Document:

Specimen Certificate evidencing shares of common stock

 Exhibit 4.1 
 

 
  
 arbinet
Arbinet-thexchange, Inc. INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE COMMON STOCK PAR VALUE $0.001 PER SHARE CUSIP 03875P 10 0 SEE REVERSE FOR CERTAIN DEFINITIONS THIS CERTIFIES THAT is the owner of FULLY PAID AND NON-ASSESSABLE SHARES, OF
THE COMMON STOCK, $0.001 PAR VALUE, OF Arbinet-thexchange, Inc. (the “Corporation”) transferable on the books of the Corporation by the holder hereof in person or by duly authorized attorney upon surrender of this Certificate properly
endorsed. This Certificate is not valid until countersigned and registered by the Transfer Agent and Registrar WITNESS the facsimile seal of the Corporation and the facsimile signatures of its duly authorized officers. Dated: COUNTERSIGNED AND
REGISTERED REGISTRAR AND TRANSFER COMPANY (Cranford, NJ) TRANSFER AGENT AND REGISTRAR BY: AUTHORIZED SIGNATURE Secretary President and Chief Executive Officer 

 Arbinet-thexchange, Inc. 
  
 THE CORPORATION WILL FURNISH WITHOUT CHARGE TO EACH STOCKHOLDER WHO SO REQUESTS THE POWERS, DESIGNATIONS, PREFERENCES AND
RELATIVE, PARTICIPATING, OPTIONAL OR OTHER SPECIAL RIGHTS OF EACH CLASS OF STOCK OR SERIES THEREOF AND THE QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS OF SUCH PREFERENCES AND/OR RIGHTS. ANY SUCH REQUEST SHOULD BE ADDRESSED TO THE SECRETARY OF THE
CORPORATION AT ITS PRINCIPAL PLACE OF BUSINESS. 
  
 The following
abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according to applicable laws or regulations: 
  

									
	 TEN COM
	 	—	 	as tenants in common	  	UNIF GIFT MIN ACT   —	 	                           Custodian
                            
            (Cust)
                                        
      (Minor)
  
 under Uniform Gifts to
Minors
  
 Act
                                
                         (State)

	 TEN ENT
	 	—	 	as tenants by the entireties	  	 	 
	 JT TEN
	 	—	 	 as joint tenants with right of
 survivorship and not as
tenants
 in common
	  	 	 
					
	 	 	 	 	 	  	UNIF TRANS MIN ACT   —	 	                           Custodian
                            
            (Cust)
                                        
      (Minor)
  
 under Uniform Transfers to
Minors
  
 Act
                                
                         (State)

  
 Additional
abbreviations may also be used though not in the above list. 
  

					
	                For value received,  
	  	 	 	hereby sell, assign and transfer unto

  

							
	 PLEASE INSERT SOCIAL SECURITY OR OTHER
 IDENTIFYING NUMBER OF
ASSIGNEE
  
	  	 	 	 
	 		
	 	  	 	 	 
	
	 
	 Please print or typewrite name and address including
postal zip code of assignee

	
	 
	
	 
		
	 	 	Shares
	 of the Common Stock represented by the within Certificate, and do hereby irrevocably
constitute and appoint

	
	 
	 Attorney to transfer the said Shares on the books of the within-named Corporation with
full power of substitution in the premises.

				
	 Dated
	  	 	  	 	 	 

  
  
  
  

	
	  
 NOTICE: THE SIGNATURE TO
THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS WRITTEN UPON THE FACE OF THE CERTIFICATE, IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT, OR ANY CHANGE WHATEVER.
  
  
  

	  
 THE SIGNATURE(S) MUST BE
GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO S.E.C. RULE 17Ad-15.

  
  
 KEEP THIS CERTIFICATE IN A SAFE PLACE. IF IT IS LOST, STOLEN, MUTILATED OR DESTROYED, THE CORPORATION WILL REQUIRE A BOND OF INDEMNITY AS A CONDITION TO THE ISSUANCE
OF A REPLACEMENT CERTIFICATE.<PAGE>
                                                                    EXHIBIT 10.5

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

                           GMAC COMMERCIAL FINANCE LLC
                              FACTORING AGREEMENT

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

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

     1.   COVERED SALES; SECURITY INTEREST

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

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

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

     2.   CUSTOMER CREDIT APPROVAL

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

                                       1

<PAGE>

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

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

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

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

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

     4.   INTEREST; COMMISSIONS; FEES

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

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

<PAGE>

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

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

          (c) For Factor's services, Client shall pay to Factor within ten (10)
business days after the end of each of Client's semi-monthly billing cycles the
greater of (i) l/24th of the Minimum Annual Commission (as defined herein); or
(ii) the accrued commission for such semi-monthly billing cycle at the rate of
[*] of the gross face amount of each invoice arising in such semi-monthly period
evidencing a Purchased Account that is an Approved Account and that is due from
a Customer that is not a Foreign Customer and [*] of the gross face amount of
each invoice arising in such semi-monthly period evidencing a Purchased Account
that is an Approved Account and that is due from a Foreign Customer, on terms
not exceeding 15 days except with Factor's written approval and at Factor's sole
option, terms for specific Customers may be up to 30 days (such maximum terms of
15 days or 30 days being hereinafter referred to as the "Maximum Invoice Days"),
plus an additional [*] for each additional 30 days or portion thereof of selling
terms; provided, however, that if Client changes the terms any invoice whether
or not Factor consents to such change (it being understood that nothing in this
provision diminishes Factor's rights or Client's obligations under any other
provision hereof), then the commission on the Gross Face Amount of that invoice
shall be the commission hereinabove set forth plus [*] for each thirty days or
portion thereof of such change. The aggregate amount of commissions that Client
is obligated to pay to Factor with respect to Purchased Accounts shall not be
less than a minimum annual commission (the "Minimum Annual Commission") of
$550,000 for the first Contract Year that this agreement is in effect and
$725,000 for the second Contract Year.

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

     5.   MATURED FUNDS

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

     6.   CHARGES; BALANCES

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

     7.   REPRESENTATIONS, WARRANTIES AND COVENANTS

          Client hereby represents, warrants and covenants that:

                                       3

<PAGE>

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

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

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

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

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

          (f) Client shall, within five (5) business days of their issuance,
provide Factor with duplicate originals of all credits which Client issues to
Client's Customers that are obligated on Approved Accounts or electronically
transmit the details of such credits to Factor in a format acceptable to Factor,
and, in either case, notify Factor in writing of any Disputes (regardless of
merit) within five (5) business days after the Dispute is asserted and, within
five (5) business days after the Dispute is asserted, provide to Factor copies
of all communications between Client and the Customer with regard to the
Dispute. Client will settle all Disputes at no cost or expense to Factor;
Factor's practice is to allow Client a reasonable time to do so. Should Factor
so elect, Factor may at any

                                       4

<PAGE>

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

          (g) Factor's Credit Risk, if any, on a Purchased Account shall
immediately terminate without any action on Factor's part in the event that (i)
there is a Dispute (regardless of merit) as a ground for non-payment of the
Purchased Account or as a ground for non-payment of any other Purchased Account
due from the Customer obligated on such Purchased Account, except that Factor's
Credit Risk, if any, on Purchased Accounts shall remain in effect following the
assertion of a Dispute to the extent of the dollar amount of the non-disputed
amount of such Purchased Account;(ii) any representation, warranty or covenant
made by Client to Factor in this agreement or elsewhere as to the Purchased
Account is breached; (iii) Client grants more extended terms or additional
dating beyond the Maximum Invoice Days on the Purchased Account without Factor's
prior written approval; (iv) Client has failed to comply with the Collection
Procedures Guidelines with respect to such Purchased Account; (v) Client shall
make any change to the terms of the Purchased Account without Factor's prior
written consent; or (v) Client fails to provide to Factor the reports,
information or documentation required to be provided hereunder with respect to
the Purchased Account (whether or not such reports, information or documentation
are requested by Factor before or after the effective date of termination of
this Agreement) or fails to notify Factor of a Dispute within ten (10) business
days after it is asserted or understates to Factor the amount of a Dispute
asserted by a Customer, Factor's Credit Risk, if any, on all Purchased Accounts
shall terminate without any action on Factor's part if Client fails to pay
commissions within ten (10) business days of the end of each of Client's
semi-monthly billing cycles, as specified in Section 4(c) and any other
Obligations within five (5) business days after Factor's demand therefor. Client
shall repay to Factor, within five business days after Factor's demand therefor,
the portion of the purchase price of a Purchased Account that Factor paid to
Client that becomes the subject of a Dispute asserted subsequent to such
payment, together with interest thereon from the Settlement Date of such
Purchased Account to the date of changeback; such action on Factor's part shall
not be deemed a reassignment of such Purchased Account and will not impair
Factor's rights thereto or security interest therein, which will continue to be
effective until this agreement is terminated and all Obligations are fully
satisfied.

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

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

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

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

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

                                       5

<PAGE>

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

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

     9.   TERMINATION

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

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

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

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

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

                                       6

<PAGE>

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

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

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

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

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

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

     11.  REMEDIES; WAIVERS; LIMITATION OF LIABILITY

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

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

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

     12.  DEFINITIONS

     As used herein:

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

                                       7

<PAGE>

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

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

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

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

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

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

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

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

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

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

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

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

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

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

          "Dispute" shall mean any cause for full or partial nonpayment of a
Purchased Account, including, without limitation, any alleged defense,
counterclaim, offset, dispute or other claim whether arising from or relating to
the sale of goods or rendition of services or arising from or relating to any
other transaction or occurrence, except if such cause is solely and exclusively
the financial inability of Client's Customer to pay a Purchased Account at
maturity.

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

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

          "Federal Funds Rate" shall mean, for any day, the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or
if such day is not a business day, for the next preceding business day) by the
Federal Reserve Bank of New York, or if such rate is not so published

                                       8

<PAGE>

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

                                       9

<PAGE>

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

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

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

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

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

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

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

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

     13.  GENERAL

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

                                       10

<PAGE>

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

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

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

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

                                        Very truly yours,

                                        GMAC COMMERCIAL FINANCE LLC

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

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

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

                                        ARBINET-THEXCHANGE, INC.

ATTEST:

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

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

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

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

GMAC COMMERCIAL FINANCE LLC

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

                                       11

<PAGE>

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

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

Schedule 7(c)     Client Organizational Information

                  Organization Type: Corporation

                  Jurisdiction of Organization: Delaware

                  Organizational Identification Number: 268341

                  Federal Employer Identification Number: 13-3930916

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

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

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

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

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

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

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

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

                                       12

<PAGE>

                  7.   12/18 Paul Street
                       London EC2A 4JH

Schedule 8(a)  -  Taxes

                       Value Added Tax under the law of the United Kingdom

                                       13

<PAGE>

                             EXPORT RECEIVABLE RIDER
                             TO FACTORING AGREEMENT

                                                               February 10, 2003

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

Gentlemen/Ladies:

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

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

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

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

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

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

     3. "Covered Risk" means the following:

<PAGE>

          A. The Insolvency of any of your Customers.

          B. The failure of a Customer to pay us solely due to the financial
inability of the Customer to pay the amount owing under the contract within 6
months of original due date of payment and excluding the Customer's failure to
pay as the result of an Unresolved Dispute, as defined in and subject to the
terms of Section 17 hereof.

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

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

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

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

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

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

     4. "Insolvency" means and shall occur if:

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

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

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

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

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

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

<PAGE>

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

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

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

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

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

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

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

<PAGE>

     10. Notwithstanding anything in the Factoring Agreement to the contrary, we
do not assume the Credit Risk on any Foreign Receivable and the purchase by us
of such Foreign Receivable shall be with Full recourse to you if (a) we revoke
the credit line with respect to a Customer prior to the Dispatch (as defined
herein) or rendition of services, as the case may be; (b) the Customer is one of
your subsidiaries or associated companies or you have a direct or indirect
interest in, or connection with, the Foreign Customer; (c) there is an
Unresolved Dispute between you and the Customer (as defined in and subject to
the terms of Section 17 hereof); (d) you or your agents fail to fulfill the
terms and conditions of your contract of sale with the Customer or you fail to
comply with any law (including any order, decree or regulation) having the force
of law; (e) to the extent of currency fluctuations and/or devaluations,
including but not limited to, any shortfall between the amount of the Foreign
Receivables and the value of the local currency deposit as of the date of that
deposit or at the date of completion of transfer formalities, whichever is later
except where the government of the Customer's country decrees that the
Customer's obligations have been discharged by the payment of the lesser amount,
(f) the reason such Foreign Receivable is not paid arises out of or is
contributed to or directly or indirectly caused by: (i) war (whether before or
after the outbreak of hostilities) between any of the following: The People's
Republic of China, France, United Kingdom of Great Britain and Northern Ireland,
The Russian Federation and the United States of America or a war, declared or
not, between the United States or Canada and the country of the Customer; (ii)
your failure or the failure of your agents or the Customer to comply with local
laws and regulations, including but not limited to the failure to obtain any
import or export license or other authorization necessary for the performance of
the sales contract underlying the Foreign Receivable or where the performance of
such sales contract would contravene any exchange control regulation; (iii)
expropriation, confiscation, nationalization, or destruction of the whole or any
part of the Customer's assets under any law, or regulation having the force of
law, in any country (or any part of it) by any person or persons exercising
powers of government in that country (or any part of it); (iv) ionizing
radiations or contamination by radioactivity from any nuclear waste from the
combustion of nuclear fuel; (v) radioactive, toxic, explosive, ionizing or other
hazardous or contaminating properties of any explosive nuclear assembly or
nuclear component of it; or (vi) the use, handling or transportation of
radioactive material.

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

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

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

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

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

                                       4

<PAGE>

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

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

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

     14. You agree as follows:

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

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

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

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

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

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

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

     17. An Unresolved Dispute is a claim by the Customer that it is justified
in withholding payment on a Foreign Receivable in full or in part for any reason
(a "Claim") that, within 30 days after its assertion, does not become a Resolved
Dispute. A Resolved Dispute is a Claim by the Customer that, within 30 days of
its assertion, is communicated by you to us in writing and is resolved by your
issuance of a credit which reduces the amount due on the Foreign Receivable to
the undisputed amount of the invoice. If a Settlement Date occurs with respect
to a Foreign Receivable within 30 days of the assertion of a Claim that has been
communicated by you to us in writing within such 30 day period but which has not
yet been resolved by your issuance of a credit equal to the amount in dispute,
such Settlement Date shall automatically be extended until the Claim is resolved
or such 30 day period ends, whichever first occurs. If the Claim is not settled
within such 30 day period, we shall no longer have the Credit Risk or Covered
Risk (as the case may be) on the affected Foreign Receivable. If the Claim is
both communicated by you to us in writing and resolved within such 30 day
period, the amount of our Credit Risk or Covered Risk (as the case may be) and
the amount of the purchase price of the Foreign Receivable, shall be reduced by
the amount of the credit that you issue.

                                       5

<PAGE>

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

                                        GMAC COMMERCIAL FINANCE LLC

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

Agreed:
ARBINET-THEXCHANGE, INC.

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

                                       6

<PAGE>

                           GMAC Commercial Finance LLC

                           1290 Avenue of the Americas
                                New York NY 10104

                                                               February 10, 2003

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

Gentlemen/Ladies:

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

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

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

Very truly yours,

GMAC COMMERCIAL FINANCE LLC

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

ACKNOWLEDGED:

ARBINET-THEXCHANGE, INC.

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

<PAGE>

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

                                                               December 12, 2003

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

Gentlemen:

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

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

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

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

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

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

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

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

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

<PAGE>

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

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

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

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

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

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

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

                                       2

<PAGE>

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

                                        Very truly yours,
                                        GMAC COMMERCIAL FINANCE LLC

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

AGREED

ARBINET-THEXCHANGE, INC.

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

                                       3

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00072-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00072-of-00352.parquet"}]]