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Master Carrier Agreement [Amendment] - AT&T Corp. and Tel-Save Inc.

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                      AMENDMENT TO MASTER CARRIER AGREEMENT

         This amendment,  dated as of January 1, 1999, modifies the terms of the
Master  Carrier  Agreement  entered  into by and among AT&T Corp.  ("AT&T")  and
Tel-Save, Inc. ("Tel-Save") on April 22, 1998, as follows:.

         1.    Section  1.1(e) of the  Master  Carrier  Agreement  is amended by
replacing the current page 6 (bearing the legend "dated  04/22/98 9:48 PM") with
revised page 6 (bearing the legend "Added by Amendment  dated as of  01/01/99"),
as attached to this Amendment.

         2.    Sections 2.2, 3.1(a),  3.1(b),  3.2(c),  and 3.2(d) of the Master
Carrier  Agreement are amended by replacing the current pages 10-13 (bearing the
legend "dated 04/22/98 9:48 PM") with revised pages 10-13.1  (bearing the legend
"Added by Amendment dated as of 01/01/99"), as attached to this Amendment.

         3.    The  introductory  paragraph of Section 1 of  Attachment A of the
Master Carrier Agreement is revised by replacing the current page 1 (bearing the
legend dated 04/22/98 9:48 PM) with revised page 1 (bearing the legend "Added by
Amendment dated as of 01/01/99"), as attached to this Amendment.

         4.    Section 1.2 of  Attachment A of the Master  Carrier  Agreement is
revised by replacing the current page 5 (bearing the legend dated  04/22/98 9:48
PM) with  revised page 5 (bearing  the legend  "Added by  Amendment  dated as of
01/01/99"), as attached to this Amendment.

         5.    A new Section 1.5 is added to Attachment A of the Master  Carrier
Agreement  by replacing  the current  page 7 (bearing the legend dated  04/22/98
9:48 PM) with revised  page 7 and new pages  7.1-7.20  (each  bearing the legend
"Added by Amendment dated as of 01/01/99"), as attached to this Amendment.



<PAGE>


         6.    Attachment  D of the  Master  Carrier  Agreement  is  revised  by
replacing  the current  Attachment D with the revised  Attachment D (bearing the
legend  "Added  by  Amendment  dated  as of  01/01/99"),  as  attached  to  this
Amendment.

                                      * * *

         AT&T   and   Tel-Save,    acting   through   their   duly    authorized
representatives,  hereby  agree to the terms set  forth in this  Amendment,  and
warrant that their respective  signatories  whose  signatures  appear below have
been and are of the date of this Amendment duly  authorized by all necessary and
appropriate  corporate  action to execute this  Amendment.

TEL-SAVE,  INC.                                      AT&T CORP.

By:                                                  By:
   ------------------------                             ------------------------

---------------------------                          ---------------------------
(Typed or printed name)                              (Typed or printed name)


---------------------------                          ---------------------------
(Title)                                              (Title)


---------------------------                          ---------------------------
(Date)                                               (Date)









<PAGE>









            REVISED PAGE 6, 10-13.1 OF THE MASTER CARRIER AGREEMENT,

                 REVISED PAGES 1, 5 AND 7-7.20 OF ATTACHMENT A,

                            AND REVISED ATTACHMENT D







                   AT&T/Tel-Save Confidential and Proprietary


<PAGE>
                                      -6-


          (d) AT&T MEGACOM(R)  Service,  as described and defined in AT&T Tariff
F.C.C. No. 1, as amended from time to time.

          (e) AT&T 800 Services,  as described and defined in AT&T Tariff F.C.C.
Nos.  2 and 14, as  amended  from time to time,  consisting  of:  basic AT&T 800
Service-Domestic;  basic AT&T 800 Service-Canada; basic AT&T 800 Service-Mexico;
basic  AT&T  800   Service-Overseas;   AT&T  800  Plan  K;  AT&T   MEGACOM   800
Service-Domestic;   AT&T   MEGACOM   800   Service-Canada;   AT&T   MEGACOM  800
Service-Mexico;  AT&T  MEGACOM  800  Service-Overseas;   AT&T  800  READYLINE(R)
Service-Domestic;   AT&T  800  READYLINE  Service-Canada;   AT&T  800  READYLINE
Service-Mexico;  AT&T 800  READYLINE  Service-Overseas;  and AT&T 800  READYLINE
Service-Puerto Rico and the U.S. Virgin Islands.

          (f) AT&T Private  Line  Services  (AT&T  ACCUNET T1.5 Service and AT&T
ACCUNET T45 Service),  as defined and described in AT&T Tariff F.C.C.  No. 9, as
amended from time to time.

          (g)  AT&T  1.544  Mbps  Echo   Cancellation.   AT&T  1.544  Mbps  Echo
Cancellation  is an  Office  Function  providing  non-frequency  selective  echo
cancellation  in AT&T's  central  office to improve  the quality of an AT&T T1.5
Inter  Office  Channel  used  for  voice  transmissions.  Echo  cancellation  is
disruptive to data  transmissions  at speeds of 64 kbps and higher,  and is only
available on an AT&T T1.5 Inter Office  Channel that is  designated  by Tel-Save
for use for voice transmissions, provided that the Local Channel associated with
the IOC terminates at a Tel-Save designated  location.  If data transmissions at
speeds  below  64 kbps  over  an IOC  conditioned  with  Echo  Cancellation  are
disrupted,  AT&T will work with  Tel-Save in an effort to determine the cause of
the  disruption.  No [The next page of this  Agreement is page 7, dated 04/22/98
9:48 PM]



                                                        Added by Amendment dated
                                                                  as of 01/01/99


<PAGE>


                                      -10-

1.6  DISCONTINUANCE OF CONTRACT TARIFF 1715

     (a)  Effective  as  of  the  Commencement  Date,  Tel-Save discontinues its
subscription  to  AT&T  Contract  Tariff  1715 ("CT 1715"), pursuant to CT 1715,
Se4ction  6.E. A Termination Charge will apply as provided in that Section. AT&T
will  provide  a  limited-purpose credit under this Agreement in an amount equal
to  the  amount of such Termination Charge. The credit will be applied to offset
the  amount  of such Termination Charge, and cannot be applied against any other
charges.

     (b)  Except  as  specified  in this Section 1.6, Tel-Save shall not seek to
discontinue  without  liability  any AT&T term plans. Contract Tariffs, or other
serving  arrangements  in  connection  with  its  order  for  service under this
Agreement.



                  2. TERM OF AGREEMENT AND RELATED PROVISIONS

2.1 EFFECTIVE DATE: COMMENCEMENT DATE.

     The  "Effective  Date"  of  this Agreement shall be the date on which it is
executed  by  each  party.  The  "Commencement  Date"  shall be May 1, 1998. The
rates,  terms  and  conditions  provided under this Agreement will not apply the
Commencement Date.


2.2 TERM OF AGREEMENT.

     The  "Term"  of  this Agreement begins on the Commencement Date and ends on
the  date  before  the third-year anniversary of the Commencement Date. However,
with  respect  to  the Services specified in Section 6 of Attachment D, the Term
is  as  follows:  for  Section  6.1(a)  the Term for Private Line Services shall
begin  on  1/1/1999  and  end  on  12/31/2004;  for  Section 6.1(b) the Term for
Private  Line  Services  shall  begin on 1/1/1999 and end on 12/31/1999; and




                                                        Added by Amendment dated
                                                                  as of 01/01/99


<PAGE>


                                      -11-

for Section  6.1(c) the Term for Private Line  Services  shall begin on 1/1/1999
and end on 12/31/2002.



                                 3. COMMITMENTS


3.1  MINIMUM ANNUAL REVENUE COMMITMENT.

     (a) The Minimum Annual Revenue Commitment ("MARC") is fifty million dollars
($50,000,000)  for the  first and  second  years of the  Term,  and  thirty-five
million dollars  ($35,000,000) for the third year of the Term. Each such year is
sometimes referred to as a "MARC Period." The total charges for the Services set
forth in 1.1 and 1.2(a),  together with the total  charges  incurred by Tel-Save
for service  under AT&T  Contract  Tariff No.  2039,  net of all  discounts  and
credits other than credit  allowances  for  interruptions  and outages,  ("Total
Qualified  Charges")  shall be applied to satisfy the MARC for the year in which
the charges are incurred. Notwithstanding any other provision of this Agreement,
5 separate  Private Line Services  MARC of four million  eight hundred  thousand
dollars  ($4,800,000)  shall apply from 1/1/99 to 12/31/04 for AT&T ACCUNET T1.5
Service IOCs, as specified in Section  6.1(a) of Attachment D. If, at the end of
any Private Line  Services MARC period,  the total Charges  incurred by Tel-Save
for AT&T ACCUNET T1.5  Service IOCs for that Private Line  Services  MARC period
has not exceeded the Private Line Services MARC for that period,  Tel-Save shall
pay a Shortfall Charge equal to sixty-five  (65%) of the difference  between the
Private Line  Services MARC and the amount of the total charges for AT&T ACCUNET
T1.5 Service IOCs  incurred by Tel-Save  for that  Private  Line  Services  MARC
period.

     (b) If, at the end of any month in the  second or third  years of the Term,
the Total  Qualified  Charges  incurred by Tel-Save during the Term is least one
hundred and ten million




                                                        Added by Amendment dated
                                                                  as of 01/01/99

<PAGE>

                                      -12-


dollars  ($110,000,000)  and  Tel-Save  is current in  payments  to AT&T for all
telecommunications  services,  Tel-Save  may,  for the  remainder  of the  Term,
continue  to purchase  Services  under this  Agreement,  without any MARC or MAP
obligations.  Tel-Save will be considered  current in payment to AT&T under this
Agreement if all billed and outstanding  charges are paid, except for any amount
for which the date for timely payment under Section 6.1(e) has not yet occurred.
This section shall not apply to the separate Private Line Services MARC.

     (c) In the event that Tel-Save  exercises  its right to terminate  affected
service  components  under  Section  5.2(b),  the MARC will be reduced  (for the
then-current  MARC Period) by the average monthly  charges  associated with such
service  components  during the three  full  billing  months  prior to the event
giving  rise to the  right to  terminate,  times the  number of full or  partial
months  remaining in the MARC Period  during which the service  components  were
terminated,  and (for each  remaining  full MARC Period) by the average  monthly
charges  associated with such service  components  during the three full billing
months prior to the event giving rist to the right to  terminate,  times twelve.

     (d) If, at the end of any MARC Period, the Total Qualified Charges incurred
by Tel-Save  for that period have not exceeded  the MARC,  Tel-Save  shall pay a
MARC Shortfall Charge. The MARC Shortfall Charge will vary as follows:





                                                        Added by Amendment dated
                                                                  as of 01/01/99


<PAGE>

                                      -13-

<TABLE>
<CAPTION>
IF THE TOTAL QUALIFIED CHARGE ARE                  THE MARC SHORTFALL CHARGE IS
<S>                                            <C>
More than 80% of the MARC ..................       3% of the Total Qualified Charges
More than 60%, but not more than 80%, of the
 MARC ......................................       5% of the Total Qualified Charges
More than 40%, but not more than 60%, of the
 MARC ......................................       8% of the Total Qualified Charges
More than 20%, but not more than 40%, of the
 MARC ......................................       10% of the Total Qualified Charges
10% or less of the MARC ....................       Two million five hundred thousand dollars
</TABLE>

     (e) In the event that this  Agreement is terminated  during MARC Period for
any  reason for which a  Termination  Charge  does not apply,  the MARC for that
partial period will be adjusted by  multiplying  that full MARC by the number of
full months of service in the MARC Period prior to the date of termination,  and
dividing by 12.  For purposes of  determining  the amount of any MARC  Shortfall
Charge,  the adjusted MARC will apply for an adjusted MARC Period, consisting of
the same months counted in calculating  the adjusted MARC. For example,  if this
Agreement is terminated  during  month  ten of the second year of the Term,  the
adjusted  MARC would be $50  million  x 9/12, or  $37.5  million.  If  the Total
Qualified  Charges incurred by Tel-Save during the first nine full months of the
MARC Period were only $28 million (75% of the adjusted MARC), the MARC Shortfall
Charge would be 5% of $28 million, or $1.4 million.

3.2  MINIMUM ANNUAL PERCENTAGE.

     (a) Except as provided in Section  3.1(b),  the Minimum  Annual  Percentage
         ("MAP")


                                                        Added by Amendment dated
                                                                  as of 01/01/99


<PAGE>

                                     -13.1-

shall apply for each year of the Term, each of which is sometimes referred to as
a "MAP Period."

     (b) In the event that this  Agreement is  terminated  for any reason in the
middle of a MAP  Period,  the MAP shall  apply for the  portion  of that  period
ending as of the date of such termination.

     (c) The MAP and  Private  Line  Services  MAP  apply  to  Tel-Save  and its
Affiliates,  collectively. (An entity is an "Affiliate" of a party of the entity
owns a  controlling  interest  in the party or an  Affiliate  of  Tel-Save  will
continue  to be subject to the MAP  requirements  of this  Agreement  until AT&T
received notice from Tel-Save  advising that such entity is no longer a Tel-Save
Affiliate.

     (d) The MAP shall be ninety  percent  (90%) for all  domestic  outbound and
inbound  voice  InterLATA   services  ("MAP  Services").   Notwithstanding   and
otherprovision of this Agreement, a separate Private Line Services MAP of ninety
percent  (90%) shall apply from 1/1/99 to 12/31/04  for all Private Line Service
and  capacity  needs,  including  T.1,  T.45,  OC3,  OC12,  and OC48  IOCs.  All
references  to MAP in Section 3.2 of this  Agreement  shall be deemed to be both
references to both MAP and Private Line Services MAP.

     (e)  Within  sixty  (60) days after the end of any period for which the MAP
applies, Tel-Sve shall certify to AT&T in writing:

      [The next page of this Agreement is page 14, dated 04/22/98 9:48 PM]





                                                        Added by Amendment dated
                                                                  as of 01/01/99


<PAGE>

AT&T NETWORK CONNECTION PLATFORM                                    ATTACHMENT A
                                                                    Page 1 of 14

                        AT&T NETWORK CONNECTION PLATFORM
                        --------------------------------

                            1. SERVICE DESCRIPTIONS
                               --------------------
                                      * * *


<PAGE>

PRICING                                                             ATTACHMENT D
                                                                    Page 1 of 50


                                    PRICING
                                    -------
                                     * * *