for at least one (1)  four-calendar-quarter  period,  for  successive
four-calendar-quarter  periods,  but not  beyond  the  later to occur of (a) the
fifth anniversary of the termination or expiration for the LD Exclusivity Period
and (b) June 30, 2006 on the terms and conditions herein provided.  Furthermore,


                                       26
<PAGE>

if the Wireless  Non-Exclusive  Period shall not previously have been terminated
or expired,  AOL shall have the right,  by  irrevocable  written notice to TS at
least  ninety  (90) days  prior to the end of such  Period  (as it may have been
extended previously),  to extend the term of the Wireless  Non-Exclusive Period,
in each case for at least one (1)  four-calendar-quarter  period, for successive
four-calendar-quarter  periods,  but not  beyond  the  later to occur of (a) the
fifth  anniversary of the termination or expiration of the Wireless  Exclusivity
Period and (b) June 30, 2006 on the terms and conditions  herein provided.  Each
such notice shall be binding on AOL and TS for all purposes hereof."

         "3. AOL shall have the right (the "Buyout Right"), by written notice to
TS by not later than September 30, 2001, to terminate all Non-Exclusive  Periods
as of June 30, 2002 and all of AOL's  obligations  to provide  online  marketing
(including,  without  limitation,  *** and all other advertising or promotion on
the AOL Service) to TS from and after December 31, 2001,  and, upon such notice,
all  Non-Exclusive  Periods  shall be  terminated  as of June 30, 2002 and AOL's
online  marketing  obligations  shall  terminate as of December 31, 2001. If AOL
does not terminate the LD  Exclusivity  Period prior to June 30, 2001,  then, if
AOL  exercises  the Buyout  Right,  AOL shall pay TS, on or before  February 28,
2002,  two (2) times the total  amount  received  by AOL from the Long  Distance
Residual during the six (6) month period ending December 31, 2001 (the "12 Month
Amount").  If AOL  terminates  the LD  Exclusivity  Period before June 30, 2001,
then, if AOL exercises the Buyout Right, AOL shall pay TS, on or before February
28, 2002, the total amount  received from the Long Distance  Residual during the
eighteen (18) month period ending December 31, 2001 (the "18 Month Amount").  At
AOL's option,  by written  notice to TS by not later than September 30, 2001, in
lieu of  exercising  the Buyout  Right,  AOL may elect to terminate all of AOL's
obligations to provide online marketing from and after December 31, 2001 but not
the Non-Exclusive  Periods, in which event, AOL shall pay TS fifty percent (50%)
of (a) the 12 Month Amount or (b) the 18 Month Amount,  as  applicable."  During
any period that AOL is not providing the online  marketing  under this Agreement
pursuant to this  Section  X.B.3.,  the Long  Distance  Residual for such period
shall be reduced by fifty percent (50%).

34.  Section  X.C.1.(b)  of the  Agreement is amended to read in its entirety as
follows:

         "Either TS or AOL may terminate this Agreement at any time upon written
notice to the other upon a material  breach by the other in the  performance  of
its agreements and obligations  hereunder and such other party's failure to cure
such breach within 30 days after  written  notice  thereof (the "Cure  Period");
provided,  however, that in the case of a scheduled payment hereunder,  the Cure
Period  shall  be  five  (5)  business  days  after  written   notice   thereof.
Notwithstanding  the foregoing,  no party shall have the right to terminate this
Agreement  for a material  breach of this  Agreement  pursuant  to this  Section
X.C.1.b  based on any  asserted  breach  unless such breach  shall not have been
cured during the  applicable  Cure Period and it is determined by an arbitration
proceeding  convened under Section XI.D that the breach was a material breach as
referenced  in the preceding  sentence and the  breaching  party fails to comply
with  the  arbitrators'  order,  or any  portion  thereof,  in which  event  the
non-breaching party may terminate this Agreement


                                       27
<PAGE>

immediately upon written notice to the other party; provided, however, that this
sentence  shall not apply in the event of any  recurrence  of the same breach or
the occurrence of any substantially  similar breach by the previously  breaching
party if such further asserted breach shall be material and the foregoing notice
and  opportunity  to cure shall have been given and such breach  shall  continue
uncured.  Nothing in this provision is intended to impair the right of any party
to contest a termination by invoking the dispute  resolution  procedures of this
Agreement,  provided that in the event that the breaching  party fails to comply
with an order issued by an arbitration  panel or in the event of a recurrence of
a breach  or  occurrence  of any  substantially  similar  breach,  a  notice  of
termination from the non-breaching  party shall take effect  immediately and all
performance   obligations  of  the  non-breaching  party  shall  be  immediately
suspended  (provided that, if such terminating  party shall be determined not to
have been entitled so to terminate, the other party shall be entitled to damages
for wrongful termination and suspension of such performance obligations)."

35.      Section  X.C.1.d.  of the  Agreement is amended to add after the phrase
         "AT&T ceases to provide long  distance  telecommunications  services to
         TS" the  following:  "and TS  shall  not  then  be  utilizing  services
         provided  by another  provider  with long  distance  telecommunications
         services  of  substantially  equivalent  quality or be  providing  such
         services of substantially  equivalent quality itself,  provided that it
         is   hereby   agreed   by  the   parties   that   the   long   distance
         telecommunications  service  of each  of * * * and  OBN  (as  currently
         operated) are of substantially  equivalent quality for purposes of this
         Section X.C.1.d."

36.      Section X.C. of the Agreement is amended by adding Section X.C.1.f. and
         Section X.C.1.g. at the end of that section:

                  "f. If TS breaches  any of its payment  obligations  under the
         Investment Agreement,  dated as of December 31, 1998 (together with all
         other documents,  agreements and instruments  referenced  therein,  the
         "Investment  Agreement"),  by and  between TS and AOL,  and such breach
         continues  beyond  any  applicable  cure  period  under the  Investment
         Agreement,  then AOL may  terminate  this  Agreement  immediately  upon
         written notice to TS and such  termination  shall not be subject to the
         provisions of X.C.1.b.

                  g. If a voluntary or involuntary  case or other  proceeding is
         commenced  by or against any party or any of its  subsidiaries  seeking
         liquidation,  reorganization or other similar relief with respect to it
         or its debts under any bankruptcy,  insolvency or other similar law now
         or  hereafter  in effect  or  seeking  the  appointment  or a  trustee,
         receiver, liquidator,  custodian or other similar official of it or any
         substantial part of its properties, or shall consent to any such relief
         or to the  appointment of or taking  possession by any such official in
         an involuntary case or other proceeding  commenced against it, or shall
         make a general  assignment for the benefit of creditors,  or shall fail
         generally  to pay its  debts as they  become  due,  or  shall  take any
         corporate  action to authorize  any of 

                                       28
<PAGE>

         the  foregoing,  or an order for relief  shall be entered  against  any
         party  or  any  of  its  subsidiaries   under  applicable   bankruptcy,
         insolvency  or other  similar  laws or hereafter  in effect  (each,  an
         "Insolvency Event"),  then AOL may terminate this Agreement immediately
         upon written  notice to the other  parties in the case of an Insolvency
         Event by TS or Holdings and TS may terminate this Agreement immediately
         upon written notice to AOL in the event of an Insolvency Event by AOL."

37.      Each  of  Section  X.D.2.,  Section  X.D.4  and  Section  X.D.6  of the
         Agreement is deleted in its  entirety and the  following is inserted in
         lieu thereof: "Intentionally Deleted."

38.      The first  sentence of Section  XI.D.1.  of the Agreement is deleted in
         its entirety and the following is inserted in lieu thereof:

"If the parties are unable to resolve any dispute,  controversy or claim arising
under this Agreement  (each a "Dispute"),  such Dispute will be submitted to the
following  senior  executive  officer of each of the parties:  specifically,  J.
Michael Kelly,  the Chief Financial  Officer of AOL, and Gabriel  Battista,  the
Chief Executive Officer of TS; for resolution, which designated senior executive
officer of either  party may be changed by mutual  agreement  of the  parties if
such persons are no longer serving in such capacity."

39.      Section XI.D. of the Agreement is amended by adding Section  XI.D.11 at
         the end of that Section:

         "11. Notwithstanding anything to the contrary in this Agreement, either
party may, without inconsistency with this agreement to arbitrate or the dispute
resolution  provisions  of  this  Agreement,  seek  from a  court  of  competent
jurisdiction any provisional  remedy that may be necessary to protect such party
from  irreparable  harm.  The parties  agree that any  violation  by TS of AOL's
privacy  policies  (as set forth at keyword  "TOS" on the AOL Service) or of the
provisions of Section 40 of Amendment No. 3 (entitled  "Public  Disclosures") or
any violation of law or regulations  by TS that exposes AOL to legal  liability,
in each case that  causes  injury to AOL,  would  cause  continuing  irreparable
injury to AOL for  which  money  damages  would not  adequately  compensate  AOL
(provided that the foregoing  agreement does not constitute an acknowledgment by
any party,  and there shall be no  implication  or statement  arising from or by
reason of such  agreement,  as to the extent of any such injury or that any such
injury or any such event or  circumstance  is material or that any such event or
circumstance should result in any remedy from any court).

40.      Public Disclosures

         The timing,  content and procedure of any press release or other public
announcement regarding the parties' entering into of this Amendment or the terms
of this Amendment  shall be mutually  agreed upon in advance by the parties.  TS
shall not make


                                       29
<PAGE>

any public  disclosure  regarding  the  existence  or  substance of any dispute,
litigation,  arbitration proceeding or other conflict between the parties except
to the  extent  required  by law,  in  which  event TS  shall  use  commercially
reasonable best efforts to disclose the minimum amount of information  necessary
or appropriate to comply with law; provided,  however,  that TS may disclose the
existence of any litigation  initiated by AOL that has  previously  been, and to
the same extent as,  disclosed by AOL. TS shall not issue or permit to be issued
on its behalf any press release or other public announcement,  or make or permit
to be  made  any  public  statement  which  intentionally  impugns,  maligns  or
disparages AOL, its business practices or its directors,  officers or employees.
Neither  AOL nor  Daniel  Borislow  shall,  make,  or  permit  to be  made,  any
communications  with or to the press or statement to investment  analysts,  fund
managers  or other  members of the  investment  community,  which  intentionally
impugns,  maligns  or  disparages  the other,  its  business  practices,  or its
directors,  officers or employees.  During the *** period  following the date of
this  Amendment,  AOL  shall  not  issue  any  press  release  or  other  public
announcement  announcing  that AOL has entered into (i) any  agreement to market
Long Distance  Telecommunications  Services,  which agreement would violate TS's
exclusivity  rights  hereunder if the LD  Exclusivity  Period had not expired or
terminated  at the time of  performance  under such  agreement  and/or  (ii) any
agreement to market Commercial Mobile Radio Services over the AOL Service, which
agreement  would  violate  TS's  exclusivity  rights  hereunder  if the Wireless
Exclusivity  Period had not  expired or  terminated  at the time of  performance
under such agreement.  During the *** following the date of this  Amendment,  in
any  press  release  issued  by AOL  announcing  that  AOL has  entered  into an
agreement to market a Broadband Service,  AOL shall use commercially  reasonable
best  efforts  not to  disclose  the  fact  that  AOL has the  right  to  market
Commercial Mobile Radio Services on such Broadband Service.  AOL represents that
it is not currently  engaged,  on the date of this  Amendment,  in  negotiations
arising from a bona fide offer to merge with or be acquired by any third party.

41.      License

         (a)  License.  TS hereby  grants  to AOL a  perpetual  and  irrevocable
              (subject  to  clause  (f)),   non-exclusive,   worldwide  license,
              (including  the right to sublicense)  to use,  store,  distribute,
              display, perform communicate, transmit, promote, upgrade, enhance,
              maintain, support, copy, modify and make derivative works from the
              TS Technology (as defined below) in connection with the use by AOL
              and/or its  partners in  connection  with an AOL,  AOL-branded  or
              AOL-owned or -controlled affiliated property or service; provided,
              however,  that such license  shall be subject to any  restrictions
              that may be imposed by third party  licensors of the TS Technology
              or portions  thereof,  provided that TS shall use all commercially
              reasonable  efforts  (which shall  include  efforts to  facilitate
              direct  negotiations  between  AOL and such  licensor)  to  secure
              complete  pass-through  rights to all TS Technology  for AOL, with
              respect  both to TS  Technology  currently  licensed  by TS and TS
              Technology hereafter licensed by TS (provided,  and so long as, TS
              does not incur any costs in connection therewith that AOL does not
              agree to pay).  "TS

                                       30
<PAGE>
              Technology"  shall mean,  collectively,  all technology  currently
              owned or licensed by TS or  acquired,  developed or licensed by TS
              during  the  Term,  including,  without  limitation,  TS's  online
              billing,  call  detail  record,   customer  service  and  database
              technology,   software  and   functionality,   including   without
              limitation  any tools,  both in object  code and source code form,
              which TS develops,  acquires or licenses and which are utilized in
              connection  with the  development,  navigation,  use,  management,
              editing,  updating,  maintenance or upgrading of such  technology,
              software and  functionality  and any other  related  materials and
              works, including, without limitation,  Upgrades, subject to clause
              (c), and documentation,  designs, technical specifications and all
              elements  and  components  of the user  interface,  and all  parts
              thereof in whatever media or form.

         (b)  Royalties.  The  license  granted  in clause  (a) shall be royalty
              free; provided,  however,  that to the extent the TS Technology is
              used or licensed by AOL in  connection  with the  provision of any
              telecommunications  services  in the nature of the  Services,  AOL
              shall pay TS a mutually agreed upon royalty not to exceed the then
              lowest royalty charged by TS to any  unaffiliated  third party for
              licensing the TS Technology; and provided further that the license
              granted  with  respect  to  Upgrades  is  subject  to the  payment
              provisions and other restrictions set forth in clause (c).

         (c)  TS  Upgrades.  From time to time,  if TS develops or acquires  any
              Upgrade to the TS Technology,  TS shall deliver all configurations
              of the then-current  versions of the TS Technology to AOL, subject
              to the provisions of subparagraph  (a) above.  For the purposes of
              this license,  "Upgrade"  shall mean, with respect to any software
              or other product, any update, upgrade, error correction,  bug fix,
              maintenance   release,   enhancement,    addition,    improvement,
              extension, modification,  configuration,  replacement, substitute,
              functional  equivalent  or successor  version or product,  and all
              related  documentation.  TS shall  provide  such  Upgrades  to AOL
              royalty-free,  unless, if TS incurred any  out-of-pocket  costs at
              the request of AOL in developing any such Upgrades or any costs in
              providing  such  Upgrades  to AOL as  required  herein,  AOL shall
              reimburse TS for all such costs.

         (d)  Representations  and  Warranties.  TS represents and warrants that
              the TS  Technology  shall not  infringe or violate any  copyright,
              trademark,  patent or any other third party right,  or violate any
              applicable law or regulation. If AOL pays royalties to TS pursuant
              to clause (b) or (c), TS further  represents and warrants that the
              TS  Technology  shall be free from  defects in  manufacturing  and
              workmanship.

         (e)  Term.  The  license  granted  in  clause  (a)  shall  survive  the
              expiration or termination  of the Term of the Agreement,  provided
              that such license may be terminated by TS if AOL fails to make any
              royalty  payments  required  pursuant 


                                       31
<PAGE>
              to Section  (a)  or (c) after  thirty  (30) days following written
              notice to AOL thereof.

42. As a condition to AOL's  entering into this  Amendment,  TS shall pay to AOL
all  amounts  due and  owing  under  the  Agreement  as of  December  31,  1998,
including,   without  limitation,  all  bounties  and  Offline  Marketing  Costs
(including,  without  limitation,  all vendor  invoices and call  representative
incentives),  which  amounts the parties  hereby  agree for all  purposes of the
Agreement total $11,780,694 (except for amounts referred to in the last sentence
of paragraph 44 of this Amendment), provided that such amount shall be offset by
any reduction in the vendor  charges  included in such amount,  which  reduction
occurs by way of a settlement of a dispute  between TS and such vendor over such
charges.  TS shall pay AOL an installment  of $6,000,000  upon execution of this
Amendment  and the balance on or before  January 31,  1999.  If TS fails to make
either of the payments described in the immediately preceding sentence within 24
hours after written notice  thereof,  AOL shall have the right to terminate this
Agreement by giving TS written notice thereof. All such amounts, and all amounts
previously  paid by or on behalf of TS or Holdings under the Agreement  shall be
non-refundable and shall not be subject to any offsets.

43.  In  consideration  of,  and as a  condition  to,  AOL  entering  into  this
Amendment,  contemporaneously with this Amendment, TS and CompuServe shall enter
into an  amendment  to the  CompuServe  Agreement  in the form  attached to this
Amendment as Attachment A (the "CompuServe Amendment").

44. In consideration of, and acknowledging that the Waiver (as defined below) is
a condition  to, the parties'  entering  into this  Amendment,  as of January 5,
1999,  each party hereby  irrevocably  waives and  releases  all claims,  suits,
demands,  actions and  rights,  whether  known,  unknown,  contingent  or fixed,
against the other parties and their  respective  current and former  affiliates,
successors,  assigns, directors, officers, agents and employees arising prior to
January 5, 1999 and arising out of or in any way related to the Agreement or the
CompuServe Agreement or the negotiation,  performance or nonperformance  thereof
or the  negotiation  of  the  Agreement  or the  CompuServe  Agreement  or  this
Amendment or the  CompuServe  Amendment,  other than third party claims that are
subject to  indemnification  under the  Agreement  and of which the  indemnified
party has given the  indemnifying  party notice prior to the date this Amendment
is executed (the "Waiver").  The Waiver shall be effective  notwithstanding  any
terms to the contrary contained in the Agreement, the CompuServe Agreement, this
Amendment  or the  CompuServe  Amendment.  The  parties  further  agree  that no
documentary,  verbal,  e-mail,  electronic  or other  evidence  relating  to the
negotiation,  performance or  nonperformance  of the Agreement or the CompuServe
Agreement  prior  to  January  5,  1999  shall be  offered  or  admitted  in any
arbitration  or related  proceeding  between  the  parties  with  respect to the
negotiation,  performance or  nonperformance of this Agreement or the CompuServe
Agreement after the date of execution of this Amendment after January 5, 1999 in
connection  with any dispute  involving  circumstances  or actions or  inactions
arising  prior to  January 5, 1999.  The Waiver  shall


                                       32
<PAGE>
not apply to any claims, suits, demands, actions and rights of AOL in connection
with  approved  costs  actually  incurred by AOL that are to be reimbursed by TS
under this  Agreement  and that are not yet  invoiced,  are under  dispute by TS
(other than with AOL) or that are not  otherwise  covered by the  provisions  of
paragraph 42 of this Amendment.

45.  With  respect  to End  Users  who are End  Users  as of the  expiration  or
termination of the Agreement or any Period  thereunder,  for so long as such End
Users continue to be End Users and subscribers to the AOL Service and subject to
Section X.A.1 of the Agreement,  AOL will provide all  information  available to
AOL that is necessary  for TS to perform  payment  processing in respect of such
End Users in accordance  with the terms of the Credit Card  Processing  Services
Agreement, as amended, and the Electronic Payment Processing Services Agreement,
between  the  parties,   subject  to  the  terms  of  each  such  agreement.  In
consideration  of and as a condition to AOL entering  into this  Amendment,  the
parties  shall  enter into the  Amendment  to Credit  Card  Processing  Services
Agreement  (the  "Credit  Card  Amendment")  and  into  the  Electronic  Payment
Processing Services Agreement (the "EFT Agreement") in the forms attached hereto
as Attachment B and Attachment C, respectively.

46. If any term, provision, covenant or restriction of this Amendment is held by
a court of competent  jurisdiction  to be invalid,  void or  unenforceable,  the
remainder  of  the  terms,  provisions,  covenants,  and  restrictions  of  this
Amendment shall remain in full force and effect and shall in no way be affected,
impaired or invalidated  and the parties shall negotiate in good faith to modify
this  Agreement to  preserve,  to the fullest  extent  legally  permitted,  each
party's  anticipated  benefits  and  obligations  under this  Amendment.  If the
parties are unable to so agree, the matter shall be resolved pursuant to Article
XI.D of the Agreement.

47. This  Amendment  does not, and shall not be construed to, modify any term or
condition  of  the  Agreement  (including,   without  limitation,   any  payment
obligations under the Agreement) except as expressly provided in this Amendment.
Except as herein  provided,  the  Agreement  shall remain  unchanged and in full
force and effect. In the event of any  inconsistency or discrepancy  between the
Agreement  and this  Amendment,  the  terms  and  conditions  set  forth in this
Amendment   shall   control.   This   Amendment  may  be  executed  in  multiple
counterparts,  each of  which  shall be  deemed  an  original,  but all of which
together shall  constitute one and the same  document.  This Amendment  shall be
governed by the internal laws of the State of New York, without giving effect to
the principles of conflict of laws thereof.

48. If at any time during the period from  January 6, 1999 until June 30,  1999,
Daniel Borislow is employed by Holdings,  TS or any affiliate in the capacity of
an executive  officer,  it shall be deemed a material breach of the Agreement by
TS and AOL shall have an immediate right to terminate the Agreement upon written
notice to TS, without regard to any of the dispute resolution  provisions of the
Agreement.

[Signatures appear on the next page]

                                       33
<PAGE>
IN WITNESS  WHEREOF,  the undersigned have caused this Amendment to be signed on
their behalf as of the date first written above.

AMERICA ON LINE, INC.

By:  /s/  J. Michael Kelly
     ---------------------
Name:    J. Michael Kelly
Title:   Senior Vice-President and CFO



TEL-SAVE, INC.

By:  /s/  Edward B. Meyercord
     ------------------------
Name:   Edward B. Meyercord
Title:  Executive Vice President



TEL-SAVE.COM, INC.

By: /s/  Edward B. Meyercord
    ------------------------
Name:   Edward B. Meyercord
Title:  Executive Vice President



                                      S-1

<PAGE>


CONFIDENTIAL

                                   SCHEDULE X

                                      * * *




<PAGE>


CONFIDENTIAL

                                   SCHEDULE Y

                                      * * *



<PAGE>



CONFIDENTIAL

                                   SCHEDULE Z

                                      * * *

<PAGE>
CONFIDENTIAL



                                  Attachment A
                                      ***


<PAGE>



CONFIDENTIAL



                                  Attachment B
                                      ***


<PAGE>



CONFIDENTIAL



                                  Attachment C
                                      ***


















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