AMENDMENT #3
                                       to
                                CREDIT AGREEMENT


                  THIS AMENDMENT #3 TO CREDIT AGREEMENT (this "Amendment") dated
as of January 19, 1999, between V BAND CORPORATION (the "Borrower") and NATIONAL
BANK OF CANADA, NEW YORK BRANCH (the "Bank").


                                    RECITALS
                                    --------

                  A.  The  Borrower  and the  Bank  are  parties  to the  Credit
Agreement  dated as of May 28, 1997, as amended by Amendment and Waiver dated as
of February 10, 1998 and  Amendment  and Waiver dated as of June 4, 1998 (as the
same may have been, is hereby or may hereafter be further  amended,  the "Credit
Agreement"),  pursuant to which the Bank agreed to extend credit to the Borrower
in the form of revolving  loans and letters of credit upon the terms and subject
to the conditions set forth in the Credit Agreement.

                  B. The  Borrower  has  requested  that the Bank  permit  it to
borrow  under  the  Credit  Agreement  overadvances  of up to  $153,000  in  the
aggregate and allow such  overadvances to remain  outstanding  until January 29,
1999, in  consideration  of, inter alia, the agreement of the Borrower to comply
with the requirements imposed hereby.

                  C. The Bank is willing to permit such overadvances, subject to
the terms and conditions set forth below.

                  NOW THEREFORE,  in consideration of the premises and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

                  1.       Definitions.  All  capitalized  terms  used  but  not
defined herein shall have the meanings ascribed to them in the Credit Agreement.
<PAGE>
                  2.       Amendment to Credit Agreement.

                           (a)      The   definition  of  the  term   "Permitted
Overadvance  Amount" set forth  within the  definition  of  "Borrowing  Base" in
Section 1.1 of the Credit Agreement (Defined Terms) is hereby amended to read as
follows:

                           "Permitted  Overadvance  Amount" means (x) during the
                           period  commencing  on January 19, 1999 and ending on
                           January 29, 1999,  One Hundred  Fifty-Three  Thousand
                           Dollars ($153,000), and (y) thereafter, $0.00.

                           (b)      All  references  in the Credit  Agreement to
"this Agreement" or such words as "hereof",  "herein",  or "hereunder"  shall be
deemed to be references to the "Credit Agreement," as defined in this Amendment.

                  3.       Reaffirmation  of  Obligations.  The Borrower  hereby
acknowledges and confirms to the Bank (a) that the amendments and  modifications
to the Credit  Agreement  made  pursuant to this  Amendment  shall not affect or
impair in any way the validity,  binding  effect or  enforceability  of any Loan
Document to which the Borrower is a party or of any liens or security  interests
granted to the Bank  thereunder,  or the  Borrower's  obligations  or the Bank's
rights and  remedies  thereunder,  and (b) that the Loan  Documents to which the
Borrower  is a party,  any  liens and  security  interests  granted  to the Bank
thereunder,  and the Borrower's  obligations  and the Bank's rights and remedies
thereunder  shall  continue  in full  force  and  effect,  notwithstanding  such
amendments and modifications.

                  4.       Effectiveness.  The  provisions of this  Amendment to
the contrary  notwithstanding,  the foregoing  amendment shall be effective only
through  the  earliest  of (a)  noncompliance  by the  Borrower  with any of the
limitations or requirements  contained herein, or (b) the occurrence of an Event
of Default under the Credit Agreement.

                  5.       Amendment Fee. As consideration  for the amendment to
the Credit Agreement  provided  herein,  the Borrower shall pay to the Bank upon
the execution  hereof a fee in the amount of $500 (the "Amendment  Fee"),  which
fee is nonrefundable and is deemed earned by the Bank when paid.

                  6.       Representations  and Warranties.  The Borrower hereby
represents  and warrants to the Bank that (a) it has full power and authority to
execute and deliver this Amendment, (b) this Amendment, and the Credit Agreement
as amended hereby,  constitute the legal,  valid and binding  obligations of the
Borrower,  enforceable  against the Borrower in accordance with their respective
terms,  (c) the  Borrower's  execution and delivery of this  Amendment,  and its
performance  of this  Amendment  and of

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<PAGE>
the Credit  Agreement,  have been duly authorized by all requisite action of the
Borrower and do not require the approval of its shareholders,  (d) the execution
and  delivery  by the  Borrower of this  Amendment  and the  performance  by the
Borrower of the Credit  Agreement do not and will not (i) violate the Borrower's
Certificate of Incorporation  or By-Laws or any law or regulation  applicable to
the Borrower,  (ii) violate or  constitute  (with due notice or lapse of time or
both) a default under any indenture,  agreement,  license or other instrument to
which the Borrower is a party or by which the Borrower or any of its  properties
may be bound or  affected,  (iii)  violate  any order of any court,  tribunal or
governmental agency binding upon the Borrower or its properties,  (iv) result in
the  creation  or  imposition  of any  Lien of any  nature  whatsoever  upon any
properties  or assets of the  Borrower,  or (v) require any license,  consent or
approval of any governmental  agency or regulatory  authority or any other third
party.

                  7.       Conditions Precedent.  This Amendment shall be deemed
effective as of January 19,  1999,  upon  satisfaction  or waiver of each of the
following conditions precedent:


                  (a)      the  Borrower  and the Bank shall have  executed  and
delivered counterpart originals or facsimiles hereof;

                  (b)      the Consent  attached  hereto as Exhibit A shall have
been duly executed by all of the Borrower's Domestic  Subsidiaries and delivered
to the Bank;

                  (c)      the Bank shall have  received  payment in full of the
Amendment Fee; and

                  (d)      all   legal,   documentary   and  other   matters  in
connection with this Amendment and the transactions contemplated hereby shall be
satisfactory to the Bank and its counsel.


                  8.       Default.   Any   default  by  the   Borrower  in  the
observance or performance of any term,  condition,  covenant,  representation or
warranty set forth in this Amendment shall  constitute an Event of Default under
the Credit Agreement.

                  9.       Miscellaneous.

                  (a)      THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING
EFFECT TO ITS CONFLICT OF LAWS RULES  (OTHER THAN SECTION  5-1401 OF THE GENERAL
OBLIGATIONS LAW).

                  (b)      Except as  expressly  amended  hereby,  all terms and
conditions of the Credit Agreement and the other Loan Documents,  and all rights
of the Bank and  obligations  of the Borrower  thereunder  and under all related
documents,  shall  remain  in  full  force  and  effect.  Without  limiting  the
generality  of the  foregoing,  nothing  herein  contained  shall be  deemed  to
increase
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<PAGE>
the Commitment.

                  (c)      The Borrower hereby agrees to pay on demand all costs
and expenses  (including  without limitation the reasonable fees and expenses of
outside  counsel  to the  Bank)  incurred  by the  Bank in  connection  with the
negotiation,  preparation,  execution  and  delivery of this  Amendment  and all
related  documents,  whether  or not the  transactions  contemplated  hereby are
consummated.

                  (d)      This  Amendment may be executed by one or more of the
parties  hereto  on any  number  of  separate  counterparts,  and  all  of  said
counterparts  taken  together  shall be  deemed to  constitute  one and the same
instrument.  Delivery  of an  executed  signature  page  to  this  Amendment  by
facsimile  transmission  shall be as effective as delivery of a manually  signed
counterpart hereof.

                  (e)      This Amendment  constitutes the entire  agreement and
understanding  of the parties  hereto with respect to the subject  matter hereof
and any prior oral agreements or understandings are merged herein.

                  IN WITNESS  WHEREOF,  the  parties  hereto  have  caused  this
Amendment to be duly  executed by their duly  authorized  officers as of the day
and year first above written.


                                        V BAND CORPORATION


                                        By:___________________________
                                        Name:
                                        Title:


                                        NATIONAL BANK OF CANADA, NEW YORK BRANCH


                                        By:___________________________
                                        Name:
                                        Title:


                                        By:___________________________
                                        Name:
                                        Title:

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<PAGE>
                                    Exhibit A
                                    ---------

                              CONSENT OF GUARANTORS

         Each of the  undersigned  consents  and  agrees  to the  execution  and
delivery by the  Borrower of the  Amendment #3 to Credit  Agreement  dated as of
January 19, 1999 (the "Amendment")  between V Band Corporation and National Bank
of  Canada,  New  York  Branch  (the  "Bank")  and to  all  of the  transactions
contemplated  by the Amendment.  Each of the  undersigned  acknowledge and agree
that each of the  documents  which they have  executed  in  connection  with the
Credit  Agreement are ratified,  confirmed and  reaffirmed,  including,  without
limitation,  their respective Subsidiary Guarantee, and any other Loan Documents
to which they are party and that such  documents are in full force and effect in
accordance with their terms and there are no defenses,  counterclaims  or rights
of set-off as to any of their  respective  obligations  thereunder.  Each of the
undersigned  further  acknowledges and agrees that the Amendment is supported by
good and valuable consideration by the Bank including,  without limitation,  the
Bank's agreement to execute the Amendment.

                                                  LICOM Incorporated


                                                  By:___________________________
                                                     Name:
                                                     Title:


                                                  V Band NE, Inc.


                                                  By:___________________________
                                                     Name:
                                                     Title:


                                                  V Band Services, Inc.


                                                  By:___________________________
                                                     Name:
                                                     Title:
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