Document:

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                                                                 EXHIBIT 10.39.2

                               SECOND AMENDMENT TO
                           LOAN AND SECURITY AGREEMENT

         THIS SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT dated as of April
13, 2001 (the "SECOND AMENDMENT"), amends that certain Loan and Security
Agreement dated as of December 31, 1998, as amended by that certain Amendment to
Loan and Security Agreement dated as of June 30, 2000 (as so amended, the "LOAN
AGREEMENT"), between NTFC Capital Corporation, a Delaware corporation (the
"LENDER"), and Startec Global Communications Corporation, a Delaware corporation
(the "BORROWER"), as the successor by merger to Startec Global Communications
Corporation, a Maryland corporation.

                              W I T N E S S E T H:

         WHEREAS, the Borrower has requested that the Loan Agreement be amended
pursuant to this Second Amendment to change the financial covenants contained in
Schedule 7.14 of the Loan Agreement as provided for herein, to permit (i) two
loans to Startec Global Operating Company from Allied Capital Corporation in an
aggregate amount of $20,000,000 and (ii) a sale by Startec Global Operating
Company of an undivided interest in its accounts to Allied Capital Corporation
pursuant to that certain Receivables Purchase Agreement dated as of April 13,
2001, between and among Startec Global Operating Company and Startec Global
Licensing Company (the "RECEIVABLES PURCHASE AGREEMENT"), and that the Lender
waive the Events of Default arising out of (i) the payment by the Borrower more
than ten days after its due date of the regularly scheduled loan payments of
principal and interest required by Sections 2.02(b) and (c) of the Loan
Agreement in the amount of $1,253,866.60 (which was due on or before March 1,
2001) and in the amount of $1,253,866.60 (which was due on or before April 1,
2001) (collectively, the "DEFAULTED LOAN PAYMENTS") and (ii) the failure of the
Borrower to comply with the financial covenants required by Section 7.14 and
Schedule 7.14 of the Loan Agreement (as that schedule exists prior to the
Amendment Effective Date (as defined in Section 5.1 below)) for the fiscal
quarter ended December 31, 2000; and

         WHEREAS, the Lender is willing to amend the Loan Agreement to change
the financial covenants contained in Schedule 7.14 of the Loan Agreement as
provided for herein, to permit the loans from Allied Capital Corporation to
Startec Global Operating Company in an aggregate amount of $20,000,000 and to
permit a sale by Startec Global Operating Company of an undivided interest in
its accounts to Allied Capital Corporation pursuant to the Receivables Purchase
Agreement in consideration for the payment of a non-refundable amendment fee of
One Hundred Twenty-Five Thousand Dollars ($125,000) (the "AMENDMENT FEE") and to
waive the Events of Defaults caused by (i) the payment by the Borrower of the
Defaulted Loan Payments more than ten days after their respective due dates and
(ii) the failure of the Borrower to comply with the financial covenants required
by Section 7.14 and Schedule 7.14 of the Loan Agreement (as that schedule exists
prior to the Amendment Effective Date) for the fiscal quarter ended December 31,
2000, but only on the terms and conditions set forth herein;

<PAGE>

         NOW, THEREFORE, in consideration of the agreements herein contained,
the parties hereto agree as follows:

                                    ARTICLE I
                    AMENDMENTS TO LOAN AGREEMENT AND CONSENT

1.1 AMENDMENT TO SCHEDULE 7.14 OF THE LOAN AGREEMENT. Effective on, and subject
to the occurrence of, the Amendment Effective Date, Schedule 7.14 of the Loan
Agreement is hereby amended by deleting the text thereof in its entirety and
replacing it with Schedule 7.14 attached to this Second Amendment as EXHIBIT A.

1.2 AMENDMENTS TO SECTION 9.01 OF THE LOAN AGREEMENT.

(a) Effective on, and subject to the occurrence of, the Amendment Effective
Date, Section 9.01 of the Loan Agreement is hereby amended by deleting the text
of clauses (e), (f), (g), (h), (i), (j), and (k) of Section 9.1 in their
entirety and replacing them with the following:

                  (e) UNDISCHARGED JUDGMENTS. If one or more judgments for the
         payment of money has been entered against Borrower or any Subsidiary of
         the Borrower in an amount in excess of $500,000, and such judgment or
         judgments have remained undischarged and unstayed for a period of
         thirty (30) calendar days, unless the validity thereof is contested in
         compliance with SECTION 7.07 hereof; or

                  (f) ATTACHMENTS, ETC. If one or more writs or warrants of
         attachment, garnishment, execution, distraint or similar process have
         been issued against Borrower or any Subsidiary of the Borrower or any
         of their respective properties which have remained undischarged and
         unstayed for a period of thirty (30) consecutive days and are not being
         contested in compliance with SECTION 7.07 hereof; or

                  (g) DEFAULT UNDER THIRD PARTY AGREEMENTS. If a default, or
         event or condition which with notice or lapse of time or both would
         become a default, occurs that gives the creditor the right to
         accelerate in respect of any other obligation of Borrower or any
         Subsidiary of the Borrower for borrowed money (including lease
         obligations) in the amount of $500,000 in the aggregate, or under any
         two or more such other obligations of any amount; or

                  (h) DISSOLUTION; DISCONTINUANCE OF BUSINESS, ETC. Borrower or
         any Subsidiary of the Borrower discontinues its usual business as an
         integrated provider of voice, data and/or internet services, dissolves,
         has its Organizational Document revoked, winds up or liquidates itself
         or its business; or

                  (i) INVOLUNTARY BANKRUPTCY OR RECEIVERSHIP PROCEEDINGS. If a
         receiver, custodian, liquidator, or trustee of Borrower or any
         Subsidiary of the Borrower or of any substantial part of their
         respective property is appointed by the order or decree of any court

                                       2

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         or agency or supervisory authority having jurisdiction; or an order is
         entered adjudicating Borrower or any Subsidiary of the Borrower as
         bankrupt or insolvent; or any substantial part of the property of
         Borrower or any Subsidiary of the Borrower is sequestered by court
         order; or a petition is filed against any Borrower or any Subsidiary of
         the Borrower under any state or federal bankruptcy, reorganization,
         arrangement, insolvency, readjustment of debt, dissolution,
         liquidation, or receivership law of any jurisdiction, whether now or
         hereafter in effect; or

                  (j) VOLUNTARY BANKRUPTCY. If Borrower or any Subsidiary of the
         Borrower takes affirmative steps to prepare to file, or files, a
         petition in voluntary bankruptcy or to seek relief under any provision
         of any bankruptcy, reorganization, arrangement, insolvency,
         readjustment of debt, dissolution, or liquidation law of any
         jurisdiction, whether now or hereafter in effect, or consents to the
         filing of any petition against it under any such law; or

                  (k) ASSIGNMENTS FOR BENEFIT OF CREDITORS, ETC. If Borrower or
         any Subsidiary of the Borrower makes an assignment for the benefit of
         creditors, or admits in writing its inability to pay its debts
         generally as they become due, or consents to the appointment of a
         receiver, trustee, or liquidator of itself or of all or any part of its
         properties; or

(b) Effective on, and subject to the occurrence of, the Amendment Effective
Date, Section 9.01 of the Loan Agreement is hereby amended by adding at the end
thereof the following additional clauses:

                  (q) RECEIVABLES PURCHASE AGREEMENT. The occurrence of an
         "Amortization Event" (as such term is defined in the Receivables
         Purchase Agreement), or of an event or condition which with notice or
         lapse of time or both would become an Amortization Event.

                  (r) AGREEMENT TO SENIOR NOTE RESTRUCTURING. Borrower shall
         have failed to fulfill its obligations under that certain letter
         agreement delivered simultaneously with the Second Amendment by
         Borrower to Lender, relating to the Senior Note Restructuring, as
         defined therein (the "SENIOR NOTE RESTRUCTURING").

1.3 AMENDMENT TO SECTION 10.20 OF THE LOAN AGREEMENT. Effective on, and subject
to the occurrence of, the Amendment Effective Date, Section 10.20 of the Loan
Agreement is hereby amended by deleting in its entirety the first sentence (in
all capital letters) of such section and replacing such sentence with the
following sentence:

                  "BORROWER HEREBY IRREVOCABLY SUBMITS AND CONSENTS TO THE
                  JURISDICTION OF ANY STATE OR FEDERAL COURT SITTING IN NEW YORK
                  COUNTY, NEW YORK, FOR ANY SUIT BROUGHT OR ACTION COMMENCED IN
                  CONNECTION WITH THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, ANY
                  OF THE OBLIGATIONS, ANY

                                       3

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                  COLLATERAL, OR ANY RELATIONSHIP BETWEEN LENDER AND BORROWER,
                  AND AGREES NOT TO CONTEST OR CHALLENGE VENUE IN ANY SUCH
                  COURTS. BORROWER HEREBY IRREVOCABLY WAIVES, TO THE FULLEST
                  EXTENT THAT IT MAY DO SO, THE DEFENSE OF INCONVENIENT FORUM TO
                  THE MAINTENANCE OF SUCH ACTION OR PROCEEDING."

1.4 AMENDMENT TO ARTICLE VII OF LOAN AGREEMENT. Effective on, and subject to the
occurrence of, the Amendment Effective Date, Article VII of the Loan Agreement
is hereby amended by adding at the end thereof the following additional clauses:

                  "7.17 CORPORATE ACTION BY STARTEC GLOBAL COMMUNICATIONS U.K.
         LIMITED. Borrower shall deliver evidence that requisite corporate
         action necessary to be taken by Startec Global Communications U.K.
         Limited has been taken to authorize and ratify the execution and
         delivery of its Guaranty Amendment, no later than April 17, 2001, in
         form and substance satisfactory to Lender in its sole discretion.

                  "7.18 ADDITIONAL LEGAL OPINION. Borrower shall deliver an
         opinion of counsel on behalf of Startec Global Communications U.K.
         Limited no later than April 20, 2001, in form and substance
         satisfactory to Lender in its sole discretion."

                  "7.19 LANDLORD CONSENTS. Borrower shall deliver those consents
         listed on EXHIBIT F to this Second Amendment, which such consents the
         Borrower shall obtain within 30 days after the date of this Agreement."

                  "7.20 EXHIBIT F. Borrower shall deliver a fully completed
         EXHIBIT F to Lender no later than April 20, 2001, in form and substance
         satisfactory to Lender in its sole discretion."

                                   ARTICLE II
       LIMITED CONSENTS AND LIMITED WAIVERS OF COVENANTS TO LOAN AGREEMENT

2.1.     LIMITED WAIVER OF ARTICLE II (LOANS).

         (a) Effective on, and subject to the occurrence of, the Amendment
Effective Date, Section 2.02(d) of ARTICLE II of the Loan Agreement is hereby
waived to the extent, but only to the extent, necessary to permit the Borrower
not to pay the amounts required thereunder as a result of the payment by the
Borrower of the Defaulted Loan Payment more than ten days after its due date.

                                       4

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2.2.     LIMITED CONSENT UNDER ARTICLE VIII (NEGATIVE COVENANTS).

         (a) Effective on, and subject to the occurrence of, the Amendment
Effective Date, the Lender consents to (i) the incurrence by Startec Global
Operating Company and Startec Global Licensing Company of the Indebtedness
evidenced under, and in compliance with the terms of, and (ii) the transactions
contemplated by, the Loan Agreement (Secured) dated as of April 13, 2001 (the
"SECURED LOAN AGREEMENT") between and among Startec Global Operating Company and
Startec Global Licensing Company as borrowers and Allied Capital Corporation as
lender and the Loan Agreement (Unsecured) dated as of April 13, 2001 between and
among Startec Global Operating Company and Startec Global Licensing Company as
borrowers and Allied Capital Corporation as lender.

         (b) Effective on, and subject to the occurrence of, the Amendment
Effective Date, the Lender consents to (i) the sale of accounts to Allied
Capital Corporation pursuant to the Receivables Purchase Agreement, (ii) the
other transactions contemplated by the Receivables Purchase Agreement and (iii)
the granting of a lien on and security interest in its accounts pursuant to the
Security Agreement dated as of April 13, 2001 between and among Startec Global
Operating Company and Startec Global Licensing Company as grantors and Allied
Capital Corporation as secured party securing the indebtedness incurred under
the Secured Loan Agreement; PROVIDED, HOWEVER, that the interests of Allied
Capital Corporation in such assets sold, and in which it receives a security
interest, shall in each case be limited by the terms of that certain
Intercreditor and Subordination Agreement dated as of April 13, 2001 (the
"INTERCREDITOR AGREEMENT"), between and among Lender, Allied Capital
Corporation, and Startec Global Operating Company.

2.3.     LIMITED WAIVER OF ARTICLE IX (EVENTS OF DEFAULT).

         (a) Effective on, and subject to the occurrence of, the Amendment
Effective Date, the Lender waives the Event of Default under Section 9.01(a) of
ARTICLE IX of the Loan Agreement caused solely by the payment by the Borrower of
the Defaulted Loan Payments more than ten days after their respective due dates.

         (b) Effective on, and subject to the occurrence of, the Amendment
Effective Date, the Lender waives the Event of Default under Section 9.01(c) of
ARTICLE IX of the Loan Agreement caused solely by the failure of the Borrower to
comply with the financial covenants required by Section 7.14 and Schedule 7.14
of the Loan Agreement (as that schedule existed prior to the Amendment Effective
Date) for the fiscal quarter ended December 31, 2000.

                                   ARTICLE III
                                  AFFIRMATIONS

3.1.     REAFFIRMATION AND RELEASE.

         (a) The Borrower hereby represents, warrants and covenants that (i) the
representations and warranties of the Borrower contained in the Loan Agreement
and the other Loan Documents (as may have been modified by Article 2 of that
certain Amendment to Loan and Security Agreement, dated as of June 30, 2000,
between Borrower and Lender and EXHIBIT 4.07, EXHIBIT

                                       5

<PAGE>

4.10, EXHIBIT 4.11, EXHIBIT 4.12, EXHIBIT 4.14, EXHIBIT 4.16, EXHIBIT 4.24 and
EXHIBIT 4.30 attached hereto) are true and correct in all material respects with
the same effect as if now made (unless stated to relate solely to an earlier
date, in which case such representations and warranties were true and correct as
of such earlier date), (ii) there has been no Material Adverse Change in the
financial condition or results of operations of Borrower since the date of the
projections previously delivered to Lender on March 15, 2001, (iii) on the date
hereof no Default or Event of Default has occurred and is continuing or exists
(except for (1) the payment by the Borrower of the Defaulted Loan Payments more
than ten days after their respective due dates and (2) the failure of the
Borrower to comply with the financial covenants required by Section 7.14 and
Schedule 7.14 of the Loan Agreement (as that schedule existed prior to the
Amendment Effective Date) for the fiscal quarter ended December 31, 2000), or
will occur or exist after giving effect to this Second Amendment, (iv) the
execution and terms of this Second Amendment have been duly authorized by all
necessary and appropriate corporate action for the Borrower, and (v) the
Borrower's execution of this Second Amendment does not require the consent of or
the giving of notice to any other Person other than those consents which the
Borrower already has obtained.

         (b) The Borrower reaffirms that the Loan Agreement, as amended hereby,
and the other Loan Documents to which it is a party are and remain the valid and
binding obligations of the Borrower, enforceable against the Borrower in
accordance with their respective terms. The Borrower acknowledges that the
Lender is not waiving, and the Borrower is required to and shall comply with,
the financial covenants for the fiscal quarter ended December 31, 2000, required
by Section 7.14 and Schedule 7.14 of the Loan Agreement in effect on and after
the Amendment Effective Date.

         (c) The Borrower hereby acknowledges and stipulates it has no claims or
causes of action against the Lender, and/or its officers, directors, agents,
and/or employees, of any kind whatsoever, and hereby releases the Lender and its
officers, directors, agents, and employees from any and all claims, causes of
action, demands and liabilities of any kind whatsoever, whether direct or
indirect, fixed or contingent, liquidated or non-liquidated, disputed or
undisputed, known or unknown, arising under contract, warranty, tort (including
negligence), strict liability or otherwise, which the Borrower has or may
acquire in the future under any event, circumstance, action, failure to act, or
otherwise from any time prior to, and through, the date of this Second
Amendment, whether relating in any way to the Loan Agreement, any other Loan
Document(s), any Collateral or otherwise.

                                       6

<PAGE>

                                   ARTICLE IV
                                  CONSIDERATION

4.1. CONSIDERATION. In consideration of Lender's agreement to amend the Loan
Agreement pursuant to this Second Amendment, Borrower shall pay Lender the
Amendment Fee, and grants Lender a warrant for 25,000 shares of Borrower's
common stock at a price equal to the lesser of (i) the closing market price of
the Borrower's common stock on the date hereof or (ii) the closing market price
of the Borrower's common stock on the date that is one day prior to the date of
any public announcement of the Senior Note Restructuring. The warrant granted
hereby shall be evidenced by a form of warrant with terms (including such terms
and conditions pertaining to registration rights and anti-dilution rights) no
less favorable to Lender than those contained in that certain Stock Purchase
Warrant, issued as of June 30, 2000, to Allied Capital Corporation, attached
hereto in the form of EXHIBIT E, together with such opinions of counsel to
Borrower and certificates of Borrower as Lender shall require in its sole
discretion, each of which shall be issued to Lender immediately prior to the
effectiveness of any Senior Note Restructuring.

                                    ARTICLE V
                           CONDITIONS TO EFFECTIVENESS

5.1. AMENDMENT EFFECTIVE DATE. This Second Amendment shall become effective as
of the date first above written (the "AMENDMENT EFFECTIVE DATE"), when the
Lender shall have received:

         (a) $7,500,000, representing payment of (i) the Defaulted Loan Payment
and (ii) the regularly scheduled loan payments of principal and interest
required by Section 2.02(b) and (c) of the Loan Agreement due on or before May
1, 2001, June 1, 2001, July 1, 2001, and August 1, 2001;

         (b) counterparts of this Second Amendment duly executed by the Borrower
and the Lender;

         (c) counterparts of the First Amendment to the Pledge Agreement dated
as of April 13, 2001 (the "PLEDGE AGREEMENT AMENDMENT"), in the form of EXHIBIT
B to this Second Amendment duly executed by the Borrower and the Lender;

         (d) counterparts of the First Amendments to Guaranty Agreements dated
as of April 13, 2001 (the "GUARANTY AMENDMENTS"), in the forms of EXHIBIT C-1
and C-2 to this Second Amendment executed by the respective Guarantors and the
Lender;

         (e) counterparts of the Intercreditor Agreement in the form of EXHIBIT
D executed by Startec Global Operating Company and the Lender;

         (f) an opinion of counsel to the Borrower satisfactory to Lender it its
sole discretion;

                                       7

<PAGE>

         (g) a certificate and its attachments (the "OFFICERS' CERTIFICATE")
dated the date first above written executed by a Responsible Officer of the
Borrower and a Responsible Officer of each of the Guarantors certifying that the
resolutions attached to the Officers' Certificate are true and correct copies of
all corporate action necessary to be taken by the Borrower and the Guarantors to
authorize the execution and delivery of this Second Amendment, the Pledge
Agreement Amendment, the Guaranty Amendments and the Intercreditor Agreement, as
applicable, and such resolutions remain in full force and effect; and the
Responsible Officers of the Borrower and of each of the Guarantors whose the
names, true signatures and incumbency are set forth therein are authorized to
execute and deliver this Second Amendment, the Pledge Agreement Amendment, the
Guaranty Amendments and the Intercreditor Agreement, as applicable;

         (h) the Amendment Fee and confirmation from Lender's counsel that all
fees and expenses of Lender's counsel outstanding on the date hereof have been
paid in full.

         (i) The transaction contemplated by the Receivables Purchase Agreement
shall have closed and Allied Capital Corporation shall have advanced $15,000,000
to the Borrower for application to, among other things, the uses provided
herein.

                                   ARTICLE VI
                                  MISCELLANEOUS

6.1. CROSS REFERENCES. References in this Second Amendment to any article or
section are, unless otherwise specified, to such article or section of this
Second Amendment.

6.2. INSTRUMENT PURSUANT TO LOAN AGREEMENT. This Second Amendment is a Loan
Document executed pursuant to the Loan Agreement and shall (unless otherwise
expressly indicated therein) be construed, administered, and applied in
accordance with all of the terms and provisions of the Loan Agreement (including
that it shall be governed by the laws of the State of New York and that the
Borrower shall pay, or demand, all out-of-pocket expenses (including reasonable
attorneys' fees) of the Lender in connection herewith). Any term or provision of
and any modification or waiver effected by this Second Amendment may be modified
in any manner by an instrument in writing executed by the Borrower and the
Lender. Except as expressly amended or waived hereby, all of the
representations, warranties, terms, covenants and conditions of the Loan
Agreement shall remain unmodified and unwaived. The modifications and waiver set
forth herein shall be limited precisely as provided for herein to the provisions
expressly modified or waived herein and shall not be deemed to be an amendment
of, consent to or modification or waiver of any other term or provision of the
Loan Agreement or any other Loan Document or of any transaction or further or
future action on the part of the Borrower or any Guarantor which could require
the consent of the Lender under the Loan Agreement or any other Loan Document.
Unless otherwise defined herein or the context otherwise requires, capitalized
terms used in this Second Amendment, including its preamble and recitals, have
the meanings provided in the Loan Agreement.

6.3. SUCCESSORS AND ASSIGNS. This Second Amendment shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns.

                                       8

<PAGE>

6.4. COUNTERPARTS. This Second Amendment may be executed by the parties hereto
in several counterparts which shall be executed by the Borrower and the Lender,
as the case may be, all of which shall be deemed to be an original and which
shall constitute together but one and the same agreement.

6.5. EVENT OF DEFAULT. It is understood and agreed that any breach by the
Borrower or any Guarantor of any representation, warranty or covenant contained
herein or the Officers' Certificate shall constitute an Event of Default.

                         [NEXT PAGE IS SIGNATURE PAGE.]

                                       9

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Second
Amendment to be executed by the respective officers hereunder duly authorized to
be effective as of the day and year first above written.

                                            BORROWER:
                                            --------

                                            STARTEC GLOBAL
                                            COMMUNICATIONS CORPORATION

                                            BY: /s/ PRABHAV V. MANIYAR
                                               -----------------------------

                                            TITLE: Chief Financial Officer
                                                   and Corporate Vice President
                                                   ----------------------------

                                                    LENDER:
                                                    ------

                                                    NTFC CAPITAL CORPORATION

                                                    BY: /s/ LI-BIN WANG
                                                       ------------------------

                                                    TITLE: Portfolio Manager
                                                          ---------------------

                                      10

<PAGE>

                                    EXHIBIT A

                                                                SCHEDULE 7.14 TO
                                                     LOAN AND SECURITY AGREEMENT

                               FINANCIAL COVENANTS

         (a) Except as provided by item (b) to this Schedule 7.14, the Borrower
shall at all times comply with the following financial covenants:

                  (1) TOTAL SECURED DEBT TO TOTAL CAPITALIZATION. At the time of
each Advance and at the end of each fiscal quarter, the Borrower shall maintain
a ratio of Total Secured Debt to Total Capitalization of not more than .50:1.
For the purposes of that ratio, the following definitions shall apply:

                           (i) "TOTAL CAPITALIZATION": All equity as shown on
                  the balance sheet of the Borrower plus all funded Indebtedness
                  of the Borrower.

                           (ii) "TOTAL SECURED DEBT": Indebtedness of the
                  Borrower secured by a Lien on assets of the Borrower,
                  excluding any Indebtedness secured solely by accounts
                  receivable.

                  (2) CASH FLOW COVERAGE RATIO. Commencing with the fiscal
quarter ended June 30, 2002, the Borrower shall maintain at the end of each
fiscal quarter a minimum Cash Flow Coverage Ratio (for the past four fiscal
quarters ending with the end of such fiscal quarter) of at least 1.25:1. For the
purposes of that ratio, "Cash Flow Coverage Ratio" shall mean: at the end of any
fiscal period, the ratio of the Borrower's Cash Flow plus interest income for
the fiscal period to the Borrower's Debt Service for the fiscal period.

                  (3) MINIMUM REVENUES. The Borrower shall have at the end of
each fiscal quarter shown below "Minimum Revenues" for the fiscal quarter ending
on the date of measurement equal to or greater than the minimum amount for such
fiscal quarter required by the following table:

<TABLE>
<CAPTION>
                        QUARTER ENDED                                       AMOUNT
                        -------------                                       ------
<S>                                                                  <C>
                      March 31, 2001                                     53,000,000
                      June 30, 2001                                      57,000,000
                      September 30, 2001                                 60,000,000
                      December 31, 2001                                  75,000,000
                      March 31, 2002                                     87,000,000
                      June 30, 2002                                      97,000,000
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
                        QUARTER ENDED                                       AMOUNT
                        -------------                                       ------
<S>                                                                  <C>
                      September 30, 2002                                103,000,000
                      December 31, 2002                                 108,000,000
                      March 31, 2003                                    114,000,000
                      June 30, 2003                                     120,000,000
                      September 30, 2003                                125,000,000
                      December 31, 2003                                 127,000,000
                      March 31, 2004                                    131,000,000
                      June 30, 2004                                     135,000,000
                      September 30, 2004                                138,000,000
                      December 31, 2004                                 142,000,000

</TABLE>

                      The phrase "Minimum Revenues" shall mean the Borrower's
total consolidated revenues for the fiscal quarter ending on the date of
measurement.

                  (4) MINIMUM EBITDA. The Borrower shall have at the end of each
fiscal quarter shown below EBITDA for the fiscal quarters ending on the date of
measurement equal to or greater than the minimum amount required for such fiscal
quarter by the following table:

<TABLE>
<CAPTION>
                           QUARTER ENDED                             AMOUNT
                           -------------                             ------
<S>                                                            <C>
                         March 31, 2001                           (2,500,000)
                         June 30, 2001                                    -0-
                         September 30, 2001                         1,000,000
                         December 31, 2001                          5,000,000
                         March 31, 2002                             5,000,000
                         June 30, 2002                              6,000,000
                         September 30, 2002                         7,000,000
                         December 31, 2002                          8,000,000
                         March 31, 2003                             9,000,000
                         June 30, 2003                             11,000,000
                         September 30, 2003                        12,000,000
                         December 31, 2003                         14,000,000
                         March 31, 2004                            16,000,000
                         June 30, 2004                             17,000,000
                         September 30, 2004                        18,000,000
                         December 31, 2004                         20,000,000

</TABLE>

<PAGE>

                  (5) Commencing with the fiscal quarter ended December 31,
2000, the Borrower shall have at the end of each fiscal quarter shown below
gross margin for such fiscal quarter not less than the amount required for such
fiscal quarter by the following table:

<TABLE>
<CAPTION>
                             QUARTER ENDED                     AMOUNT
                             -------------                     ------
<S>                                                         <C>
                            March 31, 2001                       22%
                            June 30, 2001                        25%
                            September 30, 2001                   25%
                            December 31, 2001                    26%
                            March 31, 2002                       26%
                            June 30, 2002                        26%
                            September 30, 2002                   26%
                            December 31, 2002                    27%

</TABLE>

                  (6) Commencing with the fiscal quarter ended December 31,
2000, the Borrower shall maintain at all times the minimum Cash balance required
for such quarter by the following table:

<TABLE>
<CAPTION>

                             QUARTER ENDED                             AMOUNT
                             -------------                             ------
<S>                                                              <C>
                            March 31, 2001                           -0-
                            June 30, 2001                            2,000,000
                            September 30, 2001                       5,000,000
                            December 31, 2001                        5,000,000
                            March 31, 2002                           5,000,000
                            June 30, 2002                            9,000,000
                            September 30, 2002                       8,000,000
                            December 31, 2002                        9,000,000

</TABLE>

(b) (i) The Borrower shall not be required to comply with the requirements of
item (a) of this Schedule 7.14, commencing with the fiscal quarter ended March
31, 2001 and ending with the fiscal quarter ended December 31, 2001, if and for
such time as, the following conditions are met:

                  (1) The Borrower shall have completed the Senior Note
         Restructuring on the terms as described in that certain letter
         agreement delivered simultaneously with this Second Amendment by
         Borrower to Lender, relating to the Senior Note Restructuring.

                  (2) The Borrower receives on or before August 1, 2001 at least
         $5,000,000 from the issuance by it of equity or Subordinated
         Indebtedness, the structure of which shall be satisfactory to Lender in
         its sole discretion;

<PAGE>

                  (3) The Borrower shall not make capital expenditures
         individually or in the aggregate during fiscal year 2001 in excess of
         $5,000,000; and

                  (4) The Borrower shall have at the end of each fiscal quarter
         shown below EBITDA for the fiscal quarter ending on the date of
         measurement equal to or greater than the minimum amount required for
         such fiscal quarter by the following table:

<TABLE>
<CAPTION>
                       FISCAL QUARTER ENDED                          MINIMUM EBITDA
                       --------------------                          --------------
<S>                                                               <C>
                     March 31, 2001                                  ($2,500,000)
                     June 30, 2001                                        -0-
                     September 30, 2001                                   -0-
                     December 31, 2001                                    -0-

</TABLE>

         (ii) If the Borrower fails to satisfy at the time it is to be satisfied
         a condition set forth in item (b)(i) of this Schedule 7.14, the
         Borrower shall immediately be required to comply with the requirements
         of item (a) of this Schedule 7.14 commencing retroactively to the first
         day of the fiscal quarter in which the Borrower first failed to comply
         with any of the conditions set forth in item (b)(i) of this Schedule
         7.14.<PAGE>

                                                                   EXHIBIT 10.58

                                                                  EXECUTION COPY

                         RECEIVABLES PURCHASE AGREEMENT

                           dated as of April 13, 2001

                                      Among

                        STARTEC GLOBAL OPERATING COMPANY

                                   as Seller,

                        STARTEC GLOBAL LICENSING COMPANY

                                   as Seller,

                                       and

                           ALLIED CAPITAL CORPORATION

                                  as Purchaser

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>

                                                                                                        PAGE
                                                                                                        ----

<S>                <C>                                                                                 <C>

ARTICLE I
PURCHASE ARRANGEMENTS...................................................................................  5
Section 1.01       Purchase Facility....................................................................  5
Section 1.02       Increases............................................................................  5
Section 1.03       Decreases............................................................................  6
Section 1.04       Payment Requirements.................................................................  6

ARTICLE II
PAYMENTS AND COLLECTIONS................................................................................  6
Section 2.01       Collection Account...................................................................  6
Section 2.02       Collections Prior to Amortization....................................................  7
Section 2.03       Collections Following Amortization...................................................  7
Section 2.04       Application of Collections...........................................................  7
Section 2.05       Payment Rescission...................................................................  8

ARTICLE III
DISCOUNT
Section 3.01       Discount ............................................................................  8
Section 3.02       Discount Payments....................................................................  8
Section 3.03       Calculation of Discount..............................................................  8

ARTICLE IV
REPRESENTATIONS AND WARRANTIES..........................................................................  8
Section 4.01       Representations and Warranties of Sellers............................................  8
Section 4.02       Purchaser Representations and Warranties.............................................  12

ARTICLE V
CONDITIONS OF PURCHASES..................................................................................13
Section 5.01       Conditions Precedent to Initial Incremental Purchase..................................13
Section 5.02       Conditions Precedent to All Purchases and Reinvestments...............................13

ARTICLE VI
COVENANTS................................................................................................14
Section 6.01       Affirmative Covenants of the Sellers .................................................14
Section 6.02       Negative Covenants of the Sellers.................................................... 18

</TABLE>

                                                                               2
<PAGE>

                                TABLE OF CONTENTS
                                   (CONTINUED)

<TABLE>
<CAPTION>

<S>                <C>                                                                                 <C>

ARTICLE VII
ADMINISTRATION AND COLLECTION............................................................................19
Section 7.01       Designation of Servicer...............................................................19
Section 7.02       Duties of Servicer....................................................................19
Section 7.03       Responsibilities of Sellers...........................................................20
Section 7.04       Reports...............................................................................20
Section 7.05       Servicing Fees........................................................................20

ARTICLE VIII
AMORTIZATION EVENTS......................................................................................20
Section 8.01       Amortization Events...................................................................20
Section 8.02       Remedies..............................................................................22

ARTICLE IX
INDEMNIFICATION..........................................................................................22
Section 9.01       Indemnities by the Sellers............................................................22
Section 9.02       Other Costs and Expenses..............................................................25

ARTICLE X
MISCELLANEOUS............................................................................................26
Section 10.01      Waivers and Amendments................................................................26
Section 10.02      Notices...............................................................................26
Section 10.03      Protection of Ownership Interests of the Purchaser....................................26
Section 10.04      Confidentiality.......................................................................27
Section 10.05      Limitation of Liability...............................................................27
Section 10.06      Choice of Law.........................................................................27
Section 10.07      Consent to Jurisdiction...............................................................28
Section 10.08      Waiver of Jury Trial..................................................................28
Section 10.09      Integration; Binding Effect; Survival of Terms........................................28
Section 10.10      Counterparts; Severability; Usury Laws; Section References............................28
Section 10.11      Materiality; Material Adverse Effect..................................................29
Section 10.12      Assignment............................................................................29
Section 10.13      Characterization......................................................................29

</TABLE>

                                                                               3
<PAGE>

                                TABLE OF CONTENTS
                                   (CONTINUED)

<TABLE>
<CAPTION>

EXHIBITS AND SCHEDULES

<S>              <C>

Exhibit I         Definitions
Exhibit II        Form of Purchase Notice
Exhibit III       Places of Business of the Sellers; Locations of Records; Federal
                  Employer Identification Number(s)
Exhibit IV        Name and Address of Collection Bank and Collection Account Details
Exhibit V         Form of Compliance Certificate
Exhibit VI        Form of Collection Account Agreement
Exhibit VII       Credit and Collection Policy
Exhibit VIII      Form of Weekly Report

Schedule A        List of Closing Documents
Schedule B        Disclosure Schedule
Schedule C        Identified Accounts Receivables
Schedule D        Excluded Receivables
Schedule E        Commercial Accounts Receivable
Schedule F        Retail Accounts Receivable

</TABLE>

                                                                               4
<PAGE>

                        STARTEC GLOBAL OPERATING COMPANY
                        STARTEC GLOBAL LICENSING COMPANY

                         RECEIVABLES PURCHASE AGREEMENT

This Receivables Purchase Agreement, dated as of April 13, 2001, is among
Startec Global Operating Company, a Delaware corporation ("SGOC" and a
"Seller"), Startec Global Licensing Company, a Delaware corporation (a "Seller",
and together with SGOC, the "Sellers") and Allied Capital Corporation, a
Maryland Corporation (the "Purchaser"). Unless defined elsewhere herein,
capitalized terms used in this Agreement shall have the meanings assigned to
such terms in Exhibit I.

                             PRELIMINARY STATEMENTS

Sellers desire to transfer and assign Purchaser Interests to the Purchaser from
time to time. Purchaser shall, in accordance with and subject to the terms and
conditions hereof, purchase Purchaser Interests from Sellers from time to time.

                                    ARTICLE I
                              PURCHASE ARRANGEMENTS

                  1.01 PURCHASE FACILITY. (a) Upon the terms and subject to the
conditions hereof, Sellers may, at their option, sell and assign Purchaser
Interests to Purchaser from time to time during the period from the date hereof
to but not including the Facility Termination Date.

                  (b) As of the date of this Agreement the "Purchase Limit"
shall be $15,000,000. The "Purchase Price" of any Incremental Purchase of a
Purchaser Interest shall mean the least of (i) the amount requested by Sellers
in the applicable Purchase Notice delivered in connection with Section 1.02,
(ii) the unused portion of the applicable Purchase Limit on the relevant
purchase date and (iii) the excess, if any, of the Net Receivables Balance (less
the Loss Reserve) on the relevant purchase date over the aggregate outstanding
amount of Aggregate Capital determined as of the date of the most recent Weekly
Report, taking into account any proposed Incremental Purchase.

                  1.02 INCREASES. Sellers shall provide the Purchaser with at
least two (2) Business Days' prior notice in a form set forth as Exhibit II
hereto of each Incremental Purchase (a "Purchase Notice"). Each Purchase Notice
shall be subject to Section 5.02 hereof and, except as set forth below, shall be
irrevocable and shall specify the requested Purchase Price (which shall not be
less than $1,000,000) and date of purchase (which, in the case of any
Incremental Purchase (after the initial Incremental Purchase hereunder), shall
only be on a Settlement Date unless otherwise consented to by the Purchaser). On
the date of each Incremental Purchase, (a) upon satisfaction of the applicable
conditions precedent set forth in Article V, Purchaser shall deposit to the
Facility Account, in immediately available funds, no later than 12:00 noon
(Washington D.C. time), an amount equal to the Purchase Price of the Purchaser
Interest that Purchaser is then purchasing and (b) Sellers hereby sell and
assign to Purchaser full legal and beneficial ownership of such Purchaser

                                                                               5
<PAGE>

Interest free and clear of any Adverse Claim, except as created in favor of
Purchaser under the Transaction Documents.

                  1.03 DECREASES. Sellers shall provide the Purchaser with prior
written notice in conformity with the Required Notice Period (a "Reduction
Notice") of any proposed reduction of Aggregate Capital from Collections. Such
Reduction Notice shall designate (i) the date (the "Proposed Reduction Date")
upon which any such reduction of Aggregate Capital shall occur (which date shall
give effect to the applicable Required Notice Period), and (ii) the amount of
Aggregate Capital to be reduced which shall be applied to the Purchaser
Interests of Purchaser (the "Aggregate Reduction"). Only one (1) Reduction
Notice shall be outstanding at any time. No Aggregate Reduction shall be made
following the occurrence of the Amortization Date without the consent of the
Purchaser.

                  1.04 PAYMENT REQUIREMENTS. All amounts to be paid or deposited
by any Seller pursuant to any provision of this Agreement shall be paid or
deposited in accordance with the terms hereof no later than 12:00 noon
(Washington, D.C. time) on the day when due in immediately available funds, and
if not received before 12:00 noon (Washington, D.C. time) shall be deemed to be
received on the next succeeding Business Day. If such amounts are payable to the
Purchaser, they shall be paid to the Purchaser, for the account of the
Purchaser, by wire transfer of immediately available funds until otherwise
notified by the Purchaser. Upon notice to Sellers, the Purchaser may debit the
Collection Account for all amounts due and payable hereunder. If any amount
hereunder shall be payable on a day which is not a Business Day, such amount
shall be payable on the next succeeding Business Day.

                                   ARTICLE II
                                   COLLECTIONS

                  2.01 COLLECTION ACCOUNT. Sellers hereby irrevocably transfer
(which transfer is coupled with an interest) to the Purchaser and NTFC for the
benefit of the Purchaser and NTFC, the exclusive ownership, dominion and control
over the Collection Account. Sellers hereby authorize the Purchaser and NTFC,
and agree that the Purchaser and NTFC shall be entitled to (a) endorse each
Seller's name on checks and other instruments representing Collections, (b)
enforce the Receivables, the related Contracts, Invoices and the Related
Security and (c) take such action as shall be necessary or desirable to cause
all cash, checks and other instruments constituting Collections of Receivables
to come into the possession of the Purchaser rather than Sellers. If at any time
Sellers receive any Collections or are deemed to receive any Collections,
Sellers shall immediately pay such Collections or Deemed Collections to the
Collection Account for application in accordance with the terms and conditions
hereof and, at all times prior to such payment, such Collections or Deemed
Collections shall be held in trust by Sellers for the exclusive benefit of the
Purchaser.

                  2.02 COLLECTIONS PRIOR TO AMORTIZATION. Prior to the
Amortization Date, any Collections and/or Deemed Collections paid to the
Collection Account shall be held in trust (a) for the payment of any accrued and
unpaid Aggregate Unpaids as the same become due and payable in accordance with
the terms of this Agreement, (b) for payment of any Aggregate Reduction and (c)
for Reinvestment as provided in this Section 2.02. With respect to any
Collections received prior to the Amortization Date, Sellers hereby request and
the Purchaser hereby agrees to make,

                                                                               6
<PAGE>

simultaneously with such receipt, a reinvestment (each a "Reinvestment") with
that portion of the balance of each and every Collection received that is part
of the Purchaser Interest, such that after giving effect to such Reinvestment,
the amount of Aggregate Capital of all Purchaser Interests immediately after
such receipt and corresponding Reinvestment shall be equal to the amount of
Aggregate Capital immediately prior to such receipt. Accordingly, except on days
when Aggregate Unpaids are due or there is an Aggregate Reduction, prior to an
Amortization Event all Collections shall be paid to the Sellers, in all events
subject to any rights of NTFC or Purchaser under the Intercreditor and
Subordination Agreement and the NTFC Loan Agreement.

                  2.03 COLLECTIONS FOLLOWING AMORTIZATION. Subject to Section
2.04, on the Amortization Date and on each Business Day thereafter, (a) all
Collections received on such day shall be applied for the payment of any accrued
and unpaid Obligations outstanding as of such day, (b) after payment of all such
Obligations, the portion of Collections received on such day equal to the
product of the amount of such Collections multiplied by the then applicable
Purchaser Interest shall be applied to reduce the Capital associated with the
Purchaser Interest and any other Aggregate Unpaids and (c) after the
satisfaction of the amounts payable in (a) and (b) of this Section 2.03, any
Collections then remaining shall be retained in the Collection Account for
allocation and distribution to Sellers, in all events subject to any rights of
NTFC or Purchaser under the Intercreditor and Subordination Agreement and the
NTFC Loan Agreement.

                  2.04 APPLICATION OF COLLECTIONS. If there shall be
insufficient Collections deposited in the Collection Account to satisfy in full
the payments required pursuant to Section 2.03(a) and Section 2.03(b), the
Collections shall be distributed as follows:

                           FIRST, to the reimbursement of the Purchaser's costs
                           of collection and enforcement of this Agreement,

                           SECOND, to the Purchaser for the payment of all
                           Accrued Portion of Discount,

                           THIRD, for the payment of all other unpaid
                           Obligations,

                           FOURTH, to the reduction of the Aggregate Capital
                           until the Aggregate Capital is reduced to 0,

                           FIFTH, to the payment of any outstanding Servicing
                           Fees,

                           SIXTH, after the Aggregate Unpaids have been
                           indefeasibly reduced to zero, to Sellers.

                   2.05 PAYMENT RESCISSION. No payment of any of the Aggregate
Unpaids shall be considered paid or applied hereunder to the extent that, at any
time, all or any portion of such payment or application is rescinded by
application of law or judicial authority, or must otherwise be returned or
refunded for any reason. Sellers shall remain obligated for the amount of any
payment or application so rescinded, returned or refunded, and shall promptly
pay to the Purchaser (for application to the Person or Persons who suffered such
rescission, return or refund) the full amount thereof, plus the Default Fee from
the date of any such rescission, return or refunding.

                                                                               7
<PAGE>

                                   ARTICLE III
                                    DISCOUNT

                  3.01 DISCOUNT. In consideration of each Incremental Purchase
(including the initial Incremental Purchase) and each Reinvestment, the Discount
shall accrue against, and be paid from, Collections with respect to the Capital
associated with the Purchaser Interest for each day that any Capital in respect
of the Purchaser Interest is outstanding.

                  3.02 CURRENT PORTION OF DISCOUNT PAYMENTS. On each Settlement
Date, Purchaser shall be paid from Collections an aggregate amount equal to all
accrued and unpaid Current Portion of Discount in respect of the Capital
associated with the Purchaser Interest for the immediately preceding Accrual
Period in accordance with Article II. Any accrued and unpaid Current Portion of
Discount not paid in full on each Settlement Date shall be referred to as the
"Delinquent Current Portion of Discount". The Delinquent Current Portion of
Discount shall compound quarterly and shall, commencing as of the first day
after each applicable Settlement Date, be subject to the Default Fee to the
extent, and until such time, that the Delinquent Current Portion of the Discount
and the Default Fee accrued thereon shall be paid in full. The accrued and
unpaid Delinquent Current Portion of Discount and the Default Fee accrued
thereon shall be payable in full on the Amortization Date.

                  3.03 CALCULATION OF CURRENT PORTION OF DISCOUNT. On the third
Business Day immediately preceding each Settlement Date, Purchaser shall
calculate the aggregate amount of Current Portion of Discount for the applicable
Accrual Period and shall notify Sellers of such aggregate amount. All
computations of the Current Portion of Discount shall be made on the basis of a
year of 360 days for the actual number of days elapsed.

                                   ARTICLE IV
                         REPRESENTATIONS AND WARRANTIES

                  4.01 REPRESENTATIONS AND WARRANTIES OF SELLERS.

                  Sellers represent and warrant to Purchaser that the statements
contained in this Article IV are true and correct, except as set forth in the
disclosure schedule delivered by Sellers to Purchaser immediately prior to the
execution and delivery of this Agreement (the "Disclosure Schedule"). The
Disclosure Schedule shall be arranged in paragraphs corresponding to the
numbered Sections contained in this Article IV, and the disclosure with respect
to any section of the Disclosure Schedule shall qualify only the corresponding
Section in this Article IV.

                  Subject to the foregoing, each Seller hereby represents and
warrants to the Purchaser, as to itself and as to the other Seller, that as of
the date hereof and as of the date of each Incremental Purchase and as of the
date of each Reinvestment that:

                  (a) Corporate Existence and Power. Such Seller is a
corporation duly organized, validly existing and in good standing under the laws
of its state of incorporation. Seller is duly qualified to do business and is in
good standing as a foreign corporation, and has and holds all

                                                                               8
<PAGE>

corporate power and all governmental licenses, authorizations, consents and
approvals required to carry on its business in each jurisdiction in which its
business is conducted.

                  (b) Power and Authority; Due Authorization, Execution and
Delivery. The execution and delivery by such Seller of this Agreement and each
other Transaction Document to which it is a party, and the performance of its
obligations hereunder and thereunder and such Seller's use of the proceeds of
purchases made hereunder, are within its corporate powers and authority and have
been duly authorized by all necessary corporate action on its part. This
Agreement and each other Transaction Document to which such Seller is a party
have been duly executed and delivered by such Seller.

                  (c) No Conflict. The execution and delivery by such Seller of
this Agreement and each other Transaction Document to which it is a party, and
the performance of its obligations hereunder and thereunder do not contravene or
violate, except where any such violation or contravention would not result in a
Material Adverse Effect (i) its certificate or articles of incorporation or
by-laws, (ii) any law, rule or regulation applicable to it, (iii) any agreement,
contract or instrument to which it or any of its Affiliates is a party or by
which it or any of its Affiliates or any of their property is bound, or (iv) any
order, writ, judgment, award, injunction or decree binding on or affecting it or
its properties, and do not result in the creation or imposition of any Adverse
Claim on any assets of such Seller or its Subsidiaries (except as created
hereunder) and no transaction contemplated hereby requires compliance with any
bulk sales act or similar law.

                  (d) Governmental Authorization. Other than the filing of the
financing statements required hereunder, no authorization or approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required for the due execution and delivery by such Seller of
this Agreement and each other Transaction Document to which it is a party and
the performance of its obligations hereunder and thereunder.

                  (e) Actions, Suits. Except as set forth on the Disclosure
Schedule, there are no actions, suits or proceedings pending, or to the best of
such Seller's knowledge, threatened, against or affecting such Seller or any of
its properties, in or before any court, arbitrator or other body. Such Seller is
not in default with respect to any order of any court, arbitrator or
governmental body.

                  (f) Binding Effect. This Agreement and each other Transaction
Document to which such Seller is a party constitute the legal, valid and binding
obligations of such Seller enforceable against such Seller in accordance with
their respective terms, subject to any applicable bankruptcy or similar laws
affecting creditor's rights generally and to equitable principles.

                  (g) Disclosure. None of the statements made in this Agreement
or in the Disclosure Schedule delivered herewith, nor any other written
statement or document furnished by or on behalf of either of the Sellers to
Purchaser contained, as of its respective date, or now contain (except as
disclosed to the Purchaser in writing), any untrue statement of a material fact
or as of any such date omitted, or now omit (except as disclosed to the
Purchaser in writing), a material fact necessary to make any of the statements
contained herein and therein not misleading.

                  (h) Use of Proceeds. No proceeds of any purchase hereunder
shall be used (i) for a purpose that violates, or would be inconsistent with,
Regulation T, U or X promulgated by the

                                                                               9
<PAGE>

Board of Governors of the Federal Reserve System from time to time or (ii) to
acquire any security in any transaction which is subject to Section 12, 13 or 14
of the Securities Exchange Act of 1934, as amended.

                  (i) Good Title. Except as set forth in the Disclosure
Schedule, immediately prior to each purchase hereunder, such Seller shall be the
legal and beneficial owner of the Receivables and Related Security with respect
thereto, free and clear of any Adverse Claim, except as created by the
Transaction Documents in favor of Purchaser. There have been duly filed all
financing statements or other similar instruments or documents necessary under
the UCC (or any comparable law) of all appropriate jurisdictions to perfect such
Seller's ownership interest in each Receivable, its Collections and the Related
Security, to the full extent that such security interest can be perfected by the
filing of a financing statement under the UCC. Each Contract which is "chattel
paper" within the meaning of Section 9-105 of the UCC of all applicable
jurisdictions has been stamped to reflect the fact that such Contract has been
assigned to such Seller.

                  (j) Perfection. This Agreement, together with the filing of
the financing statements contemplated hereby, is effective to, and shall, upon
each purchase hereunder, transfer to the Purchaser a valid and perfected first
priority undivided percentage ownership or security interest in each Receivable
existing or hereafter arising and in the Related Security and Collections with
respect thereto, free and clear of any Adverse Claim, except as created by the
Transaction Documents. There have been duly filed all financing statements or
other similar instruments or documents necessary under the UCC (or any
comparable law) of all appropriate jurisdictions to perfect the Purchaser's
ownership or security interest in the Receivables, the Related Security and the
Collections to the full extent such ownership or security interest can be
perfected by the filing of financing statements under the UCC (or any comparable
law).

                  (k) Places of Business and Locations of Records. The principal
places of business and chief executive office of such Seller and the offices
where it keeps all of its Records are located at the address(es) listed on
Exhibit III or such other locations of which the Purchaser has been notified in
accordance with Section 6.02(a) in jurisdictions where all action required by
Section 10.04(a) has been taken and completed. Such Seller's Federal Employer
Identification Number is correctly set forth on Exhibit III.

                  (l) Collections. The conditions and requirements set forth in
Section 6.01(h) and Section 7.02 have at all times been satisfied and duly
performed. The name and address of the Collection Bank, together with the
account number of the Collection Account for Sellers at the Collection Bank is
listed on Exhibit IV. Such Seller has not granted any Person, other than the
Purchaser as contemplated by this Agreement, dominion and control of the
Collection Account, or the right to take dominion and control of the Collection
Account at a future time or upon the occurrence of a future event.

                  (m) Material Adverse Effect. Except as set forth on the
Disclosure Schedule, since the date of this Agreement, no event has occurred
that would have a Material Adverse Effect.

                  (n) Names. In the past five (5) years, such Seller has not
used any corporate names, trade names or assumed names other than the name in
which it has executed this Agreement, and other than eStart and Startec.

                                                                              10
<PAGE>

                  (o) Ownership of Sellers. SGCC owns, directly or indirectly,
100% of the issued and outstanding capital stock of such Seller, free and clear
of any Adverse Claim, except that all of the outstanding shares of capital stock
of SGOC are pledged to NTFC. Such capital stock is validly issued, fully paid
and non-assessable, and there are no options, warrants or other rights to
acquire securities of such Seller.

                  (p) Not a Holding Company or an Investment Company. Such
Seller is not a "holding company" or a "subsidiary holding company" of a
"holding company" within the meaning of the Public Utility Holding Company Act
of 1935, as amended, or any successor statute. Seller is not an "investment
company" within the meaning of the Investment Company Act of 1940, as amended,
or any successor statute.

                  (q) Compliance with Law. Such Seller has complied in all
respects with all applicable laws, rules, regulations, orders, writs, judgments,
injunctions, decrees or awards to which it may be subject, except where any
failure to comply, either individually or in aggregate, is not reasonably likely
to have a Material Adverse Effect. Each Receivable, together with the Contract
and Invoice related thereto, does not contravene any laws, rules or regulations
applicable thereto (including, without limitation, laws, rules and regulations
relating to truth in lending, fair credit billing, fair credit reporting, equal
credit opportunity, fair debt collection practices and privacy), and no part of
such Contract or Invoice is in violation of any such law, rule or regulation,
except where such a violation is not reasonably likely to have a Material
Adverse Effect.

                  (r) Compliance with Credit and Collection Policy. Such Seller
has complied in all material respects with the Credit and Collection Policy with
regard to each Receivable and the related Contract and Invoice, and has not made
any change to such Credit and Collection Policy, other than as permitted under
Section 6.02(c), and in compliance with the notification requirements in Section
6.01(a)(v).

                  (s) Payments to Sellers. No transfer by either Seller of any
Receivable under this Agreement is or may be voidable under any section of the
Bankruptcy Reform Act of 1978 (11 U.S.C. ss.ss. 101 et seq.), as amended.

                  (t) Eligible Receivables. Each Receivable included in the Net
Receivables Balance as an Eligible Receivable in each Weekly Report was an
Eligible Receivable as of the date of such Weekly Report.

                  (u) Receivables Balance. Such Seller has determined that,
immediately after giving effect to each purchase hereunder (i) the Net
Receivables Balance is at least equal to $27 million and (ii) the sum of the Net
Receivables Balance plus all Receivables that would be Eligible Receivables but
for the fact that they are Delinquent Receivables is at least equal to $35
million.

                  (v) Servicing Agreement. All Retail Accounts Receivables are
serviced on behalf of the Sellers under the Invoice Ready Billing and
Information Management Services Agreement dated as of July 31, 2000 (the "BCI
Agreement") between Billing Concepts, Inc. ("BCI") and SGOC. The BCI Agreement
is in full force and effect and no party thereto is in breach of its payment or
any other material obligations thereunder. Sellers are not aware of service
disputes or

                                                                              11
<PAGE>

other claims involving any retail customers of Sellers or any LEC that invoices
such retail customers under the BCI Agreement that could give rise to a right of
offset or recoupment or similar claim in favor of BCI that, in the aggregate,
would reduce by more than $100,000 the amount of Collections otherwise payable
by BCI to Sellers under the BCI Agreement.

                  Section 4.02 PURCHASER REPRESENTATIONS AND WARRANTIES.
Purchaser hereby represents and warrants, as to itself, to the Sellers that:

                  (a) Existence and Power. Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation or organization, and has all corporate power to
perform its obligations hereunder.

                  (b) No Conflict. The execution and delivery by Purchaser of
this Agreement and the performance of its obligations hereunder are within its
corporate powers, have been duly authorized by all necessary corporate action,
do not contravene or violate (i) its certificate or articles of incorporation or
association or by-laws, (ii) any law, rule or regulation applicable to it, (iii)
any restrictions under any agreement, contract or instrument to which it is a
party or any of its property is bound, or (iv) any order, writ, judgment, award,
injunction or decree binding on or affecting it or its property, and do not
result in the creation or imposition of any Adverse Claim on its assets. This
Agreement has been duly authorized, executed and delivered by the Purchaser.

                  (c) Governmental Authorization. No authorization or approval
or other action by, and no notice to or filing with, any governmental authority
or regulatory body is required for the due execution and delivery by Purchaser
of this Agreement and the performance of its obligations hereunder.

                  (d) Binding Effect. This Agreement constitutes the legal,
valid and binding obligation of Purchaser enforceable against Purchaser in
accordance with its terms.

                                    ARTICLE V
                             CONDITIONS OF PURCHASES

                  Section 5.01 CONDITIONS PRECEDENT TO INITIAL INCREMENTAL
PURCHASE. The initial Incremental Purchase of a Purchaser Interest under this
Agreement is subject to the conditions precedent that (a) the Purchaser shall
have received on or before the date of such purchase those documents listed on
Schedule A and (b) the Purchaser shall have received the Consulting Fee and all
other fees and expenses required to be paid on such date pursuant to the terms
of this Agreement.

                  Section 5.02 CONDITIONS PRECEDENT TO ALL PURCHASES AND
REINVESTMENTS. Each purchase of a Purchaser Interest and each Reinvestment shall
be subject to the further conditions precedent that in the case of each such
purchase or Reinvestment: (a) the Seller shall have delivered to the Purchaser
on or prior to the date of such purchase, in form and substance satisfactory to
the Purchaser, all Weekly Reports as and when due under Section 7.04 and upon
the Purchaser's request, the Servicer shall have delivered to the Purchaser at
least three (3) days prior to such purchase or Reinvestment an interim Weekly
Report showing the amount of Eligible Receivables, (b) the Facility Termination
Date shall not have occurred and (c) on the date of each such Incremental
Purchase or Reinvestment, the following statements shall be true (and acceptance
of the

                                                                              12
<PAGE>

proceeds of such Incremental Purchase or Reinvestment shall be deemed a
representation and warranty by each Seller as to itself and as to the other
Seller that such statements are then true):

                           (i) the representations and warranties set forth in
Section 4.01 are true and correct on and as of the date of such Incremental
Purchase or Reinvestment as though made on and as of such date;

                           (ii) no event has occurred and is continuing, or
would result from such Incremental Purchase or Reinvestment, that will
constitute an Amortization Event, and no event has occurred and is continuing,
or would result from such Incremental Purchase or Reinvestment, that would
constitute a Potential Amortization Event; and

                           (iii) the Aggregate Capital does not exceed the
Purchase Limit and the Purchaser Interest does not exceed one-hundred percent
(100%).

It is expressly understood that each Reinvestment shall, unless otherwise
directed by the Purchaser, occur automatically on each day that the Servicer
shall receive any Collections without the requirement that any further action be
taken on the part of any Person and notwithstanding the failure of Sellers to
satisfy any of the foregoing conditions precedent in respect of such
Reinvestment. The failure of Sellers to satisfy any of the foregoing conditions
precedent in respect of any Reinvestment shall give rise to a right of the
Purchaser, which right may be exercised at any time on demand of the Purchaser,
to rescind the related purchase and direct Sellers to pay to the Purchaser an
amount equal to the Collections prior to the Amortization Date that shall have
been applied to the affected Reinvestment.

                                   ARTICLE VI
                                    COVENANTS

                  6.01 AFFIRMATIVE COVENANTS OF THE SELLERS. Until the date on
which the Aggregate Unpaids have been indefeasibly paid in full and this
Agreement terminates in accordance with its terms, each Seller hereby covenants,
as to itself and as to the other Seller, as set forth below:

                  (a) Reporting. Such Seller shall cause SGCC to maintain, for
itself and each of its Subsidiaries including each Seller, a system of
accounting established and administered in accordance with GAAP, and furnish or
cause to be furnished to the Purchaser:

                           (i) Annual Reporting. Within ninety (90) days after
the close of each of the fiscal years of SGCC (except for Fiscal Year 2000, in
which case the delivery date shall be on or before April 17, 2001), audited,
unqualified (except as set forth in the Disclosure Schedule) financial
statements (which shall include balance sheets, statements of income and
retained earnings and a statement of cash flows) for such fiscal year certified
in a manner acceptable to the Purchaser by independent public accountants
acceptable to the Purchaser.

                           (ii) Quarterly Reporting. Within forty-five (45) days
after the close of each of the first three (3) quarterly periods of each of the
fiscal years of SGCC, balance sheets of SGCC as at the close of each such period
and statements of income and retained earnings and a statement

                                                                              13
<PAGE>

of cash flows of SGCC for the period from the beginning of such fiscal year to
the end of such quarter, all certified by its chief financial officer.

                           (iii) Compliance Certificate. Together with the
financial statements required hereunder, a compliance certificate in
substantially the form of Exhibit V signed by such Seller's Authorized Officer,
as applicable, and dated the date of such annual financial statement or such
quarterly financial statement, as the case may be.

                           (iv) Bank Reports. Promptly upon the filing thereof,
copies of all reports which are delivered to the Lender under (and as defined
in) the NTFC Loan Agreement.

                           (v) Change in Credit and Collection Policy. At least
thirty (30) days prior to the effectiveness of any material change in or
material amendment to the Credit and Collection Policy, a copy of the Credit and
Collection Policy then in effect and a notice (A) indicating such change or
amendment, and (B) if such proposed change or amendment would be reasonably
likely to adversely affect the collectibility of the Receivables or decrease the
credit quality of any newly created Receivables, requesting the Purchaser's
consent thereto.

                           (vi) Other Information. Promptly, from time to time,
such other information, documents, records or reports relating to the
Receivables or the condition or operations, financial or otherwise, of such
Seller as the Purchaser may from time to time reasonably request in order to
protect the interests of the Purchaser under or as contemplated by this
Agreement.

                  (b) Notices. Such Seller shall notify the Purchaser in writing
of any of the following promptly upon learning of the occurrence thereof,
describing the same and, if applicable, the steps being taken with respect
thereto:

                           (i) Amortization Events or Potential Amortization
Events. The occurrence of each Amortization Event and each Potential
Amortization Event, by a statement of an Authorized Officer of such Seller.

                           (ii) Judgment and Proceedings. (A) The entry of any
judgment or decree against such Seller or any of its Affiliates if the aggregate
amount of all judgments and decrees then outstanding against such Seller and its
Affiliates exceeds $500,000, (B) the institution of any litigation, arbitration
proceeding or governmental proceeding against such Seller which could reasonably
be expected to have a Material Adverse Effect and (C) the entry of any judgment
or decree or the institution of any litigation, arbitration proceeding or
governmental proceeding against such Seller or any of its Affiliates.

                           (iii) Material Adverse Effect. The occurrence of any
event or condition that has had, or could reasonably be expected to have, a
Material Adverse Effect.

                           (iv) Defaults Under Other Agreements. The occurrence
of a default or an event of default under any other material financing
arrangement pursuant to which such Seller or any of its Affiliates is a debtor
or an obligor, including without limitation, the NTFC Loan Agreement.

                                                                              14
<PAGE>

                  (c) Compliance with Laws and Preservation of Corporate
Existence. Such Seller shall comply in all material respects with all applicable
laws, rules, regulations, orders, writs, judgments, injunctions, decrees or
awards to which it may be subject. Such Seller shall preserve and maintain its
corporate existence, rights, franchises and privileges in the jurisdiction of
its incorporation, and qualify and remain qualified in good standing as a
foreign corporation in each jurisdiction where its business is conducted.

                  (d) Audits. Such Seller shall furnish to the Purchaser from
time to time such information with respect to it and the Receivables as the
Purchaser may reasonably request. Such Seller shall, from time to time during
regular business hours as requested by the Purchaser upon reasonable notice and
at the sole cost of such Seller, permit the Purchaser, or its agents or
representatives, (i) to examine and make copies of and abstracts from all
Records in the possession or under the control of such Person relating to the
Receivables and the Related Security, including, without limitation, the related
Contracts and Invoices, and (ii) to visit the offices and properties of such
Person for the purpose of examining such materials described in clause (i)
above, and to discuss matters relating to such Person's financial condition or
the Receivables and the Related Security or any Person's performance under any
of the Transaction Documents or any Person's performance under the Contracts and
Invoices and, in each case, with any of the officers or employees of such Person
having knowledge of such matters.

                  (e)      Keeping and Marking of Records and Books.

                           (i) Such Seller shall maintain and implement
administrative and operating procedures (including, without limitation, an
ability to recreate records evidencing Receivables in the event of the
destruction of the originals thereof), and keep and maintain all documents,
books, records and other information reasonably necessary or advisable for the
collection of all Receivables (including, without limitation, records adequate
to permit the immediate identification of each new Receivable and all
Collections of and adjustments to each existing Receivable). Such Seller shall
give the Purchaser notice of any material change in the administrative and
operating procedures referred to in the previous sentence.

                           (ii) Such Seller shall (A) on or prior to the date
hereof, mark its master data processing records and other books and records
relating to the Purchaser Interests with a legend, acceptable to the Purchaser,
describing the Purchaser Interests and (B) upon the request of the Purchaser at
any time following the occurrence of an Amortization Event, (x) mark each
Contract and Invoice with a legend describing the Purchaser Interests and (y)
deliver to the Purchaser all Contracts and Invoices (including, without
limitation, all multiple originals of any such Contract and Invoice) relating to
the Receivables.

                  (f) Compliance with Contracts and Credit and Collection
Policy. Such Seller shall timely and fully (i) perform and comply with all
provisions, covenants and other promises required to be observed by it under the
Contracts related to the Receivables, and (ii) comply in all respects with the
Credit and Collection Policy in regard to each Receivable and the related
Contract and Invoice.

                                                                              15
<PAGE>

                  (g) Ownership. Such Seller shall take all necessary action to
establish and maintain, in favor of the Purchaser, a valid and perfected first
priority undivided percentage ownership interest (and/or a valid and perfected
first priority security interest) in all Receivables, Related Security and
Collections to the full extent contemplated herein, free and clear of any
Adverse Claims other than Adverse Claims in favor of the Purchaser (including,
without limitation, the filing of all financing statements or other similar
instruments or documents necessary under the UCC (or any comparable law) of all
appropriate jurisdictions to perfect the Purchaser's interest in such
Receivables, Related Security and Collections and such other action.

                  (h) Creation of Collection Account; Collections. Such Seller
shall cause all Collections to be directly deposited by all Obligors into the
Collection Account. In the event any Collections are remitted directly to such
Seller or any Affiliate of such Seller, such Seller shall remit (or shall cause
all such payments to be remitted) and deposit such Collections into the
Collection Account within two (2) Business Days following receipt thereof, and,
at all times prior to such remittance, such Seller shall itself hold as trustee
or, if applicable, shall cause such payments to be held in trust for the
exclusive benefit of the Purchaser. At all times from and after the date hereof
that Purchaser does not have exclusive ownership, dominion and control of the
Collection Account, such Seller shall maintain exclusive ownership, dominion and
control (subject to the terms of this Agreement) over the Collection Account for
the sole benefit of Purchaser.

                  (i) Taxes. Such Seller shall file (on time or no later than
the expiration of any extension period) all tax returns and reports required by
law to be filed by it and shall promptly pay all taxes and governmental charges
at any time owing. Such Seller shall pay when due any taxes payable in
connection with the Receivables, exclusive of taxes on or measured by income or
gross receipts of the Purchaser.

                  (j) Insurance. Such Seller shall maintain in effect, or cause
to be maintained in effect, at such Seller's own expense, such casualty and
liability insurance as such Seller shall deem appropriate in its good faith
business judgment.

                  (k) Concentration Limit Letter Agreement. Such seller shall
execute and deliver within ten (10) Business Days of the initial Incremental
Purchase the Concentration Limit Letter Agreement.

                  (l) Collection Account Agreement. Such Seller shall cause the
Collection Bank to irrevocably transfer (which transfer is coupled with an
interest) to the Purchaser and NTFC, for the benefit of Purchaser and NTFC, the
exclusive ownership, dominion and control over the Collection Account (including
all monies deposited therein) within five (5) Business Days of the date of the
initial Incremental Purchase, which transfer shall provide for the joint signing
authority of Purchaser and NTFC.

                  6.02 NEGATIVE COVENANTS OF THE SELLERS. Until the date on
which the Aggregate Unpaids have been indefeasibly paid in full and this
Agreement terminates in accordance with its terms, each Seller hereby covenants,
as to itself and as to the other Seller, that:

                  (a) Name Change, Offices and Records. Such Seller shall not
change its name, identity or corporate structure (within the meaning of Section
9-402(7) of any applicable enactment

                                                                              16
<PAGE>

of the UCC) or relocate its chief executive office or any office where Records
are kept unless it shall have (i) given the Purchaser at least forty-five (45)
days' prior written notice thereof and (ii) delivered to the Purchaser all
financing statements, instruments and other documents requested by the Purchaser
in connection with such change or relocation.

                  (b) Change in Payment Instructions to Obligors. Except as may
be required by the Purchaser pursuant to Section 7.02(b) or as otherwise
required herein, such Seller shall not add or terminate any bank as a Collection
Bank, or make any change in the instructions to Obligors regarding payments to
be made to the Collection Bank for deposit in the Collection Account, unless the
Purchaser shall have expressly approved in writing any such addition or
termination of a Collection Bank or approved such change in the instructions to
Obligor, as applicable.

                  (c) Modifications to Contracts, Invoices and Credit and
Collection Policy. Such Seller shall not amend, modify or otherwise make any
change to (i) the Credit and Collection Policy, except pursuant to Section
6.01(a)(v) or (ii) any Contract or Invoice that, in the case of (ii), could
materially adversely affect the collectibility of the Receivables or materially
decrease the credit quality of any newly created Eligible Receivables. Except as
provided in Section 7.02(b), the Seller shall not extend, amend or otherwise
modify the terms of any Receivable or any Invoice related thereto other than in
accordance with the Credit and Collection Policy.

                  (d) Sales, Liens. Such Seller shall not sell, assign (by
operation of law or otherwise) or otherwise dispose of, or grant any option with
respect to, or create or suffer to exist any Adverse Claim upon (including,
without limitation, the filing of any financing statement) or with respect to,
any Receivable, Related Security or Collections, or upon or with respect to any
Contract or Invoice under which any Receivable arises, or the Collection
Account, or assign any right to receive income with respect thereto (other than,
in each case, the creation of the interests therein in favor of the Purchaser
provided for herein), and such Seller shall defend the right, title and interest
of the Purchaser, to and under any of the foregoing property, against all
Adverse Claims. Such Seller shall not create or suffer to exist any mortgage,
pledge, security interest, encumbrance, lien, charge or other similar
arrangement on any of its inventory, the financing or lease of which gives rise
to any Receivable.

                                   ARTICLE VII
                          ADMINISTRATION AND COLLECTION

                  7.01 DESIGNATION OF SERVICER. (a) The servicing,
administration and collection of the Receivables shall be conducted by such
Person (the "Servicer") so designated from time to time in accordance with this
Section 7.01. Each Seller is hereby designated as, and hereby agrees to perform
the duties and obligations of, the Servicer pursuant to the terms of this
Agreement in respect of the Receivables that it originates. At any time
following the occurrence of an Amortization Event, the Purchaser may at any time
designate as Servicer any Person to succeed such Seller or any successor
Servicer and the Sellers agree to pay all fees charged by such third party
Servicer.

                  (b) Without the prior written consent of the Purchaser,
Sellers shall not be permitted to delegate any of its duties or responsibilities
as Servicer to any Person other than with

                                                                              17
<PAGE>

respect to certain Charged-Off Receivables and outside collection agencies in
accordance with its customary practices.

                  7.02 DUTIES OF SERVICER. The Servicer shall take or cause to
be taken all such actions as may be necessary or advisable to collect each
Receivable from time to time, all in accordance with applicable laws, rules and
regulations, with reasonable care and diligence, and in accordance with the
Credit and Collection Policy.

                  (a) The Servicer shall instruct all Obligors to pay all
Collections directly to the Collection Account.

                  (b) The Servicer may, in accordance with the Credit and
Collection Policy, extend the maturity of any Receivable or adjust the
Outstanding Balance of any Receivable as the Servicer determines to be
appropriate to maximize Collections thereof; PROVIDED, HOWEVER, that such
extension or adjustment shall not alter the status of such Receivable as a
Delinquent Receivable or Charged-Off Receivable or limit the rights of the
Purchaser under this Agreement. Notwithstanding anything to the contrary
contained herein, the Purchaser shall have the absolute and unlimited right to
direct the Servicer to commence or settle any legal action with respect to any
Receivable or to foreclose upon or repossess any Related Security, provided that
the Purchaser has given the Sellers seven (7) days' prior notice and during such
notice period the outstanding Balance of such Receivable has not been reduced to
zero.

                  (c) The Servicer shall hold in trust for the Purchasers and
the Sellers, if applicable, all Records that (i) evidence or relate to the
Receivables, the related Contracts, Invoices and Related Security or (ii) are
otherwise necessary or desirable to collect the Receivables and shall, as soon
as practicable upon demand of the Purchaser deliver or make available to the
Purchaser all such Records, at a place selected by the Purchaser if Purchaser
terminates the Servicer's engagement.

                  (d) Any payment by an Obligor in respect of any indebtedness
owed by it to Sellers shall, except as otherwise specified by such Obligor or
otherwise required by contract or law and unless otherwise instructed by the
Purchaser, be applied as a Collection of any Receivable of such Obligor
(starting with the oldest such Receivable) to the extent of any amounts then due
and payable thereunder before being applied to any other receivable or other
obligation of such Obligor.

                  7.03 RESPONSIBILITIES OF SELLERS. Notwithstanding anything
contained herein to the contrary, the exercise by the Purchaser of its rights
hereunder shall not release the Sellers from any of their duties or obligations
with respect to any Receivables or under the related Contracts or Invoices. The
Purchaser shall have no obligation or liability with respect to any Receivables
or related Contracts or Invoices, nor shall it be obligated to perform the
obligations of Sellers.

                  7.04 REPORTS. The Servicer shall prepare and forward to the
Purchaser (a) on Wednesday of each week and at such times as the Purchaser shall
request a Weekly Report and (b) at such times as the Purchaser shall request, a
listing by Obligor of all Receivables together with the aging in respect of all
the Receivables.

                                                                              18
<PAGE>

                  7.05 SERVICING FEES. In consideration of each Sellers'
agreement to act as Servicer hereunder, the Purchaser hereby agrees that, so
long as Sellers shall continue to perform as Servicer hereunder, Sellers shall
be paid a fee from Collections (the "Servicing Fee") on the first calendar day
of each month, in arrears for the immediately preceding month, equal to 1% per
annum of the Net Receivables Balance outstanding during such period, as
compensation for its servicing activities.

                                  ARTICLE VIII
                               AMORTIZATION EVENTS

                  8.01 AMORTIZATION EVENTS. The occurrence of any one or more of
the following events shall constitute an Amortization Event:

                  (a) Any Seller shall fail (i) to make any payment or deposit
required hereunder when due (which shall include the insufficiency of
Collections deposited in the Collection Account as of any Settlement Date to
satisfy in full the payment of the Current Portion of Discount then due in
accordance with Section 3.02 hereunder) (ii) to observe or perform any covenant
set forth in Section 6.02, 6.01(k) or 6.01(l) or (iii) to perform or observe any
term, covenant or agreement hereunder (other than as referred to in clauses (i)
and (ii) of this paragraph (a) and paragraph 8.01(e)) and such failure shall
continue for thirty (30) consecutive days or, if the relevant term, covenant or
agreement hereunder is required to be performed in a lesser period of time, such
lesser period of time.

                  (b) Any representation or warranty made by any Seller in this
Agreement, any other Transaction Document or in any other document delivered
pursuant hereto or thereto shall prove to have been incorrect when made or
deemed made or any certification or statement made by any Seller in connection
with the foregoing shall prove to have been incorrect in any material respect
when made or deemed made.

                  (c) Failure of either Seller to pay any Indebtedness when due,
or the failure of any Affiliate of either Seller to pay any Indebtedness when
due, which (i) is payable to Purchaser under any other agreement or instrument
to which Starctec Global Communications Corporation is a party or (ii) in the
case of any Indebtedness payable to another Person, individually or together
with other such Indebtedness as to which is owed Purchaser under any other
agreement or instrument any such failures exists has an aggregate outstanding
principal amount in excess of $5,000,000; or the default by any Seller or any of
its Affiliates in the performance of any term, provision or condition contained
in any agreement under which any such Indebtedness was created or is governed,
the effect of which is to cause, or to permit the holder or holders of such
Indebtedness to cause, such Indebtedness to become due prior to its stated
maturity; or any such Indebtedness of any Seller or an Affiliate thereof shall
be declared to be due and payable or required to be prepaid (other than by a
regularly scheduled payment) prior to the date of maturity thereof.

                  (d) (i) Any Seller, SGCC or any of their Subsidiaries shall
generally not pay its debts as such debts become due or shall admit in writing
its inability to pay its debts generally or shall make a general assignment for
the benefit of creditors; or (ii) any proceeding shall be instituted by or
against Seller, SGCC or any of their Subsidiaries seeking to adjudicate it
bankrupt

                                                                              19
<PAGE>

or insolvent, or seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of debtors, or
seeking the entry of an order for relief or the appointment of a receiver,
trustee or other similar official for it or any substantial part of its property
or (iii) any Seller, SGCC or any of their Subsidiaries shall take any corporate
or partnership action to authorize any of the actions set forth in clauses (i)
or (ii) above in this subsection (d).

                  (e)      As of any date:

                           (i) the Net Receivables Balance shall be less than
$27 million; or

                           (ii) the sum of the Net Receivables Balance plus all
Receivables that would be Eligible Receivables but for the fact that they are
Delinquent Receivables shall be equal to less than $35 million; or

                           (iii) the Purchaser Interest shall exceed 100%.

unless, in the case of clause (i) and (ii) above, (A) the applicable shortfall
is, in the sole judgment of the Purchaser, due solely to a timing gap between
the dates on which (x) Collections are received in respect of Commercial
Accounts Receivable originated in the immediately preceding month and (y)
invoices are generated by the Sellers in accordance with billing practices in
effect as of the date of this Agreement with respect to Commercial Accounts
Receivable for the current month and (B) the portion of the current Net
Receivables Balance comprised of Retail Accounts Receivable is at least
$10,000,000.

                   (f) A Change of Control shall occur.

                   (g) One or more final judgments for the payment of money
shall be entered against either Seller or SGCC in an amount of $5,000,000 or
more individually or in the aggregate, on claims not covered by insurance or as
to which the insurance carrier has denied its responsibility, and such judgment
shall continue unsatisfied and in effect for fifteen (15) consecutive days
without a stay of execution.

                  (h) This Agreement shall terminate in whole or in part (except
in accordance with their terms), or shall cease to be effective or to be the
legally valid, binding and enforceable obligation of any party thereto, or any
Seller or affiliate of a Seller shall directly or indirectly contest in any
manner such effectiveness, validity, binding nature or enforceability.

                  (i)  The Facility Termination Date shall occur.

                  8.02 REMEDIES. Upon the occurrence and during the continuation
of an Amortization Event, the Purchaser may take any of the following actions:
(i) replace the Person then acting as Servicer, (ii) declare the Amortization
Date to have occurred, whereupon the Amortization Date shall forthwith occur,
without demand, protest or further notice of any kind, all of which are hereby
expressly waived by each Seller; PROVIDED, HOWEVER, that upon the occurrence of
an Amortization Event described in Section 8.01(d), or of an actual or deemed
entry of an order for relief with respect to any Seller under the Federal
Bankruptcy Code, the Amortization Date shall

                                                                              20
<PAGE>

automatically occur, without demand, protest or any notice of any kind, all of
which are hereby expressly waived by each Seller, (iii) to the fullest extent
permitted by applicable law, declare that the Default Fee shall accrue with
respect to any of the Aggregate Unpaids outstanding at such time, (iv) direct
the application of all Collections and Deemed Collections in accordance with
Section 2.03 and Section 2.04 hereof, and (v) notify Obligors of the Purchaser's
interest in the Receivables. The aforementioned rights and remedies shall be
without limitation, and shall be in addition to all other rights and remedies of
the Purchaser otherwise available under any other provision of this Agreement,
by operation of law, at equity or otherwise, all of which are hereby expressly
preserved, including, without limitation, all rights and remedies provided under
the UCC, all of which rights shall be cumulative.

                                   ARTICLE IX
                                 INDEMNIFICATION

                  9.01 INDEMNITIES BY THE SELLERS. Without limiting any other
rights that the Purchaser may have hereunder or under applicable law,

                  (a) Each Seller hereby agrees to jointly and severally
indemnify (and pay upon demand to) the Purchaser and its respective assigns,
officers, directors, agents and employees (each an "Indemnified Party") from and
against any and all damages, losses, claims, taxes, liabilities, costs, expenses
and for all other amounts payable, including reasonable attorneys' fees (which
attorneys may be employees of the Purchaser) and disbursements (all of the
foregoing being collectively referred to as "Indemnified Amounts") awarded
against or incurred by any of them arising out of or as a result of this
Agreement or the acquisition, either directly or indirectly, by the Purchaser of
an interest in the Receivables, and

                  (b) the Servicer hereby agrees to indemnify (and pay upon
demand to) each Indemnified Party for Indemnified Amounts awarded against or
incurred by any of them arising out of its activities as Servicer (as
applicable) hereunder excluding, however, in all of the foregoing instances
under this clause (b) or the preceding clause (a);

                           (i) Indemnified Amounts to the extent a final
judgment of a court of competent jurisdiction holds that such Indemnified
Amounts resulted from gross negligence or willful misconduct on the part of the
Indemnified Party seeking indemnification;

                           (ii) Indemnified Amounts to the extent the same
includes losses in respect of Receivables that are uncollectible on account of
the insolvency, bankruptcy or lack of creditworthiness of the related Obligor;
or

                           (iii) taxes imposed by the United States, by the
jurisdiction in which such Indemnified Party's principal executive office is
located, or by any other jurisdiction in the United States where such
Indemnified Party has established a taxable nexus other than in connection with
the transactions contemplated by this Agreement, on or measured by the overall
net income of such Indemnified Party to the extent that the computation of such
taxes is consistent with the characterization for income tax purposes of the
acquisition by the Purchaser of the Purchaser Interest as a loan or loans by the
Purchaser to Sellers secured by the Receivables, the Related

                                                                              21
<PAGE>

Security, the Collection Account and the Collections, but not including any such
taxes resulting from the adoption after the date hereof of any law or any
amendment or change in the interpretation of any existing or future law that
subjects such Indemnified Party to taxes that would not be imposed by any law or
the interpretation thereof existing on the date hereof (except for changes in
the rate of such taxes); PROVIDED, HOWEVER, that nothing contained in this
sentence shall limit the liability of any Seller or limit the recourse of the
Purchaser to any Seller for amounts otherwise specifically provided to be paid
by such Seller under the terms of this Agreement.

Without limiting the generality of the foregoing indemnification, Sellers shall
be jointly and severally liable for indemnifying the Purchaser for Indemnified
Amounts (including, without limitation, losses in respect of uncollectible
receivables, regardless of whether reimbursement therefore would constitute
recourse to Seller or the Servicer) relating to or resulting from:

                                    A. any representation or warranty made by
any Seller (or any officers of any such Seller) under or in connection with this
Agreement, any other Transaction Document or any other information or report
delivered by any such Person pursuant hereto or thereto, which shall have been
false or incorrect when made or deemed made;

                                    B. the failure by either Seller or the
Servicer to comply with any applicable law, rule or regulation with respect to
any Receivable, Contract or Invoice related thereto, or the nonconformity of any
Receivable, Contract or Invoice included therein with any such applicable law,
rule or regulation to keep or perform any of its obligations, express or
implied, with respect to any Contract or Invoice;

                                    C. any failure of either Seller or the
Servicer to perform its duties, covenants or other obligations in accordance
with the provisions of this Agreement or any other Transaction Document;

                                    D. any products liability, personal injury
or damage suit, or other similar claim arising out of or in connection with
merchandise, insurance or services that are the subject of any Contract, Invoice
or any Receivable;

                                    E. any dispute, claim, offset or defense
(other than discharge in bankruptcy of the Obligor) of the Obligor to the
payment of any Receivable (including, without limitation, a defense based on
such Receivable or the related Invoice or Contract not being a legal, valid and
binding obligation of such Obligor enforceable against it in accordance with its
terms), or any other claim resulting from the sale of the merchandise or service
related to such Receivable or the furnishing or failure to furnish such
merchandise or services;

                                    F. the commingling of Collections of
Receivables at any time with other funds;

                                    G. any investigation, litigation or
proceeding related to or arising from this Agreement or any other Transaction
Document, the transactions contemplated hereby, the use of the proceeds of an
Incremental Purchase or a Reinvestment, the ownership of the Purchaser Interest
or any other investigation, litigation or proceeding relating to either Seller
or the Servicer in

                                                                              22
<PAGE>

which any Indemnified Party becomes involved as a result of any of the
transactions contemplated hereby;

                                    H. any inability to litigate any claim
against any Obligor in respect of any Receivable as a result of such Obligor
being immune from civil and commercial law and suit on the grounds of
sovereignty or otherwise from any legal action, suit or proceeding;

                                    I. any failure to vest and maintain vested
in the Purchaser for the benefit of the Purchaser, or to transfer to the
Purchaser, legal and equitable title to, and ownership of, a first priority
perfected undivided percentage ownership interest (to the extent of the
Purchaser Interest contemplated hereunder) or security interest in the
Receivables, the Related Security and the Collections, free and clear of any
Adverse Claim (except as created by the Transaction Documents);

                                    J. the failure to have filed, or any delay
in filing, financing statements or other similar instruments or documents under
the UCC of any applicable jurisdiction or other applicable laws or the failure
to stamp each Contract constituting "chattel paper" within the meaning of
Section 9-105 of the UCC with a notation describing the assignments to either
Seller and the Purchaser with respect to any Receivable, the Related Security
and Collections with respect thereto, and the proceeds of any thereof, whether
at the time of any Incremental Purchase or Reinvestment or at any subsequent
time;

                                    K. any action or omission by any Seller
which reduces or impairs the rights of the Purchaser with respect to any
Receivable or the value of any such Receivable;

                                    L. any attempt by any Person to void any
Incremental Purchase or Reinvestment hereunder under statutory provisions or
common law or equitable action; and

                                    M. the failure of any Receivable included in
the calculation of the Net Receivables Balance as an Eligible Receivable to be
an Eligible Receivable at the time so included.

                  9.02 OTHER COSTS AND EXPENSES. Sellers shall pay to the
Purchaser on demand all costs and out-of-pocket expenses in connection with the
preparation, execution, delivery and administration of this Agreement, the
transactions contemplated hereby and the other documents to be delivered
hereunder, including without limitation, the cost of Purchaser's auditors
auditing the books, records and procedures of Sellers, reasonable fees and
out-of-pocket expenses of legal counsel for the Purchaser (which such counsel
may be employees of the Purchaser) with respect thereto and with respect to
advising the Purchaser as to its respective rights and remedies under this
Agreement. Sellers shall pay to the Purchaser on demand any and all costs and
expenses of the Purchaser, if any, including reasonable counsel fees and
expenses in connection with the enforcement of this Agreement and the other
documents delivered hereunder and in connection with any restructuring or
workout of this Agreement or such documents, or the administration of this
Agreement following an Amortization Event. Sellers shall reimburse Purchaser on
demand for all other costs and expenses incurred by the Purchaser ("Other
Costs"), including, without limitation, the cost of auditing the Purchaser's
books by certified public accountants and the reasonable fees and out-of-pocket
expenses of counsel for Purchaser or any counsel for any shareholder of

                                                                              23
<PAGE>

Purchaser with respect to advising Purchaser or such shareholder as to matters
relating to Purchaser's operations.

                                    ARTICLE X
                                  MISCELLANEOUS

                  10.01 WAIVERS AND AMENDMENTS. (a) No failure or delay on the
part of the Purchaser in exercising any power, right or remedy under this
Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of any such power, right or remedy preclude any other further exercise
thereof or the exercise of any other power, right or remedy. The rights and
remedies herein provided shall be cumulative and nonexclusive of any rights or
remedies provided by law. Any waiver of this Agreement shall be effective only
in the specific instance and for the specific purpose for which given.

                           (b) No provision of this Agreement may be amended,
supplemented, modified or waived except in a writing agreed to by each of the
parties hereto.

                  10.02 NOTICES. Except as provided in this Section 10.02, all
communications and notices provided for hereunder shall be in writing (including
bank wire, telecopy or electronic facsimile transmission or similar writing) and
shall be given to the other parties hereto at their respective addresses or
telecopy numbers set forth on the signature pages hereof or at such other
address or telecopy number as such Person may hereafter specify for the purpose
of notice to each of the other parties hereto. Each such notice or other
communication shall be effective if given by telecopy, upon the receipt thereof,
if given by mail, three (3) Business Days after the time such communication is
deposited in the mail with first class postage prepaid or if given by any other
means, when received at the address specified in this Section 10.02.

                  10.03 PROTECTION OF OWNERSHIP INTERESTS OF THE PURCHASER. (a)
Sellers agree that from time to time, at its expense, it shall promptly execute
and deliver all instruments and documents, and take all actions, that may be
necessary or desirable, or that the Purchaser may request, to perfect, protect
or more fully evidence the Purchaser Interest, or to enable the Purchaser to
exercise and enforce its rights and remedies hereunder. At any time after an
Amortization Event has occurred and is continuing, the Purchaser may direct
Sellers or the Servicer to notify the Obligors of Receivables, at Sellers'
expense, of the ownership or security interests of the Purchaser under this
Agreement and may also direct that payments of all amounts due or that become
due under any or all Receivables be made directly to the Purchaser or its
designee. Sellers or the Servicer (as applicable) shall, at Purchaser's request,
withhold the identity Purchaser in any such notification.

                  (b) If any Seller fails to perform any of its obligations
hereunder, the Purchaser may (but shall not be required to) perform, or cause
performance of, such obligations, and the Purchaser's costs and expenses
incurred in connection therewith shall be payable by Sellers as provided in
Section 9.02. Each Seller irrevocably authorizes the Purchaser at any time and
from time to time in the sole discretion of the Purchaser, and appoints the
Purchaser as its attorney-in-

                                                                              24
<PAGE>

fact, to act on behalf of such Seller (i) to execute on behalf of Sellers as
debtor and to file financing statements necessary or desirable in the
Purchaser's sole discretion to perfect and to maintain the perfection and
priority of the interest of the Purchaser in the Receivables and (ii) to file a
carbon, photographic or other reproduction of this Agreement or any financing
statement with respect to the Receivables as a financing statement in such
offices as the Purchaser in its sole discretion deems necessary or desirable to
perfect and to maintain the perfection and priority of the interests of the
Purchaser in the Receivables. This appointment is coupled with an interest and
is irrevocable.

                  10.04 CONFIDENTIALITY. (a) Each Seller and Purchaser shall
maintain and shall cause each of its employees and officers to maintain the
confidentiality of this Agreement and the other confidential or proprietary
information with respect to the Purchaser and its respective businesses obtained
by it or them in connection with the structuring, negotiating and execution of
the transactions contemplated herein, except that (i) such Seller and Purchaser
and its officers and employees may disclose such information to such Seller's
and the Purchaser's external accountants and attorneys and as required by any
applicable law or order of any judicial or administrative proceeding and (ii)
such Seller and its officers and employees may disclose the Transaction
Documents, other than the Concentration Limit Letter Agreement (or any
information contained in the Concentration Limit Letter Agreement that may also
be contained in any other Transaction Document), to any institution providing or
proposing to provide financial services to such Seller, pursuant to a written
agreement of confidentiality in form and substance reasonably satisfactory to
the Purchaser.

                  (b) Anything herein to the contrary notwithstanding, each
Seller hereby consents to the disclosure of any nonpublic information with
respect to it (i) to the Purchaser, (ii) by the Purchaser to any prospective or
actual assignee or participant of any of them and (iii) to any officers,
directors, employees, outside accountants and attorneys of any of the foregoing,
provided each such Person is informed of the confidential nature of such
information. In addition, the Purchaser may disclose any such nonpublic
information pursuant to any law, rule, regulation, direction, request or order
of any judicial, administrative or regulatory authority or proceedings (whether
or not having the force or effect of law).

                  10.05 LIMITATION OF LIABILITY. Except with respect to any
claim arising out of the willful misconduct or gross negligence of Sellers or
the Purchaser, no claim may be made by any Seller or any other Person against
Sellers or the Purchaser or their respective Affiliates, directors, officers,
employees, attorneys or agents for any special, indirect, consequential or
punitive damages in respect of any claim for breach of contract or any other
theory of liability arising out of or related to the transactions contemplated
by this Agreement, or any act, omission or event occurring in connection
therewith; and each Seller hereby waives, releases, and agrees not to sue upon
any claim for any such damages, whether or not accrued and whether or not known
or suspected to exist in its favor.

                  10.06 CHOICE OF LAW. This agreement shall be governed by and
construed in accordance with the internal laws (but not the law of conflicts) of
the District of Columbia.

                  10.07 CONSENT TO JURISDICTION. Each Seller hereby irrevocably
submits to the non-exclusive jurisdiction of any united states federal or the
courts sitting in the District of Columbia in any action or proceeding arising
out of or relating to this agreement or any document executed by

                                                                              25
<PAGE>

such person pursuant to this agreement and each Seller hereby irrevocably agrees
that all claims in respect of such action or proceeding may be heard and
determined in any such court and irrevocably waives any objection it may now or
hereafter have as to the venue of any such suit, action or proceeding brought in
such a court or that such court is an inconvenient forum. Nothing herein shall
limit the right of Purchaser to bring proceedings against any Seller in the
courts of any other jurisdiction. Any judicial proceeding by any Seller against
the Purchaser or any Affiliate of the Purchaser involving, directly or
indirectly, any matter in any way arising out of, related to, or connected with
this Agreement or any document executed by such Seller pursuant to this
Agreement shall be brought only in a court in the District of Columbia.

                  10.08 WAIVER OF JURY TRIAL. Each party hereto hereby waives
trial by jury in any judicial proceeding involving, directly or indirectly, any
matter (whether sounding in tort, contract or otherwise) in any way arising out
of, related to, or connected with this agreement, any document executed by any
Seller pursuant to this agreement or the relationship established hereunder or
thereunder.

                  10.09 INTEGRATION; BINDING EFFECT; SURVIVAL OF TERMS.

                  (a) This Agreement and each other Transaction Document contain
the final and complete integration of all prior expressions by the parties
hereto with respect to the subject matter hereof and shall constitute the entire
agreement among the parties hereto with respect to the subject matter hereof
superseding all prior oral or written understandings.

                  (b) This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and permitted
assigns (including any trustee in bankruptcy). This Agreement shall create and
constitute the continuing obligations of the parties hereto in accordance with
its terms and shall remain in full force and effect until terminated in
accordance with its terms; PROVIDED, HOWEVER, that the rights and remedies with
respect to (i) any breach of any representation and warranty made by any Seller
pursuant to Article IV and (ii) the indemnification and payment provisions of
Article IX, and Sections 10.04 and 10.05 shall be continuing and shall survive
any termination of this Agreement.

                  10.10 COUNTERPARTS; SEVERABILITY; USURY LAWS; SECTION
REFERENCES. This Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which when taken together
shall constitute one and the same Agreement. Any provisions of this Agreement
which are prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction. No provision of
this Agreement shall require the payment or permit the collection of any amounts
hereunder in excess of the maximum permitted by applicable law. Unless otherwise
expressly indicated, all references herein to "Article," "Section," "Schedule"
or "Exhibit" shall mean articles and sections of, and schedules and exhibits to,
this Agreement.

                  10.11 MATERIALITY; MATERIAL ADVERSE EFFECT. Any reference in
the Agreement to any event, change, condition or effect being "material" with
respect to any entity means any material

                                                                              26
<PAGE>

event, change, condition or effect related to the financial condition,
properties, assets (including intangible assets), liabilities, business,
prospects, operations or results of operations of such entity and its
subsidiaries, taken as a whole. In the Agreement, the words "aware," "knowledge"
or similar words, expressions or phrases with respect to a party means the
actual knowledge of the executive officers (as defined in SEC Rule 405 of the
Securities Act of 1933, as amended (the "Securities Act")), and directors of
such party and its subsidiaries, including, without limitation, with respect to
the Sellers, Ram Mukunda, Prabhav V. Maniyar and Yolanda S. Faerber.

                  10.12 ASSIGNMENT. Purchaser may at any time and from time to
time sell, assign or otherwise transfer to one or more Persons all or any
portion of its interest, rights or obligations under this Agreement without
either Seller's consent. Neither Seller may assign this Agreement or any of its
obligations hereunder without the express written consent of the Purchaser.

                  10.13 CHARACTERIZATION. (a) It is the intention of the parties
hereto that each purchase hereunder shall constitute and be treated as an
absolute and irrevocable sale, which purchase shall provide the Purchaser with
the full benefits of ownership of the applicable Purchaser Interest. Except as
specifically provided in this Agreement, each sale of a Purchaser Interest
hereunder is made without recourse to Sellers; PROVIDED, HOWEVER, that (i)
Sellers shall be liable to the Purchaser for all representations, warranties,
covenants and indemnities made by Sellers pursuant to the terms of this
Agreement and (ii) such sale does not constitute and is not intended to result
in an assumption by the Purchaser or any assignee thereof of any obligation of
Sellers or any other person arising in connection with the Receivables, the
Related Security, or the related Contracts or Invoices or any other obligations
of Sellers.

                  (b) In addition to any ownership interest which the Purchaser
may from time to time acquire pursuant hereto, Sellers hereby grant to the
Purchaser a valid and perfected security interest in all of Sellers' right,
title and interest in, to and under the following assets, now existing or
hereafter arising: (i) all Receivables, (ii) the Collections, (iii) the
Collection Account, (iv) all Related Security, (v) all other rights and payments
relating to such Receivables, (vii all proceeds of any of the foregoing, and
(vii) all other assets to, under or in which the Purchaser has acquired, may
hereafter acquire and/or purports to have acquired an interest hereunder prior
to all other liens on and security interests therein to secure the prompt and
complete payment of the Aggregate Unpaids. The Purchaser shall have, in addition
to the rights and remedies that they may have under this Agreement, all other
rights and remedies provided to a secured creditor under the UCC and other
applicable law, which rights and remedies shall be cumulative.

                            [SIGNATURE PAGES FOLLOW]

                                                                              27
<PAGE>

                  IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above written.

                        STARTEC GLOBAL OPERATING COMPANY
                        as Seller

                        By:  /s/ PRABHAV V. MANIYAR
                           ------------------------------------
                           Name: Prabhav V. Maniyar
                           Title: Vice President and Secretary

                           Address:
                           1151 Seven Locks Road,
                           Potomac, MD 20854

                        STARTEC GLOBAL LICENSING COMPANY
                        as Seller

                        By:  /s/ PRABHAV V. MANIYAR
                           ------------------------------------
                           Name: Prabhav V. Maniyar
                           Title: Vice President and Secretary

                           Address:
                           1151 Seven Locks Road,
                           Potomac, MD 20854

                         ALLIED CAPITAL CORPORATION

                         By:  /s/ SCOTT S. BINDER
                            ------------------------------------
                            Name:     Scott S. Binder
                            Title:    Managing Director

                            Address:
                            1919 Pennsylvania Avenue, NW
                            Third Floor
                            Washington, DC  20006
                            Fax:   (202) 659-2053

                                                                              28
<PAGE>

                                    EXHIBIT I
                                   DEFINITIONS

As used in this Agreement, the following terms shall have the following meanings
(such meanings to be equally applicable to both the singular and plural forms of
the terms defined):

                  "Accrual Period" means each fiscal quarter of Sellers,
         provided that the initial Accrual Period hereunder means the period
         from (and including) the date of the initial purchase hereunder to (and
         including) June 30, 2001.

                  "Accrued Portion of Discount" shall mean for each respective
         Accrual Period relating to the Purchaser Interest, the accrued portion
         of the Discount payable on the Amortization Date equal to the product
         of (a) 5% multiplied by (b) the Capital of such Purchaser Interest,
         computed for each day elapsed during such Accrual Period on an
         annualized basis.

                  "Adverse Claim" means a lien, security interest, charge or
         encumbrance, or other right or claim in, of or on any Person's assets
         or properties in favor of any other Person other than the NTFC Security
         Interest, other than the interest, if any, of Billing Concepts, Inc.
         referred to in the Consent and Estoppel Agreement.

                  "Affiliate" means, with respect to any Person, any other
         Person directly or indirectly controlling, controlled by, or under
         direct or indirect common control with, such Person or any Subsidiary
         of such Person. A Person shall be deemed to control another Person if
         the controlling Person owns 10% or more of any class of voting
         securities of the controlled Person or possesses, directly or
         indirectly, the power to direct or cause the direction of the
         management or policies of the controlled Person, whether through
         ownership of stock, by contract or otherwise.

                  "Aggregate Capital" means, on any date of determination, the
         aggregate amount of Capital of the Purchaser Interest outstanding on
         such date.

                  "Aggregate Reduction" has the meaning specified in
         Section 1.03.

                  "Aggregate Unpaids" means, at any time, an amount equal to the
         sum of Aggregate Capital and all other unpaid Obligations (whether due
         or accrued) at such time.

                  "Agreement" means this Receivables Purchase Agreement, as it
         may be amended or modified and in effect from time to time.

                  "Amortization Date" means the earliest to occur of (i) the day
         on which any of the conditions precedent set forth in Section 5.02 are
         not satisfied, (ii) the Business Day immediately prior to the
         occurrence of an Amortization Event set forth in Section 8.01(d)(ii),
         (iii) the Business Day specified in a written notice from the Purchaser
         following the occurrence of any other Amortization Event, and (iv) the
         date which is fifteen (15)

                                                                              29
<PAGE>

         Business Days after the Purchaser's receipt of written notice from
         Sellers that they wish to terminate the facility evidenced by this
         Agreement.

                  "Amortization Event" has the meaning specified in Article
         VIII.

                  "Authorized Officer" means, with respect to any Person, its
         president, corporate controller, treasurer or chief financial officer.

                  "BCI" means Billings Concepts, Inc., as Delaware Corporation.

                  "BCI Agreement" means the Invoice Ready Billing and
         Information Management Services Agreement, dated as of July 31, 2001,
         between SGOC and BCI.

                  "Business Day" means any day on which banks are not authorized
         or required to close in New York, New York and The Depository Trust
         Company of New York is open for business.

                  "Capital" of the Purchaser Interest means, at any time, (i)
         the Purchase Price of the Purchaser Interest, minus (ii) (x) the sum of
         the aggregate amount of Collections and (y) all other payments received
         by the Purchaser which in each case are applied to reduce such Capital
         in accordance with the terms and conditions of this Agreement;
         PROVIDED, that such Capital shall be restored (in accordance with
         Section 2.05) in the amount of any Collections or other payments so
         received and applied if at any time the distribution of such
         Collections or payments are rescinded, returned or refunded for any
         reason.

                  "Change of Control" means (i) the acquisition by any Person,
         or two or more Persons acting in concert, of beneficial ownership
         (within the meaning of Rule 13d-3 of the Securities and Exchange
         Commission under the Securities Exchange Act of 1934) of 50% or more of
         the outstanding shares of voting stock of SGCC, (ii) SGCC shall cease
         to own, free and clear of all Adverse Claims, directly or indirectly,
         all of the outstanding capital stock issued and outstanding of either
         Seller or (iii) SGCC shall cease to own directly, free and clear of all
         Adverse Claims, all of the outstanding shares of voting stock of either
         Seller.

                  "Charged-Off Receivable" means a Receivable: (i) as to which
         the Obligor thereof has taken any action, or suffered any event to
         occur, of the type described in Section 8.01(d) (as if references to
         Seller therein refer to such Obligor); (ii) as to which the Obligor
         thereof, if a natural person, is deceased, (iii) which, consistent with
         the Credit and Collection Policy, would be written off either Seller's
         books as uncollectible, (iv) which has been identified by either Seller
         as uncollectible or (v) which is a Defaulted Receivable.

                  "Collection Account" means a depositary account owned by
         Purchaser and NTFC in which all Collections are required to be
         deposited for the benefit of Purchaser and NTFC.

                  "Collection Bank" means First Union Bank or any bank that
         holds the Collection Account.

                                                                              30
<PAGE>

                  "Collections" means, with respect to any Receivable, all cash
         collections and other cash proceeds in respect of such Receivable,
         including, without limitation, all yield, Finance Charges or other
         related amounts accruing in respect thereof and all cash proceeds of
         Related Security with respect to such Receivable.

                  "Commercial Accounts Receivable" shall mean all accounts
         receivable set forth on Schedule E hereto.

                  "Concentration Limit" means, at any time, for any Obligor, the
         limit set forth in the Concentration Limit Letter Agreement, or such
         other amount (a "Special Concentration Limit") for such Obligor as set
         forth in the Concentration Limit Letter Agreement or as otherwise
         designated by the Purchaser; PROVIDED, that in the case of an Obligor
         and any Affiliate of such Obligor, the Concentration Limit shall be
         calculated as if such Obligor and such Affiliate are one Obligor; and
         provided, further, that the Purchaser may, upon not less than five (5)
         Business Days' notice to Sellers, cancel any Special Concentration
         Limit.

                  "Concentration Limit Letter Agreement" means that certain
         letter agreement in a form mutually agreed upon between Purchaser and
         Sellers, between the Sellers and the Purchaser, regarding the
         Concentration Limit and designating certain Special Concentration
         Limits, as it may be amended or modified and in effect from time to
         time. "Consent and Estoppel Agreement" means that certain Consent and
         Estoppel Agreement, dated April __, 2001, by and between Billing
         Concepts, Inc., a Delaware corporation, SGCC, SGOC, SGLC and Purchaser.

                  "Consulting Fee" means $300,000 payable by Sellers to
         Purchaser as provided in Section 5.01 hereof.

                  "Contingent Obligation" of a Person means any agreement,
         undertaking or arrangement by which such Person assumes, guarantees,
         endorses, contingently agrees to purchase or provide funds for the
         payment of, or otherwise becomes or is contingently liable upon, the
         obligation or liability of any other Person, or agrees to maintain the
         net worth or working capital or other financial condition of any other
         Person, or otherwise assures any creditor of such other Person against
         loss, including, without limitation, any comfort letter, operating
         agreement, take-or-pay contract or application for a letter of credit.

                  "Contract" means, with respect to any Receivable, any and all
         instruments, agreements or other writings (other than the related
         Invoice) pursuant to which such Receivable arises or which evidences
         such Receivable.

                  "Credit and Collection Policy" means Sellers' credit and
         collection policies and practices relating to Contracts, Invoices and
         Receivables existing on the date hereof and summarized in Exhibit VII
         hereto, as modified from time to time in accordance with this
         Agreement.

                  "Current Portion of Discount" shall mean for each respective
         Accrual Period relating to the Purchaser Interest the current portion
         of the Discount payable on each Settlement Date

                                                                              31
<PAGE>

         equal to the product of (a) 11% multiplied by (b) the Capital of such
         Purchaser Interest, computed for each day elapsed during such Accrual
         Period on an annualized basis.

                  "Current Portion of Discount Reserve" means on any date, an
         amount equal the Current Portion of Discount that is accrued and unpaid
         of such date.

                  "Deemed Collections" means the aggregate of all amounts
         Sellers shall have been deemed to have received as a Collection of a
         Receivable. Sellers shall be deemed to have received a Collection of a
         Receivable if at any time (i) the Outstanding Balance of any such
         Receivable is either (x) reduced as a result of any defective or
         rejected goods or services, any discount or any adjustment or otherwise
         by Sellers (other than cash Collections on account of the Receivables)
         or (y) reduced or canceled as a result of a setoff in respect of any
         claim by any Person (whether such claim arises out of the same or a
         related transaction or an unrelated transaction), in which case the
         Deemed Collection amount shall equal the amount by which such
         Collection is reduced or (ii) any of the representations or warranties
         in Article V are no longer true with respect to any such Receivable, in
         which case the Deemed Collection amount shall be equal to the full
         amount of such Collection.

                  "Default Fee" means with respect to any amounts due and
         payable by Sellers in respect of any Aggregate Unpaids, an amount equal
         to the interest on any such unpaid Aggregate Unpaids at a rate per
         annum equal to 18%.

                  "Default Ratio" means, as at the last day of any calendar
         month, a percentage equal to (i) the sum of (A) the aggregate
         Outstanding Balance of all Defaulted Receivables as of such day plus
         (B) the aggregate Outstanding Balance of all Receivables (other than
         Defaulted Receivables) that became Charged-Off Receivables during such
         month, divided by (ii) the aggregate Outstanding Balance of all
         Receivables as of such day.

                  "Defaulted Receivable" means a Receivable as to which any
         payment, or part thereof, remains unpaid for ninety (90) days or more
         from the original invoice date for such payment, provided that any
         Receivable in respect of which BCI provides billing services shall not
         be considered a Defaulted Receivable for purposes of the definition of
         "Eligible Receivable" and the Deemed Collection provisions of this
         Agreement unless and until such Receivable shall have aged more than
         105 days from date of transmission by Sellers to BCI of billing tapes
         in accordance with Sellers' past billing practice.

                  "Delinquent Receivable" means a Receivable as to which any
         payment, or part thereof, remains unpaid for sixty-one (61) days or
         more, but less than ninety (90) days, from the original invoice date
         for such payment, provided that (i) any Receivable in respect of which
         BCI provides billing services shall not be considered a Delinquent
         Receivable for purposes of the definition of "Eligible Receivable" and
         the Deemed Collection provisions of this Agreement unless such
         Receivable shall have aged more than 105 days from date of transmission
         by Sellers to BCI of billing tapes in accordance with Sellers' past
         billing practice, and (ii) a Receivable in respect of which Worldcom is
         the Obligor shall not be considered a Delinquent Receivable for
         purposes of the definition of "Eligible Receivable" and the Deemed
         Collection provisions of this Agreement unless and until such
         Receivable shall have aged 75 days from its original invoice date.

                                                                              32
<PAGE>

                  "Designated Obligor" means an Obligor indicated by the
         Purchaser to Sellers in writing.

                  "Discount" means for each respective Accrual Period relating
         to the Purchaser Interest, the product of (x) 16% multiplied by (y) the
         Capital of such Purchaser Interest (which Capital shall be deemed to
         include Delinquent Portion of Current Discount in accordance with
         Section 3.02) computed for each day elapsed during such Accrual Period
         on an annualized basis.

                  "Eligible Receivable" means, at any time, a Receivable:

                  (i) the Obligor of which (a) if a natural person, is a
                  resident of the United States or, if a corporation or other
                  business organization, is organized under the laws of the
                  United States or any political subdivision thereof and has its
                  chief executive office in the United States; (b) is not an
                  Affiliate of any of the parties hereto; (c) is not a
                  Designated Obligor; and (d) is not a government or a
                  governmental subdivision or agency,

                  (ii) the Obligor of which is not the Obligor of any
                  Charged-Off Receivable which in the aggregate constitute more
                  than twenty-five percent (25%) of all Receivables of such
                  Obligor,

                  (iii) which is not a Charged-Off Receivable, Defaulted
                  Receivable or Delinquent Receivable,

                  (iv) which by its terms is due and payable within forty-five
                  (45) days of the original billing date therefore, has not had
                  its payment terms extended, and has not had its original
                  billing date changed for any portion thereof,

                  (v) which is either (a) an "account" within the meaning of
                  Section 9-106 of the UCC of all applicable jurisdictions or
                  (b) a general intangible within the meaning of the UCC.

                  (vi) which arises under an Invoice which represents all or
                  part of the sale price of merchandise, insurance and services
                  within the meaning of the Investment Company Act of 1940,
                  Section 3(c)5, as amended,

                  (vii) which is denominated and payable only in United States
                  dollars in the United States,

                  (viii) which arises under an Invoice which, together with such
                  Receivable, is in full force and effect and constitutes the
                  legal, valid and binding obligation of the related Obligor
                  enforceable against such Obligor in accordance with its terms
                  subject to no offset, counterclaim or other defense,

                                                                              33
<PAGE>

                  (ix) which arises under a Contract which (a) either does not
                  require the Obligor under such Contract to consent to the
                  transfer, sale or assignment of the rights and duties of the
                  applicable Seller any of its assignees under such Contract or
                  requires such consent and such consent has been obtained
                  within sixty (60) days of the date hereof and (b) does not
                  contain a confidentiality provision that purports to restrict
                  the ability of the Purchaser to exercise its rights under this
                  Agreement, including, without limitation, its right to review
                  the Contract and Invoices,

                  (x) which arises under a Invoice that contains an obligation
                  to pay a specified sum of money, contingent only upon the sale
                  of goods or the provision of services by the applicable
                  Seller,

                  (xi) which, together with the Contract and Invoice related
                  thereto, does not contravene any law, rule or regulation
                  applicable thereto (including, without limitation, any law,
                  rule and regulation relating to truth in lending, fair credit
                  billing, fair credit reporting, equal credit opportunity, fair
                  debt collection practices and privacy) and with respect to
                  which no part of the Contract or Invoice related thereto is in
                  violation of any such law, rule or regulation,

                  (xii) which satisfies all applicable requirements of the
                  Credit and Collection Policy,

                  (xiii) which was generated in the ordinary course of the
                  applicable Seller's business,

                  (xiv) which arises solely from the sale of goods or the
                  provision of services to the related Obligor by the applicable
                  Seller, and not by any other Person (in whole or in part),

                  (xv) as to which the Purchaser has not notified Sellers that
                  the Purchaser has determined in good faith that such
                  Receivable or class of Receivables is not acceptable as an
                  Eligible Receivable, including, without limitation, because
                  such Receivable arises under a Contract or an Invoice that is
                  not acceptable to the Purchaser,

                  (xvi) which is not subject to any right of rescission,
                  set-off, counterclaim, any other defense (including defenses
                  arising out of violations of usury laws) of the applicable
                  Obligor against the applicable Seller or any other Adverse
                  Claim, and the Obligor thereon holds no right as against the
                  applicable Seller to cause such Seller to repurchase the goods
                  or merchandise the sale of which shall have given rise to such
                  Receivable (except with respect to sale discounts effected
                  pursuant to the Contract, or defective goods returned in
                  accordance with the terms of the Contract); PROVIDED, that in
                  the case of a Receivable which may be subject to set-off due
                  to the fact that a Seller has a payable outstanding to the
                  related Obligor, that portion, if any, of such Receivable
                  which is in excess of such payable, shall be an "Eligible
                  Receivable",

                  (xvii) as to which (a) the applicable Seller has satisfied and
                  fully performed all obligations on its part with respect to
                  such Receivable required to be fulfilled by it, (b) no further
                  action is required to be performed by any Person with respect
                  thereto

                                                                              34
<PAGE>

                  other than payment thereon by the applicable Obligor and (c)
                  no "bill and hold" arrangement applies, and

                  (xviii) as to which the Invoice in respect thereto is
                  effective to create, and has created, a legal, valid and
                  binding obligation of the related Obligor to pay the
                  Outstanding Balance of the Receivable created thereunder and
                  any accrued interest thereon, enforceable against the Obligor
                  in accordance with its terms.

                  "ERISA" means the Employee Retirement Income Security Act of
         1974, as amended from time to time.

                  "Excluded Receivable" means a Receivable described on Schedule
         D, as such schedule may be modified from time to time by the Sellers
         with the consent of the Purchaser.

                  "Facility Account" means Sellers' operating account at First
         Union Bank in Charlotte, North Carolina having the following account
         number: 2000005780268.

                  "Facility Termination Date" means the earliest of (i) April
         ___, 2003 and (ii) the Amortization Date.

                  "Federal Bankruptcy Code" means Title 11 of the United States
         Code entitled "Bankruptcy," as amended and any successor statute
         thereto.

                  "Federal Funds Effective Rate" means, for any period, a
         fluctuating interest rate per annum for each day during such period
         equal to (a) the weighted average of the rates on overnight federal
         funds transactions with members of the Federal Reserve System arranged
         by federal funds brokers, as published for such day (or, if such day is
         not a Business Day, for the preceding Business Day) by the Federal
         Reserve Bank of New York in the Composite Closing Quotations for U.S.
         Government Securities; or (b) if such rate is not so published for any
         day which is a Business Day, the average of the quotations at
         approximately 10:30 a.m. (Washington D.C. time) for such day on such
         transactions received by the Purchaser from three federal funds brokers
         of recognized standing selected by it.

                  "Finance Charges" means, with respect to a Receivable, any
         finance, interest, late payment charges or similar charges owing by an
         Obligor pursuant to the related Contract and Invoice.

                  "GAAP" means generally accepted accounting principles in
         effect in the United States of America as of the date of this
         Agreement.

                  "Identified Accounts Receivable" means all accounts receivable
         set forth on Schedule C hereto.

                  "Incremental Purchase" means a purchase of one or more
         Purchaser Interests which increases the total outstanding Aggregate
         Capital hereunder.

                                                                              35
<PAGE>

                  "Indebtedness" of a Person means such Person's (i) obligations
         for borrowed money, (ii) obligations representing the deferred purchase
         price of property or services (other than accounts payable arising in
         the ordinary course of such Person's business payable on terms
         customary in the trade), (iii) obligations, whether or not assumed,
         secured by liens or payable out of the proceeds or production from
         property now or hereafter owned or acquired by such Person, (iv)
         obligations which are evidenced by notes, acceptances, or other
         instruments, (v) capitalized lease obligations, (vi) net liabilities
         under interest rate swap, exchange or cap agreements, (vii) Contingent
         Obligations and (viii) liabilities in respect of unfunded vested
         benefits under plans covered by Title IV of ERISA.

                  "Intercreditor and Subordination Agreement" means the
         Intercreditor and Subordination Agreement, dated April ___, 2001, among
         Purchaser, SGOC and NTFC, including all successors and assigns to such
         parties.

                  "Invoice" means, with respect to any Receivable, an invoice
         that conforms to form required by the Credit and Collection Policy.

                  "Loss Horizon Ratio" means, as of the last day of any calendar
         month, a percentage equal to (i) the Seller Sales during the
         three-month period ended on such date, divided by (ii) the aggregate
         Outstanding Balance of all Eligible Receivables as of such date.

                  "Loss Percentage" means, at any time, the greater of (i) 15%
         and (ii) (a) two (2) times (b) the Loss Ratio, times (c) the Loss
         Horizon Ratio (in each case as determined as of the last day of the
         calendar month then most recently ended).

                  "Loss Ratio" means, as of the last day of any calendar month,
         a percentage equal to the highest three-month rolling average Default
         Ratio as of the last day of any of the twelve (12) months then most
         recently ended.

                  "Loss Reserve" means, on any date, an amount equal to the Loss
         Percentage multiplied by the Net Receivables Balance at such time.

                  "Material Adverse Effect" means a material adverse effect on
         (i) the financial condition or operations of any Seller or SGCC, (ii)
         the ability of any Seller or any of its Subsidiaries to perform its
         obligations under any Transaction Document, (iii) the legality,
         validity or enforceability of this Agreement or any other Transaction
         Document, (iv) the Purchaser's interest in the Receivables generally or
         in any significant portion of the Receivables, the Related Security or
         the Collections with respect thereto, or (v) the collectibility of the
         Receivables generally or of any material portion of the Receivables.

                  "Net Receivables Balance" means, at any time, the aggregate
         Outstanding Balance of all Eligible Receivables at such time reduced by
         the aggregate amount by which the Outstanding Balance of all Eligible
         Receivables of each Obligor and its Affiliates exceeds the
         Concentration Limit for such Obligor.

                                                                              36
<PAGE>

                  "NTFC" means NTFC Capital Corporation, a Delaware corporation,
         and any successor or assign of NTFC in respect of its rights and
         obligations under the NTFC Loan Agreement.

                  "NTFC Loan Agreement" means the Loan and Security Agreement,
         dated as of December 31, 1998, by and between NTFC Capital Corporation,
         a Delaware corporation and SGCC, including all successors and assigns
         to such parties, as amended, supplemented, modified or waived.

                  "NTFC Security Interest" means any and all security interests
         assigned, conveyed, granted or otherwise transferred by SGCC to NTFC
         under the NTFC Loan Agreement.

                  "Obligations" means (i) all amounts payable as Discount, (ii)
         all amounts payable pursuant to Article IX and (iii) all Default Fees
         (including those Default Fees payable pursuant to Section 3.02 hereof).

                  "Obligor" means a Person obligated to make payments pursuant
         to a Contract and/or Invoice.

                  "Outstanding Balance" of any Receivable at any time means the
         then outstanding principal balance thereof.

                  "Person" means an individual, partnership, corporation
         (including a business trust), limited liability company, joint stock
         company, trust, unincorporated association, joint venture or other
         entity, or a government or any political subdivision or agency thereof.

                  "Potential Amortization Event" means an event which, with the
         passage of time or the giving of notice, or both, would constitute an
         Amortization Event.

                  "Proposed Reduction Date" has the meaning set forth in
        Section 1.03.

                  "Purchase Limit" has the meaning set forth in Section 1.01.

                  "Purchase Notice" has the meaning set forth in Section 1.02.

                  "Purchase Price" has the meaning set forth in Section 1.01.

                  "Purchaser" has the meaning set forth in the preamble to this
         Agreement.

                  "Purchaser Interest" means, at any time, an undivided
         percentage ownership interest (computed as set forth below) associated
         with a designated amount of Capital, selected pursuant to the terms and
         conditions hereof in (i) each Receivable arising prior to the time of
         the most recent computation or recomputation of such undivided
         interest, (ii) all Related Security with respect to each such
         Receivable, and (iii) all Collections with respect to, and other
         proceeds of, each such Receivable. Each such undivided percentage
         interest shall equal:

                                                                              37
<PAGE>

                                        C
                                 NRB - LR - APD

                              where:

                                    C =  the Capital of the Purchaser Interest
                                   LR =  the Loss Reserve
                                  APD =  Accrued Portion of Discount
                                  NRB =  Net Receivables Balance

                  Such undivided percentage ownership interest shall be
         initially computed on its date of purchase. Thereafter, until the
         Amortization Date, the Purchaser Interest shall be automatically
         recomputed (or deemed to be recomputed) on each day prior to the
         Amortization Date. The variable percentage represented by the Purchaser
         Interest as computed (or deemed recomputed) as of the close of the
         business day immediately preceding the Amortization Date shall remain
         constant at all times thereafter.

                  "Receivable" means, in respect to the Included Receivables,
         all indebtedness and other obligations owed to each Seller (at the time
         it arises, and before giving effect to any transfer or conveyance
         hereunder) or in which Sellers have a security interest or other
         interest, including, without limitation, any indebtedness, obligation
         or interest constituting an account, instrument or general intangible,
         arising in connection with the sale of goods or the rendering of
         services by the applicable Seller and further includes, without
         limitation, the obligation to pay any Finance Charges with respect
         thereto. The Term "Receivable" shall not include any Excluded
         Receivable. Indebtedness and other rights and obligations arising from
         any one transaction, including, without limitation, indebtedness and
         other rights and obligations represented by an individual Invoice,
         shall constitute a Receivable separate from a Receivable consisting of
         the indebtedness and other rights and obligations arising from any
         other transaction; PROVIDED HOWEVER, that any indebtedness, rights or
         obligations referred to in the immediately preceding sentence shall be
         a Receivable regardless of whether the account debtor or either Seller
         treats such indebtedness, rights or obligations as a separate payment
         obligation.

                  "Records" means, with respect to any Receivable, all
         Contracts, Invoices and other documents, books, records and other
         information (including, without limitation, computer programs, tapes,
         disks, punch cards, data processing software and related property and
         rights) relating to such Receivable, any Related Security therefore and
         the related Obligor.

                  "Reduction Notice" has the meaning set forth in Section 1.03.

                  "Reinvestment" has the meaning set forth in Section 2.02.

                  "Related Security" means, with respect to any Receivable:

                  (i) all of either Seller's interest in the inventory and goods
                  (including returned or repossessed inventory or goods), if
                  any, the sale, financing or lease of which by the

                                                                              38
<PAGE>

                  applicable Seller gave rise to such Receivable, and all
                  insurance contracts with respect thereto,

                  (ii) all other security interests or liens and property
                  subject thereto from time to time, if any, purporting to
                  secure payment of such Receivable, whether pursuant to the
                  Contract related to such Receivable or otherwise, together
                  with all financing statements and security agreements
                  describing any collateral securing such Receivable,

                  (iii) all guaranties, letters of credit, insurance and other
                  agreements or arrangements of whatever character from time to
                  time supporting or securing payment of such Receivable whether
                  pursuant to the Contract related to such Receivable or
                  otherwise,

                  (iv) all service contracts and other contracts and agreements
                  associated with such Receivable,

                  (v) all Records (other than Contracts) related to such
                  Receivable and all rights (with respect to enforcement or
                  otherwise) under the Contracts related to such Receivable, and

                  (vi) all proceeds of any of the foregoing.

                  "Required Notice Period" means (i) in cases where the
         Aggregate Reduction is greater than or equal to $500,000, two (2)
         Business Days and (ii) in cases where the Aggregate Reduction is less
         than $500,000, five (5) Business Days.

                  "Retail Accounts Receivable" shall mean those accounts
         receivable set forth on Schedule F thereto.

                  "Seller" has the meaning set forth in the preamble to this
         Agreement.

                  "Seller Parties" has the meaning set forth in the preamble to
         this Agreement.

                  "Sellers" has the meaning set forth in the preamble to this
         Agreement.

                  "Sellers Interest" means, at any time, an undivided percentage
         ownership interest of Sellers in the Receivables, Related Security and
         all Collections with respect thereto equal to (i) one, minus (ii) the
         Purchaser Interest.

                  "Sellers Sales" means, in respect of any period, aggregate
         sales by the Sellers that shall have given rise to Receivables in
         accordance with generally accepted accounting principles.

                  "Servicer" means at any time the Person (which may be the
         Purchaser) then authorized pursuant to Article VII to service,
         administer and collect Receivables as set forth in Article VII.

                                                                              39
<PAGE>

                  "Servicing Fee" has the meaning set forth in Section 7.06.

                  "Settlement Date" means the fifth (5th) Business Day of each
         quarter (or such other day as agreed to by the Sellers and the
         Purchaser in writing).

                  "Settlement Period" means the immediately preceding Accrual
         Period in respect of the Purchaser Interest.

                  "Subsidiary" of a Person means (i) any corporation more than
         50% of the outstanding securities having ordinary voting power of which
         shall at the time be owned or controlled, directly or indirectly, by
         such Person or by one or more of its Subsidiaries or by such Person and
         one or more of its Subsidiaries, or (ii) any partnership, association,
         limited liability company, joint venture or similar business
         organization more than 50% of the ownership interests having ordinary
         voting power of which shall at the time be so owned or controlled.
         Unless otherwise expressly provided, all references herein to a
         "Subsidiary" shall mean a Subsidiary of either Seller.

                  "Transaction Documents" means, collectively, this Agreement,
         each Purchase Notice, the Collection Account Agreement, the
         Concentration Limit Letter Agreement, the Intercreditor and
         Subordination Agreement, the Consent and Estoppel Agreement and all
         other instruments, documents and agreements executed and delivered in
         connection herewith.

                  "UCC" means the Uniform Commercial Code as from time to time
         in effect in the specified jurisdiction.

                  "Weekly Report" means a report, in substantially the form of
         Exhibit X hereto (appropriately completed), furnished by the Servicer
         to the Purchaser pursuant to Section 7.04.

                  All accounting terms not specifically defined herein shall be
         construed in accordance with GAAP.

                                                                              40

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