Document:

EXHIBIT 10.1                                                      August 1, 2000

                              EMPLOYMENT AGREEMENT

            EMPLOYMENT AGREEMENT, dated as of August 1, 2000, by and between RSL
Communications, Ltd., a Bermuda corporation (the "Company"), and Paul B.
Domorski ("Executive").

                              W I T N E S S E T H:

            WHEREAS, the Company desires to employ Executive, effective as of a
date mutually agreed, but if the parties do not agree on an earlier date, August
19, 2000 (the "Commencement Date") and to set out the terms and conditions of
Executive's employment by the Company from and after the Commencement Date; and

            WHEREAS, the Executive desires to enter into the employment of the
Company from and after the Commencement Date under those terms and conditions;

            NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the Company and Executive hereby agree as follows:

1. Employment.

      (a) Agreement to Employ. Upon the terms and subject to the conditions of
this Agreement, the Company hereby employs Executive, and Executive hereby
accepts employment by the Company.

      (b) Term of Employment. The Company shall employ Executive for a term (the
"Term") commencing on the Commencement Date and ending on the date immediately
preceding the third anniversary of the Commencement Date, unless extended by a
written agreement signed by both parties. The period commencing on the
Commencement Date and ending on the earlier of (i) the expiration of the Term,
or (ii) the date of Executive's termination of employment pursuant to Section
5(a) shall be referred to as the "Employment Period".

2. Position and Duties.

      (a) In general. Executive shall be employed as Chief Executive Officer and
President and shall perform such duties and services, consistent with such
position for the Company, as may be (i) specified in the Bye-Laws of the Company
or (ii) assigned to him from time to time by the Executive Committee (the
"Executive Committee") of the Board of Directors (the "Board") or the Board. The
duties of the Executive shall include serving as an officer or director or
otherwise performing services for any "Affiliate" of the Company as requested by
the Company, provided, however, that such services are
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consistent with Executive's role as CEO of the Company. An "Affiliate" of the
Company means any entity that controls, is controlled by or is under common
control with the Company. Executive shall report to the Board.

      (b) Full-time employment. During the Employment Period, Executive shall
devote his full business time to the services required of him hereunder, except
for time devoted to services required by him to be performed for any "Affiliate"
of the Company, vacation time and reasonable periods of absence due to sickness,
personal injury or other disability, and shall use his best efforts, judgement,
skill and energy to perform such services in a manner consonant with the duties
of his position and to improve and advance the business and interests of the
Company. Executive shall not be engaged in any other business activity which, in
the reasonable judgment of the Board, conflicts with the duties of the Executive
under this Agreement. Executive shall travel (if by airfare such travel shall be
business class) to such location or locations as may be requested by the
Company, or which Executive believes is necessary or advisable, in the
performance by Executive of his duties hereunder or to the extent appropriate to
improve and advance the interests of the Company and its Affiliates.

3. Compensation.

      (a) Base Salary. During the Employment Period, the Company shall pay
Executive a base salary at the annual rate of US$500,000; provided that,
Executive's annual base salary shall be increased as of January 1 of each year,
commencing January 1, 2002, by an amount equal to the base salary then in
effect, multiplied by the percentage increase in the Cost of Living Index during
the preceding year. The "Cost of Living Index" means the Retail Prices Index for
the London metropolitan area published by the Office of National Statistics for
the preceding 12 month period, or if such index is no longer available, such
other generally available index measuring changes in consumer purchasing power
(in the London metropolitan area or nationally) designated by the Board of
Directors. Any delay in increase in Executive's annual base salary by reason of
the unavailability of any such index at the time any such increase shall
otherwise be due shall be made up by a lump sum payment promptly after the index
becomes available. Executive's salary, as adjusted for any increase in the Cost
of Living Index, may be further increased at the option and in the discretion of
the Board of Directors (such salary, as the same may be increased from time to
time, is referred to herein as the "Base Salary"). The Base Salary shall be
payable in such installments (but not less frequent than monthly) as the
salaries of other executives of the Company are paid.

      (b) Performance Incentive Plan. During the Employment Period, Executive
shall participate in the Company's 1997 Performance Incentive Plan and be given
an opportunity to earn up to one times Base Salary upon the achievement of
targets determined by the Compensation Committee. The discretionary portion of
the bonus shall be determined by the Compensation Committee. Executive shall be
guaranteed a

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bonus equal to one times Base Salary for the first year of the Employment Period
(the "First Year Bonus") only (provided that such bonus shall be paid on a pro
rata basis with respect to the portion of the Employment Period in the fiscal
year ending December 31, 2000 (such pro rata bonus hereafter referred to as the
"2000 Bonus") and Executive shall be entitled to receive the remainder of the
First Year Bonus following 2001 year end). If the Company shall amend or
terminate the 1997 Performance Incentive Plan in a manner that would reduce the
opportunity of Executive to earn an incentive bonus as provided in the 1997
Performance Incentive Plan, the Company shall provide a substitute arrangement
so that Executive's total bonus opportunity will not be materially reduced.

      (c) Stock Incentive Plan. Except as otherwise provided in this subsection
(c), the Company shall grant Executive an option (the "Option") under the
Company's 1997 Stock Incentive Plan to purchase 3,000,000 shares of the
Company's Class A Common Stock. The Option exercise price shall equal the "Fair
Market Value" (as defined in the 1997 Stock Incentive Plan) on August 1, 2000.
The Option shall become exercisable as set forth below, provided that Executive
is employed by the Company on such date, and once exercisable shall remain
exercisable until the expiration of seven years from the date of grant, unless
otherwise earlier terminated by reason of a termination of Executive's
employment by the Company for Cause or by the Executive other than for Good
Reason (as those terms are hereinafter defined):

      Date First Exercisable               Percentage Exercisable
      ----------------------               ----------------------

      August 1, 2001                              33.33%
      August 1, 2002                              66.66%
      August 1, 2003                             100.00%

            The Option shall become immediately exercisable in full in the event
that Executive's employment with the Company is terminated by the Company other
than for Cause, by the Executive for Good Reason, or by reason of the death or
Disability (as hereinafter defined) of the Executive and shall, following any
such event, remain exercisable for the lesser of two years and the remaining
term of the Option.

4. Benefits, Perquisites and Expenses.

      (a) Benefits. During the Employment Period, Executive shall be eligible to
participate in (i) each welfare benefit plan sponsored or maintained by the
Company, including, without limitation, each group life, hospitalization,
medical, dental, health, accident or disability insurance or similar plan or
program of the Company, and (ii) each pension, profit sharing, retirement,
deferred compensation or savings plan sponsored or maintained by the Company, in
each case, whether now existing or established hereafter, on the same basis as
generally made available to other senior officers of the Company. In addition,
during the Employment Period, the Company shall provide (at its cost) life

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insurance coverage for the Executive of no less than US$1,000,000, provided that
Executive submits to any physical examination required by the insurer and is
insurable at standard or preferred rates.

      (b) Perquisites. During the Employment Period, Executive shall be entitled
to five weeks' paid vacation annually and shall also be entitled to receive such
perquisites as are generally provided to other senior officers of the Company in
accordance with the then current policies and practices of the Company.

      (c) Business Expenses. During the Employment Period, the Company shall pay
or reimburse Executive for all reasonable expenses incurred or paid by Executive
in the performance of Executive's duties hereunder, upon presentation of expense
statements or vouchers and such other information as the Company may require and
in accordance with the generally applicable policies and procedures of the
Company.

      (d) Indemnification. The Company shall indemnify Executive and hold
Executive harmless from and against any claim, loss or cause of action arising
from or out of Executive's performance as an officer, director or employee of
the Company or any of its subsidiaries or in any other capacity, including any
fiduciary capacity, in which Executive serves at the request of the Company to
the maximum extent permitted by applicable law and the Company's Memorandum of
Association and Bye-Laws in effect on the date hereof. If any claim is asserted
against Executive with respect to which Executive reasonably believes in good
faith he is entitled to indemnification, the Company shall either defend
Executive or, at its option, pay Executive's legal expenses (or cause such
expenses to be paid) on a quarterly basis, provided that Executive shall
reimburse the Company for such amounts, plus simple interest thereon at the
90-day United States Treasury Bill rate as in effect from time to time,
compounded annually, if Executive shall be found by a court of competent
jurisdiction not to have been entitled to indemnification.

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5. Termination of Employment.

      (a) Termination of the Employment Period. The Employment Period shall end
upon the earliest to occur of (i) a termination of Executive's employment on
account of Executive's death, (ii) a Termination due to Disability or
Retirement, (iii) a Termination for Cause, (iv) a Termination Without Cause, (v)
a Termination for Good Reason, (vi) a Termination Without Good Reason, or (vii)
the expiration of the Term. The Company or the Executive may initiate a
termination in any manner permitted hereunder by giving the other party written
notice thereof (the "Termination Notice"). The effective date (the "Termination
Date") of any termination shall be deemed to be the later of (i) in the case of
a Termination Notice from Executive, 45 days after the receipt by the Company of
the Termination Notice, (ii) the date on which the Termination Notice is given,
or (iii) the date specified in the Termination Notice; provided, however, that
in the case of the Executive's death, the Termination Date shall be the date of
death. Upon termination of his employment for any reason, Executive will
immediately resign from all positions that he holds with the Company and its
Affiliates.

      (b) Payments Upon Certain Terminations.

            (i) Termination for Good Reason or Termination Without Cause. In the
event that Executive's employment is terminated by Executive for Good Reason or
by the Company Without Cause, the Company shall pay Executive his Earned Salary,
Vested Benefits and a Severance Benefit (as such terms are hereinafter defined).
In addition, if Executive's employment terminates pursuant to this subsection
(i), the Company shall continue to provide to Executive the welfare benefits
(other than disability insurance) referred to in Section 4, or substantially
comparable benefits, until the earlier of (x) the date on which Executive is
eligible to obtain comparable benefits from other employment or (y) the
expiration of the Term.

            (ii) Termination due to Death. In the event of the termination of
Executive's employment due to Executive's death, the Company shall pay
Executive's estate Executive's Earned Salary, Vested Benefits and a lump sum
payment equal to 12 months of Executive's Base Salary (at the rate in effect on
the date of his death), in addition to any life insurance benefits that
Executive shall be entitled pursuant to this Agreement.

            (iii) Termination due to Disability or Retirement. In the event of
termination of Executive's employment by the Company due to Disability or a
Termination due to Retirement, the Company shall pay Executive his Earned Salary
and Vested Benefits, plus, in the event of termination due to Disability, to the
Executive or his estate his Base Salary at the Termination Date on a monthly
basis for 12 months following the month in which Executive's employment is
terminated. In addition, if Executive's employment is terminated by reason of
Disability, the Company shall continue to provide to Executive the welfare
benefits (other than disability insurance) referred to in Section 4 during the

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term of his disability. In the event that Executive's employment with the
Company is terminated due to Disability, Executive's benefits under this
subsection (iii) shall be reduced by the amount of any Company sponsored (and
paid for) disability benefits paid to Executive. The payments to be made to
Executive during the period of disability prior to termination are intended to
comply with the Disability Discrimination Act (United Kingdom).

            (iv) Termination Without Good Reason. In the event of a termination
of Executive's employment by Executive Without Good Reason, the Company shall
pay Executive his Earned Salary and Vested Benefits.

            (v) Termination for Cause. In the event of a termination of
Executive's employment by the Company for Cause, the Company shall pay Executive
his Earned Salary and Vested Benefits.

      (c) Timing of Payments. Earned Salary shall be paid in a single lump sum
as soon as practicable, but in no event later than the earlier of 60 days or the
day such Earned Salary would have been payable under the Company's normal
payroll practices. Vested Benefits shall be payable in accordance with the terms
of the plan, policy, practice, program, contract or agreement under which such
benefits have accrued except as otherwise expressly modified by this Agreement.
Fifty percent (50%) of Severance Benefits shall be paid within 30 days after the
Termination Date and the remaining 50% of the Severance Benefits shall be paid
in equal monthly installments for a period commencing one month after the
payment of the first 50% of Severance Benefits and ending on the expiration date
of the Term; provided that in the event of the Executive's Termination for Good
Reason as the result of a "Change in Control", 100% of the Severance Benefit
shall be paid within five days after the Termination Date.

      (d) Definitions. The following capitalized terms have the following
meanings:

            "Earned Salary" means any Base Salary earned, but unpaid, for
services rendered to the Company on or prior to the date on which the Employment
Period ends.

            "Normal Retirement Age" means the first day of the month following
Executive attaining age 65.

            "Severance Benefit" means the sum of (i) Executive's minimum Base
Salary for the remainder of the Term, but in no event less than 12 months, and
(ii) an amount equal to Executive's award, if any, under the 1997 Performance
Incentive Plan (or any successor plan) for the year immediately preceding the
year in which Executive's employment is terminated or (a) if Executive's
termination has occurred before the first anniversary of the Commencement Date,
the pro-rata portion of the First Year Bonus and

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(b) if Executive's termination has occurred on or after the first anniversary of
the Commencement Date and before December 31, 2001, the First Year Bonus.

            "Termination due to Disability" means a termination of Executive's
employment by the Company because Executive has been incapable of substantially
fulfilling the positions, duties, responsibilities and obligations set forth in
this Agreement because of physical, mental or emotional incapacity resulting
from injury, sickness or disease for a period of (i) at least six consecutive
months or (ii) more than nine months in any twelve month period. Any question as
to the existence, extent or potentiality of Executive's disability upon which
Executive and the Company cannot agree shall be determined by a qualified,
independent physician selected by the Company and reasonably acceptable to
Executive. The determination of any such physician shall be final and conclusive
for all purposes of this Agreement. Executive or his legal representative or any
adult member of his immediate family shall have the right to present to such
physician such information and arguments as to Executive's disability as he, she
or they deem appropriate, including the opinion of Executive's personal
physician.

            "Termination due to Retirement" means termination of employment by
Executive other than for Good Reason, or termination of Executive's employment
by the Company other than a Termination for Cause, on or after Executive's
Normal Retirement Age.

            "Termination for Cause" means a termination of Executive's
employment by the Company due to (i) Executive's conviction of a felony (as
defined under United States federal law) or the entering by Executive of a plea
of nolo contendere (or equivalent) with respect to a charged felony (as defined
under United States federal law), (ii) Executive's gross negligence,
recklessness, dishonesty, fraud, willful malfeasance or willful misconduct in
the performance of the services contemplated by this Agreement, (iii) a willful
failure without reasonable justification to comply with a reasonable written
order of the Board of Directors; or (iv) a willful and material breach of
Executive's duties or obligations under this Agreement. Notwithstanding the
foregoing, a termination shall not be treated as a Termination for Cause unless
the Company shall have delivered a written notice to Executive stating that it
intends to terminate his employment for Cause and specifying the factual basis
for such termination, and the event or events that form the basis for the
notice, if capable of being cured, shall not have been cured within 30 days of
the receipt of such notice.

            "Termination for Good Reason" means a termination of Executive's
employment by Executive within 90 days following (i) a reduction in Executive's
annual Base Salary or opportunity under the 1997 Performance Incentive Plan
below the levels contemplated by Sections 3(a) and (b), (ii) a significant
reduction in Executive's positions, duties, responsibilities or reporting lines
from those described in Section 2 hereof; (iii) a material breach of this
Agreement by the Company, (iv) relocation of

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Executive's principal place of employment outside of the London metropolitan
area or (v) a "Change in Control" of the Company. Notwithstanding the foregoing,
a termination shall not be treated as a Termination for Good Reason (x) if
Executive shall have consented in writing to the occurrence of the event giving
rise to the claim of Termination for Good Reason or (y) unless Executive shall
have delivered a written notice to the Company within 30 days of his having
actual knowledge of the occurrence of one of the events specified in clause (i),
(ii), (iii) or (iv) above stating that he intends to terminate his employment
for Good Reason and specifying the factual basis for such termination, and such
event, if capable of being cured, shall not have been cured within 30 days of
the receipt of such notice.

            "Change in Control" means the occurrence of (i) a sale or other
disposition of stock of the Company, other than a spin-off or any other form of
distribution of the Company's shares, or an issuance of stock of the Company as
a result of which any "person" (as such term is used in section 13(d) and 14(d)
of the Exchange Act), other than the Company, or Ronald S. Lauder ("Lauder"), or
any of his controlled entities, is or becomes the beneficial owner of more than
50% of the total voting power of the Company and those persons who are members
of the Board of Directors of the Company immediately prior to the closing of
such transaction constitute less than one half of the membership of the Board of
Directors of the Company immediately following the closing of such transaction,
(ii) any merger, consolidation or reorganization following which those persons
who are members of the Board of Directors of the Company immediately prior to
the closing of such transaction constitute less than one half of the membership
of the board of directors of the surviving entity immediately following the
closing of such transaction, (iii) a transaction pursuant to which more than 50%
of the total value of the assets of the Company and its consolidated
subsidiaries are transferred and the transferee of such assets is not Lauder or
a company controlled by him, or (iv) a complete liquidation of the Company.

            "Termination Without Cause" means any termination by the Company of
Executive's employment hereunder other than (i) a Termination due to Disability,
(ii) a Termination due to Retirement or (iii) a Termination for Cause.

            "Termination Without Good Reason" means any termination by Executive
of Executive's employment hereunder other than (i) a termination due to
Executive's death, (ii) a Termination due to Retirement, (iii) a Termination for
Good Reason, or (iv) a Termination due to Disability.

            "Vested Benefits" means amounts which are vested or which Executive
is otherwise entitled to receive under the terms of or in accordance with any
plan, policy, practice or program of, or any contract or agreement with, the
Company, at or subsequent to the date of his termination without regard to the
performance by Executive of further

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services or the resolution of a contingency and expenses incurred prior to
termination of employment that are reimbursable under Section 4(c).

      (e) Adjustment to Notice. The Company reserves the right to make a payment
in lieu of notice should it so desire, or require Executive to remain away from
work during the notice period, whichever it may deem appropriate. Any payment in
lieu of notice will have any appropriate PAYE tax and National Insurance
Contributions deducted at source.

      (f) Full Discharge of Company Obligations. The amounts payable to
Executive pursuant to this Section 5 following termination of his employment
(including amounts payable with respect to Vested Benefits) shall be in full and
complete satisfaction of Executive's rights under this Agreement and any other
claims he may have in respect of his employment by the Company or any of its
subsidiaries. Such amounts shall constitute liquidated damages with respect to
any and all such rights and claims and, upon Executive's receipt of such
amounts, the Company shall be released and discharged from any and all liability
to Executive in connection with this Agreement or otherwise in connection with
Executive's employment with the Company and its subsidiaries, other than
Executive's rights to indemnification under Section 4(d).

6. Agreement Not to Compete With Company

            (a) During the Employment Period and for a period of one year
thereafter (the "Applicable Period"), Executive shall not directly or indirectly
own, manage, operate, finance, join, control, advise, consult, render services
to, have an interest or future interest or participate in the ownership,
management, operation, financing or control of, or be employed by or connected
in any manner with any Competing Business (other than as a holder of common
stock of the Company, and not in excess of 5% of the outstanding voting shares
of any other publicly traded company); provided that Executive shall not make
any equity investment during the Applicable Period in a non-publicly traded
company that engages in a Competing Business without the prior written approval
of the Executive Committee. "Competing Business" means the business of
telecommunication services and solutions engaged in by the Company in any
country where the Company or an Affiliate conducts such business at any time
during the Term. Notwithstanding the foregoing, if the Company disengages in any
such business prior to the expiration of the Term, then such disengaged business
shall not be considered a Competing Business. Any opportunity directly or
indirectly related to any business engaged in by the Company, its subsidiaries
and Affiliates of which Executive becomes aware during the Term shall be deemed
a corporate opportunity of the Company, and Executive shall promptly make such
opportunity available to the Company.

            (b) If, during the period of one year after expiration of the
Employment Period, Executive or an Affiliate of Executive proposes to engage in
what may be a

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Competing Business, Executive shall so notify the Company in a writing which
shall fully set forth and describe in detail the nature of the activity which
may be a competitive Business, the names of the companies or other entities with
or for whom such activity is proposed to be engaged in by Executive or by an
Affiliate of Executive (the "Section 6 Notice"). If, within 30 days after
receipt by the Company of a Section 6 Notice, the Company shall fail to notify
Executive that it deems the proposed activity to be a Competitive Business, then
Executive shall be free to engage in the activities described in the Section 6
Notice without violation of Section 6(a). If, however, the Company notifies
Executive that the proposed activities constitute a Competitive Business, then
(i) Executive shall not engage in such Competitive Business during the one-year
period following expiration of the Employment Period, and (ii) the Company shall
pay Executive, during such one-year period, in equal monthly installments, an
amount equal to his highest Base Salary; provided that the amount payable under
this Section 6(b) shall be reduced by the amount of Severance Benefit that
Executive is receiving for such period.

7. Confidential Information

      (a) Without the prior written consent of the Company, Executive shall not
disclose at any time during the Employment Period or any time thereafter any
Confidential Information (as defined below) to any third person other than in
the course of fulfilling Executive's responsibilities under this Agreement
unless such Confidential Information has been previously disclosed to the public
by the Company or an Affiliate or is in the public domain (other than by reason
of Executive's breach of the provisions of this paragraph).

      (b) "Confidential Information" is any non-public information pertaining to
the Company or an Affiliate, any of their businesses or the business or personal
affairs of Lauder or his family and how any of them conducts its or his business
or affairs. "Confidential Information" includes not only information disclosed
by the Company or an Affiliate to Executive, but non-public information
developed, created or learned by Executive during the course of or as a result
of Executive's employment with the Company. "Confidential Information"
specifically includes non-public information and documents concerning the
Company's and its Affiliates' methods of doing business; research,
telecommunications technology, its actual and potential clients, transactions
and suppliers (including the Company's or an Affiliate's terms, conditions and
other business arrangements with them); client or potential client or
transaction lists and billing; advertising, marketing and business plans and
strategies (including prospective or pending licensing applications or
investments in license holders or applicants); profit margins, goals, objectives
and projections; compilations, analyses and projections regarding the Company,
its Affiliates or any of its clients or potential clients or their businesses;
trade secrets; salary, staffing, management organization or employment
information; information relating to members of the Board of Directors and
management of the Company or an Affiliate; files, drawings or designs;
information regarding product development,

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marketing plans, sales plans or manufacturing plans; operating policies or
manuals, business plans, financial records or packaging design; or any other
non-public financial, commercial, business or technical information relating to
the Company, an Affiliate, Lauder or his family or non-public information
designated as confidential or proprietary that the Company, an Affiliate or
Lauder may receive belonging to others who do business with any of them.

      (c) Nothing herein shall prevent the disclosure by Executive of any
information required by an order of a court having competent jurisdiction or
under subpoena from a government agency, provided that, if Executive receives a
request for the disclosure of any Confidential Information pursuant to court
process or by a government agency, Executive shall promptly (and at the latest
within five business days but not less than three days prior to the date
Executive is required to respond to the request) notify the Company of that
request and cooperate to the maximum extent authorized by law with the Company
in protecting the Company's and it Affiliates' interest in maintaining the
confidentiality of any Confidential Information. The Company will reimburse
Executive for reasonable out-of-pocket costs or expenses incurred by Executive
in connection with his cooperation with the Company and its Affiliates
hereunder.

8. No Disparaging Comments

Each of the parties hereto agrees not to make disparaging or derogatory comments
about the other party, members of the Board or Affiliates, except to the extent
required by law, and then only after consultation with the other party to the
maximum extent possible in order to maintain goodwill for each of the parties.

9. Return of Company Property

Promptly (and at the latest within ten business days) following Executive's
termination of services, Executive shall:

      (i)   return to the Company all documents, records, notebooks, computer
            diskettes and tapes and anything else containing the Company's
            Confidential Information (as defined above), and any other property
            or Confidential Information of the Company or its Affiliates,
            including all copies thereof in Executive's possession, custody or
            control, and

      (ii)  delete from any computer or other electronic storage medium owned by
            Executive any of the proprietary or Confidential Information of the
            Company or its Affiliates.

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10. No Soliciting or Hiring Company Employees

Without the prior written consent of the Company, during the Employment Period
and for a one-year period thereafter, Executive shall not directly or indirectly
induce any employee of the Company or any Affiliate, other than Executive's
secretary or personal assistant, to terminate employment with such entity, and
during the Employment Period and for a six-month period thereafter, shall not
directly or indirectly, either individually or as owner, agent, employee,
consultant or otherwise, employ or offer employment to any person who is or was
employed by the Company or any Affiliate as an employee.

11. Continuing Obligations Following Termination

Executive agrees that his obligations and restrictions with respect to
noncompetition, confidentiality, Company property, nondisparagement and
nonsolicitation, and the Company obligations to indemnify Executive under
Section 4(d), will continue to apply following the termination of Executive's
relationship regardless of the manner in which his relationship with the Company
is terminated, whether voluntarily, for Cause, for Good Reason, without Cause or
otherwise.

12. Arbitration of All Disputes

      (a) Any dispute, controversy or claim between the Executive and the
Company or any of its officers, directors, employees or shareholders (who are
expressly made third-party beneficiaries of this agreement) arising out of,
relating to or in connection with this agreement, or the breach, termination or
validity thereof, shall be finally resolved by binding and non-appealable
arbitration, before a single arbitrator selected by the procedure set forth
below, conducted in New York, New York.

      (b) Either party may commence an arbitration proceeding by giving written
notice to the other party of its desire to arbitrate.

      (c) The single arbitrator (the "Arbitrator") shall be selected from among
the New York City members of the New York Regional Panel of Distinguished
Neutrals (the "Panel") of the Center for Public Resources ("CPR") by mutual
agreement of the parties, or if the parties are unable to agree, by the
following means:

                        (A) The Company, on one hand, and Executive on the other
            hand, shall simultaneously exchange lists each containing the names
            of five members of their choice of the Panel who have indicated a
            willingness to serve.

                        (B) If a single name appears on both lists, that
            individual shall be appointed.

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                        (C) If more than one name appears on both parties'
            lists, the Arbitrator shall be selected from the common names by
            mutual agreement of the parties or by the toss of a coin.

                        (D) If the lists contain no names in common, each party
            shall strike four names from the other party's list and the
            Arbitrator shall be selected from the remaining two names by mutual
            agreement of the parties or by the toss of a coin.

                        (E) If the CPR ceases to have a Panel or it is otherwise
            impossible to select the Arbitrator from the Panel as contemplated
            by this Agreement, the Arbitrator shall be selected by the President
            of the CPR in the manner that the President deems closest to
            satisfying the purposes of this Section, or, if such person is
            unable to do so, by the President of the Association of the Bar of
            the City of New York.

      (d) The Arbitrator, after appropriate consultation with the parties, shall
(i) determine, in his or her sole discretion, the rules governing the
arbitration proceeding, including whether and to what extent the parties shall
have any right to pre-hearing discovery or other forms of disclosure, the manner
of presentation of arguments and/or evidence before or at any hearing, whether
and to what extent formal rules of evidence shall govern the proceeding and the
parties' rights following the proceeding, and (ii) be governed in exercising
such discretion by the goal of reaching a fair and reasonable decision in an
expeditious and efficient manner while endeavoring to streamline the process and
avoid undue litigation costs.

      (e) The Arbitrator shall assess the costs of the proceeding (including the
prevailing party's reasonable attorney's fees) on any unsuccessful party to the
extent the Arbitrator concludes that such party is unsuccessful, unless he or
she concludes that (i) matters of equity or important considerations of fairness
dictate otherwise or (ii) in the case of Executive, the Arbitrator determined
that Executive acted reasonably and in good faith in pursuing all of the claims
asserted by him in such arbitration.

      (f) The Arbitrator shall be required to state his or her decision in
writing and may, but shall not be required to, elaborate on the reasons for such
decision.

      (g) The arbitrator(s) shall have the authority upon application by a party
to direct specific performance, including preliminary or interim specific
performance pending the final resolution of the arbitration, of any portion of
this agreement. The parties expressly consent to the jurisdiction and power of
any federal or state court in New York to enforce the terms of such a direction
upon application by a party. If the arbitrator(s) have not yet been appointed,
the parties may obtain injunctive or other appropriate relief from a court

                                       13
<PAGE>

to enforce the terms of this agreement pending the appointment of the
arbitrator(s) who shall thereafter have full power to continue, modify or vacate
the terms of any injunctive relief ordered by the court.

      (h) Notwithstanding the terms of this agreement that provide that New York
law shall govern, the arbitration and the provisions in this agreement dealing
with arbitration shall be governed exclusively by the United States (Federal)
Arbitration Act, 9 U.S.C. ss.ss. 1-16, and judgment on or enforcement of the
award or any direction for specific performance rendered by the arbitrators may
be entered by any court having jurisdiction thereof or having jurisdiction over
the relevant party or assets of such party.

      (i) If, notwithstanding the parties' agreement to arbitrate, any issue is
presented to a court for decision, the parties hereby waive any right to trial
by jury.

      (j) The parties agree that any dispute between the parties and the
arbitration itself shall be kept confidential and that the existence of the
arbitration and any element of it (including but not limited to any pleading,
brief or other document submitted or exchanged, any testimony or other oral
submission, and any award) shall not be disclosed except to the arbitrator(s),
the CPR Institute for Dispute Resolution, the parties, their counsel and any
person necessary to the conduct of the proceeding, except as may be lawfully
required in judicial proceedings relating to the arbitration or otherwise.

13. No Punitive or Emotional Damages

The parties hereto agree that neither the Executive nor the Company will be
entitled to seek or obtain punitive, exemplary or similar damages of any kind
from the other or, in the case of Executive, from the Company's officers,
directors, employees or shareholders, or to seek or obtain damages or
compensation for emotional distress, as a result of any dispute, controversy or
claim arising out of, relating to or in connection with this Agreement, or the
performance, breach, termination or validity thereof. Nothing herein shall
preclude an award of compensatory or punitive damages against any other third
party.

14. Injunctive Relief to Avoid Irreparable Injury

      (a) Executive acknowledges and agrees that the individualized services and
capabilities that he will provide to the Company under this Agreement are of a
personal, special, unique, unusual, extraordinary and intellectual character.

      (b) Executive acknowledges and agrees that the restrictions in this
agreement are reasonable to protect the Company's rights under this Agreement
and to safeguard the Company's and its Affiliates' Confidential Information.

                                       14
<PAGE>

      (c) Executive acknowledges and agrees that the covenants and obligations
of Executive with respect to noncompetition, nonsolicitation, confidentiality
and Company property relate to special, unique and extraordinary matters and
that a violation of any of the terms of such covenants and obligations will
cause the Company and its Affiliates irreparable injury for which adequate
remedies are not available at law. Executive therefore agrees that the Company
shall be entitled to an order of specific performance, injunction, restraining
order or such other interim or permanent equitable relief (without the
requirement to post bond) restraining Executive from committing any violation of
the covenants and obligations contained in this Agreement

      (d) These injunctive remedies are cumulative and are in addition to any
other rights and remedies the Company may have at law or in equity.

      (e) Executive represents that his economic means and circumstances are
such that the provisions of this Agreement, including the noncompetition,
nonsolicitation, confidentiality and Company property provisions, will not
prevent him from providing for himself and his family on a basis satisfactory to
him and them.

15. Automatic Amendment by Court Order and Interim Enforcement

      (a) If the Arbitrator(s) or a court determines that, but for the
provisions of this paragraph, any part of this agreement is illegal, void as
against public policy or otherwise unenforceable, the relevant part will
automatically be amended to the extent necessary to make it sufficiently narrow
in scope, time and geographic area to be legally enforceable. All other terms
will remain in full force and effect.

      (b) If the Executive raises any question as to the enforceability of any
part or terms of this agreement, including, without limitation, the provisions
relating to noncompetition, nonsolicitation, confidentiality and Company
property, the Executive specifically agrees that he will comply fully with this
Agreement unless and until the entry of an arbitral award to the contrary.

16. Notices

All notices and other communications required or permitted hereunder shall be
sufficiently given if (a) delivered personally, (b) sent by facsimile
transmission (with confirmation received), (c) sent by a nationally-recognized
air courier assuring overnight delivery, or (d) mailed (by registered or
certified mail, return receipt requested and postage prepaid) as follows:

            if to the Executive, to the Executive at:

                                       15
<PAGE>

            Birch Common
            Brockenhurst Road
            South Ascot
            Berkshire
            United Kingdom
            SL5 9HA

            with a copy to:

            Wolf, Block, Schorr and Solis-Cohen LLP
            1650 Arch Street, 22nd Floor
            Philadelphia, Pennsylvania 19103-2097
            Fax: (215) 977-2334
            Attn:  Robert M. Goldich, Esq.

            if to the Company,  to the Company at

            Clarendon House
            Church Street
            Hamilton HM CX
            Bermuda
            Fax:  (441) 292-4720
            Attention:  Roger Burgess

            with a copy to:

            c/o RSL Communications, N. America, Inc.
            810 Seventh Avenue, 39th Floor
            New York, New York 10019
            Fax: (212) 445-7531
            Attention: General Counsel

or to such other address as shall be furnished by notice from time to time by
one party hereto to the other party. Any such communication shall be deemed to
have been given, (i) in the case of personal delivery, on the date of delivery,
(ii) in the case of delivery by air courier, on the first business day following
the day on which such communication was posted, and (iii) in the case of
mailing, on the third business day following the day on which such notice was
posted.

17. Sole and Entire Understanding; Amendments

The entire understanding and agreement between the Company and Executive have
been incorporated into this Agreement. There are no other promises,
representations, under-

                                       16
<PAGE>

standings or inducements by the Company to Executive or Executive to the Company
other than those specifically set forth in this Agreement. This Agreement may
not be altered, amended or added to except in a single writing signed by the
Company and the Executive.

18. Waiver of Breach

A waiver or breach of any provision of this Agreement shall not constitute or
operate as a waiver of any other breach of such provision or of any other
provision, and any failure to enforce any provision hereof shall not operate as
a waiver of such provision or of any other provision.

19. Headings

The headings of sections in this Agreement are for convenience only, are not a
part of this Agreement and shall not affect the construction of the provisions
of this Agreement.

20. Arm's Length

      (a) This Agreement was entered into at arm's length, without duress or
coercion, and is to be interpreted as an agreement between parties of equal
bargaining strength. Both the Company and the Executive agree that this
Agreement is clear and unambiguous as to its terms, and that no parol or other
evidence will be used or admitted to alter or explain the terms of this
Agreement, but that it will be interpreted based on the language within its four
corners in accordance with the purposes for which it is entered into.

      (b) The parties hereto expressly agree that any rule or contractual
interpretation, as applied under California law or anywhere else, that would
allow parol or extrinsic evidence to attempt to show fraud in the inducement or
duress to contradict the plain, unambiguous terms of this Agreement shall not
apply to this Agreement and its performance and enforcement. This provision is a
material part of this Agreement and, should any party try to introduce evidence
contrary to this provision, any other party shall be entitle to consider it a
breach and to rescind this contract in full.

21. Successors and Assigns

      (a) This Agreement will inure to the benefit of, and will be binding upon,
the Company, its successors and assigns and upon the Executive and his heirs,
successors and assigns; provided, however, that, because this is an Agreement
for personal services, the Executive cannot assign any of his obligations under
this Agreement to anyone else.

                                       17
<PAGE>

      (b) This Agreement may be executed in counterparts, in which case each of
the two counterparts will be deemed to be an original and the final counterpart
shall be deemed to have been executed in New York, New York.

22. New York Law Governs

Any questions or other matters arising under this Agreement, whether of
validity, interpretation, performance or otherwise, will therefore be governed
by and construed in accordance with the laws of the State of New York applicable
to agreements made and to be wholly performed in New York, without reference to
principles of conflicts or choice of law under which the law of any other
jurisdiction would apply.

                                       18
<PAGE>

            IN WITNESS WHEREOF, this Agreement has been executed by Executive
and then by the Company in New York, New York, on the dates shown below, but
effective as of the date and year first above written.

Date: 8/1/00                              /s/ Paul B. Domorski
     ------------------------------       --------------------------------------
                                                   Executive

                                          RSL COMMUNICATIONS, LTD.

Date: 8/1/00                              BY: /s/ Itzhak Fisher
     ------------------------------          -----------------------------------

                                          Title: Chief Executive Officer
                                                 -------------------------------================================================================================

                            RSL COMMUNICATIONS PLC.,
                                   as Borrower

                                  $100,000,000

                    SENIOR STANDBY LOAN AND WARRANT AGREEMENT

                     GUARANTEED BY RSL COMMUNICATIONS, LTD.
                            and RSL COM U.S.A., INC.

                            dated as of July 6, 2000

                                RONALD S. LAUDER,
                                    as Lender

================================================================================

<PAGE>

                                Table of Contents

                                                                     Page
                                                                     ----

SECTION 1.  AMOUNT AND TERMS OF LOANS..................................1
      1.1   Credit.....................................................1
      1.2   Procedure for Borrowing....................................1
      1.3   The Note...................................................2
      1.4   Repayment..................................................2
      1.5   Optional Prepayment and Reborrowing........................2
      1.6   Mandatory Prepayments......................................2
      1.7   Ranking....................................................3
      1.8   Interest...................................................3
      1.9   Computation of Interest and Fees...........................3
      1.10  Fees.......................................................4
      1.11  General Provisions as to Payments..........................4
      1.12  Taxes......................................................4

SECTION 2.  WARRANTS...................................................5
      2.1   Warrant Issuance...........................................5
      2.2   Warrant Registration.......................................5
      2.3   Tax Matters................................................5

SECTION 3.  CONDITIONS.................................................5
      3.1   Effectiveness..............................................5
      3.2   Drawdown Conditions........................................6

SECTION 4.  REPRESENTATIONS AND WARRANTIES.............................7
      4.1   Representations of the Borrower, RSL COM and RSL USA.......7
      4.2   Representations of the Lender..............................9

SECTION 5.  COVENANTS.................................................10
      5.1   Information...............................................10
      5.2   Notices...................................................11
      5.3   Insurance.................................................11
      5.4   Maintenance and Existence.................................11
      5.5   Compliance with Law.......................................11
      5.6   Consolidation, Merger, Sale of Assets, Etc................11
      5.7   Use of Proceeds...........................................11
      5.8   Pari Passu................................................11
      5.9   Limitation on Certain Payments............................11
      5.10  Limitation on Liens.......................................12
      5.11  Compensation..............................................12

SECTION 6.  EVENTS OF DEFAULT.........................................12

                                       i
<PAGE>

                                Table of Contents
                                   (continued)

                                                                     Page
                                                                     ----

SECTION 7.  EXCHANGE NOTES............................................14
      7.1   Conversion of Loans to Exchange Notes.....................14
      7.2   Issuance of Exchange Notes; Terms.........................14
      7.3   Exchange Note Closing.....................................15

SECTION 8.  GUARANTEE.................................................16

SECTION 9.  INDEMNIFICATION...........................................17

SECTION 10. DEFINITIONS...............................................19

SECTION 11. MISCELLANEOUS.............................................23
      11.1  Amendments and Waivers....................................23
      11.2  Successors and Assigns....................................23
      11.3  Notices...................................................23
      11.4  Expenses..................................................25
      11.5  No Waiver; Cumulative Remedies............................25
      11.6  Survival of Representations and Warranties................25
      11.7  Severability..............................................25
      11.8  Integration...............................................25
      11.9  Counterparts..............................................25
      11.10 Governing Law.............................................25
      11.11 Submission to Jurisdiction................................26
      11.12 Trial Without Jury........................................26
      11.13 No Counterclaims..........................................26

                                       ii
<PAGE>

EXHIBIT 10.2                                                      EXECUTION COPY

                    SENIOR STANDBY LOAN AND WARRANT AGREEMENT

            SENIOR STANDBY LOAN AND WARRANT AGREEMENT, dated as of July 6, 2000,
by and among, RSL Communications PLC, a company organized under the laws of the
United Kingdom (the "Borrower"); RSL Communications, Ltd., a company organized
under the laws of Bermuda ("RSL COM") and RSL COM U.S.A., Inc., a Delaware
company ("RSL USA"), as guarantors (collectively, the "Guarantors"); and Ronald
S. Lauder, (the "Lender").

                                    RECITALS:

      A. The Lender is the Chairman of RSL COM.

      B. The Borrower and RSL COM have requested the Lender to extend senior
financing to the Borrower; and the Lender is willing to provide such financing
on the terms and subject to the conditions hereof.

      C. The Borrower is a wholly-owned Subsidiary of RSL COM and RSL USA is a
wholly-owned Subsidiary of the Borrower, each of which is willing to fully and
unconditionally guarantee the obligations of the Borrower hereunder.

            The parties, intending to be legally bound, agree as follows:

                                   SECTION 1.
                            AMOUNT AND TERMS OF LOANS

      1.1 Credit. Subject to the terms and conditions of this Agreement, at any
time and from time to time during the period commencing on the date of this
Agreement to and including the Availability Date, the Lender agrees to make
revolving loans (individually, a "Loan" and collectively, the "Loans") to the
Borrower in an aggregate amount at anytime outstanding up to but not exceeding
the amount of the Commitment. All Loans shall become due and payable on June 30,
2001 (the "Maturity Date"), or such earlier date as provided herein.

      1.2 Procedure for Borrowing.

            (a) The Borrower shall give the Lender an irrevocable notice (which
notice must be received by the Lender prior to 11:00 a.m., New York City time,
at least five (5) Business Days in advance of the date of the borrowing for
Loans drawn in the principal amount of $5 million or less and at least ten (10)
Business Days in advance of the date of the borrowing for Loans drawn in the
principal amount exceeding $5 million) specifying the date of the borrowing
(which shall be a Business Day), the aggregate amount of such borrowing, and the
account to which funds should be transferred (the "Notice of Borrowing").

<PAGE>

            (b) Unless the Lender shall have determined that any applicable
condition specified in Section 3 has not been satisfied, not later than 1:00
p.m., New York City time, on the date of each borrowing, the Lender shall make
available such borrowing, in Federal or other funds immediately available in New
York City, to the Borrower by wire transfer to the account designated by the
Borrower in the Notice of Borrowing.

      1.3 The Note. The obligation of the Borrower to repay the Lender shall be
evidenced by a single revolving demand note of the Borrower payable to the order
of the Lender on the Maturity Date, dated as of the date hereof and delivered
simultaneously herewith (the "Note"). The Note shall be in an amount equal to
the Commitment. The Loans evidenced by the Note shall bear interest as provided
in Section 1.8 hereof. The Note shall be valid and enforceable as to the
principal amount at any time only to the extent of the Loans advanced by the
Lender and then outstanding, and, as to the interest, only to the extent of the
interest accrued and unpaid in respect of such Loans.

      1.4 Repayment. The Borrower hereby unconditionally promises to pay on the
Maturity Date, without notice, the principal amount of each Loan in accordance
with the terms hereof and of the Note. The Borrower hereby further agrees to pay
interest on the unpaid principal amount of the Loans from time to time
outstanding until payment in full thereof at the rates per annum, and on the
dates, set forth in Section 1.8 hereof.

      1.5 Optional Prepayment and Reborrowing.

            (a) The Borrower may at any time and from time to time prepay the
Loans, in whole or in part, without premium or penalty. The Borrower shall give
notice to the Lender prior to 11:00 a.m., New York City time, two (2) Business
Days prior to any prepayment, specifying the date and amount of such prepayment.
If any such notice is given, the amount specified in such notice shall be due
and payable on the date specified therein, together with accrued interest to
such date on the amount prepaid. Partial prepayments shall be in an aggregate
principal amount of $500,000 or a whole multiple of $100,000 in excess thereof.
Accrued interest on the amount of principal of Loans prepaid under this Section
1.5 shall be due and paid on the date of such prepayment.

            (b) Subject to Section 1.1, Section 1.6, Section 3.2 and Section 6
hereof, principal amounts prepaid on account of the Loans may be reborrowed.

      1.6 Mandatory Prepayments.

            (a) In the event of (i) any Change of Control of RSL COM, or (ii)
the Telegate Sale, then all outstanding Loans, together with all accrued and
unpaid interest thereon and all fees (if any), will become immediately due and
payable, and the Commitment will automatically and permanently be reduced to
zero.

            (b) In the event that, (i) the Borrower or RSL COM issue any equity
or debt securities (other than upon the exercise of employee stock options), or
(ii) any Subsidiary of RSL COM issues any debt securities that are guaranteed by
RSL COM, or

                                       2
<PAGE>

(iii) the Borrower, RSL COM or any Subsidiary of RSL COM sells any assets,
including but not limited to any securities of any other Person, outside the
ordinary course of business (each such event, a "Liquidity Event"), then the
Commitment will automatically and permanently be reduced by the amount of the
net cash proceeds received from such Liquidity Event. To the extent that the
aggregate amount of all outstanding Loans exceed the amount of the Commitment in
affect immediately after such reduction, all such Loans (to the extent of such
excess), together with all accrued and unpaid interest thereon and all fees (if
any) then due to the Lender, will be immediately due and payable.

            (c) The Borrower shall give the Lender at least two (2) Business
Days' prior notice of any prepayment pursuant to this Section 1.6 setting forth
the date and amount of such prepayment, provided that the failure of the
Borrower to give such prior notice will not relieve the Borrower of any of its
obligations under this Section 1.6.

      1.7 Ranking. The Loans and the Note shall in all respects rank pari passu
with all other senior indebtedness of the Borrower, RSL COM and RSL USA,
including, but not limited to, the obligations of the Borrower, RSL COM and RSL
USA with respect to the Borrower's High Yield Notes. The Loans and the Note
shall rank senior to all subordinated indebtedness of the Borrower, RSL COM and
RSL USA.

      1.8 Interest.

            (a) Each Loan shall bear interest for the period from and including
the date such Loan is made to but excluding the Maturity Date thereof on the
unpaid principal amount thereof at a rate per annum for each Interest Period
equal to the sum of LIBOR for such Interest Period plus a margin of 4.5%.
Notwithstanding the foregoing, the interest rate borne by the Loans shall not
exceed any amount in excess of the maximum rate of interest permitted to be
charged by applicable law.

            (b) If all or a portion of (i) the principal amount of any Loan,
(ii) any interest payable thereon or (iii) any fee or other amount payable
hereunder shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise, but taking into account any applicable grace period
under Section 6(a)), such overdue amount shall bear interest at a rate per annum
which is (x) in the case of overdue principal, the rate that would otherwise be
applicable thereto pursuant to Section 1.8(a) plus two percent (2.0%) and (y) in
the case of overdue interest, commitment fees or other amounts due and payable
hereunder, the interest rate then in effect for the Loans (but without giving
effect to the foregoing clause (x)) plus two percent (2.0%), in each case from
the date of such non-payment until such amount is paid in full (after as well as
before judgment).

            (c) Interest shall be payable monthly in arrears on the last day of
each Interest Period, provided that interest accruing pursuant to Section 1.8(b)
shall be payable from time to time on demand.

      1.9 Computation of Interest and Fees. Interest shall be calculated on the
basis of a 360-day year for the actual days elapsed. LIBOR for any Interest
Period shall be determined by the Lender and notified to the Borrower. Each
determination of an interest

                                       3
<PAGE>

rate by the Lender pursuant to any provision of this Agreement shall be
conclusive and binding on the Borrower in the absence of manifest error.

      1.10 Fees. The Borrower shall pay fees to the Lender as follows:

            (a) a non-refundable arrangement fee in the amount equal to 1.00% of
      the Commitment, payable in cash on the date of execution of this
      Agreement;

            (b) a draw down fee in an aggregate amount equal to 1.00% of the
      principal amount of each Loan, payable in cash on the date of each drawing
      of a Loan; and

            (c) a commitment fee at a rate per annum equal to 1.00% of the daily
      average of the Lender's undisbursed Commitment, for the period from and
      including the date hereof to but excluding the Availability Date, payable
      in cash in arrears on the first day of each month and, with respect to the
      final payment, on the earlier of (i) the date on which the Commitment has
      been permanently reduced to zero and (ii) the Availability Date.

      1.11 General Provisions as to Payments. The Borrower shall make each
payment of principal of, and interest on, the Loans and of all fees hereunder
not later than 2:00 p.m., New York City time, on the due date thereof, in
Federal or other funds immediately available in New York City, to the Lender in
the amount due thereto at its address referred to in Section 11.3. Whenever any
payment of principal of, or interest on, the Loans or of fees shall be due on a
day which is not a Business Day, the date for payment thereof shall be extended
to the next succeeding Business Day (unless such an extension would have
resulted in a payment falling in another calendar month, in which case the
payment shall be made on the next preceding Business Day). If the date for any
payment of principal is extended by operation of law or otherwise, interest
thereon shall be payable for such extended time.

      1.12 Taxes. Except as provided below in this Section 1.12, all payments
made by the Borrower, RSL COM or RSL USA, as the case may be, under this
Agreement, the Note or any other Loan Document shall be made free and clear of,
and without deduction or withholding for or on account of, any present or future
taxes, levies, imposts, duties, charges, deductions, withholdings or fees of any
nature whatsoever, together with any related penalties, interest thereon or
additions thereto, now or hereafter imposed, levied, collected, withheld or
assessed by any Governmental Authority, excluding net income taxes of the Lender
imposed by: (i) the jurisdiction under the laws of which the Lender is
organized; or (ii) the jurisdiction in which the Lender has a permanent
establishment to which the Note is attributable. If any such non-excluded taxes,
levies, imposts, duties, charges, deductions, withholdings or fees
("Non-Excluded Taxes") are required to be withheld or deducted from any amounts
payable to the Lender hereunder, under the Note or under any other Loan
Documents, the amounts so payable to the Lender shall be increased to the extent
necessary to yield to the Lender (after payment of all Non-Excluded Taxes)
interest or any such other amounts payable hereunder, under the Note or under
any other Loan Document at the rates or in the amounts specified in this

                                       4
<PAGE>

Agreement, the Note and any other Loan Document. Whenever any Non-Excluded Taxes
are payable by the Borrower, RSL COM or RSL USA, as promptly as possible
thereafter the Borrower, RSL COM or RSL USA, as the case may be, shall send to
the Lender for its own account, a certified copy of an original official receipt
received by the Borrower, RSL COM or RSL USA, as the case may be, showing
payment thereof. If the Borrower, RSL COM or RSL USA, as the case may be, fails
to pay any Non-Excluded Taxes when due to the appropriate taxing authority or
fails to remit to the Lender the required receipts or other required documentary
evidence, the Borrower, RSL COM or RSL USA, as the case may be, shall indemnify
the Lender for any incremental taxes, interest, penalties or additions to taxes
that may become payable by the Lender as a result of any such failure. The
agreements in this Section shall survive the termination of this Agreement and
the payment of the Loans and all other amounts payable hereunder.

                                   SECTION 2.
                                    WARRANTS

      2.1 Warrant Issuance. In order to induce the Lender to make available the
Loans hereunder, RSL COM agrees to issue to the Lender on the date of each
drawdown, if any, warrants (each, a "Warrant") to purchase an aggregate of
75,000 of RSL COM's Class A common shares for each $5 million in Loans drawn, up
to a maximum aggregate limit of 1,500,000 of RSL COM's Class A common shares.
RSL COM will issue warrants to purchase its Class A common shares on a pro rata
basis for Loans drawn in other than $5 million increments. Subject to the terms
and conditions of this Section 2.1, the Warrants will be exercisable in
accordance with and otherwise have the terms and conditions set forth in the
Form of Warrant attached to this Loan Agreement as Exhibit A.

      2.2 Warrant Registration. The Warrants and the Class A common shares
issued upon exercise thereof will be entitled to the registration rights set
forth in the Warrant Registration Rights Agreement, dated as of October 3, 1996,
between the Borrower and The Chase Manhattan Bank.

      2.3 Tax Matters. In connection with any Loan with respect to which RSL COM
issues Warrants to the Lender, the Lender and the Borrower shall agree to a
valuation of the Warrants so issued, and the Lender and Borrower shall use such
valuation for all tax purposes, including the determination of the issue price
of such Loan in accordance with U. S. Treasury Reg.ss.1.1273-2(h). For U. S. tax
purposes, each Loan with respect to which Warrants are issued to the Lender
shall be treated as a separate debt instrument with its own issue price and
issue date.

                                   SECTION 3.
                                   CONDITIONS

      3.1 Effectiveness. This Agreement shall become effective on the date that
each of the following conditions shall have been satisfied (or waived in
accordance with Section 11.1):

                                       5
<PAGE>

            (a) receipt by the Lender of counterparts hereof signed by each of
      the parties hereto (or, in the case of any party as to which an executed
      counterpart shall not have been received, receipt by the Lender in form
      satisfactory to it of telegraphic, telex or other written confirmation
      from such party of execution of a counterpart hereof by such party);

            (b) receipt by the Lender of the duly executed Note evidencing the
      Borrowers' obligation to the Lender; and

            (c) receipt by the Lender of all documents it may reasonably request
      relating to the corporate authority for and the validity of this Agreement
      and the Note, and any other matters relevant hereto, all in form and
      substance satisfactory to the Lender.

The Lender shall promptly notify the Borrower of the effective date of this
Agreement, and such notice shall be conclusive and binding on all parties
hereto.

      3.2 Drawdown Conditions. The obligation of the Lender to make any Loan is
subject to the satisfaction of the following conditions:

            (a) the Lender shall have received of a Notice of Borrowing as
      required by Section 1.2;

            (b) the Lender and the Borrower shall have agreed to the Warrant
      valuation described in Section 2.3;

            (c) immediately after the Loan is extended, the aggregate
      outstanding principal amount of the Loans will not exceed the Commitment;

            (d) the Borrower has available the capacity or an applicable
      exemption under the High Yield Notes and their respective indentures to
      drawdown the Loan;

            (e) immediately before and after the Loan is extended, no Event of
      Default shall have occurred and be continuing;

            (f) the representations and warranties of the Borrower, of RSL COM
      and of RSL USA contained in this Agreement shall be true and correct in
      all material respects on and as of the date of the Loan;

            (g) since March 31, 2000, no Material Adverse Change shall have
      occurred;

            (h) RSL COM, RSL USA, the Borrower and the Lender shall have
      received all consents and approvals, and shall have made all filings and
      notices, required in connection with the transactions contemplated hereby;

                                       6
<PAGE>

            (i) no order of any court or governmental agency enjoining any of
      the transactions contemplated hereby may be in effect, and no action,
      suit, proceeding or investigation seeking any such order or substantial
      damages in connection with the transactions contemplated hereby, or that
      could reasonably be expected to have a Material Adverse Effect, may be
      pending or threatened;

            (j) RSL COM shall have delivered a duly executed Warrant to the
      Lender permitting the Lender to purchase Class A Common Shares in
      accordance with this Loan Agreement;

            (k) the Borrower shall have paid all fees and expenses due to the
      Lenders pursuant to the Loan Documents; and

            (l) the Lender shall have received a certificate signed by the chief
      executive officer of the Borrower, dated the date of any drawing of any
      Loan, to the effect set forth in clauses (c), (d), (e) and (f) of this
      Section 3.2 (and, with respect to (c), such certificate shall set forth
      the calculation or exception upon which the Borrower is relying to
      draw-down the Loan).

                                   SECTION 4.
                         REPRESENTATIONS AND WARRANTIES

      4.1 Representations of the Borrower, RSL COM and RSL USA. The Borrower,
RSL COM and RSL USA, jointly and severally, each represent and warrant to the
Lender, on the date hereof and on the date of any drawing of any Loan, as
follows:

            4.1.1 Corporate Existence and Power. Each of the Borrower, RSL COM
and RSL USA is a company duly incorporated, validly existing and in good
standing under the laws of the jurisdiction of its organization, and has all
corporate powers and authority and all material governmental licenses,
authorizations, consents, and approvals required to own, lease and operate its
properties and to carry on its business as now conducted.

            4.1.2 Corporate and Governmental Authorization; No Contravention.
The execution, delivery and performance by each of the Borrower, RSL COM and RSL
USA of this Agreement, and the execution and delivery by the Borrower of the
Note, are within respective corporate powers of the Borrower, RSL COM and RSL
USA, have been duly authorized by all necessary corporate action, require no
action by or in respect of, or filing with, any governmental body, agency or
official and do not contravene, or constitute a default under, any provision of
applicable law or regulation or of the certificate of incorporation or by-laws
of the Borrower, RSL COM or RSL USA or of any agreement, judgment, writ,
injunction, order, decree or other instrument binding upon the Borrower, RSL COM
or RSL USA or result in the creation or imposition of any lien, mortgage,
pledge, charge, security interest or encumbrance of any kind (the "Lien") on any
asset of the Borrower, RSL COM or RSL USA or any of their respective
Subsidiaries.

                                       7
<PAGE>

            4.1.3 Binding Effect. This Agreement has been duly and validly
executed and delivered by each of the Borrower, RSL COM and RSL USA, and
assuming the due authorization, execution and delivery by the other parties
hereto, constitutes the valid and binding obligation of the Borrower, RSL COM
and RSL USA enforceable against each of them in accordance with its terms; and,
when executed and delivered, the Note will constitute a valid and binding
obligation of the Borrower enforceable against the Borrower in accordance with
its terms, in each case except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors rights generally and by general
principles of equity.

            4.1.4 SEC Reports and Financial Statements.

            (a) RSL COM has filed all required forms, reports and documents with
the Securities Exchange Commission (hereinafter collectively referred to as the
"Company Reports") required to be filed by it pursuant to the Securities Act of
1933, as amended, and the rules and regulations promulgated thereunder (the
"Securities Act") and the Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder (the "Exchange Act"), all of which have
complied in all material respects with all applicable requirements of the
Securities Act and the Exchange Act.

            (b) None of the Company Reports, including, without limitation, any
financial statements or schedules included therein, at the time filed, contained
any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.

            (c) The consolidated balance sheets and the related consolidated
statements of income, cash flow and shareholders' equity (including without
limitation the related notes thereto) of RSL COM and its consolidated
Subsidiaries included in the financial statements contained in RSL COM's Annual
Report on Form 10-K for the year ended December 31, 1999 (the "Company 10-K")
and in RSL COM's Quarterly Reports on Form 10-Q for the quarter ended March 31,
2000 (the "Company 10-Q"), present fairly the consolidated financial position of
RSL COM and its consolidated Subsidiaries as of their respective dates, and the
results of consolidated operations and cash flows for the periods then ended,
all in conformity with United States generally accepted accounting principles
applied on a consistent basis, except as otherwise noted therein and in the case
of unaudited financial statements subject to normal year-end audit adjustments,
and except for certain footnote disclosures required by United States generally
accepted accounting principles.

            4.1.5 Absence of Undisclosed Liabilities. Except for liabilities
reflected or reserved against in the consolidated balance sheet of RSL COM and
its Subsidiaries as of March 31, 2000 or reflected in the notes thereto, none of
RSL COM and its Subsidiaries has any liabilities or obligations (absolute or
accrued or contingent, whether accrued or unaccrued and whether due or to become
due) other than liabilities and obligations incurred in the ordinary course of
business since March 31, 2000 or liabilities

                                       8
<PAGE>

or obligations which, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.

            4.1.6 Changes. Since the date of the Company 10-K, and except as set
forth in the Company 10-K, the Company 10-Q or any Company Current Report filed
prior to the date hereof:

            (a) no Material Adverse Change has occurred; and

            (b) there has been no direct or indirect redemption, purchase or
other acquisition of any shares of RSL COM's capital stock, or any declaration,
setting aside or payment of any dividend or other distribution by RSL COM in
respect of RSL COM's capital stock.

            4.1.7 Litigation. Since the date of the Company 10-K, and except as
set forth in the Company 10-K, the Company 10-Q or any Company Current Report
filed prior to the date hereof, there is no action, suit or proceeding pending
against, or to the knowledge of the Borrower or RSL COM threatened against or
affecting, the Borrower, RSL COM, RSL USA or any of their Subsidiaries before
any court or arbitrator or any governmental body, agency or official which could
reasonably be expected to have a Material Adverse Effect or which in any manner
draws into question the validity or enforceability of this Loan Agreement or the
Note.

            4.1.8 Taxes. Each of RSL COM, RSL USA, the Borrower and their
Subsidiaries has filed or caused to be filed all income tax returns and all
other material tax returns which are required to be filed and has paid (i) all
taxes shown to be due and payable on such returns and (ii) all taxes shown to be
due and payable on any assessments of which it has received notice made against
it or any of its property and all other taxes, fees or other governmental
charges imposed on it or any of its property and no tax Lien has been filed, and
no claim is being asserted, with respect to any such tax, fee or other charge
(other than any (x) taxes, fees or other charges with respect to which the
failure to pay, in the aggregate, would not have a Material Adverse Effect or
(y) taxes, fees or other charges the amount or validity of which are currently
being contested in good faith by appropriate proceedings diligently conducted
and with respect to which adequate reserves in accordance with United Stated
generally accepted accounting principles have been maintained).

      4.2 Representations of the Lender. The Lender, represents and warrants to
the Borrower, RSL COM and RSL USA, on the date hereof, as follows:

            4.2.1 Organization and Authorization. The Lender is duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization; and the execution, delivery and performance by the Lender of this
Agreement are within the Lender's limited liability company powers and have been
duly authorized by all necessary limited liability company action.

            4.2.2 Binding Effect. This Agreement has been duly and validly
executed and delivered by the Lender and, assuming the due authorization,
execution and

                                       9
<PAGE>

delivery by the other parties hereto, constitutes the valid and binding
obligation of the Lender enforceable against the Lender in accordance with its
terms, in each case except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors rights generally and by general principles of equity.

                                   SECTION 5.
                                    COVENANTS

            Until the later of (i) the Availability Date and (ii) the payment in
full of the Loans and all other liabilities of the Borrower, RSL COM and RSL USA
to the Lender under any of the Loan Documents whether now or hereafter existing:

      5.1 Information. RSL COM will deliver to the Lender:

            (a) as soon as available and in any event within ninety (90) days
      after the end of each fiscal year of RSL COM, a consolidated balance sheet
      of RSL COM and its Subsidiaries as of the end of such fiscal year and the
      related consolidated statements of operations and cash flows for such
      fiscal year, accompanied by an opinion of Deloitte & Touche LLP or other
      independent public accountants of nationally recognized standing that such
      statements are in accordance with generally accepted accounting principles
      in the United States, consistently applied;

            (b) as soon as available and in any event within forty-five (45)
      days after the end of each of the first three quarters of each fiscal year
      of RSL COM, a consolidated balance sheet of RSL COM and its Subsidiaries
      as of the end of such quarter and the related consolidated statements of
      operations and cash flows for such quarter and for the portion of RSL
      COM's fiscal year ended at the end of such quarter, certified (subject to
      normal year-end adjustments) as to fairness of presentation, generally
      accepted accounting principles and consistency by the chief financial
      officer or the chief accounting officer or the treasurer of the Borrower;

            (c) promptly upon the mailing thereof to the shareholders of RSL COM
      generally, copies of all financial statements, reports, proxy statements
      or other information so mailed;

            (d) promptly upon the filing thereof, copies of all registration
      statements (other than the exhibits thereto and any registration
      statements on Form S-8 or its equivalent) and reports on Forms 10-K, 10-Q
      and 8-K (or their equivalents) which the Borrower or RSL COM shall have
      filed with the Securities and Exchange Commission; and

            (e) from time to time such additional historical information
      regarding the financial position or business of RSL COM and its
      Subsidiaries as the Lender may reasonably request.

                                       10
<PAGE>

      5.2 Notices. Within three (3) days after any officer of the Borrower, RSL
COM or RSL USA obtains knowledge of any Event of Default or of any event or
condition which with the giving of notice and lapse of time would, unless cured
or waived, become an Event of Default, if such event or condition is then
continuing, the Borrower will deliver to each Lender a certificate of the chief
financial officer or the chief accounting officer or the treasurer of the
Borrower setting forth the details thereof and the action which the Borrower is
taking or proposes to take with respect thereto.

      5.3 Insurance. RSL COM, RSL USA and the Borrower will maintain insurance
(including but not limited to liability insurance) with responsible and
reputable insurers in such amounts and covering such risks as is usually carried
by companies engaged in similar business and owning similar properties and such
other insurance as is required by law.

      5.4 Maintenance and Existence. RSL COM, RSL USA and the Borrower will
preserve, renew and keep in full force and effect their corporate existence and
their rights, privileges and franchises necessary or desirable in the normal
conduct of business.

      5.5 Compliance with Law. RSL COM, RSL USA and the Borrower will comply, in
all material respects, with all applicable laws, rules, regulations and orders
which are of material importance to the conduct of the business, or the
ownership of their property (including, without limitation, paying before the
same become delinquent, all taxes, assessments and governmental charges upon it
or its property), except where the necessity of compliance therewith is
contested in good faith.

      5.6 Consolidation, Merger, Sale of Assets, Etc. RSL COM shall not
consolidate with or merge with or into any Person, or sell, convey, assign,
transfer, lease or otherwise dispose of all or substantially all of its assets,
whether in one transaction or a group of related transactions, to any Person or
group of Persons (except for any such transaction constituting a Change of
Control, provided that RSL COM fully complies with its obligations under Section
1.6) unless prior to the closing thereof, all outstanding Loans (together with
all accrued and unpaid interest thereon and all fees, if any) have been paid and
thereupon the Commitment shall have been permanently reduced to zero.

      5.7 Use of Proceeds. The Borrower shall use the proceeds of the Loans made
under this Agreement in compliance with all legal and regulatory requirements
for general corporate purposes. None of such proceeds will be used, directly or
indirectly, for the purpose, whether immediate, incidental or ultimate, of
buying or carrying any "margin stock" within the meaning of Regulation U.

      5.8 Pari Passu. The Borrower shall ensure that no claims of the Lender
will be at any time subordinate to the claims of other unsecured creditors
(except to the extent provided under bankruptcy, insolvency and other similar
laws of general application relating to or affecting the enforcement of
creditors' rights).

      5.9 Limitation on Certain Payments. RSL COM shall not, and shall not
permit the Borrower or any other of its Subsidiaries, directly or indirectly, to
(i) declare

                                       11
<PAGE>

or pay any dividend or make any distribution on or in respect of its capital
stock (except dividends or distributions payable to RSL COM), or (ii) make any
payment on account of the purchase, redemption, defeasance retirement or
acquisition of (x) any shares of any capital stock of RSL COM or any of its
Subsidiaries, (y) any option, warrant or other right to acquire shares of any
capital stock of RSL COM or any of its Subsidiaries, or (z) any debt of RSL COM
or any of its Subsidiaries that is subordinated to the Loans, other than (A)
dividends or distributions made by RSL COM in kind on a cashless basis with
respect to RSL COM Series A preferred shares or other series of preferred shares
issued by RSL COM after the date hereof or (B) distributions of RSL COM Class A
shares or cash pursuant to roll-up or similar agreements between RSL COM, its
Subsidiaries and other shareholders of such Subsidiaries that do not
individually or in the aggregate exceed 5% of the value of the capital stock of
such Subsidiary.

      5.10 Limitation on Liens. RSL COM shall not, and shall not permit the
Borrower or any other of its Subsidiaries, directly or indirectly, to create,
incur, assume or permit to exist any Lien on any asset now owned or hereafter
acquired, or any income or profits therefrom, or assign or convey any right to
receive income therefrom, except for any Permitted Lien, or any banker's right
of set-off arising by operation of law in the ordinary course of business,
unless contemporaneously therewith effective provision is made to secure the
Note or, in respect of Liens on RSL COM's property or assets, the guarantee set
forth in Section 6 hereof, equally and ratably with such obligation for so long
as such obligation is so secured.

      5.11 Compensation. RSL COM will not, and will not permit any of its
Subsidiaries to, pay any bonus (whether in securities, cash or otherwise) to any
executive officer of RSL COM except in accordance with and within the limits
provided in the bonus programs of RSL COM and its Subsidiaries, or any contract
between RSL COM or any of its Subsidiaries and such officer, in effect on the
date hereof.

                                   SECTION 6.
                                EVENTS OF DEFAULT

            The Borrower shall be in default under this Agreement upon the
happening of any of the following Events of Default:

            (a) a default in the payment when due of any amount due with respect
      to the Loans, or in the performance of any obligation, covenant or
      liability contained herein or in any of the Notes, which default shall
      continue unremedied for a period of five (5) days in a case of a payment
      default, or thirty (30) days after notice thereof in the case of any other
      default;

            (b) any representation or warranty of the Borrower, RSL COM or RSL
      USA set forth herein, or any representation, warranty, or written
      statement made or furnished to the Lender by or on behalf of the Borrower,
      RSL COM or RSL USA pursuant hereto, proves to have been false or
      misleading in any material respect when made or furnished;

                                       12
<PAGE>

            (c) any change occurs in the condition, financial or otherwise, of
      the Borrower, RSL COM, RSL USA or any Subsidiary of RSL COM that, in the
      reasonable opinion of the Lender has or could have a Material Adverse
      Effect;

            (d) the Borrower, RSL COM or RSL USA admits in writing its inability
      to pay its debts generally as such debts become due, or carry on as a
      going business;

            (e) a judgment or order for the payment of money in excess of an
      amount of $5,000,000 is entered against the Borrower, RSL COM or RSL USA
      and such judgment or order shall continue unsatisfied and unstayed for a
      period of thirty (30) days;

            (f) an event of default occurs under the indenture relating to any
      of the High Yield Notes, or with respect to any other indebtedness of RSL
      COM, the Borrower or any of their Subsidiaries arising under a single
      instrument or document or under a series of related instruments or
      documents in an aggregate amount exceeding $10,000,000; or

            (g) (i) the Borrower, RSL COM or RSL USA or any of RSL COM's
      Subsidiaries, shall commence any case, proceeding or other action (x)
      under any existing or future law of any jurisdiction, domestic or
      foreign, relating to bankruptcy, insolvency, reorganization or relief of
      debtors, seeking to have an order for relief entered with respect to it,
      or seeking to adjudicate it a bankrupt or insolvent, or seeking
      reorganization, arrangement, adjustment, winding-up, liquidation,
      dissolution, composition or other relief with respect to it or its debts,
      or (y) seeking appointment of a receiver, trustee, custodian, conservator
      or other similar official for it or for all or any substantial part of its
      assets, or the Borrower, RSL USA, or any of RSL COM or its Subsidiaries,
      shall make a general assignment for the benefit of its creditors; or (ii)
      there shall be commenced against the Borrower, RSL USA, or any of RSL COM
      or its Subsidiaries, any case, proceeding or other action of a nature
      referred to in clause (i) above which (x) results in the entry of an order
      for relief or any such adjudication or appointment or (y) remains
      undismissed, undischarged or unbonded for a period of ninety (90) days; or
      (iii) there shall be commenced against the Borrower, RSL USA, or any of
      RSL COM or its Subsidiaries, any case, proceeding or other action seeking
      issuance of a warrant of attachment, execution, distraint or similar
      process against all or any substantial part of its assets which results in
      the entry of an order for any such relief which shall not have been
      vacated, discharged, or stayed or bonded pending appeal within 90 days
      from the entry thereof; or (iv) the Borrower, RSL USA, or any of RSL COM
      or its Subsidiaries, shall take any action in furtherance of, or
      indicating its consent to, approval of, or acquiescence in, any of the
      acts set forth in clause (i), (ii), or (iii) above.

Upon the occurrence of an Event of Default specified in clause (i) or (ii) of
paragraph (g) of this Section with respect to the Borrower, RSL COM or RSL USA,
the Loans (with accrued interest thereon) and all other amounts owing under this
Agreement shall

                                       13
<PAGE>

immediately become due and payable and the Commitment shall be permanently
reduced to zero. Upon the occurrence of any other Event of Default, the Lender
may, by notice to the Borrower, declare the Loans hereunder (with accrued
interest thereon) and all other amounts owing under this Agreement to be due and
payable forthwith, whereupon the same shall immediately become due and payable,
and/or permanently reduce the Commitment to zero. Except as expressly provided
above in this Section, presentment, demand, protest and all other notices of any
kind are hereby expressly waived.

                                   SECTION 7.
                                 EXCHANGE NOTES

      7.1 Conversion of Loans to Exchange Notes. Upon the occurrence of any
Event of Default and the expiration of any applicable cure period, in addition
to any other remedies available to the Lender, or immediately after the Maturity
Date or at anytime thereafter that the Loans remain unpaid, the Lender may, at
its sole option, convert all or any portion of the outstanding principal amount
of the Loans, together with any accrued and unpaid interest and fees, into one
or more senior convertible notes of the Borrower having the terms set forth in
this Section 7 and the term sheet attached hereto as Exhibit B (the "Exchange
Notes"). The Exchange Notes will be unconditionally guaranteed as to payment of
principal, interest and any other amounts due thereon by RSL COM and RSL USA.

      7.2 Issuance of Exchange Notes; Terms.

            (a) The Exchange Notes will be issued under and subject to the terms
of an indenture to be concluded between the Borrower, RSL COM, RSL USA and an
indenture trustee reasonably satisfactory to the Lender (the "Exchange Note
Indenture"). The terms of the Exchange Note Indenture will be in form and
substance reasonably satisfactory to the Lender, but will not contain terms more
onerous to the Borrower than the terms of the Dollar Note Indenture, dated as of
February 22, 2000, among the Borrower, RSL COM, RSL USA and The Chase Manhattan
Bank, as trustee, with respect to the Borrower's 12-7/8% Senior Notes due 2010.
The Lender may exercise its option to convert all or any portion of the
outstanding principal amount of the Loans, together with any accrued and unpaid
interest and fees, into Exchange Notes by delivering notice of its exercise to
the Borrower (such notice, the "Exchange Notice") at any time after the Maturity
Date or at any time after the occurrence of an Event of Default. The Exchange
Notice will state the principal amount of the Exchange Notes to be issued by the
Borrower. After the Maturity Date or after the occurrence of an Event of
Default, within thirty days (30) days of receipt of the Exchange Notice and in
accordance with the terms hereof, the Borrow will execute the Exchange Note
Indenture and other ancillary documents required thereby and by Section 7.3 and
issue to the Lender the Exchange Notes in an aggregate principal amount set
forth in the Exchange Notice and the amount of Loans and accrued but unpaid
interest and fees then outstanding will be reduced by the principal amount of
the Exchange Notes so issued. The date on which the Exchange Notes are issued is
referred to herein as the "Exchange Note Closing Date."

                                       14
<PAGE>

            (b) The Exchange Notes will mature on the seventh anniversary of the
Exchange Note Closing Date.

            (c) Interest will accrue on the Exchange Notes, commencing from the
Exchange Note Closing Date, and be payable in arrears on each March 31, June 30,
September 30 and December 31 thereafter until all amounts due and payable under
the Exchange Notes has been paid in full, at an annual rate that is equal to the
greater of (i) the applicable interest rate of the Loans at the time of the
exchange, plus 50 basis points, (ii) the yield in effect two days prior to the
Exchange Note Closing Date with respect to U.S. Treasury Notes with a remaining
maturity closest to seven years, plus 600 basis points and (iii) the high yield
index maintained by Goldman Sachs Group, Inc. for securities having a similar
credit rating in effect two days prior to the Exchange Note Closing Date, plus
200 basis points. Notwithstanding the foregoing, after the occurrence and during
the continuance of any default under the Exchange Notes or the Exchange Note
Indenture, interest will accrue on the Exchange Notes at the then applicable
interest rate, plus 200 basis points per annum.

            (d) At any time and from time to time at the option of the holder
thereof upon at least five (5) Business Days' written notice to RSL COM, the
Exchange Notes will be convertible, pursuant to the terms and conditions hereof
and the Exchange Note Indenture, in whole or in part, into that number of Common
Shares equal to the quotient of (i) the principal amount of the Exchange Notes
then being converted, plus any accrued and unpaid interest thereon, divided by
(ii) the Exchange Note Conversion Price. The Exchange Note Conversion Price will
equal the lower of (i) $12 and (ii) the average daily closing bid price of the
Common Stock for the ten trading days immediately preceding the Exchange Note
Closing Date.

            (e) Prior to the issuance of the Exchange Notes, the Borrower and
the Guarantors will enter into an exchange and registration rights agreement
(the "Exchange and Registration Rights Agreement") that will provide for the
registration under the Securities Act (or the exchange for identical notes
registered under the Securities Act) of the Exchange Notes in accordance with
the terms thereof. The Exchange and Registration Rights Agreement will be in
form and substance reasonably satisfactory to the Lender, but will not contain
terms more onerous for the Borrower than the exchange and registration rights
agreement, dated February 22, 2000, between the Borrower and Goldman Sachs, on
behalf of the Initial Purchasers defined therein with respect to the Borrower's
12-7/8% Senior Notes due 2010.

      7.3 Exchange Note Closing. On or prior to the Exchange Note Closing Date,
the Borrower will deliver to the Lender: (i) an Exchange Note Indenture, duly
executed by the Borrower, the Guarantors and the trustee for the Exchange Notes,
which will be a nationally recognized trustee reasonably acceptable to the
Lender; (ii) one or more duly executed and authenticated global Exchange Notes
in the form provided by the Exchange Note Indenture; (iii) an Exchange and
Registration Rights Agreement, duly executed by the Borrower and the Guarantors;
and (iv) the legal opinion of Rosenman & Colin, dated the Exchange Note Closing
Date, as to (A) the due organization and good standing of the Borrower and the
Guarantors, (B) the due authorization, execution and delivery (and,

                                       15
<PAGE>

with respect to the Exchange Notes, authentication) of the Exchange Notes, the
Exchange Note Indenture and the Exchange and Registration Rights Agreement by
the Borrower and each of the Guarantors and that each of such instruments
constitutes the valid and legally binding obligation of the Borrower and the
Guarantors and is enforceable in accordance with its terms (subject, as to
enforcement, to bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights), (C) the due issuance
of the Exchange Notes and that such issuance does not conflict with or result in
a breach or violation of or constitute a default under any indenture of the
Borrower and the Guarantors, other material contract or law; and (D) such other
matters reasonably requested by the Lender.

                                   SECTION 8.
                                    GUARANTEE

            Each of RSL COM and RSL USA jointly and severally, unconditionally
and irrevocably guarantees to the Lender:

            (a) the due, prompt and complete payment by the Borrower of the
      principal of and interest on the Loans advanced from time to time under
      this Agreement and any other amount due hereunder and under the Note, when
      and as the same shall become due and payable, whether at maturity or by
      acceleration, in accordance with the terms of this Agreement and the Note,
      and

            (b) the due, prompt and complete payment of the principal of and
      interest on the Exchange Notes issued from time to time under this
      Agreement and any other amount due hereunder or under the Exchange Note
      Indenture, and

            (c) the due, prompt and faithful performance of, and compliance
      with, all other undertakings of the Borrower contained in this Agreement
      and the Note and in any other Loan Document (the amounts payable by the
      Borrower under any of the Loan Documents, and all other obligations of the
      Borrower thereunder, being sometimes collectively hereinafter referred to
      as the "Guaranteed Obligations").

            This guaranty is a guaranty of payment, performance and compliance
and not of collectibility and is in no way conditioned or contingent upon any
attempt to collect from or enforce performance or compliance by the Borrower or
upon any other event or condition whatsoever. If for any reason whatsoever the
Borrower shall fail or be unable duly, 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, whether or not such failure or inability shall
constitute an Event of Default hereunder, RSL COM or RSL USA will forthwith pay
or cause to be paid such amounts to the Lender, at its address specified in
Section 11.3 hereof, in lawful money of the United States, 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) on any amount due and owing from the Borrower. RSL COM and RSL
USA, jointly and severally, promptly after demand, will reimburse the Lender for
all

                                       16
<PAGE>

costs and expenses of collecting such amounts or otherwise enforcing this
guarantee, including, without limitation, the reasonable fees and expenses of
counsel. The obligations of RSL COM and RSL USA set forth herein constitute the
full recourse obligations of RSL COM and RSL USA enforceable against each of
them to the full extent of all assets and properties of each of them. The
obligations of RSL COM and RSL USA under this Section are primary, absolute and
unconditional, are not subject to any counterclaim, set-off, deduction,
diminution, abatement, recoupment, suspension, deferment or defense based upon
any claim RSL COM, RSL USA or any other Person may have against the Borrower,
the Lender 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 (whether or not RSL COM, RSL USA or
the Borrower shall have any knowledge or notice thereof). Each of RSL COM and
RSL USA unconditionally waives, to the extent permitted by applicable law, (i)
any notice that may be required, by statute, rule of law or otherwise, to
preserve any rights of the Lender against RSL COM or RSL USA, (ii) presentment
to or demand of payment from the Borrower, RSL COM or RSL USA with respect to
the Note, the Exchange Notes or protest for nonpayment or dishonor, (iii) any
right to the enforcement, assertion, exercise or exhaustion by the Lender of any
right, power, privilege or remedy conferred in this Agreement or any other Loan
Document or otherwise, (iv) any requirement of diligence on the part of the
Lender, (v) any requirement to mitigate the damages resulting from any default
under any Loan Document, (vi) any notice of any sale, transfer or other
disposition of any right, title to or interest in any Loan by the Lender, and
(vii) any other circumstance whatsoever which might otherwise constitute a legal
or equitable discharge, release or defense of RSL COM, or RSL USA or surety or
which might otherwise limit recourse against RSL COM or RSL USA.

                                   SECTION 9.
                                 INDEMNIFICATION

            In the event that the Lender (the "Indemnified Party") becomes
involved in any capacity in any action, proceeding or investigation brought by
or against any Person, including, without limitation, RSL COM or any equity
holders or creditors of RSL COM and RSL USA, in connection with or as a result
of any matter referred to in this Agreement, including but not limited to the
Loans, RSL COM and RSL USA periodically will reimburse such Indemnified Party
for all of its out-of-pocket legal, expert and other expenses (including the
out-of-pocket cost of any investigation and preparation) incurred in connection
therewith. RSL COM and RSL USA also will indemnify and hold each Indemnified
Party harmless against any and all losses, claims, damages, expenses, actions,
demands, assessments, costs, judgments, awards, fines, sanctions, penalties,
amounts paid in settlement (provided that RSL COM has consented to such
settlement), or liabilities ("Damages") to any such Person in connection with or
as a result of any matter referred to in this Agreement and without regard to
the exclusive or contributory negligence of any of the Indemnified Parties,
except to the extent that any such Damages are finally judicially determined to
have resulted from the gross negligence, willful misconduct or bad faith of such
Indemnified Party in connection with the subject matter of this Agreement (and
in the event of such a determination, the

                                       17
<PAGE>

Indemnified Party will reimburse RSL COM and RSL USA for any expenses advanced
to such Indemnified Party by RSL COM and RSL USA pursuant to the immediately
preceding sentence). If for any reason the foregoing indemnification is
unavailable to any Indemnified Party or insufficient to hold it harmless, then
RSL COM and RSL USA shall contribute to the amount paid or payable by such
Indemnified Party as a result of such Damages in such proportion as is
appropriate to reflect the relative economic interests of RSL COM and RSL USA
and RSL COM's equity holders, on the one hand, and such Indemnified Party, on
the other hand, in the matters contemplated in this Agreement as well as the
relative fault of RSL COM and RSL USA, on the one hand, and such Indemnified
Party, on the other hand, with respect to such loss, claim, damage or liability
and any other relevant equitable considerations. The reimbursement, indemnity
and contribution obligations of RSL COM and RSL USA under this Section will be
in addition to any liability which RSL COM and RSL USA may otherwise have, shall
extend upon the same terms and conditions to any Affiliate of any Indemnified
Party and the directors, agents, advisors, employees and controlling Persons of
such Indemnified Party and any such Affiliate, and shall be binding upon and
inure to the benefit of any successors, assigns, heirs and personal
representatives of RSL COM and RSL USA, such Indemnified Party, any such
Affiliate and any such Person. RSL COM and RSL USA will not be responsible, in
connection with any one action or proceeding (or separate but substantially
similar proceedings arising out of the same general allegations), for the fees
and expenses of more than one firm of attorneys at any time for all Indemnified
Parties, except to the extent local counsel, in addition to its regular counsel,
is required to effectively defend against such action, provided that if counsel
to the Indemnified Parties reasonably determines that there is a conflict of
interest among the Indemnified Parties, then the Indemnified Party with respect
to which such conflict of interest relates may employ separate counsel at the
cost and expense of RSL COM and RSL USA. RSL COM and RSL USA also agree that
neither any Indemnified Party nor any of such Affiliates, directors, agents,
advisors, employees or controlling Persons will have any liability based on its
or their exclusive or contributory negligence or otherwise to RSL COM and RSL
USA, any Person asserting claims on behalf or in the right of RSL COM and RSL
USA, or any other Person in connection with or as a result of any matter
referred to in this Agreement except to the extent that any Damages incurred by
RSL COM and RSL USA result from the gross negligence, willful misconduct or bad
faith of such Indemnified Party in connection with the subject matter of this
Agreement. Prior to entering into any agreement or arrangement with respect to,
or effecting, any merger, statutory exchange or other business combination or
proposed sale, exchange, dividend or other distribution or liquidation of all or
a significant portion of its assets in one or a series of transactions or any
significant recapitalization, or reclassification of its outstanding securities,
RSL COM shall notify the Indemnified Parties in writing thereof (if not
previously so notified) and, if requested by the Indemnified Parties, shall
arrange in connection therewith alternative means of providing for the
obligations of RSL COM set forth in this Section including the assumption of
such obligations by another party, insurance, surety bonds or the creation of an
escrow, in each case in an amount and upon terms and conditions satisfactory to
the Indemnified Parties.

                                       18
<PAGE>

                                   SECTION 10.
                                   DEFINITIONS

            In this Agreement, the following terms shall have the following
respective meanings:

            "Affiliate" means, with regard to any person, any other person who,
      individually or as a part of a "group" for purposes of Section 13(d) of
      the Securities Exchange Act, controls, is controlled by or is under common
      control with, such person.

            "Agreement" means this Senior Standby Loan and Warrant Agreement,
      including any exhibits and schedules hereto, as it may be supplemented or
      amended from time to time in accordance with its terms.

            "Availability Date" means the earlier of (i) May 30, 2001 and (ii)
      the date of Change of Control of the Company.

            "Borrower" shall have the meaning assigned to it in the preamble.

            "Business Day" means a day other than a Saturday, Sunday or other
      day on which commercial banks in New York City are authorized or required
      by law to close, which is also a day on which such banks are open for
      international business (including dealings in dollar deposits) in London.

            "Change of Control of the Company" means the occurrence of any of
      the following events:

                  (a) any "Person" (as such term is used in Sections 13(d) and
            14(d) of the Exchange Act), other than one or more Permitted
            Holders, is or becomes the beneficial owner (as defined in Rules
            13d-3 and 13d-5 under the Exchange Act, except that a Person shall
            be deemed to have "beneficial ownership" of all shares that any such
            Person has the right to acquire within one year), directly or
            indirectly, of more than twenty percent (20%) of the total voting
            power of the equity securities of the Borrower or RSL COM; provided
            that Permitted Holders beneficially own, directly or indirectly, in
            the aggregate a lesser percentage of the total voting power of the
            equity securities of RSL COM than such other Person and do not have
            the right or ability by voting power, contract or otherwise to elect
            or designate for election a majority of the Board of Directors of
            RSL COM; or

                  (b) during any period of two consecutive years, individuals
            who at the beginning of such period constituted the Board of
            Directors of RSL COM (together with any new directors whose election
            by such Board of Directors of RSL COM or whose nomination for
            election by the shareholders of RSL COM was approved by a vote of a
            majority of the directors of RSL COM then still in office who were
            either directors at the

                                       19
<PAGE>

            beginning of such period or whose election or nomination for
            election was previously so approved) cease for any reason to
            constitute a majority of the Board of Directors of RSL COM then in
            office.

            "Commitment" means $100,000,000.

            "Company 10-K" shall have the meaning assigned to it in Section
      4.1.4(c).

            "Company 10-Q" shall have the meaning assigned to it in Section
      4.1.4(c).

            "Company Current Report" means any report filed by RSL COM with the
      Securities and Exchange Commission on Form 8-K.

            "Company Reports" has the meaning assigned to it in Section 4.1.4.

            "Damages" shall have the meaning assigned to it in Section 9.

            "Events of Default" shall mean any of the events set forth in
      Section 6.

            "Exchange Act" shall have the meaning assigned to it in Section
      4.1.4.

            "Exchange and Registration Rights Agreement" has the meaning
      assigned to it in Section 7.2(e).

            "Exchange Note Closing Date" is defined in Section 7.2.

            "Exchange Note Conversion Price" has the meaning assigned to it in
      Section 7.2(d).

            "Exchange Note Indenture" has the meaning assigned to it in Section
      7.2(a).

            "Exchange Notes" has the meaning assigned to it in Section 7.1.

            "Exchange Notice" has the meaning assigned to it in Section 7.2(a).

            "Governmental Authority" means any nation or government, any state
      or other political subdivision thereof and any entity exercising
      executive, legislative, judicial, regulatory or administrative functions
      of or pertaining to government including, without limitation, the European
      Union.

            "Guaranteed Obligations" shall have the meaning assigned to it in
      Section 8.

            "Guarantors" has the meaning assigned to it in the Preamble.

            "High Yield Notes" means RSL COM's (i) 12 1/4% Senior Notes due
      2006, (ii) 9 1/8% Senior Notes due 2008, (iii) 10 1/8% Senior Discount
      Notes due 2008, (iv) 10% Senior Discount Notes due 2008, (v) 12% Senior
      Notes due 2008,

                                       20
<PAGE>

      (vi) 10 1/2% Senior Notes due 2008, (vii) the 9 7/8% Senior Notes due 2009
      and (viii) the 12 7/8% Senior Dollar Notes and Senior Euro Notes due 2010.

            "Indemnified Party" shall have the meaning assigned to it in Section
      9.

            "Interest Period" means, for each Loan, (a) the period commencing on
      and including the date of such Loan and ending on but not including the
      last day of the same month, and (b) thereafter each one-month period
      commencing on and including the last day of the immediately preceding
      Interest Period and ending on but excluding the last day of next
      succeeding month, provided that (i) any Interest Period which would
      otherwise end on a day which is not a Business Day shall end on the next
      preceding Business Day and (ii) any Interest Period which would otherwise
      end after the Maturity Date shall end on the Maturity Date.

            "Lender" shall have the meaning assigned to it in the preamble.

            "LIBOR" for any Interest Period means the one month London Interbank
      Offered Rate for the first day of such Interest Period as set forth in the
      "Money Rates" column of the Wall Street Journal, or as published on such
      date (or, if not published on such date, the next day following such date
      when so published) in such other publication as the Agent may designate.

            "Lien" shall have the meaning assigned to it in Section 4.1.2.

            "Liquidity Event" shall have the meaning assigned to it in Section
      1.6.

            "Loan Documents" means the Commitment Letter , this Agreement, the
      Note, the Warrants, the Exchange Notes, the Exchange Note Indenture, the
      Exchange and Registration Rights Agreement and any other agreements
      entered into in connection with the transactions contemplated hereby.

            "Loans" shall have the meaning assigned to it in Section 1.1.

            "Material Adverse Change" means any material adverse change in the
      financial condition, business, operations, assets (taken as a whole),
      liabilities (taken as a whole) or prospects of the Borrower or of RSL COM
      and its Subsidiaries, taken as a whole.

            "Material Adverse Effect" means a material adverse effect on the
      financial condition, business, operations, assets (taken as a whole),
      liabilities (taken as a whole) or prospects of the Borrower or RSL COM and
      its Subsidiaries, taken as a whole, or on the ability of the Borrower or
      RSL COM to perform its obligations hereunder.

            "Maturity Date" shall have the meaning assigned to it in Section
      1.1.

            "Non-Excluded Taxes" shall have the meaning assigned to it in
      Section 1.12.

                                       21
<PAGE>

            "Note" shall have the meaning assigned to it in Section 1.3.

            "Notice of Borrowing" shall have the meaning assigned to it in
      Section 1.2(a).

            "Permitted Holders" means the Lender and its Affiliates.

            "Permitted Liens" means (i) the respective rights and interests
      created by or pursuant to or resulting from the Loan Documents, and the
      respective rights of the Agent and Borrower as therein provided; (ii)
      Liens for taxes either not yet due or being contested in good faith (and
      for the payment of which adequate reserves have been provided) by
      appropriate proceedings; (iii) materialmen's, mechanics', workers',
      repairmen's, employees, or other like Liens arising in the ordinary course
      of business for amounts the payment of which is either not yet delinquent
      or is being contested in good faith (and for the payment of which adequate
      reserves have been provided) by appropriate proceedings; (iv) Liens (other
      than Liens for taxes) arising out of judgments or awards against the
      Borrower with respect to which at the time an appeal or proceeding for
      review is being prosecuted in good faith and with respect to which there
      shall have been secured a stay of execution pending such appeal or
      proceeding for review; and (v) Liens permitted to be incurred under each
      of the Indentures in respect of the High Yield Notes outstanding on the
      date hereof.

            "Person" means, an individual, corporation, partnership,
      association, trust or other entity or organization, including a government
      or political subdivision or any agency or instrumentality thereof.

            "RSL COM" shall have the meaning assigned in the preamble.

            "RSL USA" shall have the meaning assigned in the preamble.

            "Securities Act" shall have the meaning assigned to it in Section
      4.1.4.

            "Subsidiary" means, as to any Person, any corporation, association,
      partnership or other business entity of which more than 50% of the total
      voting power of shares of capital stock or other interests (including
      partnership interests) entitled (without regard to the occurrence of any
      contingency) to vote in the election of directors, managers or trustees
      thereof is at the time owned or controlled, directly or indirectly, by (i)
      such Person or (ii) one or more Subsidiaries of such Person.

            "Telegate Sale" means the consummation of the transactions
      contemplated by the Option Agreement, dated May 6, 2000 (the "Option
      Agreement"), between Seat Pagine Gialle S.P.A. and RSL COM Deutschland
      GmbH, pursuant to which the Borrower or any of its Affiliates receives
      consideration for the Remaining Shareholding (as defined in the Option
      Agreement) either from Seat Pagine Gialle S.P.A. or from an intermediary
      in connection with any hedging transaction with

                                       22
<PAGE>

      respect to amounts due the Borrower and its Affiliates under the Option
      Agreement.

            "Warrant" has the meaning set forth in Section 2.1.

            "Warrant Registration Rights Agreement" has the meaning assigned to
      it in Section 2.2.

                                   SECTION 11.
                                  MISCELLANEOUS

      11.1 Amendments and Waivers. Neither this Agreement nor the Note, nor any
terms hereof or thereof, may be amended, supplemented or modified except in a
writing executed by the parties hereto in accordance with the provisions of this
subsection. In the case of any waiver, the Borrower and RSL COM and the Lender
shall be restored to their former positions and rights hereunder and under the
other Loan Documents, and any Event of Default waived shall be deemed to be
cured and not continuing; no such waiver shall extend to any subsequent or other
Event of Default or impair any right consequent thereon.

      11.2 Successors and Assigns. This Agreement shall inure to the benefit of
the Lender and its heirs, personal representatives, successors and assigns and
shall be binding upon the Borrower, RSL COM, RSL USA and the respective
successors and assigns of each of them, except that none of the Borrower, RSL
COM or RSL USA may assign or otherwise transfer any of its rights or obligations
under this Agreement without the prior written consent of the Lender and, other
than to Affiliates, the Lender may not assign or otherwise transfer any of its
rights or obligations under this Agreement for so long as the Commitment has not
been permanently reduced to zero without the consent of the Borrower.

      11.3 Notices. All notices, requests and other communications to any party
hereunder shall be in writing (including bank wire, telex, facsimile
transmission or similar writing) and shall be effective (i) if given by mail, 72
hours after such communication is deposited in the mail with first class postage
prepaid, or (ii) if given by any other means, when delivered at the address
specified below in this Section 11.3.

The Borrower:     RSL Communications PLC
                  c/o 810 Seventh Avenue, 32nd Floor
                  New York, N.Y. 10019
                  Attention:  Avery S. Fischer, Esq.
                  telecopy number: 212-445-7529

                  with a copy to:

                                       23
<PAGE>

                  Rosenman & Colin
                  575 Madison Avenue
                  New York, New York 10022
                  Attention:  Robert Kohl, Esq.
                  telecopy number: 212-940-8776

RSL COM:          RSL Communications, Ltd.
                  c/o 810 Seventh Avenue, 32nd Floor
                  New York, N.Y. 10019
                  Attention:  Avery S. Fischer, Esq.
                  telecopy number: 212-445-7529

                  with a copy to:

                  Rosenman & Colin
                  575 Madison Avenue
                  New York, New York 10022
                  Attention:  Robert Kohl, Esq.
                  telecopy number: 212-940-8776

RSL USA:          RSL COM U.S.A., Inc.
                  430 Park Avenue
                  New York, NY 10022
                  Attention:  Avery S. Fischer, Esq.

                  with a copy to:

                  Rosenman & Colin
                  575 Madison Avenue
                  New York, New York 10022
                  Attention:  Robert Kohl, Esq.
                  telecopy number: 212-940-8776

The Lender:       Ronald S. Lauder
                  767 Fifth Avenue, Suite 4200
                  New York, N.Y. 10153
                  telecopy number: 212-572-6758

                  with a copy to:

                  Debevoise & Plimpton
                  875 Third Avenue
                  New York, NY 10022
                  Attention:  Louis Begley, Esq.
                  telecopy number:  212-909-6836

                                       24
<PAGE>

      11.4 Expenses. The Borrower shall pay (i) the reasonable fees and expenses
of Debevoise & Plimpton, counsel for the Lender, in connection with the
preparation of the Loan Documents or any amendment thereof or any Event of
Default or alleged Event of Default thereunder and (ii) if an Event of Default
occurs, all out-of-pocket expenses incurred by the Lender, including reasonable
fees and expenses of counsel, in connection with such Event of Default and
collection, bankruptcy, insolvency and other enforcement proceedings resulting
therefrom. The Borrower shall indemnify the Lender against any transfer taxes,
documentary taxes, stamp duties, assessments or charges made by any Governmental
Authority by reason of the execution, delivery, amendment or enforcement of any
of the Loan Documents.

      11.5 No Waiver; Cumulative Remedies. No failure to exercise and no delay
in exercising, on the part of the Lender, any right, remedy, power or privilege
hereunder or under any Note shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege. The rights, remedies, powers and privileges
herein provided are cumulative and not exclusive of any rights, remedies, powers
and privileges provided by law.

      11.6 Survival of Representations and Warranties. All representations and
warranties made hereunder and in the Note and in any document, certificate or
statement delivered pursuant hereto or in connection herewith shall survive the
execution and delivery of this Agreement and the making of the Loans hereunder.

      11.7 Severability. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without, to the extent
permitted by law, invalidating the remaining provisions hereof, and any such
prohibition or unenforceability in any jurisdiction shall not, to the extent
permitted by law, invalidate or render unenforceable such provision in any other
jurisdiction.

      11.8 Integration. This Agreement and the Note represent the entire
agreement of the Borrower, RSL COM, RSL USA, and the Lender with respect to the
subject matter hereof, and supersede any and all prior arrangements and
understandings, oral or written, relating to the subject matter hereof and the
Note.

      11.9 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be considered an original but all of which
together shall constitute one and the same instrument.

      11.10 Governing Law. THIS AGREEMENT, THE NOTES AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HERETO AND THERETO SHALL FOR ALL PURPOSES BE GOVERNED
BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK, WITHOUT GIVING EFFECT TO ITS PRINCIPLES OR RULES OF CONFLICT OF LAWS TO
THE EXTENT SUCH PRINCIPLES OR RULES WOULD REQUIRE OR PERMIT THE APPLICATION OF
THE LAWS OF ANOTHER JURISDICTION.

                                       25
<PAGE>

      11.11 Submission to Jurisdiction. EACH OF THE BORROWER, RSL COM, RSL USA
AND THE LENDER AGREES THAT, IN CONNECTION WITH ANY LEGAL SUIT OR PROCEEDING
ARISING UNDER, OUT OF OR WITH RESPECT TO THIS AGREEMENT, THE NOTE OR ANY OTHER
LOAN DOCUMENT, IT SHALL SUBMIT TO THE JURISDICTION OF THE UNITED STATES COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK OR ANY STATE COURT LOCATED IN THE CITY AND
COUNTY OF NEW YORK, AND AGREES TO VENUE IN ANY SUCH COURT.

      11.12 Trial Without Jury. EACH OF THE BORROWER, RSL COM, RSL USA AND THE
LENDER AGREES THAT ANY LITIGATION GROWING OUT OF ANY CONTROVERSY WITH RESPECT
TO, IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT, THE NOTE OR ANY OTHER
LOAN DOCUMENT WILL BE TRIED BY A JUDGE SITTING WITHOUT A JURY AND HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY SUCH LEGAL
PROCEEDING.

      11.13 No Counterclaims. THE BORROWER AND RSL COM AND RSL USA HEREBY WAIVE
THE RIGHT TO ASSERT COUNTERCLAIMS (OTHER THAN COUNTERCLAIMS RELATED TO THE
TRANSACTION CONTEMPLATED HEREIN) IN ANY LITIGATION IN ANY COURT WITH RESPECT TO,
IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT, ANY NOTE, OR ANY OTHER LOAN
DOCUMENT.

                                       26
<PAGE>

            IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the date first above written:

                                    RSL COMMUNICATIONS PLC

                                    By: /s/
                                       -----------------------------------------
                                       Name:
                                       Title:

                                    RSL COM U.S.A., INC.

                                    By: /s/
                                       -----------------------------------------
                                       Name:
                                       Title:

                                    RSL COMMUNICATIONS, LTD.

                                    By: /s/
                                       -----------------------------------------
                                       Name:
                                       Title:

                                       /s/
                                       -----------------------------------------
                                       Ronald S. Lauder

                                       27

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