SAVVIS COMMUNICATIONS CORP
EXHIBIT 10.1
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>2
<FILENAME>0002.txt
<DESCRIPTION>EXHIBIT 10.1
<TEXT>


                                                                    EXHIBIT 10.1

CONFIDENTIAL MATERIALS HAVE BEEN OMITTED FROM THIS EXHIBIT PURSUANT TO A REQUEST
FOR  CONFIDENTIAL  TREATMENT AND HAVE BEEN FILED  SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.

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

                      AMENDED AND RESTATED CREDIT AGREEMENT

                          dated as of September 5, 2000

                                  by and among

            SAVVIS COMMUNICATIONS CORPORATION, a Delaware Corporation
                                 as a Guarantor,

            SAVVIS COMMUNICATIONS CORPORATION, a Missouri Corporation
                                as the Borrower,

                              NORTEL NETWORKS INC.
                           as the Administrative Agent

                                       and

                            THE LENDERS NAMED HEREIN

                   $235,000,000 ADVANCING TERM LOANS FACILITY

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

<PAGE>


                                TABLE OF CONTENTS

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                                                                                                                 Page
<S>                                                                                                               <C>
ARTICLE 1 Definitions..............................................................................................1
          Section 1.1       Definitions, etc.......................................................................1
          Section 1.2       Other Definitional Provisions.........................................................26
          Section 1.3       Accounting Terms and Determinations...................................................27
          Section 1.4       Financial Covenants and Reporting.....................................................27
ARTICLE 2 Loans...................................................................................................28
          Section 2.1       Commitments...........................................................................28
          Section 2.2       Notes.................................................................................28
          Section 2.3       Repayment of Loans....................................................................29
          Section 2.4       Interest..............................................................................29
          Section 2.5       Borrowing Procedure...................................................................30
          Section 2.6       Optional Prepayments, Conversions and Continuations of Loans..........................31
          Section 2.7       Mandatory Prepayments.................................................................31
          Section 2.8       Minimum Amounts.......................................................................32
          Section 2.9       Certain Notices.......................................................................32
          Section 2.10      Use of Proceeds.......................................................................33
          Section 2.11      Fees..................................................................................34
          Section 2.12      Computations..........................................................................34
          Section 2.13      Termination or Reduction of Commitments...............................................35
ARTICLE 3 Payments................................................................................................35
          Section 3.1       Method of Payment and Application of Payments.........................................35
          Section 3.2       Pro Rata Treatment....................................................................36
          Section 3.3       Sharing of Payments, Etc..............................................................36
          Section 3.4       Non-Receipt of Funds by the Administrative Agent......................................37
          Section 3.5       Taxes.................................................................................37
          Section 3.6       Withholding Tax Exemption.............................................................38
          Section 3.7       Reinstatement of Obligations..........................................................38
          Section 3.8       No Force Majeure, Disputes............................................................39
ARTICLE 4 Yield Protection and Illegality.........................................................................39
          Section 4.1       Additional Costs......................................................................39
          Section 4.2       Limitation on Types of Loans..........................................................41
          Section 4.3       Illegality............................................................................41
          Section 4.4       Treatment of Affected Loans...........................................................41
          Section 4.5       Compensation..........................................................................42
          Section 4.6       Capital Adequacy......................................................................42
          Section 4.7       Additional Interest on Eurodollar Loans...............................................43
          Section 4.8       Replacement of Lenders................................................................43
ARTICLE 5 Security................................................................................................44
          Section 5.1       Collateral............................................................................44
          Section 5.2       Guaranties............................................................................45
          Section 5.3       New Subsidiaries; Additional Capital Stock............................................45

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                                       ii

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<S>                                                                                                              <C>
          Section 5.4       Mortgaged Properties; Landlord Waivers................................................46
          Section 5.5       Further Assurances....................................................................47
          Section 5.6       Setoff................................................................................48
ARTICLE 6 Conditions Precedent....................................................................................48
          Section 6.1       Initial Extension of Credit...........................................................48
          Section 6.2       All Extensions of Credit..............................................................52
          Section 6.3       Closing Certificates..................................................................53
ARTICLE 7 Representations and Warranties..........................................................................53
          Section 7.1       Existence.............................................................................53
          Section 7.2       Financial Statements..................................................................54
          Section 7.3       Corporate Action; No Breach...........................................................54
          Section 7.4       Operation of Business; Licenses.......................................................55
          Section 7.5       Intellectual Property.................................................................55
          Section 7.6       Litigation and Judgments..............................................................55
          Section 7.7       Rights in Properties; Liens...........................................................56
          Section 7.8       Enforceability........................................................................56
          Section 7.9       Approvals.............................................................................56
          Section 7.10      Debt..................................................................................56
          Section 7.11      Taxes.................................................................................56
          Section 7.12      Margin Securities.....................................................................57
          Section 7.13      ERISA.................................................................................57
          Section 7.14      Disclosure............................................................................58
          Section 7.15      Loan Parties; Capitalization..........................................................58
          Section 7.16      Compliance with Laws..................................................................58
          Section 7.17      Investment Company Act................................................................58
          Section 7.18      Public Utility Holding Company Act....................................................58
          Section 7.19      Environmental Matters.................................................................58
          Section 7.20      Year 2000 Compliance..................................................................59
          Section 7.21      Labor Disputes and Acts of God........................................................60
          Section 7.22      Material Contracts....................................................................60
          Section 7.23      Outstanding Securities................................................................60
          Section 7.24      Solvency..............................................................................60
          Section 7.25      Employee Matters......................................................................60
          Section 7.26      Insurance.............................................................................60
          Section 7.27      Common Enterprise.....................................................................61
          Section 7.28      Burdensome Agreements.................................................................61
ARTICLE 8 Affirmative Covenants...................................................................................61
          Section 8.1       Reporting Requirements................................................................61
          Section 8.2       Maintenance of Existence; Conduct of Business.........................................65
          Section 8.3       Maintenance of Properties and Licenses................................................65
          Section 8.4       Taxes and Claims......................................................................65
          Section 8.5       Insurance.............................................................................66
          Section 8.6       Inspection Rights.....................................................................67
          Section 8.7       Keeping Books and Records.............................................................67
          Section 8.8       Compliance with Laws..................................................................67
          Section 8.9       Compliance with Agreements............................................................68

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                                      iii

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<S>                                                                                                               <C>
           Section 8.10      Further Assurances....................................................................68
           Section 8.11      ERISA.................................................................................68
           Section 8.12      Non-Consolidation.....................................................................68
           Section 8.13      Year 2000 Compliance..................................................................68
           Section 8.14      Trade Accounts Payable................................................................69
           Section 8.15      Delivery of Certain Amendments, Material Contracts and Subordinated Debt
                             Documents.............................................................................69
           Section 8.16      Interest Rate Protection..............................................................69
           Section 8.17      Ownership of Telecommunications Assets and Telecommunications Business;
                             Holdings to Remain a Holding Company..................................................70
           Section 8.18      Observation Rights....................................................................70
           Section 8.19      Contributions to the Equity Capital of the Borrower...................................70
           Section 8.20      Veracity and Accuracy of Financial Statements.........................................70
           Section 8.21      Investment Company Act and Public Utility Holding Company Act.........................71
           Section 8.22      Management Team.......................................................................71
ARTICLE 9  Negative Covenants......................................................................................71
           Section 9.1       Debt. ................................................................................71
           Section 9.2       Limitation on Liens...................................................................72
           Section 9.3       Mergers, Etc..........................................................................73
           Section 9.4       Restricted Payments...................................................................73
           Section 9.5       Investments...........................................................................74
           Section 9.6       Limitation on Issuance of Capital Stock...............................................75
           Section 9.7       Transactions with Affiliates..........................................................75
           Section 9.8       Disposition of Property...............................................................75
           Section 9.9       Sale and Leaseback....................................................................76
           Section 9.10      Lines of Business.....................................................................76
           Section 9.11      Environmental Protection..............................................................77
           Section 9.12      Intercompany Transactions.............................................................77
           Section 9.13      Management Fees.......................................................................77
           Section 9.14      Master Purchase Agreement.............................................................77
           Section 9.15      Modification of Certain Agreements....................................................77
           Section 9.16      ERISA.................................................................................78
           Section 9.17      No Prepayment of Debt, Etc............................................................78
           Section 9.18      Rights of Third Parties in Intellectual Property......................................79
ARTICLE 10 Financial Covenants.....................................................................................79
           Section 10.1      Total Debt to Total Capitalization....................................................79
           Section 10.2      Senior Debt to Total Capitalization...................................................80
           Section 10.3      Total Debt to Annualized EBITDA.......................................................80
           Section 10.4      Senior Debt to Annualized EBITDA......................................................80
           Section 10.5      Annualized EBITDA.....................................................................80
           Section 10.6      Fixed Charge Coverage.................................................................80
           Section 10.7      Capital Expenditures..................................................................80
           Section 10.8      Minimum Gross Revenue.................................................................81
           Section 10.9      Gross Margin Percentage...............................................................81
ARTICLE 11 Default.................................................................................................81

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                                       iv

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<S>                                                                                                               <C>
           Section 11.1      Events of Default.....................................................................81
           Section 11.2      Remedies..............................................................................84
           Section 11.3      Performance by the Administrative Agent, etc..........................................85
ARTICLE 12 The Administrative Agent................................................................................86
           Section 12.1      Appointment, Powers and Immunities....................................................86
           Section 12.2      Rights of Administrative Agent as a Lender............................................87
           Section 12.3      Defaults..............................................................................87
           Section 12.4      INDEMNIFICATION.......................................................................87
           Section 12.5      Independent Credit Decisions..........................................................88
           Section 12.6      Several Commitments...................................................................88
           Section 12.7      Successor Administrative Agent........................................................89
ARTICLE 13 Miscellaneous...........................................................................................89
           Section 13.1      Expenses..............................................................................89
           Section 13.2      INDEMNIFICATION.......................................................................90
           Section 13.3      Limitation of Liability...............................................................91
           Section 13.4      No Duty...............................................................................91
           Section 13.5      No Fiduciary Relationship.............................................................91
           Section 13.6      Equitable Relief......................................................................91
           Section 13.7      No Waiver; Cumulative Remedies........................................................92
           Section 13.8      Successors and Assigns................................................................92
           Section 13.9      Survival..............................................................................95
           Section 13.10     ENTIRE AGREEMENT......................................................................96
           Section 13.11     Amendments............................................................................96
           Section 13.12     Maximum Interest Rate.................................................................97
           Section 13.13     Notices...............................................................................98
           Section 13.14     GOVERNING LAW; SUBMISSION TO JURISDICTION; SERVICE OF PROCESS.........................98
           Section 13.15     Counterparts..........................................................................99
           Section 13.16     Severability..........................................................................99
           Section 13.17     Headings..............................................................................99
           Section 13.18     Construction..........................................................................99
           Section 13.19     Independence of Covenants.............................................................99
           Section 13.20     Confidentiality.......................................................................99
           Section 13.21     WAIVER OF JURY TRIAL.................................................................100
           Section 13.22     Approvals and Consent................................................................100
           Section 13.23     Service of Process...................................................................101
           Section 13.24     Amendment and Restatement of the Original Credit Agreement...........................101
           Section 13.25     Assignments of Original Loans........................................................101


                                INDEX TO EXHIBITS

Exhibit A           -    Form of Assignment and Acceptance
Exhibit B           -    Form of Notes
Exhibit C           -    Form of Notice of Borrowings, Conversions, Continuations and Prepayments

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                                       v

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<S>                      <C>

Exhibit D           -    Form of Compliance Certificate

                               INDEX TO SCHEDULES

Schedule 1.1(a)     -    Certain Permitted Holders
Schedule 1.1(b)     -    Certain Permitted Liens
Schedule 5.1        -    Lucent Equipment
Schedule 5.5        -    Locations of Nortel Networks Equipment to Be Maintained Outside the United States
Schedule 7.4        -    Licenses
Schedule 7.5        -    Intellectual Property
Schedule 7.6        -    Litigation, Etc.
Schedule 7.7        -    Real Property
Schedule 7.10       -    Existing Debt
Schedule 7.13       -    Plans
Schedule 7.15       -    Loan Parties; Capitalization
Schedule 7.22       -    Material Contracts
Schedule 7.25       -    Employee Matters
Schedule 7.26       -    Insurance
Schedule 8.13       -    Year 2000 Compliance
Schedule 8.17       -    Telecommunications Assets Not Owned by the Borrower and its Subsidiaries
Schedule 9.5        -    Investments
Schedule 10.3       -    Total Debt to Annualized EBITDA
Schedule 10.4       -    Senior Debt to Annualized EBITDA
Schedule 10.5       -    Annualized EBITDA
Schedule 10.6       -    Fixed Charge Coverage
Schedule 10.7       -    Capital Expenditures
Schedule 10.8       -    Minimum Gross Revenues
Schedule 10.9       -    Minimum Gross Margin Percentage

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                                       vi

<PAGE>

                      AMENDED AND RESTATED CREDIT AGREEMENT

         THIS AMENDED AND RESTATED  CREDIT  AGREEMENT,  dated as of September 5,
2000, is by and among SAVVIS COMMUNICATIONS  CORPORATION, a Delaware corporation
("Holdings"),  SAVVIS  COMMUNICATIONS  CORPORATION,  a Missouri corporation (the
"Borrower"),  each of the lending entities which is a party hereto (as evidenced
by the signature  pages of this Agreement) or which may from time to time become
a party hereto as a lender or any successor or assignee thereof (individually, a
"Lender" and, collectively, the "Lenders"), and NORTEL NETWORKS INC., a Delaware
corporation,  as administrative  agent for itself and the other Lenders (in such
capacity,  together with its  successors in such capacity,  the  "Administrative
Agent").

                                    RECITALS:

         A. The Borrower is a party to that certain Credit Agreement dated as of
June  30,  2000,  among  the  Borrower,  Holdings,  the  lenders  named  therein
(including  Nortel  Networks Inc., the "Original  Lenders") and Nortel  Networks
Inc. as administrative  agent (the "Original  Administrative  Agent") for itself
and such  lenders  (the  "Original  Credit  Agreement")  pursuant  to which  the
Borrower was  provided  loan  facilities  in an  aggregate  principal  amount of
$38,000,000.  The Original Lenders made loans to the Borrower under the Original
Credit Agreement, which loans remain outstanding as of the Closing Date.

         B. The  Borrower  desires to amend and  restate  the  $38,000,000  loan
facilities  under the Original  Credit  Agreement  and to obtain a  $235,000,000
advancing  term loan  facility to finance a portion of the  Borrower's  costs to
purchase  Nortel  Networks  Goods and  Installation  Services and to pay certain
third-party  expenses, as set forth herein, and to amend, extend and restate the
Original Credit Agreement.

         C. The Lender(s)  identified on the signature  pages of this  Agreement
desire  to  provide  such  credit   facilities   with  the   assistance  of  the
Administrative  Agent upon and subject to the terms and provisions  contained in
this Agreement.

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

                                    ARTICLE 1

                                   Definitions

         Section 1.1 Definitions,  etc. As used in this Agreement, the following
terms shall have the following meanings:

         "Additional Costs" means as specified in Section 4.1(a).

         "Adjusted  Eurodollar  Rate"  means,  for any  Eurodollar  Loan for any
Interest Period therefor, the rate per annum (rounded upwards, if necessary,  to
the nearest 1/16 of one percent)  determined by the  Administrative  Agent to be
equal to (a) the  Eurodollar  Rate for such  Eurodollar  Loan for such  Interest
Period divided by (b) one minus the Reserve Requirement for such Eurodollar Loan
for such Interest Period.

                                       1

<PAGE>


         "Adjusted Net Income"  means,  as to any Person (the "subject  Person")
and its Consolidated  Subsidiaries  and for any period,  Consolidated Net Income
less the following (without duplication) to the extent that any of the following
shall have been included in Consolidated Net Income for such period: (a) any net
gain or loss arising from the sale of any property, plant or equipment; provided
net  gains or loss  arising  from  the  following  shall  not be  excluded  from
Consolidated  Net Income:  (i) the sale of inventory  in the ordinary  course of
business;  (ii) to the extent  treated as an asset sale,  the sales of IRUs in a
transaction  that does not constitute an Asset  Disposition  under clause (e) of
the  definition  of the term  "Asset  Disposition";  and  (iii) the sale by such
Person to its  customers in the  ordinary  course of business of equipment to be
located at the customer's premises which is used to connect such customer to the
telecommunications  network owned and operated by such Person;  (b) any net gain
or loss  arising  from any  write-up or  write-down  of assets;  (c) earnings or
losses of any other Person,  substantially  all of the assets of which have been
acquired  by the  subject  Person or a  Consolidated  Subsidiary  of the subject
Person in any manner,  to the extent that such  earnings or losses were realized
by such other  Person  prior to the date of such  acquisition;  (d)  earnings or
losses of any  Person  (other  than a  Consolidated  Subsidiary  of the  subject
Person) in which the subject Person or a Consolidated  Subsidiary of the subject
Person has an  ownership  interest,  unless such  earnings  have  actually  been
received by the subject  Person or such  Consolidated  Subsidiary in the form of
cash distributions; and (e) any net gain or loss arising from the acquisition of
any securities of the subject Person or a Consolidated Subsidiary of the subject
Person.

         "Administrative Agent" means as specified in the introductory paragraph
of this Agreement.

         "Administrative  Agent's Letter" means the letter agreement dated as of
September 5, 2000 between the Administrative Agent and the Borrower.

         "Affiliate" means, as to any Person (the "subject  Person"),  any other
Person  (a) that  directly  or  indirectly  through  one or more  intermediaries
controls or is  controlled  by, or is under  direct or indirect  common  control
with, the subject Person,  (b) that directly or indirectly  beneficially owns or
holds ten  percent or more of any class of voting  Capital  Stock of the subject
Person,  or (c) ten  percent  or more of the  voting  Capital  Stock of which is
directly or indirectly beneficially owned or held by the subject Person. For the
purposes  of this  definition,  "control"  when used with  respect to any Person
means the power to direct the management  and policies of such Person,  directly
or indirectly,  whether through the ownership of voting securities,  by contract
or  otherwise;  and the  terms  "controlling"  and  "controlled"  have  meanings
correlative to the foregoing.  For purposes of the Loan  Documents,  neither the
Administrative  Agent nor any Lender  shall be deemed to be an  Affiliate of the
Borrower or any other Loan Party.

         "Agreement"   means  this   Agreement  and  any  and  all   amendments,
modifications, supplements, renewals, extensions or restatements hereof.

         "Amortization Commencement Date" means September 30, 2003.

                                       2

<PAGE>

         "Annualized  EBITDA"  means,  as to any  Person  and  its  Consolidated
Subsidiaries  and for the  applicable  period,  EBITDA for the two most recently
completed fiscal quarters multiplied by two.

         "Applicable  Lending  Office"  means,  for each Lender and each Type of
Loan,  the  lending  office of such  Lender  (or an  Affiliate  of such  Lender)
designated  for such Type of Loan below its name on the  signature  pages hereof
(or, with respect to a Lender that becomes a party to this Agreement pursuant to
an assignment  made in  accordance  with Section  13.8,  in the  Assignment  and
Acceptance  executed by it) or such other office of such Lender (or an Affiliate
of such Lender) as such Lender may from time to time specify to the Borrower and
the Administrative Agent as the office by which such Lender's Loans of such Type
are to be made and maintained.

         "Applicable Margin" means (a) with respect to each Base Rate Loan, [**]
percent  ([**]%) and (b) with  respect to each  Eurodollar  Loan,  [**]  percent
([**]%).

         "Approved  Fund" means (a) with  respect to any Lender  which is a fund
primarily  engaged in making,  purchasing  or otherwise  investing in commercial
loans,  any other fund which is  primarily  engaged  in  making,  purchasing  or
otherwise investing in commercial loans or extending, or investing in extensions
of, credit for its own account in the ordinary  course of its business and which
is managed or advised  by the same  investment  advisor as such  Lender or by an
Affiliate  of such  investment  advisor or (b) any other  entity  which has been
approved  by the  Administrative  Agent and which is (or which is  managed  by a
manager which manages funds which are) primarily  engaged in making,  purchasing
or  otherwise  investing  in  commercial  loans or  extending,  or  investing in
extensions  of,  credit  for its  own  account  in the  ordinary  course  of its
business;  provided, however, that Approved Fund shall not include any Affiliate
of the Borrower.

         "Asset Disposition" means the disposition of any or all of the Property
of the  Borrower  or any of  Borrower's  Subsidiaries,  whether by sale,  lease,
transfer,  assignment,  condemnation  or  otherwise,  but excluding (a) sales of
inventory  in the  ordinary  course  of  business;  (b) the  grant  of a Lien as
security;  (c) any  involuntary  disposition  resulting from casualty  damage to
Property;  (d) dispositions of equipment if and to the extent that the equipment
disposed of is,  concurrently  therewith,  exchanged or replaced by equipment of
equal or  greater  value;  (e) the  sale of any IRU in the  ordinary  course  of
business  provided  that any such sale is a sale of not more  than the  measured
data rate of one OC48 of a Fiber Optic Segment (for purposes of this definition,
a Fiber Optic Segment shall mean a fiber optic line connecting two points with a
measured data rate of OC192  operated by a single  carrier;  (f) the sale in the
ordinary  course of business to its  customers of equipment to be located at the
customer's   premises   which  is  used  to  connect   such   customer   to  the
telecommunications  network  owned and  operated  by the  Borrower or one of its
Subsidiaries;  and  (g)  the  sale  of a Data  Center  in a sale  and  leaseback
transaction permitted by Section 9.9.

         "Assignee" means as specified in Section 13.8(b).

         "Assigning Lender" means as specified in Section 13.8(b).

[**] CONFIDENTIAL TREATMENT REQUESTED

                                       3

<PAGE>

         "Assignment and Acceptance" means an assignment and acceptance  entered
into by a Lender and its  Assignee  and  accepted  by the  Administrative  Agent
pursuant to Section 13.8(e), in substantially the form of Exhibit A hereto.

         "Bankruptcy Code" means as specified in Section 11.1(e).

         "Base Rate" means, at any time, the greater of (a) the rate of interest
per annum then most recently  announced or  established by the Reference Bank at
its principal  office in New York City as its highest  commercial  prime or base
rate then in effect,  or (b) the Federal Funds Rate then in effect plus one-half
of one percent (0.50%).  The Base Rate may not necessarily be the lowest rate of
interest charged by the Reference Bank to its commercial borrowers.  Each change
in any  interest  rate  provided for herein based upon the prime or base rate or
the Federal Funds Rate  resulting from a change in the prime or base rate or the
Federal  Funds  Rate,  respectively,  shall take  effect  without  notice to the
Borrower  at the time of such  change in the  prime or base rate or the  Federal
Funds Rate, respectively.

         "Base Rate Loans"  means  Loans that bear  interest at rates based upon
the Base Rate.

         "Basle  Accord" means the proposals for  risk-based  capital  framework
described  by  the  Basle  Committee  on  Banking  Regulations  and  Supervisory
Practices  in  its  paper   entitled   "International   Convergence  of  Capital
Measurement and Capital Standards" dated July 1988, as amended, supplemented and
otherwise modified and in effect from time to time, or any replacement thereof.

         "Board of Directors"  means (a) with respect to any Loan Party which is
a corporation, the board of directors of such Loan Party and (b) with respect to
any Loan  Party  which is not a  corporation,  an  analogous  body,  officer  or
representative  of such Loan Party  which is the  functional  equivalent  of the
board of directors  of a  corporation  and which has the power and  authority to
authorize and  effectuate the  execution,  delivery and  performance of the Loan
Documents  to be  executed  by such Loan Party and other  actions to be taken by
such Loan Party.

         "Board  Resolution"  means  a copy  of a  resolution  certified  by the
Secretary or an Assistant  Secretary or analogous  officer of any Loan Party, as
applicable based upon the context in which such term appears,  to have been duly
adopted by its Board of Directors and to be in full force and effect on the date
of such certification.

         "Borrower"  means  as  specified  in  the  initial  paragraph  of  this
Agreement.

         "Bridge" means Bridge Information Systems, Inc.

         "Bridge   Administrative   Services   Agreement"   means  that  certain
Administrative Services Agreement, dated February 18, 2000, between the Borrower
and Bridge, as amended, supplemented or restated from time to time in accordance
with this Agreement.

                                       4

<PAGE>

         "Bridge  Agreements"  means the Bridge  Administrative  Agreement,  the
Bridge  Master  Establishment  and  Transition  Agreement,  the  Bridge  Network
Services Agreement and the Bridge Technical Services Agreement.

         "Bridge  Master  Establishment  and  Transition  Agreement"  means that
certain Master Establishment and Transition  Agreement,  dated February 9, 2000,
between the Borrower and Bridge, as amended,  supplemented or restated from time
to time in accordance with this Agreement.

         "Bridge Network Services Agreement" means that certain Network Services
Agreement, dated February 18, 2000, between the Borrower and Bridge, as amended,
supplemented or restated from time to time in accordance with this Agreement.

         "Bridge  Technical  Services  Agreement"  means that certain  Technical
Services Agreement, dated February 18, 2000, between the Borrower and Bridge, as
amended,  supplemented  or restated  from time to time in  accordance  with this
Agreement.

         "Business Day" means (a) any day other than a Saturday, Sunday or other
day on which  commercial banks are authorized or required by law to close in New
York, New York, and (b) with respect to all borrowings,  payments,  Conversions,
Continuations, Interest Periods and notices in connection with Eurodollar Loans,
any day which is a Business Day  described in clause (a) above and which is also
a day on which  dealings  in  Dollar  deposits  are  carried  out in the  London
interbank market.

         "Business  Plan" means the Borrower's  marketing and Network  build-out
plans, budget and schedule as submitted to the Administrative  Agent,  including
financial projections of Holdings and its Consolidated  Subsidiaries (including,
without  limitation,  the  Borrower)  for the ten year period  beginning  on the
Closing  Date,  certified  by the chief  financial  officer of Holdings as being
prepared generally in accordance with the policies and procedures of GAAP to the
extent of the information  presented therein,  such projections giving effect to
the Debt to be  incurred  under this  Agreement  as well as the other Debt to be
incurred by  Holdings  and its  Consolidated  Subsidiaries  (including,  without
limitation, the Borrower) during such period, as modified,  amended, replaced or
superceded by any Business  Plan  subsequently  submitted to the  Administrative
Agent in accordance with Section 8.1(j).

         "Capital  Expenditures"  means,  as to any Person and its  Consolidated
Subsidiaries,  amounts paid or Debt incurred by such Person in  connection  with
the purchase or lease by such  Persons of Property  that would be required to be
capitalized  and shown on the balance sheet of such Persons in  accordance  with
GAAP.

         "Capital  Lease   Obligations"   means,   as  to  any  Person  and  its
Consolidated Subsidiaries,  the obligations of such Persons to pay rent or other
amounts  under a lease of (or other  agreement  conveying the right to use) real
and/or personal Property, which obligations are classified as a capital lease on
a balance sheet of such Persons under GAAP. For purposes of this Agreement,  the
amount  of such  Capital  Lease  Obligations  shall  be the  capitalized  amount
thereof, determined in accordance with GAAP.

                                       5

<PAGE>

         "Capital  Stock"  means  corporate  stock  and any and all  securities,
shares,  partnership  interests  (whether  general,  limited,  special  or other
partnership   interests),   limited  liability  company  interests,   membership
interests,  equity  interests,  participations,   rights  or  other  equivalents
(however  designated) of corporate  stock or any of the foregoing  issued by any
entity (whether a corporation,  a partnership,  a limited  liability  company or
another entity) and includes,  without limitation,  securities  convertible into
Capital Stock and rights, warrants or options to acquire Capital Stock.

         "Change in Control"  means the  existence or  occurrence  of any of the
following:  (a) any of the Capital  Stock of the Borrower is owned by any Person
other than Holdings;  (b) any Capital Stock of any Subsidiary of the Borrower is
owned by any Person other than the Borrower or a Wholly-Owned  Subsidiary of the
Borrower;  (c) any  Person  or two or more  Persons  (other  than the  Permitted
Holders)  acting as a group (as defined in Section  13d-3 of the  Exchange  Act)
shall have acquired  beneficial  ownership  (within the meaning of Rule 13d-3 of
the Securities and Exchange  Commission  under the Exchange Act) of (i) [**]% or
more of the outstanding  shares of Voting Stock of Holdings and (ii) [**] or (d)
individuals  who, as of the Closing Date,  constitute  the Board of Directors of
Holdings (the "Holdings  Incumbent Board") cease for any reason to constitute at
least a majority of the Board of Directors of Holdings;  provided, however, that
any  individual  becoming a director of Holdings  subsequent to the Closing Date
whose election or nomination for election by Holdings' shareholders was approved
by a vote of at least a majority of the directors  then  comprising the Holdings
Incumbent  Board shall be considered as though such  individual were a member of
the  Holdings  Incumbent  Board,  but  excluding,  for  this  purpose,  any such
individual  whose  initial  assumption of office occurs as a result of either an
actual or threatened  election contest (as such terms are used in Rule 14a-11 of
Regulation 14A promulgated under the Exchange Act) or other actual or threatened
solicitation  of proxies  or contest by or on behalf of a Person  other than the
Board of Directors of Holdings.

         "Closing Date" means September 5, 2000, the date of this Agreement.

         "Code" means the Internal  Revenue  Code of 1986,  as amended,  and the
regulations promulgated and rulings issued thereunder.

         "Collateral"  means all Property of any Person of any nature whatsoever
upon which a Lien is created or purported or required  (in  accordance  with the
Loan  Documents)  to be  created  by any  Loan  Document  as  security  for  the
Obligations or any portion thereof.

         "Commitment"  means, as to any Lender,  such Lender's  Commitment,  and
"Commitments"  means,  as to any one or more of the  Lenders,  such  Lender's or
Lenders' Commitments, collectively.

         "Commitment Percentage" means, as to any Lender and its Commitment, the
percentage equivalent of a fraction, the numerator of which is the amount of the
outstanding Commitments of such Lender (or, if such Commitment has terminated or
expired,  the  outstanding  principal  amount of Loans of such  Lender)  and the
denominator of which is the aggregate  amount of the outstanding  Commitments of
all Lenders (or, if such Commitments  have terminated or expired,  the aggregate
outstanding  principal amount of Loans of all Lenders), as adjusted from time to
time in accordance with Section 13.8.

[**] CONFIDENTIAL TREATMENT REQUESTED

                                       6

<PAGE>

         "Commitment  Termination  Date"  means  the  earliest  to  occur of (a)
September  30, 2003,  (b)  September  30, 2001,  if less than $[**] in aggregate
principal  amount of the Loans has been  advanced  as of such date,  and (c) the
date upon which the Loans are fully funded.

         "Communications  Act"  means the  Communications  Act of 1934,  and any
similar or successor  federal statute,  and the rules and regulations of the FCC
thereunder, all as amended and as the same may be in effect from time to time.

         "Consolidated   Fixed  Charges"   means,  as  to  any  Person  and  its
Consolidated  Subsidiaries and for any period, the sum of (without  duplication)
(a) Consolidated Interest Expense of such Persons paid or payable in cash during
such period,  plus (b) all payments or  prepayments of principal with respect to
the Loans and other  outstanding Debt during such period (but excluding all such
payments or  prepayments  made with proceeds of a refinancing  of the Debt being
paid),  plus (c) taxes of such  Persons  paid or  payable  in cash  during  such
period,  plus (d) the  aggregate  amount paid or payable by such Persons in cash
during such period on account of Capital Expenditures.

         "Consolidated  Interest  Expense"  means,  as to  any  Person  and  its
Consolidated  Subsidiaries  and for any  period,  and without  duplication,  all
interest on Debt of such  Persons  paid or payable in cash  during such  period,
including the interest  portion of payments under Capital Lease  Obligations and
all fees paid with  respect  such Debt  during  such  period  (but  specifically
excluding  fees paid during  previous  periods but amortized  during the current
period in accordance with GAAP) consolidated in accordance with GAAP.

         "Consolidated  Net Income" means, as to any Person and its Consolidated
Subsidiaries  and for any period,  the net income (or loss) of such  Persons for
such period, determined on a consolidated basis in accordance with GAAP.

         "Consolidated  Subsidiary"  means,  with  respect  to any  Person,  any
Subsidiary the financial  attributes of which are or would be consolidated  with
those of such Person in the consolidated  financial statements of such Person in
accordance with GAAP.

         "Continue",   "Continuation"   and  "Continued"   shall  refer  to  the
continuation  pursuant to Section 2.6 of a Eurodollar  Loan as a Eurodollar Loan
of the same Type from one Interest Period to the next Interest Period.

         "Contract Rate" means as specified in Section 13.12(a).

         "Contributed  Capital"  means,  as to any  Person and as of any date of
determination,  the sum of (without  duplication:  (a) cash equity contributions
(including the proceeds from the issuances of

[**] CONFIDENTIAL TREATMENT REQUESTED

                                       7

<PAGE>


Capital Stock) made to such Person as of such date (including equity contributed
on or  before  the  Closing  Date),  plus (b) the  amount  of cash  proceeds  of
Subordinated  Debt  received  by such  Person  as of such  date,  minus  (c) the
aggregate  amount of any  Restricted  Payments paid or made by such Person as of
such date in cash or other  Property,  other than:  (i) payments made in Capital
Stock of such  Person;  (ii)  loans and  advances  to  employees,  officers  and
directors  of the Loan  Parties  in the  ordinary  course  of  business  made in
compliance  with  Section  9.5(i);  and (iii)  interest  paid by the Borrower to
Holdings on Subordinated Debt; minus (d) any amount the Borrower has paid or has
become  obligated  to pay under  Section  11.4 of the  Bridge  Network  Services
Agreement.

         "Convert",  "Conversion"  and  "Converted"  shall refer to a conversion
pursuant  to Section 2.6 or Article 4 of one Type of Loan into the other Type of
Loan.

         "Current Date" means (a) a date occurring no more than 30 days prior to
the  Closing  Date  or  other  relevant  date  as may be  specified  herein  (as
applicable)  or (b) such earlier date which is acceptable to the  Administrative
Agent.

         "Data  Centers" means the data centers  planned to be  constructed  and
operated by the Borrower at 587  McDonnell  Blvd.,  Hazelwood,  MO 63042 and 760
Office Parkway, Creve Coeur, MO 63141.

         "Data  Communications  and Operations  Costs" means, as to Holdings and
its Consolidated  Subsidiaries  and for any period,  the amount reflected on the
financial  statements  of Holdings and its  Consolidated  Subsidiaries  for such
period as the line item data  communications  and operations  costs,  which line
item shall not at any time be reclassified  to eliminate  therefrom any category
or type of cost or expense  that is included in such line item as of the date of
the Financial Statements delivered pursuant to Section 7.2.

         "Debt" means as to any Person at any time  (without  duplication):  (a)
all indebtedness, liabilities and obligations of such Person for borrowed money;
(b) all  indebtedness,  liabilities and obligations of such Person  evidenced by
bonds,  notes,  debentures or other similar  instruments;  (c) all indebtedness,
liabilities and obligations of such Person to pay the deferred purchase price of
Property or services,  except (i) trade accounts  payable of such Person arising
in the  ordinary  course of business  that are not past due by more than 90 days
and (ii) up to $[**] of trade  accounts  payable of such  Person  arising in the
ordinary  course of  business  that are past due by more  than 90 days;  (d) all
Capital Lease  Obligations of such Person;  (e) all Debt of others Guaranteed by
such Person; (f) all indebtedness, liabilities and obligations secured by a Lien
existing  on Property  owned by such  Person,  whether or not the  indebtedness,
liabilities or obligations  secured  thereby have been assumed by such Person or
are non-recourse to such Person;  (g)  reimbursement  obligations of such Person
(whether  contingent  or  otherwise)  in respect of letters of credit,  bankers'
acceptances, surety or other bonds and similar instruments, except to the extent
such obligations are  collateralized by cash; (h) all indebtedness,  liabilities
and  obligations  of such Person to redeem or retire  shares of Capital Stock of
such Person;  (i) all  indebtedness,  liabilities and obligations of such Person
under Interest Rate Protection Agreements; and (j) all indebtedness, liabilities
and  obligations of such Person in respect of unfunded vested benefits under any
pension plans.

[**] CONFIDENTIAL TREATMENT REQUESTED

                                       8

<PAGE>

         "Debt  Issuance"  means any issuance by Holdings or the Borrower of any
Debt securities of Holdings or the Borrower, respectively.

         "Default"  means an Event of Default or the  occurrence  of an event or
condition  which with  notice or lapse of time or both would  become an Event of
Default.

         "Default  Rate" means,  in respect of any  principal of any Loan at all
times during which any Default has occurred and is  continuing  or in respect of
any other amount  payable by the Borrower under this Agreement or any other Loan
Document which is not paid when due (whether at stated maturity, by acceleration
or otherwise),  a rate per annum during the period of such Default or during the
period  commencing  on the due date of such other amount until such other amount
is paid in full equal to the lesser of (a) the sum of [**]  percent ([**]%) plus
the Base Rate as in effect from time to time plus the Applicable Margin for Base
Rate Loans or (b) the Maximum Rate;  provided,  however,  that if such amount in
default is principal  of a Eurodollar  Loan and the due date is a day other than
the last  day of an  Interest  Period  therefor,  the  "Default  Rate"  for such
principal  shall be, for the period from and  including  the due date and to but
excluding the last day of the Interest Period  therefor,  the lesser of the rate
per annum equal to (i) the sum of [**] percent  ([**]%)  plus the interest  rate
for such  Eurodollar Loan for such Interest Period as provided in clause (ii) of
Section  2.4(a)  hereof  or (ii) the  Maximum  Rate  and,  thereafter,  the rate
provided for above in this definition.

         "Dollars" and "$" mean lawful money of the U.S.

         "EBITDA" means, as to any Person and its Consolidated  Subsidiaries and
for any period,  without duplication,  the sum of the following for such Persons
for such period determined on a consolidated  basis in accordance with GAAP: (a)
Adjusted Net Income, plus (b) Consolidated Interest Expense, plus (c) income and
franchise taxes to the extent deducted in determining  Adjusted Net Income, plus
(d) depreciation and amortization  expense and other non-cash,  non-tax items to
the extent  deducted in  determining  Adjusted  Net Income,  minus (e)  non-cash
income (or losses) to the extent included in determining Adjusted Net Income.

         "Eligible  Assignee" means (a) any Lender or Affiliate of a Lender, (b)
any  commercial  bank,  savings  and loan  association,  savings  bank,  finance
company,  insurance  company,  pension  fund,  mutual  fund or  other  financial
institution  (whether a corporation,  partnership,  limited liability company or
other entity) which has been  approved by the  Administrative  Agent as a Lender
under this  Agreement  or (c) any Approved  Fund;  provided,  however,  that (i)
Eligible  Assignee  shall not include any  Affiliate  of the  Borrower  and (ii)
Eligible  Assignee  shall not include any  business  competitor  of the Borrower
engaged in the same line of business as the Borrower except after the occurrence
and during the continuance of an Event of Default.

         "Environmental  Law" means any  federal,  state,  provincial,  local or
foreign  law,  statute,  code or  ordinance,  principle  of common law,  rule or
regulation,  as well as any  License,  order,  decree,  judgment  or  injunction
issued,  promulgated,  approved or entered thereunder,  relating to pollution or
the protection,  cleanup or restoration of the environment or natural resources,
or to the public health or safety, or otherwise  governing the generation,  use,
handling, collection,  treatment, storage,

[**] CONFIDENTIAL TREATMENT REQUESTED

                                       9

<PAGE>


transportation,   recovery,  recycling,   discharge  or  disposal  of  Hazardous
Materials,  including,  without  limitation as to U.S. laws,  the  Comprehensive
Environmental  Response,  Compensation  and  Liability Act of 1980, 42 U.S.C.ss.
9601 et seq., the Superfund  Amendment and  Reauthorization Act of 1986, 99-499,
100 Stat. 1613, the Resource  Conservation and Recovery Act of 1976, 42 U. S. C.
ss.6901 et seq.,  the  Occupational  Safety and Health Act, 29 U  S.C.ss.651  et
seq.,  the Clean Air Act, 42 U.S.C.  ss.7401 et seq., the Clean Water Act, 33 U.
S. C.ss.1251 et seq., the Emergency Planning and Community Right to Know Act, 42
U. S.  C.ss.11001 et seq., the Federal  Insecticide,  Fungicide and  Rodenticide
Act,  7  U.S.C.ss.136  et  seq.,  and  the  Toxic  Substances  Control  Act,  15
U.S.C.ss.2601 et seq., and any state or local counterparts.

         "Environmental  Liabilities"  means, as to any Person, all liabilities,
obligations,  responsibilities,  Remedial  Actions,  losses,  damages,  punitive
damages,  consequential damages,  treble damages, costs and expenses (including,
without limitation,  all reasonable fees, disbursements and expenses of counsel,
expert and consulting fees and costs of investigation and feasibility  studies),
fines,  penalties,  sanctions and interest  incurred as a result of any claim or
demand,  by any Person,  whether  based in  contract,  tort,  implied or express
warranty,  strict  liability or  criminal,  penal or civil  statute,  including,
without limitation,  any Environmental Law, License, order or agreement with any
Governmental  Authority or other Person,  arising from environmental,  health or
safety conditions or the Release or threatened  Release of a Hazardous  Material
into the environment.

         "Equity Issuance" means any issuance by Holdings or the Borrower of any
Capital Stock of Holdings or the Borrower, respectively.

         "ERISA" means the Employee  Retirement  Income Security Act of 1974, as
amended from time to time,  and the  regulations  and published  interpretations
thereunder.

         "ERISA Affiliate" means any corporation or trade or business which is a
member of a group of entities,  organizations or employers of which a Loan Party
is also a member and which is treated as a single employer within the meaning of
Sections 414(b), (c), (m) or (o) of the Code.

         "Eurodollar  Loans" means Loans that bear  interest at rates based upon
the Eurodollar Rate or the Adjusted Eurodollar Rate.

         "Eurodollar  Rate"  means,  for any  Eurodollar  Loan for any  Interest
Period  therefor,  the rate per annum  (rounded  upwards,  if necessary,  to the
nearest 1/16 of 1%) appearing on Telerate  Page 3750 (or any successor  page) as
the London  interbank  offered rate for  deposits in Dollars in the  approximate
amount of the proposed Eurodollar Loan at approximately 11:00 a.m. (London time)
two  Business  Days  prior to the first day of such  Interest  Period for a term
comparable to such  Interest  Period.  If such rate ceases to be available  from
Telerate  News  Service,   the  Eurodollar  Rate  shall  be  determined  by  the
Administrative  Agent in good faith from another  financial  reporting  service,
which service shall be reasonably acceptable to the Borrower.

         "Event of Default" has the meaning specified in Section 11.1.

                                       10

<PAGE>

         "Excess  Cash  Flow"  means,  as to any  Person  and  its  Consolidated
Subsidiaries  and for any fiscal  year,  and without  duplication,  the positive
remainder  (if any) of (a) EBITDA for such  fiscal year minus (b) the sum of (i)
taxes  payable in cash for such fiscal year,  plus (ii) all  principal  and cash
interest  payments  on Debt made  during such  fiscal  year,  whether  optional,
mandatory or scheduled  payments,  plus (iii) Capital  Expenditures (but only to
the extent paid in cash and not financed) made during such fiscal year.

         "Excess Proceeds Amount" means as specified in Section 2.7(a).

         "Exchange  Act" means the  Securities  Exchange Act of 1934, as amended
(or any successor act), and the rules and regulations  thereunder (or respective
successors thereto).

         "FCC" means the Federal  Communications  Commission  and any  successor
agency.

         "FCC Licenses" means all Licenses issued by the FCC.

         "Federal  Funds Rate" means,  for any day, the rate per annum  (rounded
upwards, if necessary, to the nearest one-sixteenth of one percent (1/16 of 1%))
equal  to  the  weighted  average  of  the  rates  on  overnight  Federal  funds
transactions  with  members of the Federal  Reserve  System  arranged by Federal
funds brokers on such day, as published by the Federal  Reserve Bank of New York
on the Business Day next succeeding  such day,  provided that (a) if the day for
which such rate is to be  determined  is not a Business  Day, the Federal  Funds
Rate for such day shall be such rate on such  transactions on the next preceding
Business Day as so published on the next succeeding Business Day and (b) if such
rate is not so published on such next succeeding Business Day, the Federal Funds
Rate for any day  shall be the  average  rate  which  would  be  charged  to the
Reference  Bank  on  such  day  on  such   transactions  as  determined  by  the
Administrative Agent.

         "GAAP" means generally  accepted  accounting  principles,  applied on a
consistent basis, as set forth in Opinions of the Accounting Principles Board of
the American  Institute of Certified Public  Accountants and/or in statements of
the Financial Accounting Standards Board and/or their respective  successors and
which are applicable in the circumstances as of the date in question. Accounting
principles are applied on a "consistent  basis" when the  accounting  principles
applied in a current  period are  comparable  in all material  respects to those
accounting principles applied in a preceding period.

         "Governmental  Authority"  means any nation or  government,  any state,
provincial or political subdivision thereof and any entity exercising executive,
legislative,  judicial,  regulatory or administrative functions of or pertaining
to government.

         "Governmental  Requirement"  means any law, statute,  code,  ordinance,
order, rule, regulation,  judgment,  decree, injunction,  franchise,  License or
other directive or requirement of any federal, state, county, municipal, parish,
provincial or other Governmental Authority or any department, commission, board,
court, agency or any other instrumentality of any of them.

                                       11

<PAGE>

         "Gross Margin  Percentage" means, as to any Person and its Consolidated
Subsidiaries and for any period, the quotient of (a) Gross Profit divided by (b)
Gross Revenue for such period, expressed as a percentage.

         "Gross   Profit"  means,   as  to  any  Person  and  its   Consolidated
Subsidiaries  for any period,  the  remainder of (a) the Gross  Revenues of such
Person  and its  Consolidated  Subsidiaries  for  such  period  minus  (b)  Data
Communications  and  Operations  Costs  of  such  Person  and  its  Consolidated
Subsidiaries for such period.

         "Gross  Revenue"   means,  as  to  any  Person  and  its   Consolidated
Subsidiaries and for any period,  gross revenue of such Persons for such period,
determined in accordance with GAAP.

         "Gross Up Lender" means as specified in Section 4.8.

         "Guarantee"  by  any  Person  means  any   obligation,   contingent  or
otherwise,  of such Person directly or indirectly guaranteeing any Debt or other
obligation  of any other  Person and,  without  limiting the  generality  of the
foregoing,  any  indebtedness,  liability  or  obligation,  direct or  indirect,
contingent  or  otherwise,  of such Person (a) to purchase or pay (or advance or
supply  funds for the  purchase  or  payment  of) such Debt or other  obligation
(whether  arising  by  virtue  of  partnership  arrangements,  by  agreement  to
keep-well,  to purchase assets, goods, securities or services, to take-or-pay or
to maintain financial statement conditions or otherwise) or (b) entered into for
the purpose of  assuring  in any other  manner the obligee of such Debt or other
indebtedness,  liability or obligation  as to the payment  thereof or to protect
the obligee against loss in respect thereof (in whole or in part), provided that
the term "Guarantee" shall not include endorsements for collection or deposit in
the  ordinary  course of  business.  The term  "Guarantee"  used as a verb has a
corresponding  meaning.  The  amount of any  Guarantee  shall be deemed to be an
amount equal to the stated or determinable  amount of the primary  obligation in
respect of which such Guarantee is made or, if not stated or  determinable,  the
maximum  anticipated  liability  in respect  thereof  (assuming  such  Person is
required to perform thereunder).

         "Guarantors"  means  Holdings,  each  Subsidiary of Borrower  which has
executed a Guaranty and each other  Person  which has  executed a Guaranty,  and
"Guarantor" means any of such Persons.

         "Guaranty"  means  a  guaranty  agreement   guaranteeing   payment  and
performance  of the  Obligations  in  form  and  substance  satisfactory  to the
Administrative  Agent  executed  by a Guarantor  in favor of the  Administrative
Agent and the Lenders, and any and all amendments,  modifications,  supplements,
renewals, extensions or restatements thereof.

         "Hazardous  Material"  means any  substance,  product,  liquid,  waste,
pollutant,  chemical,  contaminant,  insecticide,  pesticide,  gaseous  or solid
matter,  organic  or  inorganic  matter,  fuel,   micro-organisms,   ray,  odor,
radiation,  energy,  vector,  plasma,  constituent  or material  which (a) is or
becomes listed, regulated or addressed under any Environmental Law or (b) is, or
is deemed to be, alone or in any combination, hazardous, hazardous waste, toxic,
a pollutant,  a deleterious substance, a contaminant or a source of pollution or
contamination  under  any  Environmental  Law,  including,  without  limitation,
asbestos, petroleum,  underground storage tanks (whether empty or containing any
substance) and polychlorinated biphenyls.

                                       12

<PAGE>

         "Holdings"  means  SAVVIS   Communications   Corporation,   a  Delaware
corporation.

         "Insurance  Recovery"  means,  with  respect  to  any  Property  of the
Borrower  or any of its  Subsidiaries  and  any  single  occurrence  or  related
occurrences  with respect thereto,  the receipt or constructive  receipt by such
Loan Party, or the payment by an insurance company to the Administrative  Agent,
of proceeds of any such Property or casualty insurance.

         "Intellectual  Property"  means any U.S.  or  foreign  patents,  patent
applications,  trademarks,  trade names,  service marks,  brand names, logos and
other trade designations (including unregistered names and marks), trademark and
service  mark   registrations   and   applications,   copyrights  and  copyright
registrations and applications,  inventions,  invention  disclosures,  protected
formulae,  formulations,  processes,  methods, trade secrets, computer software,
computer programs and source codes, manufacturing research and similar technical
information,  engineering know-how, customer and supplier information,  assembly
and test data drawings or royalty rights.

         "Interest  Period"  means,  with respect to any Eurodollar  Loan,  each
period  commencing  on the date such Loan is made or Converted  from a Base Rate
Loan or (if Continued) the last day of the next preceding  Interest  Period with
respect to such Loan,  and ending on the  numerically  corresponding  day in the
first,  second,  third or sixth calendar month  thereafter,  as the Borrower may
select as provided in Section 2.9 hereof,  except that each such Interest Period
which  commences on the last Business Day of a calendar month (or on any day for
which there is no numerically  corresponding  day in the appropriate  subsequent
calendar month) shall end on the last Business Day of the appropriate subsequent
calendar month.  Notwithstanding  the foregoing:  (a) each Interest Period which
would  otherwise  end on a day which is not a Business Day shall end on the next
succeeding  Business Day (or, if such succeeding  Business Day falls in the next
succeeding calendar month, on the next preceding Business Day); (b) any Interest
Period which would otherwise extend beyond the Maturity Date with respect to any
Loans shall end on such Maturity  Date;  (c) no more than five Interest  Periods
for Eurodollar Loans shall be in effect at the same time; (d) no Interest Period
shall have a duration of less than one month and, if the Interest Period for any
Eurodollar  Loans would otherwise be a shorter  period,  such Loans shall not be
available hereunder;  and (e) no Interest Period for a Loan may commence before,
and end after, any principal  payment date unless,  after giving effect thereto,
the aggregate  principal  amount of the Eurodollar Loans having Interest Periods
that end after such  principal  payment  date shall be equal to or less than the
amount of the applicable Loans scheduled to be outstanding  hereunder after such
principal payment date.

         "Interest  Rate  Protection  Agreement"  means,  with  respect  to  the
Borrower,  an interest rate swap, cap or collar agreement or similar arrangement
between the Borrower and one or more Lenders or other  counterparties  providing
for the transfer or mitigation of interest rate risks either  generally or under
specified contingencies.

         "Investments" means as specified in Section 9.5.

                                       13

<PAGE>

         "IRU" means an indefeasible right of use of the lit capacity of a fiber
optic cable.

         "Lender" and "Lenders"  means as specified in the initial  paragraph of
this Agreement.

         "Level 3  Agreements"  means  the  following  agreements  entered  into
between Borrower and Level 3 Communications, LLC:

                (a)  General  Terms and  Conditions  for  Delivery of Service as
                     modified  by that  certain  Addendum  to General  Terms and
                     Conditions dated as of August 2, 2000;

                (b)  Metro IRU Agreement dated as of August 2, 2000;

                (c)  Long Haul IRU Agreement dated as of August 2, 2000;

as the  same may be  amended,  supplemented  or  restated  from  time to time in
compliance with this Agreement.

         "License" means any consent, permit, franchise, certificate,  approval,
order, license,  right-of-way (whether an easement, contract or agreement in any
form) or other authorization, including, without limitation, any FCC License.

         "Lien"  means,  with respect to any  Property,  any mortgage or deed of
trust,  pledge,  hypothecation,   assignment,   deposit  arrangement,   security
interest, tax lien, financing statement,  pledge, charge, hypothecation or other
lien,  charge,  easement  (other  than any  easement  not  materially  impairing
usefulness),  encumbrance,  preference,  priority or other security agreement or
preferential  arrangement of any kind or nature whatsoever on or with respect to
such Property  (including,  without  limitation,  any conditional  sale or other
title retention  agreement having  substantially the same economic effect as any
of the foregoing).

         "Loan Documents" means this Agreement,  the Guaranties,  the Notes, the
Security Documents,  the Administrative Agent's Letter and all other agreements,
documents,  instruments  and  certificates  now  or  hereafter  executed  and/or
delivered  pursuant to or in connection  with any of the foregoing,  and any and
all amendments, modifications, supplements, renewals, extensions or restatements
thereof.

         "Loan  Party"  means the  Borrower,  Holdings,  any  Subsidiary  of the
Borrower,  any  Guarantor  or any Person who  grants a Lien on any  Property  to
secure the payment or performance of the Obligations or any portion thereof, and
"Loan Parties" means all of such Persons.

         "Loans" means as specified in Section 2.1(a).

                                       14

<PAGE>


         "Lucent  Equipment"  means the equipment:  (i) acquired by the Borrower
from Lucent  Technologies,  Inc.,  (ii)  delivered to the Borrower  prior to the
Closing Date and (iii) identified on Schedule 5.1.

         "Master  Purchase  Agreement" means that certain Nortel Networks Global
Purchase  Agreement,  dated as of June 30, 2000, by and between the Borrower and
Nortel Networks, as amended, supplemented or restated from time to time.

         "Material Adverse Effect" means any event,  development or circumstance
that has had or could  reasonably be expected to have a material  adverse effect
on (a) the  business,  assets,  financial  condition,  results of  operations or
prospects of Holdings and its  Subsidiaries  taken as a whole, (b) the business,
assets, financial condition,  results of operations or prospects of the Borrower
individually or of the Borrower and its  Subsidiaries  taken as a whole, (c) the
validity or  enforceability  of any of the Loan  Documents or the Liens,  rights
and/or remedies of the Administrative  Agent and/or the Lenders thereunder,  (d)
the ability of any Loan Party to pay and perform its  indebtedness,  liabilities
and/or  obligations  under  any of the  Loan  Documents,  or (e)  the  value  of
Collateral  available to the  Administrative  Agent and the Lenders after giving
effect to Liens in favor of other Persons.

         "Material Contracts" means (a) as to the Borrower, any Bridge Agreement
and (b), as to any Loan Party (other than Holdings but including Borrower),  any
other supply,  purchase,  service,  employment,  tax, indemnity,  shareholder or
other agreement or contract for which the aggregate  amount or value of services
performed or to be performed for or by, or funds or other  Property  transferred
or to be transferred to or by, any Loan Party (other than Holdings but including
Borrower) to such agreement or contract,  or by which any such Loan Party or any
of its Properties is otherwise bound,  during any fiscal year of such Loan Party
exceeds  $[**]  (or  the  equivalent  amount  in any  currency)  and any and all
amendments, modifications, supplements, renewals or restatements thereof.

         "Maturity Date" means the earlier to occur of (a) September 30, 2008 or
(b) the fifth anniversary of the Commitment Termination Date.

         "Maximum  Rate"  means,  with  respect  to  any  Lender,   the  maximum
non-usurious  interest rate or an amount  computed in reference to such rate (as
applicable),  if any, that any time or from time to time may be contracted  for,
taken, reserved,  charged or received with respect to the particular Obligations
as to which such rate is to be  determined,  payable to such Lender  pursuant to
this Agreement or any other Loan Document,  under laws applicable to such Lender
which are  presently  in effect  or, to the extent  allowed  by law,  under such
applicable  laws  which  may  hereafter  be in effect  and which  allow a higher
maximum  non-usurious  interest rate than applicable laws now allow. The Maximum
Rate shall be  calculated  in a manner that takes into account any and all fees,
payments  and other  charges in respect of the Loan  Documents  that  constitute
interest  under  applicable  law.  Each change in any interest rate provided for
herein based upon the Maximum Rate  resulting  from a change in the Maximum Rate
shall take effect  without  notice to the Borrower at the time of such change in
the Maximum Rate.

[**] CONFIDENTIAL TREATMENT REQUESTED

                                       15

<PAGE>

         "Monthly Date" means the last day of each month of each year, the first
of which shall be September 30, 2000.

         "Mortgage"  means  a  mortgage,  deed of  trust  or  other  appropriate
agreement,  document or instrument evidencing or creating a Lien on any fee real
Property or leasehold  interest therein (and any related  personal  Property) as
security  for the  Obligations  or any  portion  thereof  in form and  substance
satisfactory to the Administrative  Agent executed by any Loan Party in favor of
the  Administrative  Agent for the benefit of the  Administrative  Agent and the
Lenders,  and any  and all  amendments,  modifications,  supplements,  renewals,
extensions or restatements thereof.

         "Mortgaged  Properties"  means  Properties  in  which a Lien  has  been
granted or purported to be granted pursuant to a Mortgage.

         "Multiemployer  Plan"  means a  multiemployer  plan  defined as such in
Section 3(37) of ERISA to which  contributions have been made by or are required
from the  Borrower  or any ERISA  Affiliate  since  1974 and which is covered by
Title IV of ERISA.

         "Net Proceeds" means,  with respect to any Asset  Disposition,  (a) the
gross amount of cash  received by the Borrower or any of its  Subsidiaries  from
such  Asset  Disposition,  minus (b) the  amount,  if any,  of all taxes paid or
payable by the Borrower or any of its Subsidiaries  directly resulting from such
Asset Disposition  (including the amount,  if any,  estimated by the Borrower in
good  faith at the time of such  Asset  Disposition  for  taxes  payable  by the
Borrower  or any of its  Subsidiaries  on or  measured  by net  income  or  gain
resulting from such Asset Disposition),  minus (c) the reasonable  out-of-pocket
costs and expenses  incurred by the Borrower or such  Subsidiary  in  connection
with such  Asset  Disposition  (including  reasonable  brokerage  fees paid to a
Person other than an Affiliate of the  Borrower)  excluding any fees or expenses
paid to an Affiliate of the Borrower, minus (d) amounts applied to the repayment
of Debt (other than the  Obligations)  secured by any Permitted Lien (if any) on
the Property  subject to the Asset  Disposition.  "Net Proceeds" with respect to
any Asset  Disposition  shall also include proceeds (after deducting any amounts
specified in clauses (b),  (c) and (d) of the  preceding  sentence) of insurance
with  respect  to any  actual or  constructive  loss of  Property,  an agreed or
compromised  loss of Property or the taking of any  Property  under the power of
eminent domain and  condemnation  awards and awards in lieu of condemnation  for
the taking of Property under the power of eminent domain.  "Net Proceeds" means,
with  respect to any Equity  Issuance  and  without  duplication,  (i) the gross
amount of cash or cash  equivalents  received by Holdings or the  Borrower  from
such Equity  Issuance,  exclusive of the  proceeds of sales of Capital  Stock of
Holdings to employees or directors of Holdings or its  Subsidiaries  (including,
without   limitation,   the  Borrower)  in  connection  with  the  provision  of
compensation or benefits to such employees or directors for their  activities as
such, minus (ii) the  out-of-pocket  costs and expenses  incurred by Holdings or
the Borrower in connection with such Equity Issuance (including any underwriting
fees)  excluding  any fees or expenses  paid to an  Affiliate of Holdings or the
Borrower  which  are in  excess  of  those  that  would  be paid or  payable  in
connection  with  an  arms'  length  transaction  with  a  Person  who is not an
Affiliate of Holdings or the Borrower. "Net Proceeds" means, with respect to any
Debt  Issuance  and without  duplication,  (A) the gross  amount of cash or cash
equivalents received by Holdings or the Borrower from such Debt Issuance,  minus
(B) the out-of-pocket costs and expenses incurred by

                                       16

<PAGE>


Holdings or the Borrower in connection  with such Debt Issuance  (including  any
underwriting  fees)  excluding  any fees or  expenses  paid to an  Affiliate  of
Holdings  or the  Borrower  which are in excess of those  that  would be paid or
payable in connection with an arms' length  transaction with a Person who is not
an Affiliate of Holdings or the Borrower;  minus (c) the amount of any such cash
required to be held in an escrow or  collateral  account under the terms of such
Debt Issuance for the purposes of paying interest on such Debt as it comes due.

         "Network" means the Borrower's  integrated  communications  network for
the provision of high speed data and voice  services in the U.S. as described in
the Business Plan.

         "Nortel Networks" means Nortel Networks Inc., a Delaware corporation.

         "Nortel Networks Equipment" means all hardware,  software and equipment
(including fixtures) manufactured, sold or otherwise provided to the Borrower or
any Subsidiary of Holdings by Nortel Networks and/or Nortel Networks Corporation
including, without limitation, pursuant to the Master Purchase Agreement.

         "Nortel Networks Goods and Installation Services" means Nortel Networks
Equipment  and  related  software   (including  Nortel  Networks  Software)  and
installation  services  performed by personnel of Nortel  Networks and/or Nortel
Networks Corporation.

         "Nortel Networks  Software" means any and all software sold or licensed
by Nortel  Networks  and/or Nortel  Networks  Corporation to the Borrower or any
Subsidiary of Holdings and including,  without  limitation,  all source code and
object code and all manuals and other  documentation  relating  thereto and each
copy thereof regardless of the media in which they are stored.

         "Notes"  means  the Notes in the form of  Exhibit B hereto  made by the
Borrower  evidencing  the  Loans  and  any and  all  amendments,  modifications,
supplements,  renewals, extensions or restatements thereof and all substitutions
therefor (including  promissory notes issued by the Borrower pursuant to Section
13.8), and "Note" means any such promissory note.

         "Notice of Borrowing" means as specified in Section 2.9.

         "Obligations"  means  any  and all (a)  indebtedness,  liabilities  and
obligations of the Borrower or any other Loan Party to the Administrative  Agent
and the Lenders, or any of them,  evidenced by and/or arising pursuant to any of
the Loan  Documents  (including,  without  limitation,  this  Agreement  and the
Notes), now existing or hereafter arising,  whether direct,  indirect,  related,
unrelated, fixed, contingent, liquidated,  unliquidated, joint, several or joint
and several, including,  without limitation, (i) the obligations of the Borrower
or any  other  Loan  Party to repay  the  Loans,  to pay  interest  on the Loans
(including, without limitation, interest accruing after any, if any, bankruptcy,
insolvency,  reorganization  or  other  similar  filing)  and to pay  all  fees,
indemnities,  costs and expenses (including attorneys' fees) provided for in the
Loan  Documents  and (ii)  the  indebtedness  constituting  the  Loans  and such
interest,   fees,  indemnities,   costs  and  expenses,  and  (b)  indebtedness,
liabilities  and  obligations  of the Borrower or any other Loan Party under any
and all  Interest  Rate  Protection  Agreements  that it may enter into with any
Lender with the written  consent of the  Administrative  Agent and the  Required
Lenders.

                                       17

<PAGE>


         "Original Administrative Agent" means as specified in Recital A.

         "Original Credit Agreement" means as specified in Recital A.

         "Original Lenders" means as specified in Recital A.

         "Original  Loans"  means the  "Loans"  as such term is  defined  in the
Original Credit Agreement.

         "Original  Obligations" means the "Obligations" as such term is defined
in the Original Credit Agreement.

         "Payor" means as specified in Section 3.4.

         "PBGC" means the Pension  Benefit  Guaranty  Corporation  or any entity
succeeding to all or any of its functions under ERISA.

         "Pension  Plan" means an employee  pension  benefit  plan as defined in
Section 3(2) of ERISA  (including a Multiemployer  Plan) which is subject to the
funding  requirements  under Section 302 of ERISA or Section 412 of the Code, in
whole or in part,  and which is maintained or contributed to currently or at any
time within the six years immediately preceding the Closing Date or, in the case
of a Multiemployer Plan, at any time since September 2, 1974, by any Borrower or
any ERISA Affiliate for employees of any Borrower or any ERISA Affiliate.

         "Permitted Holders" means (a) the Persons identified on Schedule 1.1(a)
hereto who are  shareholders of Holdings as of the Closing Date; (b) any spouse,
parent,  sibling,  child or grandchild of any of the aforesaid  individuals  (in
each case,  whether such  relationship  arises from birth or adoption or through
marriage) or any trust  established  for the benefit of any such  individuals or
any spouse,  parent,  sibling,  child or grandchild of any such  individuals (in
each case  whether  such  relationship  arises from birth or adoption or through
marriage);  and (c) any Affiliates of any of the Persons  identified on Schedule
1.1(a) hereto who are controlled by any such Person.

         "Permitted Liens" mean:

                 (a)   Liens disclosed on Schedule 1.1(b) hereto;

                 (b)   Liens   securing   the   Obligations   in  favor  of  the
         Administrative  Agent (for the benefit of the Administrative  Agent and
         the Lenders) pursuant to the Loan Documents;

                 (c) encumbrances consisting of easements, rights-of-way, zoning
         restrictions  or  other  restrictions  on the use of real  Property  or
         imperfections  to title that do not  (individually or in the aggregate)
         materially  affect  the value of the  Property  encumbered  thereby  or
         materially   impair  the  ability  of  the   Borrower  or  any  of  its
         Subsidiaries to use such Property in its businesses,  and none of which
         is violated in any material respect by existing or proposed  structures
         or land use;

                                       18

<PAGE>

                 (d) Liens for taxes,  assessments or other governmental charges
         that are not  delinquent or which are being  contested in good faith by
         appropriate   proceedings,   which   proceedings  have  the  effect  of
         preventing  the  forfeiture  or sale of the  Property  subject  to such
         Liens,  and for which  adequate  reserves (as  determined in accordance
         with GAAP) have been established;

                 (e) Liens of mechanics,  materialmen,  warehousemen,  carriers,
         landlords or other similar  statutory Liens securing  obligations  that
         are not yet due and are incurred in the ordinary  course of business or
         which are being  contested  in good faith by  appropriate  proceedings,
         which  proceedings have the effect of preventing the forfeiture or sale
         of the Property subject to such Liens, and for which adequate  reserves
         (as determined in accordance with GAAP) have been established;

                 (f) Liens  resulting from good faith deposits to secure payment
         of worker's compensation or other social security programs or to secure
         the performance of tenders,  statutory  obligations,  surety and appeal
         bonds, bids,  contracts (other than for payment of Debt) or leases, all
         in the ordinary course of business;

                 (g)  purchase-money  Liens on any Property  acquired  after the
         Closing  Date or the  assumption  after the Closing Date of any Lien on
         Property  existing at the time of such  acquisition (and not created in
         contemplation  of  such  acquisition),  or a Lien  incurred  after  the
         Closing Date in  connection  with any  conditional  sale or other title
         retention agreement or Capital Lease Obligation; provided that:

                      (i) any Property  subject to any of the  foregoing  (A) is
                 acquired  by the  Borrower  or any of its  Subsidiaries  in the
                 ordinary course of its respective  business and (B) the Lien on
                 such Property attaches concurrently or within 90 days after the
                 acquisition  thereof;  provided,  that  the  Lien on  equipment
                 acquired by the Borrower  prior to the Closing Date from Lucent
                 Technologies, Inc. need not attach until the purchase price for
                 such equipment is financed or refinanced;

                      (ii) the Debt  secured by any Lien so created,  assumed or
                 existing shall not exceed the lesser of the cost or fair market
                 value  at the  time  of  acquisition  of the  Property  covered
                 thereby  (inclusive of the cost of engineering,  furnishing and
                 installation services directly relating to such Property);

                      (iii) each such Lien shall  attach only to the Property so
                 acquired and the proceeds thereof; and

                                       19

<PAGE>


                      (iv) the aggregate  amount of all Debt secured by all such
                 Liens,   when   aggregated   with  the  Debt   secured  by  all
                 purchase-money  Liens  and all  Liens  in  connection  with any
                 conditional sale or other title retention  agreement or Capital
                 Lease  Obligation  existing  as of the  Closing  Date or at any
                 other time,  shall not exceed $[**] at any time outstanding  in
                 the aggregate;

                 (h) Liens on the real Property and related  fixtures located at
         the Data Centers and the proceeds  thereof which are incurred after the
         Closing Date in connection with the  construction  and financing of the
         Data  Centers   securing   Debt   not   to  exceed  $[**]  at any  time
         outstanding in the aggregate;

                 (i) Liens  encumbering  funds held back from the  proceeds of a
         Debt  Issuance  for the  purpose of paying  interest on such Debt as it
         accrues; and

                 (j)  Any  extension,  renewal  or  replacement  of  any  of the
         foregoing  Permitted  Liens,  provided that Liens  permitted under this
         clause  (j) shall  not be  extended  or spread to cover any  additional
         indebtedness or Property;

provided,  however,  that (A) none of the Permitted Liens (except those in favor
of the  Administrative  Agent securing payment of the Obligations) may attach or
relate to the Capital Stock of or any other  ownership  interest in the Borrower
or any of its  Subsidiaries  and (B) except for the Liens  disclosed on Schedule
1.1(b) which are expressly identified as constituting purchase money Liens, none
of the Permitted  Liens  referred to in clause (a) preceding may have a priority
equal or prior to the Liens in favor of the Administrative Agent as security for
the Obligations.

         "Person"  means  any  individual,   corporation,   trust,  association,
company,  partnership,  joint venture,  limited liability  company,  joint stock
company, Governmental Authority or other entity.

         "Phase II Date" means as specified in Section 10.1.

         "Plan"  means any  employee  benefit plan as defined in Section 3(3) of
ERISA established or maintained or contributed to by any Loan Party or any ERISA
Affiliate, including any Pension Plan.

         "Principal  Office"  means the principal  office of the  Administrative
Agent  in  Richardson,   Texas,   presently  located  at  2221  Lakeside  Blvd.,
Richardson, Texas 75082.

         "Prohibited Transaction" means any transaction set forth in Section 406
of ERISA or Section 4975 of the Code.

         "Property"  means  property  and/or assets of all kinds,  whether real,
personal or mixed, tangible or intangible  (including,  without limitation,  all
rights  relating  thereto),  whether  owned or  acquired on or after the Closing
Date.

         "Quarterly Date" means the last day of each March, June,  September and
December of each year, the first of which shall be September 30, 2000.

[**] CONFIDENTIAL TREATMENT REQUESTED

                                       20

<PAGE>


         "Receivables" means, as at any date of determination  thereof, each and
every  "account"  as such  term is  defined  in the  UCC and  includes,  without
limitation,  the unpaid portion of the  obligation,  as stated on the respective
invoice,  or,  if there is no  invoice,  other  writing,  of a  customer  of the
Borrower  or any of its  Subsidiaries  in respect of  services  rendered  by the
Borrower or any of its Subsidiaries.

         "Reference Bank" means Citibank, N.A.

         "Register" means as specified in Section 13.8(d).

         "Registered Note" means as specified in Section 2.2(b).

         "Registered Note Register" means as specified in Section 13.8(h).

         "Regulation  D" means  Regulation  D of the Board of  Governors  of the
Federal Reserve System as the same may be amended or  supplemented  from time to
time.

         "Regulatory Change" means, with respect to any Lender, any change after
the Closing  Date in any U.S.  federal or state or foreign  laws or  regulations
(including  Regulation  D) or the  adoption  or  making  after  such date of any
interpretations,  directives,  guidelines  or  requests  applying  to a class of
lenders  including such Lender of or under any U.S.  federal or state or foreign
laws or regulations (whether or not having the force of law) by any Governmental
Authority charged with the interpretation or administration thereof.

         "Release"  means,  as to any  Person,  any  release,  spill,  emission,
leaking,  pumping,  injection,  deposit,  discharge,   disposal,   dispersement,
leaching  or  migration  of  Hazardous  Materials  into the  indoor  or  outdoor
environment or into or out of Property owned by such Person, including,  without
limitation,  the movement of Hazardous  Materials  through or in the air,  soil,
surface water or ground water.

         "Remedial  Action" means all actions  required to (a) cleanup,  remove,
respond to,  treat or  otherwise  address  Hazardous  Materials in the indoor or
outdoor  environment,  (b)  prevent the Release or threat of Release or minimize
the  further  Release  of  Hazardous  Materials  so that they do not  migrate or
endanger  or  threaten  to  endanger  public  health or welfare or the indoor or
outdoor  environment,  (c) perform studies and  investigations on the extent and
nature of any actual or  suspected  contamination,  the remedy or remedies to be
used  or  health  effects  or  risks  of  such  contamination,  or  (d)  perform
post-remedial monitoring, care or remedy of a contaminated site.

         "Reportable Event" means any of the events set forth in Section 4043(b)
of ERISA other than any such event for which the 30-day notice  requirement  has
been waived in regulations issued by the PBGC.

         "Required  Consents"  means:  (i) the written  consent of Bridge to the
grant  by the  Borrower  of a Lien in the  Bridge  Agreements  in  favor  of the
Administrative Agent and (ii) the written consent of Level 3 Communications, LLC
to the grant by the Borrower of a Lien in the Level 3 Agreements in favor of the
Administrative  Agent,  with  both  such  consents  to be in form and  substance
reasonably acceptable to the Administrative Agent.

                                       21

<PAGE>

         "Required Lenders" means, at any date of determination, Lenders holding
at  least  two-thirds  (in  Dollar  amount)  of the  sum of  (a)  the  aggregate
outstanding  principal amount of the Loans, plus (b) the aggregate amount of the
outstanding Commitments.

         "Required Payment" means as specified in Section 3.4.

         "Reserve  Requirement" means, for any Eurodollar Loan of any Lender for
any Interest Period therefor,  the maximum rate at which reserves (including any
marginal,  supplemental  or emergency  reserves)  are required to be  maintained
during such Interest  Period under any  regulations of the Board of Governors of
the  Federal  Reserve  System (or any  successor)  by such  Lender for  deposits
exceeding $1,000,000 against "Eurocurrency  Liabilities" as such term is used in
Regulation  D.  Without  limiting  the  effect  of the  foregoing,  the  Reserve
Requirement  shall reflect any other reserves  required to be maintained by such
Lenders  by  reason  of any  Regulatory  Change  against  (a)  any  category  of
liabilities which includes deposits by reference to which the Eurodollar Rate or
the  Adjusted  Eurodollar  Rate  is to be  determined  or (b)  any  category  of
extensions of credit or other assets which include Eurodollar Loans.

         "Responsible  Officer" means, as to any Loan Party, the chief executive
officer,  the president,  any vice president,  the chief financial officer,  the
chief operating officer or the treasurer of such Person.

         "Restricted  Payment"  means (a) any  dividend  or other  distribution,
payment (whether for damages or otherwise) or penalty (whether in cash, Property
or  obligations),  direct or  indirect,  on account  of,  with  respect to or in
connection  with (or the setting apart of money for a sinking or other analogous
fund for) any shares of any class of Capital Stock of Holdings,  the Borrower or
any Subsidiaries of the Borrower now or hereafter outstanding, except a dividend
payable  solely in shares of that class of stock to the  holders of that  class;
(b) any redemption,  conversion,  exchange,  retirement, sinking fund or similar
payment, purchase or other acquisition for value, direct or indirect, of or with
respect to any shares of any class of Capital Stock of Holdings, the Borrower or
any  Subsidiaries  of  Borrower  now or  hereafter  outstanding,  other  than an
exchange for shares of Capital Stock; (c) any payment or prepayment of principal
of, premium,  if any, or interest on, or any redemption,  conversion,  exchange,
purchase,  retirement  or  defeasance  of, or payment  with respect to, any Debt
which is  contractually  subordinated  to the  Obligations  (including,  without
limitation,  Subordinated  Debt) other than non-cash  payments  satisfied by the
issuance of Capital  Stock or payments  made with the  proceeds of  Subordinated
Debt the  maturity  of  which is no  shorter  than the Debt  prepaid,  redeemed,
converted,  exchanged,  purchased, retired, defeased or purchased; (d) any loan,
advance or payment to any officer, director or shareholder of Holdings, Borrower
or any  Subsidiaries  of Borrower  (other than a  shareholder  consisting of the
Borrower or a Wholly-Owned Subsidiary of the Borrower),  exclusive of reasonable
compensation  paid to  officers  or  directors  paid in the  ordinary  course of
business  and  exclusive  of payments  made for goods sold or services  rendered
which comply with Section 9.7; and (e) any payment made to retire,  or to obtain
the surrender of, any outstanding  warrants,  options or other rights to acquire
shares  of  any  class  of  Capital  Stock  of  Holdings,  the  Borrower  or any
Subsidiaries of Borrower now or hereafter outstanding.

                                       22

<PAGE>

         "Security  Agreements" means security  agreements,  pledge  agreements,
securities  pledge  agreements  and other  agreements,  documents or instruments
evidencing  or creating a Lien as security  for the  Obligations  or any portion
thereof in form and substance  satisfactory to the Administrative Agent executed
by any Loan Party, in favor of the  Administrative  Agent for the benefit of the
Administrative  Agent  and the  Lenders,  and any such  agreement,  document  or
instrument subsequently executed in accordance or connection with this Agreement
or  any  other  Loan  Document,  and  any  and  all  amendments,  modifications,
supplements, renewals, extensions or restatements thereof.

         "Security  Documents" means the Security  Agreements and the Mortgages,
as they may be amended,  modified,  supplemented,  renewed, extended or restated
from time to time, and any and all other agreements,  deeds of trust, mortgages,
chattel mortgages,  security  agreements,  pledges,  guaranties,  assignments of
proceeds,  assignments  of contract  rights,  or other  collateral  assignments,
subordination   agreements,   undertakings  and  other  agreements,   documents,
instruments and financing  statements now or hereafter executed and/or delivered
by any Person in connection  with or as security or assurance for the payment or
performance of the Obligations or any part thereof.

         "Senior   Debt"   means,   as  to  any  Person  and  its   Consolidated
Subsidiaries,  and as of any date of  determination,  the sum of (i) Total  Debt
minus (ii) all Subordinated Debt.

         "Solvent"  means,  with  respect  to any  Person  as of the date of any
determination,  that on such  date (a) the fair  value of the  Property  of such
Person (both at fair  valuation and at present fair  saleable  value) is greater
than  the  total  liabilities,   including,   without   limitation,   contingent
liabilities,  of such Person,  (b) the present fair saleable value of the assets
of such  Person is not less than the  amount  that will be  required  to pay the
probable  liability  of such  Person on its debts as they  become  absolute  and
matured,  (c) such  Person is able to realize  upon its assets and pay its debts
and other  liabilities,  contingent  obligations  and other  commitments as they
mature in the normal course of business, (d) such Person does not intend to, and
does not believe that it will,  incur debts or liabilities  beyond such Person's
ability to pay as such debts and liabilities  mature, and (e) such Person is not
engaged in business or a transaction,  and is not about to engage in business or
a transaction,  for which such Person's  Property would constitute  unreasonably
small capital after giving due  consideration to current and anticipated  future
capital requirements and current and anticipated future business conduct and the
prevailing  practice  in the  industry  in which  such  Person  is  engaged.  In
computing the amount of contingent  liabilities  at any time,  such  liabilities
shall be computed at the amount which,  in light of the facts and  circumstances
existing at such time,  represents the amount that can reasonably be expected to
become an actual or matured liability.

         "Subordinated  Debt" means Debt of Holdings or the Borrower which meets
all of the following requirements:  (a) such Debt is wholly unsecured;  (b) such
Debt is contractually  subordinated,  as to payment, to payment of the Loans and
other  Obligations  (or,  in the case of  Holdings,  to its  Guaranty of payment
thereof) on terms, and pursuant to agreements in form and substance,  reasonably
satisfactory  to the  Administrative  Agent;  and (c) such Debt is evidenced and
governed by agreements,  documents and  instruments  in form and substance,  and
containing  payment,  subordination  and other terms and provisions,  which have
been  wholly  approved  by the  Administrative  Agent  in  writing  prior to the
incurrence of such Debt.

                                       23

<PAGE>

         "Subordinated  Debt Documents" means any and all agreements,  documents
and instruments now or hereafter evidencing or governing any Subordinated Debt.

         "Subsidiary"  means,  with respect to any Person,  any  corporation  or
other entity of which at least a majority of the outstanding  shares of stock or
other ownership  interests  having by the terms thereof ordinary voting power to
elect a  majority  of the board of  directors  (or  Persons  performing  similar
functions) of such corporation or entity  (irrespective of whether or not at the
time, in the case of a corporation,  stock of any other class or classes of such
corporation  shall have or might have voting power by reason of the happening of
any  contingency)  is at the time directly or indirectly  owned or controlled by
such Person or one or more of its Subsidiaries or by such Person and one or more
of its Subsidiaries.

         "Telecommunications  Assets" means all assets,  rights  (contractual or
otherwise) and Properties,  whether tangible or intangible, used or intended for
use in connection with a Telecommunications Business.

         "Telecommunications  Business" means the business of (a)  transmitting,
or providing  services  relating to the  transmission  of, voice,  data or video
through   owned  or  leased   transmission   facilities,   including   providing
applications and content services  through such  facilities,  (b)  constructing,
creating, developing or marketing communications related network equipment, data
centers, software and other devices for use in a telecommunications  business or
(c) evaluating, participating or pursuing any other activity or opportunity that
is primarily  related to, or ancillary or complementary to, those referred to in
clause (a) or (b) preceding.

         "Total  Capitalization"  means,  as to any Person and its  Consolidated
Subsidiaries and as of any date of  determination,  the sum of (a) Total Debt of
such Persons as of such date plus (b) the remainder of (i)  Contributed  Capital
of such  Persons as of such date minus (ii) the  aggregate  principal  amount of
Subordinated Debt of such Persons  outstanding as of such date,  determined on a
consolidated basis in accordance with GAAP.

         "Total Debt" means, as to any Person and its Consolidated  Subsidiaries
and as of any date of determination,  the aggregate principal amount of all Debt
of such Persons  outstanding,  determined on a consolidated  basis in accordance
with GAAP but  excluding  any Debt arising  under any Interest  Rate  Protection
Agreement unless such Debt is in a liquidated  amount and has arisen as a result
of  the  early  termination  or  default  under  the  applicable  Interest  Rate
Protection Agreement.

         "Type"  means any type of Loan  (i.e.,  a Base Rate Loan or  Eurodollar
Loan).

                                       24

<PAGE>


         "UCC"  means the Uniform  Commercial  Code as in effect in the State of
New York and/or any other  jurisdiction,  the laws of which may be applicable to
or in connection  with the  creation,  perfection or priority of any Lien on any
Property created pursuant to any Security Document.

         "U.S." means the United States of America.

         "U.S.  Person" means a citizen or resident of the U.S., a  corporation,
partnership,  limited  liability company or other entity created or organized in
or under any laws of the U.S.  or any  estate or trust  that is  subject to U.S.
Federal income taxation regardless of the source of its income.

         "U.S.  Taxes"  means any  present or future  tax,  assessment  or other
charge  or levy  imposed  by or on behalf of the U.S.  or any  taxing  authority
thereof.

         "Vendor"  means  Nortel  Networks in its  capacity as vendor  under the
Master Purchase Agreement.

         "Voting  Stock" of any Person means  Capital Stock of such Person which
ordinarily  has voting power for the election of directors,  managers or general
partners (or persons performing  similar  functions) of such Person,  whether at
all times or only for so long as no senior class of  securities  has such voting
power by reason of any contingency.

         "Wholly-Owned   Subsidiary"  means,  with  respect  to  any  Person,  a
Subsidiary  of such Person all of whose  outstanding  Capital  Stock (other than
directors'  qualifying shares, if any) shall at the time be owned by such Person
and/or one or more of its Wholly-Owned Subsidiaries.

         "Year 2000  Compliant"  means that (a) the services,  products or other
item(s) at issue accurately  process,  provide and/or receive all date/time data
(including  calculating,   comparing,  sequencing,  processing  and  outputting)
within,   from,  into  and  between  centuries   (including  the  twentieth  and
twenty-first  centuries  and the  years  1999 and  2000),  including  leap  year
calculations,  and (b) neither the  performance  nor the  functionality  nor the
business' provision of the services, products and other item(s) at issue will be
affected by any dates/times prior to, on, after or spanning January 1, 2000. The
design of the services, products and other item(s) at issue to ensure compliance
with the "year 2000"  representations  and warranties and covenants contained in
this  Agreement   includes  proper   date/time  data  century   recognition  and
recognition of 1999 and 2000,  calculations that accommodate  single century and
multi-century  formulae  and  date/time  values  before,  on, after and spanning
January 1, 2000, and date/time  data interface  values that reflect the century,
1999 and 2000. In particular, but without limitation, such design means that (i)
no value for current  date/time will cause any error,  interruption or decreased
performance  in or for such  services,  products  and  other  item(s),  (ii) all
manipulations of date and time related data (including  calculating,  comparing,
sequencing processing and outputting) will produce correct results for all valid
dates and times when used  independently  or in combination with other services,
products and/or items,  (iii) date/time  elements in interfaces and data storage
will specify the century to eliminate date ambiguity without human intervention,
including  leap  year   calculations,   (iv)  where  any  date/time  element  is
represented  without a century,  the correct century will be unambiguous for all
manipulations  involving that element,  (v) authorization  codes,  passwords and
zaps (purge  functions)  will function  normally and in the same manner  during,
prior to, on and after  January  1,  2000,  including  the  manner in which they
function with respect to expiration  dates and CPU serial numbers,  and (vi) the
business'  supply  of the  services,  products  and  other  item(s)  will not be
interrupted,  delayed, decreased or otherwise affected by the advent of the year
2000.

                                       25

<PAGE>


         Section 1.2 Other Definitional Provisions. All definitions contained in
this  Agreement  are equally  applicable to the singular and plural forms of the
terms defined. The words "hereof", "herein" and "hereunder" and words of similar
import referring to this Agreement refer to this Agreement as a whole and not to
any   particular   provision   of  this   Agreement.   The  term   "continuing",
"continuation"  or "continuance"  means, in reference to any Default or Event of
Default  that has  occurred,  that such Default or Event of Default has not been
either cured to the reasonable  satisfaction of the Administrative  Agent within
the  applicable  grace period (if any)  specified in this Agreement or the other
Loan Documents (as applicable) or waived in writing by the requisite  Lenders in
accordance  with Section  13.11.  Unless  otherwise  specified,  all Article and
Section references pertain to this Agreement. Terms used herein that are defined
in the UCC, unless otherwise defined herein,  shall have the meanings  specified
in the UCC. All references in this Agreement to any agreement shall be deemed to
mean and refer to such agreement as it may be amended,  modified or supplemented
from time to time if (but only if) such  amendment,  modification  or supplement
has been  approved by the  Administrative  Agent and the requisite  Lenders,  is
expressly referred to in such reference or is otherwise  expressly  permitted by
the terms of this Agreement.

         Section 1.3       Accounting Terms and Determinations.

         (a) Except as may be expressly provided herein to the contrary, (i) all
accounting terms (whether or not specifically defined herein) shall be construed
in  accordance  with  GAAP  (subject  to year end  adjustments,  if  applicable)
consistent  with such  accounting  principles  applied in the preparation of the
audited financial  statements  referred to in Section 7.2(a), (ii) all financial
information  delivered to the Administrative Agent pursuant to Section 8.1 shall
be  prepared  in  accordance  with GAAP  (subject  to year end  adjustments,  if
applicable)  applied  on a basis  consistent  with  such  accounting  principles
applied in the preparation of the audited financial statements of the applicable
Person  referred to in Section 7.2 or in accordance  with Section 8.7, and (iii)
with respect to accounting terms or financial  information  defined or described
in reference to a Person and its Consolidated  Subsidiaries,  all such terms and
information  shall be construed as applying to such Person and its  Consolidated
Subsidiaries  on a consolidated  basis in accordance with GAAP. In the event any
changes in accounting principles required by GAAP and implemented by Holdings or
the  Borrower  occur and such  changes  result in a change in the  method of the
calculation  of financial  covenants,  standards or terms under this  Agreement,
then the Borrower,  Holdings, the Administrative Agent, and the Lenders agree to
enter into  negotiations  in order to amend such provisions of this Agreement so
as to equitably  reflect such changes with the desired  result that the criteria
for evaluating such covenants,  standards, or terms shall be the same after such
changes  as if such  changes  had not  been  made.  Until  such  time as such an
amendment  shall have been executed and delivered by the  Administrative  Agent,
the Borrower, Holdings, and the Lenders, all financial covenants, standards, and
terms in this Agreement  shall continue to be calculated or construed as if such
changes had not occurred.

                                       26

<PAGE>

         (b) The  Borrower  shall  deliver to the  Administrative  Agent and the
Lenders,  at the same time as the delivery of any annual or quarterly  financial
statement  under Section 8.1, (i) a description,  in reasonable  detail,  of any
material  variation  between the application of GAAP employed in the preparation
of the next  preceding  annual or  quarterly  financial  statements  prepared in
accordance with Section 1.3(a)  preceding as to which no objection has been made
by the  Administrative  Agent and (ii)  reasonable  estimates of the  difference
between such statements arising as a consequence thereof.

         (c) To enable the ready and consistent determination of compliance with
the covenants set forth in this Agreement, the Borrower will not change the last
day of its  fiscal  year from  December  31 or the last days of the first  three
fiscal  quarters of the Borrower in each of its fiscal years from March 31, June
30 and September 30, respectively.

         (d) Unless  otherwise  expressly  provided herein to the contrary,  all
references  herein to the Closing  Date shall be deemed to mean and refer to the
Closing Date after giving  effect to all  transactions  which occur on or before
such date.

         Section 1.4 Financial Covenants and Reporting. All financial statements
and reports  required to be delivered  pursuant to this  Agreement and the other
Loan  Documents,  and  all  financial  covenants  (if  any)  contained  in  this
Agreement,  shall be prepared or determined (as  applicable) in accordance  with
GAAP (except as may be expressly provided to the contrary herein) and, if and to
the extent  that such  statements,  reports or  covenants  are to be prepared or
determined  on a  consolidated  basis,  shall be  prepared  or  determined  on a
consolidated  basis for Holdings and its Consolidated  Subsidiaries  (including,
without  limitation,  the Borrower)  except as may be expressly  provided to the
contrary herein.

                                    ARTICLE 2

                                      Loans

         Section 2.1       Commitments.

         (a)  Loans.  Subject  to the terms  and  conditions  of this  Agreement
(including,  without limitation,  Section 2.13(a)), each Lender severally agrees
to make one or more loans to the Borrower  from time to time from and  including
the Closing Date to but excluding the Commitment  Termination Date up to but not
exceeding  the amount  (if any) of such  Lender's  Commitment  as then in effect
(such loans  referred to in this  Section  2.1(a) now or  hereafter  made by the
Lenders to the Borrower,  including, without limitation, such loans which remain
outstanding after the Commitment Termination Date, are hereinafter  collectively
called the "Loans").  Notwithstanding anything to the contrary contained in this
Agreement, the Borrower, the Administrative Agent and the Lenders agree that, as
of the Closing  Date,  the  aggregate  principal  amount of the  Original  Loans
outstanding  as of the  Closing  Date  shall  be  deemed  outstanding  as  Loans
hereunder. The Borrower may not reborrow the Loans which have been repaid.

                                       27

<PAGE>


         (b)  Continuation  and  Conversion  of Loans.  Subject to the terms and
conditions  of this  Agreement,  the  Borrower may borrow the Loans as Base Rate
Loans or  Eurodollar  Loans and,  until the  Maturity  Date with  respect to the
applicable Loans, the Borrower may Continue Eurodollar Loans or Convert Loans of
one Type into Loans of the other Type.

         (c) Lending  Offices.  Loans of each Type made by each Lender  shall be
made and maintained at such Lender's Applicable Lending Office for Loans of such
Type.

         Section 2.2       Notes.

         (a) Notes.  Each of the Loans made by each Lender shall be evidenced by
a single  promissory note of the Borrower in substantially the form of Exhibit B
hereto dated the Closing Date (or such appropriate  later date if such Lender is
a party to an Assignment and Acceptance), payable to the order of such Lender in
a principal amount equal to the sum of (A) the aggregate principal amount of the
Loans of such Lender plus (B) the  aggregate  principal  amount of the  unfunded
Commitment of such Lender, as originally in effect and otherwise duly completed.
Each Lender is hereby  authorized by the Borrower to endorse on the schedule (or
a  continuation  thereof)  attached  to the Note of such  Lender,  to the extent
applicable,  the  date,  amount  and Type of and the  Interest  Period  for each
applicable  Loan made by such  Lender  to the  Borrower  and the  amount of each
payment  or  prepayment  of  principal  of such Loan  received  by such  Lender,
provided that any failure by such Lender to make any such endorsement  shall not
affect the  obligations of the Borrower under any such Note or this Agreement in
respect of any such Loan.

         (b)  Registered  Notes.  Any Lender that is not a U.S.  Person and that
could become  completely  exempt from  withholding  of U.S.  Taxes in respect of
payment of any Obligations due to such Lender  hereunder  relating to any of its
Loans if such Loans were in registered form for U.S. Federal income tax purposes
may request the Borrower (through the  Administrative  Agent),  and the Borrower
agrees  thereupon,  to exchange such Lender's  Note  evidencing  its Loans for a
promissory  note registered as provided in Section 13.8(h) hereof (a "Registered
Note").  Registered  Notes  may  not be  exchanged  for  Notes  that  are not in
registered form.

         Section  2.3  Repayment  of  Loans.  The  Borrower  shall  pay  to  the
Administrative  Agent for the account of each Lender the principal amount of the
Loans  outstanding  as of the  Commitment  Termination  Date (and the  principal
amount of such Loans  outstanding  as of such date shall be due and  payable) in
twenty (20) quarterly installments,  commencing on the Amortization Commencement
Date  and  continuing  on  each  Quarterly  Date   thereafter,   each  of  which
installments  shall  be in an  amount  equal  to  [**]  percent  ([**]%)  of the
aggregate  principal  amount  of the  Loans  outstanding  as of  the  Commitment
Termination  Date.  In addition,  the Borrower  shall pay to the  Administrative
Agent for the account of each Lender all outstanding principal of the Loans (and
all outstanding  principal of the Loans shall be due and payable in full) on the
Maturity Date.

[**] CONFIDENTIAL TREATMENT REQUESTED

                                       28

<PAGE>

         Section 2.4       Interest.

         (a) Interest Rate. The Borrower shall pay to the  Administrative  Agent
for the account of each Lender interest on the unpaid  principal  amount of each
Loan made by such Lender (or deemed  made by such Lender with  respect to a Loan
assigned to such Lender  after the making of such Loan) to the  Borrower for the
period commencing on the date of such Loan to, but excluding, the date such Loan
shall be paid in full, at the following rates per annum:

                  (i) during  the  periods  such Loan is a Base Rate  Loan,  the
         lesser  of (A) the Base  Rate  plus the  Applicable  Margin  or (B) the
         Maximum Rate; and

                  (ii) during the periods  such Loan is a Eurodollar  Loan,  the
         lesser of (A) the Adjusted  Eurodollar Rate plus the Applicable  Margin
         or (B) the Maximum Rate.

         (b)  Payment  Dates.  Accrued  interest  on the Loans  shall be due and
payable as follows:

                  (i)  in the case of Base Rate Loans on each Monthly Date;

                  (ii) in the case of each  Eurodollar  Loan, on the last day of
         the  Interest  Period  with  respect  thereto  and,  in the  case of an
         Interest  Period greater than three months,  at  three-month  intervals
         after the first day of such Interest Period;

                  (iii) upon the payment or  prepayment  (whether  mandatory  or
         optional)  of any Loan or the  Conversion  of any Loan to a Loan of the
         other  Type  (but only on the  principal  amount  so paid,  prepaid  or
         Converted); and

                  (iv)  with respect to all Loans, on the Maturity Date.

         (c) Default Interest. Notwithstanding the foregoing, the Borrower shall
pay to the  Administrative  Agent for the account of each Lender interest at the
applicable  Default  Rate (i) at all times during which any Default has occurred
and is  continuing,  on any principal of any Loan  outstanding,  and (ii) to the
fullest extent  permitted by law, any other amount payable by the Borrower under
this  Agreement or any other Loan  Document to or for the account of such Lender
which is not paid in full when due (whether at stated maturity,  by acceleration
or  otherwise)  for the period from and  including  the due date  thereof to but
excluding the date the same is paid in full. Interest accrued and payable at the
Default Rate shall be payable from time to time on demand by the  Administrative
Agent.

         Section 2.5       Borrowing Procedure.

         (a) General Procedure. The Borrower shall give the Administrative Agent
notice of each  borrowing  hereunder in  accordance  with Section 2.9. Not later
than  1:00  p.m.  (New  York,  New York  time) on the  date  specified  for each
borrowing  hereunder,  each Lender will make available the amount of the Loan to
be made by it on such date to the Administrative Agent, at the Principal Office,
in immediately  available funds, for the account of the Borrower.  The amount of
each borrowing

                                       29

<PAGE>

hereunder so received by the  Administrative  Agent shall,  subject to the terms
and conditions of this Agreement,  be made  available,  for and on behalf of the
Borrower,  in immediately  available funds by no later than 1:00 p.m. (New York,
New York time);  provided,  however,  that the Administrative  Agent may, in its
discretion,  cause  such  amount  to be made  available  directly  to or for the
benefit of the Person who is to receive the proceeds of such Loan in  accordance
with Section 2.10 (e.g.,  the Vendor if and to the extent that  proceeds of such
borrowing are used to pay for Nortel Networks Goods and Installation Services).

         (b)  Procedure  While  Nortel  Networks  is Sole  Lender  --  Automatic
Advancement of Loans. Notwithstanding anything to the contrary contained in this
Agreement,  the  Administrative  Agent  shall  cause Loans to be advanced by the
Lenders  for and on  behalf of the  Borrower  whether  or not (i) any  Notice of
Borrowing is given in accordance  with Section 2.9,  (ii) any of the  conditions
precedent set forth in Article 6 hereof are satisfied, (iii) any Default exists,
or (iv) any other fact or circumstance exists, if (A) Nortel Networks shall have
given five Business Day's prior written notice to the  Administrative  Agent and
the Borrower of Nortel  Networks' desire to cause the Lenders to make such Loans
and (B) Nortel  Networks is then the sole Lender and all  proceeds of such Loans
are  used  to  pay  the  purchase  price  due  for  Nortel  Networks  Goods  and
Installation  Services  which goods or services have been  delivered or rendered
and which  invoice  has not been  paid  within  ten (10) days  after the date of
invoice by the Vendor  therefor  and/or to pay accrued late charges  relating to
such purchase price in accordance with the Master Purchase Agreement.  All Loans
advanced  pursuant  to this  Section  2.5(b)  shall  be  initially  advanced  as
Eurodollar  Loans with a one month Interest  Period or, if the maximum number of
Interest  Periods for Eurodollar  Loans is already then in effect,  as Base Rate
Loans (but after such  advancement,  may be Converted or Continued in accordance
with this Agreement).

         (c)  Credits  Under  the  Master  Purchase  Agreement.  Notwithstanding
anything to the contrary contained in this Agreement,  if and to the extent that
Nortel  Networks is a Lender under this Agreement,  the Borrower  further hereby
irrevocably  agrees  that each Loan to be  advanced  by Nortel  Networks  to the
Borrower in accordance  with this  Agreement  (and only in accordance  with this
Agreement and after the Administrative  Agent's receipt of a Notice of Borrowing
executed by the Borrower) may (in the  discretion of Nortel  Networks and if and
to the extent that the proceeds of such Loan are to be paid to Nortel  Networks)
be  effectively  disbursed on the date set forth in the Notice of Borrowing  for
such  disbursement  to the  Borrower by virtue of a credit in the amount of such
Loan given to the Borrower under the Master Purchase Agreement.

         Section 2.6 Optional  Prepayments,  Conversions  and  Continuations  of
Loans.  Subject to Section 2.8 and Section 2.11(c),  the Borrower shall have the
right from time to time to prepay the Loans in whole or in part,  to Convert all
or  part of a Loan  of one  Type  into a Loan  of  another  Type or to  Continue
Eurodollar  Loans;  provided,  however,  that (a) the  Borrower  shall  give the
Administrative Agent notice of each such prepayment,  Conversion or Continuation
as provided in Section  2.9, (b)  Eurodollar  Loans may only be Converted on the
last day of the Interest  Period and any  prepayment of Eurodollar  Loans on any
day other than the last day of the  Interest  Period shall be subject to payment
of the  additional  compensation  specified  in  Section  4.5,  (c)  except  for
Conversions  of  Eurodollar  Loans  into  Base Rate  Loans,  no  Conversions  or
Continuations shall be made while a Default has occurred and is continuing,  and
(d) optional  prepayments  of the Loans shall be applied to the principal of the
Loans  prepaid in the  inverse  order of the  maturities  of the then  remaining
installments of such Loans. No amounts prepaid  pursuant to this Section 2.6 may
be reborrowed.

                                       30

<PAGE>

         Section 2.7       Mandatory Prepayments.

         (a) Asset  Dispositions,  etc. The Borrower shall,  within two Business
Days after it receives  any Net Proceeds of any Asset  Disposition,  proceeds of
any Insurance Recovery or proceeds of condemnation  awards aggregating in excess
of $[**]  during  any  period of 12  consecutive  months or less (the  aggregate
amount of all such Net Proceeds or proceeds  exceeding $[**] received during any
such  period  are  herein  called  the  "Excess  Proceeds  Amount"),  pay to the
Administrative Agent, as a prepayment of the Loans, an aggregate amount equal to
the Excess Proceeds Amount;  provided,  however, that no such prepayment will be
required if and to the extent that the Excess  Proceeds Amount is re-invested in
productive  assets  used  in  the  ordinary  course  of  the  Borrower's  or its
Subsidiary's  (as  applicable)  business within [**] days of the receipt of such
Excess Proceeds Amount;  provided,  further,  however,  that the Excess Proceeds
Amount  shall  be  deposited  into  a  cash  collateral   account  held  by  the
Administrative  Agent pursuant to an agreement in form and substance  reasonably
satisfactory  to the  Administrative  Agent  until  such  time  as  such  amount
(exclusive of any interest  accrued thereon) is either  re-invested  within such
[**] day period or applied to the Loans or other Obligations as provided in this
Section 2.7.

         (b) Excess  Cash Flow.  The  Borrower  shall,  commencing  on the first
Quarterly  Date  immediately  succeeding  the first  fiscal year end of Holdings
occurring  after  the  Commitment   Termination  Date  and  continuing  on  each
anniversary of such Quarterly Date thereafter,  pay (or cause to be paid) to the
Administrative  Agent, as a prepayment of the Loans and other  Obligations  then
outstanding,  an aggregate  amount equal to [**] percent  ([**]%) of Excess Cash
Flow of the Borrower and its Subsidiaries for the fiscal year then most recently
ended.

         (c) Sale of the Network.  The  Borrower  shall,  concurrently  with any
sale,  transfer or other  disposition of all or substantially all of the Network
prepay  in full (i) the  outstanding  principal  amount of all  Loans,  (ii) all
interest  accrued  and  unpaid  with  respect  to all  Loans and (iii) all other
outstanding Obligations.

         (d) Application of Mandatory  Prepayments.  All prepayments pursuant to
Section 2.7(a) and Section 2.7(b) shall be applied first to the principal of the
Loans in the inverse order of the maturities of the then remaining  installments
of the Loans and then to the remaining outstanding  Obligations in such order as
the Administrative Agent may determine.

         (e) No Reborrowing. No amounts prepaid pursuant to this Section 2.7 may
be reborrowed.

         Section 2.8 Minimum  Amounts.  Except for  Conversions  and prepayments
pursuant to Section 2.7 and Article 4, each borrowing,  each Conversion and each
optional  prepayment  of  principal  of the Loans shall be in an amount at least
equal to $[**] or an integral  multiple of $[**] in excess thereof  (borrowings,
prepayments or  Conversions of or into Loans of different  Types or, in the case
of  Eurodollar  Loans,  having  different  Interest  Periods  at the  same  time
hereunder shall be deemed separate  borrowings,  prepayments and Conversions for
purposes of the foregoing, one for each Type or Interest Period).

[**] CONFIDENTIAL TREATMENT REQUESTED

                                       31

<PAGE>

         Section  2.9  Certain   Notices.   Notices  by  the   Borrower  to  the
Administrative   Agent  of  terminations   or  reductions  of  Commitments,   of
borrowings,  Conversions,  Continuations  and  prepayments  of Loans  and of the
duration of Interest Periods shall be irrevocable and shall be effective only if
received by the  Administrative  Agent not later than 11:00 a.m. (New York,  New
York,  time) on the  applicable  Business  Day prior to the date of the relevant
termination, reduction, borrowing, Conversion, Continuation or prepayment or the
first day of such Interest Period specified below:

--------------------------------------------------------------------------------
                                                             Number of
                 Notice                                  Business Days Prior
--------------------------------------------------------------------------------
Terminations or Reductions of Commitments                        1
--------------------------------------------------------------------------------
Borrowings of Loans which are Base Rate Loans                    2
--------------------------------------------------------------------------------
Borrowings of Loans which are Eurodollar Loans                   3
--------------------------------------------------------------------------------
Prepayments of Loans                                             3
--------------------------------------------------------------------------------

Each such notice of  termination  or reduction  shall  specify the amount of the
Commitments  to be  terminated  or  reduced.  Each  such  notice  of  borrowing,
Conversion,  Continuation or prepayment  shall specify the Loans to be borrowed,
Converted,  Continued or prepaid and the amount  (subject to Section 2.8 hereof)
and Type of the Loans to be borrowed,  Converted,  Continued or prepaid (and, in
the case of a Conversion,  the Type of Loans to result from such Conversion) and
the date of borrowing, Conversion,  Continuation or prepayment (which shall be a
Business  Day).   Each  such  notice  of  termination,   reduction,   borrowing,
Conversion, Continuation or prepayment shall be in the form of Exhibit C hereto,
appropriately  completed as  applicable.  Each notice of borrowing (a "Notice of
Borrowing")  (a) shall  certify  that all proceeds of the  requested  Loans are,
concurrently  with the making of such Loans,  being used by the Borrower for the
purpose  specified  in Section 2.10 and (b) shall be  accompanied  by such other
evidence as to use of the  proceeds  of such  borrowing,  as the  Administrative
Agent may  reasonably  request  from time to time.  Each notice  which  includes
reference to the duration of an Interest Period shall specify the Loans to which
such  Interest  Period is to relate.  The  Administrative  Agent shall  promptly
notify  the  Lenders  of the  contents  of each  such  notice.  In the event the
Borrower  fails to select  the Type of Loan,  or the  duration  of any  Interest
Period for any Eurodollar Loan, within the time period and otherwise as provided
in this Section  2.9,  such Loan (if  outstanding  as  Eurodollar  Loan) will be
automatically  Converted  into a Base  Rate  Loan on the last  day of  preceding
Interest  Period  for such Loan or (if  outstanding  as a Base Rate  Loan)  will
remain as, or (if not then  outstanding)  will be made as, a Base Rate Loan. The
Borrower may not borrow any Eurodollar Loans,  Convert any Loans into Eurodollar
Loans or Continue any Loans as  Eurodollar  Loans if the interest  rate for such
Eurodollar Loans would exceed the Maximum Rate.

                                       32

<PAGE>

         Section 2.10      Use of Proceeds.

         (a) Loans.  The Borrower agrees that all proceeds of the Loans shall be
used (i) to refinance the existing Debt  outstanding  under the Original  Credit
Facility,  (ii) to finance  the  purchase  price for Nortel  Networks  Goods and
Installation   Services  provided  by  the  Vendor  under  the  Master  Purchase
Agreement,  excluding  sales and use taxes and  freight  charges,  which  Nortel
Networks Goods and  Installation  Services shall be used in the construction and
operation of the Network, (iii) to pay [**], and (iv) to pay [**].

         (b)  Margin  Stock.  None of the  proceeds  of any  Loan may be used to
acquire any security in any  transaction  that is subject to Section 13 or 14 of
the Exchange Act or to purchase or carry any margin stock (within the meaning of
Regulations T, U or X of the Board of Governors of the Federal Reserve System).

         Section 2.11      Fees.

         (a)  Subject  to  Section   13.12,   the  Borrower  shall  pay  to  the
Administrative  Agent for the account of each applicable Lender a commitment fee
on the daily average  outstanding  amount of each such Lender's  Commitments (as
the same may be terminated or reduced  pursuant to Section 2.13), for the period
from and including the Closing Date to but excluding the Commitment  Termination
Date, at the rate per annum specified in the table below based on a 360 day year
and the  actual  number  of days  elapsed  and  based  upon  the  daily  average
outstanding  amount of the Commitments,  which accrued  commitment fees shall be
payable in  arrears on each  Quarterly  Date and on the  Commitment  Termination
Date:

--------------------------------------------------------------------------------
              Daily Average Outstanding                         Commitment
                 Amount of the Loans                             Fee Rate
--------------------------------------------------------------------------------
Less than [**] of the amount of the Commitments                     [**]%
--------------------------------------------------------------------------------
Equal to or greater than [**] of the amount of the                  [**]%
Commitments but less than [**] of the amount of the
Commitments
--------------------------------------------------------------------------------
Equal to or greater than [**] of the amount of the                  [**]%
Commitments
--------------------------------------------------------------------------------

         (b)  Subject  to  Section  13.12,  the  Borrower  agrees  to pay to the
Administrative  Agent and Nortel  Networks such additional fees as are specified
in the  Administrative  Agent's  Letter,  which  fees  shall be  payable in such
amounts and on such dates as are specified therein.


[**] CONFIDENTIAL TREATMENT REQUESTED

                                       33

<PAGE>

         Section  2.12  Computations.  Interest and fees payable by the Borrower
hereunder  and under the other Loan  Documents on all Loans shall be computed on
the basis of a year of 360 days and the actual number of days elapsed (including
the first day but  excluding  the last day)  occurring  in the  period for which
payable unless,  in the case of interest or fees which  constitute  interest (if
applicable),  such  calculation  would result in a usurious  rate, in which case
interest or fees which constitute  interest (if applicable)  shall be calculated
on the basis of a year of 365 or 366 days, as the case may be.

         Section 2.13      Termination or Reduction of Commitments.

         (a)  Notwithstanding   anything  to  the  contrary  contained  in  this
Agreement,  each of the  Commitments  shall  automatically  terminate  upon  the
earlier to occur of (i) the  occurrence  of any Change in  Control,  or (ii) any
sale,  transfer  or other  disposition  of the Network or any  material  portion
thereof.

         (b)  Notwithstanding   anything  to  the  contrary  contained  in  this
Agreement, each of the Commitments shall automatically be reduced,  concurrently
with the making of any Loans by an amount equal to the principal amount of Loans
advanced.

         (c) The  Borrower  shall have the right to  terminate or reduce in part
the unused portion of the Commitments at any time and from time to time prior to
the Commitment Termination Date; provided, however, that (i) no such termination
or reduction  shall be effective  unless the Borrower shall have given notice of
each such  termination  or  reduction  as  provided in Section 2.9 and (ii) each
partial  reduction of any such  Commitment  shall be in an  aggregate  amount at
least equal to $1,000,000 or an integral multiple of $100,000 in excess thereof.

         (d)  The  Commitments  may  not be  reinstated  after  they  have  been
terminated or increased after they have been reduced.

                                    ARTICLE 3

                                    Payments

         Section 3.1 Method of Payment and Application of Payments. All payments
of principal,  interest, fees and other amounts to be made by the Borrower under
this Agreement and the other Loan Documents shall be made to the  Administrative
Agent at the  Principal  Office  for the  account  of each  Lender's  Applicable
Lending Office in Dollars and in immediately  available  funds,  without setoff,
deduction or counterclaim, not later than 1:00 p.m. (New York, New York time) on
the date on which such  payment  shall  become due (each such payment made after
such time on such due date to be deemed to have been made on the next succeeding
Business  Day).  The Borrower  shall,  at the time of making each such  payment,
specify to the Administrative  Agent the sums payable by the Borrower under this
Agreement  and the other Loan  Documents  to which such payment is to be applied
(and in the  event  that the  Borrower  fails to so  specify,  or if an Event of
Default has occurred and is continuing,  the Administrative Agent may apply such
payment to the Obligations in such order and manner as the Administrative  Agent
may elect, subject to this Section 3.1 and Section 3.2). Upon the occurrence and
during the  continuation of an Event of Default,  all proceeds of any Collateral
and all

                                       34

<PAGE>

other funds of the Borrower in the possession of the Administrative Agent or any
Lender may be applied by the  Administrative  Agent to the  Obligations  in such
order and manner as the Administrative  Agent may elect, subject to Section 3.2;
provided, however, that, in the event of any sale, disposition or liquidation of
the Collateral or any portion  thereof as a result of or in connection  with the
occurrence of an Event of Default and receipt by the Administrative Agent of any
proceeds  thereof,  or in the event of any  bankruptcy  or  similar  proceedings
involving Holdings, the Borrower or any of their Subsidiaries and receipt by the
Administrative  Agent  of  any  payments  with  respect  to the  Obligations  in
connection   therewith,   all   proceeds   thereof   shall  be  applied  by  the
Administrative  Agent as follows unless otherwise  agreed by the  Administrative
Agent and the Required Lenders: (i) first, to reimburse the Administrative Agent
for all  fees,  costs  and  expenses  relating  to  such  sale,  disposition  or
liquidation or bankruptcy or similar  proceedings,  (ii) second,  to the accrued
and unpaid interest with respect to the Loans,  (iii) third, to the principal of
the Loans  (until  such Loans are paid in full),  and (iv)  fourth,  to the then
remaining outstanding  Obligations in such order as the Administrative Agent may
determine.  Each  payment  received  by  the  Administrative  Agent  under  this
Agreement  or any other Loan  Document for the account of a Lender shall be paid
promptly to such Lender, in immediately available funds, for the account of such
Lender's Applicable Lending Office. Whenever any payment under this Agreement or
any  other  Loan  Document  shall  be  stated  to be due on a day  that is not a
Business Day, such payment may be made on the next succeeding  Business Day, and
such extension of time shall in such case be included in the  computation of the
payment of interest and commitment fee, as the case may be.

         Section 3.2 Pro Rata Treatment. Except to the extent otherwise provided
in this Agreement: (a) each Loan shall be made by the Lenders under Section 2.1,
each payment of  commitment  fees under  Section  2.11(a)  shall be made for the
account of the Lenders and each  termination  or  reduction  of the  Commitments
under Section 2.13 shall be applied to the Commitments of the Lenders,  pro rata
according to the respective unused Commitments;  (b) the making,  Conversion and
Continuation of Loans of a particular Type (other than Conversions  provided for
by Section 4.4) shall be made pro rata among the Lenders  holding  Loans of such
Type according to the amounts of their respective Commitments;  (c) each payment
and  prepayment  by the  Borrower  of  principal  of or  interest  on Loans of a
particular Type shall be made to the Administrative Agent for the account of the
Lenders  holding Loans of such Type pro rata in accordance  with the  respective
unpaid  principal  amounts of such Loans held by such Lenders;  and (d) Interest
Periods  for Loans of a  particular  Type shall be  allocated  among the Lenders
holding  Loans of such  Type  pro rata  according  to the  respective  principal
amounts held by such Lenders.

         Section 3.3 Sharing of Payments,  Etc. If a Lender shall obtain payment
of any  principal  of or interest on any of the  Obligations  due to such Lender
hereunder  through  the  exercise  of  any  right  of  setoff,   banker's  lien,
counterclaim or similar right, or otherwise, it shall promptly purchase from the
other Lenders  participations  in the  Obligations  held by the other Lenders in
such amounts, and make such adjustments from time to time, as shall be equitable
to the end that all the  Lenders  shall  share pro rata in  accordance  with the
unpaid  principal and interest on the  Obligations  then due to each of them. To
such end, all of the Lenders shall make appropriate adjustments among themselves
(by the resale of  participations  sold or  otherwise)  if all or any portion of
such excess payment is thereafter  rescinded or must otherwise be restored.  The
Borrower agrees, to the fullest extent it may effectively do so

                                       35

<PAGE>

under  applicable  law,  that any Lender so  purchasing a  participation  in the
Obligations  by the other  Lenders may exercise  all rights of setoff,  banker's
lien, counterclaim or similar rights with respect to such participation as fully
as if such  Lender  were a direct  holder of  Obligations  in the amount of such
participation. Nothing contained herein shall require any Lender to exercise any
such right or shall affect the right of any Lender to  exercise,  and retain the
benefits of exercising,  any such right with respect to any other  indebtedness,
liability or obligation of the Borrower.

         Section 3.4 Non-Receipt of Funds by the  Administrative  Agent.  Unless
the  Administrative  Agent shall have been  notified by a Lender or the Borrower
(the  "Payor")  prior to the date on which such Lender is to make payment to the
Administrative Agent of the proceeds of a Loan to be made by it hereunder or the
Borrower is to make a payment to the Administrative Agent for the account of one
or more of the Lenders, as the case may be (such payment being herein called the
"Required  Payment"),  which notice shall be effective  upon  receipt,  that the
Payor does not intend to make the Required Payment to the Administrative  Agent,
the Administrative  Agent may assume that the Required Payment has been made and
may, in reliance upon such  assumption  (but shall not be required to), make the
amount  thereof  available  to the  intended  recipient on such date and, if the
Payor has not in fact made the Required Payment to the Administrative Agent, the
recipient of such payment shall, on demand, pay to the Administrative  Agent the
amount made  available to it together  with  interest  thereon in respect of the
period  commencing  on the  date  such  amount  was  so  made  available  by the
Administrative  Agent  until the date the  Administrative  Agent  recovers  such
amount at a rate per annum equal to the Federal Funds Rate for such period.

         Section 3.5       Taxes.

         (a) All  payments by the  Borrower of  principal of and interest on the
Loans and of all fees and other amounts  payable under the Loan Documents  shall
be made free and clear of, and without  withholding  or  deduction by reason of,
any present or future  taxes,  levies,  duties,  imposts,  assessments  or other
charges levied or imposed by any  Governmental  Authority  (other than franchise
taxes and taxes on the  overall  net income of any  Lender).  If any such taxes,
levies, duties, imposts,  assessments or other charges are so levied or imposed,
the Borrower will (i) make additional payments in such amounts so that every net
payment  of  principal  of and  interest  on the Loans and of all other  amounts
payable by it under the Loan Documents, after withholding or deduction for or on
account  of  any  such  present  or  future  taxes,  levies,  duties,   imposts,
assessments  or other charges  (including  any tax imposed on or measured by net
income of a Lender  attributable  to  payments  made to or on behalf of a Lender
pursuant to this Section 3.5 and any penalties or interest  attributable to such
payments),  will not be less than the  amount  provided  for  herein or  therein
absent such withholding or deduction  (provided that the Borrower shall not have
any obligation to pay such  additional  amounts to any Lender to the extent that
such taxes, levies, duties, imposts,  assessments or other charges are levied or
imposed by reason of the failure of such Lender to comply with the provisions of
Section 3.6),  (ii) make such  withholding or deduction and (iii) remit the full
amount deducted or withheld to the relevant Governmental Authority in accordance
with  applicable  law.  Without  limiting the generality of the  foregoing,  the
Borrower will,  upon written  request of any Lender,  reimburse each such Lender
for the amount of (A) such taxes, levies, duties, imports,  assessments or other
charges  so levied or  imposed by any  Governmental  Authority  and paid by such
Lender as a result of payments made by the

                                       36

<PAGE>


Borrower  under or with  respect  to the Loans  other than such  taxes,  levies,
duties,  imports,  assessments and other charges previously withheld or deducted
by the Borrower  which have  previously  resulted in the payment of the required
additional  amount  to  such  Lender,  and  (B)  such  taxes,  levies,   duties,
assessments  and other  charges so levied or imposed  with respect to any Lender
reimbursement under the foregoing clause (A), so that the net amount received by
such Lender (net of payments made under or with respect to the Loans) after such
reimbursement  will not be less  than the net  amount  such  Lender  would  have
received if such taxes,  levies,  duties,  assessments and other charges on such
reimbursement  had not been  levied  or  imposed.  The  Borrower  shall  furnish
promptly to the  Administrative  Agent for distribution to each affected Lender,
as the case may be, upon request of such Lender,  official  receipts  evidencing
any such payment, withholding or reduction.

         (b) The  Borrower  will  indemnify  the  Administrative  Agent and each
Lender (without duplication) against, and reimburse the Administrative Agent and
each  Lender  for,  all  present  and future  taxes,  levies,  duties,  imposts,
assessments  or other  charges  (including  interest  and  penalties)  levied or
collected  (whether or not legally or  correctly  imposed,  assessed,  levied or
collected),  excluding,  however, any taxes imposed on the overall net income of
the  Administrative   Agent  or  such  Lender  or  any  lending  office  of  the
Administrative   Agent  or  such  Lender  by  any   jurisdiction  in  which  the
Administrative Agent or such Lender or any such lending office is located, on or
in respect of this  Agreement,  any of the Loan Documents or the  Obligations or
any portion thereof (the "reimbursable  taxes"). Any such indemnification  shall
be on an  after-tax  basis,  taking  into  account any such  reimbursable  taxes
imposed on the amounts paid as indemnity.

         (c) Without prejudice to the survival of any other term or provision of
this  Agreement,  the  obligations  of the Borrower under this Section 3.5 shall
survive the payment of the Loans and the other  Obligations  and  termination of
the Commitments.

         Section  3.6  Withholding  Tax  Exemption.  Each  Lender  that  is  not
incorporated  or otherwise  formed under the laws of the U.S. or a state thereof
agrees that it will,  prior to or on or about the Closing  Date or the date upon
which it initially  becomes a party to this  Agreement and if it is legally able
to do so,  deliver  to the  Borrower  and the  Administrative  Agent,  two  duly
completed copies of U.S. Internal Revenue Service Form W-8ECI or W-8BEN or other
equivalent  successor  form,  as  appropriate,  certifying in any case that such
Lender is entitled to receive payments from the Borrower under any Loan Document
without  deduction or withholding of any U.S. federal income taxes.  Each Lender
which so delivers a Form W-8ECI or W-8BEN or other equivalent successor form, as
appropriate,   further   undertakes   to  deliver  to  the   Borrower   and  the
Administrative  Agent, two additional  copies of such form (or a successor form)
on or  before  the date such  form  expires  or  becomes  obsolete  or after the
occurrence of any event  requiring a change in the most recent form so delivered
by it, and such amendments  thereto or extensions or renewals  thereof as may be
reasonably  requested by the Borrower or the Administrative  Agent, in each case
certifying  that such Lender is entitled to receive  payments  from the Borrower
under any Loan Document  without  deduction or withholding  of any U.S.  federal
income  taxes,  unless an event  (including  without  limitation  any  change in
treaty,  law or  regulation)  has  occurred  prior to the date on which any such
delivery would  otherwise be required which renders all such forms  inapplicable
or which would prevent such Lender from duly  completing and delivering any such
form  with  respect  to  it  and  such  Lender  advises  the  Borrower  and  the
Administrative  Agent that it is not capable of receiving such payments  without
any deduction or withholding of U.S. federal income tax.

                                       37

<PAGE>

         Section 3.7 Reinstatement of Obligations.  Notwithstanding  anything to
the contrary  contained in this  Agreement  or any other Loan  Document,  if the
payment of any amount of principal  of or interest  with respect to the Loans or
any other  amount of the  Obligations,  or any portion  thereof,  is  rescinded,
voided or must otherwise be refunded by the  Administrative  Agent or any Lender
upon the insolvency,  bankruptcy or  reorganization of the Borrower or otherwise
for any  reason  whatsoever,  then  each of (a) the  Obligations,  (b) the  Loan
Documents  (including,  without  limitation,  this Agreement,  the Notes and the
Security  Documents),  (c) the indebtedness,  liabilities and obligations of the
Borrower  and any other Loan  Parties  and (d) all Liens for the  benefit of the
Administrative  Agent and the Lenders  created  under or  evidenced  by the Loan
Documents,  will be automatically  reinstated and become automatically effective
and in full force and effect,  all to the extent that and as though such payment
so rescinded, voided or otherwise refunded had never been made.

         Section 3.8 No Force Majeure,  Disputes.  The Borrower's  obligation to
pay all  amounts  due under the  Loans  and the other  Obligations  shall not be
affected  by (a) any setoff,  counterclaim,  recoupment,  deduction,  abatement,
suspension, diminution, reduction, defense or other right which the Borrower may
have against the Vendor for any reason  whatsoever  arising under or pursuant to
the Master Purchase  Agreement or otherwise relating to the purchase of goods or
services from the Vendor, (b) any defect in the condition,  design, operation or
fitness for use of, or any damage to or loss or destruction of, any equipment or
material  or service  provided by the Vendor,  (c) any  insolvency,  bankruptcy,
reorganization  or similar  proceedings  by or against the Borrower or affecting
any of its  Properties,  (d) any  action of any  Governmental  Authority  or any
damage to or destruction of or any taking of the Borrower's Property or any part
thereof, (e) any change, waiver, extension,  indulgence or failure to perform or
comply with, or other action or omission  herein or in the other Loan  Documents
(except  for  express  written  modifications  to this  Agreement  or other Loan
Documents as and in the manner  permitted under this Agreement or the other Loan
Documents), (f) any dissolution of the Borrower or any other Loan Party, (g) any
inability or illegality  with respect to the use or ownership of the  Borrower's
Property,  (h) any  failure  to  obtain,  or  expiration,  suspension  or  other
termination of, or interruption to, any required  licenses,  permits,  consents,
authorizations,  approvals or other legal  requirements,  (i) the  invalidity or
unenforceability  of any of the Loan Documents or any other infirmity therein or
any lack of power or authority of the Administrative  Agent or any Lender or the
Borrower,  or (j) any other  event or  circumstance  whatsoever,  whether or not
similar  to any of the  foregoing  and  whether or not the  Borrower  shall have
notice or  knowledge  of any of the  foregoing,  it being the  intention  of the
Administrative  Agent and the Lenders and the Borrower that the  Obligations  of
the  Borrower  shall be absolute  and  unconditional  and shall be separate  and
independent  covenants and agreements and shall continue  unaffected  unless the
requirements to pay or perform the same shall have been  terminated  pursuant to
an express provision thereof or of any of the other Loan Documents.

                                       38

<PAGE>

                                    ARTICLE 4

                         Yield Protection and Illegality

         Section 4.1       Additional Costs.

         (a) The  Borrower  shall pay directly to each Lender from time to time,
promptly  upon the  request of such  Lender,  the costs  incurred by such Lender
which such Lender  determines are  attributable  to its making or maintaining of
any  Eurodollar  Loans  or its  obligation  to make  any of such  Loans,  or any
reduction in any amount  receivable  by such Lender  hereunder in respect of any
such Loans or  obligations  (such  increases in costs and  reductions in amounts
receivable  being  herein  called  "Additional   Costs"),   resulting  from  any
Regulatory Change which:

                  (i) changes  the basis of  taxation of any amounts  payable to
         such Lender under this Agreement or its Notes in respect of any of such
         Loans  (other  than  taxes  imposed on the  overall  net income of such
         Lender or its  Applicable  Lending  Office for any of such Loans by the
         jurisdiction  in which  such  Lender has its  principal  office or such
         Applicable Lending Office);

                  (ii) imposes or modifies any reserve, special deposit, minimum
         capital,   capital  ratio  or  similar  requirement   relating  to  any
         extensions  of credit or other assets of, or any deposits with or other
         liabilities or commitments of, such Lender (including any of such Loans
         or any deposits  referred to in the definition of "Eurodollar  Rate" in
         Section 1.1 hereof, but excluding the Reserve Requirement to the extent
         it is included in the calculation of the Adjusted Eurodollar Rate); or

                  (iii) imposes any other condition  affecting this Agreement or
         the Notes or any  extensions of credit or  liabilities  or  commitments
         contemplated hereunder or thereunder.

Each Lender will notify the Borrower (with a copy to the  Administrative  Agent)
of any event  occurring after the Closing Date which will entitle such Lender to
compensation pursuant to this Section 4.1(a) as promptly as practicable after it
obtains knowledge thereof and determines to request such  compensation,  and (if
so requested by the  Borrower)  will  designate a different  Applicable  Lending
Office for the Eurodollar  Loans of such Lender if such  designation  will avoid
the need for,  or reduce the amount of, such  compensation  and will not, in the
sole opinion of such Lender,  violate any law,  rule or  regulation or be in any
way  disadvantageous  to such  Lender,  provided  that such Lender shall have no
obligation to so designate an Applicable Lending Office located in the U.S. Each
Lender will furnish the Borrower with a certificate  setting forth the basis and
the amount of each  request of such Lender for  compensation  under this Section
4.1(a). If any Lender requests compensation from the Borrower under this Section
4.1(a),  the  Borrower  may,  by  notice  to  such  Lender  (with  a copy to the
Administrative Agent), suspend the obligation of such Lender to make or Continue
making,  or Convert Base Rate Loans into,  Eurodollar Loans until the Regulatory
Change  giving  rise to such  request  ceases to be in effect (in which case the
provisions of Section 4.4 hereof shall be applicable).

         (b) Without  limiting the effect of the  foregoing  provisions  of this
Section 4.1, in the event that, by reason of any Regulatory  Change,  any Lender
either (i) incurs  Additional  Costs based on or measured by the excess  above a
specified level of the amount of a category of deposits or other

                                       39

<PAGE>

liabilities  of such Lender  which  includes  deposits by reference to which the
interest rate on Eurodollar Loans is determined as provided in this Agreement or
a category of extensions of credit or other assets of such Lender which includes
Eurodollar Loans or (ii) becomes subject to restrictions on the amount of such a
category of  liabilities  or assets which it may hold,  then,  if such Lender so
elects by notice to the Borrower (with a copy to the Administrative  Agent), the
obligation of such Lender to make or Continue making, or Convert Base Rate Loans
into, Eurodollar Loans hereunder shall be suspended until such Regulatory Change
ceases to be in effect (in which case the provisions of Section 4.4 hereof shall
be applicable).

         (c)  Determinations  and allocations by any Lender for purposes of this
Section 4.1 of the effect of any  Regulatory  Change on its costs of maintaining
its  obligation  to make Loans or of making or  maintaining  Loans or on amounts
receivable by it in respect of Loans and of the additional  amounts  required to
compensate such Lender in respect of any Additional  Costs,  shall be conclusive
in the  absence  of  manifest  error,  provided  that  such  determinations  and
allocations are made on a reasonable basis.

         Section  4.2  Limitation  on Types of  Loans.  Anything  herein  to the
contrary  notwithstanding,  if with  respect  to any  Eurodollar  Loans  for any
Interest Period therefor:

         (a) the Administrative  Agent determines (which  determination shall be
conclusive  absent  manifest  error) that  quotations of interest  rates for the
relevant  deposits referred to in the definition of "Eurodollar Rate" in Section
1.1 hereof are not being  provided in the  relative  amounts or for the relative
maturities  for purposes of  determining  the rate of interest for such Loans as
provided in this Agreement; or

         (b) the  Required  Lenders  determine  (which  determination  shall  be
conclusive absent manifest error) and notify the  Administrative  Agent that the
relevant rates of interest referred to in the definition of "Eurodollar Rate" or
"Adjusted  Eurodollar Rate" in Section 1.1 hereof on the basis of which the rate
of interest for such Loans for such  Interest  Period is to be determined do not
accurately  reflect the cost to the Lenders of making or maintaining  such Loans
for such Interest Period;

then the Administrative Agent shall give the Borrower prompt notice thereof and,
so long as such  condition  remains in  effect,  the  Lenders  shall be under no
obligation  to  make  Eurodollar  Loans  or to  Convert  Base  Rate  Loans  into
Eurodollar  Loans and the Borrower shall, on the last day(s) of the then current
Interest  Period(s) for the  outstanding  Eurodollar  Loans,  either prepay such
Loans or Convert such Loans into Base Rate Loans in accordance with the terms of
this Agreement.

         Section 4.3  Illegality.  Notwithstanding  any other  provision of this
Agreement,  in the  event  that  it  becomes  unlawful  for  any  Lender  or its
Applicable  Lending Office to (a) honor its obligation to make Eurodollar  Loans
or (b) maintain  Eurodollar  Loans,  then such Lender shall promptly  notify the
Borrower  (with a copy to the  Administrative  Agent)  thereof and such Lender's
obligation to make or maintain  Eurodollar  Loans and to Convert Base Rate Loans
into  Eurodollar  Loans  hereunder  shall be  suspended  until such time as such
Lender  may  again  make  and  maintain  Eurodollar  Loans  (in  which  case the
provisions of Section 4.4 hereof shall be applicable).

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<PAGE>

         Section 4.4  Treatment  of Affected  Loans.  If the  obligation  of any
Lender to make or Continue, or to Convert Base Rate Loans into, Eurodollar Loans
is  suspended  pursuant  to Section 4.1 or Section  4.3  hereof,  such  Lender's
Eurodollar  Loans shall be  automatically  Converted into Base Rate Loans on the
last day(s) of the then current Interest Period(s) for the Eurodollar Loans (or,
in the case of a Conversion required by Section 4.1(b) or Section 4.3 hereof, on
such earlier date as such Lender may specify to the Borrower  with a copy to the
Administrative Agent) and, unless and until such Lender gives notice as provided
below that the  circumstances  specified  in Section  4.1 or Section  4.3 hereof
which gave rise to such Conversion no longer exist:

         (a) to the  extent  that such  Lender's  Eurodollar  Loans have been so
Converted,  all payments and  prepayments of principal  which would otherwise be
applied to such Lender's  Eurodollar  Loans shall be applied instead to its Base
Rate Loans; and

         (b) all Loans which would otherwise be made or Continued by such Lender
as Eurodollar  Loans shall be made as or Converted  into Base Rate Loans and all
Loans of such Lender which would  otherwise be Converted into  Eurodollar  Loans
shall be Converted instead into (or shall remain as) Base Rate Loans.

If such Lender gives notice to the Borrower that the circumstances  specified in
Section  4.1 or Section  4.3 hereof  which gave rise to the  Conversion  of such
Lender's  Eurodollar  Loans  pursuant to this Section 4.4 no longer exist (which
such Lender agrees to do promptly upon such circumstances ceasing to exist) at a
time when Eurodollar Loans are outstanding,  such Lender's Base Rate Loans shall
be automatically  Converted, on the first day(s) of the next succeeding Interest
Period(s) for such  outstanding  Eurodollar  Loans,  to the extent  necessary so
that,  after  giving  effect  thereto,  all Loans  held by the  Lenders  holding
Eurodollar Loans and by such Lender are held pro rata (as to principal  amounts,
Types and Interest Periods) in accordance with their respective Commitments.

         Section 4.5 Compensation.  The Borrower shall pay to the Administrative
Agent for the account of each Lender,  promptly  upon the request of such Lender
through the Administrative  Agent, such amount or amounts as shall be sufficient
(in the reasonable  opinion of such Lender) to compensate it for any loss,  cost
or expense incurred by it as a result of:

         (a) Any payment,  prepayment or Conversion of a Eurodollar Loan for any
reason (including, without limitation, the acceleration of the outstanding Loans
pursuant  to  Section  11.2) on a date  other  than the last day of an  Interest
Period for such Loan; or

         (b) Any  failure by the  Borrower  for any reason  (including,  without
limitation, the failure of any conditions precedent specified in Article 6 to be
satisfied) to borrow,  Convert or prepay a Eurodollar  Loan on the date for such
borrowing,  Conversion  or  prepayment  specified  in  the  relevant  notice  of
borrowing, prepayment or Conversion under this Agreement.

         Section 4.6 Capital  Adequacy.  If, after the Closing Date,  any Lender
shall have determined that the adoption or implementation of any applicable law,
rule or regulation  regarding capital


                                       41

<PAGE>

adequacy   (including,   without   limitation,   any  law,  rule  or  regulation
implementing  the Basle  Accord),  or any change  therein,  or any change in the
interpretation  or   administration   thereof  by  any  central  bank  or  other
Governmental   Authority  charged  with  the  interpretation  or  administration
thereof,  or  compliance  by such  Lender (or its  parent)  with any  guideline,
request or directive regarding capital adequacy (whether or not having the force
of law) of any central bank or other Governmental Authority (including,  without
limitation,  any guideline or other requirement  implementing the Basle Accord),
has or would have the effect of reducing the rate of return on such Lender's (or
its  parent's)  capital as a  consequence  of its  obligations  hereunder or the
transactions contemplated hereby to a level below that which such Lender (or its
parent) could have  achieved but for such  adoption,  implementation,  change or
compliance  (taking into  consideration  such Lender's  policies with respect to
capital  adequacy) by an amount reasonably deemed by such Lender to be material,
then from time to time,  within ten  Business  Days after  demand by such Lender
(with a copy to the Administrative Agent), the Borrower shall pay to such Lender
such additional amount or amounts as will compensate such Lender (or its parent)
for such  reduction.  A certificate of such Lender claiming  compensation  under
this Section 4.6 and setting forth the  additional  amount or amounts to be paid
to it hereunder shall be conclusive  absent  manifest  error,  provided that the
determination  thereof is made on a reasonable basis. In determining such amount
or  amounts,  such  Lender  may use any  reasonable  averaging  and  attribution
methods.

         Section  4.7   Additional   Interest  on  Eurodollar   Loans.   Without
duplication of Section 2.4 or amounts directly included in the definition of the
term "Adjusted Eurodollar Rate", the Borrower shall pay, directly to each Lender
from time to time,  additional  interest on the unpaid  principal amount of each
Eurodollar  Loan  held by such  Lender,  from  the  date of the  making  of such
Eurodollar Loan until such principal amount is paid in full, at an interest rate
per  annum  determined  by such  Lender  in good  faith  equal  to the  positive
remainder  (if  any) of (a) the  Adjusted  Eurodollar  Rate  applicable  to such
Eurodollar  Loan minus (b) the  Eurodollar  Rate  applicable to such  Eurodollar
Loan. Each payment of additional  interest pursuant to this Section 4.7 shall be
payable  by the  Borrower  on each date upon which  interest  is payable on such
Eurodollar Loan pursuant to Section 2.4(b); provided, however, that the Borrower
shall not be  obligated  to make any such  payment  of  additional  interest  in
accordance  with this  Section 4.7 until the first  Business  Day after the date
when the Borrower has been informed (i) that such Lender is subject to a Reserve
Requirement and (ii) of the amount of such Reserve Requirement (after which time
the  Borrower  shall  be  obligated  to make  all such  payments  of  additional
interest,  including,  without  limitation,  such payment of additional interest
that otherwise  would have been payable by the Borrower on or prior to such time
had the Borrower been earlier informed).

         Section 4.8 Replacement of Lenders. If at any time a Lender, other than
Nortel Networks, becomes a Gross Up Lender (as defined in this Section 4.8), the
Borrower  shall have the right to  replace  such  Lender  with  another  Person;
provided that (a) such other Person shall be an Eligible Assignee and such other
Person shall execute an Assignment and Acceptance,  (b) the Administrative Agent
shall use commercially reasonable efforts to assist the Borrower in finding such
other Person but neither the Administrative  Agent nor any Lender shall have any
obligation to provide such other Person,  (c) in the event of a replacement of a
Gross Up Lender,  in order for the  Borrower  to be  entitled  to  replace  such
Lender:  Borrower must (i) notify such Gross Up Lender of the Borrower's

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<PAGE>

desire to replace such Lender  within 30 days after the date the Gross Up Lender
notifies the Borrower and the Administrative  Agent of its desire to be paid any
amount pursuant to Sections 3.5, 4.1 or 4.6 and (ii) such  replacement must take
place no later than 365 days after the date the Gross Up Lender is provided such
notice,  and (d) if the Borrower  replaces one Gross Up Lender,  it must replace
all Gross Up Lenders or replace all Gross Up Lenders on a pro rata basis  except
that if the Gross Up Lender is a Gross Up Lender  under  this  Section  4.8 as a
result of a request for compensation under Section 3.5, the Borrower will not be
required to replace any other Gross Up Lender.  Each  Lender,  other than Nortel
Networks,  agrees to its  replacement at the option of the Borrower  pursuant to
this  Section  4.8 and in  accordance  with  Section  12.8;  provided  that  the
successor Lender shall purchase  without recourse such Lender's  interest in the
Obligations of the Borrower to such Lender for cash in an aggregate amount equal
to the aggregate unpaid principal thereof,  all unpaid interest accrued thereon,
all unpaid commitment fees accrued for the account of such Lender,  any breakage
costs incurred by the selling Lender because of the prepayment of any Eurodollar
Loans,  all  other  fees (if  any)  applicable  thereto  and all  other  amounts
(including any amounts under this Article 4) then owing to such Lender hereunder
or under any other Loan  Document and the Loan Parties  shall  execute a release
addressed  to such  Lender  releasing  such  Lender  from all claims  arising in
connection with the Loan Documents.  Any Lender who requests a payment  pursuant
to Section 3.5, 4.1 or 4.6 shall be deemed a "Gross Up Lender".

                                    ARTICLE 5

                                    Security

         Section 5.1  Collateral.  To secure the full and  complete  payment and
performance of the  Obligations,  Holdings and the Borrower will, and will cause
each  Subsidiary of the Borrower to, grant to the  Administrative  Agent for the
benefit of the Administrative Agent and the Lenders a perfected,  first priority
Lien on all of the right,  title and interest in and to their  Properties as set
forth below (as more specifically  described in the Security  Documents) whether
now owned or hereafter acquired, pursuant to the Security Documents,  including,
without limitation, the following:

         (a) all Capital Stock of  the  Borrower  and  each  Subsidiary  of  the
Borrower;

         (b) all of the  Property of the  Borrower  and each  Subsidiary  of the
Borrower  (as such  Property  is more  specifically  described  in the  Security
Documents),  including  tangible and  intangible  Property and real and personal
Property,  including, without limitation, the following:  Investments (including
certificates of deposit);  accounts;  inventory (including,  without limitation,
work  in  process);  equipment;  deposit  accounts  (including  cash  collateral
accounts); brokerage accounts; instruments;  contract rights (including, without
limitation,  all  contracts  relating to the  construction  or  operation of the
Network, including rights of way, easements,  leases and all related contracts);
customer deposits in connection with purchase orders; general intangibles;  real
Property  and  interests  therein  (if and to the extent  required  pursuant  to
Section 5.4); instruments;  chattel paper; Licenses;  Intellectual Property; and
intercompany Debt;

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<PAGE>


         (c)  all  Debt  (i)  owed  by the  Borrower  to any  Subsidiary  of the
Borrower,  (ii) owed by any Subsidiary of the Borrower to the Borrower or to any
Subsidiary to the Borrower,  or (iii) owed by Holdings to the Borrower or to any
Subsidiary of the Borrower; and

         (d)  all  cash  and  non-cash  proceeds  and  products  of  any  of the
foregoing.

         The Collateral shall not include any of the following  Property as long
as such Property is encumbered by Permitted Liens (or, in the case of the Lucent
Equipment,  expected to be  encumbered by November 30, 2000) and as long as such
Property is not Nortel  Networks  Equipment,  Nortel  Networks  Software nor any
other Property acquired with the proceeds of the Loans:

         (x)      any  Property  encumbered  (or,  in the  case  of  the  Lucent
                  Equipment,  expected to be encumbered by November 30, 2000) by
                  purchase money Liens permitted by clause (g) of the definition
                  of Permitted Liens;

         (y)      the real property and related  fixtures and equipment  located
                  at the Data Centers and the proceeds thereof; and

         (z)      funds  held  back by a  lender  from  the  proceeds  of a Debt
                  Issuance in an escrow or collateral account for the purpose of
                  paying interest on such Debt as it accrues.

         Without the consent or  agreement  of any  Lender,  the  Administrative
Agent shall,  upon the request of the  Borrower,  execute such releases or other
terminations  of Liens as may be necessary to terminate the Liens granted to the
Administrative  Agent  under  the  Security  Documents  in any  of the  Property
described  in the  foregoing  clauses (x), (y) and (z). If the Debt secured by a
Permitted  Lien  encumbering  any Property of the type described in clauses (x),
(y) or (z)  immediately  above shall be paid in full and the  Permitted  Lien on
such Property is released  (other than in connection  with a refinancing of such
Debt where the grant of a  Permitted  Lien to secure  such  refinancing  Debt is
contemplated)  or if a Permitted Lien does not encumber the Lucent  Equipment by
November 30, 2000, the Borrower shall and shall cause its  Subsidiaries  to take
such  action as the  Administrative  Agent may  reasonably  require to cause the
Liens of the  Security  Documents  to encumber  the Property in question and for
such Liens to be perfected and protected.

         Section 5.2 Guaranties. Holdings will, and the Borrower will cause each
Subsidiary of the Borrower  (whether  owned as of the Closing Date or thereafter
organized  or  created)  to,  Guarantee  the  payment  and  performance  of  the
Obligations pursuant to the Guaranties.

         Section   5.3   New    Subsidiaries;    Additional    Capital    Stock.
Contemporaneously  with the creation or acquisition of any Subsidiary  after the
Closing Date, the Borrower will:

         (a) grant or cause to be granted to the  Administrative  Agent, for the
benefit of itself and the Lenders, a perfected, first priority security interest
in all Capital  Stock owned by the  Borrower in such  Subsidiary  (to the extent
such Capital Stock was not previously pledged to the Administrative Agent);

                                       44

<PAGE>


         (b) cause each  Subsidiary of the Borrower to Guarantee the payment and
performance of the Obligations by executing and delivering to the Administrative
Agent a Guaranty or a joinder therein  acceptable to the  Administrative  Agent;
and

         (c) cause each Subsidiary of the Borrower to execute and deliver to the
Administrative Agent a Security Agreement and such other Security Documents,  in
form and substance acceptable to the Administrative Agent, as the Administrative
Agent may request to grant the  Administrative  Agent, for the benefit of itself
and the  Lenders,  a  perfected,  first  priority  Lien on all  Property of such
Subsidiary of the Borrower.

Contemporaneously  with the  issuance  of any  additional  Capital  Stock of the
Borrower or any Subsidiary of the Borrower after the Closing Date,  Holdings and
the Borrower (as  applicable)  will, and will cause each Subsidiary to, grant or
cause  to be  granted  to the  Administrative  Agent,  for  the  benefit  of the
Administrative  Agent and the Lenders,  a  perfected,  first  priority  security
interest  in all  Capital  Stock  owned in such  Subsidiary  (to the extent such
Capital Stock was not previously pledged to the Administrative  Agent).  Each of
Holdings and the Borrower covenants that none of the Capital Stock to be pledged
in accordance with this Section 5.3 will be subject to any transfer restriction,
shareholders'  agreement or other restriction except for such restrictions under
applicable  securities laws, such  restrictions  existing as of the Closing Date
which have been disclosed to the Administrative  Agent in the Security Documents
and  such  restrictions,  if  any,  as  may  be  reasonably  acceptable  to  the
Administrative Agent. In connection with and in addition to the foregoing,  each
of  Holdings  and the  Borrower  will,  and will  cause each  Subsidiary  of the
Borrower  and other  appropriate  Persons (as  applicable)  to,  execute  and/or
deliver such further agreements,  documents and instruments (including,  without
limitation,  stock certificates,  stock powers and financing  statements) as the
Administrative  Agent may  reasonably  request  in order  for it to  obtain  and
maintain the perfected,  first  priority Liens to be granted in accordance  with
this Section 5.3.

         Section 5.4 Mortgaged  Properties;  Landlord Waivers.  Without limiting
the  generality of the other terms and  provisions of this Article 5 but subject
to the last two  paragraphs  of Section 5.1, the Borrower  will,  and will cause
each Subsidiary of the Borrower to, on the Closing Date (with respect to any fee
real  Property or leasehold  interest  therein  owned as of the Closing Date) or
contemporaneously  with the  acquisition  of any fee real  Property or leasehold
interest  therein (with  respect to any fee real Property or leasehold  interest
therein  acquired after the Closing Date),  execute,  acknowledge and deliver to
the  Administrative  Agent a Mortgage  or an  amendment  or  modification  to an
existing  Mortgage  covering all fee real Property and all  leasehold  interests
therein  owned  by any such  Loan  Party,  together  with  evidence  in form and
substance  reasonably  satisfactory to the Administrative  Agent and its counsel
that the  Mortgage  creates a valid,  first  priority  Lien on the fee estate or
leasehold estate (as applicable),  in favor of the Administrative  Agent for the
benefit of the  Administrative  Agent and the Lenders  securing  the payment and
performance of the Obligations  (including,  without limitation and if requested
by the  Administrative  Agent,  a  commitment  for a  mortgagee  policy of title
insurance insuring the Administrative Agent's first priority Lien status created
by such Mortgage or a title opinion in favor of the  Administrative  Agent), and
together  with  current  appraisals  complying  with all  applicable  regulatory
requirements and surveys certified to the

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<PAGE>


Administrative  Agent and the Lenders if requested by the Administrative  Agent,
all of which  shall  be in form and  substance  reasonably  satisfactory  to the
Administrative Agent;  provided,  however,  that, with respect to any particular
parcel of fee real  Property,  the  Borrower and its  Subsidiaries  shall not be
required to execute a Mortgage or Mortgages in favor of the Administrative Agent
unless and until the Borrower  and/or its  Subsidiaries  own fee real Properties
having an aggregate  fair market value  (inclusive of fixtures) of $[**] or more
(at  which  time  all  fee  real  Property  owned  by the  Borrower  and/or  its
Subsidiaries shall be mortgaged in favor of the Administrative Agent); provided,
further,  however,  that, with respect to any particular  leasehold  interest in
real  Property,  the  Borrower  and its  Subsidiaries  shall not be  required to
execute a Mortgage or Mortgages in favor of the Administrative  Agent unless the
leasehold  interest  is for one of the  Data  Centers  (pursuant  to a sale  and
leaseback  transaction permitted under Section 9.9) or with respect to any other
leasehold  interest,  unless and until such leasehold interest has a fair market
value of [**] or more (based upon the intrinsic value of such leasehold interest
in excess of the rental payable  thereunder).  In addition,  if requested by the
Administrative  Agent,  the Borrower will, and will cause each Subsidiary of the
Borrower with an interest in such Property to, provide the Administrative  Agent
with a current  environmental  assessment of such Property in form and substance
reasonably  satisfactory to the Administrative Agent. In addition,  with respect
to each lease of real Property executed by the Borrower or any Subsidiary of the
Borrower  and each other  parcel of real  Property  on which any  Collateral  is
located,  the Borrower will, and will cause each  Subsidiary of the Borrower to,
obtain waivers or  subordinations  of landlord's  Liens and agreements to permit
the Administrative Agent's access from each sublessor, lessor or other Person in
possession  of such real  Property  and other  agreements  from such Persons and
their respective  lenders necessary or appropriate to ensure the  Administrative
Agent's  perfected,  first  priority Lien on the  Collateral  or, as applicable,
Property affected thereby, the Administrative  Agent's access to such Collateral
or, as  applicable,  Property  and the right of the  Administrative  Agent,  the
Lenders  or their  designee  to succeed to the rights of such Loan Party that is
the  lessee  under  the  lease,  in each case in form and  substance  reasonably
satisfactory  to the  Administrative  Agent;  provided,  however,  that separate
waivers or  subordinations  need not be obtained with respect to a location that
is not owned or leased by Level 3  Communications,  LLC.  or Bridge if no Nortel
Networks  optronic  equipment of a Loan Party is located at such  location.  The
Loan Parties have  disclosed  pursuant to the Security  Documents  all locations
where any Nortel  Networks  optronic  equipment is located.  In  addition,  with
respect to any Data Center  subject to a mortgage that is a Permitted  Lien, the
Borrower  will,  and will cause each  Subsidiary  of the Borrower  to,  obtain a
subordination,  non-disturbance and attornment agreement from each mortgagee, in
form and substance reasonably satisfactory to the Administrative Agent.

         Section 5.5 Further  Assurances.  In  addition  to the  foregoing,  the
Borrower  will,  and  will  cause  each of the  other  Loan  Parties  and  other
appropriate  Persons (as  applicable)  to,  execute  and/or deliver such further
agreements,  documents and instruments (including, without limitation,  Security
Documents and financing  statements) as the Administrative  Agent may reasonably
request  from  time  to time in  order  for it to  obtain  and  maintain  valid,
perfected, first priority Liens to be granted in accordance with this Article 5.
All   Collateral   shall  remain   located  in  the  United  States  unless  the
Administrative   Agent  shall  have   specifically   consented  in  writing  and
appropriate action has been taken to maintain valid,  perfected,  first priority
Liens on any  Collateral  removed  from the United  States;  provided,  that (i)
Nortel  Networks  Equipment  purchased  with the  proceeds of the Loans having

[**] CONFIDENTIAL TREATMENT REQUESTED

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<PAGE>

a value (based upon its purchase price under the Master  Purchase  Agreement) of
not  greater  than $[**] may be located  outside the  United  States as shown on
Schedule 5.5 and (ii) Collateral (other than Nortel Networks Equipment purchased
with the  proceeds  of the  Loans)  having a value  (based  upon the book  value
therefor) of not greater than $[**] may be located outside the United States.

         Section 5.6 Setoff.  If an Event of Default  shall have occurred and be
continuing,  each Lender is hereby authorized at any time and from time to time,
without  notice to  Holdings  or the  Borrower or any other Loan Party (any such
notice being hereby  expressly waived by Holdings and the Borrower and the other
Loan  Parties),  to set off and apply any and all deposits  (general or special,
time or demand,  provisional or final  excluding any trust accounts) at any time
held and  other  indebtedness  at any time  owing by such  Lender  to or for the
credit or the account of Holdings,  the Borrower or any other Loan Party against
any and all of the Obligations  now or hereafter  existing under this Agreement,
such Lender's Note or any other Loan  Document,  irrespective  of whether or not
the  Administrative  Agent or such Lender  shall have made any demand under this
Agreement,  such Lender's Note or any such other Loan Document and although such
Obligations may be unmatured. Each Lender agrees promptly to notify the Borrower
(with a copy to the Administrative Agent) after any such setoff and application,
provided  that the failure to give such notice  shall not affect the validity of
such setoff and  application.  The rights and remedies of each Lender  hereunder
are in addition to other rights and  remedies  (including,  without  limitation,
other rights of setoff) which such Lender may have.

                                    ARTICLE 6

                              Conditions Precedent

         Section 6.1 Initial Extension of Credit.  The obligation of each Lender
to make its initial Loan under this  Agreement  (other than the  Original  Loans
made prior to the Closing Date  pursuant to the Original  Credit  Agreement)  is
subject to the  receipt by the  Administrative  Agent,  on or before the Closing
Date,  of all  of the  following  in  form  and  substance  satisfactory  to the
Administrative  Agent and the  Lenders  and, in the case of actions to be taken,
the taking of the following required actions and evidence that such actions have
been taken to the satisfaction of the  Administrative  Agent (it being expressly
acknowledged  and  agreed  by each  Loan  Party  that  the  satisfaction  of any
condition set forth below in connection with the Original Credit Agreement shall
not  necessarily  constitute  satisfaction  of such condition in connection with
this Agreement):

         (a)  Resolutions.  Resolutions  of the Board of Directors or equivalent
governing  body (as  applicable)  certified  by the  Secretary  or an  Assistant
Secretary  or  equivalent  officer or  representative  of each Loan Party  which
authorize the execution, delivery and performance by such Loan Party of the Loan
Documents to which it is or is to be a party;

         (b) Incumbency  Certificate.  A certificate of incumbency  certified by
the  Secretary or an Assistant  Secretary (or other  analogous  officer) of each
Loan Party certifying as to the name of each officer or other  representative of
such Loan Party (i) who is authorized to sign the Loan  Documents to

[**] CONFIDENTIAL TREATMENT REQUESTED

                                       47

<PAGE>


which  it  is  or is to be a  party  (including  any  certificates  contemplated
therein),  together  with  specimen  signatures  of each such  officer  or other
representative,  and  (ii)  who  will,  until  replaced  by  other  officers  or
representatives  duly authorized for that purpose, act as its representative for
the purposes of signing documents and giving notices and other communications in
connection with the Loan Documents and the transactions contemplated thereby;

         (c) Certificates or Articles of Incorporation,  etc. The certificate or
articles of  incorporation or other analogous  constitutional  documents of each
Loan Party certified by the Secretary of State or other applicable  Governmental
Authority of the state of incorporation or organization of such entity and dated
as of a Current Date;

         (d) Bylaws, etc. The bylaws or other analogous constitutional documents
of each Loan Party  certified by its  Secretary or an  Assistant  Secretary  (or
other analogous officer or representative);

         (e) Governmental Certificates. Certificates of appropriate officials as
to the  existence  and  good  standing  of  each  of  the  Loan  Parties  in its
jurisdiction of incorporation or organization and in all  jurisdictions in which
such Loan Party is  qualified  or is  required  to qualify to do  business  as a
foreign entity, each such certificate to be dated as of a Current Date;

         (f) Notes.  The Notes duly  completed and executed by the Borrower (one
payable to the order of each Lender with respect to each of its Commitment);

         (g)  Guaranties,  Security  Agreements  and Other  Security  Documents.
Guaranties executed by each of the Guarantors; and Security Agreements and other
Security  Documents  executed  by each of the  Loan  Parties  pertaining  to the
Collateral  owned by such  Loan  Party or in which  such Loan  Party has  rights
sufficient to create a Lien (one such Security  Agreement  executed by each such
Loan Party)  together with all related  financing  statements and other filings,
the Required  Consents,  delivery of all pledged  Capital Stock and  instruments
constituting Collateral, together with appropriate stock powers and endorsements
thereto  and,  with  respect  to each  existing  parcel of real  Property  where
Collateral is located and if and to the extent required by Section 5.4,  waivers
or  subordinations  of  landlord's  Liens from each  sublessor,  lessor or other
Person in possession and other agreements from such Persons and their respective
lenders necessary or appropriate to ensure the Administrative Agent's perfected,
first  priority  Lien  on the  Collateral  or  Property  affected  thereby,  the
Administrative  Agent's  access to such  Collateral or Property and the right of
the Administrative Agent, the Lenders or their designee to succeed to the rights
of the Loan Party that is the lessee  under the lease,  in each case in form and
substance satisfactory to the Administrative Agent;

         (h)  Mortgages,  etc.  If and to the extent  required  by Section  5.4,
Mortgages  executed by the  Borrower  and/or the  Subsidiaries  of Borrower  (as
applicable)  pertaining to the real Property  Collateral owned or leased by such
Loan Party (one Mortgage  executed by each such Loan Party) and, with respect to
each tract of such real Property, a mortgagee policy of title insurance insuring
the Administrative  Agent's first priority Lien status of each such Mortgage,  a
current  survey  certified  to the  Administrative  Agent  and the  Lenders,  an
appraisal  complying  with  all  applicable   regulatory   requirements  and  an
environmental survey acceptable to the Administrative Agent;

                                       48

<PAGE>


         (i) Insurance  Certificates and Policies.  Certificates  evidencing all
insurance  policies required by this Agreement and the other Loan Documents and,
if requested by the Administrative Agent, copies of all such insurance policies;

         (j)  Lien  Searches.  Lien  searches  in the  name of each of the  Loan
Parties (and in all names under which any of them has done  business  within the
last five years) in each jurisdiction  where such Loan Party maintains an office
or has Property,  showing no financing  statements or other Lien  instruments of
record  affecting  the  Collateral  except for  Permitted  Liens and Liens being
released prior to or concurrently with the making of the initial Loan;

         (k) Master Purchase Agreement. The Master Purchase Agreement shall have
been executed and delivered by all parties thereto, and the Administrative Agent
shall have received a photocopy of the Master Purchase  Agreement as so executed
and  delivered,  certified by a  Responsible  Officer of the Borrower as being a
true and correct copy of such document;

         (l) Payment of Fees and Expenses. The Borrower shall have paid all fees
due on or before the  Closing  Date as  specified  in this  Agreement  or in the
Administrative Agent's Letter and all fees, costs and expenses of or incurred by
the  Administrative  Agent and its counsel to the extent billed on or before the
Closing Date and payable pursuant to this Agreement;

         (m)  Compliance  with Laws.  Holdings,  the Borrower and the other Loan
Parties  shall have  complied in all  material  respects  with all  Governmental
Requirements  necessary to execute and deliver this Agreement and the other Loan
Documents and to perform and consummate the  transactions  contemplated  by this
Agreement and the other Loan Documents;

         (n) No  Prohibitions.  No Governmental  Requirement  shall prohibit the
execution  or  delivery  of this  Agreement  or any other Loan  Document  or the
performance or consummation of the  transactions  contemplated by this Agreement
or any other Loan Document, and no order, judgment or decree of any Governmental
Authority or arbitrator  shall,  and no litigation or other  proceeding shall be
pending or to Holdings' or the  Borrower's  knowledge,  threatened  which would,
enjoin, prohibit,  restrain or otherwise adversely affect in any material manner
the  execution or delivery of this  Agreement or any other Loan  Document or the
performance or consummation of the  transactions  contemplated by this Agreement
or any other Loan Document or otherwise have a Material Adverse Effect;

         (o) Financial  Statements.  Copies of each of the financial  statements
referred to in Section 7.2, in each case as certified by a  Responsible  Officer
of  Holdings  as having  been  prepared  in  accordance  with GAAP and as fairly
presenting the financial condition of Holdings and its Consolidated Subsidiaries
as of the respective  dates indicated  therein and results of operations for the
respective periods indicated therein;

         (p) Opinions of Counsel.  Favorable  legal  opinions of counsel for the
Loan Parties,  in form and substance and issued by counsel  satisfactory  to the
Administrative  Agent,  with respect to the Loan Parties and with respect to the
Loan  Documents  and a  favorable  legal  opinion of  regulatory  counsel to the
Borrower  and  its  Subsidiaries  in  form  and  substance  satisfactory  to the
Administrative Agent;

                                       49

<PAGE>

         (q) Legal  Matters and Loan  Documents.  All matters of a legal  nature
relating to Holdings, the Borrower and the other Loan Parties and this Agreement
and  the  other  Loan  Documents   shall  be  reasonably   satisfactory  to  the
Administrative  Agent and its counsel,  and the Administrative  Agent shall have
received all such other agreements,  documents and instruments, each in form and
substance and executed and delivered by all parties, as the Administrative Agent
may have reasonably requested to receive;

         (r) Business  Plan. A copy of the Business  Plan in form and  substance
satisfactory to the Administrative Agent;

         (s) Material Contracts. A true and correct copy of each of the Material
Contracts  in  existence  as  of  the  Closing   Date,  in  form  and  substance
satisfactory to the Administrative Agent;

         (t)  Licenses.  Copies  of all  Licenses  affecting  any Loan  Party in
connection  with its businesses or any of the  Properties  owned or leased by it
and in connection with its businesses to be conducted and Properties to be owned
or leased as contemplated by the Business Plan, and evidence satisfactory to the
Administrative  Agent that  Holdings,  the Borrower and each other Loan Party is
able to conduct its businesses as currently  conducted and as to be conducted as
contemplated  by the Business  Plan with the use of such  Licenses in full force
and  effect;  and the  Administrative  Agent  shall  be  satisfied  that (i) the
Borrower and each other Loan Party has the exclusive,  unrestricted right to use
each of such  Licenses  pursuant  to  license  agreements  or other  agreements,
documents or instruments in form and substance  reasonably  satisfactory  to the
Administrative  Agent,  which rights shall be assignable  to the  Administrative
Agent and by the Administrative  Agent to its transferees upon the occurrence of
an Event of Default,  and (ii) Holdings,  the Borrower and each other Loan Party
has complied with all initial and on-going conditions of the issuance and use of
all such Licenses and all other terms and provisions thereof;

         (u) Waivers and  Consents.  To the extent not referred to in clause (g)
preceding,  copies  of all  material  waivers  and  consents  necessary  for the
execution,  delivery  and  performance  by each of the Loan  Parties of the Loan
Documents to which it is a party, including, without limitation, any waivers and
consents in connection with the Master Purchase  Agreement as the Administrative
Agent  may  require,  which  waivers  and  consents  shall  be  certified  by  a
Responsible  Officer of the Borrower as true and correct copies of such consents
as of the Closing Date;

         (v) Regulatory  Approvals.  Evidence satisfactory to the Administrative
Agent  that  all  filings,   consents  or  approvals  with  or  of  Governmental
Authorities  necessary or  appropriate to execute and deliver this Agreement and
the  other  Loan  Documents  and to  perform  and  consummate  the  transactions
contemplated by the Loan Documents have been made and obtained, as applicable;

         (w) No Material Adverse Change. As of the Closing Date, (i) no material
adverse  change  shall have  occurred  with respect to the  businesses,  assets,
financial  condition,   results  of  operations,

                                       50

<PAGE>

operations,    capitalization,     indebtedness,    liabilities,    obligations,
profitability or prospects or Properties or of the general affairs or management
of  Holdings  and  its  Subsidiaries,  taken  as a  whole,  or of  the  Borrower
individually or of the Borrower and its  Subsidiaries  taken as a whole, in each
case since June 30, 2000,  (ii) no disruption  or adverse  change in the capital
markets  generally or in the market for loan  syndications  in particular  shall
have occurred since June 30, 2000,  which disruption or adverse change is deemed
material  in  the  judgment  of  the   Administrative   Agent,   and  (iii)  the
Administrative  Agent  shall be  satisfied  that the  financial  performance  of
Holdings and its  Subsidiaries  (including,  without  limitation,  the Borrower)
prior  to the  Closing  Date is not  materially  different  from  the  financial
projections  for such  Person(s)  through the Closing Date that were  previously
submitted to the Administrative Agent;

         (x)  Accountant's  Letter.  A  letter  from  Holdings  authorizing  the
independent  public  accountants  of Holdings and its  Subsidiaries  (including,
without limitation,  the Borrower) to communicate with the Administrative  Agent
and the Lenders; and

         (y) Solvency.  A certificate  from each of the Loan Parties  certifying
that each of the Loan Parties is Solvent.

The Borrower  shall  deliver,  or cause to be delivered,  to the  Administrative
Agent  sufficient  counterparts of each agreement,  document or instrument to be
received  by the  Administrative  Agent  under  this  Section 6. 1 to permit the
Administrative  Agent to  distribute  a copy of the same to each of the Lenders.
After the request of the  Borrower,  the  Administrative  Agent shall inform the
Borrower in writing as to the status of satisfaction of the conditions precedent
set forth in this Section 6.1.

         Section 6.2 All Extensions of Credit.  The obligation of each Lender to
make any Loan  (including  the initial Loan) under this  Agreement is subject to
the  continued  satisfaction  of each of the  conditions  precedent set forth in
Section 6.1 and each of the following additional conditions precedent:

         (a) No Default  or  Material  Adverse  Effect.  No Default or  Material
Adverse Effect shall have occurred and be continuing,  or would result from such
Loan;

         (b)  Representations  and Warranties.  All of the  representations  and
warranties  of Holdings,  the  Borrower and the other Loan Parties  contained in
this Agreement and in the other Loan Documents  shall be true and correct on and
as of the  date  of  such  Loan  with  the  same  force  and  effect  as if such
representations  and warranties had been made on and as of such date unless they
relate solely to an earlier date;

         (c)  Use  of  Proceeds.  The  Borrower  shall  have  certified  to  the
Administrative  Agent  that all  proceeds  of the Loans  then  being made by the
Lenders  are,  concurrently  with the  making of such  Loans,  being used by the
Borrower for the purposes specified in Section 2.10;

         (d) Master Purchase Agreement.  The Master Purchase Agreement shall not
have been terminated by the Borrower or any other Loan Party and shall remain in
full force and effect;

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<PAGE>


         (e) Full Disclosure.  Neither Holdings, the Borrower nor any other Loan
Party has  failed to  disclose  to the  Administrative  Agent or any  Lender any
material  fact with  respect to the  Network or its  business  or its  financial
condition (including any contingent liabilities),  or has failed to disclose any
information,  the absence of which makes any information previously disclosed to
the Administrative Agent or any Lender materially misleading; and

         (f)  Additional  Documentation.  The  Administrative  Agent  shall have
received such additional approvals, agreements, documents and instruments as the
Administrative Agent may reasonably request.

Each  notice  of  borrowing  by  the  Borrower   hereunder  shall  constitute  a
representation  and warranty by the Borrower that the  conditions  precedent set
forth in this  Section  6.2  have  been  satisfied  (both as of the date of such
notice and,  unless the Borrower  otherwise  notifies the  Administrative  Agent
prior to the date of such borrowing, as of the date of such borrowing).

         Section 6.3 Closing Certificates. The Borrower shall, concurrently with
the Closing Date (with respect to the conditions  precedent set forth in Section
6.1)  and  concurrently  with  the  date of the  making  of each  other  Loan if
requested by the Administrative Agent, execute and deliver to the Administrative
Agent a certificate  in form and substance  satisfactory  to the  Administrative
Agent certifying as to the satisfaction of each of the conditions  precedent set
forth in this  Article 6 which are  required to be  satisfied  on or before such
date (without  regard to whether such matters are, in fact,  satisfactory to the
Administrative   Agent  to  the  extent  that  such   satisfaction  is  required
hereunder).

                                    ARTICLE 7

                         Representations and Warranties

         Each of  Holdings  and the  Borrower  represents  and  warrants  to the
Administrative  Agent and the Lenders that the following  statements  are on the
Closing Date, and after giving effect to the funding of the initial Loans on the
Closing Date and  continuing  thereafter as long as the  Obligations or any part
thereof are  outstanding  or any Lender has any  Commitment  hereunder  will be,
true, correct and complete:

         Section 7.1  Existence.  Each of the Loan Parties (a) is a  corporation
(or other entity) duly  organized,  validly  existing and in good standing under
the laws of the jurisdiction of its incorporation (or organization), (b) has all
requisite  corporate or other entity (as applicable)  power and authority to own
its Properties and carry on its business as now conducted,  and (c) is qualified
to do business in all  jurisdictions  in which the nature of its business  makes
such  qualification  necessary  and where  failure  to so  qualify  would have a
Material  Adverse  Effect.  Each of the Loan Parties has the power and authority
and legal right to execute,  deliver and perform its obligations  under the Loan
Documents to which it is or may become a party.

                                       52

<PAGE>

         Section 7.2       Financial Statements.

         (a) Holdings has delivered to the Administrative  Agent and the Lenders
(i) the audited  consolidated and consolidating  (as to the Borrower)  financial
statements  (including  balance sheet and  statements  of income or  operations,
shareholders'   equity  and  cash  flows)  of  Holdings  and  its   Consolidated
Subsidiaries  (including,  without  limitation,  the Borrower) as of and for the
fiscal  year ended  December  31,  1999,  (ii) the  unaudited  consolidated  and
consolidating (as to the Borrower) financial statements (including balance sheet
and statements of income or operations,  shareholders' equity and cash flows) of
Holdings and its Consolidated Subsidiaries (including,  without limitation,  the
Borrower)  as of and for the fiscal  period  ended June 30,  2000,  and (iii) an
unaudited  consolidated and consolidating (as to the Borrower) pro forma balance
sheet  of  Holdings  and  its  Consolidated  Subsidiaries  (including,   without
limitation, the Borrower) dated as of the Closing Date which gives effect to the
initial  Loans made on the Closing Date and the other  transactions  to occur on
such  date.   All  financial   statements   required  to  be  delivered  to  the
Administrative  Agent in  accordance  with this  Agreement  (including,  without
limitation, those referred to in the immediately preceding sentence) are or will
be when  delivered (as  applicable)  true and correct,  have been or will be (as
applicable)  prepared in accordance  with GAAP (except for year-end  adjustments
and the absence of financial  statement  footnotes  required by GAAP) and fairly
and accurately  present or will fairly and accurately present (as applicable) in
all material  respects,  on a consolidated and consolidating (as to the Borrower
where   applicable)   basis,  the  financial   condition  of  Holdings  and  its
Consolidated  Subsidiaries (including,  without limitation,  the Borrower) as of
such dates and the results of operations  for the respective  periods  indicated
therein. There has not been, as of the Closing Date, any material adverse change
in the  financial  condition,  results of  operations,  businesses,  operations,
Properties, capitalization, assets, liabilities or prospects of Holdings and its
Subsidiaries  taken as a whole, or of the Borrower on an individual  basis or of
the Borrower and its Subsidiaries taken as a whole, since June 30, 2000.

         (b) The Business Plan  (including,  without  limitation,  the financial
projections  contained  therein)  represents,  as of the Closing Date,  the good
faith estimate of each of Holdings and the Borrower and their respective  senior
management  concerning  the probable  financial  condition  and  performance  of
Holdings and its Subsidiaries for the time period covered  thereunder based upon
the assumptions believed by such management to be reasonable at the time made.

         Section 7.3 Corporate  Action; No Breach.  The execution,  delivery and
performance  by each of the Loan Parties of the Loan Documents to which it is or
may  become a party and  compliance  with the terms and  provisions  hereof  and
thereof have been duly authorized by all requisite  entity action and do not and
will not (a) violate or conflict  with, or result in a breach of, or require any
consent  under (i) the  certificate  or articles of  incorporation,  articles of
organization, bylaws, regulations or other constitutional documents of such Loan
Party, (ii) any Governmental  Requirement  (including,  without limitation,  the
Communications  Act, any rule or regulation of the FCC or any rule or regulation
of any  federal  or  state  public  utility  commission  or  other  Governmental
Authority)  or any  order,  writ,  injunction  or  decree  of  any  Governmental
Authority or arbitrator, or (iii) any material agreement, document or instrument
to which  any Loan  Party  is a party or by which  any Loan  Party or any of its
Property  is bound or  subject,  or (b)  constitute  a  default  under  any such
material  agreement,  document  or  instrument,  or  result in the  creation  or
imposition of any Lien (except a Lien in favor of the  Administrative  Agent for
and on behalf of the Lenders under the Security Documents as provided in Article
5) upon any of the revenues or Property of any Loan Party.

                                       53

<PAGE>


         Section 7.4 Operation of Business;  Licenses.  Each of the Loan Parties
(a)  possesses all material  Licenses  necessary or  appropriate  to conduct its
businesses substantially as now conducted and as to be conducted as contemplated
by the  Business  Plan,  and (b) has  complied  with all  initial  and  on-going
conditions to the issuance and use of all such Licenses  except where failure to
comply could not reasonably be expected to have a Material Adverse Effect.  None
of such  Persons is in violation of any such  material  Licenses  which could be
expected to result in any termination or cessation thereof. All of such material
Licenses   required  by  any  Governmental   Requirement   (including,   without
limitation,  the  Communications  Act, any rule or  regulation of the FCC or any
state public utility  commission) or issued by any Governmental  Authority as of
the  Closing  Date are  summarized  by  category  or type,  as  relevant  to the
operation  of each Loan  Party,  on Schedule  7.4.  Such  Licenses  set forth on
Schedule 7.4 have been duly issued by the appropriate Governmental Authority (as
applicable)  and are in full  force  and  effect,  and  all  provisions  of such
Licenses  have been complied  with in all material  respects.  As of the Closing
Date, no such License set forth on Schedule 7.4 is subject to any pending or, to
the knowledge of the Borrower,  threatened revocation or termination  proceeding
or action.

         Section 7.5 Intellectual  Property.  All Intellectual Property owned or
used by each of the Loan  Parties in the  operation of its business is set forth
on Schedule 7.5. Each of the Loan Parties owns or possesses (or will be licensed
or have the full right to use) all  Intellectual  Property which is necessary or
appropriate  for the operation of its  businesses as presently  conducted and as
currently  proposed to be conducted,  without any known conflict with the rights
of others.  The consummation of the transactions  contemplated by this Agreement
and the other Loan Documents will not materially  alter or impair,  individually
or in the aggregate,  any of such rights of any of the Loan Parties.  No product
or service of any of the Loan Parties  infringes upon any Intellectual  Property
of any other Person,  and no claim or litigation is pending or, to the knowledge
of Holdings or the Borrower,  threatened  against any Loan Party  contesting its
right to sell or  otherwise  use any product or material or service  which could
reasonably be expected to have a Material Adverse Effect.  There is no violation
by any Loan Party of any right of such Loan Party with  respect to any  material
Intellectual Property owned or used by such Loan Party.

         Section 7.6  Litigation  and  Judgments.  Each material  action,  suit,
investigation or proceeding in any court or before any arbitrator or mediator or
before  or by  any  Governmental  Authority  (whether  or not  any  Governmental
Authority is a party  thereto)  pending or, to the  knowledge of Holdings or the
Borrower, threatened against or affecting any Loan Party, or that relates to any
of the Loan Documents as of the Closing Date, is disclosed on Schedule 7.6. None
of such  actions,  suits,  investigations  or  proceedings  could,  if adversely
determined,  reasonably be expected to have a Material Adverse Effect. Except as
may  be  disclosed  on  Schedule  7.6,  as of the  Closing  Date,  there  are no
outstanding  judgments  against any Loan Party.  No Loan Party has  received any
opinion or  memorandum  or legal advice from legal counsel to the effect that it
is exposed to any liability or disadvantage that could reasonably be expected to
have a Material Adverse Effect.

                                       54

<PAGE>


         Section  7.7  Rights  in  Properties;  Liens.  Except as  disclosed  on
Schedule 7.7, none of the Loan Parties owns any right,  title or interest in any
real Property. Each Loan Party has good and marketable title to or, with respect
to  leasehold  interests,  valid  leasehold  interests  in all  of its  material
Properties  and assets,  real and personal,  including the material  Properties,
assets and leasehold interests reflected in the financial  statements  described
in Section  7.2(a),  except where failure to have good and  marketable  title or
valid  leasehold  interests  could not reasonably be expected to have a Material
Adverse  Effect,  and none of the Properties or leasehold  interests of any Loan
Party is subject to any Lien,  except Permitted Liens.  None of the Loan Parties
has granted or voluntarily allowed or permitted to exist any Lien to or in favor
of any  Person  (other  than the  Administrative  Agent for and on behalf of the
Lenders as security for the Obligations) which attaches or relates to any of the
Collateral and the Liens on the Collateral in favor of the Administrative  Agent
are perfected, first priority Liens.

         Section  7.8  Enforceability.  The Loan  Documents  have  been duly and
validly  executed  and  delivered  by each of the Loan  Parties  that is a party
thereto,  and such Loan  Documents  constitute  the  legal,  valid  and  binding
obligations of each such Loan Party, enforceable against each such Loan Party in
accordance  with  their  respective  terms,  except as  limited  by  bankruptcy,
insolvency or other laws of general  application  relating to the enforcement of
creditors' rights and general principles of equity.

         Section 7.9 Approvals. No authorization, approval or consent of, and no
filing or registration with or notice to, any Governmental  Authority (including
the FCC) or third party is or will be necessary for the  execution,  delivery or
performance  by any  Loan  Party  of any of  the  Loan  Documents  or any of the
Material  Contracts  to which it is or will be a party  or for the  validity  or
enforceability thereof, except for such consents,  approvals and filings as have
been  validly  obtained  or made and are in full force and effect and except for
such consents (other than the Required Consents) to the grant of a Lien in favor
of the  Administrative  Agent  in the  Material  Contracts  which  have not been
obtained.  The  consummation  of  the  transactions  contemplated  by  the  Loan
Documents and the Material Contracts does not require the consent or approval of
any other  Person,  except such  consents and approvals (a) as have been validly
obtained  and are in full  force and  effect or (b) as to which the  failure  to
obtain is not,  individually  or in the  aggregate,  material.  None of the Loan
Parties  has  failed  to  obtain  any  material  License   (including,   without
limitation,  any FCC License)  necessary or appropriate for the ownership or use
of  any of its  Properties,  conduct  of its  business  and  performance  of the
Business Plan.

         Section 7.10 Debt. As of the Closing Date,  neither Holdings nor any of
its  Subsidiaries  (including,  without  limitation,  the Borrower) has any Debt
other than (a) the  Obligations,  and (b) the Debt  disclosed  on Schedule  7.10
hereto.

         Section  7.11  Taxes.  Each of the Loan  Parties  has filed (a) all tax
returns (federal,  state and local) and reports required to be filed, including,
without limitation,  all income, franchise,  employment,  Property and sales tax
returns, and (b) all other material tax returns and reports required to be filed
except where  failure to file any such return or report could not  reasonably be
expected to have a Material  Adverse Effect,  and has paid all federal and other
material  taxes  (shown  on such  returns  or  reports  to be due and  payable),
assessments,  fees and other  governmental  charges levied or

                                       55

<PAGE>


imposed upon it or its  Properties,  income or assets  otherwise due and payable
before they become  delinquent,  except those which are being  contested in good
faith by  appropriate  proceedings  and for which  adequate  reserves  have been
provided  in  accordance  with  GAAP and no  notice  of Lien  has been  filed or
recorded.  There is no  proposed  tax  assessment  against  any Loan Party which
could,  if the assessment  were made,  reasonably be expected to have a Material
Adverse Effect.

         Section  7.12 Margin  Securities.  None of the Loan  Parties is engaged
principally, or as one of its important activities, in the business of extending
credit for the  purpose of  purchasing  or  carrying  margin  stock  (within the
meaning  of  Regulations  T, U or X of the  Board of  Governors  of the  Federal
Reserve  System),  and no  part  of the  proceeds  of any  Loan  will be used to
purchase or carry any margin stock or to extend credit to others for the purpose
of purchasing or carrying margin stock.

         Section  7.13 ERISA.  None of the Loan  Parties or any ERISA  Affiliate
maintains or contributes to, or has any obligation under, any Pension Plan other
than the Pension Plans  identified on Schedule 7.13. Each Plan of any Loan Party
is in compliance  in all material  respects  with all  applicable  provisions of
ERISA and the Code. Neither a Reportable Event nor a Prohibited  Transaction has
occurred  within  the  last 60  months  with  respect  to any  Plan  that  could
reasonably be expected have a Material  Adverse  Effect.  No notice of intent to
terminate  a  Pension  Plan  has  been  filed,  nor has any  Pension  Plan  been
terminated.  No circumstances  exist which constitute grounds entitling the PBGC
to institute  proceedings to terminate,  or appoint a trustee to  administer,  a
Pension Plan, nor has the PBGC instituted any such proceedings. None of the Loan
Parties or any ERISA  Affiliate  has  completely or partially  withdrawn  from a
Multiemployer  Plan.  Each Loan  Party and each ERISA  Affiliate  have met their
minimum funding  requirements under ERISA and the Code or with respect to all of
their Pension Plans  subject to such  requirements,  and, as of the Closing Date
except as specified on Schedule 7.13,  the present value of all vested  benefits
under each funded Plan (exclusive of any  Multiemployer  Plan) does not and will
not exceed  the fair  market  value of all such Plan  assets  allocable  to such
benefits,  as determined on the most recent  valuation  date of such Plan and in
accordance  with  ERISA.  None of the Loan  Parties or any ERISA  Affiliate  has
incurred any liability to the PBGC under ERISA.  No litigation is pending or, to
Holdings' or the Borrower's  knowledge,  threatened  concerning or involving any
Plan that could reasonably be expected to have a Material Adverse Effect.  There
are no unfunded or unreserved  liabilities (on either a going-concern basis or a
wind-up  basis)  relating  to  any  Plan  that  could,  individually  or in  the
aggregate,  have a Material  Adverse  Effect if  Holdings or the  Borrower  were
required to fund or reserve such  liability in full.  As of the Closing Date, no
funding  waivers have been or will have been  requested or granted under Section
412 of the Code with respect to any Plan.  No unfunded or  unreserved  liability
for benefits  under any Plan or Plans  (exclusive  of any  Multiemployer  Plans)
exceeds $100,000, with respect to any such Plan, or $200,000 with respect to all
such Plans,  in the aggregate as of the Closing Date, on either a  going-concern
basis or a wind-up basis.

         Section 7.14 Disclosure.  No written  statement,  information,  report,
representation  or  warranty  made by any Loan  Party in any  Loan  Document  or
furnished to the Administrative  Agent or any Lender by or on behalf of any Loan
Party in  connection  with the Loan  Documents or any  transaction  contemplated
hereby or thereby  contains any untrue  statement of a material fact or omits to
state any material fact necessary to make the statements  herein or therein,  in
light of the circumstances in which made, not misleading. There is no fact known
to Holdings or the Borrower which has had a Material  Adverse Effect,  and there
is no fact known to  Holdings or the  Borrower  which might in the future have a
Material  Adverse  Effect  except as may have been  disclosed  in writing to the
Administrative Agent.

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<PAGE>



         Section  7.15 Loan  Parties;  Capitalization.  Schedule  7.15  attached
hereto  contains,  as of the Closing  Date,  complete and  accurate  information
regarding (a) the identities of each of the  Subsidiaries  of the Borrower,  (b)
the number of issued  and  outstanding  shares of each  class of  Capital  Stock
issued by the Borrower and each of its  Subsidiaries  and the identities of, and
number and  percentage  of each of such  shares held by, the  owner(s)  (both of
record and  beneficially)  of such  Capital  Stock and (c) the  jurisdiction  of
incorporation  or  other  organization  of  each  Loan  Party.   Holdings  owns,
beneficially and of record,  all of the issued and outstanding shares of Capital
Stock of the Borrower.

         Section  7.16  Compliance  with  Laws.  None of the Loan  Parties is in
violation of any Governmental  Requirement (including,  without limitation,  the
Communications  Act, any rule or regulation of the FCC or any rule or regulation
of any  federal  or  state  public  utility  commission  or  other  Governmental
Authority),  except for instances of non-compliance that could not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect.

         Section 7.17  Investment  Company  Act.  None of the Loan Parties is an
"investment  company" within the meaning of the Investment  Company Act of 1940,
as amended.

         Section  7.18 Public  Utility  Holding  Company  Act.  None of the Loan
Parties is a "holding company" or a "subsidiary  company" of a "holding company"
or an  "affiliate"  of a  "holding  company"  or a "public  utility"  within the
meaning of the Public Utility Holding Company Act of 1935, as amended.

         Section 7.19  Environmental Matters.

         (a) Except for instances of noncompliance  with or exceptions to any of
the following  representations and warranties that could not have,  individually
or in the aggregate, a Material Adverse Effect:

                  (i)  Each  of the  Loan  Parties  and  all  of its  respective
         Properties and operations are in full compliance with all Environmental
         Laws.  Neither Holdings nor the Borrower is aware of, and no Loan Party
         has received written notice of, any past, present or future conditions,
         events, activities,  practices or incidents which may interfere with or
         prevent the compliance or continued  compliance by such Loan Party with
         all Environmental Laws;

                  (ii) Each of the Loan Parties has  obtained all Licenses  that
         are required under applicable Environmental Laws, and all such Licenses
         are in good standing and all such Persons are in compliance with all of
         the terms and conditions thereof;


                                       57

<PAGE>

                  (iii) No Hazardous Materials exist on, about or within or have
         been (to the  knowledge of Holdings or the Borrower) or are being used,
         generated, stored, transported,  disposed of on or Released from any of
         the Properties of any Loan Party except in compliance  with  applicable
         Environmental  Laws.  The use which each of the Loan Parties  makes and
         intends  to make of its  respective  Properties  will not result in the
         use, generation,  storage,  transportation,  accumulation,  disposal or
         Release of any Hazardous Material on, in or from any of their currently
         owned  Properties  except in compliance with  applicable  Environmental
         Laws;

                  (iv) There are no conditions or circumstances  associated with
         the  currently  owned or leased  Properties  or  operations of any Loan
         Party  that  could   reasonably   be  expected  to  give  rise  to  any
         Environmental  Liabilities  or claims  resulting  in any  Environmental
         Liabilities;

                  (v) None of the  Loan  Parties  and  none of their  respective
         currently or previously  owned or leased  Properties or operations  are
         subject to any  outstanding  or, to the  knowledge  of  Holdings or the
         Borrower,  threatened  order from or  agreement  with any  Governmental
         Authority or other Person or subject to any judicial or  administrative
         proceeding with respect to (A) any failure to comply with Environmental
         Laws, (B) any Remedial Action, or (C) any Environmental Liabilities;

                  (vi) None of the Loan  Parties is subject to, or has  received
         written notice of any claim from any Person alleging that it is or will
         be subject to, any Environmental Liabilities;

                  (vii) None of the  Properties  of any of the Loan Parties is a
         treatment  facility  (except for the  recycling of Hazardous  Materials
         generated  on-site and the  treatment of liquid  wastes  subject to the
         Clean Water Act or other  applicable  Environmental  Law for  temporary
         storage  of  Hazardous  Materials  generated  on-site  prior  to  their
         disposal  off-site) or disposal  facility  requiring a permit under the
         Resource  Conservation  and Recovery  Act, 42 U.S.C.  ss. 6901 et seq.,
         regulations  thereunder or any  comparable  provision of state law. The
         Loan  Parties  are  in  compliance   with  all   applicable   financial
         responsibility requirements of all Environmental Laws; and

                  (viii) None of the Loan  Parties has failed to file any notice
         required under applicable Environmental Law reporting a Release.

         (b) No Lien  arising  under  any  Environmental  Law that  could  have,
individually or in the aggregate,  a Material Adverse Effect has attached to any
Property or revenues of any of the Loan Parties.

         Section 7.20 Year 2000  Compliance.  Each of the Loan Parties  believes
that it is Year 2000  Compliant  as of the  Closing  Date  except to the  extent
described in Schedule 8.13 and except for such instances as  individually  or in
the  aggregate  could not  reasonably  be  expected  to have a Material  Adverse
Effect.


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<PAGE>

         Section 7.21 Labor  Disputes and Acts of God.  Neither the business nor
the  Properties of any of the Loan Parties are affected by any fire,  explosion,
accident,  strike,  lockout  or  other  labor  dispute,  drought,  storm,  hail,
earthquake,  embargo,  act of  God or of the  public  enemy  or  other  casualty
(whether  or not covered by  insurance)  that is having or could  reasonably  be
expected to have a Material Adverse Effect.

         Section 7.22 Material Contracts.  Attached hereto as Schedule 7.22 is a
complete list, as of the Closing Date, of all Material Contracts, other than the
Loan Documents.  All of the Material  Contracts are in full force and effect and
none of the Loan Parties who is a party thereto is in default under any Material
Contract and, to the  knowledge of Holdings and the Borrower  after due inquiry,
no other Person that is a party  thereto is in default under any of the Material
Contracts.   None  of  the  Material   Contracts   prohibits  the   transactions
contemplated  under the Loan  Documents.  Except as may be  provided on Schedule
7.22,  (a) each of the  Material  Contracts  is  currently in the name of a Loan
Party, and (b) each of the Material Contracts (other than agreements relating to
other  Debt of the Loan  Parties)  of the  Borrower  and any  Subsidiary  of the
Borrower  is  assignable  to  the  Administrative  Agent  as  collateral  and is
assignable  by the  Administrative  Agent to a transferee if an Event of Default
were to occur.  Holdings and the Borrower have  delivered to the  Administrative
Agent a complete and current copy of each Material Contract (other than purchase
orders entered into in the ordinary course of business)  existing on the Closing
Date.

         Section 7.23  Outstanding  Securities.  All outstanding  securities (as
defined in the Securities Act of 1933, as amended, or any successor thereto, and
the rules and regulations of the Securities and Exchange Commission  thereunder)
of each of the Loan Parties have been  offered,  issued,  sold and  delivered in
compliance with all applicable Governmental Requirements.

         Section 7.24 Solvency.  Each of the Loan Parties, as a separate entity,
is Solvent, both before and after giving effect to the Loans.

         Section 7.25 Employee Matters. Except as set forth on Schedule 7.25, as
of the  Closing  Date (a)  neither  any Loan Party nor any of its  employees  is
subject  to  any  collective  bargaining  agreement,  and  (b) no  petition  for
certification  or union election is pending with respect to the employees of any
Loan  Party,  and no  union  or  collective  bargaining  unit  has  sought  such
certification  or recognition  with respect to the employees of any such Person.
There are no strikes,  slowdowns, work stoppages or controversies pending or, to
the best  knowledge of Holdings and the Borrower  after due inquiry,  threatened
against,  any Loan Party or its respective  employees  which could have,  either
individually or in the aggregate, a Material Adverse Effect. Except as set forth
on Schedule 7.25, as of the Closing Date, none of the Loan Parties is subject to
an employment contract.

         Section  7.26  Insurance.  Schedule  7.26  sets  forth a  complete  and
accurate  description  of all policies of insurance that are in effect as of the
Closing  Date  for  the  Loan  Parties  and  their  Properties.   No  notice  of
cancellation  has been  received  for any of such  policies and each of the Loan
Parties and the owner and holder of each such policy are in compliance  with all
of the terms and conditions of such policies.

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<PAGE>


         Section  7.27  Common   Enterprise.   Holdings  and  its   Subsidiaries
(including, without limitation, the Borrower) are members of an affiliated group
with each other such Person and are collectively  engaged in a common enterprise
with one another. Each of the Loan Parties expects to derive substantial benefit
(and may  reasonably be expected to derive  substantial  benefit),  directly and
indirectly,  from the Loans contemplated by this Agreement, both in its separate
capacity and as a member of an affiliated and integrated group.

         Section 7.28 Burdensome Agreements. None of the Loan Parties is a party
to any indenture, loan agreement,  credit agreement, stock purchase agreement or
any lease or other agreement,  document or instrument, or subject to any charter
or corporate restriction, that is unduly and materially burdensome or that could
reasonably  be  expected  to have a Material  Adverse  Effect.  None of the Loan
Parties  is in  default  in  any  respect  in  the  performance,  observance  or
fulfillment of any of the obligations,  covenants or conditions contained in any
agreement,  document or instrument  binding on it or its Properties,  except for
instances of  noncompliance  that,  individually or in the aggregate,  could not
have a Material Adverse Effect.

                                    ARTICLE 8

                              Affirmative Covenants

         Each of Holdings and the Borrower covenants and agrees that, as long as
the  Obligations  or any part  thereof  are  outstanding  or any  Lender has any
Commitment hereunder,  it will perform and observe, or cause to be performed and
observed, the following covenants:

         Section 8.1 Reporting  Requirements.  Holdings and/or the Borrower will
furnish (or will cause to be  furnished)  to the  Administrative  Agent and each
Lender:

         (a) Annual Financial Statements. As soon as available, and in any event
within 90 days after the end of each fiscal year of Holdings, beginning with the
fiscal  year  ending  December  31,  2000,  either  (i) a copy of the Form  10-K
(including all financial  statements  contained therein) filed by Holdings as of
the end of and for such  fiscal  year then ended,  together  with  consolidating
schedules for the Borrower with respect to the  financial  statements  contained
therein,  or (ii) a copy of the annual audit report  (including the consolidated
balance sheet) of Holdings and its Subsidiaries (including,  without limitation,
the Borrower) as of the end of such year and the related consolidated statements
of income or  operations,  shareholders'  equity and cash flows for such  fiscal
year, together with consolidating schedules for the Borrower with respect to the
balance sheet and statement of income or operations,  in each case setting forth
in  comparative  form the figures for the previous  fiscal year,  except for the
balance sheet where the  comparative  figures from the previous year end will be
set forth  and  accompanied  by the  opinion  of  independent  certified  public
accountants of recognized standing  reasonably  acceptable to the Administrative
Agent,  which opinion shall state that such  consolidated  financial  statements
present fairly, in all material respects,  the financial position and results of
operations for the periods  indicated in conformity with GAAP applied on a basis
consistent  with prior years and which opinion shall not be qualified or limited
because  of a  restricted  or  limited  examination  by such  accountant  of any
material portion of such Person's records;

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<PAGE>


         (b) Quarterly Financial  Statements.  As soon as available,  and in any
event  within 45 days after the end of each of the  quarters of each fiscal year
of Holdings, beginning with the fiscal quarter ending September 30, 2000, either
(i) a copy of the  Form  10-Q  (including  all  financial  statements  contained
therein)  filed by Holdings as of the end of and for such  fiscal  quarter  then
ended,  together with  consolidating  schedules for the Borrower with respect to
the balance sheet and statement of  operations,  or (ii) a copy of the unaudited
consolidated balance sheet of Holdings and its Subsidiaries (including,  without
limitation,  the  Borrower)  as of the  end of  such  quarter  and  the  related
consolidated  statements of income or operations,  shareholders' equity and cash
flows and quarterly operating budgets for the period commencing on the first day
and  ending  on  the  last  day  of  such  quarter,   together  with   unaudited
consolidating  schedules for the Borrower with respect to each of such financial
statements  (other  than the cash  flow) and  consolidated  quarterly  operating
budgets,  in each case setting  forth in  comparative  form the  information  or
figures and quarterly operating budget figures,  respectively, for (or as of the
end of) the  corresponding  period of the preceding fiscal year (other than with
respect to the operating budget for which only the current year operating budget
will be  provided),  and  certified  by an  appropriate  Responsible  Officer of
Holdings as fairly  presenting,  in accordance with GAAP, the financial position
and the results of  operations  of  Holdings  and its  Subsidiaries  (including,
without limitation, the Borrower), except for year-end adjustments and financial
statement footnotes required by GAAP;

         (c) Compliance  Certificate.  Concurrently with the delivery of each of
the financial statements referred to in Sections 8.1(a) and 8.1(b), a Compliance
Certificate of a Responsible Officer of Holdings and the Borrower  substantially
in the form of Exhibit D hereto,  appropriately completed,  stating that, to the
best of such officer's knowledge,  no Default has occurred and is continuing or,
if a Default has occurred and is continuing,  stating the nature thereof and the
action that has been taken and is proposed to be taken with respect thereto;

         (d) Notice of Actions, Suits,  Investigations or Proceedings.  Promptly
after the commencement thereof, notice of all actions, suits, investigations and
proceedings  in any court or before any  arbitrator  or mediator or before or by
any Governmental  Authority (including the FCC) (whether or not any Governmental
Authority is a party thereto) affecting any Loan Party or any License, which, if
determined  adversely to any Loan Party,  could reasonably be expected to have a
Material Adverse Effect;

         (e)  Notice  of  Default,  etc.  As soon as  possible  and in any event
immediately upon Holdings' or the Borrower's  knowledge of the occurrence of any
Default,  a written  notice  setting  forth the details of such  Default and the
action  that  Holdings  and/or  any  of  its  Subsidiaries  (including,  without
limitation, the Borrower) has taken and, if and to the extent known, proposes to
take with respect thereto;

         (f) ERISA Plan Reports.  Promptly after the filing or receipt  thereof,
copies of all reports, including annual reports, and notices which Holdings, the
Borrower or any of their ERISA  Affiliates  files with or receives from the PBGC
or the U.S.  Department  of Labor under ERISA with  respect to a Pension Plan or
for which Holdings or the Borrower has any potential  liability;  and as soon as
possible

                                       61

<PAGE>


and in any event within five days after  Holdings or the  Borrower  knows or has
reason to know that any Pension Plan is insolvent,  or that any Reportable Event
or Prohibited Transaction has occurred with respect to any Plan or Multiemployer
Plan,  or that the PBGC,  Holdings,  the  Borrower  or any ERISA  Affiliate  has
instituted or will  institute  proceedings  under ERISA to terminate or withdraw
from or reorganize any Pension Plan, a certificate  of a Responsible  Officer of
Holdings setting forth the details as to such insolvency, withdrawal, Reportable
Event, Prohibited Transaction or termination and the action that Holdings and/or
any of its Subsidiaries (including,  without limitation, the Borrower) has taken
and proposes to take with respect thereto;

         (g) Proxy Statements,  Etc. As soon as available,  one copy of each (if
any) financial statement,  report, notice or proxy statement sent by Holdings or
the Borrower to its  stockholders  or other security  holders  generally and one
copy of each (if any) regular,  periodic or special report  (including,  without
limitation,  reports on forms 10-K,  10-Q and 8-K),  registration  statement  or
prospectus filed by Holdings with any securities  exchange or the Securities and
Exchange Commission or any successor agency;

         (h)  Insurance.  Within 60 days prior to the end of each fiscal year of
Holdings,  a  report  in  form  and  substance  reasonably  satisfactory  to the
Administrative  Agent summarizing all material insurance coverage  maintained by
Holdings and its Subsidiaries (including,  without limitation,  the Borrower) as
of the date of such report and all  material  insurance  coverage  planned to be
maintained by such Persons in the subsequent fiscal year;

         (i) Plan Information. From time to time, as reasonably requested by the
Administrative  Agent or any  Lender,  such books,  records and other  documents
relating to any Pension  Plan as the  Administrative  Agent or any Lender  shall
specify;  prior to any termination,  partial  termination or merger of a Pension
Plan covering employees of Holdings,  the Borrower or any ERISA Affiliate,  or a
transfer  of  assets of a Pension  Plan  covering  employees  of  Holdings,  the
Borrower or any ERISA Affiliate,  written  notification  thereof;  promptly upon
Holdings' or the Borrower's receipt thereof, a copy of any determination  letter
or advisory  opinion  regarding any Pension Plan received from any  Governmental
Authority  and any  amendment or  modification  thereto as may be necessary as a
condition to obtaining a favorable determination letter or advisory opinion; and
promptly  upon  the  occurrence  thereof,  written  notification  of any  action
requested by any  Governmental  Authority to be taken as a condition to any such
determination letter or advisory opinion;

         (j) Business Plan, etc. Not later than 15 days prior to the end of each
fiscal  year,  an update of the  Business  Plan for the  immediately  succeeding
fiscal year and for the next succeeding nine fiscal years and, promptly upon any
preparation thereof,  any proposed amendment,  modification or supplement to the
Business Plan;

         (k) Management Letters.  Promptly upon each receipt thereof by any Loan
Party,  a copy  of any  management  letter  submitted  to  such  Loan  Party  by
independent certified public accountants with respect to the business, condition
(financial or otherwise), operations, prospects or Properties of any Loan Party;

                                       62

<PAGE>

         (l) Reports to Other Creditors.  Promptly after the furnishing thereof,
a copy of any financial or other material  statement or report  furnished by any
Loan Party to any other  party  pursuant  to the terms of any  indenture,  loan,
stock purchase or credit or similar  agreement and not otherwise  required to be
furnished  to the  Administrative  Agent and the  Lenders  pursuant to any other
clause of this Section 8.1;

         (m) Notice of Material  Adverse Effect.  Within two Business Days after
any Loan Party becomes aware  thereof,  written  notice of any matter that could
reasonably be expected to have a Material Adverse Effect;

         (n) Environmental  Assessments and Notices.  Promptly after the receipt
thereof,  a copy  of  each  environmental  assessment  (including  any  analysis
relating  thereto)  prepared  with respect to any Property of any Loan Party and
each notice sent by any Governmental Authority to any Loan Party relating to any
failure or alleged failure to comply with any Environmental Law or any liability
with respect thereto; and

         (o)  Notices  Under  Material  Contracts.  Promptly  after the  receipt
thereof by any Loan Party and promptly  after the  delivery  thereof by any Loan
Party, a copy of each written notice  delivered  under any Material  Contract or
real Property  lease as to which the Borrower or any  Subsidiary of the Borrower
is  obligated to cause a landlord's  waiver or  subordination  to be provided in
accordance  with  Section 5.4,  which notice (i) relates to any alleged  default
under or noncompliance with or proposed termination of such Material Contract or
real Property lease or (ii)  otherwise  relates to any matter under any Material
Contract or real  Property  lease which could  reasonably  be expected to have a
Material Adverse Effect;

         (p) Notices  Under Bridge and Level 3  Agreements.  Promptly  after the
receipt by any Loan Party and promptly  after the delivery by any Loan Party,  a
copy of each written notice  delivered  under any Bridge  Agreement which notice
(i) relates to an "Event of Default" as defined in any Bridge  Agreement  or any
other event that will entitle a party to terminate  any Bridge  Agreement,  (ii)
relates to a dispute resolution proceeding under any Bridge Agreement,  or (iii)
otherwise relates to matter under the Bridge Agreements which could give rise to
Material  Adverse  Effect.  Promptly  after the  receipt  by any Loan  Party and
promptly  after the delivery by any Loan Party,  a copy of each  written  notice
delivered  under any Level 3 Agreement  which  notice (i) relates to an event of
default as defined in any Level 3 Agreement or any other event that will entitle
a party to terminate any Level 3 Agreement, (ii) relates to a dispute resolution
proceeding  under any Level 3 Agreement,  or (iii)  otherwise  relates to matter
under the Level 3 Agreements which could give rise to Material Adverse Effect;

         (q) Material  Contracts and Leases.  Concurrently  with the delivery of
the compliance  certificate  referred to in Section  8.1(c),  a true and correct
copy of  newly  created  Material  Contract  to  which  the  Borrower  or any of
Subsidiary of the Borrower is a party or (directly or indirectly) subject and of
each lease of real Property to which Holdings, the Borrower or any of Subsidiary
of the Borrower is a party or (directly or indirectly) subject and as to which a
waiver or  subordination  of  landlord's  Lien is  required  to be  provided  in
accordance with Section 5.4; and

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         (r) General  Information.  Promptly,  such other  business,  financial,
corporate  affairs and other  similar  information  concerning  the Loan Parties
and/or the Collateral as the Administrative Agent or any Lender may from time to
time reasonably request,  including,  for example and without  limitation,  aged
trial balances of all  then-existing  Receivables and all then existing accounts
payable  of  the  Borrower  and  reports  as to  key  business  and  operational
statistics of Holdings and the Borrower.  In addition,  the Borrower will ensure
that its officers and other  personnel  of the Loan Parties are  available  from
time to time upon reasonable  notice and during normal business hours to discuss
the agreements,  documents,  matters and information referred to in this Section
8.1 with the Administrative Agent and the Lenders as they may reasonably request
from time to time.

         Section 8.2  Maintenance  of  Existence;  Conduct of Business.  Each of
Holdings  and the Borrower  will,  and will cause each of the other Loan Parties
to,  preserve  and  maintain  its entity  existence.  Each of  Holdings  and the
Borrower  will,  and will cause each of the other Loan  Parties to,  conduct its
business in an orderly and  efficient  manner in  accordance  with good business
practices and the Business Plan.

         Section 8.3  Maintenance of Properties  and Licenses.  Each of Holdings
and the  Borrower  will,  and will  cause  each of the other  Loan  Parties  to,
maintain, keep and preserve all of its Properties,  privileges,  qualifications,
intangible Property, contract and other rights and Licenses that are material in
the proper conduct of its businesses in existence and/or in good repair, working
order and  condition  (ordinary  wear and tear  excepted) and make all necessary
repairs,  renewals and replacements and improvements  thereof.  Without limiting
the  generality  of the  foregoing,  each of the  Loan  Parties  will (a) own or
possess  (or will be  licensed  or have the full right to use) all  Intellectual
Property which is necessary or appropriate for the operation of their respective
businesses as currently  conducted and as proposed to be conducted,  without any
known conflict with the rights of others, and (b) maintain and preserve good and
marketable  title to, or, with respect to leasehold  interests,  valid leasehold
interests  in, all of its material  Properties  and assets,  real and  personal,
including  the material  Properties  and  leasehold  interests  reflected in the
financial statements  described in Section 7.2(a),  except where failure to have
good and marketable  title or valid leasehold  interests could not reasonably be
expected to have a Material Adverse Effect.

         Section 8.4 Taxes and Claims.  Each of Holdings and the Borrower  will,
and will cause  each of the other  Loan  Parties  to,  pay or  discharge  before
becoming delinquent (a) all taxes, levies,  assessments and governmental charges
imposed on it or its income or profits or any of its Property and (b) all lawful
claims for labor,  material and supplies,  which, if unpaid, might become a Lien
upon any of its Property; provided, however, that none of the Loan Parties shall
be  required to pay or  discharge  any tax,  levy,  assessment  or  governmental
charge, or claim for labor, material or supplies, whose amount, applicability or
validity  is being  contested  in good faith by  appropriate  proceedings  being
diligently  pursued and for which adequate  reserves have been established under
GAAP.

         Section 8.5       Insurance.

         (a) Each of Holdings and the Borrower  will, and will cause each of the
other Loan Parties to, keep insured by financially sound and reputable  insurers
all Property of a character  usually insured

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by  responsible  entities  engaged in the same or a similar  business  similarly
situated  against  loss or damage of the  kinds and in the  amounts  customarily
insured against by such  corporations or entities and carry such other insurance
as is usually  carried by such  corporations  or entities,  provided that in any
event the Loan Parties will maintain:

                  (i)  Property  Insurance.  Insurance  against  loss or  damage
         covering  substantially  all of the tangible real and personal Property
         (including, without limitation, the Nortel Networks Equipment and other
         equipment  related to the Network) and  improvements  of such Person by
         reason of any  Peril (as  defined  below) in such  amounts  as shall be
         reasonable  and  customary  and  sufficient  to avoid the insured named
         therein from becoming a co-insurer  of any loss under such policy,  but
         in any  event  in such  amounts  as are  (A)  reasonably  available  as
         determined  by the  Borrower's  independent  insurance  broker  and (B)
         reasonably acceptable to the Administrative Agent.

                  (ii)  Automobile  Liability  Insurance  for Bodily  Injury and
         Property Damage.  Insurance in respect of all vehicles  (whether owned,
         hired or  rented by such  Person)  at any time  located  at, or used in
         connection with, its Properties or operations  against  liabilities for
         bodily injury and Property damage in such amounts as are then customary
         for vehicles used in connection with similar Properties and businesses,
         but in any event to the extent required by applicable law.

                  (iii)  Comprehensive  General Liability  Insurance.  Insurance
         against claims for bodily injury,  death or Property  damage  occurring
         on, in or about the Property  (and  adjoining  streets,  sidewalks  and
         waterways)  of such Person,  in such amounts as are then  customary for
         Property similar in use in the jurisdictions  where such Properties are
         located.

                  (iv)   Worker's Compensation Insurance. Worker's  compensation
         insurance   (including  employers'  liability  insurance) to the extent
         required by applicable law, which may be self-insurance to   the extent
         permitted by applicable law.

Without  limiting  the  generality  of the  foregoing,  the Loan  Parties  shall
purchase  and  maintain in effect  all-risk,  property  and  casualty  insurance
(including  casualty insurance covering  earthquake and flood damage) reasonably
acceptable  and  in  amounts  (A)  reasonably  available  as  determined  by the
Borrower's  independent  insurance  broker and (B) reasonably  acceptable to the
Administrative  Agent covering all Nortel Networks Equipment and other equipment
related to the  Network and  liability  insurance  covering  the  operations  of
Holdings and its Subsidiaries (including, without limitation, the Borrower). All
insurance shall be written by financially  responsible companies selected by the
applicable Loan Party and having an A.M. Best Rating of "A-" or better and being
in a financial size category of "VI" or larger, or by other companies reasonably
acceptable to the Administrative  Agent. Each policy referred to in this Section
8.5 shall name the Administrative Agent (for the benefit of itself and the other
Lenders)  as loss  payee  (with  respect to  casualty  insurance  policies)  and
additional  insured  (with  respect to liability  insurance  policies) and shall
provide that it will not be canceled,  amended or reduced  except after not less
than 30 days' prior written  notice to the  Administrative  Agent and shall also
provide that the interests of the Administrative Agent and the Lenders shall not
be invalidated or reduced by any act,  omission or negligence of any Loan Party.
Holdings  and/or the

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Borrower  will  advise  the   Administrative   Agent   promptly  of  any  policy
cancellation,  reduction or  amendment.  For purposes  hereof,  the term "Peril"
shall mean, collectively,  fire, lightning,  flood, windstorm,  hail, explosion,
riot  and  civil  commotion,  vandalism  and  malicious  mischief,  damage  from
aircraft,  vehicles  and  smoke  and  other  perils  covered  by the  "all-risk"
endorsement  then in use in the  jurisdictions  where the Properties of the Loan
Parties are located.

         (b)  The   Borrower   will  pay  all   Insurance   Recoveries   to  the
Administrative  Agent for  application  against  the  Obligations  if and to the
extent required in accordance with Section 2.7(a).

         (c) If a Default  shall have occurred and be  continuing,  the Borrower
will cause all proceeds of insurance paid on account of the loss of or damage to
any Property of any Loan Party and all awards of  compensation  for any Property
of any Loan Party taken by  condemnation  or eminent  domain to be promptly paid
directly to the  Administrative  Agent to be applied against or held as security
for  the  Obligations,  at the  election  of the  Administrative  Agent  and the
Required Lenders.

         Section 8.6 Inspection Rights.  Each of Holdings and the Borrower will,
and will cause each of the other Loan  Parties to,  permit  representatives  and
agents of the Administrative Agent and the Lenders, during normal business hours
and upon  reasonable  notice to Holdings or the Borrower,  to examine,  copy and
make  extracts from its books and records,  to visit and inspect its  Properties
and to  discuss  its  business,  operations  and  financial  condition  with its
officers and independent certified public accountants.  Each of Holdings and the
Borrower  will  authorize,  and will  cause  each of the other  Loan  Parties to
authorize,  its accountants in writing (with a copy to the Administrative Agent)
to  comply  with  this  Section  8.6.  The   Administrative   Agent  and/or  its
representatives  may,  at any  time  and  from  time to  time at the  Borrower's
expense,  conduct field exams for such purposes as the Administrative  Agent may
reasonably  request during normal business hours and upon  reasonable  notice to
Holdings or the Borrower.

         Section  8.7  Keeping  Books  and  Records.  Each of  Holdings  and the
Borrower  will,  and will  cause  each of the other Loan  Parties  to,  maintain
appropriate  books of record and account in  accordance  with GAAP  consistently
applied in which true, full and correct entries will be made of their respective
dealings and business affairs.

         Section 8.8  Compliance  with Laws.  Each of Holdings  and the Borrower
will,  and will  cause  each of the  other  Loan  Parties  to,  comply  with all
Governmental   Requirements   applicable   to  the  operation  of  its  business
(including,  without limitation,  the Communications Act, any rule or regulation
of the FCC or any rule or  regulation  of any  federal or state  public  utility
commission   or  other   Governmental   Authority),   except  for  instances  of
noncompliance that could not reasonably be expected to have,  individually or in
the aggregate, a Material Adverse Effect.

         Section  8.9  Compliance  with  Agreements.  Each of  Holdings  and the
Borrower will, and will cause each of the other Loan Parties to, comply with all
agreements,  documents and instruments binding on it or affecting its Properties
or business,  including,  without limitation, all Material Contracts, except for
instances  of  noncompliance  that could not  reasonably  be  expected  to have,
individually or in the aggregate, a Material Adverse Effect.

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         Section 8.10 Further Assurances. Each of Holdings and the Borrower will
execute and  deliver,  and will cause each of the other Loan  Parties to execute
and deliver,  such further  agreements,  documents and  instruments  (including,
without limitation,  financing statements and amendments to financing statements
specifying each item of the Collateral and the serial number  therefor) and take
such further actions as may be reasonably  requested by the Administrative Agent
to carry out the terms and  provisions  and purposes of this  Agreement  and the
other Loan  Documents,  to evidence  the  Obligations  and to create,  preserve,
maintain  and perfect the Liens of the  Administrative  Agent for the benefit of
itself and the Lenders in and to the  Collateral  and the  required  priority of
such Liens.  Without limiting the generality of the foregoing,  each of Holdings
and the  Borrower  will,  and will cause each of the other Loan  Parties to, (a)
take all  necessary  actions to and  otherwise  ensure that,  at all times,  the
Obligations  will  rank  senior  in  respect  of  priority  of  payment  to  any
Subordinated  Debt  (to  the  extent  of  the  subordination  provisions  in the
Subordinated Debt Documents  governing such Subordinated  Debt) and will rank at
least pari passu in respect of priority of treatment  with all other present and
future Debt of the Borrower (excluding rights of secured parties with respect to
Permitted  Liens) and (b) take all  necessary  actions to and  otherwise  ensure
that, at all times,  the  indebtedness,  liabilities and obligations of Holdings
under this  Agreement  and the Guaranty  executed by Holdings will rank at least
pari passu in respect of priority of treatment with all other present and future
Debt of Holdings  (excluding rights of secured parties with respect to Permitted
Liens).

         Section 8.11 ERISA.  Each of Holdings and the Borrower  will,  and will
cause  each  of its  ERISA  Affiliates  to,  comply  with  all  minimum  funding
requirements and all other material requirements of ERISA so as not to give rise
to any material liability thereunder.

         Section 8.12 Non-Consolidation. Each of Holdings and the Borrower will,
and will cause each  Subsidiary  of Holdings  and the  Borrower to: (a) maintain
entity  records  and books of account  separate  from those of any other  entity
which is an Affiliate of such Person; (b) not commingle its funds or assets with
those of any other entity which is an Affiliate of such Person;  and (c) provide
that its Board of  Directors  or other  analogous  governing  body will hold all
appropriate  meetings to authorize  and approve such  Person's  entity  actions,
which meetings will be separate from those of other Persons.

         Section 8.13 Year 2000 Compliance. Except as set forth in Schedule 8.13
and except for such  instances as  individually  or in the  aggregate  could not
reasonably be expected to have a Material  Adverse  Effect,  all of the material
computer software,  computer hardware (whether general or special purpose),  and
other similar or related items of automated,  computerized  or software  systems
that are used or relied  upon by any Loan Party in the  conduct of its  business
are and will  continue  to be Year 2000  Compliant  and,  without  limiting  the
generality of the foregoing,  will not malfunction,  will not cease to function,
will not generate  incorrect  data and will not produce  incorrect  results when
processing,  providing or receiving (a)  date-related  data into and between the
twentieth and  twenty-first  centuries and (b)  date-related  data in connection
with any valid date in the twentieth and twenty-first centuries. Holdings or the
Borrower will  promptly  notify the  Administrative  Agent in the event any Loan
Party discovers or determines that any computer application  (including those of
its suppliers  and vendors)  that is material to such Loan Party's  business and
operations will not be Year 2000 Compliant on a timely basis.

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<PAGE>


         Section 8.14 Trade Accounts Payable.  Each of Holdings and the Borrower
will,  and will cause each of the other Loan Parties to, pay all trade  accounts
payable  before  the same  become  more than 90 days past due,  except (a) trade
accounts  payable  contested  in good faith,  (b) trade  accounts  payable in an
aggregate amount not to exceed $[**] at any time outstanding and with respect to
which no  proceeding  to  enforce  collection  has  been  commenced  or,  to the
knowledge of any Loan Party,  threatened or (c) amounts not to exceed $[**] owed
as of the Closing  Date to Lucent  Technologies,  Inc.  for the  purchase of the
Lucent  Equipment  to the extent such  amounts are to be financed and secured by
Permitted  Liens  and  only  to the  extent  Lucent  Technologies,  Inc.  is not
demanding  the payment of such  amounts or  otherwise  taking  action to enforce
collection of such amounts unless the payment of such amounts is being contested
by the Borrower in good faith by appropriate proceedings diligently pursued.

         Section 8.15  Delivery of Certain  Amendments,  Material  Contracts and
Subordinated  Debt  Documents.  Each of Holdings and the Borrower will, and will
cause each of the other Loan Parties to, promptly deliver to the  Administrative
Agent any  amendment,  modification  or  supplement  to (a) the  certificate  or
articles  of   incorporation,   articles  of   organization,   bylaws  or  other
organizational  documents of any Loan Party, (b) any Material  Contract to which
it is a party, (c) any License which it possesses, and (d) any Subordinated Debt
Document; provided, however, that any such amendment, modification or supplement
shall be subject to the  provisions  of Section  9.15.  Each of Holdings and the
Borrower  will, and will cause each of the other Loan Parties to, deliver to the
Administrative Agent, promptly after such Material Contract or Subordinated Debt
Document  comes into  existence,  a true and correct copy of each such  Material
Contract or  Subordinated  Debt Document in existence which is not identified on
Schedule 7.22.

         Section 8.16 Interest Rate Protection. The Borrower will, commencing on
or before the 30th day after the Closing Date, maintain in full force and effect
through the final Maturity Date one or more Interest Rate Protection Agreements,
in form and substance reasonably  satisfactory to the Administrative Agent, with
one or more  counterparties  rated in one of the three highest rating categories
of  Standard  & Poors  Corporation  or  Moody's  Investors  Services,  Inc.  and
otherwise  reasonably  acceptable to the  Administrative  Agent, that enable the
Borrower  to fix or place a limit upon a rate of  interest  with  respect to not
less than an  aggregate  notional  amount  (not less than  zero)  equal to fifty
percent (50.0%) of the remainder of the aggregate amount of Total Debt minus the
aggregate  amount of such Total Debt with a fixed  interest  rate.  The  maximum
amount for which  interest may be fixed or limited  under all such Interest Rate
Protection  Agreements  shall not exceed one hundred percent (100%) of the Total
Debt of the Borrower and its Subsidiaries bearing interest at a variable rate.

         Section    8.17    Ownership   of    Telecommunications    Assets   and
Telecommunications  Business; Holdings to Remain a Holding Company. The Borrower
shall,  at all times and  except as may be set forth on  Schedule  8.17,  own or
lease all  Telecommunications  Assets  used or useful  in the  operation  of the
Telecommunications  Business  of  Holdings  and its  Subsidiaries  in the United
States.  Holdings shall at all times be a holding  company that does not own any
material  Properties or assets other than the Capital Stock of its  Subsidiaries
and Holdings'  sole business  shall be the ownership of the Capital Stock of its
Subsidiaries and matters incidental  thereto,  including the raising of capital.
Holdings shall not own or lease Telecommunications  Assets used or useful in the
operation of the Telecommunications Business.

[**] CONFIDENTIAL TREATMENT REQUESTED

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         Section 8.18  Observation  Rights.  So long as Nortel Networks holds at
least fifty percent (50%) of the  Commitments,  Holdings and the Borrower  shall
give  Nortel  Networks  notice  of each  meeting  of the Board of  Directors  of
Holdings  or the  Borrower  and each  meeting of any  committee  of the Board of
Directors  of Holdings or the  Borrower  (other than the audit  committee or the
compensation  committee)  not less than five Business Days prior to the dates of
any such meetings and allow a Person  designated by Nortel  Networks to serve as
an observer  (the  "Observer")  who may attend all such meetings of the Board of
Directors  of  Holdings  or the  Borrower  and any  committee  of the  Board  of
Directors  of Holdings or the  Borrower  (other than the audit  committee or the
compensation  committee);  provided,  that the  Observer  may be  excused at the
request  of the  majority  of the  directors  present  at any such  meeting  for
discussions of sensitive information regarding Nortel Networks or competitors of
Nortel  Networks.  The Observer will not be a director,  nor entitled to vote on
any matter  submitted  to the Board of Directors of Holdings or the Borrower (or
any committee of such board),  and will have no rights,  duties,  liabilities or
obligations of a director.  The Observer may share any  information  gained from
presence at such meetings with the employees, officers, directors, attorneys and
advisors  of Nortel  Networks  who have a need to know such  information  in the
performance  of their duties  (collectively,  the  "Representatives"),  but such
information  shall  otherwise be kept  confidential  by Nortel  Networks and its
Representatives to the same extent that financial information with regard to the
Borrower is required to be kept  confidential  in  accordance  with the terms of
this  Agreement.  Holdings or the Borrower shall  reimburse the Observer for all
reasonable costs of travel to attend all such meetings of the Board of Directors
of  Holdings or the  Borrower  or any  committee  of the Board of  Directors  of
Holdings or the Borrower  (other than the audit  committee  or the  compensation
committee)  and all other  reasonable  out-of-pocket  expenses  of the  Observer
relating to such meetings and attendance.

         Section  8.19  Contributions  to the Equity  Capital  of the  Borrower.
Holdings  agrees  that it will,  substantially  concurrently  with its actual or
constructive  receipt  of any  Net  Proceeds  of any  Equity  Issuance  or  Debt
Issuance, contribute [**] ([**]%) of such Net Proceeds as equity or Subordinated
Debt of the  Borrower;  provided,  however,  that at such time as the  aggregate
amount  contributed or lent to the Borrower pursuant to the requirements of this
Section 8.19,  together  with the amount of net cash proceeds  realized from any
financing  or sale of the Data  Centers,  exceeds the sum of (i) $[**] plus (ii)
any amount  Borrower has paid or has become  obligated to pay under Section 11.4
of the Bridge Network Services Agreement, the obligations of Holdings under this
Section 8.19 shall cease.

         Section  8.20  Veracity  and  Accuracy  of  Financial  Statements.  All
financial  statements to be delivered to the Administrative  Agent in accordance
with this Agreement will be, when  delivered,  true and correct  (subject to any
estimates or approximations permitted in accordance with GAAP), will be prepared
in  accordance  with GAAP  (except,  in the case of other than annual  financial
statements,  for

[**] CONFIDENTIAL TREATMENT REQUESTED

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year-end  adjustments and the absence of financial  statement footnotes required
by GAAP and, in the case of the unaudited pro forma balance sheet, the pro forma
nature of such financial  statement)  and will fairly and accurately  present in
all  material   respects,   on  a  consolidated  and  consolidating   basis  (as
applicable),   the  financial   condition  of  Holdings  and  its   Consolidated
Subsidiaries  (including without limitation,  the Borrower) as of the respective
dates indicated therein and the results of operations for the respective periods
indicated therein.

         Section 8.21 Investment  Company Act and Public Utility Holding Company
Act.  Each of the Loan  Parties  will take such  actions as may be  necessary or
appropriate  to ensure that it is not, and does not become,  (a) an  "investment
company"  within the meaning of the Investment  Company Act of 1940, as amended,
or (b) a "holding  company" or a "subsidiary  company" of a "holding company" or
an "affiliate" of a "holding  company" or a "public  utility" within the meaning
of the Public Utility Holding Company Act of 1935, as amended.

         Section 8.22  Management  Team.  Holdings and the Borrower  will at all
times maintain an experienced telecom management team composed of, at a minimum,
a chief executive  officer, a chief financial officer, a chief operating officer
and a chief technology officer.

                                    ARTICLE 9

                               Negative Covenants

         Each of Holdings and the Borrower covenants and agrees that, as long as
the  Obligations  or any part  thereof  are  outstanding  or any  Lender has any
Commitment hereunder,  it will perform and observe, or cause to be performed and
observed, the following covenants:

         Section 9.1 Debt.  Neither Holdings nor the Borrower will, nor will the
Borrower  permit any  Subsidiary  of the Borrower to, incur,  create,  assume or
permit to exist any Debt, except:

         (a) Debt to the Lenders pursuant to the Loan Documents;

         (b) unsecured Debt under Interest Rate  Protection  Agreements  entered
into in compliance with Section 8.16;  provided,  however,  that Debt thereunder
may be secured if such Debt constitutes a part of the Obligations;

         (c) existing Debt in the principal  amounts and as otherwise  described
on Schedule 7.10 hereto and renewals,  extensions or  refinancings  of such Debt
which do not increase the outstanding  principal  amount of such Debt,  which do
not  shorten  the  maturity  of any  principal  of such  Debt and the  terms and
provisions  of  which  are not  materially  more  onerous  than  the  terms  and
provisions of such Debt on the Closing Date;

         (d) purchase money Debt (including Capital Lease  Obligations)  secured
by purchase money Liens,  which Debt and Liens are permitted  under and meet all
of the  requirements of clause (g) (including  subclauses  (i), (ii),  (iii) and
(iv) thereof) of the definition of Permitted Liens contained in Section 1.1;

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         (e)  liabilities of Holdings and/or the Borrower in respect of unfunded
vested  benefits  under any Plan if and to the extent that the existence of such
liabilities will not constitute, cause or result in a Default;

         (f)  intercompany  Debt  between or among the  Borrower  and any of its
Wholly-Owned  Subsidiaries incurred in the ordinary course of business,  subject
to the following  requirements:  any and all of the Debt  permitted  pursuant to
this  clause  (f):  (i) shall not exceed  $[**] in  aggregate  principal  amount
outstanding,  (ii) shall be unsecured,  (iii) shall be evidenced by  instruments
satisfactory  to  the  Administrative   Agent  which  will  be  pledged  to  the
Administrative  Agent  for  the  benefit  of the  Administrative  Agent  and the
Lenders,  and (iv)  shall  be  subordinated  to the  Obligations  pursuant  to a
subordination agreement in form and substance satisfactory to the Administrative
Agent; provided,  however, that temporary advances made from time to time in the
ordinary course of business not to exceed $[**] in aggregate principal amount at
any time owing by any  Wholly-Owned  Subsidiary  of the Borrower to the Borrower
shall not be required to meet the  requirements  of clause  (iii) or clause (iv)
preceding;

         (g) if at the time of  incurrence  no  Default  exists or would  result
therefrom,  Debt of the type  described in clauses (a),  (b), (c) and (d) of the
definition  thereof  incurred  by the  Borrower  or one of its  Subsidiaries  to
finance or refinance  the  construction  of the Data Centers in an amount not to
exceed $[**] in the  aggregate  at any time  outstanding  provided  such Debt is
secured by Permitted Liens of the type described in clause (h) of the definition
of Permitted Liens; and

         (h) unsecured  Debt of the type  described in clauses (a), (b), (c) and
(d) of the definition  thereof (in addition to the Debt permitted by clauses (a)
through (g) of this Section 9.1)  incurred by Holdings or Borrower;  provided as
of the date of the  incurrence  thereof:  (i) no Default  shall  exist or result
therefrom,  (ii) any such Debt of the  Borrower  payable  to  Holdings  shall be
Subordinated  Debt,  and (iii)  [**].  For  purposes  of  Section  10.6 and such
proforma  effect,  such Debt shall be assumed to have been incurred on the first
day of the period of measurement and the interest rate in effect for such period
shall be assumed to be the interest rate in effect on the date of calculation.

         Section 9.2  Limitation  on Liens.  Neither  Holdings  nor the Borrower
will, nor will the Borrower  permit any Subsidiary of the Borrower to (a) incur,
create, assume or permit to exist any Lien upon any of its Property or revenues,
whether now owned or hereafter  acquired,  except  Permitted Liens and (b) enter
into any negative  pledge or similar  arrangement in favor of other creditors in
any way restricting, limiting or otherwise affecting its power, authority, right
or ability  (whether  by

[**] CONFIDENTIAL TREATMENT REQUESTED

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contract or  otherwise)  to grant,  create or permit to exist any Lien on any of
its Properties  (other than such negative  pledge or similar  arrangement  under
purchase  money  Debts  and  Capital  Lease  Obligations  and the  documentation
relating to Permitted  Liens of the type described in clauses (h) and (i) of the
definition  of Permitted  Liens with  respect to the assets  financed or secured
thereby).

         Section 9.3 Mergers, Etc. The Borrower will not and will not permit any
Subsidiary  of the Borrower to (a) become a party to a merger or  consolidation,
(b) wind-up,  dissolve or liquidate  itself, or (c) purchase or acquire all or a
material  or  substantial  part of the  business  or  Properties  of any Person;
provided,  however,  that (i) any  Subsidiary of the Borrower may merge with and
into the Borrower or a  Wholly-Owned  Subsidiary of the Borrower if the Borrower
or a  Wholly-Owned  Subsidiary of the Borrower is the  surviving  entity in such
merger,  provided that (x) no  consideration is given by the surviving entity in
such merger other than the issuance of any Capital Stock of the surviving entity
and such Capital Stock is pledged to the Administrative Agent, for and on behalf
of the  Administrative  Agent and the Lenders,  as security for the  Obligations
pursuant to Section 9.6 and (y) the  surviving  entity in any such merger  shall
ratify the Guaranty, the Security Documents and other indebtedness,  liabilities
and  obligations of the  non-surviving  entity under the Loan Documents and (ii)
Borrower or any Subsidiary of Borrower may purchase or acquire all or a material
or  substantial  part of the business or Properties of any Person engaged in the
Telecommunications  Business  after  December  31,  2002  if as of the  date  of
acquisition  and after giving proforma effect thereto no Default exists or would
result  therefrom and as of the most recent Quarterly Date,  Holdings,  Borrower
and Borrower's  Subsidiaries would otherwise be in compliance with all terms and
conditions  of the Loan  Documents.  Holdings  will not (a)  become a party to a
merger or  consolidation,  (b)  wind-up,  dissolve or liquidate  itself,  or (c)
purchase  or acquire all or a material or  substantial  part of the  business or
Properties of any Person;  provided,  however,  that  Holdings may  consummate a
transaction  set forth in  clause  (a) or (c) if (x) no  Change  in  Control  of
Holdings  occurs,  (y)  Holdings is the  surviving  entity in any merger and (z)
after  giving  effect to the  transaction  on a  pro-forma  basis as of the most
recent  Quarterly  Date,  Holdings,  Borrower  and the  Borrower's  Subsidiaries
(including, without limitation the Borrower and the acquired Person) would be in
compliance with all terms and conditions of the Loan Documents.

         Section 9.4  Restricted  Payments.  Neither  Holdings  nor the Borrower
will,  nor will the Borrower  permit any  Subsidiary of the Borrower to, make or
pay, or obligate itself to make or pay, any Restricted Payments, except:

         (a) subject to the subordination provisions relating thereto,  Holdings
and the Borrower may make regularly  scheduled  payments of interest  accrued on
any  Subordinated  Debt if and to the  extent  (but  only if and to the  extent)
permitted by the express terms of the Subordinated Debt Documents governing such
Subordinated  Debt, which terms shall have been expressly approved in writing by
the Administrative Agent;

         (b) Subsidiaries of Holdings may make Restricted  Payments to Holdings,
the Borrower or any Subsidiary of Holdings and  Subsidiaries of the Borrower may
make Restricted Payments to the Borrower;

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         (c) the  Borrower  and its  Subsidiaries  may make  temporary  loans or
advances  to  employees,  officers  and  directors  of the Loan  Parties  in the
ordinary course of business that do not exceed $[**] in aggregate  amount at any
time outstanding; and

         (d)  Holdings  may  repurchase  Capital  Stock  owned by  employees  of
Holdings or the Borrower in connection with the termination of the employment of
such employees  provided that the aggregate amount paid under the permissions of
this clause (d) for the entire term of this Agreement shall not exceed $[**];

provided,  however,  that no Restricted Payments may be made pursuant to clauses
(a),  (b),  (d) or (e)  preceding  if a  Default  exists  at the  time  of  such
Restricted Payment or would result therefrom.

         Section 9.5 Investments.  The Borrower will not, nor will it permit any
Subsidiary of the Borrower to, make or permit to remain outstanding any advance,
loan,  extension  of credit or  capital  contribution  to or  investment  in any
Person,  or  purchase  or own any  stock,  bonds,  notes,  debentures  or  other
securities  of any Person,  or be or become a joint  venturer with or partner of
any Person (all such transactions being herein called "Investments"), except:

         (a) Investments in obligations or securities  received in settlement of
debts  (created in the  ordinary  course of  business)  owing to the Borrower or
another Loan Party;

         (b) existing Investments identified on Schedule 9.5 hereto;

         (c)  Investments in securities  issued or guaranteed by the U.S. or any
agency thereof with maturities of one year or less from the date of acquisition;

         (d) Investments in certificates of deposit and Eurodollar time deposits
with  maturities  of six months or less from the date of  acquisition,  bankers'
acceptances  with  maturities  not  exceeding  six  months  and  overnight  bank
deposits,  in each case with any  Lender or with any  domestic  commercial  bank
having capital and surplus in excess of $[**];

         (e) Investments in repurchase  obligations with a term of not more than
seven days for  securities of the types  described in clause (c) preceding  with
any Lender or with any domestic  commercial  bank having  capital and surplus in
excess of $[**];

         (f)  Investments in commercial  paper of a domestic issuer rated A-1 or
better or P-1 or better by Standard & Poor's  Corporation  or Moody's  Investors
Services, Inc., respectively,  maturing not more than [**] days from the date of
acquisition;

         (g) intercompany Debt permitted by Section 9.1(f);

         (h) Interest Rate Protection Agreements entered into in compliance with
Section 8.16;

         (i) Investments permitted by Section 9.5;

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<PAGE>


         (j)  amounts  reflected  as  Investments  in  accordance  with  GAAP in
connection  with direct  financing or sales type leases arising from the sale of
any IRU in the  ordinary  course  of  business  in a  transaction  that does not
constitute an Asset Disposition; and

         (k) temporary loans or advances to employees, officers and directors of
the  Loan  Parties  in the  ordinary  course  of  business  that  do not  exceed
$[**] in aggregate amount at any time outstanding;

provided,  however,  that no Investments may be made by the Borrower pursuant to
clauses (g)  preceding  if a Default  exists at the time of such  Investment  or
would result therefrom.

         Section 9.6 Limitation on Issuance of Capital Stock.  The Borrower will
not, and will not permit any  Subsidiary  of the Borrower to, at any time issue,
sell,  assign or  otherwise  dispose of (a) any of its  Capital  Stock,  (b) any
securities  exchangeable  for or  convertible  into or  carrying  any  rights to
acquire any of its Capital Stock,  or (c) any option,  warrant or other right to
acquire any of its Capital Stock, in each case to any Person other than Holdings
(with respect to Capital Stock of the Borrower) or the Borrower (with respect to
Capital  Stock  of  the  Subsidiaries  of the  Borrower).  Such  Capital  Stock,
securities,  options,  warrants  and other  rights  issued,  sold,  assigned  or
disposed  of shall be, and shall,  as  provided  in Article 5,  continue  to be,
subject  to a first  priority  Lien in  favor  of the  Administrative  Agent  as
security for the payment and performance of the Obligations.

         Section  9.7  Transactions  with  Affiliates.  Except for  transactions
pursuant to the Bridge  Agreements,  neither Holdings nor the Borrower will, nor
will it permit any  Subsidiary  of the Borrower to, enter into any  transaction,
including, without limitation, the purchase, sale or exchange of Property or the
rendering of any service,  with any Affiliate of Holdings or the Borrower except
in the  ordinary  course  of and  pursuant  to the  reasonable  requirements  of
Holdings',  the  Borrower's  or such  Subsidiary's  business  and upon  fair and
reasonable terms no less favorable to Holdings, the Borrower or such Subsidiary,
respectively,  than would be obtained in a  comparable  arms-length  transaction
with a Person not an Affiliate of Holdings or the Borrower;  provided,  however,
that  transactions  between or among the  Borrower  and  Holdings  or any of the
Subsidiaries  or  Affiliates  of Holdings or the  Borrower  may be on terms more
favorable  to the Borrower  than would be obtained in a  comparable  arms-length
transaction with a Person not an Affiliate of the Borrower.

         Section 9.8 Disposition of Property. The Borrower will not and will not
permit any  Subsidiary  of the  Borrower to, sell,  lease,  assign,  transfer or
otherwise dispose of any of its Property  (including,  without  limitation,  the
Nortel Networks Equipment and the Nortel Networks Software),  except (subject to
the succeeding proviso):

         (a)  dispositions  of inventory  (other than equipment) by the Borrower
and its  Subsidiaries  in the ordinary course of business,  and  expenditures of
money (including,  without  limitation,  money held in deposit accounts) made in
the ordinary course of business or for the purpose of making Restricted Payments
expressly  permitted in accordance with this Agreement or Investments  expressly
permitted in accordance with this Agreement;

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<PAGE>


         (b)  Asset   Dispositions   of  Property,   other  than   accounts  and
Receivables, by the Borrower and its Subsidiaries made in the ordinary course of
business if each of the following conditions has been satisfied:  (i)(A) the Net
Proceeds  from  any  single  Asset   Disposition  or  series  of  related  Asset
Dispositions  in any fiscal year do not exceed $[**] and (B) the Borrower or its
Subsidiary (as applicable)  receives fair consideration for such assets and (ii)
no Default exists at the time of or will result from such Asset Disposition;

         (c) Asset Dispositions of Property, other than equipment,  accounts and
Receivables, by the Borrower and its Subsidiaries to any Wholly-Owned Subsidiary
of the Borrower if each of the following conditions has been satisfied:  (i) the
assets sold, disposed of or otherwise  transferred to a Wholly-Owned  Subsidiary
of the Borrower shall continue to be subject to a perfected, first priority Lien
(except for Permitted  Liens, if any, which are expressly  permitted by the Loan
Documents to have priority over the Liens in favor of the Administrative  Agent)
in favor of the Administrative Agent and the Lenders, and (ii) no Default exists
at the time of or will result from such Asset Disposition;

         (d)  dispositions  of  Property  no  longer  capable  of being  used or
appropriate  for use in the  ordinary  course of  business,  including,  without
limitation,   dispositions   of  equipment  being  exchanged  or  replaced  with
comparable or better equipment; and

         (e) the  dispositions  of Property  described in clauses (e) and (f) of
the definition of "Asset Disposition";

provided, however, that the Borrower will not and will not permit any Subsidiary
of the Borrower to, sell, lease, assign, transfer or otherwise dispose of any of
the Nortel Networks  Equipment without the prior written consent of the Required
Lenders and Nortel Networks.

         Section 9.9 Sale and Leaseback. Neither Holdings nor the Borrower will,
nor will the Borrower  permit any  Subsidiary of the Borrower to, enter into any
arrangement with any Person pursuant to which it leases from such Person real or
personal  Property  that has been or is to be sold or  transferred,  directly or
indirectly,  by it to such Person; provided,  however, that if no Default exists
or would result  therefrom,  the Data Centers may be sold and leased back if the
Debt and Liens  incurred in  connection  therewith are permitted by Sections 9.1
and 9.2 hereof.

         Section  9.10 Lines of Business.  The  Borrower  will not, and will not
permit any  Subsidiary of the Borrower to, (a) engage in any business other than
the   build-out,   implementation   and  operation  of  the  Network  and  other
Telecommunications  Businesses  and the  conduct of  related  Telecommunications
Businesses  and matters  incidental  thereto,  in each case as  described in and
contemplated  by the  Business  Plan or (b)  discontinue  any  line of  business
contemplated by the Business Plan that provides ten percent (10%) or more of the
consolidated revenues of Borrower.

         Section 9.11 Environmental Protection.  The Borrower will not, and will
not permit any  Subsidiary  of the Borrower to, (a) use (or permit any tenant to
use) any of its Properties for the handling, processing, storage, transportation
or disposal of any  Hazardous  Material  except in  compliance  with  applicable
Environmental Laws, (b) generate any Hazardous Material except in

[**] CONFIDENTIAL TREATMENT REQUESTED

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<PAGE>

compliance with applicable  Environmental Laws, (c) conduct any activity that is
likely to cause a Release or  threatened  Release of any  Hazardous  Material in
violation of any Environmental Law, or (d) otherwise conduct any activity or use
any of its  Properties in any manner,  that violates or is likely to violate any
Environmental  Law or create any  Environmental  Liabilities  for which any Loan
Party would be  responsible,  except for  circumstances  or events  described in
clauses  (a)  through  (d)  preceding  that  could not,  individually  or in the
aggregate, reasonably be expected to have a Material Adverse Effect.

         Section  9.12  Intercompany  Transactions.  Except as may be  expressly
permitted or required by the Loan Documents,  neither  Holdings nor the Borrower
will,  nor will it not permit  any  Subsidiary  of the  Borrower  to,  create or
otherwise  cause  or  permit  to  exist  or  become   effective  any  consensual
encumbrance  or  restriction  of any  kind on the  ability  of  Holdings  or the
Borrower or any  Subsidiary  of the  Borrower to (a) pay  dividends  or make any
other  distribution to the Borrower or any Subsidiary of the Borrower in respect
of the Capital Stock of such Loan Party or with respect to any other interest or
participation in, or measured by, its profits,  (b) pay any indebtedness owed to
Holdings or the Borrower or any Subsidiary of the Borrower, (c) make any loan or
advance  or  capital  contribution  to the  Borrower  or any  Subsidiary  of the
Borrower in accordance with this Agreement,  (d) sell,  lease or transfer any of
its Property to the Borrower or any Subsidiary of the Borrower, or (e) grant any
Lien on any of the Collateral.

         Section 9.13 Management Fees. The Borrower will not and will not permit
any  Subsidiary of the Borrower to, pay any management  fees except  pursuant to
the Bridge  Agreements  and management  fees payable  pursuant to the reasonable
requirements of the Borrower's business and upon fair and reasonable terms in an
arms-length  transaction  with a Person  not an  Affiliate  of  Holdings  or the
Borrower.

         Section  9.14  Master  Purchase  Agreement.  Neither  Holdings  nor the
Borrower will, nor will it permit any Subsidiary of Holdings or the Borrower to,
terminate the Master  Purchase  Agreement or any  additional  similar  agreement
between or among any one or more of the Loan Parties and Nortel  Networks  prior
to the  later to  occur  of the  Amortization  Commencement  Date,  the date the
Commitments  have been fully funded or the  satisfaction in full of all purchase
commitments of the Borrower and the other Loan Parties under the Master Purchase
Agreement and any such similar agreement.

         Section 9.15 Modification of Certain  Agreements.  Neither Holdings nor
the  Borrower  will,  nor will it permit any other Loan Party to,  consent to or
implement any termination, amendment, modification,  supplement or waiver of (a)
the certificate or articles of incorporation,  articles of organization, bylaws,
regulations or other constitutional  documents of Holdings,  the Borrower or any
other Loan  Party,  (b) any  Material  Contract  to which it is a party,  or any
License which it possesses,  (c) any Bridge  Agreement,  or (d) any Subordinated
Debt Documents; provided, however, that the Loan Parties may amend or modify (i)
the documents referred to in clause (a) preceding if and to the extent that such
amendment or modification  could not reasonably be expected to be adverse to the
ability of  Borrower  to repay the Loans or of the  Administrative  Agent or any
Lender to realize on the Loans,  provided,  however, that none of such documents
referred to in clause (a) preceding may be



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<PAGE>

amended or modified as they relate to, in any way, any capital  contribution  to
the Borrower or any obligation or agreement relating thereto,  (ii) the Material
Contracts  referred  to in clause (b)  preceding  if and to the extent that such
amendment or  modification  could not  reasonably be expected to have a material
adverse effect on the validity or  enforceability  of the Liens thereon  granted
under the Security  Documents,(ii)  the Bridge Agreements  referred to in clause
(c) preceding if and to the extent that such amendment or modification  (A) does
not reduce the "Minimum Annual Commitment"  provided for under Section 10 of the
Bridge Network Services Agreement, (B) does not amend Section 11.4 of the Bridge
Network Services Agreement in a manner adverse to the Borrower,  (C) is pursuant
to the  reasonable  requirements  of the  Borrower's  business and upon fair and
reasonable  terms  no  less  favorable  to the  Borrower  than an  amendment  or
modification  that would be agreed to in a  comparable  arms-length  transaction
with a Person not an Affiliate of the Borrower,  and (D)could not  reasonably be
expected  to be adverse to the  ability of Borrower to repay the Loans or of the
Administrative  Agent  or any  Lender  to  realize  on the  Loans,  and (iv) the
Subordinated  Debt  Documents  referred to in clause (d) preceding if and to the
extent that such amendment or  modification  is not material and does not result
in the Debt evidenced or governed thereby not being  "Subordinated Debt" as such
term is defined herein.

         Section 9.16 ERISA.  Neither  Holdings nor the Borrower  will, nor will
the Borrower permit any Subsidiary of the Borrower to:

         (a) allow,  or take (or permit any ERISA  Affiliate to take) any action
which would cause,  any unfunded or unreserved  liability for benefits under any
Plan  (exclusive  of any  Multiemployer  Plan) to exist  or to be  created  that
exceeds  $100,000  with respect to any such Plan or $200,000 with respect to all
such Plans in the aggregate on either a going concern or a wind-up basis; or

         (b) with respect to any  Multiemployer  Plan, allow, or take (or permit
any ERISA  Affiliate  to take) any action  which would  cause,  any  unfunded or
unreserved liability for benefits under any Multiemployer Plan to exist or to be
created,  either  individually as to any such Plan or in the aggregate as to all
such  Plans,  that  could,  upon any  partial  or  complete  withdrawal  from or
termination of any such  Multiemployer  Plan or Plans,  have a Material  Adverse
Effect.

         Section 9.17 No Prepayment of Debt, Etc. The Borrower will not and will
not permit any Subsidiary of the Borrower to,  directly or indirectly,  make any
optional  prepayment or  distribution  on account of, or  voluntarily  purchase,
acquire,  redeem or retire,  any Debt,  prior to 30 days  before its  originally
stated  maturity  (or its stated  maturity as of the Closing Date in the case of
Debt  outstanding on the Closing Date),  or in the case of interest,  its stated
due date,  or directly or  indirectly  do or become  obligated  to do any of the
foregoing by amending the terms thereof or otherwise, except for:

         (a)  prepayments  of the Loans or other  Obligations  pursuant to or as
permitted by the Loan Documents;

         (b)  prepayments  made with the  proceeds of new Debt  incurred for the
purpose of refinancing  the Debt being prepaid,  provided that (i) no portion of
such new Debt  matures or is  required  to be prepaid,  purchased  or  otherwise
retired earlier than the corresponding portion of the



                                       77
<PAGE>

Debt  being  prepaid  (including  as a result  of any  mandatory  prepayment  or
mandatory redemption), (ii) such new Debt (A) is subordinated to the Obligations
to at least  the  same  extent  as the Debt  being  refinanced  if such  Debt is
subordinated  debt or (B) is permitted in accordance  with this  Agreement,  and
(iii) no Default  or Event of  Default  then  exists or would  result  from such
prepayment or refinancing;

         (c)  prepayments  of purchase  money Debt  permitted  to be incurred in
accordance with Section 9.1(d); and

         (d)  prepayments of trade payables  incurred in the ordinary  course of
business.

In addition,  the Borrower  will not, and will not permit any  Subsidiary of the
Borrower to, prepay any rent or other  obligations  under any operating lease or
any other Material  Contract  prior to 90 days before the originally  stated due
date  therefor  (or the due date  therefor as of the Closing Date in the case of
operating leases or Material Contracts in existence on the Closing Date).

         Section 9.18 Rights of Third Parties in Intellectual Property.  Neither
Holdings nor the Borrower  will, nor will it permit any other Loan Party to, (a)
allow any  product or service of any of the Loan  Parties to  infringe  upon any
Intellectual  Property of any other Person in a manner that could  (individually
or in the aggregate) reasonably be expected to have a Material Adverse Effect or
(b) violate any right of any such other Person with respect to any  Intellectual
Property  owned or used by any such other Person other than  violations (if any)
that could not (individually or in the aggregate) reasonably be expected to have
a Material Adverse Effect.

                                   ARTICLE 10

                Financial CovenantsARTICLE 10 Financial Covenants

         Section  10.1 Total Debt to Total  Capitalization.  For the period from
the Closing Date to the Phase II Date,  neither  Holdings nor the Borrower  will
permit the ratio of (a) Total Debt of Holdings and its Consolidated Subsidiaries
(including,  without  limitation,  the Borrower)  outstanding at any date to (b)
Total Capitalization of Holdings and its Consolidated  Subsidiaries  (including,
without  limitation,  the Borrower) on such date, to exceed [**]. For the period
from the Closing  Date to the Phase II Date,  neither  Holdings nor the Borrower
will  permit the ratio of (a) Total Debt of the  Borrower  and its  Consolidated
Subsidiaries  (other than  Subordinated  Debt owed by the  Borrower to Holdings)
outstanding  at any date to (b) Total  Capitalization  of the  Borrower  and its
Consolidated Subsidiaries on such date, to exceed [**]. The term "Phase II Date"
means,  the later of (i) September 30, 2002 or (ii) if as of September 30, 2002,
Holdings and the Borrower are not in  compliance  with  Sections  10.3 and 10.4,
then the first calendar  quarter end after  September 30, 2002 in which Holdings
and/or the Borrower are in compliance with Sections 10.3 and 10.4.

         Section 10.2 Senior Debt to Total  Capitalization.  For the period from
the Closing Date to the Phase II Date, the Borrower will not permit the ratio of
(a) Senior Debt of the Borrower and its Consolidated Subsidiaries outstanding at
any  date to (b)  Total  Capitalization  of the  Borrower  and its  Consolidated
Subsidiaries on such date, to exceed [**].

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         Section 10.3 Total Debt to Annualized EBITDA.  Neither Holdings nor the
Borrower  will  permit  the  ratio  of  (a)  Total  Debt  of  Holdings  and  its
Consolidated   Subsidiaries  (including,   without  limitation,   the  Borrower)
outstanding  at the end of any of the  calendar  quarters  set forth on Schedule
10.3 to (b)  Annualized  EBITDA of Holdings  and its  Consolidated  Subsidiaries
(including,  without  limitation,  the  Borrower)  for the period ending on such
date,  to  exceed  the  ratio set  forth  opposite  such date on such  Schedule;
provided  that,  Holdings  shall not be required to be in  compliance  with this
Section 10.3 until the Phase II Date and as of each calendar quarter thereafter.
Neither Holdings nor the Borrower will permit the ratio of (a) Total Debt of the
Borrower and its Consolidated Subsidiaries (other than Subordinated Debt owed by
the Borrower to Holdings) outstanding at the end of any of the calendar quarters
set forth on Schedule  10.3 to (b)  Annualized  EBITDA of the  Borrower  and its
Consolidated  Subsidiaries  for the period  ending on such  date,  to exceed the
ratio set forth opposite such date on such Schedule; provided that, the Borrower
shall not be required to be in compliance with this Section 10.3 until the Phase
II Date and as of each calendar quarter thereafter.

         Section 10.4 Senior Debt to  Annualized  EBITDA.  The Borrower will not
permit  the  ratio  of (a)  Senior  Debt of the  Borrower  and its  Consolidated
Subsidiaries outstanding at the end of any of the calendar quarters set forth on
Schedule  10.4 to (b)  Annualized  EBITDA of the Borrower  and its  Consolidated
Subsidiaries  for the period  ending on such date, to exceed the ratio set forth
opposite such date on such  Schedule;  provided  that, the Borrower shall not be
required to be in compliance  with this Section 10.4 until the Phase II Date and
as of each calendar quarter thereafter.

         Section 10.5 Annualized EBITDA.  Neither Holdings nor the Borrower will
permit the  Annualized  EBITDA of  Holdings  and its  Consolidated  Subsidiaries
(including,  without limitation,  the Borrower) for any of the calendar quarters
set forth on Schedule  10.5 to be less than the amount set forth  opposite  such
date on such Schedule.

         Section 10.6 Fixed Charge  Coverage.  Neither Holdings nor the Borrower
will permit the ratio of (a) Annualized  EBITDA of Holdings and its Consolidated
Subsidiaries  (including,  without  limitation,  the  Borrower)  for  any of the
calendar  quarters set forth on Schedule 10.6 to (b) Consolidated  Fixed Charges
of Holdings and its Consolidated  Subsidiaries  (including,  without limitation,
the Borrower) for the four calendar  quarter  period then ending to be less than
the ratio set forth opposite such calendar quarter on such Schedule.

         Section 10.7 Capital  Expenditures.  Neither  Holdings nor the Borrower
will permit the  aggregate  amount of Capital  Expenditures  of Holdings and its
Consolidated Subsidiaries (including,  without limitation, the Borrower) for any
of the calendar  years set forth on Schedule 10.7 to exceed the amount set forth
opposite such calendar year on such Schedule;  provided, however, that if and to
the extent that the aggregate amount of Capital Expenditures during any calendar
year (the "subject year") are less than the maximum  aggregate amount of Capital
Expenditures  permitted  during such year as specified on Schedule 10.7 (without
giving effect to this proviso),  then additional  Capital  Expenditures shall be
permitted to be made in the calendar  year  immediately  succeeding  the subject
year in an aggregate  amount equal to the lesser of (a) the aggregate  amount of
Capital Expenditures



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so  permitted  to be made during the subject  year that were not made during the
subject year or (b) fifty percent  (50%) of the aggregate  amount of the Capital
Expenditures so permitted to be made during the subject year.

         Section 10.8 Minimum Gross Revenue.  Neither  Holdings nor the Borrower
will permit the Gross  Revenue of  Holdings  and its  Consolidated  Subsidiaries
(including,  without limitation,  the Borrower) for any of the calendar quarters
set forth on Schedule  10.8 to be less than the amount set forth  opposite  such
quarter on such Schedule.

         Section 10.9 Gross Margin Percentage. Neither Holdings nor the Borrower
will permit the Gross  Margin  Percentage  of Holdings  for any of the  calendar
quarters  set forth on Schedule  10.9 to be less than the  percentage  set forth
opposite such quarter on such Schedule.

                                   ARTICLE 11

                                     Default

         Section 11.1 Events of Default.  Each of the following  shall be deemed
an "Event of Default":

         (a) (i) The Borrower  shall fail to pay,  repay or prepay when due, any
amount of principal or interest owing to the Administrative  Agent or any Lender
pursuant to this  Agreement  or any other Loan  Document,  or (ii) the  Borrower
shall fail to pay, within two Business Days after the due date thereof, any fee,
expense or other amount or other Obligation owing to the Administrative Agent or
any Lender pursuant to this Agreement or any other Loan Document.

         (b) Any  representation or warranty made or deemed made by or on behalf
of any Loan Party in any Loan Document or in any certificate,  report, notice or
financial  statement  furnished at any time in connection with this Agreement or
any other Loan Document shall be false,  misleading or erroneous in any material
respect when made or deemed to have been made.

         (c) Any Loan Party  shall fail to  perform,  observe or comply with any
covenant, agreement or term contained in Article 5, Section 8.1(e), Section 8.2,
Section  8.6,  Section  8.10,  Article 9 or Article  10;  any Loan  Party  shall
wilfully fail to perform, observe or comply with any covenant, agreement or term
contained in Section  8.18 or shall fail to perform,  observe or comply with any
covenant,  agreement or term contained in Section 8.18 on more than one occasion
in any calendar  year;  any Loan Party shall fail to perform,  observe or comply
with any  covenant,  agreement  or term  contained  in Sections  8.1 (other than
Section  8.1(e)),  8.3, 8.4, 8.5, 8.7, 8.8, 8.9, 8.11,  8.12,  8.13, 8.14, 8.15,
8.16,  8.17,  8.19,  8.20,  8.21,  and 8.22, and such failure is not remedied or
waived  within ten days after such  failure  commenced;  or any Loan Party shall
fail to perform,  observe or comply with any other  covenant,  agreement or term
contained in this Agreement or any other Loan Document  (other than covenants to
pay the  Obligations)  and such  failure is not  remedied  or waived  within the
earlier to occur of 30 days  after such  failure  commenced  or, if a  different
grace period is expressly  made  applicable in such other Loan  Documents,  such
applicable grace period.



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         (d) Any Loan Party or Bridge  ceases to be  Solvent  or shall  admit in
writing its inability to, or be generally unable to, pay its debts as such debts
become due.

         (e) Any Loan  Party or Bridge  shall (i)  apply for or  consent  to the
appointment of, or the taking of possession by, a receiver,  custodian, trustee,
liquidator or  administrator  of itself or of all or a  substantial  part of its
Property, (ii) admit in writing its inability to, or be generally unable to, pay
its debts as such debts become due,  subject to any  applicable  grace  periods,
(iii) make a general assignment for the benefit of its creditors,  (iv) commence
a voluntary case under the United States Bankruptcy Code (as now or hereafter in
effect, the "Bankruptcy Code"), (v) file a petition seeking to take advantage of
any other law  providing  for the relief of debtors or relating  to  bankruptcy,
insolvency, reorganization, liquidation, dissolution, arrangement or winding up,
or composition or readjustment of debts,  (vi) fail to controvert in a timely or
appropriate manner, or acquiesce in writing to, any petition filed against it in
an involuntary case under the Bankruptcy Code or other  applicable  Governmental
Requirement, (vii) dissolve, or (viii) take any entity action for the purpose of
effecting any of the foregoing.

         (f) A proceeding or case shall be commenced, without the application or
consent  of any Loan Party or Bridge,  in any court of  competent  jurisdiction,
seeking (i) the liquidation,  reorganization,  dissolution, arrangement, winding
up, or  composition  or  readjustment  of its debts,  (ii) the  appointment of a
trustee, receiver, custodian, examiner, liquidator, administrator or the like of
it or of all or any substantial part of its Property, or (iii) similar relief in
respect of it, under any law  providing for the relief of debtors or relating to
bankruptcy, insolvency, reorganization, liquidation, dissolution, arrangement or
winding up, or composition or readjustment of debts, and such proceeding or case
shall  continue  undismissed,  or an  order,  judgment  or decree  approving  or
ordering  any of the  foregoing  shall be entered and  continue  unstayed and in
effect, for a period of 60 or more days; or an order for relief shall be entered
in an  involuntary  case under the  Bankruptcy  Code  against  any Loan Party or
Bridge  and  shall  continue  unstayed  and  in  effect  for  any  period  of 60
consecutive days.

         (g) Any Loan Party shall fail to  discharge  within a period of 30 days
after the  commencement  thereof any  attachment,  sequestration,  forfeiture or
similar  proceeding or  proceedings  involving an aggregate  amount in excess of
$[**] against any of its Properties.

         (h) A final judgment or judgments for the payment of money in excess of
$[**] in the aggregate  shall be rendered by a court or courts  against any Loan
Party on claims not covered by insurance  and the same shall not be  discharged,
bonded or a stay of execution thereof shall not be procured, within 30 days from
the date of entry thereof and any Loan Party shall not, within said period of 30
days, or such longer  period during which  execution of the same shall have been
stayed,  appeal  therefrom and cause the  execution  thereof to be stayed during
such appeal.

         (i) Any Loan  Party  shall  fail to pay when  due any  principal  of or
interest  on any Debt of such Loan Party  (other  than the  Obligations)  having
(either  individually or in the aggregate) a principal  amount of at least $[**]
or the maturity of any such Debt shall have been  accelerated,  or any such Debt
shall have been required to be prepaid prior to the stated maturity thereof,  or
any event shall

[**] CONFIDENTIAL TREATMENT REQUESTED

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<PAGE>

have occurred  (and shall not have been waived or otherwise  cured) that permits
(or,  with the  giving  of notice or lapse of time or both,  would  permit)  any
holder or holders of such Debt or any Person  acting on behalf of such holder or
holders to accelerate the maturity thereof or require any such prepayment.

         (j) This Agreement or any other Loan Document shall cease to be in full
force  and  effect  or  shall be  declared  null  and  void or the  validity  or
enforceability thereof shall be contested or challenged by any Loan Party or any
Loan Party shall deny that it has further  liability or obligation  under any of
the Loan  Documents;  or any Lien created or purported to be created by the Loan
Documents shall for any reason cease to be or fail to be a valid, first priority
perfected Lien upon any of the Collateral purported to be covered thereby.

         (k) Any of the  following  events  shall occur or exist with respect to
any Loan Party or any ERISA Affiliate:  (i) any Prohibited Transaction involving
any Plan; (ii) any Reportable  Event with respect to any Pension Plan; (iii) the
filing  under  Section  4041 of ERISA of a notice  of intent  to  terminate  any
Pension  Plan  or the  termination  of any  Pension  Plan;  (iv)  any  event  or
circumstance  that could reasonably be expected to constitute  grounds entitling
the  PBGC  to  institute  proceedings  under  Section  4042  of  ERISA  for  the
termination of, or for the  appointment of a trustee to administer,  any Pension
Plan,  or the  institution  by  the  PBGC  of  any  such  proceedings;  (v)  any
"accumulated  funding deficiency" (as defined in Section 302 of ERISA or Section
412 of the Code), whether or not waived, shall exist with respect to any Pension
Plan; or (vi) complete or partial withdrawal under Section 4201 or 4204 of ERISA
from a Multiemployer  Plan or the  reorganization,  insolvency or termination of
any Pension Plan; and in each case above, such event or condition, together with
all  other  events  or  conditions,  if any,  have  subjected  or  could  in the
reasonable  opinion  of  Required  Lenders  subject  any Loan Party or any ERISA
Affiliate to any tax,  penalty or other  liability  to a Plan,  a  Multiemployer
Plan, the PBGC or otherwise (or any combination  thereof) which in the aggregate
exceed or could reasonably be expected to exceed $100,000.

         (l) The  occurrence of any breach or default by Holdings,  the Borrower
and/or any other Loan Party  under the Master  Purchase  Agreement  or any other
similar  agreement  between or among any Loan Party and Nortel  Networks  (after
giving  effect to any grace or cure period  specified  therein)  which breach or
default  entitles  Nortel  Networks  to  exercise a right or remedy  under or in
connection with the Master Purchase Agreement or such other similar agreement.

         (m)  Any  termination,  revocation  or  non-renewal  by the  FCC or any
federal or state public utility  commission or other  Governmental  Authority of
any material License of Holdings or any of its Subsidiaries (including,  without
limitation, the Borrower).

         (n) The occurrence of any Material Adverse Effect.

         (o) The occurrence of any Change in Control.

         (p)  If,  at  any  time,  the  subordination  provisions  of any of the
Subordinated  Debt Documents shall be invalidated or shall otherwise cease to be
in full force and effect.



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         (q) If, at any time, any event or circumstance  shall occur which gives
any holder of any Subordinated  Debt the right to request or require Holdings or
the  Borrower  or any of other  Loan  Party to  redeem,  purchase  or prepay any
Subordinated Debt.

         (r)  The  occurrence  of  (i)  a  default  under  (including,   without
limitation,  a "Default"  as such term is used or defined  in) any  Subordinated
Debt Document, unless (A) such default has been waived, cured or consented to in
accordance with such documents,  (B) such default is not a payment default,  (C)
the  maturity  of the Debt  affected  thereby  has not been  accelerated,  (D) a
blockage  under such  Subordinated  Debt Document has not been invoked,  and (E)
such  waiver  or  consent  is not  made in  connection  with  any  amendment  or
modification of any such  Subordinated  Debt Documents or in connection with any
payment to the holders of any  Subordinated  Debt,  (ii) a payment default under
(including,  without  limitation,  a payment  "Default"  as such term is used or
defined in) any  Subordinated  Debt  Document,  (iii) an event of default  under
(including,  without  limitation,  an "Event of Default" as such term is used or
defined in) any  Subordinated  Debt Document,  or (iv) any  acceleration  of the
maturity of any Subordinated Debt.

         (s) Any of the following shall occur with respect to the Bridge Network
Services  Agreement:  (i) Bridge shall have the right, or shall take any action,
to  terminate  the  Bridge  Network  Services  Agreement  pursuant  to Section 7
thereof, (ii) Bridge shall have notified Borrower of the right to make, or shall
make, a claim under Section 11.4 of the Bridge Network  Services  Agreement,  or
(iii) the Borrower shall have the right, or shall take any action,  to terminate
the Bridge Network Services Agreement pursuant to Section 8 thereof.

         (t) Any sale, transfer or other disposition of all or substantially all
of the Network.

         Section  11.2  Remedies.  If any Event of  Default  shall  occur and be
continuing,  the  Administrative  Agent may and,  if  directed  by the  Required
Lenders, the Administrative Agent shall do any one or more of the following:

         (a) Acceleration.  Declare all outstanding principal of and accrued and
unpaid interest on the Loans and all other amounts payable by the Borrower under
the Loan Documents  immediately  due and payable,  and the same shall  thereupon
become immediately due and payable, without notice, demand, presentment,  notice
of dishonor, notice of acceleration,  notice of intent to accelerate, protest or
other  formalities  of any kind,  all of which are  hereby  expressly  waived by
Holdings and the Borrower;

         (b)  Termination  of  Commitments.  Terminate  each of the  Commitments
without notice to the Borrower or any other Loan Party;

         (c) Judgment. Reduce any claim to judgment;

         (d) Foreclosure. Foreclose or otherwise enforce any Lien granted to the
Administrative Agent for the benefit of the Administrative Agent and the Lenders
to secure  payment and  performance of the  Obligations  in accordance  with the
terms of the Loan Documents; or



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         (e) Rights.  Exercise any and all rights and  remedies  afforded by the
laws of the  State of New  York or any  other  jurisdiction,  by any of the Loan
Documents, by equity or otherwise;

provided, however, that upon the occurrence of an Event of Default under Section
11.1(e)  or  Section  11.1(f),  the  Commitments  of all of  the  Lenders  shall
immediately and automatically  terminate,  and the outstanding  principal of and
accrued and unpaid  interest on the Loans and all other  amounts  payable by the
Borrower  under  the Loan  Documents  shall  thereupon  become  immediately  and
automatically due and payable,  without notice, demand,  presentment,  notice of
dishonor,  notice of  acceleration,  notice of intent to accelerate,  protest or
other  formalities  of any kind,  all of which are  hereby  expressly  waived by
Holdings and the Borrower.

         Section 11.3 Performance by the Administrative  Agent, etc. If Holdings
and/or  the  Borrower  shall  fail to  perform  any  covenant  or  agreement  in
accordance with the terms of the Loan Documents,  the  Administrative  Agent may
perform or attempt to perform, or may cause any Lender (with the consent of such
Lender) to perform or attempt to perform,  such  covenant or agreement on behalf
of Holdings  and/or the  Borrower.  In such event,  the Borrower  shall,  at the
request of the  Administrative  Agent,  promptly pay any amount  expended by the
Administrative  Agent or the  Lenders in  connection  with such  performance  or
attempted  performance  to the  Administrative  Agent at its  Principal  Office,
together with interest thereon at the applicable Default Rate from and including
the date of such  expenditure to but excluding the date such expenditure is paid
in full.  Notwithstanding the foregoing, it is expressly agreed that neither the
Administrative  Agent nor any Lender shall have any liability or  responsibility
for the performance of any obligation of Holdings,  the Borrower, any Loan Party
or any other Person under this Agreement or any of the other Loan Documents.

                                   ARTICLE 12

                            The Administrative Agent

         Section 12.1  Appointment,  Powers and  Immunities.  Each Lender hereby
irrevocably appoints and authorizes the Administrative Agent to act as its agent
hereunder  and  under  the  other  Loan   Documents  with  such  powers  as  are
specifically  delegated  to the  Administrative  Agent  by  the  terms  of  this
Agreement and the other Loan  Documents,  together with such other powers as are
reasonably  incidental thereto.  Neither the Administrative Agent nor any of its
Affiliates,  officers, directors, employees, attorneys or agents shall be liable
for any  action  taken  or  omitted  to be  taken  by any of them  hereunder  or
otherwise in connection  with this  Agreement or any of the other Loan Documents
except  for its or their own gross  negligence  or willful  misconduct.  Without
limiting the generality of the preceding sentence,  the Administrative Agent (a)
may treat the payee of any Note as the holder  thereof until the  Administrative
Agent receives  written  notice of the assignment or transfer  thereof signed by
such payee and in form satisfactory to the Administrative  Agent, (b) shall have
no duties or responsibilities except those expressly set forth in this Agreement
and the other Loan  Documents,  and shall not by reason of this Agreement or any
other Loan Document be a trustee or fiduciary  for any Lender,  (c) shall not be
required to initiate any litigation or collection proceedings



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hereunder or under any other Loan Document except to the extent requested by the
Required Lenders,  (d) shall not be responsible to the Lenders for any recitals,
statements,  representations  or warranties  contained in this  Agreement or any
other  Loan  Document,  or any  certificate  or other  document  referred  to or
provided for in, or received by any of them under,  this  Agreement or any other
Loan Document,  or for the value,  validity,  effectiveness,  enforceability  or
sufficiency  of this  Agreement or any other Loan Document or any other document
referred to or  provided  for herein or therein or for any failure by any Person
to perform any of its obligations hereunder or thereunder,  (e) may consult with
legal  counsel  (including   counsel  for  the  Borrower),   independent  public
accountants  and other  experts  selected  by it and shall not be liable for any
action taken or omitted to be taken in good faith by it in  accordance  with the
advice of such counsel, accountants or experts, and (f) shall incur no liability
under or in respect of any Loan  Document by acting  upon any  notice,  consent,
certificate  or other  instrument  or writing  reasonably  believed  by it to be
genuine and signed or sent by the proper party or parties. As to any matters not
expressly provided for by this Agreement,  the Administrative Agent shall in all
cases be fully protected in acting,  or in refraining from acting,  hereunder in
accordance  with  instructions   signed  by  the  Required  Lenders,   and  such
instructions  of the  Required  Lenders  and any action  taken or failure to act
pursuant thereto shall be binding on all of the Lenders; provided, however, that
the Administrative  Agent shall not be required to take any action which exposes
the Administrative  Agent to liability or which is contrary to this Agreement or
any other Loan Document or applicable law. The Administrative Agent shall not be
deemed to have any fiduciary relationship with any Lender or any Loan Party, and
no  implied  covenants,  functions,  responsibilities,  duties,  obligations  or
liabilities  shall be read into this  Agreement or otherwise  exist  against the
Administrative Agent. Without limiting the generality of the foregoing,  the use
of the term "agent" in this Agreement with respect to the  Administrative  Agent
is not intended to connote any fiduciary or other express or implied  obligation
arising under agency doctrine of any applicable law; instead,  such term is used
merely as a matter of market custom and is intended to create or reflect only an
administrative relationship among independent contracting parties.

         Section 12.2 Rights of Administrative  Agent as a Lender.  With respect
to its  Commitments,  the Loans made by it and the Note(s)  issued to it, Nortel
Networks (and any successor acting as Administrative Agent) in its capacity as a
Lender  hereunder  shall have the same rights and powers  hereunder as any other
Lender  and  may  exercise  the  same  as  though  it  were  not  acting  as the
Administrative  Agent,  and the term  "Lender" or  "Lenders"  shall,  unless the
context otherwise indicates,  include the Administrative Agent in its individual
capacity.  The  Administrative  Agent and its Affiliates may (without  having to
account  therefor to any Lender)  accept  deposits  from,  lend money to, act as
trustee  under   indentures  of,  provide  merchant  banking  services  to,  own
securities  of,  and  generally  engage in any kind of  banking,  trust or other
business  with,  the Borrower or any of its  Affiliates and any other Person who
may do business with or own securities of the Borrower or any of its Affiliates,
all as if it were not acting as the Administrative Agent and without any duty to
account therefor to the Lenders.

         Section 12.3 Defaults.  The Administrative Agent shall not be deemed to
have  knowledge  or  notice  of the  occurrence  of a  Default  (other  than the
non-payment  of  principal  of or interest on the Loans or of  commitment  fees)
unless  the  Administrative  Agent  has  received  notice  from a Lender  or the
Borrower  specifying  such  Default and stating that such notice is a "notice of
default". In the event



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that the  Administrative  Agent  receives  such a notice of the  occurrence of a
Default,  the  Administrative  Agent  shall give  prompt  notice  thereof to the
Lenders (and shall give each Lender prompt notice of each such non-payment). The
Administrative  Agent  shall  (subject  to Section  12.1) take such  action with
respect to such Default as shall be directed by the Required  Lenders,  provided
that  unless  and  until the  Administrative  Agent  shall  have  received  such
directions,  the  Administrative  Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Default as
it shall seem advisable and in the best interest of the Lenders.

         Section 12.4  INDEMNIFICATION.  EACH LENDER  HEREBY AGREES TO INDEMNIFY
THE ADMINISTRATIVE AGENT FROM AND HOLD THE ADMINISTRATIVE AGENT HARMLESS AGAINST
(TO THE EXTENT NOT  REIMBURSED  UNDER SECTION 13.1 AND SECTION 13.2, BUT WITHOUT
LIMITING THE  OBLIGATIONS  OF HOLDINGS AND THE BORROWER  UNDER  SECTION 13.1 AND
SECTION 13.2),  RATABLY IN ACCORDANCE WITH ITS PRO RATA SHARE (CALCULATED ON THE
BASIS OF ITS COMMITMENT  PERCENTAGE OF THE AGGREGATE  COMMITMENTS),  ANY AND ALL
LIABILITIES   (INCLUDING,   WITHOUT  LIMITATION,   ENVIRONMENTAL   LIABILITIES),
OBLIGATIONS,  LOSSES,  DAMAGES,  PENALTIES,  ACTIONS,  JUDGMENTS,  DEFICIENCIES,
SUITS, COSTS, EXPENSES (INCLUDING ATTORNEYS' FEES) AND DISBURSEMENTS OF ANY KIND
OR NATURE  WHATSOEVER  WHICH MAY BE IMPOSED ON, INCURRED BY OR ASSERTED  AGAINST
THE  ADMINISTRATIVE  AGENT IN ANY WAY  RELATING  TO OR ARISING OUT OF ANY OF THE
LOAN DOCUMENTS OR ANY ACTION TAKEN OR OMITTED TO BE TAKEN BY THE  ADMINISTRATIVE
AGENT UNDER OR IN RESPECT OF ANY OF THE LOAN DOCUMENTS;  PROVIDED, FURTHER, THAT
NO LENDER SHALL BE LIABLE FOR ANY PORTION OF THE  FOREGOING TO THE EXTENT CAUSED
BY THE ADMINISTRATIVE  AGENT'S GROSS NEGLIGENCE OR WILLFUL  MISCONDUCT.  WITHOUT
LIMITATION OF THE FOREGOING, IT IS THE EXPRESS INTENTION OF THE LENDERS THAT THE
ADMINISTRATIVE  AGENT  SHALL BE  INDEMNIFIED  HEREUNDER  FROM AND HELD  HARMLESS
AGAINST ALL OF SUCH LIABILITIES  (INCLUDING,  WITHOUT LIMITATION,  ENVIRONMENTAL
LIABILITIES),  OBLIGATIONS,  LOSSES,  DAMAGES,  PENALTIES,  ACTIONS,  JUDGMENTS,
DEFICIENCIES,   SUITS,   COSTS,   EXPENSES   (INCLUDING   ATTORNEYS'  FEES)  AND
DISBURSEMENTS  OF ANY KIND OR NATURE  DIRECTLY OR  INDIRECTLY  ARISING OUT OF OR
RESULTING FROM THE SOLE OR CONTRIBUTORY  NEGLIGENCE OF THE ADMINISTRATIVE  AGENT
(EXCEPT TO THE EXTENT THE SAME ARE CAUSED BY THE  ADMINISTRATIVE  AGENT'S  GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT).  WITHOUT LIMITING ANY OTHER PROVISION OF THIS
SECTION 12.4, EACH LENDER AGREES TO REIMBURSE THE ADMINISTRATIVE  AGENT PROMPTLY
UPON DEMAND FOR ITS PRO RATA SHARE  (CALCULATED  ON THE BASIS OF ITS  COMMITMENT
PERCENTAGE OF THE AGGREGATE  COMMITMENTS) OF ANY AND ALL OUT-OF-POCKET  EXPENSES
(INCLUDING  ATTORNEYS' FEES) INCURRED BY THE ADMINISTRATIVE  AGENT IN CONNECTION
WITH  THE  PREPARATION,   EXECUTION,  DELIVERY,  ADMINISTRATION,   MODIFICATION,
AMENDMENT OR ENFORCEMENT  (WHETHER THROUGH  NEGOTIATIONS,  LEGAL  PROCEEDINGS OR
OTHERWISE) OF, OR



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LEGAL ADVICE IN RESPECT OF RIGHTS OR RESPONSIBILITIES UNDER, THE LOAN DOCUMENTS,
TO THE EXTENT THAT THE ADMINISTRATIVE  AGENT IS NOT PROMPTLY REIMBURSED FOR SUCH
EXPENSES BY THE BORROWER.

         Section 12.5 Independent  Credit Decisions.  Each Lender agrees that it
has independently and without reliance on the Administrative  Agent or any other
Lender,   and  based  on  such  documents  and  information  as  it  has  deemed
appropriate,  made its own credit  analysis of  Holdings,  the  Borrower and the
other Loan Parties and its own decision to enter into this Agreement and that it
will,  independently and without reliance upon the  Administrative  Agent or any
other Lender,  and based upon such  documents and  information  as it shall deem
appropriate  at the time,  continue to make its own  analysis  and  decisions in
taking or not  taking  action  under  this  Agreement  or any of the other  Loan
Documents.  The  Administrative  Agent  shall  not be  required  to keep  itself
informed as to the performance or observance by any Loan Party of this Agreement
or any other Loan  Document  or to inspect the  Properties  or books of any Loan
Party (or any other Person). Except for notices, reports and other documents and
information   expressly   required  to  be  furnished  to  the  Lenders  by  the
Administrative   Agent  hereunder  or  under  the  other  Loan  Documents,   the
Administrative  Agent shall not have any duty or  responsibility  to provide any
Lender with any credit or other  financial  information  concerning the affairs,
financial  condition  or  business  of any Loan  Party  which  may come into the
possession of the Administrative Agent or any of its Affiliates.

         Section 12.6 Several Commitments. The Commitments and other obligations
of the Lenders under this  Agreement  are several.  The default by any Lender in
making a Loan in accordance  with any of its  Commitments  shall not relieve the
other Lenders of their  obligations  under this  Agreement.  In the event of any
default by any Lender in making any Loan,  each  non-defaulting  Lender shall be
obligated  to make its Loan but shall not be  obligated  to  advance  the amount
which the defaulting Lender was required to advance hereunder. In no event shall
any Lender be  required to advance an amount or amounts  with  respect to any of
the Loans which would in the  aggregate  exceed such  Lender's  Commitment  with
respect to such Loans. No Lender shall be responsible for any act or omission of
any other Lender.

         Section 12.7 Successor Administrative Agent. Subject to the appointment
and  acceptance  of a  successor  Administrative  Agent as provided  below,  the
Administrative  Agent may  resign at any time by giving  notice  thereof  to the
Lenders and the Borrower.  Upon any such resignation,  the Required Lenders will
have the right to appoint another Lender as a successor Administrative Agent. If
no successor  Administrative  Agent shall have been so appointed by the Required
Lenders  and shall  have  accepted  such  appointment  within 30 days  after the
retiring  Administrative  Agent's  giving  of notice  of  resignation,  then the
retiring Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative  Agent, which shall be a commercial bank organized under the laws
of the U.S. or any state thereof or of a foreign  country if acting  through its
U.S.  branch and having combined  capital and surplus of at least  $100,000,000.
Upon the acceptance of its appointment as successor  Administrative  Agent, such
successor Administrative Agent shall thereupon succeed to and become vested with
all  rights,  powers,  privileges,   immunities  and  duties  of  the  resigning
Administrative Agent, and the resigning Administrative Agent shall be discharged
from its  duties  and  obligations  under  this  Agreement  and the  other  Loan
Documents. After any Administrative Agent's resignation as



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Administrative Agent, the provisions of this Article 12 shall continue in effect
for its  benefit in respect  of any  actions  taken or omitted to be taken by it
while it was the Administrative Agent. Each Administrative Agent (including each
successor  Administrative  Agent)  agrees  that,  so  long  as it is  acting  as
Administrative  Agent  under  this  Agreement,  it shall be a Lender  under this
Agreement.

                                   ARTICLE 13

                                  Miscellaneous

         Section 13.1 Expenses. Each of Holdings and the Borrower hereby agrees,
on demand, to pay or reimburse the Administrative  Agent and each of the Lenders
for  paying:  (a)  all  reasonable  out-of-pocket  costs  and  expenses  of  the
Administrative  Agent  accrued  in  connection  with  the  arranging,  drafting,
preparation, negotiation, execution and/or delivery of the Loan Documents and in
connection  with  any  and all  waivers,  amendments,  modifications,  renewals,
extensions and supplements of or to the Loan  Documents,  and the syndication of
the Commitments and the Loans,  including,  without  limitation,  the reasonable
fees and  expenses  of legal  counsel  (including  all  local  counsel)  for the
Administrative   Agent,  (b)  all  out-of-pocket   costs  and  expenses  of  the
Administrative  Agent  and the  Lenders  in  connection  with any  Default,  the
exercise of any right or remedy and the  enforcement  of this  Agreement  or any
other Loan  Document  or any term or  provision  hereof or  thereof,  including,
without  limitation,  the  fees  and  expenses  of all  legal  counsel  for  the
Administrative Agent and/or any Lender, (c) all transfer,  stamp, documentary or
other similar taxes, assessments or charges levied by any Governmental Authority
in respect of this Agreement or any of the other Loan Documents,  (d) all costs,
expenses,  assessments and other charges incurred in connection with any filing,
registration, recording or perfection of any Lien contemplated by this Agreement
or any other Loan Document, (e) all reasonable  out-of-pocket costs and expenses
incurred by the Administrative Agent in connection with due diligence,  computer
services,  copying,  appraisals,  environmental audits, collateral audits, field
exams, insurance, consultants and search reports, and (f) all costs and expenses
incurred by the Observer if and to the extent provided in Section 8.18.

         Section 13.2 INDEMNIFICATION.  EACH OF HOLDINGS AND THE BORROWER HEREBY
AGREES TO INDEMNIFY THE ADMINISTRATIVE  AGENT AND EACH LENDER AND EACH AFFILIATE
THEREOF AND THEIR  RESPECTIVE  OFFICERS,  DIRECTORS,  EMPLOYEES,  ATTORNEYS  AND
AGENTS  FROM,  AND  HOLD  EACH OF THEM  HARMLESS  AGAINST,  ANY AND ALL  LOSSES,
LIABILITIES (INCLUDING, WITHOUT LIMITATION,  ENVIRONMENTAL LIABILITIES), CLAIMS,
DAMAGES,  PENALTIES,  JUDGMENTS,  DISBURSEMENTS,  COSTS AND EXPENSES  (INCLUDING
REASONABLE  ATTORNEYS'  AND  CONSULTANTS'  FEES) TO WHICH ANY OF THEM MAY BECOME
SUBJECT WHICH  DIRECTLY OR INDIRECTLY  ARISE FROM OR RELATE TO (A) THE DRAFTING,
PREPARATION,  NEGOTIATION,  EXECUTION, DELIVERY, PERFORMANCE,  ADMINISTRATION OR
ENFORCEMENT OF ANY OF THE LOAN DOCUMENTS,  INCLUDING,  WITHOUT  LIMITATION,  THE
EXERCISE OF ANY  FORECLOSURE  RIGHT OR OTHER RIGHT OR REMEDY WHETHER OR NOT SUCH
EXERCISE  IS IN  COMPLIANCE  WITH LAWS  AFFECTING  OTHER  PERSONS  OR RESULTS IN
DAMAGES PAYABLE TO OTHER PERSONS,  (B) ANY OF THE  TRANSACTIONS  CONTEMPLATED BY
THE LOAN DOCUMENTS, (C) ANY BREACH



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<PAGE>

BY ANY LOAN PARTY OF ANY MATERIAL  REPRESENTATION,  WARRANTY,  COVENANT OR OTHER
AGREEMENT CONTAINED IN ANY OF THE LOAN DOCUMENTS, (D) THE USE OR PROPOSED USE OF
ANY LOAN, (E) THE PRESENCE,  RELEASE,  THREATENED RELEASE,  DISPOSAL, REMOVAL OR
CLEANUP OF ANY HAZARDOUS MATERIAL LOCATED ON, ABOUT,  WITHIN OR AFFECTING ANY OF
THE PROPERTIES OF ANY LOAN PARTY OR ANY OF ITS AFFILIATES,  EXCEPT TO THE EXTENT
THAT THE LOSS,  DAMAGE OR CLAIM IS THE  DIRECT  RESULT  OF GROSS  NEGLIGENCE  OR
WILLFUL  MISCONDUCT OF THE PERSON TO BE INDEMNIFIED,  OR (F) ANY  INVESTIGATION,
LITIGATION OR OTHER PROCEEDING,  INCLUDING,  WITHOUT LIMITATION,  ANY THREATENED
INVESTIGATION,  LITIGATION OR OTHER PROCEEDING RELATING TO ANY OF THE FOREGOING,
WHETHER  BROUGHT  BY ANY LOAN  PARTY,  ANY  CREDITOR  OR ANY OTHER  PERSON;  BUT
EXCLUDING ANY OF THE  FOREGOING TO THE EXTENT CAUSED BY THE GROSS  NEGLIGENCE OR
WILLFUL  MISCONDUCT  OF THE  PERSON  TO BE  INDEMNIFIED.  WITHOUT  LIMITING  ANY
PROVISION  OF THIS  AGREEMENT OR OF ANY OTHER LOAN  DOCUMENT,  IT IS THE EXPRESS
INTENTION OF THE PARTIES  HERETO THAT EACH PERSON TO BE  INDEMNIFIED  UNDER THIS
SECTION 13.2 SHALL BE  INDEMNIFIED  FROM AND HELD  HARMLESS  AGAINST ANY AND ALL
LOSSES, LIABILITIES (INCLUDING, WITHOUT LIMITATION,  ENVIRONMENTAL LIABILITIES),
CLAIMS,  DAMAGES,  PENALTIES,  JUDGMENTS,   DISBURSEMENTS,  COSTS  AND  EXPENSES
(INCLUDING REASONABLE ATTORNEYS' FEES) ARISING OUT OF OR RESULTING FROM THE SOLE
OR CONTRIBUTORY  NEGLIGENCE OF SUCH PERSON. WITHOUT PREJUDICE TO THE SURVIVAL OF
ANY OTHER TERM OR PROVISION OF THIS  AGREEMENT,  THE OBLIGATIONS OF HOLDINGS AND
THE BORROWER  UNDER THIS SECTION 13.2 SHALL  SURVIVE THE  REPAYMENT OF THE LOANS
AND OTHER OBLIGATIONS AND TERMINATION OF THE COMMITMENTS.

         Section 13.3 Limitation of Liability. None of the Administrative Agent,
any Lender or any  Affiliate,  officer,  director,  employee,  attorney or agent
thereof shall be liable for any error of judgment or act done in good faith,  or
be otherwise liable or responsible under any circumstances whatsoever (including
such Person's negligence),  except for such Person's gross negligence or willful
misconduct.  None of the  Administrative  Agent,  any  Lender or any  Affiliate,
officer, director,  employee, attorney or agent thereof shall have any liability
with respect to, and each of Holdings and the Borrower  hereby waives,  releases
and  agrees not to sue any of them upon,  any claim for any  special,  indirect,
incidental  or  consequential  damages  suffered or incurred  by  Holdings,  the
Borrower,  any Loan  Party or any  Affiliate  of  Holdings  or the  Borrower  in
connection  with,  arising out of or in any way related to this Agreement or any
of the other Loan  Documents,  or any of the  transactions  contemplated by this
Agreement or any of the other Loan Documents.  Each of Holdings and the Borrower
hereby waives,  releases and agrees not to sue the  Administrative  Agent or any
Lender or any of their respective Affiliates,  officers,  directors,  employees,
attorneys or agents for exemplary or punitive damages in respect of any claim in
connection  with,  arising out of or in any way related to this Agreement or any
of the other Loan  Documents,  or any of the  transactions  contemplated by this
Agreement or any of the other Loan Documents.



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<PAGE>

         Section 13.4 No Duty. All attorneys, accountants,  appraisers and other
professional  Persons and consultants  retained by the Administrative  Agent and
the  Lenders  shall have the right to act  exclusively  in the  interest  of the
Administrative Agent and the Lenders and shall have no duty of disclosure,  duty
of  loyalty,  duty of care or other  duty or  obligation  of any type or  nature
whatsoever to Holdings,  the Borrower, any Loan Party or any of their respective
Affiliates or any other Person.

         Section  13.5  No  Fiduciary  Relationship.  The  relationship  between
Holdings  and each  Lender and the  Borrower  and each  Lender is solely that of
debtor and creditor, and neither the Administrative Agent nor any Lender has any
fiduciary or other special  relationship with Holdings,  the Borrower,  any Loan
Party or any of their respective Affiliates, and no term, provision or condition
of any of the Loan Documents  shall be construed so as to deem the  relationship
between  Holdings and any Lender,  between the Borrower and any Lender,  between
any other Loan Party and any Lender or between any such Affiliate and any Lender
to be other than that of debtor and creditor. No joint venture or partnership is
created by this Agreement among the Lenders or among Holdings, the Borrower, any
Loan Party or any of their respective Affiliates and the Lenders.

         Section  13.6  Equitable  Relief.  Each of  Holdings  and the  Borrower
recognizes that, in the event it fails to pay, perform, observe or discharge any
or all of the Obligations,  any remedy at law may prove to be inadequate  relief
to the Administrative  Agent and the Lenders.  Each of Holdings and the Borrower
therefore  agrees  that  the  Administrative  Agent  and  the  Lenders,  if  the
Administrative  Agent or the Lenders so request,  shall be entitled to temporary
and  permanent  injunctive  relief in any such case  without  the  necessity  of
proving actual damages.

         Section 13.7 No Waiver;  Cumulative Remedies. No failure on the part of
the  Administrative  Agent or any Lender to exercise and no delay in exercising,
and no course of dealing  with respect to, any right,  power or privilege  under
this Agreement or any other Loan Document shall operate as a waiver thereof, nor
shall any single or partial exercise of any right, power or privilege under this
Agreement  or any other Loan  Document  preclude  any other or further  exercise
thereof or the exercise of any other right,  power or privilege.  The rights and
remedies  provided  for in this  Agreement  and the  other  Loan  Documents  are
cumulative and not exclusive of any rights and remedies provided by law.

         Section 13.8 Successors and Assigns.

         (a) This  Agreement  shall be binding  upon and inure to the benefit of
the parties hereto and their respective successors and assigns. Neither Holdings
nor the Borrower may assign or transfer any of its rights or  obligations  under
this Agreement or any other Loan Document  without the prior written  consent of
the Administrative  Agent and the Lenders. Any Lender may sell participations in
all or a portion of its  rights and  obligations  under this  Agreement  and the
other Loan Documents  (including,  without  limitation,  all or a portion of its
Commitments  and the  Loans  owing  to it);  provided,  however,  that  (i) such
Lender's   obligations  under  this  Agreement  and  the  other  Loan  Documents
(including,  without limitation,  its Commitments) shall remain unchanged,  (ii)
such Lender shall remain solely  responsible to the Borrower for the performance
of such obligations,  (iii) such Lender shall remain the holder of its Notes for
all purposes of this Agreement, (iv) Holdings and the Borrower shall continue to
deal solely and  directly  with such  Lender in  connection  with such  Lender's
rights and obligations



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<PAGE>

under this Agreement and the other Loan Documents, and (v) the Lenders shall not
grant any  participation  under  which the  participant  shall have the right to
approve (or under which the consent of the participant must be obtained prior to
the Lenders' being able to approve) any amendment or waiver of this Agreement or
the other Loan Documents, except to the extent that such amendment or waiver (A)
increases  any  Commitment,  (B)  reduces  the  interest  rate or the  amount of
principal  or  fees  applicable  to the  Loans  or  Commitments  in  which  such
participant is participating, (C) extends any Maturity Date, (D) releases any of
the Collateral  (except as provided for herein or in any other Loan Document) or
any  guaranty  of the  Obligations,  or (E)  releases  any Loan  Party  from its
monetary Obligations under any of the Loan Documents.

         (b)  Holdings,  the  Borrower  and each of the  Lenders  agree that any
Lender (the  "Assigning  Lender") may at any time assign to one or more Eligible
Assignees (each an "Assignee") all or any part of its rights and/or  obligations
under  this  Agreement  and  the  other  Loan  Documents   (including,   without
limitation, its Commitments and/or Loans); provided, however, that (i) each such
assignment  may be of a varying  percentage  of the  Assigning  Lender's  rights
and/or  obligations  under this  Agreement and the other Loan  Documents and may
relate to some but not all of such rights and/or obligations, (ii) except in the
case of (A) an assignment of all of a Lender's rights and obligations under this
Agreement  and the other Loan  Documents or (B) an  assignment by a Lender to an
Affiliate of such Lender,  to another  Lender or to an Approved Fund, the amount
of the  Commitment(s)  and/or  Loans  of the  Assigning  Lender  being  assigned
pursuant to each  assignment  (determined  as of the date of the  Assignment and
Acceptance  with  respect  to such  assignment)  shall in no event be less  than
$5,000,000  calculated  based  upon the  aggregate  amount of the  Commitment(s)
and/or  Loans  assigned,  and (iii) the  parties to each such  assignment  shall
execute and deliver to the Administrative Agent for its acceptance and recording
in the Register (as defined below), an Assignment and Acceptance,  together with
the Note subject to such  assignment,  and a processing and  recordation  fee of
$[**]. Upon such execution,  delivery, acceptance and recording, from and after
the effective date specified in each Assignment and Acceptance,  which effective
date shall be at least five Business  Days after the  execution  thereof or such
other date as may be  approved by the  Administrative  Agent,  (1) the  Assignee
thereunder  shall be a party hereto as a "Lender" and, to the extent that rights
and  obligations  hereunder have been assigned to it pursuant to such Assignment
and Acceptance,  have the rights and obligations of a Lender hereunder and under
the other Loan Documents,  and (2) the Assigning Lender thereunder shall, to the
extent that rights and  obligations  hereunder have been assigned by it pursuant
to such  Assignment and  Acceptance,  relinquish its rights and be released from
its  obligations  under this Agreement and the other Loan Documents (and, in the
case of an Assignment and Acceptance  covering all or the remaining portion of a
Lender's  rights and  obligations  under the Loan  Documents,  such Lender shall
cease to be a party thereto, provided that such Lender's rights under Article 4,
Section  13.1 and Section  13.2  accrued  through the date of  assignment  shall
continue).  Holdings and the Borrower will provide full and prompt assistance to
each Lender as it may  reasonably  request from time to time in connection  with
such  Lender's  efforts  to  assign  its  Commitments  and/or  Loans or sell any
participation   interest  therein.   Such  assistance  shall  include,   without
limitation,  making senior  officers of Holdings and the Borrower  available for
meetings with  prospective  Lenders and  participants and providing (in a timely
manner) such assistance as may be reasonably requested by such Lender and/or its
advisors, including, without limitation, providing information to and responding
to inquiries from such prospective  Lenders and participants with respect to the
businesses,

[**] CONFIDENTIAL TREATMENT REQUESTED

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<PAGE>

operations,  business  plan,  financial  condition  and results of operations of
Holdings and its Subsidiaries (including, without limitation, the Borrower).

         (c) By executing  and  delivering  an Assignment  and  Acceptance,  the
Assigning  Lender  thereunder and the Assignee  thereunder  confirm to and agree
with each  other and the other  parties  hereto as  follows:  (i) other  than as
provided in such  Assignment  and  Acceptance,  such  Assigning  Lender makes no
representation  or warranty  and assumes no  responsibility  with respect to any
statements, warranties or representations made in or in connection with the Loan
Documents or the execution,  legality,  validity,  enforceability,  genuineness,
sufficiency or value of the Loan  Documents or any other  instrument or document
furnished  pursuant thereto;  (ii) such Assigning Lender makes no representation
or  warranty  and  assumes  no  responsibility  with  respect  to the  financial
condition or results of operations of Holdings,  the Borrower, any Loan Party or
any of their respective Affiliates or the performance or observance by Holdings,
the  Borrower,  any Loan Party or any of their  respective  Affiliates of any of
their  respective  obligations  under the Loan  Documents;  (iii) such  Assignee
confirms that it has received a copy of the Loan Documents, together with copies
of the financial  statements referred to in Section 7.2 and such other documents
and information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance;  (iv) such Assignee will,
independently  and  without  reliance  upon  the  Administrative  Agent  or such
Assigning  Lender and based on such  documents and  information as it shall deem
appropriate at the time,  continue to make its own credit decisions in taking or
not taking action under this  Agreement and the other Loan  Documents;  (v) such
Assignee confirms that it is an Eligible  Assignee;  (vi) such Assignee appoints
and  authorizes  the  Administrative  Agent to take such  action as agent on its
behalf and exercise such powers under the Loan Documents as are delegated to the
Administrative  Agent by the terms  thereof,  together  with such  powers as are
reasonably  incidental  thereto;  and (vii) such  Assignee  agrees  that it will
perform in accordance with their terms all of the obligations which by the terms
of the Loan Documents are required to be performed by it as a Lender.

         (d) The  Administrative  Agent shall maintain at its Principal Office a
copy of each  Assignment  and  Acceptance  delivered to and accepted by it and a
register for the  recordation  of the names and addresses of the Lenders and the
Commitments  of, and  principal  amount of the Loans  owing to, each Lender from
time to time (the  "Register").  The entries in the Register shall be conclusive
and binding for all purposes, absent manifest error, and Holdings, the Borrower,
the  Administrative  Agent and the Lenders  may treat each Person  whose name is
recorded in the Register as a Lender  hereunder for all purposes  under the Loan
Documents.  The Register  shall be available  for  inspection  by Holdings,  the
Borrower  or any  Lender  at any  reasonable  time  and from  time to time  upon
reasonable prior notice.

         (e) Upon its receipt of an  Assignment  and  Acceptance  executed by an
Assigning  Lender and  Assignee  representing  that it is an Eligible  Assignee,
together with the Note(s) subject to such assignment,  the Administrative  Agent
shall,  if  such  Assignment  and  Acceptance  has  been  completed  and  is  in
substantially  the form of Exhibit A hereto,  (i)  accept  such  Assignment  and
Acceptance,  (ii) record the information contained therein in the Register,  and
(iii) give prompt written  notice thereof to the Borrower.  Within five Business
Days after its receipt of such notice, the Borrower,  at the Borrower's expense,
shall execute and deliver to the Administrative Agent in exchange for each


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surrendered Note evidencing the Loans assigned, a new Note evidencing such Loans
payable to the order of such Eligible  Assignee in an amount equal to such Loans
assigned to it and, if the Assigning  Lender has retained any Loans,  a new Note
evidencing  each such Loans payable to the order of the Assigning  Lender in the
amount of such Loans retained by it (each such promissory note shall  constitute
a "Note" for purposes of the Loan Documents).  Such new Notes shall be dated the
effective  date of such  Assignment  and  Acceptance  and shall  otherwise be in
substantially the form of Exhibit B hereto.

         (f) Any Lender may, in connection with any assignment or  participation
or proposed assignment or participation  pursuant to this Section 13.8, disclose
to  the  Assignee  or  participant  or  proposed  Assignee  or  participant  any
information relating to Holdings,  the Borrower,  any Loan Party or any of their
respective Affiliates furnished to such Lender by or on behalf of Holdings,  the
Borrower,  any Loan Party or any of their respective  Affiliates;  provided that
each such actual or proposed  Assignee or participant shall agree to be bound by
the provisions of Section 13.20.

         (g) Any Lender may assign and pledge any Note held by it to any Federal
Reserve Bank or the U.S. Treasury as collateral  security pursuant to Regulation
A of the Board of  Governors  of the Federal  Reserve  System and any  operating
circular  issued by such Federal  Reserve  System and/or  Federal  Reserve Bank;
provided, however, that any payment made by the Borrower for the benefit of such
assigning  and/or  pledging  Lender  in  accordance  with the  terms of the Loan
Documents shall satisfy the Borrower's  obligations  under the Loan Documents in
respect thereof to the extent of such payment.  No such assignment and/or pledge
shall  release  the  assigning  and/or  pledging  Lender  from  its  obligations
hereunder.

         (h) The Borrower shall maintain, or cause to be maintained,  a register
(the "Registered Note Register")  (which,  at the request of the Borrower (which
request the Borrower makes by the execution of this Agreement)  shall be kept by
the  Administrative  Agent on behalf of the  Borrower at no extra  charge to the
Borrower at the address to which notices to the  Administrative  Agent are to be
sent hereunder) on which it shall enter the name of the registered owner of each
of the Loans which is evidenced by a Registered Note.  Notwithstanding  anything
to the contrary  contained in this Section 13.8, a Registered Note and the Loans
evidenced  thereby may be assigned or otherwise  transferred in whole or in part
only by  registration of such assignment or transfer of such Registered Note and
the Loans evidenced thereby on the Registered Note Register (and each Registered
Note shall  expressly so provide).  Any assignment or transfer of all or part of
such Loans and the  Registered  Note  evidencing the same shall be registered on
the Registered Note Register only upon surrender for  registration of assignment
or transfer of the Registered Note  evidencing such Loans,  duly endorsed by (or
accompanied by a written  instrument of assignment or transfer duly executed by)
the  registered  noteholder  thereof,  and thereupon one or more new  Registered
Notes in the same aggregate  principal  amount shall be issued to the designated
assignee(s) or  transferee(s).  Prior to the due presentment for registration of
transfer of any Registered Note, the Borrower and the Administrative Agent shall
treat the Person in whose name such Loans and the Registered  Note(s) evidencing
the same are  registered  as the owner  thereof for the purpose of receiving all
payments thereon and for all other purposes,  notwithstanding  any notice to the
contrary.  The  Registered  Note Register  shall be available for



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inspection by Holdings,  the Borrower and any Lender at any reasonable time upon
reasonable prior notice.

         (i) Neither  Holdings  nor the  Borrower  will,  nor will it permit any
other Loan Party to, become a party to any loan agreement,  credit  agreement or
similar  agreement  which  restricts  or  prohibits  the right or ability of any
lender which is a party thereto to become a Lender under this Agreement.

         (j) Holdings and the Borrower  shall provide  prompt  assistance to the
Administrative  Agent and the  Lenders  in  connection  with  their  efforts  in
syndicating  the Loans and  Commitments.  Such  assistance  shall include making
senior officers and other representatives of Holdings and the Borrower and their
respective  Affiliates  available  for  meetings  with  prospective  Lenders and
providing, in a timely manner, such assistance as may be reasonably requested by
the  Administrative  Agent  or  its  advisors,  including,  without  limitation,
providing  information to and responding to inquiries from  prospective  Lenders
with  respect to the  business,  operations,  Business  Plan,  results and other
matters  relating to the business of  Holdings,  the Borrower and the other Loan
Parties.

         Section 13.9  Survival.  All  representations  and  warranties  made or
deemed made in this  Agreement  or any other Loan  Document or in any  document,
statement or  certificate  furnished in  connection  with this  Agreement  shall
survive  the  execution  and  delivery  of this  Agreement  and the  other  Loan
Documents  and  the  making  of  the  Loans,   and  no   investigation   by  the
Administrative   Agent  or  any  Lender  or  any   closing   shall   affect  the
representations  and warranties or the right of the Administrative  Agent or any
Lender  to rely  upon  them.  Without  prejudice  to the  survival  of any other
obligation of Holdings or the Borrower  hereunder,  the  obligations of Holdings
and the  Borrower  under  Article 4,  Section  13.1 and  Section  13.2,  and the
obligations of the Lenders to the Administrative Agent under Section 12.4, shall
survive repayment of the Loans and the  Reimbursement  Obligations and the other
Obligations.

         SECTION 13.10 ENTIRE AGREEMENT. THIS AGREEMENT, THE NOTES AND THE OTHER
LOAN DOCUMENTS  REFERRED TO HEREIN EMBODY THE FINAL,  ENTIRE AGREEMENT AMONG THE
PARTIES HERETO AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS  (INCLUDING,  WITHOUT
LIMITATION, ANY COMMITMENT LETTER), TERM SHEETS, AGREEMENTS, REPRESENTATIONS AND
UNDERSTANDINGS,  WHETHER WRITTEN OR ORAL,  RELATING TO THE SUBJECT MATTER HEREOF
AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR,  CONTEMPORANEOUS  OR
SUBSEQUENT ORAL  AGREEMENTS OR DISCUSSIONS OF THE PARTIES  HERETO.  THERE ARE NO
UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES HERETO.

         Section  13.11  Amendments.  No amendment or waiver of any provision of
this  Agreement,  the Notes or any other Loan Document to which  Holdings or the
Borrower  is a party,  nor any  consent  to any  departure  by  Holdings  or the
Borrower  therefrom,  shall in any event be  effective  unless the same shall be
agreed or  consented to by the  Required  Lenders,  Holdings and the Borrower in
writing, and each such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given;  provided,  however, that
no amendment, waiver or consent shall, unless in



                                       94
<PAGE>

writing and signed by all of the Lenders,  Holdings and the Borrower,  do any of
the  following:  (a) increase the  Commitments of the Lenders (or any Lender) or
subject the Lenders to any additional obligations;  (b) reduce the principal of,
or interest on, the Loans or any fees or other amounts  payable  hereunder;  (c)
postpone  any date fixed for any payment  (including,  without  limitation,  any
mandatory  prepayment) of principal of, or interest on, the Loans or any fees or
other amounts payable  hereunder;  (d) change the Commitment  Percentages or the
aggregate unpaid principal amount of the Loans or the number or interests of the
Lenders  which  shall be  required  for the  Lenders  or any of them to take any
action under this Agreement;  (e) change any provision contained in Section 3.2,
Section  3.3,  Section 5.1 or this  Section  13.11 or modify the  definition  of
"Required  Lenders"  contained  in  Section  1.1;  or (f)  except  as  expressly
authorized  by this  Agreement,  release  any  Collateral  from any of the Liens
created by the  Security  Documents;  and  provided  further,  however,  that no
amendment, waiver or consent relating to Sections 12.1, 12.2, 12.3, 12.4 or 12.5
shall  require  the  agreement  of  Holdings  or the  Borrower.  Notwithstanding
anything to the contrary  contained in this Section 13.11, no amendment,  waiver
or consent shall be made with respect to (i) Article 12 hereof without the prior
written  consent of the  Administrative  Agent,  (ii) the  definition of "Master
Purchase  Agreement",  "Nortel Networks  Equipment",  "Nortel Networks Goods and
Installation  Services",  "Nortel Networks Software" or Section 2.5, Section 2.9
or Section  2.10 hereof  without the prior  written  consent of Nortel  Networks
(whether or not Nortel Networks is then a Lender hereunder), (iii) any condition
precedent set forth in Article 6 with respect to the making of any Loans without
the  prior  written  consent  of the  Lenders  that  hold,  at the  time of such
amendment,  waiver or consent, at least a majority (in Dollar amount) of the sum
of  the  outstanding   principal  amount  of  the  Loans  plus  the  outstanding
Commitments,  or (iv) the interest rate  applicable to the Loans or the Maturity
Date, without the prior written consent of the Lenders that hold, at the time of
such amendment, waiver or consent, at least a majority (in Dollar amount) of the
sum of the  outstanding  principal  amount  of the  Loans  plus the  outstanding
Commitments.

         Section 13.12 Maximum Interest Rate.

         (a)  Notwithstanding   anything  to  the  contrary  contained  in  this
Agreement  or any other  Loan  Document,  no  interest  rate  specified  in this
Agreement or any other Loan Document  shall at any time exceed the Maximum Rate.
If at any time the interest rate (the "Contract  Rate") for any Obligation shall
exceed  the  Maximum  Rate,  thereby  causing  the  interest  accruing  on  such
Obligation to be limited to the Maximum Rate,  then any subsequent  reduction in
the Contract Rate for such  Obligation  shall not reduce the rate of interest on
such  Obligation  below the Maximum Rate until the aggregate  amount of interest
accrued on such Obligation  equals the aggregate  amount of interest which would
have accrued on such  Obligation if the Contract Rate for such Obligation had at
all times been in effect.

         (b)  Notwithstanding   anything  to  the  contrary  contained  in  this
Agreement or the other Loan Documents,  none of the terms and provisions of this
Agreement  or the other  Loan  Documents  shall  ever be  construed  to create a
contract or  obligation to pay interest at a rate in excess of the Maximum Rate;
and neither the Administrative Agent nor any Lender shall ever charge,  receive,
take, collect,  reserve or apply, as interest on the Obligations,  any amount in
excess of the Maximum Rate. The parties hereto agree that any interest,  charge,
fee, expense or other obligation  provided for in this



                                       95
<PAGE>

Agreement  or in the other  Loan  Documents  which  constitutes  interest  under
applicable law shall be, ipso facto and under any and all circumstances, limited
or reduced to an amount equal to the lesser of (i) the amount of such  interest,
charge, fee, expense or other obligation that would be payable in the absence of
this Section 13.12(b) or (ii) an amount,  which when added to all other interest
payable under this  Agreement and the other Loan  Documents,  equals the Maximum
Rate. If, notwithstanding the foregoing,  the Administrative Agent or any Lender
ever contracts for, charges,  receives, takes, collects,  reserves or applies as
interest  any amount in excess of the Maximum  Rate,  such amount which would be
deemed  excessive  interest  shall be deemed a partial  payment or prepayment of
principal  of  the  Obligations  and  treated  hereunder  as  such;  and  if the
Obligations,  or applicable  portions  thereof,  are paid in full, any remaining
excess  shall  promptly  be paid to the  Borrower.  In  determining  whether the
interest paid or payable,  under any specific  contingency,  exceeds the Maximum
Rate,  the Borrower,  the  Administrative  Agent and the Lenders  shall,  to the
maximum extent  permitted by applicable law, (i)  characterize  any nonprincipal
payment as an expense,  fee or premium  rather than as  interest,  (ii)  exclude
voluntary  prepayments and the effects  thereof,  and (iii)  amortize,  prorate,
allocate  and  spread in equal or  unequal  parts the total  amount of  interest
throughout  the  entire  contemplated  term of the  Obligations,  or  applicable
portions thereof,  so that the interest rate does not exceed the Maximum Rate at
any time  during  the term of the  Obligations;  provided  that,  if the  unpaid
principal  balance  is paid and  performed  in full prior to the end of the full
contemplated term thereof, and if the interest received for the actual period of
existence thereof exceeds the Maximum Rate, the Administrative  Agent and/or the
Lenders, as appropriate,  shall refund to the Borrower the amount of such excess
and,  in such  event,  the  Administrative  Agent and the  Lenders  shall not be
subject to any penalties  provided by any laws for  contracting  for,  charging,
receiving,  taking, collecting,  reserving or applying interest in excess of the
Maximum Rate.

         (c) Pursuant to Article  15.10(b) of Chapter 15,  Subtitle 79,  Revised
Civil Statutes of Texas 1925, as amended,  the Borrower agrees that such Chapter
15 (which  regulates  certain  revolving  credit  loan  accounts  and  revolving
tri-party accounts) shall not govern or in any manner apply to the Obligations.

         Section 13.13 Notices.  All notices and other  communications  provided
for in this  Agreement  and the other Loan  Documents  to which  Holdings or the
Borrower  is a party  shall be  given  or made by  telecopy  or in  writing  and
telecopied,  mailed by certified mail return  receipt  requested or delivered to
the intended  recipient at the "Address for Notices" specified below its name on
the signature pages hereof (or, with respect to a Lender that becomes a party to
this Agreement  pursuant to an assignment  made in accordance with Section 13.8,
in the Assignment and Acceptance  executed by it); or, as to any party,  at such
other  address  as shall be  designated  by such party in a notice to each other
party given in accordance with this Section 13.13.  Except as otherwise provided
in this  Agreement,  all such  communications  shall be deemed to have been duly
given when transmitted by telecopy or personally  delivered or, in the case of a
mailed  notice,  upon  receipt,  in each case given or addressed  as  aforesaid;
provided,  however,  that  notices to the  Administrative  Agent shall be deemed
given when received by the Administrative Agent.

         SECTION 13.14  GOVERNING LAW;  SUBMISSION TO  JURISDICTION;  SERVICE OF
PROCESS. EXCEPT AS MAY BE EXPRESSLY STATED TO THE CONTRARY IN



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<PAGE>

CERTAIN LOAN DOCUMENTS,  THIS AGREEMENT,  THE NOTES AND THE OTHER LOAN DOCUMENTS
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK  (WITHOUT  REGARD  TO  CONFLICTS  OF LAWS  PRINCIPLES)  AND EACH OF THE
PARTIES HERETO CHOOSE THE LAWS OF THE STATE OF NEW YORK TO GOVERN THIS AGREEMENT
PURSUANT TO N.Y. GEN. OBLIG.  LAW SECTION 5-1401  (CONSOL.  1995) AND APPLICABLE
LAWS OF THE  U.S.  EACH OF  HOLDINGS  AND THE  BORROWER  HEREBY  SUBMITS  TO THE
NON-EXCLUSIVE  JURISDICTION  OF EACH  OF (1) THE  U.S.  DISTRICT  COURT  FOR THE
SOUTHERN DISTRICT OF NEW YORK, (2) ANY NEW YORK STATE COURT SITTING IN NEW YORK,
NEW YORK, (3) THE U.S.  DISTRICT COURT FOR THE NORTHERN  DISTRICT OF TEXAS,  AND
(4) ANY TEXAS STATE COURT SITTING IN DALLAS COUNTY,  TEXAS,  FOR THE PURPOSES OF
ALL LEGAL  PROCEEDINGS  ARISING OUT OF OR RELATING TO THIS AGREEMENT,  ANY OTHER
LOAN  DOCUMENT  OR THE  TRANSACTIONS  CONTEMPLATED  HEREBY OR  THEREBY.  EACH OF
HOLDINGS AND THE BORROWER HEREBY IRREVOCABLY  CONSENTS TO THE SERVICE OF ANY AND
ALL  PROCESS IN ANY SUCH ACTION OR  PROCEEDING  BY THE MAILING OF COPIES OF SUCH
PROCESS TO SUCH PERSON AT ITS ADDRESS SET FORTH UNDERNEATH ITS SIGNATURE HERETO.
EACH OF HOLDINGS  AND THE BORROWER  HEREBY  IRREVOCABLY  WAIVES,  TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM
THAT  ANY  SUCH  PROCEEDING  BROUGHT  IN SUCH A COURT  HAS  BEEN  BROUGHT  IN AN
INCONVENIENT FORUM.

         Section 13.15  CounterpartsSection  13.15 Counterparts.  This Agreement
may be  executed in one or more  counterparts,  each of which shall be deemed an
original,  but  all  of  which  together  shall  constitute  one  and  the  same
instrument.

         Section 13.16  Severability.  Any provision of this Agreement held by a
court of competent  jurisdiction to be invalid or unenforceable shall not impair
or invalidate  the remainder of this  Agreement and the effect  thereof shall be
confined to the provision held to be invalid or illegal.

         Section 13.17 Headings. The headings, captions and arrangements used in
this Agreement are for convenience only and shall not affect the  interpretation
of this Agreement.

         Section 13.18 Construction.  Holdings, the Borrower, the Administrative
Agent and each Lender  acknowledges that it has had the benefit of legal counsel
of its own choice and has been afforded an  opportunity to review this Agreement
and the other Loan  Documents with its legal counsel and that this Agreement and
the other Loan Documents shall be construed as if jointly drafted by the parties
hereto.

         Section 13.19 Independence of Covenants.  All covenants hereunder shall
be given  independent  effect so that if a particular action or condition is not
permitted  by any of such  covenants,  the fact that it would be permitted by an
exception to, or be otherwise within the limitations of,



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<PAGE>

another  covenant  shall not avoid the occurrence of a Default if such action is
taken or such condition exists.

         Section 13.20 Confidentiality.

         (a)  Each  Lender  agrees  to  exercise  its best  efforts  to keep any
information  delivered  or made  available  by Holdings or the  Borrower to such
Lender which is clearly indicated to be confidential  information,  confidential
from anyone  other than  Persons  employed or retained by such Lender who are or
are  expected  to  become  engaged  in  evaluating,  approving,  structuring  or
administering  the Loans;  provided that nothing herein shall prevent any Lender
from disclosing such  information (a) to any other Lender,  (b) to any Person if
reasonably  incidental to the administration of the Loans, (c) upon the order of
any  court or  administrative  agency,  (d) upon the  request  or  demand of any
regulatory agency or authority having  jurisdiction over such Lender,  (e) which
has been publicly disclosed,  (f) in connection with any litigation to which the
Administrative  Agent, any Lender or their respective Affiliates may be a party,
(g) to the extent  reasonably  required in  connection  with the exercise of any
right or remedy under the Loan  Documents,  (h) to such Lender's  legal counsel,
independent  auditors  and  Affiliates,  and  (i)  to  any  actual  or  proposed
participant or Assignee of all or part of its rights hereunder,  so long as such
actual or proposed  participant or Assignee agrees to be bound by the provisions
of this Section 13.20.

         (b) Loan Parties' and Affiliates' Obligations. Each of Holdings and the
Borrower  agrees that it will,  and will cause the other Loan  Parties and their
Affiliates  to, keep the terms and  provisions  of this  Agreement and the other
Loan  Documents  confidential  from anyone  other than  individuals  employed or
retained  by  Holdings,  the  Borrower,  any  other  Loan  Party or any of their
Affiliates  who are or are expected to become  engaged in  financial  matters or
matters  relating to compliance with the Loan  Documents,  provided that nothing
herein shall prevent any such Person from disclosing such information (i) to any
such  other  Loan  Party  or  Affiliate,  (ii)  upon the  order of any  court or
administrative agency, (iii) upon the request or demand of any regulatory agency
or authority having  jurisdiction over such Loan Party or Affiliate,  (iv) which
has been publicly  disclosed,  or (v) to such Loan Party's or Affiliate's  legal
counsel and independent  auditors;  provided,  however, that Holdings and/or the
Borrower  will  deliver  to  the  Administrative  Agent  written  notice  of any
intention or  obligation  of any Loan Party to deliver or provide a copy of this
Agreement or any other Loan Document or any term or provision  hereof or thereof
to any  Governmental  Authority at least ten Business  Days prior to the initial
date upon which any such  delivery  or  provision  occurs and  Holdings  and the
Borrower  shall,  and shall  cause  each of the other Loan  Parties  to, use all
reasonable  efforts to redact or delete from such copy or such term or provision
such terms or  provisions  or  language  relating  to rates of  interest,  fees,
financial  covenants,  availability and other terms or provisions of a sensitive
nature as may be  requested  by the  Administrative  Agent to be so  redacted or
deleted  before the same is so  delivered  or  provided.  Without  limiting  the
generality of the foregoing, Holdings and the Borrower agree that they will not,
and will not permit any other Loan Party or its Affiliates to, without the prior
written consent of the  Administrative  Agent, issue or publish a press release,
tombstone  or  other  similar  announcement  or  publication  relating  to  this
Agreement or any other Loan  Document or the  transactions  contemplated  hereby
unless  they  or it  are  required  to do  so by  the  order  of  any  court  or
administrative agency or in accordance with applicable law.



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<PAGE>

         SECTION 13.21 WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT  PERMITTED BY
APPLICABLE  LAW,  EACH OF THE PARTIES  HERETO HEREBY  IRREVOCABLY  AND EXPRESSLY
WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION,  PROCEEDING  OR  COUNTERCLAIM
(WHETHER BASED UPON CONTRACT,  TORT OR OTHERWISE)  ARISING OUT OF OR RELATING TO
ANY OF THE  LOAN  DOCUMENTS  OR THE  TRANSACTIONS  CONTEMPLATED  THEREBY  OR THE
ACTIONS OF HOLDINGS, THE BORROWER, THE ADMINISTRATIVE AGENT OR ANY LENDER IN THE
NEGOTIATION, ADMINISTRATION OR ENFORCEMENT THEREOF.

         Section  13.22  Approvals  and  Consent.  Except  as may  be  expressly
provided to the contrary in this  Agreement or in the other Loan  Documents  (as
applicable),  in any instance  under this  Agreement of the other Loan Documents
where the approval,  consent or exercise of judgment of the Administrative Agent
or any Lender is  requested  or  required,  (a) the  granting  or denial of such
approval or consent and the exercise of such  judgment  shall be within the sole
discretion of the  Administrative  Agent or such Lender,  respectively,  and the
Administrative Agent and such Lender shall not, for any reason or to any extent,
be required to grant such  approval or consent or to exercise  such  judgment in
any particular  manner,  regardless of the  reasonableness of the request or the
action  or  judgment  of the  Administrative  Agent or such  Lender,  and (b) no
approval or consent of the Administrative Agent or any Lender shall in any event
be effective unless the same shall be in writing and the same shall be effective
only in the specific instance and for the specific purpose for which given.

         Section  13.23  Service of Process..  Each of Holdings and the Borrower
irrevocably  consents to the  service of process by the  mailing  thereof by the
Administrative  Agent or the Required  Lenders by registered or certified  mail,
postage  prepaid,  to Holdings or the Borrower,  as  applicable,  at its address
listed on the signature pages hereof. Nothing in this Section 13.23 shall affect
the right of the  Administrative  Agent or the Lenders to serve legal process in
any other  manner  permitted  by law or affect  the right of the  Administrative
Agent or any  Lender to bring any action or  proceeding  against  Holdings,  the
Borrower or any of their respective Property in the court of any jurisdiction.

         Section  13.24   Amendment  and  Restatement  of  the  Original  Credit
Agreement.  Effective as of the Closing Date, this Agreement shall constitute an
amendment  and  restatement  of  all,  but  not  an  extinguishment,  discharge,
satisfaction or novation of any,  indebtedness,  liabilities  and/or obligations
(including,  without limitation,  the Original  Obligations) of the Loan Parties
under the Original Credit Agreement.

         Section 13.25  Assignments of Original Loans.  The Lenders hereby agree
among  themselves  (and the Borrower  and each of the other Loan Parties  hereby
consents  to  such  agreement)  that,  immediately  prior  to but  substantially
concurrently  with the  Closing  Date,  there  shall be deemed to have  occurred
assignments  with respect to the  outstanding  Original  Loans such that,  after
giving  effect  to such  assignments,  the  outstanding  Loans  are as stated in
Section 2.1 and that, as of the Closing Date,  each of the Lenders is the holder
of such Loans in an amount equal to the product of its



                                       99
<PAGE>

Commitment   Percentage   multiplied  by  the  principal  amount  of  the  Loans
outstanding as of the Original Date.


                  [Remainder of page intentionally left blank.]


                                      100
<PAGE>

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


                         HOLDINGS:

                         SAVVIS COMMUNICATIONS CORPORATION,
                         a Delaware corporation


                         By:     /s/ David J. Frear
                              --------------------------------------------------
                         Name:   David J. Frear
                         Title:  Executive Vice President,
                                   Chief Financial Officer


                         Address for Notices:

                         12851 Worldgate Drive
                         Herndon, Virginia 20170
                         Attention:     Chief Financial Officer
                         Telephone:     (703) 234-8000
                         Telecopy:      (703) 234-8309

                         with a copy (which shall not constitute notice) to:

                         717 Office Parkway
                         St. Louis, Missouri 63141
                         Attention:     General Counsel
                         Telephone:     (314) 468-7500
                         Telecopy:      (314) 468-7550


                                      101
<PAGE>

                         BORROWER:

                         SAVVIS COMMUNICATIONS CORPORATION,
                         a Missouri corporation


                         By:     /s/ David J. Frear
                              --------------------------------------------------
                         Name:   David J. Frear
                         Title:  Executive Vice President,
                                   Chief Financial Officer


                         Address for Notices:

                         12851 Worldgate Drive
                         Herndon, Virginia 20170
                         Attention:     Chief Financial Officer
                         Telephone:     (703) 234-8000
                         Telecopy:      (703) 234-8309

                         with a copy (which shall not constitute notice) to:

                         717 Office Parkway
                         St. Louis, Missouri 63141
                         Attention:     General Counsel
                         Telephone:     (314) 468-7500
                         Telecopy:      (314) 468-7550


                                      102
<PAGE>

                         ADMINISTRATIVE AGENT:


                         NORTEL NETWORKS INC.,
                         as Administrative Agent

                         By:      /s/ Mitchell L. Stone
                                  ---------------------------
                         Name:    Mitchell L. Stone
                         Title:   Director, Customer Finance


                         Address for Notices:

                         Nortel Networks Inc.
                         Mail Stop 991 15 A40
                         2221 Lakeside Blvd.
                         Richardson, Texas 75082-4399
                         Attention:     Mitchell L. Stone
                                        Director, Customer Finance
                         Telephone:     972-684-0395
                         Telecopy:      972-684-3679

                         and

                         Nortel Networks Inc.
                         Mail Stop 468/05/B40
                         2100 Lakeside Blvd.
                         Richardson, Texas 75082-4399
                         Attention:     Kimberly Poe
                                        Director, Loan Administration
                         Telephone:     972-684-7687
                         Telecopy:      972-685-3613



                                      103
<PAGE>

                         LENDERS:

Commitment: $235,000,000 NORTEL NETWORKS INC.

                         By:      /s/ Mitchell L. Stone
                                  -----------------------------------
                         Name:    Mitchell L. Stone
                         Title:   Director, Customer Finance Americas


                         Address for Notices:

                         Nortel Networks Inc.
                         Mail Stop 991 15 A40
                         2221 Lakeside Blvd.
                         Richardson, Texas 75082-4399
                         Attention:     Mitchell L. Stone
                                        Director, Customer Finance Americas
                         Telephone:     972-684-0395
                         Telecopy:      972-684-3679

                         and

                         Nortel Networks Inc.
                         Mail Stop 468/05/B40
                         2100 Lakeside Blvd.
                         Richardson, Texas 75082-4399
                         Attention:     Kimberly Poe
                                        Director, Loan Administration
                         Telephone:     972-684-7687
                         Telecopy:      972-685-3613


                         Lending Office for Base Rate Loans:

                         Nortel Networks Inc.
                         2221 Lakeside Blvd.
                         Richardson, Texas 75082


                         Lending Office for Eurodollar Loans:

                         Nortel Networks Inc.
                         2221 Lakeside Blvd.
                         Richardson, Texas 75082


                                      104

</TEXT>
</DOCUMENT>
