Document:

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                                                                    EXHIBIT 10.5

CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH
  THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
        OMITTED PORTIONS. OMITTED INFORMATION HAS BEEN REPLACED BY [*].

                           GMAC COMMERCIAL FINANCE LLC
                              FACTORING AGREEMENT

Arbinet-thexchange, Inc.
75 Broad Street, 20th Floor
New York NY 10004

     Effective as of February 1 2003 ("Effective Date"), GMAC Commercial Finance
LLC ("Factor") and Arbinet-thexchange, Inc. ("Client") agree that Factor shall
act as Client's sole factor upon the following terms and conditions:

     1.   COVERED SALES; SECURITY INTEREST

          (a) Client hereby assigns and sells to Factor, as absolute owner, and
Factor hereby purchases from Client, all Accounts, created on or after the
Effective Date (the "Purchased Accounts"). Factor's purchase of and acquisition
of title to each Purchased Account will be effective as of the date of its
creation.

          (b) Client hereby grants to Factor a continuing security interest in
all of the Collateral as security for all Obligations.

          (c) Factor acknowledges Client's intention to obtain financing from
Lenders, as defined hereinafter, based upon a priority interest in the
Collateral. In the event Factor obtains priority in the Collateral over the
Lenders, Factor agrees to subordinate Factor's position in the Collateral to
Lenders' positions therein on terms reasonably satisfactory to Factor.

     2.   CUSTOMER CREDIT APPROVAL

          Client shall submit to Factor the information requested by Factor to
analyze the credit worthiness of each of Client's Customers. Factor may, in
Factor's discretion, approve in writing all or a portion of Client's Customers'
purchases, either by establishing a credit line limited to a specific amount for
a specific Customer, or by approving all or a portion of a Customer's purchases.
If Factor does not respond to a request from Client for a credit approval or
credit line with respect to a Customer, using reasonable commercial efforts,
within thirty (30) business days after the request, in the case of a Foreign
Customer, or within seven (7) business days after the request, in the case of
Customer that is not a Foreign Customer, the request shall be deemed denied. No
credit approval in respect of a Customer shall be effective (a) unless in
writing and (b) unless the initial utilization of the purchased
telecommunications network capacity occurs within the time specified in Factor's
written credit approval or within seventy-five (75) days after the approval is
given, if no time is specified. No credit line in respect of a Customer shall be
effective unless in writing and unless utilization of the purchased
telecommunications network capacity occurs while the credit line is in effect.
After the Customer has utilized the purchased telecommunications network
capacity, Factor shall then have the Credit Risk (but not the risk of nonpayment
for any other reason), to the extent of the dollar amount specified in the
credit approval, on all Purchased Accounts evidenced by invoices which arise
from purchases approved by Factor in writing except for those Purchased Accounts
evidenced by invoices less than One Hundred Fifty Dollars ($150.00). Factor
shall have neither the Credit Risk nor the risk of non-payment for any other
reason on Purchased Accounts arising from purchases not approved by Factor in
writing. Factor may cancel Factor's credit approval or withdraw or adjust a
credit line at any time before utilization of the purchased telecommunications
network capacity based upon Factor's reasonable insecurity concerning its
ability to enforce and collect Accounts Receivable owing from such Customer.
Notwithstanding the above, (i) a credit line may be reduced to the extent of any
Customer Credit Balances due to the Customer that are held by Client; (ii) a
credit line shall not be reduced below an amount equal to the sum of (a) the
undrawn amount of unexpired letters of credit issued for the account of the
Customer that are acceptable to Factor as to form and issuer and that have been
issued to Factor as beneficiary or that have been issued to Client but are the
subject of assignments of proceeds in favor of Factor (with issuer consents)
that are acceptable to Factor as to form; and (b) cash deposited with Factor to
secure the Customer's obligations pursuant to Cash Collateral Agreements
acceptable to Factor as to form and authorization; and (iii) a credit line or
credit approval with respect to a Customer shall be deemed automatically
cancelled upon the occurrence of an Insolvency Event with respect to such
Customer. Accordingly (i) if Factor cancels or is deemed to have cancelled a
credit line or credit approval in respect of a Customer, then Factor shall not
have the Credit Risk on Purchased Accounts arising from telecommunications
network capacity utilized by such Customer after the date of such cancellation
by Factor; and (ii) if Factor reduces a credit line in respect of a Customer,
then Purchased Accounts on which such Customer is the account debtor arising
from telecommunications network capacity utilized after such reduction shall be
subject to the credit Sine, as reduced.

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     3.   PURCHASE PRICE OF PURCHASED ACCOUNTS; RESERVES; PAYMENT REQUEST

          (a) The purchase price of Purchased Accounts is the net face amount
thereof. The term "net face amount" means the gross face amount of the invoice,
less (i) discounts (which shall be determined by Factor where optional terms are
given and which shall include any Anticipation Reductions); (ii) any other
deductions taken by Customers in accordance with the payment terms of the
Purchased Account as submitted to Factor pursuant to Section 2 hereof; (iii)
credits issued by Client; (iv) allowances granted by Client to Customers of any
nature; (v) [*]; and (vi) such portion of the gross face amount of the invoice
(the "Tax Component") representing a value added tax or other tax which is
payable by the Customer to Client and is to be remitted by Client to the taxing
authority except that the Tax Component is to be deducted by Factor in computing
the purchase price of a Purchased Account only if Client is not obligated to
remit the Tax Component to the taxing authority or is entitled to a credit from
the taxing authority for the Tax Component by reason of the fact that Client did
not collect the Purchased Account directly from the Customer but obtained
payment from a third party as a result of the Customer's financial inability to
pay. The gross face amount of each invoice (the "Gross Face Amount") is the
amount due to Client from its Customer for purchased telecommunications network
capacity utilized during the billing period covered by the invoice, net of
amounts due to the Customer for telecommunications network capacity sold by the
Customer through Client and utilized during the same billing period.
Notwithstanding the foregoing, if Factor issues a credit line or credit approval
with respect to a Customer that is not a Foreign Customer and Factor indicates
that the credit line or credit approval is based on the creditworthiness of the
Customer's foreign parent, then the purchase price of Approved Accounts due from
such Customer shall be equal to 90% of the net face amount of such Approved
Accounts, less Factor's commission,

          (b) As a general matter, Factor's services will be provided on a
non-notification basis and Factor will not communicate with Client's Customers,
except with Client's consent or as Factor may otherwise elect to proceed, as
more fully described below.

          (c) If any Purchased Account on which Factor has the Credit Risk
remains wholly unpaid solely and exclusively because of the Customer's financial
inability to make payment on the Purchased Account for forty-five (45) days or
more after the original due date of such Purchased Account, Client may deliver
to Factor a Payment Request, which Payment Request must be submitted to Factor
not later than seventy-five (75) days after the original invoice date of such
Purchased Account. Factor shall credit the purchase price for each Purchased
Account, [*], on which Factor has the Credit Risk, and for which Client has
submitted a Payment Request in accordance with the terms and provisions of this
agreement, on the Settlement Date, if on such date the Customer's failure to pay
is due solely and exclusively to financial inability, as reasonably determined
by Factor. Without limiting any of Factor's rights set forth herein and
notwithstanding anything to the contrary set forth herein, Factor shall have no
obligation to pay to Client the purchase price on any Purchased Account for
which a Payment Request has been submitted unless Client shall execute and
deliver to Factor (i) all Purchased Account Transfer Documentation (as defined
herein) requested by Factor with respect to the Purchased Account; and (ii)
evidence satisfactory to Factor that Client's title to the Purchased Account as
well as Client's title to all other payment obligations, however arising, due to
Client from the Customer obligated on such Purchased Account, is free and clear
of all liens and encumbrances except in favor of Lenders.

          (d) The purchase price of Purchased Accounts upon which Factor did not
assume or no longer has the Credit Risk shall be payable only upon actual
collection of the Purchased Account and then only to the extent of the amounts
collected. Any amounts collected in excess of the purchase price of Purchased
Accounts that the Customer has identified as applicable to such Purchased
Account shall be the property of Factor. In computing the amount payable by
Factor as the purchase price of Purchased Accounts, (i) Factor shall be credited
with any amounts received or collected by Client in respect of any Purchased
Accounts from or for the account of the Customer obligated thereon (excluding
Customer Credit Balances, as hereinafter defined, but including cash collateral
deposits and payments on letters of credit) and (ii) payments or collections
made by or for the account of a Customer (including cash collateral deposits and
payments on letters of credit but excluding Customer Credit Balances) shall
first be applied to Approved Accounts due from the Customer before being applied
to any other obligations of the Customer to Client. In furtherance of the
foregoing, any collateral security obtained by Client from Customers for the
purpose of securing Customers' obligations on Purchased Accounts, including cash
collateral and letters of credit, shall be disclosed to, assigned and delivered
to Factor promptly after Client's receipt of such collateral security except
that Client may retain possession of collateral security consisting of credits
due Customers from Client resulting from overpayments on Purchased Accounts
("Customer Credit Balances") so long as Client reports to Factor the amount of
such Customer Credit Balances on Client's books at the end of each bi-monthly
billing cycle.

     4.   INTEREST; COMMISSIONS; FEES

          (a) All amounts which Factor pays or advances to Client or for
Client's account in excess of the purchase price of Purchased Accounts shall be
chargeable to Client's account when paid to Client.

          (b) For Factor's services, Factor shall charge to Client's account:

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               (i) monthly, as of the last day of each month, interest on the
average daily balance of all Obligations which are outstanding during such month
at the Borrowing Rate; provided, however, that said interest rate shall not be
less than four and one half percent (4 1/2%) per annum and shall in no event be
higher than the highest rate permitted by New York law. Interest shall be
calculated on the basis of the actual number of days elapsed over a year of
three hundred sixty (360) days and shall begin to accrue on (a) commissions
payable to Factor commencing on the date such commissions are payable pursuant
to this section and (b) other Obligations, five (5) business days after Factor's
demand for payment thereof; and

               (ii) all actual charges incurred by Factor for wire transfers.

          (c) For Factor's services, Client shall pay to Factor within ten (10)
business days after the end of each of Client's semi-monthly billing cycles the
greater of (i) l/24th of the Minimum Annual Commission (as defined herein); or
(ii) the accrued commission for such semi-monthly billing cycle at the rate of
[*] of the gross face amount of each invoice arising in such semi-monthly period
evidencing a Purchased Account that is an Approved Account and that is due from
a Customer that is not a Foreign Customer and [*] of the gross face amount of
each invoice arising in such semi-monthly period evidencing a Purchased Account
that is an Approved Account and that is due from a Foreign Customer, on terms
not exceeding 15 days except with Factor's written approval and at Factor's sole
option, terms for specific Customers may be up to 30 days (such maximum terms of
15 days or 30 days being hereinafter referred to as the "Maximum Invoice Days"),
plus an additional [*] for each additional 30 days or portion thereof of selling
terms; provided, however, that if Client changes the terms any invoice whether
or not Factor consents to such change (it being understood that nothing in this
provision diminishes Factor's rights or Client's obligations under any other
provision hereof), then the commission on the Gross Face Amount of that invoice
shall be the commission hereinabove set forth plus [*] for each thirty days or
portion thereof of such change. The aggregate amount of commissions that Client
is obligated to pay to Factor with respect to Purchased Accounts shall not be
less than a minimum annual commission (the "Minimum Annual Commission") of [*]
for the first Contract Year that this agreement is in effect and [*] for the
second Contract Year.

          (d) On the Effective Date, Factor shall be entitled to a facility fee
payable by Client equal to $35,000, which shall be fully earned on the Effective
Date, shall constitute an Obligation and shall not be subject to refund, rebate
corporation for any reason whatsoever except that nothing contained herein is
intended to limit Client's remedies for Factor's breach of this agreement that
are available under applicable law. The facility fee shall be paid by Client, by
wire transfer, no later than two (2) business days after the Effective Date.

     5.   MATURED FUNDS

          On the last day of each month, Factor shall credit Client's account
with interest at the Matured Funds Rate in effect during such month on the
average daily balance during such month of any amounts payable by Factor to
Client hereunder (as confirmed by Factor by appropriate credit to Client's
account with Factor) which are not drawn by Client on the Settlement Date, while
held by Factor after the Settlement Date.

     6.   CHARGES; BALANCES

          Factor may charge to Client's account all Obligations. Unless
otherwise specified, Obligations consisting of commissions shall be payable on
the dates specified in Section 4(c) hereof and other Obligations shall be
payable five (5) business days after Factor's demand for payment thereof.
Recourse to security will not be required at any time. All credit balances or
other sums at any time standing to Client's credit and all Reserves on Factor's
books, and all of Client's property in Factor's possession at any time or in the
possession of any parent, affiliate or subsidiary of Factor or on or in which
Factor or any of them have a lien or security interest, may be held and reserved
by Factor as security for all Obligations. Factor will account to Client monthly
and each monthly accounting statement will be fully binding on Client and will
constitute an account stated, unless, within forty five (45) days after such
statement is mailed to Client or within thirty (30) days after the mailing of
any adjustment thereof Factor may make, Client gives Factor specific written
notice of exceptions. Client recognizes that the amounts evidenced by checks,
notes, drafts or any other items of payment relating to and/or proceeds of the
Purchased Accounts and the other Collateral may not be received by Factor in
good and available funds on the date delivered. In consideration of Factor's
agreement to conditionally credit Client's account as of the business day on
which Factor receives those items of payment, Client agrees that, in computing
the charges under this agreement, all items of payment shall be deemed applied
by Factor on the business day of confirmation to Factor that such items of
payment have been collected in good and available funds and finally credited to
Factor's account.

     7.   REPRESENTATIONS, WARRANTIES AND COVENANTS

          Client hereby represents, warrants and covenants that:

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          (a) As of the Effective Date, Client has good title to the Collateral,
including without limitation, the Purchased Accounts, free of any encumbrance
except in Factor's favor or in favor of Silicon Valley Bank and Orix USA
Corporation ("Lenders"); each Purchased Account is a bona fide, enforceable
obligation arising in the ordinary course of business; Client's Customer is
unconditionally obligated to pay at maturity the full amount of each Purchased
Account without defense, counterclaim or offset (regardless of merit); all
documents in connection therewith are genuine; [*]; and Client has applied
Customer payments to Purchased Accounts and to other payment obligations of
Customers consistently with application instructions issued by Customers with
respect to such payments.

          (b) Client's exact legal name is as set forth on the signature page of
this agreement. Client shall not change Client's legal name unless Factor shall
have received not less than sixty (60) days prior written notice of such
proposed change. Client has not, during the past five years, been known by or
used any Trade Names or been a party to any merger or consolidation, or acquired
all or substantially all of the assets of any entity, or acquired any of its
property or assets out of the ordinary course of business, except as set forth
on Schedule 7(b).

          (c) Client is an organization of the type and organized in the
jurisdiction set forth on Schedule 7(c), Schedule 7(c) accurately sets forth
Client's organizational identification number or accurately states that Client
has none and accurately sets forth Client's federal employer identification
number. Client shall not change Client's organizational identification number
(or if Client does not have an organizational identification number, Client
shall not acquire one), or change Client's type of organization, jurisdiction of
organization or other legal structure unless Factor shall have received not less
than sixty (60) days prior written notice of such proposed change.

          (d) Client's chief executive office and mailing address and Client's
Records concerning Accounts are located only at the address identified as such
on Schedule 7(d). and Client's only other places of business and the only other
locations of Collateral, if any, are the addresses set forth on Schedule 7(d)
Schedule 7(d) correctly identifies any of such locations which are not owned by
Client and sets forth the owners and/or operators thereof. Client shall not
change Client's chief executive office, mailing address or any location of
Collateral unless Factor shall have received not less than forty-five (45) days
prior written notice of such proposed change.

          (e) Client shall furnish to Factor (i) within three (3) business days
after the last business day of each of Client's semi-monthly billing periods, a
detailed sales register and a detailed aged trial balance of all Purchased
Accounts as of the end of such semi-monthly billing period, certified by
Client's Chief Executive Officer, Chief Financial Officer, Chief Administrative
Officer, Vice President of Finance or Vice President of Business Systems; (ii)
internally prepared semi-annual financial statements as of June 30th and
December 3lst of each year within sixty (60) days after the end of each such
semi-annual period, in form and substance acceptable to Factor and certified by
Client's Chief Executive Officer, Chief Financial Officer, Chief Administrative
Officer, Vice President of Finance or Vice President of Business Systems; and
(iii) within one hundred twenty (120) days after the end of Client's fiscal
year, an annual financial statement with respect to such fiscal year, in form
and substance acceptable to Factor, certified by Client's Chief Executive
Officer, Chief Financial Officer or Chief Administrative Officer and reviewed by
Ernst & Young or another independent certified public accountant acceptable to
Factor; and (iv) when requested by Factor after reasonable notice, a
confirmation of the assignment to Factor of any Approved Accounts outstanding at
the time of such request and of any other Purchased Accounts due from the
Customer owing such Approved Accounts. Client shall, at Client's expense,
furnish Factor with other financial and operational information requested by
Factor from time to time. After reasonable notice, Factor shall have full access
to and the right to audit, check, inspect and make abstracts and copies from
Client's Records, audits, correspondence and all other papers relating to the
Collateral and the operation of Client's business. Factor and its agents may
enter upon Client's premises at any time during business hours after reasonable
notice, and from time to time, for the purpose of inspecting the Collateral and
any and all Records pertaining thereto and the operation of Client's business.
Factor shall give Client reasonable notice prior to conducting any inspections,
audits or examinations. On the first day of each month following any month in
which Factor performs any collection audit or collateral field examination,
Client shall pay to Factor a fee equal to Factor's then effective standard rate
per day, per person, employed or retained by Factor to perform such audits and
collateral field examinations, it being acknowledged that as of the Effective
Date, Factor's standard rate is $750 per day, per person, plus all costs, fees
and expenses incurred by Factor or its representatives in the performance of
such audits and collateral field examinations. Factor agrees that during the
first two Contract Years, Factor's standard rate per day, per person, shall
remain $750, So long as no Event of Default has occurred, Factor shall conduct
no more than two collection audits of Client's Records during each Contract Year
and shall conduct only one collateral field examination, which collateral field
examination shall be conducted within 90 days of the Effective Date but in no
event earlier than April 15, 2003.

          (f) Client shall, within five (5) business days of their issuance,
provide Factor with duplicate originals of all credits which Client issues to
Client's Customers that are obligated on Approved Accounts or electronically
transmit the details of such credits to Factor in a format acceptable to Factor,
and, in either case,[*]. Should Factor so elect, Factor may at any

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time in Factor's discretion, following a Credit Deterioration affecting a
Customer owing Approved Accounts (i) withdraw Client's authority to issue
credits to such Customers without Factor's prior written consent; or (ii) [*].
In addition to and not in limitation of the foregoing, no credits, allowances or
adjustments of any kind concerning any Approved Account or other Purchased
Accounts due from Customers owing Approved Accounts may be made by Client
without Factor's prior written approval after Factor has (A) credited Client's
account with the purchase price for such Purchased Account; (B) withdrawn any
credit approval with respect thereto; or (C) following a Credit Deterioration
affecting a Customer, elected to communicate with the Customer with respect
thereto or to collect such Purchased Account directly. Factor shall have no
obligation to take any steps to collect Purchased Accounts on which Factor did
not assume or no longer has the Credit Risk and accordingly Factor may at its
option, upon payment of all outstanding Approved Accounts due from a Customer,
reassign to Client any remaining Purchased Accounts due from such Customer.

          (g) Factor's Credit Risk, if any, on a Purchased Account shall
immediately terminate without any action on Factor's part in the event that (i)
[*] (ii) any representation, warranty or covenant made by Client to Factor in
this agreement or elsewhere as to the Purchased Account is breached; (iii)
Client grants more extended terms or additional dating beyond the Maximum
Invoice Days on the Purchased Account without Factor's prior written approval;
(iv) Client has failed to comply with the Collection Procedures Guidelines with
respect to such Purchased Account; (v) Client shall make any change to the terms
of the Purchased Account without Factor's prior written consent; or (v) Client
fails to provide to Factor the reports, information or documentation required to
be provided hereunder with respect to the Purchased Account (whether or not such
reports, information or documentation are requested by Factor before or after
the effective date of termination of this Agreement)[*], Factor's Credit Risk,
if any, on all Purchased Accounts shall terminate without any action on Factor's
part if Client fails to pay commissions within ten (10) business days of the end
of each of Client's semi-monthly billing cycles, as specified in Section 4(c)
and any other Obligations within five (5) business days after Factor's demand
therefor.[*]

          (h) Client is and shall remain in compliance with all laws,
regulations and rules applicable to Client's business of providing a trading
exchange for telephone network capacity, including all laws, rules and
regulations of the United States and state and local governmental units relating
to telecommunications services and all laws, rules and regulations of foreign
jurisdictions in which Foreign Customers obligated on Purchased Accounts are
located.

          (i) Client shall take all other actions requested by Factor from time
to time to cause the attachment, perfection and priority of, and Factor's
ability to enforce, Factor's security interest in any and all of the Collateral,
subject only to the prior security interest of the Lenders. Client irrevocably
and unconditionally authorizes Factor (or Factor's agent) to file and ratifies
the filing at any time and from time to time of such financing statements with
respect to the Collateral naming Factor or Factor's designee as the secured
party and Client as debtor, as Factor may require, and including any other
information with respect to Client or otherwise required by part 5 of Article 9
of the Uniform Commercial Code of such jurisdictions as Factor may determine,
and setting forth a notice that any disposition of any of the Collateral by
Client without Factor's prior written consent violates the rights of Factor,
together with any amendment and continuations with respect thereto, which
authorization shall apply to all financing statements filed on, prior to or
after the date hereof. Client agrees that the foregoing authorizations shall be
irrevocable while this agreement remains in effect and thereafter until Factor
has received final payment and satisfaction in full in immediately available
funds of all Obligations. In no event shall Client at any time file, or permit
or cause to be filed, any correction statement or termination statement with
respect to any financing statement (or amendment or continuation with respect
thereto) naming Factor or Factor's designee as secured party and Client as
debtor.

          (j) Upon Factor's reasonable request, Client shall, at Client's
expense, duly execute and deliver, or shall cause to be duly executed and
delivered, to Factor such further instruments and do and cause to be done such
further acts as may be necessary or proper in the opinion of Factor to
effectuate the provisions and purposes of this agreement.

          (k) Client shall maintain at its chief executive office, or at its
Herndon, Virginia facility, all sales contracts and other documentation relating
to the Purchased Accounts, and Client shall provide Factor with access to and
use of such original documentation upon Factor's request from time to time,
after reasonable notice.

     8.   INVOICING; NON-NOTIFICATION; ELECTION TO PROCEED; APPLICATION OF
          PROCEEDS

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          (a) With respect to each invoice of Client evidencing Purchased
Accounts due from Customers owing Approved Accounts, upon Factor's request,
Client shall either (i) famish Factor with a legible duplicate original of the
invoice accompanied by a written acknowledgment that such Accounts have been
assigned to Factor, or (ii) electronically transmit to Factor the invoice
details and an assignment schedule using a transmission format acceptable to
Factor. Client's failure to furnish such specific assignments shall not diminish
Factor's rights. Client shall procure and hold in trust for Factor and furnish
to Factor at Factor's request satisfactory evidence of each rendition of
services. For invoices electronically transmitted to Factor, Client shall also
(A) retain and furnish Factor at Factor's request legible copies of sales
schedules and registers, as well as duplicate originals of the invoices, and (B)
reproduce for Factor at Factor's request any and all such electronic
transmissions. Each invoice shall bear the terms of each Customer's purchase, as
submitted to Factor, whether or not the purchase has been approved by Factor.
Each payment made by a Customer shall first be applied to Approved Accounts, if
any, on which Factor has the Credit Risk, and the balance, if any, of such
payment shall be applied to other Purchased Accounts due from such Customer.
Client understands that Factor shall not be liable for any selling expenses,
orders, purchases, contracts or taxes of any kind resulting from any of Client's
transactions, and Client agrees to indemnify Factor and hold Factor harmless
with respect thereto, which indemnity shall survive termination of this
agreement. Client warrants and represents to Factor that there are no taxes
payable as an incident of Customers' purchases of telephone network capacity
except as noted on Schedule 8(a) and that Client will at all times promptly pay
such taxes when due and file all tax returns relating to such taxes in a timely
manner.

          (b) Upon submission in accordance with the terms hereof of any Payment
Request with respect to a Purchased Account, or if Factor otherwise elects in
its sole discretion to enforce its rights and remedies with respect to any
Purchased Account following the occurrence of a Credit Deterioration or after a
Purchased Account due from a Customer owing Approved Accounts becomes more than
30 days past due, only Factor, and not Client, may prospectively and directly
seek to collect and enforce any such Purchased Accounts. Whether or not Client
makes a Payment Request, Factor may, in its sole discretion, following the
occurrence of a Credit Deterioration, [*], or after a Purchased Account due from
a Customer owing Approved Accounts becomes more than 30 days past due have the
right to communicate directly with Customers obligated on Approved Accounts
(including notifying the Customer that the Purchased Account has been assigned
to Factor) and institute direct collection efforts with respect to all Purchased
Accounts due from such Customer and to otherwise deal directly with any such
Customer.

     9.   TERMINATION

          (a) This agreement shall remain in full force and effect until
terminated as follows:

               (i) Both Factor and Client may terminate this agreement at any
time upon one hundred twenty (120) days prior written notice to the other party
and, in the case of Client, payment of the termination fee; or

               (ii) If Client shall suspend business, sell all or a significant
portion of Client's assets, become insolvent or unable to pay any outstanding
debts of $190,000 or more due to any single creditor as they mature, make an
assignment for the benefit of creditors, or apply for an extension from
creditors; or if a meeting of Client's creditors is called; or if a receiver or
trustee shall be appointed for Client or Client's property; or if Client's
property shall become subject to any lien or attachment except attachments that
are bonded or discharged within 30 days after they first arise; or if a petition
under the United States Bankruptcy Code shall be filed by or against Client; or
if Client shall seek relief under any insolvency statute, federal, state or
other; or if a custodian shall be appointed for all or substantially all of
Client's property; or if Client shall breach this agreement or any other
agreement between Factor and Client or between Client and any affiliate of
Factor; or if Client shall fail to pay any Obligation when due; or if Client
shall fail to pay any material indebtedness; or if any guaranty of the
Obligations shall be terminated; or if ownership or control of fifty percent
(50%) or more of Client's aggregate outstanding stock, stock equivalents or any
other equity changes after the Effective Date; then in any of such events,
Factor may deem this agreement terminated at any time without notice.

          (b) On the effective date of termination all Obligations shall become
immediately due and payable in full without further notice or demand. Factor's
rights with respect to Obligations owing to Factor, or chargeable to Client's
account, arising out of transactions having their inception prior to the
effective date of termination, will not be affected by termination. Without
limiting the foregoing, all of Factor's security interests and other rights in
and to all Collateral shall continue to be operative until such Obligations have
been fully and finally satisfied or Client has given Factor an indemnity
satisfactory to Factor.

          (c) Notwithstanding anything to the contrary set forth herein if this
agreement is terminated by Client for any reason, or by Factor due to the
occurrence of an Event of Default, then upon the effective date of termination
and as Factor's liquidated damages, the Client shall be charged an early
termination fee equal to $250,000, if terminated before the end of the first
Contract Year or $150,000 if terminated any time after the end of the First
Contract Year but prior to the end of the second Contract Year. Such early
termination fee shall be conclusively presumed to be the amount of Factor's
damages sustained by reason of the early termination, which fee Client agrees is
fair and proper provided, however, that nothing contained herein is intended to
limit Client's remedies for

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Factor's breach of this agreement that are available under applicable law and
provided further that Client shall not be obligated to pay such early
termination fee if Client terminates after Factor assigns this agreement to
another party other than in connection with the sale of substantially all of
Factor's factoring business. The early termination fee shall be and is included
in the Obligations.

     10.  PLACE OF PAYMENT; NEW YORK LAW; FORUM SELECTION; WAIVER OF JURY TRIAL

          (a) All Obligations shall be paid at Factor's office in New York, New
York or at such other place, or by such other method, as is acceptable to
Factor.

          (b) This agreement shall be governed by and construed according to the
laws of the State of New York (without giving effect to its choice of law
principles). All terms used herein, unless otherwise defined herein, shall have
the meanings given in the UCC.

          (c) Client agrees that all actions and proceedings arising out of or
relating directly or indirectly to this agreement or any ancillary agreement or
any other obligations shall be litigated in the United States District Court for
the Southern District of New York or, at Factor's option, in any other courts
located in New York or elsewhere as Factor may select, that such courts are
convenient forums, and that Client submits to the personal jurisdiction of such
courts. Client hereby consents to the service of process therein by registered
or certified mail, return receipt requested, directed to Client at Client's
address set forth above, and Client agrees that service so made shall be deemed
complete five (5) days after the date of mailing.

          (d) TO THE EXTENT LEGALLY PERMISSIBLE, BOTH CLIENT AND FACTOR WAIVE
ALL RIGHT TO TRIAL BY JURY IN ANY LITIGATION RELATING TO TRANSACTIONS UNDER THIS
AGREEMENT, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE.

     11.  REMEDIES; WAIVERS; LIMITATION OF LIABILITY

          (a) Factor's rights and remedies under this agreement will be
cumulative and not exclusive of any other right or remedy Factor may have
hereunder or under the UCC or otherwise. After application of all Collateral to
Client's Obligations (in such order and manner as Factor in Factor's sole
discretion shall determine), Client shall remain liable to Factor for any
deficiency.

          (b) Factor shall have the right, in Factor's sole discretion, to
determine which rights, liens, security interests or remedies Factor may at any
time pursue, relinquish, subordinate, or modify or to take any other action and
incur any costs or expenses with respect thereto and such determination will not
in any way modify or affect any of Factor's rights hereunder. Failure by Factor
to exercise any right, remedy or option under this agreement or delay by Factor
in exercising the same will not operate as a waiver; no waiver by Factor will be
effective unless Factor confirms it in writing and then only to the extent
specifically stated.

          (c) Factor shall have no liability hereunder (i) for any losses or
damages (including, without limitation, incidental, special, exemplary, punitive
or consequential damages) resulting from Factor's refusal to assume, or delay in
assuming, the Credit Risk, or any malfunction, failure or interruption of
communication facilities, or labor difficulties, or other causes beyond Factor's
control; or (ii) for indirect, special or consequential damages arising from
accounting errors with respect to Client's account with Factor except that
nothing contained herein is intended to limit Client's remedies for Factor's
breach of this agreement that are available under applicable law. Factor's
liability for any default by Factor hereunder shall be limited to a refund to
Client of any commission paid by Client during the period starting on the
occurrence of the default and ending when it is cured or waived, or when this
agreement is terminated, whichever is earlier. Except as prohibited by law,
Client waives any right which it may have to claim or recover in any litigation
with Factor any incidental, special, exemplary, punitive or consequential
damages or any damages other than, or in addition to, actual damages. Client:
(A) certifies that neither Factor nor any representative, agent or attorney
acting for or on behalf of Factor has represented, expressly or otherwise, that
Factor would not, in the event of litigation, seek to enforce any of the waivers
provided for in this agreement or any of the Other Documents and (B)
acknowledges that in entering into this agreement and the Other Documents,
Factor is relying upon, among other things, the waivers and certifications set
forth in this Paragraph 11 (c) and elsewhere herein and in the Other Documents.

     12.  DEFINITIONS

     As used herein:

          "Accounts" shall mean all of Client's present and future rights to
payment that are due from Client's members by reason of members' purchase of
telecommunications network capacity from other members of Client through the
trading exchange provided by Client.

                                       7

<PAGE>

          "Alternate Base Rate" shall mean, for any day, a rate per annum equal
to the higher of (i) the Prime Rate in effect on such day and (ii) the Federal
Funds Rate in effect on such day plus one-half of one percent (1/2%).

          "Anticipation Reduction" shall mean a deduction taken by a Customer
based on the Customer's payment of the invoice before maturity whether or not
allowed according to the payment terms of such invoice.

          "Approved Account" shall mean an Account that has been approved by
Factor pursuant to Section 2 hereof, to the extent of the dollar amount of such
approval, by reason of the fact that the utilization of telecommunications
network capacity giving rise to such Account occurred while the credit approval
or credit line was in effect.

          "Bank" shall mean The Bank of New York, having its chief executive
office in New York, New York, and its successors and assigns.

          "Bankruptcy Case" shall mean a case or proceeding under the United
States Bankruptcy Code.

          "Borrowing Rate" for any given month shall mean an interest rate per
annum which is equal to the average Alternate Base Rate in effect during such
month plus three-quarters percent (0.75%).

          "Collateral" shall mean and include: all Accounts, and in addition,
(i) any other assets of Client (including assets of the Client which, under the
UCC, would constitute accounts, instruments, documents, chattel paper, deposit
accounts, investment property, supporting obligations, letter of credit rights
and general intangibles, as such terms are defined in the UCC) to the extent
such assets arise from, evidence, are proceeds of, are collateral for, or are
necessary to collect or otherwise enforce payment of, any of Client's rights to
payment that are due from Client's members by reason of members' purchase of
telecommunications network capacity from other members of Client through the
trading exchange provided by Client; (ii) all of Client's ledger sheets, ledger
cards, files, correspondence, Records, books of account, business papers,
computers, computer software (whether owned by Client or in which it has an
interest), computer programs, tapes, disks and documents relating to the
property and rights described in this section; and (iii) all proceeds and
products of the property and rights described in this section.

          "Collection Procedures Guidelines" shall mean the procedures for the
collection of Purchased Accounts issued by Factor, as modified by Factor from
time to time.

          "Contract Year" means the period of twelve consecutive months
commencing on the Effective Date and on the anniversary of the Effective Date in
each succeeding year.

          "Credit Deterioration" shall mean a material deterioration in the
creditworthiness of a Customer, as determined by Factor in its sole discretion.

          "Credit Risk" shall mean the risk of loss resulting solely and
exclusively from the financial inability of Client's Customer to pay at maturity
a Purchased Account.

          "Customer" shall mean and include members of Client who are obligated
to pay Client for telecommunications network capacity purchased from other
members of Client.

          "Customer Credit Balances" shall have the meaning set forth in
Paragraph 3(d) hereof.

          "Default Rate" shall mean an interest rate per annum which is two
percent (2%) in excess of the Borrowing Rate in effect from time to time.

          [*]

          "Effective Date" shall mean the date set forth in the introductory
paragraph hereto.

          "Event of Default" shall mean the occurrence of any of the events set
forth in Paragraph 9(a)(ii) hereof.

          "Federal Funds Rate" shall mean, for any day, 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 next preceding business day) by the
Federal Reserve Bank of New York, or if such rate is not so published

                                       8

<PAGE>

for any day which is a business day, the average of quotations for such day on
such transactions received by the Bank from three Federal funds brokers of
recognized standing selected by the Bank.

          "Foreign Customer" shall mean an entity existing under the laws of a
foreign country and the principal place of business of which is located in a
foreign country other than Canada.

          "GAAP" shall mean generally accepted accounting principles in the
United States of America in effect from time to time.

          "Gross Face Amount" shall have the meaning set forth in Section 3.1

          "Insolvency Event" with respect to a Customer shall mean (i) the
commencement of a Bankruptcy Case with respect to the Customer; (ii) the
Customer's making of an assignment for the benefit of creditors or applying for
an extension from creditors; (iii) the commencement of any other insolvency
proceedings by or against the Customer (whether under federal, state or foreign
law); (iv) the calling of a meeting of the Customer's creditors; (v) the
Customer's failure to pay its debts as they become due or its acknowledgement of
its inability to pay its debts as they become due; (vi) the Customer's
suspension of business in the ordinary course; (vii) the appointment of a
trustee, receiver or custodian with respect to any property of the Customer; or
(viii) the filing of a lien or attachment against any property of the Customer.

          "Lenders" shall have the meaning set forth in Paragraph 7(a) hereof.

          "Matured Funds Rate" shall mean an interest rate per annum which is
equal to the Prime Rate minus three percent (3%).

          "Maximum Invoice Days" shall have the meaning set forth in
Paragraph 4(c) hereof.

          "Minimum Annual Commission" shall have the meaning set forth in
Paragraph 4(c) hereof.

          "Obligations" shall mean and include all debts, liabilities,
obligations, covenants, duties and amounts of any nature whatsoever, for which
Client is now or hereafter obligated to Factor (or to any corporation that
directly or indirectly controls or is controlled by or is under common control
with Factor, including without limitation any parent, subsidiary and affiliate
of Factor), of every kind and description (whether or not evidenced by any note
or other instrument and whether or not for the payment of money or the
performance or non-performance of any act), direct or indirect, absolute or
contingent, due or to become due, contractual or tortious, liquidated or
unliquidated, whether arising under this or any other present or future
agreement or other documentation, or by operation of law or otherwise, now
existing or hereafter arising (whether before or after the filing of any
petition in bankruptcy by or against Client or the commencement of any other
insolvency proceeding, including but not limited to an assignment for the
benefit of creditors), including, without limitation, any debt, liability or
obligation now or hereafter owing from Client to others, including without
limitation any other present or future client(s) of Factor, which Factor may
have obtained or may obtain, by purchase, assignment' participation or
otherwise, and further including without limitation, all interest, charges or
any other payments Client is required to make to Factor, together with all
expenses and attorneys' fees and costs chargeable to Client's account or
incurred by Factor in connection with Client's account, whether provided for
herein or in any such other agreement or documentation. Without limiting the
foregoing, Obligations shall include the amounts of all interest, commissions,
customer late payment charges and bank related charges, costs, fees, expenses,
taxes and all Purchased Accounts charged or chargeable to Client's account
hereunder.

          "Other Documents" shall mean, collectively, all notes, guarantees,
security agreements and other agreements, documents and instruments now or at
any time hereafter executed and/or delivered by Client or any third party in
connection with this agreement.

          "Payment Request" means, as to any Purchased Account, Client's written
request for payment by Factor to Client of any remaining outstanding balance of
the purchase price thereof.

          "Prime Rate" shall mean the prime commercial lending rate of the
"Bank" as publicly announced to be in effect from time to time, such rate to be
adjusted automatically, without notice, on the effective date of any change in
such rate.

          "Purchased Accounts" shall have the meaning set forth in
Paragraph l(a) hereof.

          "Purchased Account Transfer Documentation" means and includes (i) for
Purchased Accounts for which Client has submitted Payment Requests to Factor;
and (ii) for Purchased Accounts on which Factor has decided, in its sole
discretion, to institute direct collection efforts or otherwise deal directly
with the Customer on such Purchased Account; and (iii) for all other payment
obligations, however arising, due to Client from the Customers obligated on such
Purchased Accounts, each and all of the following, in

                                       9

<PAGE>

form and substance acceptable to Factor in its sole discretion: (a) an executed
confirmation of the assignment by Client to Factor of all Purchased Accounts
concerning the applicable Customer, together with confirmation to Factor of its
grant to Factor of a first and paramount security interest therein, and
confirmation that all warranties, representations and covenants with respect
thereto remain true and correct; (b) Factor's credit approval number, if any,
with respect to such Purchased Accounts; (c) Client's original sales order(s)
and Customer's original purchase order(s), if any, relating to such Purchased
Accounts; (d) proofs) of delivery of the telecommunication services covered by
such Purchased Accounts; (e) an itemized statement of the outstanding balance
owed on such Purchased Accounts; (f) all invoices, statements and correspondence
with the applicable Customer and Client's original collection file with respect
to such Customer; (g) a release of the security interest in the Purchased
Accounts, if any, in favor of Lenders, in form satisfactory to Factor; and (h)
such additional documentation relating to such Purchased Accounts, and the
assignment thereof to Factor and/or Factor's security interest therein, all as
more frilly set forth in this agreement and otherwise as Factor may from time to
time request of Client.

          "Records" shall mean, all of Client's present and future books of
account of every kind or nature, purchase and sale agreements, invoices, ledger
cards, bills of lading and other shipping evidence, statements, correspondence,
memoranda, credit flies and other data relating to the Collateral or any
Customer, together with the tapes, disks, diskettes and other data and software
storage media and devices, file cabinets or containers in or on which the
foregoing are stored (including, without limitation, any of Client's rights with
respect to the foregoing maintained with or by any person).

          "Reports" shall have the meaning set forth in Paragraph 13(a) hereof.

          "Reserves" shall mean, with respect to Client, all Obligations then
chargeable to any account of Client, as well as Obligations which may, in
Factor's sole discretion, be chargeable to Client's account thereafter,
including, without limitation, by reason of or in connection with any of the
following: [*]; deductions; allowances; credits; bill and hold sales;
consignment sales; letters of credit; steamship guarantees; airway releases;
offsets asserted by or granted to Customers; sales calling for payment in
currencies other than United States Dollars; to adjust for audit/examination of
Client's accounts(s) or for any documentation correction; ledger debt; co-op
advertising; amounts due from Client's employees; dilution of Client's accounts
and such additional reserves as Factor in its sole discretion deems appropriate,
including, but not limited to, to adjust for any condition or prospect of the
Client or the Client's industry.

          "Settlement Date" for Purchased Accounts on payment terms of 15 days
or less shall mean the date that is one hundred twenty (120) days after the
original due date of the Purchased Account (such 120 day period being
hereinafter referred to as the "Base Period") and the Settlement Date for
Purchased Accounts on terms exceeding 15 days shall be such number of days after
the original due date of the Purchased Account as equals the Base Period plus
the number of days by which the payment terms exceed 15 days (the number of days
by which the payment terms exceed 15 days being hereinafter referred to as the
"Additional Period") except that if on or before such Settlement Date a
Bankruptcy Case has been commenced with respect to the Customer, then the
Settlement Date shall be, whichever is later, (i) the date on which the
Purchased Account is allowed in full as a claim in the Bankruptcy Case; or (ii)
the date that is such number of days after the original due date of the
Purchased Account as equals the Base Period in the case of Purchased Accounts on
terms of 15 days or less or as equals the Base Period plus the Additional Period
in the case of Purchased Accounts on terms in excess of 15 days.

          "Tax Component" shall have the meaning set forth in Paragraph 3(a)

          "Trade Names" shall mean all trade names or styles, trademarks,
divisions or other names under which Client conducts business.

          "UCC" shall mean the Uniform Commercial Code as in effect on the
Effective Date in the State of New York, as from time to time amended.

     13.  GENERAL

          (a) Factor may charge to Client's account the amount of reasonable
legal fees (including, without limitation, fees, expenses and costs payable or
allocable to attorneys retained or employed by Factor) and other costs, fees and
expenses incurred by Factor in negotiating or preparing this agreement and any
legal documentation required by Factor or requested by Client in connection with
this agreement or any amendments or supplements thereof, or in enforcing
Factor's rights hereunder or in connection with the litigation of any
controversy arising out of this agreement, or in protecting, preserving or
perfecting Factor's interest in, any Collateral, including without limitation
all costs incurred or payable with respect to any Collateral, and the costs of
all public record filings, appraisals and searches relating to any Collateral.
Without limiting Factor's rights hereafter, the amount of such costs, fees and
expenses chargeable to Client that were incurred in connection with Factor's
pre-closing investigations of Client or incurred in connection with the closing
of the financial accommodations contemplated by this agreement shall be limited
to $20,000. Factor may also charge to Client's account Factor's then
standard charge for furnishing to Client or Client's designees copies of any
statements,

                                       10

<PAGE>

records, files or other data (collectively "Reports") requested by Client or
them other than Reports of the kind furnished to Client and Factor's other
clients on a regular, periodic basis in the ordinary course of Factor's
business.

          (b) This agreement cannot be changed or terminated orally and is for
the benefit of and binding upon the parties and their respective successors and
assigns except that Client may not assign or transfer any of Client's rights or
obligations under this Agreement without Factor's prior written consent, and no
such assignment or transfer of any such obligation shall relieve Client thereof
unless Factor has consented to such release in a writing specifically referring
to the obligation from which Client is to be released. This agreement, and any
concurrent or subsequent written supplements thereto or amendments thereof
signed by both of Factor and Client, represent the entire understanding of the
parties and supersede all inconsistent agreements and communications, written or
oral, between Client's and Factor's officers, employees, agents and other
representatives.

               This agreement shall not be effective unless signed by Client
below, and signed by Factor at the place for Factor's acceptance.

     IN WITNESS WHEREOF, each of Factor and Client has executed this agreement
as of the Effective Date.

                                        Very truly yours,

                                        GMAC COMMERCIAL FINANCE LLC

                                        By /s/ authorized representative
                                           -------------------------------------
                                           Title:

                                        Address: 1290 Avenue of the Americas
                                                 New York, New York 10104

AGREED TO on this 10th day of
February, 2003.

                                        ARBINET-THEXCHANGE, INC.

ATTEST:

/s/ Chi K. Eng                          By: /s/ Peter P. Sach
------------------------------------        ------------------------------------
Secretary                               Title: CAO & Treasurer

                                        Address: 75 Broad Street, 20th Floor
                                                 New York, New York 10004

AGREED TO on this 13 day of Feb, 20
                                   --

ACCEPTED at New York, New York, as of
the above date.

GMAC COMMERCIAL FINANCE LLC

By: /s/ authorized representative
    --------------------------------
    Title

                                       11

<PAGE>

                                  SCHEDULES TO
                               FACTORING AGREEMENT
                                     between
                           GMAC COMMERCIAL CREDIT LLC
                                      and
                            ARBINETTHEXCHANGE, INC.

Schedule 7(b)     Client's Name: Arbinet-Thexchange, Inc.    (If none, so state)

Schedule 7(c)     Client Organizational Information

                  Organization Type: Corporation

                  Jurisdiction of Organization: Delaware

                  Organizational Identification Number: 268341

                  Federal Employer Identification Number: 13-3930916

Schedule 7(d)  -  Chief Executive Office and Collateral Locations:

                  Chief executive office: 75 Broad Street, New York,
                                          New York 10004
                  Other Locations:

                  1.   460 Herndon Pkway., Suite 150
                       Herndon, VA 20170

                  2.   441 Old Newport Blvd., Suite 104
                       Newport Beach, CA 92663

                  3.   c/o William Haner
                       6833 Indiana Ave., #208
                       Riverside, CA 92506

                  4.   c/o Kelly Donnelly
                       22 Second Street
                       Apt. 101
                       Sausalito, CA 94965

                  5.   611 West 6th Street
                       Suite 1200
                       Los Angeles, CA 90014

                  6.   c/o Paul Goldenberg
                       309 West Washington Street, Suite 500
                       Chicago, IL 60606

                                       12

<PAGE>

                  7.   12/18 Paul Street
                       London EC2A 4JH

Schedule 8(a)  -  Taxes

                       Value Added Tax under the law of the United Kingdom

                                       13

<PAGE>

                             EXPORT RECEIVABLE RIDER
                             TO FACTORING AGREEMENT

                                                               February 10, 2003

Arbinet-thexchange, Inc.
75 Broad Street, 20th Floor
New York, New York 10004

Gentlemen/Ladies:

     This Rider shall confirm the terms and conditions under which we will
purchase from you Foreign Receivables, as hereinafter defined, due from members
of your trading exchange for their purchases of telephone network capacity from
other members. Such members who are obligated for such purchases shall be
referred to herein as "Customers." Any reference to "we", "us", "our" or
"Factor" herein shall mean GMAC Commercial Credit LLC and any reference to
"you", "your" or "Client" shall mean Arbinet-thexchange, Inc. Unless the context
otherwise requires, all terms capitalized but not defined herein shall-have the
meanings set forth in the Factoring Agreement between us bearing the effective
date of February 1, 2003 as amended and supplemented ("Factoring Agreement").

     A Receivable shall be considered a "Foreign Receivable" if is due from an
entity existing under the laws of a country other than the United States or
Canada (a "Foreign Country") and the principal place of business of such entity
is located in a Foreign Country.

     Except to the extent inconsistent with the terms of this Rider, which terms
shall control any such inconsistencies, our mutual rights and obligations with
respect to Foreign Receivables shall be governed in all respects by the
Factoring Agreement. Accordingly, but without limiting the generality of the
foregoing, and except as otherwise specifically provided herein, the Factoring
Agreement shall determine the amounts, in addition to those specified herein,
payable in respect of your Foreign Receivables purchased hereunder.

     The terms on which we agree to factor your Foreign Receivables are as
follows:

     1. We may act as your factor with respect to your Foreign Receivables by
providing credit approval on selected Foreign Receivables for up to 100% of the
net face amount of each such approved Foreign Receivable if we operate through a
foreign agent ("Agent") in the country where the Customer on such Foreign
Receivable is located or up to 90% of the net face amount of such approved
Foreign Receivables if we do not use an Agent to collect the Foreign
Receivables.

     2. "Credit Risk" means (a) with respect to each Foreign Receivable
purchased under the Factoring Agreement (as amended by this Rider) and that is
due from a Customer located in a Foreign Country in which we operate through an
Agent, the risk of loss resulting solely and exclusively from the financial
inability of your Customer to pay the Foreign Receivable at maturity, and (b)
"Covered Risk" with respect to each Foreign Receivable which is due from a
Customer located in any other Foreign Country ("GMAC Receivable"), and
designated in our credit approval as approved for coverage for the Covered Risk,
respectively.

     3. "Covered Risk" means the following:

<PAGE>

          A. The Insolvency of any of your Customers.

          B. The failure of a Customer to pay us solely due to the financial
inability of the Customer to pay the amount owing under the contract within 6
months of original due date of payment [*].

          C. General moratorium decreed by the government of the Customer's
country or by that of a third country through which payment must be effected.

          D. Any other measures or decision of the government of a foreign
country which in whole or in part prevents performance of the contract which
forms the basis of the Foreign Receivable.

          E. Political events, economic difficulties, legislative or
administrative measures which prevent or delay the transfer of payments or
deposits made in respect to the contract which forms the basis of the Foreign
Receivable.

          F. The operation of a law in the Customer's country which gives him a
valid discharge of the debt under that law (but not under the governing law of
the contract) notwithstanding that, because of exchange rate fluctuations, the
payments he has made when converted into the currency of the contract, are less
than the amount of debt at the date of transfer.

          G. The occurrence outside your country of war (including civil war,
hostilities, rebellion and insurrection) revolution or riot, cyclone, flood,
earthquake, volcanic eruption or tidal wave which in whole or in part prevents
performance of the contract underlying the Foreign Receivable.

          H. The failure or refusal on the part of a public customer to fulfill
any of the terms of the contract underlying the Foreign Receivable. (This cause
of loss shall only apply where we have stated in the Credit Limit that the
Customer is a public Customer.)

     4. "Insolvency" means and shall occur if:

          A. An involuntary bankruptcy is made against the Customer or the
Customer files for Chapter 11 or commences an insolvency proceeding in a Foreign
Country that is the equivalent of Chapter 11; or

          B. In the course of execution of a judgement, the levy of execution
fails to satisfy the Customer's debt in full; or

          C. A valid assignment, compromise or other arrangement is made for the
benefit of the Customer's creditors generally; or

          D. An effective arrangement is made for the liquidation of a Customer;
or

          E. An administrative or other receiver or manager of any of the
Customer's property is appointed; or

          F. You show, to our satisfaction, that the Customer's financial state
is such that even partial payment is unlikely and that to enforce judgement or
to apply for a bankruptcy or winding up

<PAGE>

order would have no foreseeable result other than one disproportionate to the
likely cost of the proceedings; or

          G. An event has occurred elsewhere than in the United States of
America, which, under the law of court having jurisdiction, is substantially
equivalent in effect to any of the events listed above.

     5. "Business Day" shall mean a day for dealings by and between banks,
excluding Saturday, Sunday and any day which shall be a legal holiday in the
City of New York, New York, and any other day on which banking institutions are
authorized to close in the City of New York, New York.

     6. Once you factor with us a Foreign Receivable due from one of your
Customers whose purchases we have approved in whole or in part pursuant to the
Factoring Agreement, all other Foreign Receivables arising between you and such
Customer shall be factored with us.

     7. You agree to provide to us the names of your Customers, together with
any additional information we require, to enable us to conduct credit
investigations. In our sole discretion, we will assume a percentage of the
Credit Risk on approved Customers. We must give credit approval in writing
before you make any sale. In connection with our factoring any GMAC Receivable,
we do not assume the Credit Risk on any Customer, even if prior credit approval
had been granted, for aggregate amounts owing of Ten Thousand Dollars
($10,000.00) or less. We may charge you a fee of Fifty Dollars ($50.00) for each
credit decision we are requested to make on your Customers for Covered Risk,
whether credit approval is granted or not. Withdrawal of a credit approval or
adjustment of a credit line may be effectuated by notice to you by us. If such
notice is received by you after utilization of telephone network capacity, the
credit approval or credit line shall remain in place only with respect to
telephone network capacity utilized before your receipt of such notice. You
consent to our sharing information on Customers and proposed sales to such
Customers with third parties solely in connection with our process of
determining whether to credit approve sales to such Customers.

     8. The purchase price of each Foreign Receivable shall be due on the
"Settlement Date" as defined in the Factoring Agreement, except as hereinafter
provided. The Settlement Date for each GMAC Receivable on which we have the
Covered Risk shall be one hundred twenty (120) Business Days following the date
on which such GMAC Receivable becomes past due (plus such additional number of
days as equals the number of days by which the payment terms of such GMAC
Receivable exceed 15 days) or in connection with any loss occasioned under
subsections C, D, E, F and H of Section 3, four months after completion of the
formalities necessary to transfer to our country the payments or deposits made,
whichever is later. Anything herein to the contrary notwithstanding, with
respect to each Year (the twelve month period starting on the effective date of
this Rider and each anniversary thereof), the aggregate purchase price of GMAC
Receivables for which we have not timely received and collected payment in full
from the Customers and which would otherwise be payable pursuant to our
assumption of the Credit hereunder shall be reduced by an amount equal to the
sum of (i) ten percent (10%) of all such Foreign Receivables approved for Credit
Risk in any Year, (ii) the first $10,000 of any losses suffered on Foreign
Receivables during the Year and covered by our assumption of the Credit Risk,
plus (iii) any other amounts rightfully deducted by us in determining the loss
payments (collectively, the "Deductions").

     9. We may charge to your account with us all expenses actually incurred by
us in transferring funds (including by wire transfer) and all expenses actually
incurred by us for foreign exchange conversions and related expenses.

<PAGE>

     10. Notwithstanding anything in the Factoring Agreement to the contrary, we
do not assume the Credit Risk on any Foreign Receivable and the purchase by us
of such Foreign Receivable shall be with Full recourse to you if (a) we revoke
the credit line with respect to a Customer prior to the Dispatch (as defined
herein) or rendition of services, as the case may be; (b) the Customer is one of
your subsidiaries or associated companies or you have a direct or indirect
interest in, or connection with, the Foreign Customer; (c) [*]; (d) you or your
agents fail to fulfill the terms and conditions of your contract of sale with
the Customer or you fail to comply with any law (including any order, decree or
regulation) having the force of law; (e) to the extent of currency fluctuations
and/or devaluations, including but not limited to, any shortfall between the
amount of the Foreign Receivables and the value of the local currency deposit as
of the date of that deposit or at the date of completion of transfer
formalities, whichever is later except where the government of the Customer's
country decrees that the Customer's obligations have been discharged by the
payment of the lesser amount, (f) the reason such Foreign Receivable is not paid
arises out of or is contributed to or directly or indirectly caused by: (i) war
(whether before or after the outbreak of hostilities) between any of the
following: The People's Republic of China, France, United Kingdom of Great
Britain and Northern Ireland, The Russian Federation and the United States of
America or a war, declared or not, between the United States or Canada and the
country of the Customer; (ii) your failure or the failure of your agents or the
Customer to comply with local laws and regulations, including but not limited to
the failure to obtain any import or export license or other authorization
necessary for the performance of the sales contract underlying the Foreign
Receivable or where the performance of such sales contract would contravene any
exchange control regulation; (iii) expropriation, confiscation, nationalization,
or destruction of the whole or any part of the Customer's assets under any law,
or regulation having the force of law, in any country (or any part of it) by any
person or persons exercising powers of government in that country (or any part
of it); (iv) ionizing radiations or contamination by radioactivity from any
nuclear waste from the combustion of nuclear fuel; (v) radioactive, toxic,
explosive, ionizing or other hazardous or contaminating properties of any
explosive nuclear assembly or nuclear component of it; or (vi) the use, handling
or transportation of radioactive material.

     11. Dispatch means the occurrence of the date on which the telephone
network capacity is utilized by the Customer.

     12. You shall procure and hold in trust for us and furnish to us at our
request satisfactory evidence of each delivery of telephone network capacity.

     13. In addition to the warranties and the representations made by you under
the Factoring Agreement, you hereby make the following warranties and
representations in respect of each Foreign Receivable:

          A. Each Foreign Receivable shall be for any amount certain, payable in
U.S. funds at par or in the currency of the Customer's country in accordance
with the terms and conditions of the invoice covering such Foreign Receivable,
which terms shall not be changed without our prior written consent.

          B. You shall bear all risk of loss as a result of (i) any conversion
of foreign currency into United States legal tender and (ii) any political
restraints in the country in which your Customer is located unless the Foreign
Receivable is credit approved by us to explicitly cover such risks.

                                       4

<PAGE>

          C. As of the date of each invoice evidencing a Foreign Receivable,
there shall not be in effect any law or regulation in the Customer's country
that would in any manner prohibit or impede or otherwise affect the ability of
the Customer to make payment in accordance with the terms of the invoice.

          D. The Customer has obtained all necessary United States and foreign
government authorizations required in order to consummate the purchases involved
including but not limited to, the obtaining of all licenses.

          E. You shall give us three (3) business days prior notice of any sales
based on letters of credit to Customers whose purchases have been approved in
whole or in part pursuant to this Rider to the Factoring Agreement.

     14. You agree as follows:

          A. You must notify us using commercially reasonable efforts of the
occurrence of any event likely to cause a loss.

          B. You must use due care and diligence and take all practicable
measures to prevent and minimize loss. This includes ensuring that all rights
against the Customers and third parties are properly preserved and exercised.

          C. After reasonable notice from us, you must provide us with all
information and documents that we may require,

          D. All recoveries by you on Foreign Receivables that are Approved
Accounts under the Factoring Agreement and with respect to which you have
submitted a Payment Request to us pursuant to the Factoring Agreement shall
immediately be remitted to us. Until this remittance is made, you receive and
hold recoveries in trust for us.

          E. If you fail to comply with any of the provisions of this section
after we have made a payment, then you will be liable to refund the payment to
us on demand.

     15. All debits and credits to your account with us in respect of a Foreign
Receivable shall be in the legal tender of the United States.

     16. We have the right to withdraw credit approval or cancel a credit line
with respect to telephone network capacity which has not been utilized upon
notice to you if our Agent in the Customer's Foreign Country withdraws the
credit line on which our credit line was based and we cannot locate another
Agent in such Foreign Country that is willing to issue a credit line for such
Customer.

     17. [*]

                                       5

<PAGE>

     You, intending to be legally bound, have signed this Rider as of the 1st
day of February, 2003

                                        GMAC COMMERCIAL FINANCE LLC

                                        By: /s/  Authorized Representative
                                            ------------------------------------
                                        Title:
                                               ---------------------------------

Agreed:
ARBINET-THEXCHANGE, INC.

By: /s/  Peter P. Sach
    --------------------------------
Title: CAO & Treasurer

                                       6

<PAGE>

                           GMAC Commercial Finance LLC

                           1290 Avenue of the Americas
                                New York NY 10104

                                                               February 10, 2003

Arbinet-thexchange, Inc.
75 Broad Street, 20th Floor
New York, New York 10004

Gentlemen/Ladies:

This letter relates to the Export Receivable Rider (the "Export Rider") to the
Factoring Agreement between us effective 2/1/03. Capitalized terms are as
defined in the Export Rider.

This shall confirm that it is our present intention to issue credit approvals
under the Export Rider using Agents in Foreign Countries so that the coverage
will be 100% of the net face amount of the Foreign Receivable.

We agree that no credit approvals will be issued under the Export Rider based on
coverage other than 100% without our first obtaining your consent to do so.

Very truly yours,

GMAC COMMERCIAL FINANCE LLC

By:  /s/ Authorized Representative
    --------------------------------

ACKNOWLEDGED:

ARBINET-THEXCHANGE, INC.

By:       /s/ Peter P. Sach
    --------------------------------

<PAGE>

                           GMAC COMMERCIAL FINANCE LLC
                           1290 Avenue of the Americas
                             New York, New York 10104

                                                               December 12, 2003

ARBINET-THEXCHANGE, INC.
75 Broad Street, 20th Floor
New York, New York 10004

Gentlemen:

     Reference is made to the Factoring Agreement between us, dated February 1,
2003, as amended and supplemented (the "Agreement"). All initially capitalized
terms used and not otherwise defined herein shall have their respective meanings
as set forth in the Agreement.

     It is hereby agreed that, effective as of the date hereof, the Agreement is
amended as follows:

     1. The first sentence of the Agreement is hereby amended and restated in
its entirety to read as follows:

          "Effective as of February 1, 2003 ('Effective Date'), GMAC Commercial
     Finance, LLC ('Factor') and Arbinet-thexchange, Inc. ('Client') agree that,
     except for SCM Telco Finance LLC (the 'Other Factor'), Factor shall act as
     Client's sole factor upon the following terms and conditions:"

     2. The first sentence of Paragraph l(a) of the Agreement is hereby amended
and restated in its entirety to read as follows:

          "(a) Client hereby assigns and sells to Factor, as absolute owner, and
     Factor hereby purchases from Client, all Approved Accounts created on or
     after the Effective Date (the 'Purchased Accounts')."

     3. The following shall be added to the Agreement as Paragraph l(d) thereof:

          "(d) Factor acknowledges Client's intention to factor with the Other
     Factor Accounts of the Client other than Approved Accounts (the "Unapproved
     Accounts"). The rights of the Other Factor in the Unapproved Accounts shall
     be subject to an agreement between the Factor and the Other Factor which is
     reasonably satisfactory to Factor."

     4. The following is inserted as the first sentence of Paragraph 2 of the
Agreement:

<PAGE>

          "All of Client's requests for credit approvals or credit lines with
     respect to the Client's Customers shall be submitted first to the Factor
     and then, to the extent not credit approved by Factor in whole or in part,
     to the Other Factor."

     The definition of "Accounts" in Paragraph 12 of the Agreement is hereby
amended and restated in its entirety to read as follows:

          "Accounts" shall mean all of Client's present and future rights to
     payment assigned to Factor that are due from Client's members by reason of
     members' purchase of telecommunications network capacity from other members
     of Client through the trading exchange provided by Client which are
     assigned by Client to Factor."

     The definition of "Collateral" in Paragraph 12 of the Agreement is hereby
amended and restated in its entirety to read as follows:

          "Collateral" shall mean and include: all Approved Accounts, and in
     addition, (i) any other assets of Client (including assets of the Client
     which, under the UCC, would constitute accounts, instruments, documents,
     chattel paper, deposit accounts, investment property, supporting
     obligations, letter of credit rights and general intangibles, as such terms
     are defined in the UCC) to the extent such assets arise from, evidence, are
     proceeds of, are collateral for, or are necessary to collect or otherwise
     enforce payment of, any of Client's rights to payment that are due from
     Client's members in respect of Approved Accounts by reason of members'
     purchase of telecommunications network capacity from other members of
     Client through the trading exchange provided by Client; (ii) all of
     Client's ledger sheets, ledger cards, files, correspondence, Records, books
     of account, business papers, computers, computer software (whether owned by
     Client or in which it has an interest), computer programs, tapes, disks and
     documents relating to the property and rights described in this section;
     and (iii) all proceeds and products of the property and rights described in
     this section."

     Each reference in the Agreement to the phrase "telecommunications network
capacity" shall also constitute a reference to the phrase "access to the
Internet" in each place in the Agreement where such form phrase appears.

     Except as hereby amended, all other terms and conditions of the Agreement
shall remain in full force and effect.

                                       2

<PAGE>

     Please indicate your agreement with the foregoing by signing and returning
to us the enclosed copy of this letter.

                                        Very truly yours,
                                        GMAC COMMERCIAL FINANCE LLC

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

AGREED

ARBINET-THEXCHANGE, INC.

By:
    --------------------------------
Title: Peter P. Sach
CAO & TREASURER

                                       3<PAGE>

                                                                    EXHIBIT 10.6

         CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED
        SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
            REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. OMITTED
                     INFORMATION HAS BEEN REPLACED BY [*].

                           GMAC COMMERCIAL FINANCE LLC
                           1290 Avenue of the Americas
                            New York, New York 10104

                     INTERFACTOR AND SUBORDINATION AGREEMENT

                                                         as of December 12, 2003

SCM TELCO FINANCE LLC
c/o Corporation Service Company
2711 Centerville Road, Suite 400
Wilmington, DE 19808

                          Re: Arbinet-thexchange, Inc.

Gentlemen:

     Reference is made to the Factoring Agreement between Arbinet-thexchange,
Inc. (the "Client") and GMAC Commercial Finance LLC (the "Senior Factor") dated
February 1, 2003 (the "Senior Factoring Agreement"; together with all related
documents and agreements executed and/or delivered in connection therewith, as
the same may now exist or may hereafter be amended, supplemented, renewed or
extended, collectively, the "Senior Factoring Agreements").

     Reference is made to the Factoring Agreement between the Client and SCM
Telco Finance LLC (the "Junior Factor') dated December 12, 2003 (the "Junior
Factoring Agreement"; together with all related documents and agreements
executed and/or delivered in connection therewith, as the same may now exist or
may hereafter be amended, supplemented, renewed or extended, collectively, the
"Junior Factoring Agreements").

     Initially capitalized terms used and not otherwise defined herein shall
have their respective meanings as set forth or as referenced in the Senior
Factoring Agreement.

     This letter sets forth the agreement between the Senior Factor and the
Junior Factor concerning, among other things, designation of the sales of the
Client which will be factored by each of them, respectively, the appointment by
Junior Factor of Senior Factor as attorney in fact to collect those Accounts
factored in part by Junior Factor and in part by Senior Factor, it being
understood and agreed that Accounts factored only by Junior Factor will be
collected only by Junior Factor, the application by the Senior Factor of
collections on Accounts and the distribution of collections on Accounts not
credit approved in whole or in part by the Senior Factor (to the extent not so
approved, the "Unapproved Accounts") by Senior Factor to Junior Factor.

     1. Senior Factor's Right of First Refusal on Credit Requests; Allocation of
Sales. Junior creditor acknowledges and agrees that:

<PAGE>

     (a) All of Client's requests for credit approvals or credit lines with
respect to the Client's Customers shall be submitted first to the Senior Factor
and then, to the extent that they are Unapproved Accounts, to the Junior Factor.

     (b) Senior Factor shall factor all sales of the Client, which it has credit
approved in whole or in part (to the extent so approved, "Approved Accounts")
and Junior Factor may, in its sole discretion, factor all Unapproved Accounts.

     (c) Sales to Foreign Customers factored by the Junior Factor shall not be
further factored by Junior Factor through another factor such as Factors Chain
International or International Factors Group.

     2. Collection of Accounts; Subordination of Application of Collections.
Senior Factor shall collect all Approved Accounts of Client, and shall not
collect any Unapproved Accounts. If Junior Factor elects to factor Unapproved
Accounts, Junior Factor shall have the sole right to collect such Accounts.
Senior Factor may take any action or commence any proceeding or action as may be
necessary to effect collection of Approved Accounts. In furtherance of
collection by Senior Factor of Accounts factored in part by each of Senior
Factor and Junior Factor ("Joint Accounts") and to enable Senior Factor to
assert and enforce its rights therein, Senior Factor and any person whom Senior
Factor may designate are hereby irrevocably appointed attorney in fact for the
Junior Factor, with full power to act in the place and stead of the Junior
Factor, including the right to make, present, file and vote proofs of claim
against the Client's Customers on account of any Joint Accounts and to demand,
sue for, collect and receive any and all of such monies or dividends, assets or
other payments thereon and to apply collected funds in respect thereof, first to
the payment in full of Approved Accounts and then to the Junior Factor in
payment of Unapproved Accounts. Junior Factor will (i) execute and deliver to
Senior Factor such instruments as may be required by it to collect payment of
any and all of the Unapproved Accounts, to effectuate aforesaid power of
attorney, and to effect collection of any and all instruments or other payments
which may be made any time on the Unapproved Accounts, and (ii) provide to
Senior Factor all documents in possession of Junior Factor pertaining to the
Unapproved Accounts reasonably requested by Senior Factor from time to time. In
the event Senior Factor makes a payment to the Client on an Approved Account by
reason of Senior Factor having the Credit Risk on such Account, and thereafter
Senior Factor collects more than the amount of such payment on the invoice
evidencing such Account (such excess, "Excess Proceeds"), Senior Factor shall
credit such Excess Proceeds to Client's account in accordance with the terms of
the Senior Factoring Agreement, and Senior Factor shall have no obligation to
pay such excess funds to Junior Factor, who acknowledges that it shall obtain
any such excess funds from the Client.

     3. Standstill. Junior Factor agrees that it shall not exercise any rights
nor assert any claims with respect to any Joint Accounts, nor seek to foreclose
on its security interests in any such Accounts, nor take any action or institute
any proceedings, directly or indirectly, with respect to any such Accounts
(including, but not limited to, commencing or joining with any other creditor or
creditors in commencing any bankruptcy, reorganization or insolvency case
against any Customer obligated on any such Accounts) until the earlier of (i)
receipt by Junior Factor of notice from Senior Factor that Client has
indefeasibly satisfied in full all of Client's Obligations to Senior Factor, and
(ii) (A) if Senior Factor has failed to initiate enforcement of its rights with
respect to any Joint Account within forty-five (45) days of the assignment of
such Joint Account to Senior Factor and the posting of such Joint Account to
Client's account in accordance with the Senior Factoring Agreement, or (B) if

                                        2

<PAGE>

Client has not submitted a Payment Request (as defined in the Senior Factoring
Agreement) to Senior Factor in respect of any Joint Account in accordance with
the time periods provided in Paragraph 3(c) of the Senior Factoring Agreement
after the expiration of which such time periods Senior Factor shall have no
obligation to Client with respect to such Joint Account, then upon two (2)
business days prior written notice to Senior Factor, Junior Factor may exercise
its rights and assert any claim with respect to such Joint Account, and, at its
option, seek to foreclose on its security interests in any such Joint Account,
or take any action or institute any proceedings, directly or indirectly, with
respect to any such Joint Account.

     4. Waiver. No waiver shall be deemed to be made by Junior Factor or Senior
Factor of any of their respective rights hereunder unless the same shall be in
writing signed by either Senior Factor or Junior Factor, as the case maybe, and
each waiver, if any, shall be a waiver only with respect to the specific
instance involved and shall in no way impair the rights of Junior Factor or
Senior Factor in any other respect at any other time.

     5. Assignment; Entire Agreement.

     (a) All of the terms, covenants and conditions contained herein shall inure
to the benefit of and be binding upon the parties hereto and their successors
and assigns, as the case may be.

     (b) None of the interests in any Unapproved Accounts held by Junior Factor
may be assigned or transferred by Junior Factor or its successors and assigns
unless Senior Factor has received from the assignee a written acknowledgment
stating that it has received a copy of this Agreement and agrees to be bound by
the terms hereof.

     (c) This Agreement sets forth the entire understanding of the parties
hereto with respect to the subject matter hereof. Neither this Agreement nor any
term may be modified, altered, waived, discharged, or terminated except by an
instrument in writing executed by the party against whom such alteration,
waiver, discharge or termination is sought to be enforced.

     6. No Benefit to Third Parties. The terms and provisions of this Agreement
shall be for the sole benefit of the parties hereto and their respective
successors and assigns; no other person, firm, entity or corporation shall have
any right, benefit, priority or interest under this Agreement.

     7. Further Assurances.

     (a) Junior Factor shall execute and deliver such additional documents and
take such additional actions as shall be necessary to effectuate the provisions
and purposes of this Agreement. If requested by Senior Factor, Junior Factor
shall execute such notice filings to be filed with the Uniform Commercial Code
records in each jurisdiction where filings have been made with respect to the
Accounts, indicating the existence of this Agreement and confirming the terms
hereof.

     (b) Without limiting the generality of the foregoing, Junior Factor agrees
that each and every financing statement filed by Junior Factor claiming a
security or other interest in any assets of the Borrower shall bear a
conspicuous legend to the effect that:

     "SECURED PARTY'S RIGHTS ARE SUBJECT TO THE TERMS OF AN INTERFACTOR AND
     SUBORDINATION AGREEMENT

                                        3

<PAGE>

     BETWEEN SECURED PARTY AND GMAC COMMERCIAL FINANCE LLC, 1290 AVENUE OF THE
     AMERICAS, NEW YORK, NEW YORK 10104."

     8. Governing Law/Consent to Jurisdiction. JUNIOR FACTOR HEREBY WAIVES TRIAL
BY JURY IN ANY ACTION OR PROCEEDING ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT AND FURTHER HEREBY WAIVES ANY RIGHT OF OFFSET OR RIGHT TO INTERPOSE
ANY COUNTERCLAIM IN ANY SUCH ACTION. EACH OF THE PARTIES HERETO EXPRESSLY
SUBMITS IN ADVANCE TO THE NON-EXCLUSIVE JURISDICTION OF THE SUPREME COURT,
COUNTY OF NEW YORK AND THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK IN ANY ACTION OR PROCEEDING RELATING TO ANY CLAIM, DISPUTE
OR OTHER MATTER PERTAINING DIRECTLY OR INDIRECTLY TO THIS AGREEMENT. THIS
AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK.

     9. Reserved.

     10. Notices. All notices, requests or demands required to be made or given
hereunder shall be deemed to have been duly given or made; if by hand,
immediately upon delivery; if by certified mail, return receipt requested, five
(5) days after mailing; if by overnight delivery service, one day after
dispatch; or if by telex, telecopier (fax.) or telegram, immediately upon
receipt. All notices, requests or demands shall be in writing and shall be sent
to the respective parties at the addresses set forth below (or such other
addresses as either party may designate by notice in accordance with the
provisions of this paragraph):

     To Senior Creditor:     GMAC COMMERCIAL FINANCE LLC
                             1290 Avenue of the Americas New
                             York, New York 10104
                             Attention: John Manini
                                        Vice President
                             Fax:       212 884-7317

     To Junior Creditor:     SCM TELCO FINANCE LLC
                             Corporation Service Company
                             2711 Centerville Road, Suite 400
                             Wilmington, Delaware 19808
                             Attention: Linda Ratchford
                             Fax:       302 636-5454

     To Client:              ARBINET-THEXCHANGE, INC.
                             120 Albany Street
                             Tower II, Suite 450
                             New Brunswick, New Jersey 08901
                             Attention: Office of Contract
                             Compliance
                             Fax:       732-509-9101

<PAGE>

     11. Insolvency. This Agreement shall be applicable both before and after
the commencement of any Insolvency Case (as hereinafter defined) by or against
the Client under the Bankruptcy Code and all converted and succeeding cases in
respect thereof. The relative rights, as provided for in this Agreement, shall
continue after the commencement of any such case on the same basis as prior to
the date of the commencement of any such case, as provided in this Agreement,
subject to any court order approving the financing of or use of cash collateral
by the Client, as debtor-in-possession. "Insolvency Case" means any insolvency
or bankruptcy case under Title 11 of the United States Code (the "Bankruptcy
Code") or any other federal or state insolvency statute, or any receivership,
liquidation, reorganization or other similar proceedings in connection
therewith, relative to the Client or its property, or in the event of any
proceedings for voluntary liquidation, dissolution or other winding up of the
Client, whether or not involving insolvency or bankruptcy, or in the event of
any assignment for the benefit of creditors of Borrower.

     12. Term. This Agreement is a continuing agreement and shall remain in
force and effect until the payment satisfaction in full of all Obligations to
Senior Factor and the termination of all the Senior Factoring Agreements, or
until Senior Factor notifies Junior Factor, in writing, of the termination of
this Agreement, whichever shall first occur; provided that, termination of this
Agreement shall not release any party of its obligations hereunder with respect
to matters arising or events occurring prior to termination.

     13. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original hereof and
admissible into evidence, and all of which together shall be deemed to be a
single instrument.

     14. Paragraph Headings. The paragraph headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.

     If the foregoing correctly states our understanding and agreement, kindly
sign the counterpart of this Agreement in the space provided below.

                                        GMAC COMMERCIAL FINANCE LLC

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

AGREED:

SCM TELCO FINANCE LLC

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

<PAGE>

                          ACKNOWLEDGMENT AND AGREEMENT

     The undersigned hereby agrees to the terms set forth in Sections 1 and 2 of
the foregoing Interfactor and Subordination Agreement between SCM TELCO FINANCE
LLC and GMAC COMMERCIAL FINANCE LLC (the "Interfactor Agreement") and agrees
that it will, together with its successors and assigns, be bound by such terms.

     The undersigned acknowledges that it does not and will not receive any
right, benefit, priority or interest under or because of the existence of the
foregoing Interfactor Agreement.

     The undersigned agrees to execute and deliver such additional documents and
take such additional action as may be necessary or desirable to effectuate the
provisions and purposes of the Interfactor Agreement.

     THE UNDERSIGNED AGREES THAT THE VALIDITY, INTERPRETATION AND EFFECT OF SUCH
INTERFACTOR AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK AND
IT HEREBY IRREVOCABLY CONSENTS TO THE NON-EXCLUSIVE JURISDICTION OF THE SUPREME
COURT OF THE STATE OF NEW YORK AND THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK AND WAIVES TRIAL BY JURY IN ANY ACTION OR
PROCEEDING WITH RESPECT TO SUCH INTERFACTOR AGREEMENT.

                                        ARBINET-THEXCHANGE, INC.

                                        By:  /s/ Peter P. Sach
                                            ------------------------------------
                                            Peter P. Sach
                                        Title: CAO & Treasurer

<PAGE>

          GUARANTY AGREEMENT, dated as of December 12, 2003, between
HIGHBRIDGE/ZWIRN SPECIAL OPPORTUNITIES FUND, L.P., a Delaware limited
partnership (the "Guarantor"), and ARBINET-THEXCHANGE, INC., a Delaware
corporation (the "Company").

                              W I T N E S S E T H :

          WHEREAS, the Guarantor is the indirect owner of 90% of the issued and
outstanding limited liability company interests of SCM TELCO FINANCE LLC, a
Delaware limited liability company (the "Factor");

          WHEREAS, the Company and the Factor have entered into a Factoring
Agreement, dated as of December 12, 2003 (the "Factoring Agreement"), pursuant
to which the Factor will provide factoring services to the Company; and

          WHEREAS, to induce the Company to enter into the Factoring Agreement,
the Guarantor is entering into this Agreement and the guaranty provided for
herein.

          NOW, THEREFORE, in consideration of the premises and the covenants
herein contained, the parties hereto agree as follows:

          Section 1. Guaranty. The Guarantor unconditionally and irrevocably
guarantees to the Company:

          (a) the due, prompt and complete payment by the Factor of all amounts
     due under the Factoring Agreement, when and as the same shall become due
     and payable in accordance with the terms of the Factoring Agreement, and

          (b) the due, prompt and faithful performance of, and compliance with,
     all other undertakings of the Factor contained in the Factoring Agreement
     and in any other agreement or document executed by the Factor pursuant to
     the Factoring Agreement (the Factoring Agreement and other such agreements
     and documents being sometimes collectively hereinafter referred to as the
     "Operative Documents", and the amounts payable by the Factor under any of
     the Operative Documents, and all other obligations of the Factor
     thereunder, being sometimes collectively hereinafter referred to as the
     "Guaranteed Obligations").

          This guaranty is a guaranty of payment, performance and compliance and
is in no way conditioned or contingent upon any attempt to collect from or
enforce performance or compliance by the Factor or upon any other event or
condition whatsoever. If for any reason whatsoever the Factor shall fail or be
unable duly,

                                        1

<PAGE>

punctually and fully to pay such amounts as and when the same shall become due
and payable or to perform or comply with any other Guaranteed Obligation, the
Guarantor will forthwith pay or cause to be paid such amounts to the Company
under the terms of the applicable Operative Document, in lawful money of the
United States, at the place specified in such Operative Document, or perform or
comply with such Guaranteed Obligations or cause such Guaranteed Obligations to
be performed or complied with, together with interest (in the amounts and to the
extent required of the Factor under such Operative Documents) on any amount due
and owing from the Factor. The Guarantor, promptly after demand, will reimburse
the Company for all costs and expenses of collecting such amounts or otherwise
enforcing this Agreement, including, without limitation, the fees and expenses
of counsel.

          Section 2. Representations and Warranties. The Guarantor hereby
represents and warrants as follows:

          (a) Organization, Good Standing, Etc. The Guarantor is a limited
     partnership duly organized and validly existing and in good standing under
     the laws of the State of Delaware, and has all requisite partnership power
     and authority to own and operate its properties, to carry on its business
     as now conducted and as proposed to be conducted, and to enter into and to
     carry out the terms of this Agreement.

          (b) Due Execution and Delivery; Enforceability. This Guarantee has
     been duly executed and delivered by the Guarantor and constitutes a valid
     and legally binding obligation of the Guarantor enforceable in accordance
     with its terms, except as such enforceability may be limited by bankruptcy,
     insolvency, reorganization, moratorium or similar laws affecting creditors'
     rights generally and subject to general principles of equity. The execution
     and delivery of this Guarantee by the Guarantor and the performance by the
     Guarantor of its obligations hereunder do not violate or conflict with any
     law applicable to it, any provision of its constitutive documents, any
     order or judgment of any court or other agency of government applicable to
     it or any of its assets or any contractual provision binding on or
     affecting it or any of its assets, in any manner that could reasonably be
     expected to impair its ability to perform its obligations hereunder.

          (c) Qualification. The Guarantor is duly qualified and in good
     standing as a foreign corporation authorized to do business in each
     jurisdiction (other than the jurisdiction of its establishment) in which
     the nature of its activities or the character of the properties it owns or
     leases makes such qualification necessary and in which the failure so to
     qualify would have a materially adverse effect on the Guarantor's ability
     to perform its obligations hereunder.

                                        2

<PAGE>

          (d) Litigation, Etc. There is no action, proceeding or investigation
     pending or threatened in writing (or any basis therefor known to the
     Guarantor) which questions the validity of this Agreement. There is no
     action, proceeding or investigation pending or threatened in writing which
     might result, either in any case or in the aggregate, in any material
     adverse change in the business, operations, affairs, condition (financial
     or otherwise), properties or assets of the Guarantor, or in any liability
     on the part of the Guarantor, which would be material to the Guarantor.

          (e) Compliance with Other Instruments, Etc. The Guarantor is not in
     violation of any term of its charter documents, constituting agreements or
     by-laws, and the Guarantor is not in violation in any material respect of
     any term of any agreement or instrument to which it is a party or by which
     it is bound or any term of any applicable law, ordinance, rule or
     regulation of any governmental authority or any term of any applicable
     order, judgment or decree of any court, arbitrator or governmental
     authority, the consequences of which violation might have a materially
     adverse effect on the business, operations, affairs, condition (financial
     or otherwise), properties or assets of the Guarantor; the execution and
     delivery by the Guarantor of, and performance of the obligations of the
     Guarantor under, this Agreement will not result in any violation of or be
     in conflict with or constitute a default under any such term or result in
     the creation of (or impose any obligation on the Guarantor to create) any
     lien upon any of the properties or assets of the Guarantor pursuant to any
     such term, which violation, conflict, default or lien might have a
     materially adverse effect on the business, operations, affairs, condition
     (financial or otherwise), properties or assets of the Guarantor or upon the
     ability of the Guarantor to perform its obligations under this Agreement;
     and there is no such term which materially adversely affects or in the
     future may (so far as the Guarantor can now reasonably foresee) materially
     adversely affect the business, operations, affairs, condition (financial or
     otherwise), properties or assets of the Guarantor.

          (f) Governmental Consent. No consent, approval or authorization of, or
     declaration or filing with, any governmental authority, on the part of the
     Guarantor is required for the valid execution and delivery of this
     Agreement and the due performance of the obligations of the Guarantor under
     this Agreement.

          Section 3. Guarantor's Obligations Unconditional. The obligations of
the Guarantor under this Agreement are primary, absolute and unconditional
obligations of the Guarantor, are not subject to any counterclaim, set-off,
deduction, diminution, abatement, recoupment, suspension, deferment or defense
based upon any claim the Guarantor or any other person may have against the
Factor, the Company or any other person, and shall remain in full force and
effect without regard to, and shall not be released, discharged or in any way
affected by, any circumstance or condition whatsoever

                                        3

<PAGE>

(whether or not the Guarantor or the Factor shall have any knowledge or notice
thereof), including, without limitation:

          (a) any amendment of or change in, or termination or waiver of, any of
     the Operative Documents;

          (b) any furnishing, acceptance or release of, or any defect in any
     security for, any of the Guaranteed Obligations;

          (c) any failure, omission or delay on the part of the Factor to
     conform or comply with any term of any of the Operative Documents or any
     other instrument or agreement referred to in paragraph (a) above;

          (d) any waiver of the payment, performance or observance of any of the
     obligations, conditions, covenants or agreements contained in any Operative
     Document, or any other waiver, consent, extension, indulgence, compromise,
     settlement, release or other action or inaction under or in respect of any
     of the Operative Documents or any other instrument or agreement referred to
     in paragraph (a) above;

          (e) any failure, omission or delay on the part of the Company to
     enforce, assert or exercise any right, power or remedy conferred on it in
     this Agreement;

          (f) any voluntary or involuntary bankruptcy, insolvency,
     reorganization, arrangement, readjustment, assignment for the benefit of
     creditors, composition, receivership, conservatorship, custodianship,
     liquidation, marshalling of assets and liabilities or similar proceedings
     with respect to the Factor or any other person or any of their respective
     properties or creditors, or any action taken by any trustee or receiver or
     by any court in any such proceeding;

          (g) any limitation on the liability or obligations of the Factor or
     any other person under any of the Operative Documents, or any discharge,
     termination, cancellation, frustration, irregularity, invalidity or
     unenforceability, in whole or in part, of any of the Operative Documents or
     any other agreement or instrument referred to in paragraph (a) above or any
     term hereof;

          (h) any merger or consolidation of the Factor or the Guarantor into or
     with any other corporation, or any sale, lease or transfer of any of the
     assets of the Factor or the Guarantor to any other person;

          (i) any change in the ownership of any limited liability company
     interests of the Factor, or any change in the equity ownership of the
     Factor, or any termination of such ownership; or

<PAGE>

          (j) any other occurrence, circumstance, happening or event whatsoever,
     whether similar or dissimilar to the foregoing, whether foreseen or
     unforeseen, and any other circumstance which might otherwise constitute a
     legal or equitable defense or discharge of the liabilities of a guarantor
     or surety or which might otherwise limit recourse against the Guarantor,

          Section 4. Full Recourse Obligations. The obligations of the Guarantor
set forth herein constitute the full recourse obligations of the Guarantor
enforceable against it to the full extent of all of its assets and properties.

          Section 5. Waiver. The Guarantor unconditionally waives, to the extent
permitted by applicable law, (a) notice of any of the matters referred to in
Section 3, (b) notice to the Guarantor of the incurrence of any of the
Guaranteed Obligations, notice to the Guarantor or the Factor of any breach or
default by the Factor with respect to any of the Guaranteed Obligations or any
other notice that may be required, by statute, rule of law or otherwise, to
preserve any rights of the Company against the Guarantor, (c) presentment to or
demand of payment from the Factor or the Guarantor with respect to any Purchased
Account or protest for nonpayment or dishonor, (d) any right to the enforcement,
assertion, exercise or exhaustion by the Company of any right, power, privilege
or remedy conferred in the Factoring Agreement or any other Operative Document
or otherwise, (e) any requirement of diligence on the part of the Company, (f)
any requirement to mitigate the damages resulting from any default under any
Operative Document, (g) any notice of any sale, transfer or other disposition by
the Company of any right, title to or interest in any Purchased Account or in
any other Operative Document, (h) any release of the Guarantor from its
obligations hereunder resulting from any loss by it of its rights of subrogation
hereunder and (i) any other circumstance whatsoever which might otherwise
constitute a legal or equitable discharge, release or defense of a guarantor or
surety or which might otherwise limit recourse against the Guarantor.

          Section 6. Subrogation. Upon the payment in full of all amounts
payable by the Factor under the Operative Documents, and the performance in full
of all obligations to be performed or observed by the Factor under or pursuant
to the Operative Documents, the Guarantor shall be subrogated to the rights of
the Company in respect of any payment or other obligation with respect to which
an amount has been payable by the Guarantor hereunder. The Guarantor shall not
seek to exercise any rights of subrogation, reimbursement or indemnity arising
from payments made by the Guarantor pursuant to the provisions of this Agreement
until the full and complete payment or performance and discharge of the
Guaranteed Obligations.

          Section 7. Effect of Bankruptcy Proceedings. This Guaranty shall
continue to be effective or be automatically reinstated, as the case may be, if
at any time any payment made by any person on account of any of the sums due the
Company

                                        5

<PAGE>

pursuant to the terms of the Factoring Agreement or any other Operative Document
is rescinded or must otherwise be restored or returned by the Company upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of the Factor
or any other person, or upon or as a result of the appointment of a custodian,
receiver, trustee or other officer with similar powers with respect to the
Factor or other person or any substantial part of its property, or otherwise,
all as though such payment had not been made.

          Section 8. Term of Agreement. This Agreement and all guarantees,
covenants and agreements of the Guarantor contained herein shall continue in
full force and effect and shall not be discharged until such time as all of the
Guaranteed Obligations and other independent payment obligations of the
Guarantor under this Agreement shall be paid and performed in full and all of
the agreements of the Guarantor hereunder shall be duly paid and performed in
full.

          Section 9. Notices. All notices under the terms and provisions hereof
shall be in writing, and shall be delivered or sent by telex or telecopy or
mailed by first-class mail, postage prepaid, addressed, (a) if to the Company,
at the address set forth on Schedule 7(d) to the Factoring Agreement, or at such
other address as the Company shall from time to time designate in writing to the
Guarantor and (b) if to the Guarantor, at Highbridge/Zwim Special Opportunities
Fund, L.P., 9 W. 57th Street, 27th floor, New York, NY 10019, Attention: Ivan
Zinn, or at such other address as the Guarantor shall from time to time
designate in writing to the Company. Any notice so addressed shall be deemed to
be given when so delivered or sent or, if mailed, on the third business day
after being so mailed.

          Section 10. Amendments, etc. No amendment, alteration, modification or
waiver of any term or provision of this Agreement, nor consent to any departure
by the Guarantor therefrom, shall in any event be effective unless the same
shall be in writing and signed by the company, and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given.

          Section 11. Submission to Jurisdiction. The Guarantor, for itself and
its successors and assigns, hereby irrevocably (a) agrees that any legal or
equitable action, suit or proceeding against the Guarantor arising out of or
relating to this Agreement or any transaction contemplated hereby or the subject
matter of any of the foregoing may be instituted in any state or federal court
in the State of New York, (b) waives any objection which it may now or hereafter
have to the venue of any action, suit or proceeding, (c) irrevocably submits
itself to the nonexclusive jurisdiction of any state or federal court of
competent jurisdiction in the State of New York for purposes of any such action,
suit or proceeding. The Guarantor has designated and appointed Corporation
Service Company (or any successor corporation), at its office at 1177 Avenue of
the Americas, New York, New York 10036, as its authorized agent to accept and
acknowledge on its behalf service of any and all process which may be served in
any

                                        6

<PAGE>

such action, suit or proceeding with respect to any matter as to which it has
submitted to jurisdiction as set forth in this Section 11, and agrees that
service upon such authorized agent shall be deemed in every respect service of
process upon the Guarantor or its successors or assigns, and, to the extent
permitted by applicable law, shall be taken and held to be valid personal
service upon it. Such designation and appointment shall be irrevocable. The
Guarantor represents and warrants that Corporation Service Company has agreed to
act as such agent for service of process. The Guarantor will take all action,
including the filing of any and all documents and instruments, as may be
necessary to continue in full force and effect the designation and appointment
as such agent of Corporation Service Company or any successor corporation or
such other corporation as shall be satisfactory to the Company, so that the
Guarantor shall at all times have an agent for service of process for the above
purposes in the County of New York, State of New York, Nothing contained in this
Section 11 shall be deemed to affect the right of the Company to serve process
in any other manner permitted by law or to commence legal proceedings or
otherwise proceed against the Guarantor in any jurisdiction.

          Section 12. WAIVER OF JURY TRIAL. EACH OF THE GUARANTOR AND THE
COMPANY IRREVOCABLY AND UNCONDITIONALLY WAIVES THE RIGHT TO TRIAL BY JURY IN ANY
LEGAL OR EQUITABLE ACTION, SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY OF THE OTHER OPERATIVE DOCUMENTS OR ANY TRANSACTION
CONTEMPLATED HEREBY OR THEREBY OR THE SUBJECT MATTER OF ANY OF THE FOREGOING.

          Section 13. Survival. All warranties, representations and covenants
made by the Guarantor herein or in any certificate or other instrument delivered
by it or on its behalf hereunder shall be considered to have been relied upon by
the Company and shall survive the execution and delivery of this Agreement,
regardless of any investigation made by the Company or on its behalf. All
statements in any such certificate or other instrument shall constitute
warranties and representations by the Guarantor hereunder.

          Section 14. Miscellaneous. Any provision of this Agreement which is
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. To the extent permitted
by applicable law, the Guarantor hereby waives any provision of law that renders
any provision hereof prohibited or unenforceable in any respect. The terms of
this Agreement shall be binding upon, and inure to the benefit of, the Guarantor
and the Company and their respective successors and assigns. No term or
provision of this Agreement may be changed, waived, discharged or terminated
orally, but only by an instrument in writing signed by the Guarantor and the
Company. The section and

                                        7

<PAGE>

paragraph headings in this Agreement and the table of contents are for
convenience of reference only and shall not modify, define, expand or limit any
of the terms or provisions hereof, and all references herein to numbered
sections, unless otherwise indicated, are to sections in this Agreement. This
Agreement shall in all respects be governed by, and construed in accordance
with, the laws of the State of New York (without giving effect to its choice of
law principles), including all matters of construction, validity and
performance.

                                        8

<PAGE>

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

                                        HIGHBRIDGE/ZWIRN SPECIAL
                                        OPPORTUNITIES FUND, L.P.

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

                                        ARBINET-THEXCHANGE, INC.

                                        By  /s/ Peter P. Sach
                                           -------------------------------------
                                           Title: CAO & Treasurer

                                        9

<PAGE>

                                                               December 12, 2003

Silicon Valley Bank\One Newton
Executive Park 2221 Washington
Street, Suite 200 Newton,
Massachusetts 02462

          Re: Loan Arrangement with Arbinet-thexchange, Inc.

Gentlemen:

     Reference is made to a certain loan arrangement entered into by and between
ARBINET-THEXCHANGE, INC., a Delaware corporation with its principal place of
business at 120 Albany Street, New Brunswick, New Jersey 08901 (the "Borrower"),
and SILICON VALLEY BANK, a California-chartered bank, with its principal place
of business at 3003 Tasman Drive, Santa Clara, California 95054 and with a loan
production office located at One Newton Executive Park, Suite 200, 2221
Washington Street, Newton, Massachusetts 02462, doing business under the name
"Silicon Valley East" ("SVB" or the "Primary Lender"), as evidenced by, among
other documents, a certain Accounts Receivable Financing Agreement dated as of
February 3, 2003 (together with all documents executed in connection therewith
or related thereto, as amended, the "AR Agreement").

     Reference is further made to a certain loan arrangement entered into by and
between the Borrower, various other parties, and ORIX VENTURE FINANCE LLC, a
Delaware limited liability company (formerly ORIX Merchant Banking LLC,
successor in interest to ORIX USA Corporation), with its principal place of
business at 1177 Avenue of the Americas, 10th Floor, New York, New York 10036
("ORIX") (ORIX and SVB shall collectively be referred to herein as the
"Lenders"), as evidenced by a certain Loan and Security Agreement dated as of
January 31, 2002 (together with all documents executed in connection therewith
or related thereto, as amended, the "ORIX Agreement").

     Reference is further made to a certain factoring arrangement entered into
by and between the Borrower and SCM TELCO FINANCE LLC, a Delaware limited
liability company with a place of business at c/o Corporation Service Company,
2711 Centerville Road, Suite 400, Wilmington, DE 19808 ("SCM") as evidenced by,
among other documents, a certain Factoring Agreement dated as of December 12,
2003 (together with all documents executed in connection therewith or related
thereto, as amended, the "Factoring Agreement").

<PAGE>

     Whereas, SVB has been granted a perfected security interest in all assets
of the Borrower, including, without limitation, a perfected security interest
in, among other things, the Borrower's accounts; and

     Whereas, ORIX has been granted a perfected security interest in all assets
of the Borrower, including, without limitation, a perfected security interest
in, among other things, the Borrower's accounts; and

     Whereas, the Borrower has requested consent from the Lenders to enter into
the Factoring Agreement with SCM.

     Now, therefore, for good and valuable consideration, SVB. ORIX, SCM and the
Borrower hereby agree as follows:

     1. All Purchased Accounts (as defined in the Factoring Agreement in effect
on the date hereof) which are purchased by SCM pursuant to the Factoring
Agreement shall be purchased subject to and subordinate to the prior security
interest in such assets of SVB and of ORIX. No other assets of the Borrower
(other than the Purchased Accounts) are or will be purchased by, or are or will
be subject to a security interest in favor of, SCM. SCM and Borrower represent
and warrant that they have provided a true, complete and correct copy of the
Factoring Agreement to the Lenders.

     2. SCM will not exercise any rights or remedies against the Borrower's
assets except for rights with respect to Purchased Accounts specifically
permitted pursuant to the terms of this Agreement.

     3. All payments owing or due to Borrower under the Factoring Agreement
shall be made by SCM to the Primary Lender, when and if such amounts are due
from SCM to the Borrower under the Factoring Agreement, notwithstanding any
contrary instructions which may hereafter be issued by Borrower or any party
other than the Primary Lender. Without limiting the foregoing, SCM shall pay the
Primary Lender the Cash Payment (as defined in the Factoring Agreement) with
respect to each Purchased Account. Each Lender hereby represents and warrants to
SCM, on behalf of itself only, and not the other Lender, that while such Lender
is the Primary Lender, no other person or entity has or will have a right to
payment of the amounts payable hereunder superior to such Lender's rights
hereunder, and that such Lender alone will be entitled to such payments and
accordingly, each Lender, on behalf of itself only, and not the other Lender,
agrees that it shall hold SCM harmless from and against any loss or reasonable
expense incurred or sustained by SCM by reason of the assertion against SCM of
claims by parties asserting that such person or entity's entitlement to such
payments, while such Lender was the Primary Lender, was superior to that of such
Lender; provided that such Lender's liability under this indemnity agreement
shall be limited to the amount of such payments received by such Lender from
SCM. The Lenders are not hereby agreeing to

                                        2

<PAGE>

indemnify SCM for the wrongful acceptance by the other Lender of amounts
received by such other Lender from SCM.

     4. In consideration of the payment by SCM to the Primary Lender of the Cash
Payment with respect to any Purchased Account, the Lenders shall be deemed to
subordinate any security interest they may have in such Account, up to the
amount of the Cash Payment paid by SCM to the Primary Lender, but the Lenders
shall retain their senior security interest in that portion of the Purchased
Account due from the Customer of such Account as exceeds the Cash Payment paid
by SCM to the Primary Lender. The Lenders shall retain their senior security
interest in such portion of the Purchased Account, to secure any amounts which
may continue to be owed by the Borrower to the Lenders. Where SCM has paid the
Cash Payment with respect to a particular Purchased Account to the Primary
Lender, and notified the Primary Lender in writing of such payment, subsequent
collections on any such Purchased Account shall first be paid to SCM until the
aggregate amount paid to or collected by SCM shall equal the Cash Payment with
respect to the particular Account. The proceeds of any other collection of any
Account (by SCM, or the Primary Lender, in accordance with Section 6 hereof),
shall be paid first to the Lenders, in accordance with the terms of a certain
Intercreditor Agreement dated February 3, 2003 by and between the Lenders.
Nothing contained herein shall impose any liability on the Lenders to (x)
reimburse SCM for payments and collections on Accounts that are received by the
Lenders before the Lenders receive payment of the Cash Payment with respect to
any Purchased Account; or (y) reimburse SCM for payments and collections on
Accounts that are received by the Borrower, either directly or in Borrower's
bank accounts, including, without limitation, cash collateral, lockbox, or other
accounts. Nothing contained herein shall obligate the Lenders to account for
each other or make or direct any payments to SCM or Borrower on account of
monies received by the other Lender.

     5. In the event that the Lenders, in the exercise of their rights against
Borrower, take possession of the books and records of Borrower during the period
while any Purchased Accounts purchased by SCM remain outstanding, the Lenders
shall grant SCM access to such books and records for the purpose of obtaining
information necessary to collect and enforce such Accounts.

     6. During the period that any Purchased Accounts are outstanding, the
Lenders shall refrain from enforcing their security interests in any such
Accounts. SCM and Borrower agree that if the Primary Lender, following the
occurrence of an event of default under its loan arrangement with the Borrower
(while there are outstanding obligations under such loan arrangement), instructs
SCM to cease collection efforts with respect to Purchased Accounts due from a
specific Customer owing Accounts for which SCM has not theretofore paid the Cash
Payment to the Primary Lender or from all Customers owing Purchased Accounts for
which SCM has not theretofore paid the Cash Payment to the Primary Lender, SCM
shall comply with such request, and SCM and

                                        3

<PAGE>

Borrower hereby agree that SCM's Purchase Commitment (as defined in the
Factoring Agreement) on such Accounts shall be deemed terminated and the Primary
Lender may enforce its security interest in such Accounts. Borrower waives any
and all claims against the Lenders resulting from such termination.

     7. Unless and until SVB provides written notice to the contrary, SVB shall
be the Primary Lender for purposes of this agreement. Upon termination of the AR
Agreement and satisfaction in full of the Obligations (as defined therein), ORIX
shall become the Primary Lender hereunder. SCM may continue to consider SVB the
Primary Lender in the event that ORIX claims to have become the Primary Lender
but SVB disputes such claim.

     8. Unless otherwise provided hereunder, all notices or demands by any party
relating to this agreement or any other agreement entered into in connection
herewith shall be in writing and (except informal documents which may be sent by
first-class mail, postage prepaid) shall be personally delivered or sent by
certified mail, postage prepaid, return receipt requested, or by facsimile, or
by reputable overnight delivery service, to the parties hereto, at their
respective addresses or fax numbers set forth below:

          If to SVB:

          SILICON VALLEY BANK
          One Newton Executive Park, Suite 200
          2221 Washington Street
          Newton, Massachusetts 02462
          Attn: Mr. David Reich, Senior Vice President
          Fax: (617) 969-5965

          With a copy to:

          RIEMER & BRAUNSTEIN LLP
          Three Center Plaza, 6th Floor
          Boston, Massachusetts 02108
          Attn: David A. Ephraim, Esquire
          Fax: (617) 880-3456

          If to ORIX:

          ORIX VENTURE FINANCE LLC
          1177 Avenue of the Americas, 10th Floor
          New York, New York 10036
          Ref: Arbinet-thexchange, Inc.
          Fax: (212) 739-1701

                                        4

<PAGE>

          With a copy to:

          ORIX USA CORPORATION
          1177 Avenue of the Americas, 10th Floor
          New York, New York 10036
          Attn: Legal Department
          Fax: (212) 739-1701

          If to SCM:

          SCM TELCO FINANCE LLC
          c/o Corporation Service Company 2711
          Centerville Road, Suite 400
          Wilmington, Delaware 19808
          Attn: Linda Ratchford
          Fax: (302) 636-5454

          With a copy to:

          DEBEVOISE & PLIMPTON, LLP
          919 Third Avenue
          New York, New York 10022
          Attn: Deborah F. Stiles, Esq.
          Fax: (212) 909-6836

          If to the Borrower:

          ARBINET-THEXCHANGE, INC.
          120 Albany Street
          New Brunswick, NJ 08901
          Attn: Mr. Michael Lemberg
          Fax:

          With a copy to:

          ARBINET-THEXCHANGE, INC.
          120 Albany Street
          New Brunswick, NJ 08901
          Attn: Chi K. Eng, Esquire
          Fax:

     The parties hereto may change the address at which they are to receive
notices hereunder, by notice in writing in the foregoing manner given to the
other.

                                        5

<PAGE>

     This letter shall be governed by and construed in accordance with the laws
of the State of New York without regard to the conflicts of law provisions
thereof (other than Section 5-1401 of the New York General Obligations Law).

                                        6

<PAGE>

     This letter shall take effect as a sealed instrument under the laws of the
State of New York as of the date first written above.

                                        Very truly yours,

SILICON VALLEY BANK                     SCM TELCO FINANCE LLC

By:  /s/ David Reich                    By:  /s/ Daniel Zwirn
   ----------------------------------       ------------------------------------

Name: David Reich                       Name
     --------------------------------        -----------------------------------

Title: SVP                              Title
      -------------------------------         ----------------------------------

                                        ORIX VENTURE FINANCE LLC

                                        By:  /s/ Kevin P. Sheehan
                                            ------------------------------------
                                        Name: Kevin P. Sheehan
                                        Title: President & CEO

Agreed to and accepted:

ARBINET-THEXCHANGE, INC.

By:  /s/ Peter P. Sach
   -----------------------------------

Name: Peter P. Sach
     ----------------------------------

Title: CAO & Treasurer

                                        7

<PAGE>

     FACTORING AGREEMENT, dated as of December 12, 2003 (the "Effective Date"),
between SCM TELCO FINANCE LLC ("Factor") and ARBINET-THEXCHANGE, INC.
("Client").

     1.   APPOINTMENT

     Client hereby appoints Factor to act as its factor upon the terms and
conditions set forth in this Agreement.

     2.   DEFINED TERMS

     Defined terms used herein without definition shall have the respective
meanings ascribed thereto in Section 14.

     3.   COVERED SALES; SECURITY INTEREST

          (a) Client hereby assigns and sells to Factor, as absolute owner, and
Factor hereby purchases from Client, all Purchased Accounts created on or after
the Effective Date, subject to the Current Security Interests to the extent set
forth in the Interfactor Agreement and the Intercreditor Agreements (the "Senior
Security Interests"). Factor's purchase of and acquisition of title to each
Purchased Account will be effective as of the date of its generation.

          (b) Client hereby grants to Factor a security interest in all of the
Collateral as security for the performance of Client's obligations hereunder,
subject to the Senior Security interests.

     4.   CUSTOMER PURCHASE APPROVAL

          (a) Client may submit a written request (a "Credit Analysis Request")
to Factor to indicate, with respect to one or more Customers listed in Credit
Analysis Request (the "Proposed Customers") whose Accounts Client may request
Factor to purchase, the aggregate Credit Limit with respect to any Purchase
Period for each Proposed Customer (each, an "Estimated Credit Limit"). Each
Credit Analysis Request shall contain the following information:

               (i) the identity of such Proposed Customer;

               (ii) the maximum dollar amount of Accounts of such Proposed
Customer that Client wishes Factor to purchase in any Purchase Period;

               (iii) whether such Proposed Customer is a Domestic Customer or a
Foreign Customer;

               (iv) the factoring arrangements, if any, then in effect between
GMAC and such Proposed Customer; and

               (v) such other information reasonably requested by Factor to
analyze the creditworthiness of such Proposed Customer.

          (b) Not later than the seventh business day following delivery of any
Credit Analysis Request, Factor will provide to Client a non-binding estimate of
the Estimated Credit Limit (which may be zero) for each Proposed Customer listed
in such Credit Analysis Request.

          (c) Not later than five business days prior to the commencement of any
Purchase Period, Client may request that Factor purchase all or a portion of the
Accounts (the "Requested

<PAGE>

Accounts") of any Proposed Customer with respect to such Purchase Period by
submitting a written request (a "Purchase Request"*) to Factor containing the
following information:

               (i) the identity of such Proposed Customer;

               (ii) the maximum dollar amount of Accounts of such Proposed
Customer that Client wishes Factor to purchase in such Purchase Period;

               (iii) whether such Proposed Customer is a Domestic Customer or a
Foreign Customer; and

               (iv) the factoring arrangements, if any, then in effect between
GMAC and such Proposed Customer.

          (d) Such Purchase Request may be in the form of a spreadsheet and may
include all information relating to Requested Accounts in one file.

          (e) Factor may in its sole discretion agree to purchase all or a
portion of the Requested Accounts of any Proposed Customer for any Purchase
Period. Factor will provide Client with written confirmation of which Requested
Accounts, if any, will be purchased for the applicable Purchase Period (a
'"Purchase Commitment"). The Purchase Commitment will include the maximum dollar
amount Factor will purchase with respect to each Proposed Customer for such
Purchase Period (each, a "Credit Limit") and such other terms as will be agreed
to by Factor and Client. If Factor does not provide a written response declining
any of the Requested Accounts three business days prior to the start of the
applicable Purchase Period, such Requested Accounts shall be deemed approved by
Factor pursuant to a Purchase Commitment.

          (f) If Client receives a Purchase Commitment with respect to the
Requested Accounts of any Customer and does not submit to Factor a new Purchase
Request for such Customer's Requested Accounts in a subsequent Purchase Period,
then the Purchase Commitment for such Customer's Requested Accounts shall remain
in effect for successive consecutive Purchase Period, unless otherwise
terminated or reduced pursuant to Section 4(g).

          (g) Factor may at any time terminate any Purchase Commitment or reduce
the Credit Limit with respect to any Customer in Factor's sole discretion,
provided that (i) no Credit Limit may be reduced below an amount equal to the
sum of (x) the undrawn amount of unexpired letters of credit issued for the
account of such Customer, so long as the issuer, form and substance of the
letter of credit are acceptable to Factor and have been issued to Factor as
beneficiary or to Client as beneficiary subject of an assignment of proceeds in
favor of Factor (with the comment of the Issuer) that are acceptable to Factor
as to form and substance and (y) the amount, if any, of cash deposited with
Factor to secure any Customer's obligations pursuant to cash collateral
agreements acceptable to Factor as to form and substance and (ii) a Purchase
Commitment with respect to a Customer shall be deemed automatically cancelled
upon the occurrence of an Insolvency Event with respect to such Customer. If
Factor cancels or is deemed to have cancelled a Purchase Commitment in respect
of a Customer, then Factor shall have no further obligations with respect to any
Accounts generated after the date of such cancellation by Factor and if Factor
reduces the Credit Limit in respect of any Customer, the Purchased Accounts of
such Customer after such reduction shall be subject to such Credit Limit, as so
reduced.

          (h) In the event either Client or Factor obtains knowledge of any
Insolvency Event with respect to any Customer whose Accounts have been purchased
hereunder, it shall immediately provide notice thereof to the other party
hereto.

                                        2

<PAGE>

          (i) Client shall immediately provide notice to Factor regarding any
change in the factoring arrangements between GMAC and Client with respect to any
Account that is a Joint Account.

     5.   PURCHASE PRICE OF PURCHASED ACCOUNTS; PAYMENT REQUEST

          (a) The purchase price of each Purchased Account shall be the Gross
Face Amount thereof (regardless of any computational or other error of Client
with respect thereto), as adjusted pursuant to Section 5(b) (the "Purchase
Price").

          (b) The Purchase Price of each Purchased Account shall be paid in cash
by Factor only to the extent required by Section 5(c). Factor's obligation to
pay the Purchase Price of any Purchased Account shall be reduced if and to the
extent (i) that Client receives payment in respect of such Purchased Account
from the applicable Customer, (ii) that such Customer fails to pay such Purchase
Price within 75 days after the original due date of such Customer's Purchased
Account for any reason other than an Insolvency Event, (iii) of the Purchase
Price Discount provided for in Section 5(d) or (iv) [*].

          (c) If any Purchased Account of any Customer remains wholly unpaid for
75 days or more after the original due date of such Purchased Account solely on
account of an Insolvency Event with respect to such Customer, Client may deliver
to Factor a Payment Request not later than 90 days after the original invoice
date of such Purchased Account. Upon receipt of any such Payment Request, Factor
shall pay to Client on the Settlement Date an amount equal to 95% of the
Purchase Price (the "Cash Payment") for each Purchased Account as to which
Client has submitted a Payment Request. Without limitation of any of Factor's
rights set forth herein and notwithstanding anything to the contrary set forth
herein, Factor shall have no obligation to pay to Client the Purchase Price of
any Purchased Account as to which a Payment Request has been submitted if (i)
Client shall not have delivered to Factor following the delivery by Factor to
Client of a written request therefor, (x) within 10 business days, all Credit
Loss Documentation with respect to such Purchased Account, (y) within 20
business days, all applicable Customer Orders with respect to such Purchased
Account or (z) within 10 business days, reasonable evidence satisfactory to
Factor that Client's title to such Purchased Account and all other payment
obligations, however arising, due to Client from such Customer with respect to
such Purchased Account, are free and clear of all Liens other than Permitted
Liens, provided that if Factor believes Client has not delivered to Factor all
of the information required to be delivered pursuant to this clause (i) within
the period set forth above in clauses (x), (y) or (z), as applicable, SCM will
provide notice to Client specifying the outstanding information and Client shall
have five business days from its receipt of such notice to provide such
outstanding information, (ii) Client shall have made any change to the terms of
such Purchased Account without Factor's prior written consent or (iii) if Client
shall be in breach of any material representation, warranty or covenant
hereunder.

          (d) Upon payment of the Purchase Price of any Purchased Account of any
Customer pursuant to Section 5(c), Factor shall collect such Purchased Account
directly from such Customer, subject the provisions of the Interfactor
Agreement. Client agrees that, in the event that Factor recovers all or any
portion of the Purchase Price of any Paid Account from a Customer, the proceeds
thereof shall be applied first, to pay, or reimburse Factor for the payment of,
any reasonable expenses of collecting such Purchase Price; second, to reimburse
Factor for the Cash Payment paid by Factor pursuant to Section 5(c); and third,
to pay Client the Purchase Price Discount.

                                        3

<PAGE>

     6.   FEES

          (a) Client shall pay to Factor the following fees (collectively the
"Fees") in respect of Factor's services hereunder:

               (i) as a utilization fee (the "Utilization Fee"), on or prior to
the fifth business day following the end of each Purchase Period, the sum of the
products of (x) [*]% times (y) the Gross Face Amount of each Purchased Account
purchased during such Purchase Period (the "Purchased Account Gross Amounts");

               (ii) as a commitment fee (the "Unused Line Fee"), on or prior to
the fifth business day following the end of each Purchase Period, the sum of the
products of (x) [*]% times (y) the difference between (A) the Monthly Credit
Limit of each Customer and (B) the Purchased Account Gross Amount of such
Customer with respect to such Purchase Period;

               (iii) as a monitoring fee (the "Monitoring Fee"), on or prior to
the fifth business day following the end of each Purchase Period, the sum of the
products of (x) [*]% times (y) the Monthly Credit Limit of each Customer;

               (iv) on or prior to the fifth business day following the end of
each calendar quarter (other than the calendar quarter in which the Effective
Date falls (the "First Quarter"') and the calendar quarter immediately following
the First Quarter (the "Second Quarter"), the difference between (x) the sum of
the Minimum Quarterly Fees for such quarter and each preceding quarter in the
applicable calendar year and (y) the sum of (A) the aggregate Utilization Fees,
Unused Line Fees and Monitoring Fees paid in respect of the Purchase Periods
during such quarter and each preceding quarter in the applicable calendar year
plus (B) the aggregate Minimum Quarterly Fees paid in respect of each such
preceding quarter in the applicable calendar year; and

               (v) on the Effective Date, as a prepaid Minimum Quarterly Fee for
(x) the period from the Effective Date through the last day of the First Quarter
and (y) the Second Quarter, an amount equal to (A) for the First Quarter, the
product of (1) the Minimum Quarterly Fee for such quarter times (2) a fraction,
the numerator of which is the number of days in the First Quarter on and after
the Effective Date and the denominator of which is the number of days in the
First Quarter and (B) for the Second Quarter, the Minimum Quarterly Fee for such
quarter. For the last calendar quarter during the Term (the "Last Quarter"), the
Minimum Quarterly Fee shall be the product of (1) the Minimum Quarterly Fee for
such quarter times (2) a fraction, the numerator of which is the number of days
in the Last Quarter to and including the last day of the Term and the
denominator of which is the number of days in the Last Quarter.

          (b) The fees payable pursuant to Section 6(a) shall be paid by wire
transfer to Account No. 2090067 of Factor at LaSalle Bank N.A. - Chicago, ABA
071000505. Factor must provide Client with written notification at least five
business days prior to changing the details for any wire transfer.

          (c) In the event Client shall fail to pay any portion of a fee arising
under this Article 6 when due (any such portion, an "Unpaid Fee"). Client shall
pay a Late Fee with respect to such Unpaid Fee.

     7.   REPRESENTATIONS, WARRANTIES AND COVENANTS

     Client hereby represents, warrants and covenants that:

          (a)  As of each day on which an Account is purchased hereunder, (i)
               Client has good title to such Purchased Account, free of and
               clear of all Liens other than Permitted Liens, (ii) each such

                                        4

<PAGE>

Purchased Account is a bona fide, enforceable obligation arising in the ordinary
course of business of Client, (iii) the applicable Customer is unconditionally
obligated to pay at maturity the full amount of such Purchased Account relating
to it without defense, counterclaim or offset other than offsets permitted
pursuant to the Trading Terms and (iv) all documents evidencing such Customer's
payment obligations with respect to such Purchased Account are in full force and
effect.

          (b) Client's exact legal name is as set forth on the signature page of
this Agreement. Client will provide Factor with written notice within 30
business days of changing its legal name.

          (c) Client is an organization of the type and organized in the
jurisdiction set forth on Schedule 7(c). Schedule 7(c) accurately sets forth
Client's organizational identification number or accurately states that Client
has none and accurately sets forth Client's federal employer identification
number. Client will provide Factor with written notice within 30 business days
of changing its organizational identification number or changing its type of
organization. Client shall not change its jurisdiction, of organization unless
Factor shall have received not less than 30 business days' prior written notice
of such proposed change.

          (d) Client's chief executive office and mailing address and Client's
Records concerning Accounts are located only at the address identified as such
on Schedule 7(d). Client shall not change its chief executive office or mailing
address unless Factor shall have received not less than 30 business days' prior
written notice of such proposed change.

          (e) Client shall furnish to Factor (i) within five business days after
the last business day of each Purchase Period, a detailed sales register and a
detailed aged trial balance that includes all Purchased Accounts as of the end
of such Purchase Period, certified by Client's Chief Executive Officer, Chief
Financial Officer, Chief Administrative Officer, Vice President of Finance, Vice
President of Business Planning and Treasury Operations or Vice President of
Business Systems and (ii) within 120 days after the end of Client's fiscal year,
an audited financial statement with respect to such fiscal year, certified by
Client's Chief Executive Officer, Chief Financial Officer or Chief
Administrative Officer and reviewed by Ernst & Young or another independent
certified public accountant acceptable to Factor, such acceptance to be provided
by Factor prior to the accountant's undertaking its annual audit. Client shall,
at Client's expense, furnish Factor with other financial and operational
information reasonably requested by Factor from time to time. Upon reasonable
notice, Factor shall have full access to and the right to audit, check, inspect
and make abstracts and copies from Client's Records, audits, correspondence and
all other papers relating to the Purchased Accounts and the operation of
Client's business. Factor and its agents may enter upon Client's premises at any
time and from time to time, during business hours upon reasonable notice, for
the purpose of inspecting any and all Records pertaining to the Purchased
Accounts and to the operation of Client's business. On the first day of each
month following any month in which Factor has performed any collection audit or
field examination, Client shall pay to Factor a fee equal to Factor's then
effective standard rate per day, per person employed or retained by Factor to
perform such audits and field examinations, it being acknowledged that as of the
Effective Date, Factor's standard rate is $1,500 per day, per person, plus all
reasonable costs, fees and expenses incurred by Factor or its representatives in
the performance of such audits and field examinations, provided that Client
shall be required to pay the foregoing fee for no more than two persons per
audit or field examination. Factor agrees that until the second anniversary of
the Effective Date Factor's standard rate per day, per person, shall remain
$1,500. So long as Client is not in breach of this Agreement, Factor shall
conduct no more than one collection audit of Client's Records during any
calendar year. All information provided to Factor shall be governed by the
Non-Disclosure Agreement, dated as of November 15, 2003, between Factor and
Client.

          (f) [*]

          (g) Client is and shall remain in compliance with all laws,
regulations and rules applicable to Client's business, including all laws, rules
and regulations of the United States and state and local governmental entities
relating to telecommunications services and all laws, rules and regulations of
foreign jurisdictions in which Client has a physical presence, including but not
limited to personnel, real estate and equipment, whether leased or owned, except
to the extent that the failure to comply therewith is not reasonably likely,
alone or in the aggregate, to have a material adverse effect on the business,
operations or condition (financial or otherwise) of Client.

          (h) Client shall take all other reasonable actions requested by Factor
from time to time to cause the attachment, perfection and priority of, and
Factor's ability to enforce, Factor's security interest in any and all of the
Collateral, subject only to the prior security interest of the Lenders and GMAC.
Client irrevocably and unconditionally authorizes Factor (or Factor's agent) to
file and ratifies the

<PAGE>

filing at any time and from time to time of such financing statements with
respect to the Collateral naming Factor or Factor's designee as the secured
party and Client as debtor, as Factor may require, and including any other
information with respect to Client or otherwise required by Article 9 of the
Uniform Commercial Code of such jurisdictions as Factor may determine, together
with any amendment and continuation statements with respect thereto, which
authorization shall apply to all financing statements filed on, prior to or
after the date hereof. In no event shall Client at any time file, or permit or
cause to be filed, any amendment or termination statement with respect to any
financing statement (or amendment or continuation statement with respect
thereto) naming Factor or Factor's designee as secured party and Client as
debtor.

          (i) Upon Factor's reasonable request, Client shall, at Client's
expense, duly execute and deliver, or cause to be duly executed and delivered,
to Factor such further instruments and do and cause to be done such further acts
as may be necessary or proper in the opinion of Factor to effectuate the
provisions and purposes of this Agreement.

     8.   INVOICES; CREDIT INFORMATION REQUESTS

          (a) With respect to each Trading Account Invoice of Client evidencing
Purchased Accounts due from Customers, at Factor's option, Client shall either
(i) furnish Factor with a legible duplicate of the original invoice or (ii) make
such invoice available for the Factor to view on thexchange website. Client
shall at the end of each Purchase Period furnish to Factor evidence satisfactory
to Factor of each rendition of services by Client to Customers in respect of the
Purchased Accounts. Client agrees that Factor shall not be liable for any
selling expenses, orders, purchases or contracts of any kind resulting from any
of Client's transactions and Client shall indemnify Factor and hold Factor
harmless with respect thereto. Other than Value Added Tax in the United Kingdom,
Client represents and warrants to Factor that there are no taxes payable as a
result of Customers' purchases of telecommunications network capacity and that
Client will at all times promptly pay such taxes when due and file all tax
returns relating to such taxes in a timely manner.

          (b) Factor may at any time request Client to provide detailed credit
information with respect to any Purchased Account or Customer, and Client shall
provide all such requested information to Factor within five business days of
receiving any such request.

     9.   EXCLUSIVITY

          (a)  Except for Client's factoring arrangements with GMAC, any
               factoring arrangements entered into pursuant to current
               discussions between Client and Marsh USA, Inc. ("Marsh")

                                        6

<PAGE>

regarding potential factoring arrangements, and Client's financing arrangements
with the Lenders, Factor shall be the exclusive provider of factoring services
to Client during the Term (i) in the United States so long as the rate payable
by each Customer under its Customer Agreement in respect of its utilization fees
for any Billing Period is at least [*] and (ii) in any other country so long
as (x) Factor is legally able to provide such services in such country and (y)
the rate payable by each Customer under its Customer Agreement in respect of its
utilization fees for any Billing Period is at least [*].

          (b) Except for Client's factoring arrangements with GMAC, Client shall
not solicit or enter into any agreement on the same terms or in competition
with, this Agreement during the term of this Agreement, without the prior
written consent of Factor.

     10.  RIGHT OF FIRST REFUSAL

     In the event that:

          (a) the GMAC Agreement shall have been terminated;

          (b) the GMAC Agreement shall have been amended or modified so that the
factoring obligations of GMAC thereunder have been reduced; or

          (c) GMAC or any other GMAC Factor shall withhold or withdraw credit
approval for any Customers of Client;

Client shall not accept any offer (an "Offer") from any person other than Factor
or Marsh to provide factoring services substantially similar to the services
provided by GMAC under the GMAC Agreement in any country in which Factor is
legally able to provide such services without first giving written notice of
such offer (the "Offer Notice") to Factor, identifying the proposed provider of
services and specifying the fees and other terms and conditions of the Offer,
Client agrees that if Factor delivers a written notice to Client within 30
business days after receipt of the Offer Notice agreeing to provide Client the
services described in the Offer Notice on terms and conditions substantially
similar to the terms and conditions of the Offer (including the fees specified
therein). Factor shall have the right to provide such services on such terms and
conditions unless Client's Board of Directors does not approve Factor's
proposal.

     11.  TERMINATION

     This Agreement shall remain in full force and effect during the period from
the Effective Date to and including the second anniversary of the Effective Date
(the "Term"), unless sooner terminated as follows:

          (a) Either party may terminate this Agreement at any time upon 60
business days' prior written notice to the other party, provided that if Client
gives such notice prior to the first anniversary of the Effective Date, Client
shall pay Factor a termination fee of $250,000 upon the termination of this
Agreement.

          (b) Either party hereto may terminate this Agreement immediately,
without notice to the other party, and, in the case of termination by Client
pursuant to this clause (b), without payment of the fee described in clause (a),
if the other party shall suspend business, sell all or a significant portion of
its assets, become insolvent, make an assignment for the benefit of creditors,
or apply for an extension from creditors; or if a meeting of its creditors is
called; or if a receiver or trustee shall be appointed for it or its property;
or if its property shall become subject to any Lien or attachment except
attachments that are bonded or discharged within 30 business days after they
first arise; or if a Bankruptcy Case shall be filed by or against it; or if the
other party shall seek relief under any insolvency statute, federal, state or
other; or if a custodian shall be appointed for all or substantially all of its
property; or if the other party shall breach this

                                        7

<PAGE>

Agreement or any other agreement between Factor and Client or between Client and
any affiliate of Factor; or if the other party shall fail to pay any obligation
when due hereunder or if ownership or control of 50% or more of the other
party's aggregate outstanding stock, stock equivalents or any other equity
changes after the Effective Date.

     12.  PLACE OF PAYMENT; NEW YORK LAW, FORUM SELECTION; WAIVER OF JURY TRIAL

          (a) This Agreement shall be governed by and construed according to the
laws of the State of New York (without giving effect to its choice of law
principles).

          (b) Client agrees that (i) all actions and proceedings arising out of
or relating directly or indirectly to this Agreement or any ancillary agreement
shall be litigated in the United States District Court for the Southern District
of New York or, at Factor's option, in any other courts located in New York or
elsewhere as Factor may select, (ii) such courts are convenient forums, and
(iii) it shall submit to the personal jurisdiction of such courts. Client hereby
consents to the service of process therein by registered or certified mail,
return receipt requested, directed to Client at Client's address set forth below
its name on the signature page hereof, and Client agrees that service so made
shall be deemed complete five business days after the date of mailing.

          (c) TO THE EXTENT LEGALLY PERMISSIBLE, EACH OF CLIENT AND FACTOR WAIVE
ALL RIGHT TO TRIAL BY JURY IN ANY LITIGATION RELATING TO THIS AGREEMENT, WHETHER
SOUNDING IN CONTRACT, TORT OR OTHERWISE.

     13.  REMEDIES; WAIVERS

          (a) Factor's rights and remedies under this Agreement will be
cumulative and not exclusive of any other right or remedy Factor may have under
the UCC or otherwise.

          (b) Factor shall have the right, in Factor's sole discretion, to
determine any rights or remedies Factor may at any time pursue or to take any
other action and incur any costs or expenses with respect thereto and such
determination will not in any way modify or affect any of Factor's rights
hereunder. Failure by Factor to exercise any right, remedy or option under this
Agreement or any delay by Factor in exercising the same will not operate as a
waiver and no waiver by Factor will be effective unless set forth in a signed
writing and then only to the extent specifically stated.

     14.  DEFINITIONS

     As used herein:

          "Accounts" shall mean, with respect to any Customer and any time
period, all of Client's present and future rights to payment that are due from
such Customer in respect of the net purchase of telecommunications traffic
through Client during such time period pursuant to a Customer Agreement.

          "Bankruptcy Case" shall mean a case or proceeding under the United
States Bankruptcy Code.

          "Billing Period" shall mean, with respect to any calendar month, each
of the period from the Is1 through the 15th days of such month and the period
From the 16th through the last day of such month.

          "Cash Payment" shall have the meaning set forth in Section 5(c).

                                        8

<PAGE>

          "Collateral" shall mean and include ail Purchased Accounts and all
proceeds and products of the Purchased Accounts.

          "Credit Limit" shall have the meaning set forth in Section 4(e).

          "Credit Loss Documentation" shall mean, with respect to each Purchased
Account for which Client has submitted a Payment Request to Factor, each and all
of the following, in form and substance acceptable to Factor in its reasonable
discretion: (a) Factor's credit approval number, if any, with respect to each
such Purchased Account; (b) the Trading Account Invoice with respect to such
Purchased Account and any trading account statements accompanying such Trading
Account Invoice, (c) written evidence of the occurrence of an Insolvency Event
with respect to such Customer, (d) all correspondence relating to such Purchased
Account and Client's original collection file with respect to such Customer and
(e) such additional documentation relating to each such Purchased Account as
Factor may from time to time reasonably request of Client.

          "Current Security Interests" shall mean the security interests with
respect to the Purchased Accounts granted by Client to or for the benefit of
GMAC, Silicon and Orix pursuant to the GMAC Agreement and the Intercreditor
Agreements, respectively.

          "Customer" shall mean any person who is a "Member" of Client (as
defined in the Trading Terms).

          "Customer Agreement" shall mean, with respect to any Customer, the
Member Application entered into by such Customer with Client, including the
Trading Terms, substantially in the form attached hereto as Annex A.

          "Customer Orders" shall mean with respect to each Purchased Account
for which Client has submitted a Payment Request, the applicable Customer Buy
Orders and Sell Orders with respect to the Billing Period covered by the Trading
Account Invoice with respect to such Purchased Account.

          "Daily Credit Limit" shall mean, with respect to any Customer and any
day in a Purchase Period, the Credit Limit of such Customer in effect on such
day.

          [*]

          "Domestic Customer" shall mean a Customer organized under the laws of
a state of the United States or Canada and the principal place of business of
which is located in the United States or Canada.

          "Effective Date" shall mean the date set forth in the introductory
paragraph hereto.

          "Financing Agreements" shall mean (a) the Accounts Receivable
Financing Agreement, dated as of February 3, 2002, between Silicon and Client,
and (b) the Loan and Security Agreement, dated as of January 31, 2002, among
Client, Orix and various other parties, in each case as amended from time to
time.

          "Foreign Customer" shall mean a Customer organized under the laws of a
country other than the United States or Canada and the principal place of
business of which is located in a country other than the United States or
Canada.

          "GMAC" shall mean GMAC Commercial Finance LLC.

                                        9

<PAGE>

          "GMAC Agreement" shall mean the Factoring Agreement, dated as of
February 10, 2003, between GMAC and Client, as amended from time to time.

          "GMAC Factor" shall mean GMAC or any affiliate thereof which provides
factoring services to Client or extends credit to Client secured by Accounts.

          "Gross Face Amount" shall mean with respect to any Purchased Account
of any Customer for any Billing Period (a) that is not a Joint Account, the
amount due to Client from such Customer for purchased telecommunications network
capacity utilized during such Billing Period, net of amounts due to such
Customer from Client for telecommunications network capacity sold by such
Customer through Client and utilized during the same Billing Period, in each
case as shown on the Trading Account Invoice with respect to such Billing Period
(the "Utilized Amount") or (b) that is a Joint Account, the excess, if any, of
(i) the Utilized Amount over (ii) the maximum aggregate dollar amount of ail
credit extended by GMAC with respect to the Purchased Accounts of such Customer
for such Billing Period, provided that in no event shall the Gross Face Amount
of any Purchased Account, when aggregated with the Gross Face Amounts of all
other Purchased Accounts of such Customer with respect to the Purchase Period in
which such Purchased Account is purchased, exceed the Credit Limit for such
Customer with respect to such period.

          "Insolvency Event" shall mean, with respect to any Customer, (a) the
commencement of a Bankruptcy Case by or against such Customer, (b) the
commencement of insolvency proceedings by or against such Customer under any
other law or (c) the appointment of a trustee, receiver or custodian with
respect to all or substantially all of the property of such Customer.

          "Interfactor Agreement" shall mean the Interfactor and Subordination
Agreement, dated on or about December 12, 2003, between Factor and GMAC.

          "Intercreditor Agreements" shall mean (a) the letter agreement, dated
as of February 3, 2003, among GMAC, Orix and Silicon and (b) the letter
agreement, dated on. or about December 12, 2003 among Factor, Client, Orix and
Silicon.

          "Interest Rate" shall mean 1.00% per month.

          "Joint Account" shall mean an Account that is being factored in part
by each of Factor and GMAC.

          "Late Fee" shall mean, with respect to any period and any Unpaid Fee,
the product of: (a) the Interest Rate, (b) such Unpaid Fee and (c) a fraction,
the numerator of which is the number of days from and including the day on which
such Unpaid Fee is due to and excluding the day on which such Unpaid Fee is paid
and the denominator of which is 30.

          "Lender" shall mean each of Silicon, Orix and any other lender to
Client approved by Factor.

          "Lien" shall mean, as applied to any property, real or personal,
tangible or intangible, any pledge, mortgage, lien, charge, security interest or
encumbrance of any kind thereon (including any conditional sale or other title
retention agreement, any lease in the nature thereof or the interest of the
lessor under any capitalized lease).

          "Minimum Quarterly Fee" shall mean (a) [*], with respect to any
calendar quarter-in which Factor has agreed to purchase Accounts of Customers
located only in the United States and the United Kingdom and (b) [*], with
respect to any calendar quarter in which Factor has agreed to purchase Accounts
of Customers located in the United States and the United Kingdom and at least $5

                                       10

<PAGE>

million of Accounts of Customers located in four additional jurisdictions
selected by Client and agreed to by Factor.

          "Monthly Credit Limit" shall mean, with respect to any Customer and
any Purchase Period, the sum of the Daily Credit Limits of such Customer for
each day in such Purchase Period, divided by the number of days in such Purchase
Period.

          "ORIX" shall mean Orix Merchant Banking LLC.

          "Paid Account" shall mean any Purchased Account as to which Factor has
made a Cash Payment to Client pursuant to Section 5(c).

          "Payment Request" shall mean, as to any Purchased Account, Client's
written request for payment by Factor to Client of any remaining outstanding
balance of the Purchase Price thereof.

          "Permitted Lien" shall mean any Lien with respect to a Purchased
Account in favor of Factor, any Lender or GMAC.

          "Purchase Commitment" shall have the meaning set forth in Section
4(e).

          "Purchase Period" shall mean the two Billing Periods within any
calendar month.

          "Purchase Price" shall have the meaning set forth in Section 5(a).

          "Purchase Price Discount" shall mean, with respect to any Paid
Account, the difference between the Purchase Price thereof and the Cash Payment
with respect thereto.

          "Purchase Request" shall have the meaning set forth in Section 4(c).

          "Purchased Account" shall mean, with respect to any Customer and any
Billing Period, an Account that (a) has been approved by Factor pursuant to
Section 4(e) pursuant to a Purchase Commitment, (b) is created during such
Billing Period, (c) is evidenced by a Trading Account Invoice with respect to
such Billing Period and (d) the dollar amount of which, together with all other
Purchased Accounts of such Customer with respect to the Purchase Period in which
such Purchased Account is purchased, does not exceed the Credit Limit of such
Customer for such Purchase Period.

          "Records" shall mean all of Client's present and future books of
account of every kind or nature, purchase and sale agreements, invoices, ledger
cards, ledger sheets, bills of lading and other shipping evidence, statements,
files, documents, correspondence, memoranda, credit files and other data
relating to any Customer or Purchased Account, business papers, computers,
computer software (whether owned by Client or in which it has an interest),
computer programs, together with the tapes, disks, diskettes and other data and
software storage media and devices, File cabinets or containers in or on which
the foregoing are stored (including, without limitation, any of Client's rights
with respect to the foregoing maintained with or by any other person).

          "Requested Account" shall have the meaning set forth in Section 4(c).

          "Settlement Date" shall mean, with respect to any Purchased Account,
the date that is 90 days after the original due date of the Purchased Account.

          "Silicon" shall mean Silicon Valley Bank.

          "Term" shall have the meaning set forth in Section 11.

                                       11

<PAGE>

          "Trading Account Invoke" shall mean, with respect to any Purchased
Account, the Trading Account Invoice (as defined in the Trading Terms) with
respect thereto.

          "Trading Terms" shall mean the Arbinet-Thexchange United States
Exchange Delivery Point Member Trading Terms attached to a Customer Agreement.

          "UCC" shall mean the Uniform Commercial Code as in effect on the
Effective Date in the State of New York, as from time to time amended.

          '"Unpaid Fee" shall have the meaning set forth in Section 6(c).

     15.  CONFIDENTIALITY

     Except as may be required by applicable law, each party hereto agrees not
to disclose the terms of this Agreement or any of the transactions contemplated
hereby to any other person without the other party's prior written consent.

     16.  GENERAL

          (a) This Agreement may not be amended except in a writing signed by
each party hereto and is for the benefit of and binding upon the parties and
their respective successors and assigns except that Client may not assign or
transfer any of Client's rights or obligations under this Agreement without
Factor's prior written consent, and no such assignment or transfer of any such
obligation shall relieve Client thereof unless Factor has consented to such
release in a writing specifically referring to the obligation from which Client
is to be released. This Agreement, and any concurrent or subsequent written
supplements thereto or amendments thereof signed by each of Factor and Client,
represent the entire understanding of the parties and supersede all inconsistent
agreements and communications, written or oral, between Client's and Factor's
officers, employees, agents and other representatives.

          (b) This Agreement shall not be effective unless signed by Client and
Factor.

          (c) Except for Payment Requests delivered by Client in accordance with
Article 5, written communications made pursuant to this Agreement may be made by
email.

          (d) If any obligation to be performed pursuant to the Agreement is
required hereunder to be performed on a day that is not a business day, such
obligation shall be deemed to be required to be performed on the next succeeding
day that is a business day.

                                       12

<PAGE>

     IN WITNESS WHEREOF, each of Factor and Client has executed this Agreement
as of the Effective Date.

                                        SCM TELCO FINANCE LLC

                                        By:  /s/ Authorized Representative
                                            ------------------------------------
                                           Title:

                                        Address: c/o Corporation Service Company
                                                 2711 Centerville Road, Suite
                                                 400 Wilmington, DE 19808

                                        ARBINET-THEXCHANGE, INC.

                                        By:  /s/ Peter P. Sach
                                           -------------------------------------
                                           Title: CAO & Treasurer

                                        Address: 120 Albany Street Suite 450,
                                                 Tower II New Brunswick, New
                                                 Jersey 08901

                                       13

<PAGE>

SCHEDULES TO
FACTORING AGREEMENT
between
SCM TELCO FINANCE LLC
and
ARBINET-THEXCHANGE, INC.

Schedule 7(c)   Client Organization Information

                Organization Type: Corporation

                Jurisdiction of Organization: Delaware

                Organization Identification Number: 268341

                Federal Employer Identification Number: 13-3930916

Schedule 7(d)   Chief Executive Office:

                120 Albany Street, New Brunswick, New Jersey 08901

                Other Locations:

                1. 460 Herndon Pkway., Suite 150
                   Herndon, VA20170

                2. 441 Old Newport Blvd., Suite 104
                   Newport Beach, CA 92663

                3. 12/18 Paul Street
                   London EC2A 4JH

                                       14

<PAGE>

                                                                       Exhibit A

                                  TRADING TERMS

                                 (see attached)

                                       15

<PAGE>

                               ARBINET-TH EXCHANGE
                  UNITED STATES EXCHANGE DELIVERY POINT MEMBER
                                  TRADING TERMS

                                                               [LOGO] thexchange
                                                            Optimize Your World"

                                                                      Addendum B

1.   Introduction.

     (a) Arbinet-thexchange, Inc. ({"thexchange") provides an exchange for
facilitating the sale and purchase of telecommunication services by and between
telecommunications carriers, Internet telephony service providers, prepaid card
service providers and others. It is understood and agreed by Member that
thexchange's operation of the exchange does not constitute the provision by
thexchange of common carrier telecommunications services. Member agrees that it
will conduct all of its activities on the exchange in compliance with ail
applicable legal and regulatory requirements.

     (b) Thexchange may amend these Trading Terms or the Fee Schedule (Addendum
A) at any time by posting the amended Trading Terms or the Fee Schedule at
www.thexchanqe.com. The amended Trading Terms or Fee Schedule shall
automatically be effective thirty {30} days after they are initially posted on
www.thexchange.corn. Member agrees that such posting shall constitute reasonable
notice of such amendments. Thexchange shall notify Member's Primary Contact (as
specified in the Member Application) by fax or e-mail 30 days prior to the
effective date of any Trading Terms amendment. Member agrees that such web
posting and fax or e-mail notification shall constitute reasonable notice of
such amendments. Any changes to the contact information of the Primary Contact
must be communicated in writing to Member Services via e- mail to
Member.ServicesfSthexchanqe.com and such changes shall be effective upon receipt
by Member Services.

2.   Definitions.

The following terms as used herein have the meanings given to such terms in this
Section Z.

Answer Seizure Ratio (ASR) - The ratio of the number of seizures that result in
an answer signal, to the total number of seizures on a route or destination code
base during a specified time interval (as denned by the International
Telecommunications Union, ITU-T Terms and Definitions of Traffic Engineering
3/93).

Buy Order - A bid or buy offer by a Member to purchase minutes at a specific
price and quality.

Call Detail Record fCDR) - Call accounting record specifying the necessary call
information, such as date, duration, number called, etc.

Calling Code Inclusions and Exclusions - Country codes, city codes, prefixes or
exchanges designated to specific types or geographical areas or destinations
that are included or excluded from destination dialing (hereinafter referred as
"CCIE"), offered by Arbinet-thexchange and posted on the www.thexch3nge.com
website.

End Date - The termination date requested by a Member for a given Buy or Sell
Order.

Exchange Delivery Point - Any interconnect facility owned or operated by
thexchange, which provides Member with the ability to route (e.g., send or
receive) telecommunications traffic through the facility.

Member - An organization, which has received all membership approvals required
by thexchange and has been assigned a Member ID.

Route Plan Generation - An automated process of generating route plans based on
matched Buy and Sell Orders.

Sell Order - An ask or a sell offer by a Member to sell minutes at a specific
price and quality.

Start Dote - The commencement date requested by a Member for a given Buy or Sell
Order.

UTC - Coordinated Universal Time, formerly known as Greenwich Mean Time.

3.   Eligibility for Membership.

Member represents and warrants that it possesses all requisite legal and
regulatory authority to buy and/or sell, and transmit all telecommunications
services offered, sold or traded on thexchange.

4.   Thexchange is Only an Exchange.

Member acknowledges and agrees that (i) thexchange is an exchange for sellers
and for buyers to sell and buy telecommunications service for their own use;
(ii) thexchange is not responsible for and has no control over the quality,
safety or legality of telecommunications services offered or requested by
Members over the exchange, the truth or accuracy of any information provided by
Members, the ability of Members to sell telecommunications services or the
ability of Members to buy telecommunications services; and (iii) completion of
the sale of telecommunications services offered and purchased on the exchange is
solely the responsibility of Members and thexchange has no control of or
responsibility for Members' completion of the sale, purchase or delivery of
telecommunications services Members have agreed to trade.

5.   No Advice.

Member acknowledges that thexchange will not provide Member with any legal,
regulatory, tax or accounting advice, or advice regarding the appropriateness,
suitability or profitability of any transaction which Member undertakes on or
through thexchange. Member also acknowledges that thexchange's employees are not
authorized to give any such advice and that Member will not solicit or rely upon
any such advice from thexchange or any of its employees. Thexchange and its
officers, directors, employees, agents and affiliates will have no liability
with respect to any such advice.

6.   Credit Management.

     (a)  Thexchange reserves the right to impose such

Corporate Offices
120 Albany Street
lower II, t?' floor
New Brunswick, NJ 08901 USA
+1 732 509 9100
+1 732 509 9101 Fax

New York EDP
75 Broad Street
20* Floor
New York, NY 10004 USA
+1 917 320 2000
+1 917 320 1895 Fax

Los Angeles EDP
611 West' Street
12e' Floor
Los Angeles, CA 90017 USA
+1 80O"ARB]NET
+1 949 631 1237 Fax

London EDP 12/18 Paul
Street London EC2A 43H
United Kingdom +44 (0)
207 377 9449 +44 (0) 207
375 1854 Fax

Frankfurt vEDP
Itenos, Kleyerstrasse 90
60326 Frankfurt Am Main
Germany
+44 {0) 207 377 9449
+44 (0) 207 375 1854 Fax

<PAGE>

                                                                         arbinet
                                                               [LOGO] thexchange
                                                            Optimize Your World"

credit risk reduction management conditions on Member as are detailed in
thexchange's Credit Management Policy (attached hereto as Addendum C and as
amended from time to time), including, but not limited to, requiring authorized
trading deposits, advance payments and letters of credit, as thexchange deems
necessary and appropriate. Member agrees to the provisions of the Credit
Management Policy.

     (b) Changes to the Credit Management Policy will be reflected in the posted
policy thirty (30) days before such changes take effect. Member agrees tat
notification of Credit Management Policy changes by posting a revised.policy at
www.thexchange.com with contemporaneous notification by fax or e-mail to the
Primary Contact of Member, will constitute reasonable notice of such changes and
agrees to comply with such policy as amended from time to time.

7.   Member Responsibilities.

7.1  General

     (a) Member shall perform its obligations under these Trading Terms and use
the exchange in a manner consistent with applicable law, and shall not use the
exchange, or permit the exchange to be used, for any illegal purpose or in any
unlawful manner. Any Member's transmission of any and all material in violation
of any federal, state or local law, order or regulation is prohibited, and shall
constitute grounds for termination hereof by thexchange in its sole discretion.

     (b) Member is responsible for (i) provision of, and expenses associated
with, installation of all interconnection facilities and other actions necessary
for it to use thexchange and (ii) payment for all costs relating to equipment
and/or facilities obtained by thexchange on Member's behaLf.

     (c) Thexchange and Member will use reasonable best efforts to maintain the
security and confidentiality of any transactions conducted or information
transmitted through the exchange, subject to applicable law. Member acknowledges
that it is responsible for the security and confidentiality of information it
transmits through thexchange.

     (d) Member shall be responsible for (i) all trading and related activity on
the exchange and the www.thexchange.com website by all users of any of the
Member's trading accounts with thexchange and (ii) communicating the Trading
Terms set forth herein to such users. Alt such users will be deemed to have
read, understood and agreed to these Trading Terms. Member will provide to
thexchange in writing the names, addresses, telephone and fax numbers and email
addresses of all individuals, other than those listed in Member's member
application, authorized to trade on Member's behalf on the exchange. Such
notification shall be issued under Member's company letterhead and signed by
Member's Primary Contact or authorized representative.

7.2  Quality Standards for Selling Members

     (a) Member shall use its reasonable best efforts to verify that all
services provided by it through the exchange meet or exceed all quantitative and
qualitative service standards and route characteristics posted by or on behalf
of such Member on the exchange.

     (b)  [Intentionally left blank.]

     (c) Thexchange will from time to time (a) monitor the quality of the route
characteristics of the Member's network and (b) regrade and repost new quality
measurements on thexchange website and for Route Plan Generation. Member agrees
that the quality measurements of thexchange, not those of Member, shall govern
any dispute between Member and thexchange.

8.   Member Acknowledgments.

Member hereby acknowledges and agrees as follows:

     (a) Member is responsible for the accuracy of all orders and prices posted
by or on behalf of Member on the exchange. Thexchange assumes no responsibility
for any delays or errors in trade execution, for interruptions in
telecommunications services, or for misrouting of any telecommunications
services bought or sold by any Member through thexchange. Member agrees that
thexchange's CDRs and other records, not those of Member's, shall govern and be
used as the basis for any discussion or dispute or the resolution of any such
dispute. Member agrees to hold thexchange harmless from liability for any errors
or delays in trade execution or misrouting or interruptions in
telecommunications services, including but not limited to errors as to prices or
quality quoted by other Members. NOTWITHSTANDING ANY PROVISION TO THE CONTRARY
HEREIN, NEITHER THEXCHANGE NOR ITS AFFILIATES NOR MEMBER SHALL BE LIABLE FOR ANY
INDIRECT, SPECIAL, PUNITIVE OR CONSEQUENTIAL DAMAGES.

     (b) Sell prices posted on the exchange represent the seller's rates for
terminating minutes at the Exchange Delivery Points and are based on Member
orders. Member understands that other Members may make available limited
capacity at specified prices, and that a price displayed on thexchange may not
be available for all calls of similar characteristics at all times, as a result
of limited capacity.

     (c) [Intentionally left blank.]

     (d) [Intentionally left blank.]

     (e) Thexchange may, in its reasonable discretion, suspend, discontinue or
temporarily block Member's right to buy or sell telecommunications services
through thexchange, and remove or refuse to list any Order of the Member to buy
or sell telecommunications services if it deems such action necessary, either to
protect against improper use or to protect against fraud (e.g.. False Answer
Supervision or any other signal from Member, which tends to confuse, deceive,
disrupt or otherwise interferes with the network operation of other Members or
thexchange) or the commission of suspected illegal activities, or to otherwise
protect its personnel, agents, facilities or services, and/or arrange for
disconnection of Member's facilities interconnected with any Exchange Delivery
Point, without prior notice. Thexchange may terminate Member's membership for
any or no reasons and shall use reasonable efforts to provide Member whose
facilities are to be disconnected with advance notice of disconnection. Member
may, in its reasonable discretion, discontinue, suspend or temporarily block
services if it deems such action necessary, either to prevent improper use or to
protect against fraud or the commission of suspected illegal

Corporate Offices
120 Albany Street
Tower II, 4* Floor
New Brunswick, N3 OS901 USA
+1 732 503 9100
+1 732 509 9101 Fax

Hew York EDP
75 Broad Street
20* Floor
New York, NY 10004 USA
+1 917 320 2000
+1 917 320 1895 Fax

Los Angeles EDP
611 West ^ Street
12* Floor
Los Angeles, CA 90017 USA
+1 800 ARB1NFJ
+1 949 6311237 Fax

London EDP 12/18 Paul
Street London EC2A 43H
United Kingdom +44 (0)
207 377 9449 +44 (0) 207
375 1854 Fax

Frankfurt vEDP
Itenos, Kleyerstrasse 90
60326 Frankfurt Am Main
Germany
+44 (0) 207 377 9449
+44 (0) 207 375 1854 Fax

<PAGE>

                                                                         arbinet
                                                            ,. [LOGO] thexchange
                                                            Optimize Your World*

activities, or to otherwise protect its personnel, agents, facilities or
services. Member may discontinue participation on the exchange and may
discontinue membership on thexchange upon ten (10) days prior written notice to
thexchange. Member is responsible for any and all installation charges incurred
prior to the effective disconnection or discontinuation date. In the event
thexchange provides local access service to Member, Member must notify
thexchange in writing thirty (30) days in advance of such disconnection or
discontinuation. AH expenses incurred as a result of such disconnection or
discontinuation shall be the responsibility of Member.

     (f) If Member attempts to route traffic to a particular destination through
the exchange without providing a corresponding Buy Order, thexchange will use
commercially reasonable efforts to effect termination of such traffic, and
Member agrees to pay for such termination at the price obtained by thexchange,
plus any applicable fees.

     (g) If Seller receives and terminates a call for which it has no active
Sell order, the settlement rate of that call will be at the Seller's standard
published wholesale rate.

     (h) Thexchange shall be entitled to delete from the www.thexchanqe.coin
website any Buy Order or Sell Order posted by or on behalf of a Member if such
order has not been matched with a corresponding Sell Order or Buy Order or was
matched but Generated only negligible call volumes in the 30 days prior to such
deletion.

     (i) Thexchange will use commercially reasonable efforts to maintain the
accuracy of the Calling Code Inclusions and Exclusions ("CCIE") offered by
Arbinet-thexchange and posted on the www.thEXchanqe.com website. Thexchange will
use commercially reasonable efforts to update CCIE, but shall have no liability
for any of the information set forth in the CCIE and no obligation to update the
CCIE except upon receipt of written notice from the appropriate regulatory
authorities of changes in the information set forth on such list. All orders and
traffic routing on the exchange will occur based on the CCIE in effect at the
time of the relevant transaction. Thexchange shall not be responsible for
changes in prices that occur due to changes in codes, whether or not such codes
are reflected in the CCIE.

     0) Thexchange hereby grants to Member a non- exclusive, non-transferable,
personal right to access and use the information contained in the CCIE according
to the terms and conditions herein.

     (k) Member agrees the CCIE contains proprietary information of thexchange,
which is protected by copyright and other intellectual property laws. Thexchange
retains all rights in the CCIE and in any manner of distribution, including,
without limitation, all copyright and other proprietary rights worldwide. Member
shall not contest or otherwise interfere with such rights. Except as expressly
permitted under these Trading Terms and under U.S. copyright laws, Member may
not, or may not permit others to, reproduce, publish, distribute, sell, rent,
sublicense, lease, transfer, assign, access or provide access, use any
information retrieved from or contained ti the CCIE in any manner whatsoever or
alter, translate, modify, or adapt it to create derivative works of the CCIE.

     (l) Member acknowledges that Buy Orders and Sell Orders placed with a given
Start Date may become active as soon as the first scheduled Route Plan
Generation on or after said given Start Date is completed.

     (m) Member acknowledges that Buy Orders and Sell Orders placed with a
designated End Date will be deactivated as soon as the completion of the first
Route Plan Generation after the specified End Date that a Buy Order or Sell
Order has been requested to end.

     (n) Upon the request of thexchange, Member agrees to send, at Member's
cost, a summary of CDRs of traffic traded on the exchange to thexchange.

     (o) Member acknowledges that thexchange may from time to time combine or
break out destinations so as to simplify trading on the exchange; provided,
however, thexchange provides Member with 48 hours prior notice via e-mail.

9.   Payment/Settlement.

     (a) Subject to Section 9{d) below, thexchange will remit payment to Member
for traffic sold by Member through thexchange, and Member agrees to remit
payment to thexchange for traffic purchased by Member through thexchange, in
accordance with invoices issued by thexchange. Member also agrees to pay the
applicable fees as specified in the effective Fee Schedule. All fees will be
detailed by thexchange to Members. Thexchange reserves the right to modify,
impose new, or remove fees from the Fee Schedule pursuant to Section l(b) above.
Member is responsible for all applicable taxes and all other costs incurred by
Member in connection with participation on thexchange.

     (b) All traffic routed to a Seller at any U.S. Exchange Delivery Point will
be rated based on call durations measured by a thirty (30) second minimum period
followed by six (6) second billing increments. All traffic routed to a Seller at
the London Exchange Delivery Point will be rated based on call durations
measured by one (1) second billing increments. Notwithstanding the above, all
traffic routed to a Seller selling a destination in Mexico, regardless of the
particular Exchange Delivery Point the Seller is connected to, will be rated
based on a one (1) minute minimum period followed by one (1) minute billing
increments. Thexchange, in its discretion, may, from time to time on thirty (30)
days written notice by web posting and fax or e-mail, introduce additional call
duration measurement intervals pursuant to Section l{b) above.

     (c) All calculations and ratings of calls will be performed to the one
thousandth of a cent (US$x.xxxxx). Final settlements will be rounded up in the
Trading Account Invoice (as defined below) to the nearest whole cent (US$x.xx)
for each destination.

     (d) (i) Trading Account Invoice. Arbinet-thexchange shall issue invoices
relating to traffic (usage) traded on Arbinet-thexchange ("Trading Account
Invoice") twice monthly. The invoice dates shall be the first and the sixteenth
of a month (the "Invoice Date"). Trading Account Invoices bearing Invoice Dates
of the l" and 16th of a month shall detail Member's trading activities from the
16th through the last day of the previous month, and from

Corporate Offices
120 Albany Street
Tower II, 4* Floor
New Brunswick, N3 08901 USA
+1 732 509 91D0
+1 732 509 9101 Fax

New York EDF
75 Broad Street
20th Floor
Mew York, NY 10004 USA
+1 917 320 2000
+1 917 320 1S95 Fax

Los Angeles EDP
611 West 6* Street
12th Floor
Los Angeles, CA 90017 USA
+1 800 ARBINET
+1 949 631 1237 Fax

London EDP 12/18 Paul
Street London EC2A 40H
United Kingdom +44 (0)
207 377 9449 +44 (0) 207
375 1854 Fax

Frankfurt vEOP
Itenos, KleyerstrasseSO
60326 Frankfurt Am Main
Germany
+44 (0)(pound)07 377 9449
+44 (0) 207 375 1854 Fax

<PAGE>

                                                                         arbinet
                                                               [LOGO] thexchange
                                                            Optimize Your World*

the lst through the 15tfl of the month, respectively. The applicable due dates
for the Trading Account Invoices ("Trading Account Due Dates") are: for invoices
dated the f\ Trading Account payment ("Trading Account Payment") must be
received on or before the 15lfl of the same month; for invoices dated the 16vil,
Trading Account Payment must be received on or before the 30th of the same
month, except February, where payment must be received by March 2nd. If the
applicable Trading Account Due Date falls on a U.S. banking holiday or weekend,
then payment must be received no later than the business day immediately prior
to such banking holiday or weekend. As Member may be a net buyer or net seller
during a billing period ("Billing Period"), the Trading Account Due Dates shall
apply to Member or thexchange as the case may be. The Trading Account Invoice
and any accompanying trading account statements shall supersede any
contradictory or inconsistent reports issued by thexchange.

          (ii) Trading Account Payment Procedure. Member shall include
remittance advice detail ("Remittance Advice Detail") in the wire information
sent to thexchange. The Remittance Advice, Detail shall include: Member Name,
Member's Arbinet-thexchange Account Number, Invoice Number(s) and Invoice
Date(s) associated with the Trading Account Payment, and, if the Trading Account
Payment is different from the Invoice Amount, an explanation of discrepancies
between the Trading Account Payment and the Invoice Amount. If the Remittance
Advice Detail is not received by thexchange or its authorized agent, thexchange
or its authorized agent reserves the right to apply the Trading Account Payment
in the following order: {1} Trading Account Invoices (from the oldest to the
most current outstanding Trading Account Invoices), and (2) any outstanding
finance charges and collection fees. If there are funds remaining after applying
the Trading Account Payment to all outstanding Trading Account Invoices,
thexchange shall then apply the remaining funds to outstanding Member Account
Invoice(s) (as defined below) by applying the remaining funds from the oldest to
the most current outstanding Member Account Invoice. If excess funds remain
after applying the Trading Account Payment to alt Member Account Invoices,
thexchange will then retain the excess funds as prepayment for Member's current
or future trading activity unless Member requests in writing that the excess
funds be returned. Thexchange reserves the right to apply the excess funds to
Member's current trading activity on thexchange. The Remittance Advice Detail
shall supersede any inconsistent or contradictory instructions from Member
regarding the application of funds.

          (iii) Member Account Invoice. Arbinet- thexchange shall issue an
invoice relating to access to the exchange and services of Arbinet-thexchange
("Member Account Invoice"). The Member Account Invoice shall be dated the 2nd of
a month. Payments to thexchange for the Member Account Invoice shall be received
by thexchange no Later than the 261*1 of the month ("Member Account Due Date").
If the Member Account Due Date falls on a U.S. banking holiday or weekend, then
the Member Account payment must be received no later than the business day
immediately prior to such banking holiday or weekend. The Member Account Invoice
and any accompanying summary statements shall supersede any contradictory or
inconsistent reports issued by thexchange.

          (iv) Member Account Payment Procedure. Member shall include Remittance
Advice Detail (as defined above) in the wire information sent to thexchange. If
Member does not send Remittance Advice Detail as specified above, thexchange or
its authorized agent reserves the right to apply the Member Account Payment in
the following order: (1) outstanding finance charges and collection fees (if
any), and (2) Member Account Invoices (from the oldest to the most current
outstanding Member Account Invoices). If there are funds remaining after
applying the Member Account Payment to all outstanding Member Account Invoices,
thexchange shall then apply the remaining funds to outstanding Trading Account
Invoices by applying the remaining funds to the oldest to the most current
outstanding Trading Account Invoice. If excess funds remain after applying the
Member Account Payment to all Member Account Invoices, thexchange will then
retain the excess funds as prepayment for Member's current or future trading
activity unless Member requests in writing that the excess funds be returned.
Thexchange reserves the right to apply the excess funds to Member's current
trading activity on thexchange. The Remittance Advice Detail shall supersede any
inconsistent or contradictory instructions from Member regarding the application
of funds.

          (v) Member acknowledges and agrees that any amounts (including but not
limited to interest) payable to thexchange by Member for access, usage or other
fees may be deducted from my amount payable to Member by thexchange; such
offsetting may be done with respect to any invoice and/or among one or more
invoices. All amounts payable to thexchange by Member that remain unpaid on the
day after the applicable Due Date will bear interest from the Invoice Date at a
rate equal to the lesser of 18% per annum or the maximum amount permitted by
law.

          (vi) Thexchange will not accept funds from third parties or remit
payments to third parties, unless Member and thexchange agree otherwise in
writing.

          (vii) Member shall send payments to thexchange or its assignee by
electronic funds transfer as specified in thexchange's invoices. Thexchange wilt
charge the Member an administrative fee of 5250 if Member sends payments by
means other than electronic funds transfer. Thexchange reserves the right to
withhold payment if the total amount due Member is under $100. All costs
associated with electronic funds transfer shall be the responsibility of the
paying party.

     (e) If Member disputes any invoice or portions thereof, Member must provide
thexchange with written notice of the dispute (including the details thereof)
and accompanying documentation to support each claim within thirty (30) days of
the applicable invoice date; such notification should be delivered to
Arbinet-thexchange Member Services, at 460 Herndon Parkway, Suite 150, Herndon,
VA 20170 or e-mailed to billing@thexchange.com. The support documentation shall
include a written statement of the disputed amount, reasons for disputing such
amount, the order numbers (generated on thexchange trading floor) and CDRs in
Comma Delimited format (a csv file). The minimum required fields with the CDRs
are: Start Date, Start Time (UTC), Destination Number (dialed digits),
Destination Name, Duration, and Rate. Notification of such disputes does not
relieve Member from its obligation to remit the undisputed portion of invoices
on or prior to the applicable Payment Date. The parties shall work in good faith
to investigate and resolve all such settlement disputes. Accordingly, thexchange
wilt

Corporate Offices
120 Albany Street
Tower II, 4* Floor
New Brunswick, N3 08901 USA
+1 732 509 9100
+1 732 509 9101 Fax

New York EDP
75 Broad Street
20* Floor
New York, MY 10004 USA
+1 917 320 2000
+1 917 320 1895 Fax

Los Angeles EDP
611 West 681 Street
12* Floor
Los Angeles, CA 90017 USA
+ 1 800 ARBINET
+ 1 949 631 1237 Fax

London EDP 12/18 Paul
Street London EC2A 40K
United Kingdom +44 (0)
207 377 9449 +44 (0) 207
375 1854 Fax

Frankfurt vEDP
Itenos, Kieyerstrasse 90
60326 Frankfurt Am Main
Germany
+44 (0) 207 377 9449
+44 (0) 207 375 1854 Fax

<PAGE>

                                                               [LOGO] thexchange
                                                            Optimize Your World"

provide to Member a determination {the "Determination") no Later than ten (10)
business days from receipt of such notification and support documentation.
Member shall have no more than ten {10) business days from receipt of the
Determination to request in writing reconsideration thereof. Such request for
reconsideration shall inriude a detailed analysis and comparison of thexchange's
data with those of Member; otherwise, the reconsideration request will not be
accepted, Tiexchange reserves the right to review and resettle, if necessary,
invoices at any time for a period of thirty (30) days after the original invoice
has been issued as a result of thexchange's review of settlement data.
Thexchange settlement data shall be considered final unless demonstrated
otherwise.

     (f) Unless otherwise stated in the Fee Schedule, all fees are quoted in
U.S. Dollars. Member is responsible for paying all applicable taxes and for
other costs Member incurred to bid, buy, sell or access thexchange's facilities
or thexchange. Unless otherwise stated in the Fee Schedule, all settlement
payments between Member and thexchange shall be made in U.S. Dollars by
electronic funds transfer.

     (g) Member may maintain an open account vith thexchange to facilitate the
settlement of invoices.

     (h) In the event of non-payment by a Member, thexchange may in its sole
discretion direct traffic for termination to that Member in order to mitigate
risk through the netting process. In such event the settlement trade rate for
such traffic will be the fair market rate as determined by thexchange. In
addition, thexchange, in its sole discretion, may suspend, block and/or
disconnect Member's access to the exchange.

     (i) Member's consent shall not be required for any assignment or transfer
by thexchange to any third party of thsxchange's right to receive any monies due
to thexchange.

10.  Miscellaneous

     (a) In the event disputes exist between thexchange and Member, the
then-effective Trading Terms and Credit Management Policy shall govern,
supersede and be employed as the sole basis for determining all resolutions of
such disputes.

     (b) Nothing in these Trading Terms is intended to create any agency,
partnership or joint venture arrangement between thexchange and Member, nor are
there to be any third-patty beneficiaries hereunder.

     (c) Notwithstanding any provision herein to the contrary, thexchange
provides the www.thexchanqe.com website and thexchange's services "AS IS" AND
"AS AVAILABLE" AND MAKES NO EXPRESS WARRANTIES AND DISCLAIMS ALL IMPLIED
WARRANTIES, INCLUDING BUT NOT LIMITED TO WARRANTIES OF MERCHANTABILITY AND OF
FITNESS FOR A PARTICULAR PURPOSE, with regard to the quality, capacity,
availability, reliability or other characteristics of thexchange, the
www.thexchanqe.com website or any telecommunications service offered by any
Member on thexchange. Member makes no express or implied warranty or condition
to thexchange or any other Member, whether of merchantability, fitness for a
particular purpose or otherwise with respect to any telecommunications services.

     (d) Thexchange's and Member's obligations are subject to, and they shall
not be responsible for, any delays, failure to perform or operation of
thexchange where such delay or failure is the result of fire, flood, water, the
elements, labor disputes or shortages, utility curtailments, power failures,
explosions, civil disturbances, acts of war, acts of God, governmental actions,
including but not limited to changes in regulations, tariffs, or rates, which
make it impossible or impractical for thexchange or Member to provide the
telecommunications services offered on thexchange or to fulfill the obligations
contemplated hereby.

     (e) These Trading Terms shall be interpreted in accordance with the laws of
the State of New York without regard to conflicts of Laws principles. Member
hereby consents to the exclusive jurisdiction of the federal or state courts
located in fie City and County of New York, with respect to all Legal actions
regarding these Trading Terms, or thexchange. Any and all disputes arising
hereunder which cannot be resolved by the parties hereto within thirty (30) days
of commencement of negotiations shall be resolved pursuant to arbitration
conducted in New York, New York pursuant to the rules of the American
Arbitration Association.

     (f) All rights to thexchange's intellectual property, including but not
limited to copyrights, patents, software, trademarks and service marks, shall
remain the sole property of thexchange.

     (g) These Trading Terms are subject to all present and future valid orders
and regulations of any governmental or regulatory body having jurisdiction over
the subject matter hereof and to the laws of the United States of America, any
of its states, or any foreign governmental agency having jurisdiction over the
parties hereto. In the event these Trading Terms shall be found contrary to or
in conflict with any such order, rule, regulation a law, these Trading Terms
shall be deemed modified to the extent necessary to comply with any such order,
rule, regulation or law and shall be modified in such a way as is consistent
with the form, intent and purpose hereof.

     (h) These Trading Terms constitute the entire understanding between
thexchange and Member with respect to the subject matter hereof.

     (i) Thexchange will use reasonable best efforts to protect the identity of
Member with respect to its transactions on thexchange. Thexchange may identify
Member as a Member of thexchange without specifying that such Member is a buyer
or seller.

     (j) Member's rights under the Member Application and all addenda and
amendments hereto are personal to Member and may not be assigned, sub-licensed,
or otherwise transferred in any fashion, regardless of whether such an
arrangement is characterized as an assignment, a sub-license, or any other
agreement.

Corporate Offices
120 Albany Street
Tower II, 4* Floor
New Brunswick, N3 08901 USA
+1 732 509 9100
+1 732 509 9101 Fax

New York EDP
75 Broad Street
Ztf Floor
New York, MY 10004 USA
+1 917 320 2DO0
+1 917 320 1895 Fax

Los Angeles EDP
611 West 6th Street
12* Floor
Los Angeles, CA 90017 USA
+1 800 ARBINET
+1 949 631 1237 Fax

London EDP 12/18 Paul
Street London EC2A 4JH
United Kingdom +44 (0)
207 377 9449 +44 (0) 207
37B 1854 Fax

Frankfurt vEFJP
Itenos, Kleyerstrasse 90
60326 Frankfurt Am Main
Germany
+44 (0) 207 377 9449
+44 (0) 207 375 1854 Fax

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