EXHIBIT 10c.

                                 $3,500,000,000

                                     364-DAY

                                CREDIT AGREEMENT


                                   dated as of

                                   May 8, 1998


                                      among


                         U S WEST Capital Funding, Inc.
                                 U S WEST, Inc.
                                   USW-C, Inc.

                             The Banks Listed Herein

                                       and

                   Morgan Guaranty Trust Company of New York,
                             as Administrative Agent


-------------------------------------------------------------------------------



                           J.P. Morgan Securities Inc.
                                  Lead Arranger

             Bank of America National Trust and Savings Association,
                            Chase Securities Inc. and
                               Mellon Bank, N.A.,
                              Co-Syndication Agents





<PAGE>


<TABLE>
<CAPTION>
                                                                                        

                                TABLE OF CONTENTS

                             ----------------------

                                      Page

                                    ARTICLE 1
                                   Definitions
<S>            <C>                                                                           <C>
                                                                                             Page
Section 1.01.  The Definitions..................................................................1
Section 1.02.  Accounting Terms and Determinations.............................................12
Section 1.03.  Types of Borrowings.............................................................12

                                    ARTICLE 2
                                   The Credits

Section 2.01.  Commitments to Lend.............................................................13
Section 2.02.  Notice of Committed Borrowing...................................................15
Section 2.03.  Money Market Borrowings.........................................................15
Section 2.04.  Notice to Banks; Funding of Loans...............................................19
Section 2.05.  Notes...........................................................................20
Section 2.06.  Maturity of Loans...............................................................21
Section 2.07.  Interest Rates..................................................................21
Section 2.08.  Facility Fees...................................................................23
Section 2.09.  Termination or Reduction of Commitments.........................................24
Section 2.10.  Method of Electing Interest Rates...............................................24
Section 2.11.   Prepayments....................................................................25
Section 2.12.  General Provisions as to Payments...............................................26
Section 2.13.  Funding Losses..................................................................27
Section 2.14.  Computation of Interest and Fees................................................27
Section 2.15.  Change of Control...............................................................27

                                    ARTICLE 3
                                   Conditions

Section 3.01.  Closing.........................................................................28
Section 3.02.  All Borrowings..................................................................29
Section 3.03.  Loans after Separation..........................................................30

                                    ARTICLE 4
                         Representations and Warranties

Section 4.01.  Corporate Existence and Power...................................................30
Section 4.02.  Corporate and Governmental Authorization; No
         Contravention.........................................................................31

</TABLE>


<PAGE>


<TABLE>
<CAPTION>
<S>            <C>                                                                         <C>   
                                                                                           Page

Section 4.03.  Binding Effect..................................................................31
Section 4.04.  Financial Information...........................................................31
Section 4.05.  Litigation......................................................................31
Section 4.06.  Compliance with ERISA...........................................................32
Section 4.07.  Environmental Matters...........................................................32
Section 4.08.  Taxes...........................................................................33
Section 4.09.  Subsidiaries....................................................................33
Section 4.10.  Not an Investment Company.......................................................33
Section 4.11.  Full Disclosure.................................................................33

                                    ARTICLE 5
                                    Covenants

Section 5.01.  Information.....................................................................34
Section 5.02.  Maintenance of Property; Insurance..............................................36
Section 5.03.  Maintenance of Existence........................................................36
Section 5.04.  Compliance with Laws............................................................36
Section 5.05.  Inspection of Property, Books and Records.......................................37
Section 5.06.  Subsidiary Debt.................................................................37
Section 5.07.  Debt Coverage...................................................................37
Section 5.08.  Negative Pledge.................................................................38
Section 5.09.  Consolidations, Mergers and Sales of Assets.....................................39
Section 5.10.  Use of Proceeds.................................................................39
Section 5.11.  Year 2000 Compatibility.........................................................39

                                    ARTICLE 6
                                    Defaults

Section 6.01.  Events of Default...............................................................40
Section 6.02.  Notice of Default...............................................................42

                                    ARTICLE 7
                                    The Agent

Section 7.01.  Appointment and Authorization...................................................43
Section 7.02.  Agent and Affiliates............................................................43
Section 7.03.  Action by Agent.................................................................43
Section 7.04.  Consultation with Experts.......................................................43
Section 7.05.  Liability of Agent..............................................................43
Section 7.06.  Indemnification.................................................................44
Section 7.07.  Credit Decision.................................................................44

</TABLE>


<PAGE>

<TABLE>
<CAPTION>

                                                                                             

<S>            <C>                                                                           <C>    
                                                                                             Page
Section 7.08.  Successor Agent.................................................................44
Section 7.09.  Agent's Fee.....................................................................44

                                    ARTICLE 8
                            Changes in Circumstances

Section 8.01.  Basis for Determining Interest Rate Inadequate or Unfair........................45
Section 8.02.  Illegality......................................................................45
Section 8.03.  Increased Cost and Reduced Return...............................................46
Section 8.04.  Taxes...........................................................................47
Section 8.05.  Domestic Loans Substituted for Affected Euro-Dollar Loans.......................49
Section 8.06.  Substitution of Bank............................................................49

                                    ARTICLE 9
                                    Guaranty

Section 9.01.  The Guaranty....................................................................50
Section 9.02.  Guaranty Unconditional..........................................................50
Section 9.03.  Discharge Only upon Payment in Full; Reinstatement In
         Certain Circumstances.................................................................51
Section 9.04.  Waiver by the Company...........................................................51
Section 9.05.  Subrogation.....................................................................51
Section 9.06.  Stay of Acceleration............................................................52
Section 9.07.  Release upon Separation.........................................................52

                                   ARTICLE 10
                                  Miscellaneous

Section 10.01.  Notices........................................................................52
Section 10.02.  No Waivers.....................................................................52
Section 10.03.  Expenses; Indemnification......................................................53
Section 10.04.  Sharing of Set-offs............................................................54
Section 10.05.  Amendments and Waivers.........................................................54
Section 10.06.   Successors and Assigns........................................................55
Section 10.07.  Termination of Existing Credit Agreements......................................56
Section 10.08.  Governing Law; Submission to Jurisdiction......................................57
Section 10.09.  Counterparts; Integration; Effectiveness.......................................57
Section 10.10.  WAIVER OF JURY TRIAL...........................................................57
Section 10.11.  Confidentiality................................................................57

</TABLE>



<PAGE>



Pricing Schedule

Schedule 4.07  -  Environmental Matters

Exhibit A -   Note

Exhibit B -   Money Market Quote Request

Exhibit C -   Invitation for Money Market Quotes

Exhibit D -   Money Market Quote

Exhibit E -   Opinion of Counsel for the Company and the Borrower

Exhibit F -   Opinion of Special Counsel for the Administrative Agent

Exhibit G -   Assignment and Assumption Agreement

Exhibit H -   Extension Agreement





<PAGE>




                                CREDIT AGREEMENT


         AGREEMENT dated as of May 8, 1998 among U S WEST Capital Funding, Inc.,
U S WEST, Inc., USW-C,  Inc., the BANKS listed on the signature pages hereof and
MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Administrative Agent.

         The parties hereto agree as follows:



                                    ARTICLE 1
                                   Definitions

         Section 1.01.  The Definitions.

         The following terms, as used herein, have the following meanings:

         "Absolute  Rate Auction"  means a  solicitation  of Money Market Quotes
setting forth Money Market Absolute Rates pursuant to Section 2.03.

         "Adjusted London Interbank Offered Rate" has the meaning set forth in
Section 2.07.

         "Administrative  Questionnaire"  means,  with respect to each Bank,  an
administrative  questionnaire in the form prepared by the Agent and submitted to
the Agent (with a copy to the Company) duly completed by such Bank.

         "Agent" means Morgan Guaranty Trust Company of New York in its capacity
as  administrative  agent for the Banks  hereunder,  and its  successors in such
capacity.

         "Applicable Lending Office" means, with respect to any Bank, (i) in the
case of its Domestic Loans, its Domestic Lending Office, (ii) in the case of its
Euro-Dollar  Loans, its Euro-Dollar  Lending Office and (iii) in the case of its
Money Market Loans, its Money Market Lending Office.

         "Assignee" has the meaning set forth in Section 10.06(c).



<PAGE>



         "Bank" means each lender  listed on the signature  pages  hereof,  each
Assignee which becomes a Bank pursuant to Section 10.06(c), and their respective
successors.

         "Base Rate" means, for any day, a rate per annum equal to the higher of
(i) the Prime  Rate for such day and (ii) the sum of 1/2 of 1% plus the  Federal
Funds Rate for such day.

         "Benefit Arrangement" means at any time an employee benefit plan within
the meaning of Section 3(3) of ERISA which is not a Plan or a Multiemployer Plan
and which is maintained or otherwise  contributed  to by any member of the ERISA
Group.

         "Borrower"   means  U  S  WEST  Capital   Funding,   Inc.,  a  Colorado
corporation, and its successors.

         "Borrowing" has the meaning set forth in Section 1.03.

         "Closing  Date" means the date on or after the Effective  Date on which
the Agent shall have received the documents  specified in or pursuant to Section
3.01.

         "Commitment"  means,  with  respect to each Bank,  the amount set forth
opposite the name of such Bank on the signature pages hereof, as such amount may
be reduced from time to time pursuant to Sections 2.09 and 2.11.

         "Committed  Loan" means a loan to be made by a Bank pursuant to Section
2.01(a);  provided  that if any such loan or loans are  combined  or  subdivided
pursuant to a Notice of Interest Rate Election,  the term "Committed Loan" shall
refer to the combined  principal  amount  resulting from such  combination or to
each of the separate  principal amounts resulting from such subdivision,  as the
case may be.

         "Company" means (i) prior to the Separation, U S WEST, Inc., a Delaware
corporation,  and its successors and (ii) after the Separation,  USW-C,  Inc., a
Delaware corporation, which will be renamed U S WEST, Inc., and its successors.

         "Company's 1997 Form 10-K" means U S WEST, Inc.'s annual report on Form
10-K for 1997,  as amended by Form 10-K/A filed April 13, 1998,  in each case as
filed with the  Securities  and Exchange  Commission  pursuant to the Securities
Exchange Act of 1934.

         "Consolidated EBITDA" means, for any period, the net income of the
Company and its Consolidated Subsidiaries determined on a consolidated basis



<PAGE>



for such period (adjusted to exclude the effect of (x) equity gains or losses in
unconsolidated  Persons, (y) any preferred dividend income and any extraordinary
or  other  non-recurring  non-cash  gain or loss or (z) any  gain or loss on the
disposition of  investments),  plus, to the extent deducted in determining  such
adjusted net income,  the aggregate amount of (i) interest expense,  (ii) income
tax expense and (iii)  depreciation,  amortization  and other  similar  non-cash
charges and minus,  to the extent  included in  determining  such  adjusted  net
income, the aggregate amount of (i) interest income and (ii) income tax benefit.

         "Consolidated   Net   Worth"   means  at  any  date  the   consolidated
shareowners' equity of the Company and its Consolidated  Subsidiaries determined
as of such date.

         "Consolidated  Subsidiary"  means at any date any  Subsidiary  or other
entity the accounts of which would be consolidated  with those of the Company in
its  consolidated  financial  statements if such  statements were prepared as of
such date.

         "Debt" of any Person means at any date,  without  duplication,  (i) all
obligations  of such Person for borrowed  money,  (ii) all  obligations  of such
Person evidenced by bonds, debentures, notes or other similar instruments, (iii)
all obligations of such Person to pay the deferred purchase price of property or
services,  except  trade  accounts  payable  arising in the  ordinary  course of
business, (iv) all obligations of such Person as lessee which are capitalized in
accordance with generally accepted accounting  principles,  (v) all Debt secured
by a Lien on any asset of such Person,  whether or not such Debt is otherwise an
obligation  of such  Person,  and  (vi) all Debt of  others  Guaranteed  by such
Person.  Notwithstanding  the foregoing,  for purposes of Sections 5.06 and 5.07
Debt shall in no event include the following:

                  (x) Debt of Persons  which are not  Consolidated  Subsidiaries
         ("Joint  Ventures")  (i) which is  secured  by a Lien on the  assets or
         capital  stock of a Minor  Subsidiary  or the equity  interests in such
         Joint  Ventures or is Guaranteed by a Minor  Subsidiary,  which Lien or
         Guaranty is incurred in connection with the international operations of
         the Company and its Subsidiaries,  and (ii) for the payment of which no
         other  recourse  may be had to the Company or any of its  Subsidiaries;
         and

                  (y) Debt of the Company or the Borrower  issued in  connection
         with  the  issuance  of  Trust  Originated   Preferred   Securities  or
         substantially similar securities,  so long as such Debt is subordinated
         and junior in right of payment to substantially  all liabilities of the
         Company  or the  Borrower,  as the  case  may  be,  including,  without
         limitation, the Loans.


<PAGE>



         "Default"  means any condition or event which  constitutes  an Event of
Default  or which  with the  giving of  notice  or lapse of time or both  would,
unless cured or waived, become an Event of Default.

         "Domestic  Business  Day"  means any day except a  Saturday,  Sunday or
other day on which  commercial  banks in New York City are  authorized by law to
close.

         "Domestic Lending Office" means, as to each Bank, its office located at
its address set forth in its Administrative  Questionnaire (or identified in its
Administrative  Questionnaire  as its  Domestic  Lending  Office)  or such other
office as such Bank may hereafter  designate as its Domestic  Lending  Office by
notice to the Company and the Agent.

         "Domestic  Loan" means (i) a Committed Loan which bears interest at the
Base Rate pursuant to the applicable Notice of Committed  Borrowing or Notice of
Interest Rate Election or the  provisions of Article 8 or (ii) an overdue amount
which was a Domestic Loan immediately before it became overdue.

         "Effective  Date" means the date this  Agreement  becomes  effective in
accordance with Section 10.09.

         "Environmental  Laws"  means  any and all  federal,  state,  local  and
foreign statutes,  laws, judicial  decisions,  regulations,  ordinances,  rules,
judgments, orders, decrees, plans, injunctions,  permits,  concessions,  grants,
franchises, licenses, agreements and other governmental restrictions relating to
the environment,  the effect of the environment on human health or to emissions,
discharges  or releases of  pollutants,  contaminants,  Hazardous  Substances or
wastes into the environment including, without limitation,  ambient air, surface
water,  ground  water,  or  land,  or  otherwise  relating  to the  manufacture,
processing,  distribution,  use,  treatment,  storage,  disposal,  transport  or
handling of  pollutants,  contaminants,  Hazardous  Substances  or wastes or the
clean-up or other remediation thereof.

         "ERISA" means the Employee  Retirement  Income Security Act of 1974, as
amended, or any successor statute.

          "ERISA Group" means the Company,  any  Subsidiary and all members of a
controlled  group of corporations  and all trades or businesses  (whether or not
incorporated)  under  common  control  which,  together  with the Company or any
Subsidiary,  are treated as a single  employer under Section 414 of the Internal
Revenue Code.


<PAGE>



         "Euro-Dollar  Business  Day" means any  Domestic  Business Day on which
commercial  banks are open for  international  business  (including  dealings in
dollar deposits) in London.

         "Euro-Dollar Lending Office" means, as to each Bank, its office, branch
or   affiliate   located  at  its  address  set  forth  in  its   Administrative
Questionnaire  (or  identified  in  its  Administrative   Questionnaire  as  its
Euro-Dollar  Lending  Office) or such other office,  branch or affiliate of such
Bank as it may hereafter  designate as its Euro-Dollar  Lending Office by notice
to the Company and the Agent.

         "Euro-Dollar Loan" means (i) a Committed Loan which bears interest at a
Euro-Dollar  Rate pursuant to the  applicable  Notice of Committed  Borrowing or
Notice  of  Interest  Rate  Election  or  (ii) an  overdue  amount  which  was a
Euro-Dollar Loan before it became overdue.

         "Euro-Dollar Margin" has the meaning set forth in Section 2.07.

         "Euro-Dollar  Rate"  means a rate of  interest  determined  pursuant to
Section 2.07 on the basis of an Adjusted London Interbank Offered Rate.

         "Euro-Dollar  Reference  Banks" means the principal  London  offices of
Bank of America National Trust and Savings  Association,  Mellon Bank, N.A., and
Morgan  Guaranty Trust Company of New York,  and  "Euro-Dollar  Reference  Bank"
means any one of the foregoing.

         "Euro-Dollar Reserve Percentage" has the meaning set forth in Section
2.07.

         "Event of Default" has the meaning set forth in Section 6.01.

         "Existing  Credit  Agreements"  means the Amended and  Restated  Credit
Agreements  dated as of October 31, 1997, among the Borrower,  the Company,  the
banks listed on the signature pages thereof and Morgan Guaranty Trust Company of
New York, as administrative agent.

         "Federal  Funds Rate" means,  for any day, the rate per annum  (rounded
upward,  if  necessary,  to the  nearest  1/100th  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 Domestic  Business Day
next  succeeding  such  day,  provided  that (i) if such  day is not a  Domestic
Business  Day,  the  Federal  Funds Rate for such day shall be such rate on such
transactions on the next preceding  Domestic Business Day as so published on the
next


<PAGE>



succeeding  Domestic  Business  Day, and (ii) if no such rate is so published on
such next succeeding  Domestic Business Day, the Federal Funds Rate for such day
shall be the average rate quoted to Morgan Guaranty Trust Company of New York on
such day on such transactions as determined by the Agent.

         "Fixed  Rate  Loans"  means  Euro-Dollar  Loans or Money  Market  Loans
(excluding  Money Market LIBOR Loans bearing  interest at the Base Rate pursuant
to Section 8.01(a)) or any combination of the foregoing.

         "Group of Loans" means at any time a group of Loans  consisting  of (i)
all Committed  Loans which are Domestic Loans at such time or (ii) all Committed
Loans which are Euro-Dollar  Loans having the same Interest Period at such time;
provided  that, if a Committed  Loan of any  particular  Bank is converted to or
made as a Domestic  Loan  pursuant to Section  8.02 or 8.05,  such Loan shall be
included in the same Group or Groups of Loans from time to time as it would have
been in if it had not been so converted or made.

         "Guaranty" 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
obligation,  direct or indirect,  contingent or otherwise, of such Person (i) 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 (ii)
entered into for the purpose of assuring in any other manner the obligee of such
Debt or other  obligation  of the  payment  thereof or to protect  such  obligee
against loss in respect  thereof (in whole or in part),  provided  that the term
Guaranty  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.

         "Hazardous  Substances"  means  any  toxic,  radioactive,   caustic  or
otherwise hazardous substance, including petroleum, its derivatives, by-products
and  other  hydrocarbons,  or any  substance  having  any  constituent  elements
displaying any of the foregoing characteristics.

          "Indemnitee" has the meaning set forth in Section 10.03(b).

         "Indentures"  means  the  agreements  or  instruments   evidencing  the
following Debt of Continental Cablevision, Inc., and its successors: (i) the 11%
Senior  Subordinated  Debentures Due June 1, 2007;  (ii) the 8 5/8% Senior Notes
Due August 15, 2003; (iii) the 9% Senior  Debentures Due September 1, 2008; (iv)
the 8 7/8% Senior Debentures Due September 15, 2002; (v) the 9 1/2% Senior



<PAGE>



Debentures  Due August 1, 2013;  (vi) the 8 1/2% Senior Notes Due  September 15,
2001;  (vii) the 8.3% Senior Notes Due May 15,  2006;  and (viii) any other Debt
containing terms and conditions as or more favorable to the holders thereof than
the terms and conditions of any of the foregoing Debt.

         "Interest  Period" means: (1) with respect to each Euro-Dollar  Loan, a
period commencing on the date of borrowing specified in the applicable Notice of
Borrowing  or the date  specified  in the  applicable  Notice of  Interest  Rate
Election and ending one, two,  three or six months  thereafter,  as the Borrower
may elect in the applicable notice; provided that:

                  (a) any  Interest  Period which would  otherwise  end on a day
         which is not a  Euro-Dollar  Business Day shall be extended to the next
         succeeding  Euro-Dollar  Business Day unless such Euro-Dollar  Business
         Day falls in another calendar month, in which case such Interest Period
         shall end on the next preceding Euro-Dollar Business Day;

                  (b) any Interest  Period which begins on the last  Euro-Dollar
         Business  Day of a  calendar  month (or on a day for which  there is no
         numerically  corresponding day in the calendar month at the end of such
         Interest  Period) shall,  subject to clause (c) below,  end on the last
         Euro-Dollar Business Day of a calendar month; and

                  (c) any Interest Period  beginning prior to a Termination Date
         which would  otherwise end after a  Termination  Date shall end on such
         Termination  Date,  and any  Interest  Period  beginning  on or after a
         Termination Date which would otherwise end after the first  anniversary
         of such  Termination  Date shall end on the first  anniversary  of such
         Termination Date.

         (2) with respect to each Money Market LIBOR Loan, the period commencing
on the date of borrowing  specified in the  applicable  Notice of Borrowing  and
ending  such whole  number of months  thereafter  as the  Borrower  may elect in
accordance with Section 2.03; provided that:

                  (a) any  Interest  Period which would  otherwise  end on a day
         which is not a  Euro-Dollar  Business Day shall be extended to the next
         succeeding  Euro-Dollar  Business Day unless such Euro-Dollar  Business
         Day falls in another calendar month, in which case such Interest Period
         shall end on the next preceding Euro-Dollar Business Day;

                  (b) any Interest  Period which begins on the last  Euro-Dollar
         Business Day of a calendar month (or on a day for which there is no



<PAGE>



         numerically  corresponding day in the calendar month at the end of such
         Interest  Period) shall,  subject to clause (c) below,  end on the last
         Euro-Dollar Business Day of a calendar month; and

                  (c) any Interest Period  beginning prior to a Termination Date
         which would  otherwise end after a  Termination  Date shall end on such
         Termination Date.

         (3) with respect to each Money Market  Absolute  Rate Loan,  the period
commencing  on the date of  borrowing  specified  in the  applicable  Notice  of
Borrowing and ending such number of days  thereafter  (but not less than 7 days)
as the Borrower may elect in accordance with Section 2.03; provided that:

                  (a) any  Interest  Period which would  otherwise  end on a day
         which is not a  Euro-Dollar  Business Day shall be extended to the next
         succeeding Euro-Dollar Business Day; and

                  (b) any Interest Period  beginning prior to a Termination Date
         which would  otherwise end after a  Termination  Date shall end on such
         Termination Date.

         "Internal  Revenue  Code" means the Internal  Revenue Code of 1986,  as
amended, or any successor statute.

         "LIBOR  Auction"  means a  solicitation  of Money Market Quotes setting
forth Money Market Margins based on the London  Interbank  Offered Rate pursuant
to Section 2.03.

         "Lien" means,  with respect to any asset, any mortgage,  lien,  pledge,
charge,  security  interest  or  encumbrance  of any kind,  or any other type of
preferential  arrangement  that has the practical  effect of creating a security
interest,  in respect of such asset.  For the  purposes of this  Agreement,  the
Company  or any  Subsidiary  shall be deemed to own  subject to a Lien any asset
which it has  acquired  or holds  subject to the  interest of a vendor or lessor
under any  conditional  sale  agreement,  capital lease or other title retention
agreement relating to such asset.

         "Loan" means a Domestic  Loan or a  Euro-Dollar  Loan or a Money Market
Loan and "Loans" means Domestic Loans or Euro-Dollar Loans or Money Market Loans
or any combination of the foregoing.

         "London Interbank Offered Rate" has the meaning set forth in Section
2.07.


<PAGE>



         "Margin  Stock"  means  "margin  stock"  as  such  term is  defined  in
Regulation  U of the Board of  Governors of the Federal  Reserve  System,  as in
effect from time to time.

         "Material Debt" means Debt (other than the Notes) of the Company and/or
one or more of its  Subsidiaries,  arising in one or more  related or  unrelated
transactions, in an aggregate principal amount exceeding $100,000,000.

         "Material  Plan"  means at any time a Plan or  Plans  having  aggregate
Unfunded Liabilities in excess of $100,000,000.

         "Minor  Subsidiary"  means,  for  purposes of the last  sentence of the
definition of Debt and of Section 5.08(f) (the "Relevant  Provisions"),  (i) USW
PCN Inc., and (ii) any other Subsidiary  which, at the time of the issuance of a
Guaranty or grant of a Lien referred to in the Relevant  Provisions,  had assets
which,  when taken together with all assets of  Subsidiaries at any earlier time
when such  Subsidiaries  were deemed to be Minor  Subsidiaries  pursuant to this
clause (ii), did not exceed $250,000,000.

         "Money Market Absolute Rate" has the meaning set forth in Section
2.03(d).

         "Money  Market  Absolute  Rate Loan"  means a loan to be made by a Bank
pursuant to an Absolute Rate Auction.

         "Money Market  Lending  Office"  means,  as to each Bank,  its Domestic
Lending Office or such other office,  branch or affiliate of such Bank as it may
hereafter  designate as its Money Market Lending Office by notice to the Company
and the  Agent;  provided  that any Bank may from  time to time by notice to the
Company and the Agent  designate  separate Money Market Lending  Offices for its
Money Market LIBOR Loans,  on the one hand,  and its Money Market  Absolute Rate
Loans,  on the other  hand,  in which  case all  references  herein to the Money
Market Lending Office of such Bank shall be deemed to refer to either or both of
such offices, as the context may require.

         "Money Market LIBOR Loan" means a loan to be made by a Bank pursuant to
a LIBOR  Auction  (including  such a loan  bearing  interest  at the  Base  Rate
pursuant to Section 8.01(a)).

         "Money Market Loan" means a Money Market LIBOR Loan or a Money
Market Absolute Rate Loan.

         "Money Market Margin" has the meaning set forth in Section 2.03(d).



<PAGE>



         "Money  Market  Quote"  means an offer by a Bank to make a Money Market
Loan in accordance with Section 2.03.

         "Multiemployer Plan" means at any time an employee pension benefit plan
within the  meaning of  Section  4001(a)(3)  of ERISA to which any member of the
ERISA Group is then making or accruing an  obligation to make  contributions  or
has within the preceding five plan years made contributions, including for these
purposes  any Person  which ceased to be a member of the ERISA Group during such
five year period.

         "Notes" means  promissory  notes of the Borrower,  substantially in the
form of Exhibit A hereto, evidencing the obligation of the Borrower to repay the
Loans made to it,  and  "Note"  means any one of such  promissory  notes  issued
hereunder.

         "Notice of Borrowing" means a Notice of Committed Borrowing (as defined
in Section  2.02) or a Notice of Money Market  Borrowing  (as defined in Section
2.03(f)).

         "Parent" means, with respect to any Bank, any Person controlling such
Bank.

         "Participant" has the meaning set forth in Section 10.06(b).

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

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

         "Plan" means at any time an employee pension benefit plan (other than a
Multiemployer  Plan)  which is  covered  by Title IV of ERISA or  subject to the
minimum  funding  standards  under Section 412 of the Internal  Revenue Code and
either (i) is maintained,  or  contributed  to, by any member of the ERISA Group
for  employees  of any member of the ERISA  Group or (ii) has at any time within
the preceding five years been maintained, or contributed to, by any Person which
was at such time a member of the ERISA Group for  employees  of any Person which
was at such time a member of the ERISA Group.

         "Pricing Schedule" means the Schedule attached hereto and identified as
such.


<PAGE>



         "Prime  Rate" means the rate of interest  publicly  announced by Morgan
Guaranty  Trust  Company  of New York in New York  City from time to time as its
Prime Rate.

         "Proxy  Statement" means the definitive Proxy Statement for 1998 Annual
Meeting of Stockholders of U S WEST,  Inc.,  dated and filed with the Securities
and Exchange Commission on April 20, 1998.

         "Required  Banks"  means at any time Banks  having more than 50% of the
aggregate  amount of the  Commitments  or, if the  Commitments  shall  have been
terminated,  holding  Notes  evidencing  more than 50% of the  aggregate  unpaid
principal amount of the Loans.

         "Revolving  Credit  Period"  means the period  from and  including  the
Effective Date to but excluding the Termination Date.

         "Separation" has the meaning set forth in the Proxy Statement.

         "Significant  Subsidiary"  means any  Subsidiary  which  would meet the
definition  of  "significant  subsidiary"  contained  as of the date  hereof  in
Regulation S-X of the Securities and Exchange Commission.

         "Subsidiary"  means any corporation or other entity of which securities
or other ownership interests having ordinary voting power to elect a majority of
the board of directors or other persons  performing similar functions are at the
time directly or indirectly owned by the Company.

         "Super-Majority  Banks"  means at any time Banks having at least 85% of
the aggregate  amount of the Commitments or, if the Commitments  shall have been
terminated,  holding  Notes  evidencing  at least  85% of the  aggregate  unpaid
principal amount of the Loans.

         "Termination  Date" means,  with respect to each Bank,  May 7, 1999, or
such  later  date to which the  Termination  Date for such Bank  shall have been
extended  pursuant  to  Section  2.01(b),  or, if such day is not a  Euro-Dollar
Business Day, the next preceding Euro-Dollar Business Day.

         "Unfunded Liabilities" means, with respect to any Plan at any time, the
amount  (if any) by which (i) the value of all  benefit  liabilities  under such
Plan, determined on a plan termination basis using the assumptions prescribed by
the PBGC for  purposes of Section  4044 of ERISA,  exceeds  (ii) the fair market
value of all Plan assets allocable to such  liabilities  under Title IV of ERISA
(excluding any accrued but unpaid contributions),  all determined as of the then
most recent



<PAGE>



valuation date for such Plan, but only to the extent that such excess represents
a  potential  liability  of a member of the ERISA Group to the PBGC or any other
Person under Title IV of ERISA.

         "United  States"  means the United  States of  America,  including  the
States  and  the  District  of  Columbia,  but  excluding  its  territories  and
possessions.

         "Wholly-Owned   Consolidated   Subsidiary"   means   any   Consolidated
Subsidiary  all of the shares of capital stock or other  ownership  interests of
which  (except  directors'  qualifying  shares)  are at  the  time  directly  or
indirectly owned by the Company.

         Section 1.02.  Accounting  Terms and  Determinations.  Unless otherwise
specified  herein,  all accounting  terms used herein shall be interpreted,  all
accounting  determinations hereunder shall be made, and all financial statements
required  to be  delivered  hereunder  shall  be  prepared  in  accordance  with
generally accepted  accounting  principles as in effect from time to time in the
United States, applied on a basis consistent (except for changes concurred in by
the  Company's  independent  public  accountants)  with the most recent  audited
consolidated   financial   statements  of  the  Company  and  its   Consolidated
Subsidiaries  delivered to the Banks; provided that, if the Company notifies the
Agent that the Company  wishes to amend any  covenant in Article 5 to  eliminate
the effect of any change in such generally accepted accounting principles on the
operation  of such  covenant  (or if the Agent  notifies  the  Company  that the
Required Banks wish to amend Article 5 for such purpose),  then  compliance with
such covenant shall be determined on the basis of generally accepted  accounting
principles in effect in the United States immediately before the relevant change
in generally accepted accounting principles became effective,  until either such
notice is withdrawn or such covenant is amended in a manner  satisfactory to the
Company and the Required Banks.

         Section 1.03.  Types of Borrowings.  The term  "Borrowing"  denotes the
aggregation of Loans of one or more Banks to be made to the Borrower pursuant to
Article 2 on a single date,  all of which Loans are of the same type (subject to
Article 8) and,  except in the case of Domestic  Loans,  have the same  Interest
Period or initial  Interest  Period.  Borrowings  are classified for purposes of
this  Agreement  either by  reference  to the pricing of Loans  comprising  such
Borrowing  (e.g.,  a  "Euro-Dollar   Borrowing"  is  a  Borrowing  comprised  of
Euro-Dollar  Loans) or by reference to the  provisions  of Article 2 under which
participation  therein  is  determined  (i.e.,  a  "Committed  Borrowing"  is  a
Borrowing under Section 2.01(a) in which all Banks  participate in proportion to
their Commitments, while a "Money Market Borrowing" is a Borrowing under Section



<PAGE>



2.03 in which the Bank participants are determined on the basis of their bids in
accordance therewith).



                                    ARTICLE 2
                                   The Credits

         Section 2.01.  Commitments to Lend.

         (a) The  Commitments.  During the  Revolving  Credit  Period  each Bank
severally  agrees,  on the terms and conditions set forth in this Agreement,  to
make loans to the Borrower  pursuant to this subsection (a) from time to time in
amounts such that the aggregate principal amount of Committed Loans by such Bank
at any one time  outstanding  to the Borrower shall not exceed the amount of its
Commitment. Each Borrowing under this Section shall be in an aggregate principal
amount of $25,000,000 or any larger multiple of $5,000,000 (except that any such
Borrowing may be in the aggregate  amount  available in accordance  with Section
3.02(c)) and shall be made from the several Banks ratably in proportion to their
respective  Commitments.  Within the foregoing  limits,  the Borrower may borrow
under this subsection  (a),  repay, or to the extent  permitted by Section 2.11,
prepay Loans and reborrow at any time during the  Revolving  Credit Period under
this subsection (a). The Commitments shall terminate at the close of business on
the Termination Date.

         (b) Extension of  Commitments.  The  Commitments may be extended in the
manner  and amount set forth in this  subsection  (b),  for a period of 364 days
measured  from the  Termination  Date then in effect.  If the Company  wishes to
request an  extension  of each Bank's  Commitment,  it shall give notice to that
effect to the Agent not less than 45 days and not more than 60 days prior to the
Termination Date then in effect,  whereupon the Agent shall promptly notify each
of the Banks of such request.  Each Bank will use its best efforts to respond to
such  request,  whether  affirmatively  or  negatively,  as it may  elect in its
discretion,  within 30 days of such  notice to the Agent.  If any Bank shall not
have  responded  affirmatively  within  such 30-day  period,  such Bank shall be
deemed to have rejected the  Company's  proposal to extend its  Commitment,  and
only the Commitments of those Banks which have responded  affirmatively shall be
extended,  subject  to  receipt  by the Agent of  counterparts  of an  Extension
Agreement  in  substantially  the form of Exhibit H hereto  duly  completed  and
signed by the Borrower,  the Company,  the Agent and all of the Banks which have
responded  affirmatively.  The Agent shall provide to the Company, no later than
10 days prior to the Termination Date then in effect, a list of the Banks which



<PAGE>



have  responded  affirmatively.  The Extension  Agreement  shall be executed and
delivered no later than five days prior to the Termination  Date then in effect,
and no extension of the  Commitments  pursuant to this  subsection  (b) shall be
legally binding on any party hereto unless and until such Extension Agreement is
so executed and  delivered.  The Company and the Borrower may decline to execute
and deliver such  Extension  Agreement  if any Bank has  rejected the  Company's
proposal to extend its  Commitment  or has failed to execute  and  deliver  such
Extension  Agreement,  and will promptly notify the Agent and the Banks if it so
declines.

         (c)  Additional  Commitments.  At any time during the Revolving  Credit
Period  (unless  the  Commitments  shall have been  reduced  pursuant to Section
2.09(b)),  if no Default shall have occurred and be continuing at such time, the
Company may, if it so elects,  increase the aggregate amount of the Commitments,
either by  designating  a Person not  theretofore  a Bank and  acceptable to the
Agent to become a Bank or by  agreeing  with an  existing  Bank that such Bank's
Commitment shall be increased.  Upon execution and delivery by the Company,  the
Borrower and such Bank or other Person of an  instrument  of  assumption in form
and amount  satisfactory to the  Administrative  Agent, such existing Bank shall
have a Commitment  as therein set forth or such other Person shall become a Bank
with a Commitment as therein set forth and all the rights and  obligations  of a
Bank with such a  Commitment  hereunder;  provided  that (i) the  Company  shall
provide prompt notice of such increase to the Agent, which shall promptly notify
the other  Banks,  (ii) the  aggregate  amount of each  such  increase  which is
effective  on any day shall be at least  $50,000,000  and  (iii)  the  aggregate
amount  of the  Commitments  shall at no time  exceed  $3,750,000,000.  Upon any
increase in the aggregate amount of the Commitments  pursuant to this subsection
(c),  within five  Domestic  Business Days in the case of each Group of Domestic
Loans  outstanding,  and at the end of the then  current  Interest  Period  with
respect thereto in the case of each Group of Euro-Dollar Loans then outstanding,
the  Borrower  shall prepay such Group in its  entirety,  and, to the extent the
Borrower  elects to do so and subject to the conditions  specified in Article 3,
the Borrower  shall  reborrow  Committed  Loans from the Banks in  proportion to
their respective  Commitments  after giving effect to such increase,  until such
time  as all  outstanding  Committed  Loans  are  held  by  the  Banks  in  such
proportion.

          (d)  Term  Loans.  Each  Bank  severally  agrees,  on  the  terms  and
conditions  set forth in this  Agreement,  to make a loan to the Borrower on the
Termination  Date in amounts such that the  aggregate  principal  amount of such
Bank's  outstanding  Loans  to the  Borrower  at the  close of  business  on the
Termination  Date shall not exceed its  Commitment.  Each  Borrowing  under this
subsection  (d) shall be made from the several  Banks  ratably in  proportion to
their respective Commitments. Amounts prepaid pursuant to Section 2.11 shall not
be



<PAGE>



reborrowed.  If less  than  all the  Banks  shall  have  agreed  to  extend  the
Termination  Date pursuant to subsection (b) above, but the Termination Date for
those Banks which have not so agreed has not yet occurred (the "Earlier  Date"),
and the Borrower has requested a Borrowing pursuant to this subsection (d), then
such Borrowing shall be made on the Earlier Date.

         Section 2.02.  Notice of Committed  Borrowing.  The Borrower shall give
the Agent notice (a "Notice of Committed  Borrowing")  not later than 10:30 A.M.
(New York City  time) on (x) the date of each  Domestic  Borrowing,  and (y) the
third Euro-Dollar Business Day before each Euro-Dollar Borrowing, specifying:

                  (i) the date of such  Borrowing,  which  shall  be a  Domestic
         Business  Day in the  case of a  Domestic  Borrowing  or a  Euro-Dollar
         Business Day in the case of a Euro-Dollar Borrowing,

                  (ii)  the aggregate amount of such Borrowing,

                  (iii)  whether  the  Loans   comprising  such  Borrowing  bear
         interest initially at the Base Rate or at a Euro-Dollar Rate, and

                  (iv) in the case of a Euro-Dollar  Borrowing,  the duration of
         the  initial  Interest  Period  applicable  thereto,   subject  to  the
         provisions of the definition of Interest Period.

         Section 2.03. Money Market Borrowings.  (a) The Money Market Option. In
addition to Committed  Borrowings pursuant to Section 2.01(a), the Borrower may,
as set forth in this  Section,  request the Banks  during the  Revolving  Credit
Period to make offers to make Money Market Loans to the Borrower. The Banks may,
but shall have no  obligation  to, make such offers and the  Borrower  may,  but
shall have no  obligation  to, accept any such offers in the manner set forth in
this Section.

         (b) Money Market  Quote  Request.  When the Borrower  wishes to request
offers to make Money Market Loans under this Section,  it shall  transmit to the
Agent  by  telex  or  facsimile   transmission  a  Money  Market  Quote  Request
substantially in the form of Exhibit B hereto so as to be received no later than
9:00 A.M. (New York City time) on (x) the fourth Euro-Dollar  Business Day prior
to the date of Borrowing proposed therein, in the case of a LIBOR Auction or (y)
the Domestic Business Day prior to the date of Borrowing  proposed  therein,  in
the case of an Absolute  Rate Auction  (or, in either  case,  such other time or
date as the  Company  and the Agent  shall have  mutually  agreed and shall have
notified to the Banks not later than the date of the Money Market Quote  Request
for the



<PAGE>



first  LIBOR  Auction or  Absolute  Rate  Auction for which such change is to be
effective) specifying:

          (i) the  proposed  date of  Borrowing,  which  shall be a  Euro-Dollar
         Business Day in the case of a LIBOR Auction or a Domestic  Business Day
         in the case of an Absolute Rate Auction,

         (ii) the aggregate amount of such Borrowing, which shall be $25,000,000
         or a larger multiple of $5,000,000,

        (iii) the duration of the Interest Period applicable thereto, subject to
         the provisions of the definition of Interest Period, and

         (iv) whether the Money Market Quotes requested are to set forth a Money
         Market Margin or a Money Market Absolute Rate.

The  Borrower  may request  offers to make Money  Market Loans for more than one
Interest  Period in a single Money Market Quote  Request.  No Money Market Quote
Request  shall be given  within five  Euro-Dollar  Business  Days (or such other
number of days as the Company and the Agent may agree) of any other Money Market
Quote Request.

         (c)  Invitation  for Money Market  Quotes.  Promptly  upon receipt of a
Money  Market  Quote  Request,  the  Agent  shall  send to the Banks by telex or
facsimile  transmission an Invitation for Money Market Quotes  substantially  in
the form of  Exhibit C hereto,  which  shall  constitute  an  invitation  by the
Borrower to each Bank to submit Money Market  Quotes  offering to make the Money
Market Loans to which such Money Market Quote Request relates in accordance with
this Section.

         (d) Submission  and Contents of Money Market Quotes.  (i) Each Bank may
submit a Money Market Quote  containing  an offer or offers to make Money Market
Loans in response to any Invitation  for Money Market Quotes.  Each Money Market
Quote must  comply  with the  requirements  of this  subsection  (d) and must be
submitted  to the  Agent by  telex  or  facsimile  transmission  at its  offices
specified  in or  pursuant to Section  10.01 not later than (x) 10:30 A.M.  (New
York City time) on the third Euro-Dollar Business Day prior to the proposed date
of  Borrowing,  in the case of a LIBOR  Auction or (y) 9:15 A.M.  (New York City
time) on the proposed date of Borrowing, in the case of an Absolute Rate Auction
(or, in either case,  such other time or date as the Company and the Agent shall
have  mutually  agreed and shall have  notified  to the Banks not later than the
date of the Money Market Quote  Request for the first LIBOR  Auction or Absolute
Rate Auction for which such change is to be effective);



<PAGE>



provided  that Money Market  Quotes  submitted by the Agent (or any affiliate of
the  Agent)  in the  capacity  of a Bank  may be  submitted,  and  may  only  be
submitted,  if the Agent or such affiliate notifies the Borrower of the terms of
the offer or offers  contained  therein not later than (x) one hour prior to the
deadline for the other Banks,  in the case of a LIBOR  Auction or (y) 15 minutes
prior to the  deadline  for the other  Banks,  in the case of an  Absolute  Rate
Auction.  Subject to Articles 3 and 6, any Money  Market  Quote so made shall be
irrevocable  except  with  the  written  consent  of  the  Agent  given  on  the
instructions of the Borrower.

         (ii) Each Money  Market  Quote  shall be in  substantially  the form of
         Exhibit D hereto and shall in any case specify:

                       (A)          the proposed date of Borrowing,

                       (B) the  principal  amount of the Money  Market  Loan for
                  which each such offer is being made,  which  principal  amount
                  (w) may be  greater  than or less than the  Commitment  of the
                  quoting Bank,  (x) must be $5,000,000 or a larger  multiple of
                  $1,000,000,  (y) may not exceed the principal  amount of Money
                  Market Loans for which offers were  requested,  and (z) may be
                  subject to an aggregate  limitation as to the principal amount
                  of Money  Market  Loans for which  offers  being  made by such
                  quoting Bank may be accepted,

                       (C) in the case of a LIBOR  Auction,  the margin above or
                  below the applicable London Interbank Offered Rate (the "Money
                  Market  Margin")  offered  for each such  Money  Market  Loan,
                  expressed as a percentage (specified to the nearest 1/10,000th
                  of 1%) to be added to or subtracted from such base rate,

                       (D) in the case of an Absolute Rate Auction,  the rate of
                  interest per annum (specified to the nearest 1/10,000th of 1%)
                  (the "Money Market Absolute Rate") offered for each such Money
                  Market Loan, and

                       (E) the identity of the quoting Bank.

A Money  Market  Quote may set forth up to five  separate  offers by the quoting
Bank with respect to each Interest  Period  specified in the related  Invitation
for Money Market Quotes.

        (iii) Any Money Market Quote shall be disregarded if it:




<PAGE>



                       (A) is not  substantially  in  conformity  with Exhibit D
                  hereto or does not specify all of the information  required by
                  subsection (d)(ii);

                       (B) contains qualifying, conditional or similar language;

                       (C) proposes terms other than or in addition to those set
                  forth in the applicable Invitation for Money Market Quotes; or

                       (D)  arrives  after  the  time set  forth  in  subsection
(d)(i).

         (e) Notice to Borrower.  The Agent shall  promptly (and in any event no
later than 11:00 A.M. (New York time) on (i) the third Euro-Dollar  Business Day
prior to the proposed date of Borrowing,  in the case of a LIBOR Auction or (ii)
the proposed date of Borrowing,  in the case of an Absolute Rate Auction) notify
the Borrower of the terms (x) of any Money Market Quote submitted by a Bank that
is in  accordance  with  subsection  (d) and (y) of any Money  Market Quote that
amends, modifies or is otherwise inconsistent with a previous Money Market Quote
submitted by such Bank with respect to the same Money Market Quote Request.  Any
such subsequent Money Market Quote shall be disregarded by the Agent unless such
subsequent Money Market Quote is submitted solely to correct a manifest error in
such former Money Market Quote. The Agent's notice to the Borrower shall specify
(A) the aggregate  principal  amount of Money Market Loans for which offers have
been  received for each  Interest  Period  specified in the related Money Market
Quote Request,  (B) the respective principal amounts and Money Market Margins or
Money  Market  Absolute  Rates,  as the  case  may  be,  so  offered  and (C) if
applicable,  limitations on the aggregate principal amount of Money Market Loans
for which offers in any single Money Market Quote may be accepted.

         (f) Acceptance  and Notice by Borrower.  Not later than 11:15 A.M. (New
York City time) on (x) the third Euro-Dollar  Business Day prior to the proposed
date of  Borrowing,  in the case of a LIBOR  Auction or (y) the proposed date of
Borrowing,  in the case of an Absolute  Rate Auction  (or, in either case,  such
other time or date as the Company and the Agent shall have  mutually  agreed and
shall have  notified  to the Banks not later  than the date of the Money  Market
Quote  Request for the first LIBOR  Auction or Absolute  Rate  Auction for which
such change is to be  effective),  the  Borrower  shall  notify the Agent of its
acceptance  or  non-acceptance  of the  offers so  notified  to it  pursuant  to
subsection  (e).  In the case of  acceptance,  such  notice (a  "Notice of Money
Market  Borrowing")  shall specify the aggregate  principal amount of offers for
each Interest Period that are accepted. The Borrower may accept any Money Market
Quote in whole or in part; provided that:



<PAGE>



          (i) the aggregate  principal amount of each Money Market Borrowing may
         not exceed the applicable  amount set forth in the related Money Market
         Quote Request,

         (ii) the  principal  amount  of each  Money  Market  Borrowing  must be
         $25,000,000 or a larger multiple of $5,000,000,

        (iii)  acceptance  of offers may only be made on the basis of  ascending
         Money Market Margins or Money Market  Absolute  Rates,  as the case may
         be, and

         (iv) the  Borrower  may not  accept  any  offer  that is  described  in
         subsection  (d)(iii)  or  that  otherwise  fails  to  comply  with  the
         requirements of this Agreement.

         (g)  Allocation by Agent.  If offers are made by two or more Banks with
the same Money Market Margins or Money Market  Absolute  Rates,  as the case may
be, for a greater aggregate principal amount than the amount in respect of which
such offers are accepted for the related Interest  Period,  the principal amount
of Money  Market  Loans in respect of which such  offers are  accepted  shall be
allocated by the Agent among such Banks as nearly as possible  (in  multiples of
$1,000,000,  as the Agent may deem  appropriate)  in proportion to the aggregate
principal amounts of such offers.  Determinations by the Agent of the amounts of
Money Market Loans shall be conclusive in the absence of manifest error.

         Section 2.04. Notice to Banks;  Funding of Loans. (a) Upon receipt of a
Notice of Borrowing,  the Agent shall promptly  notify each Bank of the contents
thereof and of such Bank's share (if any) of such  Borrowing  and such Notice of
Borrowing shall not thereafter be revocable by the Borrower.

          (b) Not later than 1:00 P.M.  (New York City time) on the date of each
Borrowing,  each  Bank  participating  therein  shall  (except  as  provided  in
subsection (c) of this Section) make available its share of such  Borrowing,  in
Federal or other funds  immediately  available in New York City, to the Agent at
its  address  referred  to in Section  10.01.  Unless any  applicable  condition
specified in Article 3 has not been  satisfied,  as  determined  by the Agent in
accordance  with  Article 3, the Agent will make the funds so received  from the
Banks immediately available to the Borrower at the Agent's aforesaid address.

          (c) If any Bank makes a new Loan hereunder to the Borrower on a day on
which the Borrower is to repay all or any part of an outstanding  Loan from such
Bank,  such Bank shall apply the proceeds of its new Loan to make such repayment
and only an amount equal to the difference (if any) between the



<PAGE>



amount being  borrowed by the Borrower and the amount being repaid shall be made
available  by such  Bank to the  Agent as  provided  in  subsection  (b) of this
Section,  or remitted by the Borrower to the Agent as provided in Section  2.12,
as the case may be.

          (d) Unless the Agent shall have  received  notice from a Bank prior to
the date of any Borrowing  (or, in the case of a Base Rate  Borrowing,  prior to
Noon (New York City time) on the date of such Borrowing) that such Bank will not
make available to the Agent such Bank's share of such  Borrowing,  the Agent may
assume that such Bank has made such share  available to the Agent on the date of
such Borrowing in accordance  with  subsections (b) and (c) of this Section 2.04
and the Agent may, in  reliance  upon such  assumption,  make  available  to the
Borrower  on such date a  corresponding  amount.  If and to the extent that such
Bank shall not have so made such share available to the Agent, such Bank and the
Borrower  severally  agree  to repay  to the  Agent  forthwith  on  demand  such
corresponding  amount together with interest thereon, for each day from the date
such  amount is made  available  to the  Borrower  until the date such amount is
repaid to the Agent, at (i) in the case of the Borrower,  a rate per annum equal
to the higher of the Federal Funds Rate and the interest rate applicable thereto
pursuant to Section  2.07 and (ii) in the case of such Bank,  the Federal  Funds
Rate.  If such Bank shall  repay to the Agent such  corresponding  amount,  such
amount so repaid shall  constitute  such Bank's Loan included in such  Borrowing
for  purposes  of  this  Agreement.  If the  Borrower  shall  have  repaid  such
corresponding  amount of such Bank,  such Bank shall  reimburse the Borrower for
any loss on account thereof incurred by the Borrower.

         Section 2.05.  Notes.  (a) The Loans of each Bank to the Borrower shall
be evidenced by a single Note of the Borrower  payable to the order of such Bank
for the account of its  Applicable  Lending  Office,  unless such Bank  requests
otherwise,  in an amount equal to the aggregate  unpaid principal amount of such
Bank's Loans to the Borrower.

          (b) Each Bank may, by notice to the  Borrower  and the Agent,  request
that its Loans of a  particular  type to the Borrower be evidenced by a separate
Note of the Borrower in an amount equal to the aggregate unpaid principal amount
of such Loans.  Each such Note shall be in  substantially  the form of Exhibit A
hereto with  appropriate  modifications  to reflect  the fact that it  evidences
solely Loans of the relevant type.  Each reference in this Agreement to a "Note"
or the  "Notes" of such Bank shall be deemed to refer to and  include any or all
of such Notes, as the context may require.

          (c) Upon  receipt of each Bank's Note  pursuant to Section  3.01,  the
Agent shall forward such Note to such Bank. Each Bank shall record the date,


<PAGE>



amount and type of each Loan made by it to the  Borrower and the date and amount
of each payment of principal made with respect thereto, and may, if such Bank so
elects  in  connection  with  any  transfer  or  enforcement  of its Note of the
Borrower,  endorse on the schedule forming a part thereof appropriate  notations
to evidence  the  foregoing  information  with  respect to each such Loan to the
Borrower  then  outstanding;  provided  that the failure of any Bank to make any
such recordation or endorsement shall not affect the obligations of the Borrower
hereunder or under the Notes. Each Bank is hereby irrevocably  authorized by the
Borrower  so to endorse its Notes and to attach to and make a part of any Note a
continuation of any such schedule as and when required.

         Section  2.06.  Maturity of Loans.  Each Loan by a Bank included in any
Borrowing  made  pursuant to Section  2.01(a)  shall  mature,  and the principal
amount thereof shall be due and payable, together with accrued interest thereon,
on the Termination  Date for such Bank. Each Loan included in any Borrowing made
pursuant to Section 2.01(d) shall mature, and the principal amount thereof shall
be due and  payable,  together  with  accrued  interest  thereon,  on the  first
anniversary of the  Termination  Date on which such Borrowing is made. Each Loan
included in any Borrowing  made  pursuant to Section 2.03 shall mature,  and the
principal  amount  thereof  shall  be due and  payable,  together  with  accrued
interest thereon, on the last day of the Interest Period applicable thereto.

         Section  2.07.  Interest  Rates.  (a) Each  Domestic  Loan  shall  bear
interest on the outstanding principal amount thereof, for each day from the date
such Loan is made until it becomes  due,  at a rate per annum  equal to the Base
Rate for such day.  Such interest  shall be payable  quarterly in arrears on the
last day of each calendar  quarter and, with respect to the principal  amount of
any Domestic Loan converted to a Euro-Dollar  Loan, on each date a Domestic Loan
is so converted. Any overdue principal of or interest on any Domestic Loan shall
bear  interest,  payable on demand,  for each day until paid at a rate per annum
equal to the sum of 2% plus the rate otherwise  applicable to Domestic Loans for
such day.

          (b) Each  Euro-Dollar  Loan shall  bear  interest  on the  outstanding
principal amount thereof,  for the Interest Period applicable thereto, at a rate
per  annum  equal  to the sum of the  Euro-Dollar  Margin  plus  the  applicable
Adjusted London Interbank  Offered Rate. Such interest shall be payable for each
Interest  Period on the last day thereof and, if such Interest  Period is longer
than three months, at intervals of three months after the first day thereof.

         The "Adjusted London Interbank Offered Rate" applicable to any Interest
Period means a rate per annum equal to the quotient obtained (rounded upward, if
necessary, to the next higher 1/100 of 1%) by dividing (i) the applicable London
Interbank Offered Rate by (ii) 1.00 minus the Euro-Dollar Reserve Percentage.



<PAGE>



         "Euro-Dollar  Margin"  means a rate per annum  determined in accordance
with the Pricing Schedule.

         The "London  Interbank  Offered Rate" applicable to any Interest Period
means the average (rounded upward, if necessary,  to the next higher 1/16 of 1%)
of the  respective  rates per annum at which  deposits in dollars are offered to
each of the  Euro-Dollar  Reference  Banks in the  London  interbank  market  at
approximately 11:00 A.M. (London time) two Euro-Dollar  Business Days before the
first  day of such  Interest  Period  in an  amount  approximately  equal to the
principal amount of the Euro-Dollar  Loan of such Euro-Dollar  Reference Bank to
which such  Interest  Period is to apply and for a period of time  comparable to
such Interest Period.

         "Euro-Dollar  Reserve  Percentage"  means  for any day that  percentage
(expressed  as a decimal)  which is in effect on such day, as  prescribed by the
Board  of  Governors  of the  Federal  Reserve  System  (or any  successor)  for
determining  the maximum  reserve  requirement  for a member bank of the Federal
Reserve System in New York City with deposits  exceeding five billion dollars in
respect of  "Eurocurrency  liabilities"  (or in respect of any other category of
liabilities  which includes  deposits by reference to which the interest rate on
Euro-Dollar Loans is determined or any category of extensions of credit or other
assets which includes loans by a non-United  States office of any Bank to United
States residents).  The Adjusted London Interbank Offered Rate shall be adjusted
automatically  on and as of the effective date of any change in the  Euro-Dollar
Reserve Percentage.

          (c) Any overdue principal of or interest on any Euro-Dollar Loan shall
bear  interest,  payable on  demand,  for each day from and  including  the date
payment thereof was due to but excluding the date of actual  payment,  at a rate
per annum equal to the sum of 2% plus the higher of (i) the  Euro-Dollar  Margin
plus the quotient  obtained  (rounded upward,  if necessary,  to the next higher
1/100 of 1%) by dividing (x) the average (rounded upward,  if necessary,  to the
next higher 1/16 of 1%) of the respective  rates per annum at which one day (or,
if such amount due remains  unpaid more than three  Euro-Dollar  Business  Days,
then for such other  period of time not longer  than six months as the Agent may
select)  deposits in dollars in an amount  approximately  equal to such  overdue
payment  due to each of the  Euro-Dollar  Reference  Banks are  offered  to such
Euro-Dollar  Reference  Bank in the London  interbank  market for the applicable
period  determined as provided above by (y) 1.00 minus the  Euro-Dollar  Reserve
Percentage (or, if the  circumstances  described in clause (a) or (b) of Section
8.01  shall  exist,  at a rate  per  annum  equal to the sum of 2% plus the rate
applicable to Domestic  Loans for such day) and (ii) the sum of the  Euro-Dollar
Margin plus the


<PAGE>



Adjusted London Interbank  Offered Rate applicable to such Loan at the date such
payment was due.

          (d) Subject to Section  8.01,  each Money Market LIBOR Loan shall bear
interest on the outstanding  principal  amount thereof,  for the Interest Period
applicable thereto, at a rate per annum equal to the sum of the London Interbank
Offered Rate for such Interest  Period  (determined  in accordance  with Section
2.07 as if the related Money Market LIBOR Borrowing were a Committed Euro-Dollar
Borrowing)  plus (or minus) the Money  Market  Margin  quoted by the Bank making
such Loan in accordance  with Section 2.03. Each Money Market Absolute Rate Loan
shall  bear  interest  on the  outstanding  principal  amount  thereof,  for the
Interest  Period  applicable  thereto,  at a rate per  annum  equal to the Money
Market  Absolute  Rate quoted by the Bank making  such Loan in  accordance  with
Section  2.03.  Such interest  shall be payable for each Interest  Period on the
last day thereof and, if such Interest  Period is longer than three  months,  at
intervals of three months after the first day thereof.  Any overdue principal of
or interest on any Money Market Loan shall bear interest, payable on demand, for
each day  until  paid at a rate per  annum  equal to the sum of 2% plus the Base
Rate for such day.

          (e) The Agent shall  determine  each interest  rate  applicable to the
Loans  hereunder.  The Agent shall give prompt  notice to the  Borrower  and the
participating   Banks  of  each  rate  of  interest  so   determined,   and  its
determination thereof shall be conclusive in the absence of manifest error.

          (f) Each Euro-Dollar  Reference Bank agrees to use its best efforts to
furnish  quotations  to the Agent as  contemplated  hereby.  If any  Euro-Dollar
Reference Bank does not furnish a timely  quotation,  the Agent shall  determine
the relevant interest rate on the basis of the quotation or quotations furnished
by the  remaining  Euro-Dollar  Reference  Bank  or  Banks  or,  if none of such
quotations is available on a timely basis,  the provisions of Section 8.01 shall
apply.

         Section 2.08. Facility Fees. The Company shall pay to the Agent for the
account of the Banks ratably a facility fee at the Facility Fee Rate (determined
daily in accordance with the Pricing  Schedule).  Such facility fee shall accrue
(i) from and including the Effective Date to but excluding the Termination  Date
(or earlier date of termination of the  Commitments in their  entirety),  on the
daily average  aggregate amount of the Commitments  (whether used or unused) and
(ii) from and including the Termination  Date (or earlier date of termination of
the  Commitments in their entirety) to but excluding the date the Loans shall be
repaid in their entirety,  on the daily average aggregate  outstanding principal
amount of the Loans. Accrued facility fees shall be payable quarterly in arrears
on the last day of each calendar quarter and upon the date of termination of the


<PAGE>



Commitments in their entirety (and, if later, the date the Loans shall be repaid
in their entirety).

         "Facility  Fee Rate" means a rate per annum  determined  in  accordance
with the Pricing Schedule.

         Section 2.09.  Termination or Reduction of Commitments.  (a) During the
Revolving Credit Period,  the Company may, upon at least three Domestic Business
Days' notice to the Agent,  (i)  terminate  the  Commitments  at any time, if no
Loans are  outstanding  at such time or (ii) ratably reduce from time to time by
an aggregate  amount of  $25,000,000 or any larger  multiple of $5,000,000,  the
aggregate  amount of the  Commitments  in excess  of the  aggregate  outstanding
principal amount of the Loans.

          (b) If the Separation has not been  consummated on or before  November
8, 1998, the Commitments  shall be ratably reduced by 50% on the next succeeding
Domestic Business Day.

         Section 2.10. Method of Electing Interest Rates. (a) The Loans included
in each Committed  Borrowing  shall bear interest  initially at the type of rate
specified  by the  Borrower in the  applicable  Notice of  Committed  Borrowing.
Thereafter,  the  Borrower may from time to time elect to change or continue the
type of interest rate borne by each Group of Loans  (subject in each case to the
provisions of Article 8), as follows:

          (i) if such  Loans  are  Domestic  Loans,  the  Borrower  may elect to
         convert such Loans to Euro-Dollar Loans as of any Euro-Dollar  Business
         Day;

         (ii) if such Loans are  Euro-Dollar  Loans,  the  Borrower may elect to
         convert such Loans to Domestic Loans or elect to continue such Loans as
         Euro-Dollar  Loans  for an  additional  Interest  Period,  in each case
         effective  on  the  last  day  of  the  then  current  Interest  Period
         applicable to such Loans.

Each such  election  shall be made by delivering a notice (a "Notice of Interest
Rate Election") to the Agent at least three Euro-Dollar Business Days before the
conversion or continuation selected in such notice is to be effective.  A Notice
of Interest Rate  Election  may, if it so specifies,  apply to only a portion of
the aggregate principal amount of the relevant Group of Loans; provided that (i)
such portion is allocated ratably among the Loans comprising such Group and (ii)
the portion to which such Notice applies,  and the remaining portion to which it
does not apply, are each $25,000,000 or any larger multiple of $5,000,000.



<PAGE>



          (b)   Each Notice of Interest Rate Election shall specify:

          (i)   the Group of Loans (or portion thereof) to which such notice
         applies;

         (ii) the date on which the conversion or continuation  selected in such
         notice is to be  effective,  which  shall  comply  with the  applicable
         clause of subsection (a) above;

        (iii) if the Loans  comprising  such Group are to be converted,  the new
         type of Loans  and,  if such  new  Loans  are  Euro-Dollar  Loans,  the
         duration of the initial Interest Period applicable thereto; and

         (iv) if such  Loans are to be  continued  as  Euro-Dollar  Loans for an
         additional  Interest Period,  the duration of such additional  Interest
         Period.

Each  Interest  Period  specified in a Notice of Interest  Rate  Election  shall
comply with the provisions of the definition of Interest Period.

          (c) Upon  receipt  of a Notice  of  Interest  Rate  Election  from the
Borrower  pursuant to subsection (a) above, the Agent shall promptly notify each
Bank of the contents  thereof and such notice shall not  thereafter be revocable
by such  Borrower.  If the Borrower fails to deliver a timely Notice of Interest
Rate Election to the Agent for any Group of Euro-Dollar  Loans, such Loans shall
be converted  into Domestic  Loans on the last day of the then current  Interest
Period applicable thereto.

         Section 2.11.   Prepayments.

          (a) Subject in the case of any Euro-Dollar  Loans to Section 2.13, the
Borrower  may,  upon at least one Domestic  Business  Day's notice to the Agent,
prepay  the  Group of  Domestic  Loans (or any Money  Market  Borrowing  bearing
interest  at the  Base  Rate  pursuant  to  Section  8.01(a)),  or,  upon  three
Euro-Dollar  Business Days' notice to the Agent, prepay any Group of Euro-Dollar
Loans,  in each  case in  whole  at any  time,  or from  time to time in part in
amounts aggregating $25,000,000 or any larger multiple of $5,000,000,  by paying
the principal amount to be prepaid together with accrued interest thereon to the
date of prepayment.

          (b) Except as provided in subsection  (a) above,  the Borrower may not
prepay all or any portion of the principal amount of any Money Market Loan prior
to the maturity thereof.



<PAGE>



          (c) Upon receipt of a notice of  prepayment  pursuant to this Section,
the Agent shall  promptly  notify each Bank of the contents  thereof and of such
Bank's  ratable  share (if any) of such  prepayment  and such  notice  shall not
thereafter be revocable by the Borrower.  Each such prepayment  shall be applied
to prepay  ratably the Loans of the several Banks included in the relevant Group
or Borrowing.

          (d) On the date of any  reduction of  Commitments  pursuant to Section
2.09(b),  the Borrower shall repay such principal  amount (together with accrued
interest  thereon) of  outstanding  Loans,  if any, as may be  necessary so that
after such  repayment (i) the  aggregate  outstanding  principal  amount of each
Bank's  Committed Loans does not exceed the amount of such Bank's  Commitment as
then reduced,  and (ii) the aggregate unpaid principal amount of all outstanding
Loans does not exceed the aggregate  amount of the  Commitments as then reduced.
Any such prepayment  shall be made in accordance with all applicable  provisions
of this Agreement  (including without limitation  subsections (a) (other than as
to amount), (b) and (c) of this Section 2.11).

         Section 2.12. General Provisions as to Payments. (a) The Borrower shall
make each  payment of  principal  of, and interest on, the Loans and of fees and
other amounts payable hereunder,  not later than 12:00 Noon (New York City time)
on the date when due, in Federal or other  funds  immediately  available  in New
York City, without off set or counterclaim, to the Agent at its address referred
to in Section 10.01. The Agent will promptly distribute to each Bank its ratable
share of each such  payment  received by the Agent for the account of the Banks.
Whenever any payment of principal  of, or interest on, the Domestic  Loans or of
fees or other  amounts  payable  hereunder  shall be due on a day which is not a
Domestic  Business  Day, the date for payment  thereof  shall be extended to the
next succeeding  Domestic Business Day. Whenever any payment of principal of, or
interest  on,  the  Euro-Dollar  Loans  shall  be  due on a day  which  is not a
Euro-Dollar  Business Day, the date for payment thereof shall be extended to the
next succeeding  Euro-Dollar  Business Day unless such Euro-Dollar  Business Day
falls in another  calendar  month,  in which case the date for  payment  thereof
shall be the next preceding  Euro-Dollar  Business Day.  Whenever any payment of
principal of, or interest on, the Money Market Loans shall be due on a day which
is not a  Euro-Dollar  Business  Day,  the date  for  payment  thereof  shall be
extended to the next  succeeding  Euro-Dollar  Business Day. If the date for any
payment of  principal is extended by  operation  of law or  otherwise,  interest
thereon shall be payable for such extended time.

          (b) Unless the Agent  shall have  received  notice  from the  Borrower
prior to the date on which any  payment  is due from the  Borrower  to the Banks
hereunder that the Borrower will not make such payment in full, the Agent may


<PAGE>



assume that the Borrower has made such payment in full to the Agent on such date
and the Agent may, in reliance upon such assumption,  cause to be distributed to
each Bank on such due date an amount equal to the amount then due such Bank.  If
and to the extent that the Borrower  shall not have so made such  payment,  each
Bank shall repay to the Agent  forthwith  on demand such amount  distributed  to
such Bank together with interest thereon, for each day from the date such amount
is  distributed  to such Bank until the date such Bank repays such amount to the
Agent, at the Federal Funds Rate.

         Section  2.13.  Funding  Losses.  If the Borrower  makes any payment of
principal  with  respect  to any  Fixed  Rate  Loan or any  Fixed  Rate  Loan is
converted to a Domestic Loan (pursuant to Article 2, 6 or 8 or otherwise) on any
day other than the last day of an Interest  Period  applicable  thereto,  or the
last day of an applicable  period fixed pursuant to Section  2.07(c),  or if the
Borrower fails to borrow, convert, continue or prepay any Fixed Rate Loans after
notice has been given to any Bank in accordance with Section 2.04(a), 2.10(c) or
2.11(c),  the Company shall  reimburse each Bank within 15 days after demand for
any resulting  loss or expense  incurred by it (or by an existing or prospective
Participant  in the  related  Loan),  including  (without  limitation)  any loss
incurred in obtaining, liquidating or employing deposits from third parties, but
excluding  loss of margin for the period after any such payment or conversion or
failure to borrow or prepay, provided that such Bank shall have delivered to the
Company  a  certificate  as to  the  amount  of  such  loss  or  expense,  which
certificate shall be conclusive in the absence of manifest error.

         Section 2.14.  Computation of Interest and Fees.  Interest based on the
Prime Rate  hereunder  shall be  computed on the basis of a year of 365 days (or
366  days in a leap  year)  and  paid  for the  actual  number  of days  elapsed
(including  the first day but  excluding the last day).  All other  interest and
fees hereunder shall be computed on the basis of a year of 360 days and paid for
the actual  number of days elapsed  (including  the first day but  excluding the
last day).

         Section  2.15.  Change of Control.  If a Change of Control shall occur,
the Company will, within ten days after the occurrence  thereof,  give each Bank
notice thereof,  which notice shall describe in reasonable details the facts and
circumstances giving rise thereto and shall specify an Optional Termination Date
for purposes of this Section (the "Optional  Termination Date") which date shall
not be less than 30 nor more than 60 days  after the date of such  notice.  Each
Bank may,  by  notice to the  Company  and the Agent  given not less than  three
Domestic  Business Days prior to the Optional  Termination  Date,  terminate its
Commitment (if any),  which shall thereupon be terminated,  and declare the Note
held by it  (together  with  accrued  interest  thereon)  and any other  amounts
payable  hereunder  for its account to be, and such Note and such other  amounts
shall



<PAGE>



thereupon become, due and payable without presentment,  demand, protest or other
notice  of any kind,  all of which are  hereby  waived  by the  Company  and the
Borrower, in each case effective on the Optional Termination Date.

         A "Change  of  Control"  shall  occur if any person or group of persons
(within the meaning of Section 13 or 14 of the Securities  Exchange Act of 1934,
as amended) shall have acquired beneficial ownership (within the meaning of Rule
13d-3  promulgated by the Securities and Exchange  Commission under said Act) of
30% or more of the outstanding shares of common stock of the Company; or, during
any period of twelve consecutive calendar months, individuals who were directors
of the  Company on the first day of such  period  shall  cease to  constitute  a
majority of the board of  directors  of the Company.  The  Separation  shall not
constitute a Change of Control.



                                    ARTICLE 3
                                   Conditions

         Section 3.01.  Closing.  The closing hereunder shall occur upon receipt
by the Agent of the following (in the case of any document, dated the Closing
Date unless otherwise indicated):

          (a) a duly  executed Note of the Borrower for the account of each Bank
dated on or before the Closing Date  complying  with the  provisions  of Section
2.05;

          (b) an opinion of Thomas O. McGimpsey,  Esq.,  counsel for the Company
and the  Borrower,  substantially  in the form of Exhibit E hereto and  covering
such additional matters relating to the transactions  contemplated hereby as the
Required Banks may reasonably request;

          (c) an opinion  of Davis  Polk &  Wardwell,  special  counsel  for the
Agent,  substantially  in the  form  of  Exhibit  F  hereto  and  covering  such
additional  matters  relating  to the  transactions  contemplated  hereby as the
Required Banks may reasonably request;

          (d) evidence  satisfactory to the Agent that the commitments under the
Existing  Credit  Agreements  have been  terminated  and that the  principal and
interest on all loans and accrued fees outstanding  thereunder have been paid in
full;




<PAGE>



          (e) evidence  satisfactory to the Agent of the payment of all fees and
other amounts  payable to the Agent for the account of the Banks or the Agent on
or prior to the Closing Date, including,  to the extent invoiced,  reimbursement
of all out-of-pocket  expenses  (including,  without limitation,  legal fees and
expenses)  required  to be  reimbursed  or paid by the  Borrower  or the Company
hereunder; and

          (f) all documents  the Agent may  reasonably  request  relating to the
existence of the Company and the Borrower,  the corporate  authority for and the
validity of this Agreement and the Notes, and any other matters relevant hereto,
all in form and substance satisfactory to the Agent.

The Agent shall  promptly  notify the Company and the Banks of the Closing Date,
and such notice shall be conclusive and binding on all parties hereto.

         Section 3.02.  All Borrowings. The obligation of any Bank to make a
Loan on the occasion of any Borrowing is subject to the satisfaction of the
following conditions:

          (a) the fact that the Closing Date shall have  occurred on or prior to
         May 30, 1998;

          (b)  receipt  by the Agent of a Notice of  Borrowing  as  required  by
         Section 2.02 or 2.03, as the case may be;

          (c) the fact that,  immediately  before and after such Borrowing,  the
         aggregate outstanding principal amount of the Loans will not exceed the
         aggregate amount of the Commitments;

          (d) the fact that,  immediately  before and after such  Borrowing,  no
         Default shall have occurred and be continuing; and

          (e) the fact that the representations and warranties contained in this
         Agreement  shall  be  true  on and as of the  date  of  such  Borrowing
         (except, in the case of the representations and warranties contained in
         Section  4.04(b),  as disclosed by the Borrower to the Banks in writing
         in the Notice of Borrowing relating to such Borrowing).

         Each Borrowing  hereunder  shall be deemed to be a  representation  and
warranty by the Borrower on the date of such Borrowing as to the facts specified
in clauses (c), (d) and (e) of this Section.



<PAGE>



         Section 3.03.  Loans after  Separation.  The  obligation of any Bank to
make or maintain a Loan after the  Separation is subject to receipt by the Agent
of the following documents,  each dated or effective on the date of consummation
of the Separation:

          (a)   an instrument, satisfactory in form and substance to the
         Agent, and duly executed and delivered by USW-C, Inc. pursuant to which
         USW-C, Inc. (to be renamed U S WEST, Inc.) assumes the obligations of
         U S WEST, Inc. (to be renamed MediaOne Group, Inc.) under this
         Agreement;

          (b)  evidence   satisfactory  to  it  that  the  Separation  has  been
         consummated   substantially   on  the  terms  described  in  the  Proxy
         Statement;

          (c) an opinion of Thomas O. McGimpsey,  Esq., counsel for USW-C, Inc.,
         substantially  in the form of Exhibit E hereto with such  modifications
         as are  acceptable  to the Agent and covering such  additional  matters
         relating to the transactions  contemplated hereby as the Required Banks
         may reasonably request; and

          (d) all documents  the Agent may  reasonably  request  relating to the
         existence of USW-C, Inc., the corporate  authority for and the validity
         of this Agreement and the Notes, and any other matters relevant hereto,
         all in form and substance satisfactory to the Agent.

         The  Agent  shall  promptly  notify  the  Company  and the Banks of the
satisfaction of the foregoing conditions.



                                    ARTICLE 4
                         Representations and Warranties

         Each of the Company and the Borrower represents and warrants that:

         Section 4.01.  Corporate  Existence and Power.  Each of the Company and
the Borrower is a corporation  duly  incorporated,  validly existing and in good
standing under the laws of the state of its incorporation, and has all corporate
powers and all material governmental licenses,  authorizations,  qualifications,
consents and approvals required to carry on its business as now conducted.



<PAGE>



         Section   4.02.   Corporate   and   Governmental   Authorization;    No
Contravention.  The execution,  delivery and  performance by the Company and the
Borrower  of this  Agreement  and by the  Borrower  of the Notes are within such
Person's corporate powers,  have been duly authorized by all necessary corporate
action,  require no action by or in respect of, or filing with, any governmental
body,  agency or official and do not contravene,  or constitute a default under,
any  provision  of  applicable  law  or  regulation  or of  the  certificate  of
incorporation  or  by-laws  of  such  Person  or  of  any  agreement,  judgment,
injunction,  order,  decree or other instrument  binding upon such Person or any
Significant  Subsidiary  or result in the creation or  imposition of any Lien on
any material asset of such Person or any Significant Subsidiary.

         Section 4.03.  Binding Effect.  This Agreement  constitutes a valid and
binding agreement of the Company and the Borrower,  and the Notes, when executed
and delivered in  accordance  with this  Agreement,  will  constitute  valid and
binding obligations of the Borrower, in each case enforceable in accordance with
its terms except as the same may be limited by bankruptcy, insolvency or similar
laws affecting creditors' rights generally and by general principles of equity.

         Section 4.04.  Financial Information.

          (a) The consolidated balance sheet of the Company and its Consolidated
Subsidiaries as of December 31, 1997 and the related consolidated  statements of
income and cash  flows for the fiscal  year then  ended,  reported  on by Arthur
Andersen  L.L.P.  and set forth in the Company's 1997 Form 10-K, a copy of which
has been  delivered to each of the Banks,  fairly  present,  in conformity  with
generally accepted accounting principles, the consolidated financial position of
the  Company  and its  Consolidated  Subsidiaries  as of  such  date  and  their
consolidated results of operations and cash flows for such fiscal year.

          (b) Since December 31, 1997 there has been no material  adverse change
in the  financial  position  or results of  operations  of the  Company  and its
Consolidated  Subsidiaries,  considered as a whole (it being understood that the
consummation of the Separation shall not be considered such a change).

         Section 4.05.  Litigation.  Except as disclosed in the  Company's  1997
Form 10-K, there is no action,  suit or proceeding  pending  against,  or to the
knowledge of the Company threatened against or affecting,  the Company or any of
its Subsidiaries before any court or arbitrator or any governmental body, agency
or official in which there is a reasonable  possibility  of an adverse  decision
which would materially  adversely affect the consolidated  financial position or
consolidated results of operations of the Company and its Consolidated



<PAGE>



Subsidiaries,  considered as a whole, or which in any manner draws into question
the validity of this Agreement or the Notes.

         Section 4.06. Compliance with ERISA. Each member of the ERISA Group has
fulfilled its obligations  under the minimum funding  standards of ERISA and the
Internal  Revenue  Code with  respect to each Plan and is in  compliance  in all
respects  with the  presently  applicable  provisions  of ERISA and the Internal
Revenue Code with respect to each Plan, except where failure to comply would not
have a  material  adverse  effect  on the  consolidated  financial  position  or
consolidated   results  of  operations  of  the  Company  and  its  Consolidated
Subsidiaries, considered as a whole. No member of the ERISA Group has (i) sought
a waiver of the minimum  funding  standard  under  Section  412 of the  Internal
Revenue  Code in respect of any Plan,  (ii) failed to make any  contribution  or
payment  to any  Plan  or  Multiemployer  Plan  or in  respect  of  any  Benefit
Arrangement, or made any amendment to any Plan or Benefit Arrangement, which has
resulted or could result in the imposition of a Lien or the posting of a bond or
other  security  under ERISA or the Internal  Revenue Code or (iii) incurred any
liability  under  Title  IV of  ERISA  other  than a  liability  to the PBGC for
premiums under Section 4007 of ERISA.

         Section 4.07.  Environmental Matters. (a) The operations of the Company
and each of its Subsidiaries  comply in all respects with all Environmental Laws
except such  non-compliance  which would not (if  enforced  in  accordance  with
applicable  law)  reasonably  be  expected  to  result,  individually  or in the
aggregate,  in a material adverse effect on the financial position or results of
operations  of the Company and its  Consolidated  Subsidiaries,  considered as a
whole.

          (b) Except as  specifically  identified in Schedule  4.07, the Company
and each of its  Subsidiaries  have  obtained  all material  licenses,  permits,
authorizations   and  registrations   required  under  any  Environmental   Laws
("Environmental  Permits")  necessary for their respective  operations,  and all
such Environmental Permits are in good standing, and the Company and each of its
Subsidiaries  is in compliance  with all material  terms and  conditions of such
Environmental Permits.

          (c) Except as  specifically  identified in Schedule  4.07, (i) none of
the  Company,  any of its  Subsidiaries  or any of  their  present  property  or
operations  are subject to any  outstanding  written order from or settlement or
consent agreement with any governmental authority or other Person, nor is any of
the foregoing  subject to any judicial or docketed  administrative  proceedings,
respecting  any  Environmental  Laws or  Hazardous  Substances  with a potential
liability  in excess of  $1,000,000  and (ii) there are no other  conditions  or
circumstances  known to the Company which may give rise to any claims respecting
any Environmental Laws



<PAGE>



arising  from the  operations  of the  Company or its  Subsidiaries  (including,
without limitation, off-site liabilities), or any additional costs of compliance
with  Environmental  Laws, that would  reasonably be expected to have a material
adverse effect on the financial position or results of operations of the Company
and its Subsidiaries, considered as a whole.

         Section 4.08.  Taxes.  United States  Federal income tax returns of the
Company and its  Subsidiaries  have been examined and closed  through the fiscal
year ended  December 31, 1987. The Company and its  Subsidiaries  have filed all
United  States  Federal  income tax returns and all other  material  tax returns
which are  required to be filed by them and have paid all taxes due  pursuant to
such  returns or  pursuant  to any  assessment  received  by the  Company or any
Subsidiary,  except for taxes the amount,  applicability or validity of which is
being contested in good faith by appropriate proceedings.  The charges, accruals
and  reserves  on the books of the Company  and its  Subsidiaries  in respect of
taxes  or  other  governmental  charges  are,  in the  opinion  of the  Company,
adequate.

         Section 4.09. Subsidiaries. Each of the Company's corporate Significant
Subsidiaries (including, but not limited to, the Borrower) is a corporation duly
incorporated,  validly  existing  and in good  standing  under  the  laws of its
jurisdiction  of  incorporation,  and has all corporate  powers and all material
governmental licenses,  authorizations,  qualifications,  consents and approvals
required to carry on its business as now conducted.

         Section 4.10.  Not an Investment Company. Neither the Company nor the
Borrower is an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.

         Section  4.11.  Full  Disclosure.  All written  information  heretofore
furnished  by the Company or the  Borrower to the Agent or any Bank for purposes
of or in connection with this Agreement or any transaction  contemplated  hereby
is, and all such information  hereafter furnished by the Company or the Borrower
to the Agent or any Bank will be, true and accurate in all material  respects on
the date as of which such information is stated or certified.





<PAGE>



                                    ARTICLE 5
                                    Covenants

         The  Company  agrees  that,  so long  as any  Bank  has any  Commitment
hereunder or any amount payable under any Note remains unpaid:

         Section 5.01.  Information. The Company will deliver to each of the
Banks:

          (a) as soon as available and in any event within 95 days after the end
of each fiscal year of the Company, a consolidated  balance sheet of the Company
and its  Consolidated  Subsidiaries  as of the end of such  fiscal  year and the
related  consolidated  statements of income and cash flows for such fiscal year,
setting  forth in each case in  comparative  form the figures  for the  previous
fiscal  year,  all  reported on in a manner  acceptable  to the  Securities  and
Exchange  Commission  by Arthur  Andersen  L.L.P.  or other  independent  public
accountants of nationally recognized standing;

          (b) as soon as available and in any event within 50 days after the end
of each of the first  three  quarters  of each  fiscal  year of the  Company,  a
consolidated  balance sheet of the Company and its Consolidated  Subsidiaries as
of the end of such quarter and the related consolidated statements of income and
cash flows for such  quarter  and for the portion of the  Company's  fiscal year
ended at the end of such quarter,  setting forth in the case of such  statements
of income and cash flows in comparative  form the figures for the  corresponding
quarter and the corresponding portion of the Company's previous fiscal year, all
certified   (subject  to  normal   year-end   adjustments)  as  to  fairness  of
presentation,  generally accepted  accounting  principles and consistency by the
chief financial officer or the chief accounting officer of the Company;

          (c)  simultaneously  with  the  delivery  of  each  set  of  financial
statements  referred to in clauses (a) and (b) above, a certificate of the chief
financial  officer (or such  officer's  designee,  designated in writing by such
officer) or the chief  accounting  officer of the  Company (i) setting  forth in
reasonable detail the calculations required to establish whether the Company was
in compliance with the requirements of Sections 5.06 to 5.08, inclusive,  on the
date of such financial statements and (ii) stating whether any Default exists on
the date of such certificate and, if any Default then exists,  setting forth the
details  thereof and the action  which the Company is taking or proposes to take
with respect thereto;

          (d)  within  five  Domestic  Business  Days  after any  officer of the
Company or the Borrower obtains knowledge of any Default, if such Default is



<PAGE>



then  continuing,  a  certificate  of the chief  financial  officer or the chief
accounting  officer of the  Company or the  Borrower  setting  forth the details
thereof and the action  which the Company or the  Borrower is taking or proposes
to take with respect thereto;

          (e)  promptly  upon the  mailing  thereof to the  shareholders  of the
Company  generally,  copies  of all  financial  statements,  reports  and  proxy
statements so mailed;

          (f)  promptly  upon the  filing  thereof,  copies of all  registration
statements  (other than the exhibits thereto and any registration  statements on
Form S-8 or its  equivalent)  and reports on Forms 10-K,  10-Q and 8-K (or their
equivalents)  (other than any amendment on Form 8-K the sole purpose of which is
to file exhibits  relating to existing Debt meeting the  requirements  of clause
(ii) of the  definition  of Debt)  which the  Company  shall have filed with the
Securities and Exchange Commission;

          (g) if and when any member of the ERISA Group (i) gives or is required
to give notice to the PBGC of any "reportable event" (as defined in Section 4043
of  ERISA)  with  respect  to any Plan  which  might  constitute  grounds  for a
termination  of such  Plan  under  Title IV of  ERISA,  or  knows  that the plan
administrator  of any Plan has given or is  required  to give notice of any such
reportable  event,  a copy of the  notice  of such  reportable  event  given  or
required to be given to the PBGC;  (ii)  receives  notice of complete or partial
withdrawal  liability  under Title IV of ERISA or notice that any  Multiemployer
Plan is in reorganization,  is insolvent or has been terminated,  a copy of such
notice; (iii) receives notice from the PBGC under Title IV of ERISA of an intent
to terminate,  impose  liability  (other than for premiums under Section 4007 of
ERISA) in respect  of, or appoint a trustee to  administer  any Plan,  a copy of
such notice;  (iv) applies for a waiver of the minimum  funding  standard  under
Section 412 of the Internal Revenue Code, a copy of such application;  (v) gives
notice of intent to terminate any Plan under Section 4041(c) of ERISA, a copy of
such  notice and other  information  filed with the PBGC;  (vi) gives  notice of
withdrawal  from any Plan  pursuant  to  Section  4063 of ERISA,  a copy of such
notice;  or (vii)  fails  to make any  payment  or  contribution  to any Plan or
Multiemployer  Plan or in  respect  of any  Benefit  Arrangement  or  makes  any
amendment to any Plan or Benefit  Arrangement which has resulted or could result
in the  imposition  of a Lien or the  posting  of a bond or  other  security,  a
certificate of the chief financial  officer or the chief  accounting  officer of
the Company  setting forth  details as to such  occurrence  and action,  if any,
which  the  Company  or  applicable  member of the ERISA  Group is  required  or
proposes to take; and



<PAGE>



          (h)  from  time to time  such  additional  information  regarding  the
financial  position or business  of the  Company  and its  Subsidiaries  and the
Borrower  and its  Subsidiaries  as the Agent,  at the request of any Bank,  may
reasonably request.

         Section 5.02. Maintenance of Property;  Insurance. (a) The Company will
keep, and will cause each  Significant  Subsidiary to keep, all property  useful
and necessary in its business in good working order and condition, ordinary wear
and tear excepted.

          (b) The  Company  will  maintain,  and  will  cause  each  Significant
Subsidiary  to  maintain  (either  in  the  name  of  the  Borrower  or in  such
Significant  Subsidiary's  own name),  with  financially  sound and  responsible
insurance  companies,  insurance on all their respective  properties in at least
such amounts and against at least such risks (and with such risk  retention)  as
are usually insured against in the same general area by companies of established
repute engaged in the same or a similar business; and will furnish to the Banks,
upon request from the Agent,  information  presented in reasonable  detail as to
the  insurance so carried;  provided  that, in lieu of any such  insurance,  the
Company  and any  Significant  Subsidiary  may  maintain  a system or systems of
self-insurance  and  reinsurance  which  will  accord  with sound  practices  of
similarly  situated  corporations  maintaining  such systems and with respect to
which  the  Company  or  such  Significant  Subsidiary  will  maintain  adequate
insurance  reserves,  all  in  accordance  with  generally  accepted  accounting
principles and in accordance with sound insurance principles and practice.

         Section  5.03.  Maintenance  of Existence.  The Company will,  and will
cause each Significant Subsidiary to, preserve, renew and keep in full force and
effect  their  respective  corporate  existence  and  their  respective  rights,
privileges  and  franchises  necessary  or  desirable  in the normal  conduct of
business; provided that nothing in this Section 5.03 shall prohibit or interfere
with the Company's  publicly  announced strategy to discontinue or dispose of in
one or more  transactions the financial  services  businesses of it or of any of
its Subsidiaries.

         Section 5.04.  Compliance with Laws. The Company will comply,  and will
cause each Significant  Subsidiary to comply,  in all material respects with all
applicable   laws,   ordinances,   rules,   regulations,   and  requirements  of
governmental authorities (including, without limitation,  Environmental Laws and
ERISA and the rules and regulations  thereunder),  except where the necessity of
compliance  therewith is contested in good faith by appropriate  proceedings and
for which adequate  reserves in conformity  with generally  accepted  accounting
principles have been established.



<PAGE>



         Section 5.05.  Inspection of Property,  Books and Records.  The Company
will keep, and will cause each Significant  Subsidiary to keep,  proper books of
record and account in which full,  true and correct entries shall be made of all
dealings and  transactions in relation to its business and activities;  and will
permit, and will cause each Significant Subsidiary to permit, representatives of
any Bank at such Bank's  expense to visit and  inspect  any of their  respective
properties, to examine and make abstracts from any of their respective books and
records and to discuss  their  respective  affairs,  finances and accounts  with
their respective officers,  employees and independent public accountants, all at
such reasonable times and as often as may reasonably be desired.

     Section 5.06.  Subsidiary Debt. (a) Prior to the Separation,  total debt of
all Consolidated  Subsidiaries  (excluding Debt of a Consolidated  Subsidiary to
the Company or to a Wholly-Owned  Consolidated  Subsidiary)  ("Subsidiary Debt")
will at no time exceed 250% of Consolidated Net Worth.

          (b) After the  Separation,  Subsidiary  Debt as of the last day of any
fiscal  quarter of the Company will not exceed 150% of  Consolidated  EBITDA for
the four  consecutive  fiscal  quarters  of the  Company  ending  on such  date;
provided that in the case of any four fiscal  quarter period ending prior to the
first anniversary of the Separation,  Consolidated  EBITDA for such period shall
equal  Consolidated  EBITDA  for each  fiscal  quarter  (a  "Relevant  Quarter")
beginning  after the  Separation  and ending on or prior to the last day of such
period,  multiplied  by a  fraction,  the  numerator  of  which  is four and the
denominator of which is the number of Relevant Quarters.

          (c)  For  purposes  of  this  Section,   any  preferred   stock  of  a
Consolidated  Subsidiary other than the Borrower which is held by a Person other
than the Company or a Wholly-Owned Consolidated Subsidiary shall be included, at
the higher of its voluntary or  involuntary  liquidation  value,  in the Debt of
such Consolidated Subsidiary.

     Section 5.07. Debt Coverage. (a) Prior to the Separation, consolidated Debt
of the Company and its Consolidated  Subsidiaries will at all times be less than
70% of  the  sum of  consolidated  Debt  of the  Company  and  its  Consolidated
Subsidiaries  and  consolidated  shareowners'  equity  of the  Company  and  its
Consolidated Subsidiaries.

          (b) After the  Separation,  consolidated  Debt of the  Company and its
Consolidated  Subsidiaries  as of the  last  day of any  fiscal  quarter  of the
Company  will not exceed 400% of  Consolidated  EBITDA for the four  consecutive
fiscal quarters of the Company ending on such date; provided that in the case of
any four fiscal  quarter  period  ending prior to the first  anniversary  of the
Separation,



<PAGE>



Consolidated  EBITDA for such period  shall equal  Consolidated  EBITDA for each
fiscal quarter (a "Relevant  Quarter") beginning after the Separation and ending
on or prior  to the  last day of such  period,  multiplied  by a  fraction,  the
numerator  of which  is four and the  denominator  of  which  is the  number  of
Relevant Quarters.

         Section  5.08.  Negative  Pledge.  Neither the Company nor the Borrower
will,  and the Company  will not permit any  Subsidiary  to,  create,  assume or
suffer to exist any Lien on any asset  now owned or  hereafter  acquired  by it,
except:

          (a)  Liens  existing  on the  date of  this  Agreement  securing  Debt
outstanding on the date of this Agreement in an aggregate  principal  amount not
exceeding $265,000,000;

          (b) any Lien existing on any asset of any corporation at the time such
corporation becomes a Subsidiary and not created in contemplation of such event;

          (c) any Lien on any asset  securing  Debt  incurred or assumed for the
purpose  of  financing  all or any part of the  cost of  acquiring  such  asset,
provided that such Lien attaches to such asset  concurrently  with or within 180
days after the acquisition thereof.

          (d) any Lien on any asset of any corporation existing at the time such
corporation is merged or  consolidated  with or into the Company or a Subsidiary
and not created in contemplation of such event;

          (e) any Lien existing on any asset prior to the acquisition thereof by
the  Company  or  a  Subsidiary  and  not  created  in   contemplation  of  such
acquisition;

          (f) any Lien on assets or capital  stock of Minor  Subsidiaries  which
secures Debt of Persons  which are not  Consolidated  Subsidiaries  in which the
Company or any of its Subsidiaries has made investments ("Joint Ventures"),  but
for the payment of which Debt no other recourse may be had to the Company or any
Subsidiaries  ("Limited  Recourse  Debt"),  or any Lien on equity interests in a
Joint Venture securing Limited Recourse Debt of such Joint Venture;

          (g) any Lien arising out of the refinancing,  replacement,  extension,
renewal or  refunding  of any Debt  secured by any Lien  permitted by any of the
foregoing clauses of this Section,  provided that such Debt is not increased and
is not secured by any additional assets;

          (h) Liens arising in the ordinary  course of business which (i) do not
secure Debt, (ii) do not secure any obligation in an amount exceeding



<PAGE>



$50,000,000 and (iii) do not in the aggregate  materially detract from the value
of its assets or  materially  impair the use  thereof  in the  operation  of its
business; and

          (i) Liens not otherwise  permitted by and in addition to the foregoing
clauses of this Section  securing Debt in an aggregate  principal  amount at any
time outstanding not to exceed $750,000,000.

         Section 5.09. Consolidations,  Mergers and Sales of Assets. The Company
will not (i) consolidate with or merge into any other Person or (ii) sell, lease
or otherwise transfer,  directly or indirectly,  all or substantially all of the
assets  of the  Company  and its  Subsidiaries,  taken as a whole,  to any other
Person. The Company will retain ownership,  directly or indirectly,  of at least
80% of the  capital  stock,  and at least 80% of the voting  power,  of U S WEST
Communications,  Inc.  ("Communications"),  and  will  cause  Communications  to
continue to own  substantially all of the  telecommunications  assets it owns on
the date of this Agreement.

         Section  5.10.  Use of  Proceeds.  The proceeds of the Loans made under
this Agreement will be used by the Borrower for general corporate purposes. None
of such  proceeds  will be used,  directly or  indirectly,  in  violation of any
applicable law or  regulation,  and no use of such proceeds will include any use
for the  purpose,  whether  immediate,  incidental  or  ultimate,  of  buying or
carrying any Margin Stock.

         Section  5.11.  Year 2000  Compatibility.  The  Company  shall take all
reasonable  action  necessary to ensure that the computer  based  systems of the
Company and its  Subsidiaries  are able to operate and effectively  process data
including  dates on or after January 1, 2000,  except that such action shall not
be required to the extent that the failure to take such action  would not have a
material adverse effect on the consolidated  financial  position or consolidated
results  of  operations  of  the  Company  and  its  Consolidated  Subsidiaries,
considered  as a whole.  At the request of the Agent,  the Company shall provide
assurance  reasonably  acceptable to the Agent of the year 2000 compatibility of
the Company and its Subsidiaries.




<PAGE>



                                    ARTICLE 6
                                    Defaults

     Section 6.01.  Events of Default.  If one or more of the  following  events
shall have occurred and be continuing:

          (a) any  principal  of any Loan  shall not be paid  when  due,  or any
         interest,  any fees or any other amount payable  hereunder shall not be
         paid within five days of the due date thereof;

          (b) the Company or the  Borrower  shall fail to observe or perform any
         covenant contained in Sections 5.06 to 5.10, inclusive;

          (c) the Company or the  Borrower  shall fail to observe or perform any
         covenant or  agreement  contained in this  Agreement  (other than those
         covered by clause  (a) or (b)  above)  for 10 days (or,  in the case of
         Section 5.11, 30 days) after written  notice  thereof has been given to
         the Company by the Agent at the request of any Bank;

          (d) any representation,  warranty,  certification or statement made by
         the Company or the Borrower in this  Agreement  or in any  certificate,
         financial  statement  or  other  document  delivered  pursuant  to this
         Agreement  shall prove to have been  incorrect in any material  respect
         when made (or deemed made);

          (e) the  Company or any  Subsidiary  shall fail to make any payment or
         payments, in the aggregate in excess of $100,000,000, in respect of any
         Material Debt when due or within any applicable grace period;

          (f)  any  event  or  condition   shall  occur  which  results  in  the
         acceleration of the maturity of any Material Debt;

          (g)  the  Company  or any  Significant  Subsidiary  shall  commence  a
         voluntary case or other proceeding seeking liquidation,  reorganization
         or  other  relief  with  respect  to  itself  or its  debts  under  any
         bankruptcy,  insolvency or other similar law now or hereafter in effect
         or  seeking  the  appointment  of  a  trustee,  receiver,   liquidator,
         custodian or other similar  official of it or any  substantial  part of
         its property, or shall consent to any such relief or to the appointment
         of or taking  possession by any such official in an involuntary case or
         other  proceeding  commenced  against  it,  or  shall  make  a  general
         assignment for the benefit of creditors, or shall fail



<PAGE>



         generally to pay its debts as they become due, or shall take any
         corporate action to authorize or otherwise acquiesce in any of the
         foregoing;

          (h) an involuntary case or other proceeding shall be commenced against
         the  Company  or  any  Significant   Subsidiary  seeking   liquidation,
         reorganization  or other  relief with  respect to it or its debts under
         any  bankruptcy,  insolvency  or other  similar law now or hereafter in
         effect or seeking the appointment of a trustee,  receiver,  liquidator,
         custodian or other similar  official of it or any  substantial  part of
         its  property,  and such  involuntary  case or other  proceeding  shall
         remain  undismissed  and unstayed for a period of 60 days;  or an order
         for relief  shall be entered  against  the  Company or any  Significant
         Subsidiary  under the federal  bankruptcy  laws as now or  hereafter in
         effect;

          (i) any member of the ERISA Group shall fail to pay when due an amount
         or amounts  aggregating in excess of  $100,000,000  which it shall have
         become  liable to pay under  Title IV of ERISA;  or notice of intent to
         terminate a Material Plan shall be filed under Title IV of ERISA by any
         member of the ERISA Group, any plan administrator or any combination of
         the foregoing;  or the PBGC shall institute  proceedings under Title IV
         of ERISA to  terminate,  to impose  liability  (other than for premiums
         under Section 4007 of ERISA) in respect of, or to cause a trustee to be
         appointed to administer any Material  Plan; or a condition  shall exist
         by  reason  of which  the PBGC  would be  entitled  to  obtain a decree
         adjudicating that any Material Plan must be terminated;  or there shall
         occur a complete or partial  withdrawal from, or a default,  within the
         meaning of Section  4219(c)(5)  of ERISA,  with respect to, one or more
         Multiemployer  Plans which could cause one or more members of the ERISA
         Group to incur a current payment obligation in excess of $100,000,000;

          (j) a  judgment  or  order  for the  payment  of money  in  excess  of
         $100,000,000  shall be rendered  against the Company or any  Subsidiary
         and such judgment or order shall continue  unsatisfied and unstayed for
         a period of 10 days;

          (k) the Company  shall  repudiate  in writing  any of its  obligations
         under Article 9 or any such obligation shall be  unenforceable  against
         the  Company in  accordance  with its terms,  or the  Company  shall so
         assert in writing;

          (l) prior to the  Separation,  one or more events or conditions  shall
         occur which result in a default under any agreement or agreements in


<PAGE>



         respect of any Material Debt that is subject to the Indentures and as a
         consequence  of such  default  or  defaults  the  Company or any of its
         Subsidiaries  shall  make  any  payment  or give or  agree  to give any
         consideration  or benefit of any kind (including,  without  limitation,
         any  increased  compensation,  prepayment,  shortening  of  maturities,
         security or other credit  support) to the holders of such Debt and such
         payment,  consideration or benefit is determined by the Required Banks,
         after taking into account any payment,  consideration  or benefit made,
         given or agreed to be given by such  holders  to the  Company or any of
         its  Subsidiaries  (other  than a  waiver  of  such  default),  to be a
         material benefit to the holders of such Debt; or

          (m) the Separation  shall have occurred on terms and conditions  which
         are not  substantially  the  same  as  those  set  forth  in the  Proxy
         Statement;

then, and in every such event,  the Agent shall (i) if requested by Banks having
more than 50% in aggregate amount of the  Commitments,  by notice to the Company
terminate the  Commitments and they shall  thereupon  terminate,  and/or (ii) if
requested by Banks holding Notes evidencing more than 50% in aggregate principal
amount of the Loans,  by notice to the Company  declare the Notes (together with
accrued  interest  thereon)  to  be,  and  the  Notes  shall  thereupon  become,
immediately due and payable without presentment, demand, protest or other notice
of any kind,  all of which are hereby  waived by the Company  and the  Borrower;
provided  that in the case of any of the Events of Default  specified  in clause
(g) or (h) above with respect to the Company or the Borrower, without any notice
to the Company or the  Borrower or any other act by the Agent or the Banks,  the
Commitments shall thereupon automatically terminate and the Notes (together with
accrued  interest  thereon)  shall become  immediately  due and payable  without
presentment,  demand,  protest  or other  notice of any  kind,  all of which are
hereby waived by the Company and the Borrower.

         Section  6.02.  Notice of  Default.  The Agent shall give notice to the
Company under Section 6.01(c) promptly upon being requested to do so by any Bank
and shall thereupon notify all the Banks thereof.





<PAGE>



                                    ARTICLE 7
                                    The Agent

         Section 7.01.  Appointment  and  Authorization.  Each Bank  irrevocably
appoints and authorizes the Agent to take such action as agent on its behalf and
to exercise  such powers under this  Agreement and the Notes as are delegated to
the Agent by the terms hereof or thereof,  together  with all such powers as are
reasonably incidental thereto.

         Section 7.02.  Agent and  Affiliates.  Morgan Guaranty Trust Company of
New York shall have the same rights and powers under this Agreement as any other
Bank and may exercise or refrain from  exercising the same as though it were not
the Agent,  and Morgan Guaranty Trust Company of New York and its affiliates may
accept  deposits  from,  lend  money  to,  and  generally  engage in any kind of
business  with the Company,  the Borrower or any  Subsidiary or affiliate of the
Company or the Borrower as if it were not the Agent hereunder.

         Section 7.03.  Action by Agent.  The obligations of the Agent hereunder
are only those  expressly set forth herein.  Without  limiting the generality of
the  foregoing,  the Agent shall not be required to take any action with respect
to any Default, except as expressly provided in Article 6.

         Section 7.04.  Consultation  with  Experts.  The Agent may consult with
legal counsel (who may be counsel for the Company or 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 by it in good faith in  accordance  with
the advice of such counsel, accountants or experts.

         Section  7.05.  Liability  of Agent.  Neither  the Agent nor any of its
affiliates nor any of their respective directors,  officers, agents or employees
shall be liable for any action taken or not taken by it in  connection  herewith
(i) with the  consent  or at the  request of the  Required  Banks or (ii) in the
absence of its own gross negligence or willful misconduct. Neither the Agent nor
any of its affiliates nor any of their respective directors, officers, agents or
employees shall be responsible  for or have any duty to ascertain,  inquire into
or verify (i) any statement,  warranty or representation made in connection with
this Agreement or any borrowing hereunder; (ii) the performance or observance of
any of the covenants or  agreements  of the Company or the  Borrower;  (iii) the
satisfaction  of any condition  specified in Article 3, except  receipt of items
required to be delivered to the Agent;  or (iv) the validity,  effectiveness  or
genuineness  of this  Agreement,  the Notes or any other  instrument  or writing
furnished in  connection  herewith.  The Agent shall not incur any  liability by
acting in reliance upon any



<PAGE>



notice, consent,  certificate,  statement, or other writing (which may be a bank
wire, telex or similar writing)  believed by it to be genuine or to be signed by
the proper party or parties.

         Section 7.06.  Indemnification.  Each Bank shall, ratably in accordance
with its Commitment,  indemnify the Agent,  its affiliates and their  respective
directors,  officers,  agents and employees (to the extent not reimbursed by the
Company or the Borrower) against any cost,  expense  (including counsel fees and
disbursements),  claim, demand, action, loss or liability (except such as result
from  such  indemnitees'  gross  negligence  or  willful  misconduct)  that such
indemnitees  may suffer or incur in connection with this Agreement or any action
taken or omitted by such indemnitees hereunder.

         Section 7.07.  Credit  Decision.  Each Bank  acknowledges  that it has,
independently  and without  reliance upon the Agent or any other Bank, and based
on such  documents and  information as it has deemed  appropriate,  made its own
credit  analysis  and  decision  to enter  into this  Agreement.  Each Bank also
acknowledges that it will,  independently and without reliance upon the Agent or
any other Bank,  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 any action under this Agreement.

         Section  7.08.  Successor  Agent.  The Agent may  resign at any time by
giving notice thereof to the Banks and the Company.  Upon any such  resignation,
the  Required  Banks  shall have the right to appoint a successor  Agent.  If no
successor  Agent shall have been so appointed by the Required  Banks,  and shall
have accepted such  appointment,  within 30 days after the retiring  Agent gives
notice of  resignation,  then the  retiring  Agent may,  on behalf of the Banks,
appoint a successor Agent (with the consent of the Company,  such consent not to
be  unreasonably  withheld),  which  shall be a  commercial  bank  organized  or
licensed  under the laws of the United States of America or of any State thereof
and having a combined  capital  and surplus of at least  $400,000,000.  Upon the
acceptance of its  appointment  as Agent  hereunder by a successor  Agent,  such
successor Agent shall thereupon succeed to and become vested with all the rights
and duties of the retiring  Agent,  and the retiring  Agent shall be  discharged
from  its  duties  and  obligations   hereunder.   After  any  retiring  Agent's
resignation  hereunder as Agent,  the  provisions of this Article shall inure to
its  benefit as to any  actions  taken or omitted to be taken by it while it was
Agent.

         Section  7.09.  Agent's Fee. The Company shall pay to the Agent for its
own account fees in the amounts and at the times previously  agreed upon between
the Company and the Agent.



<PAGE>



                                    ARTICLE 8
                            Changes in Circumstances

     Section 8.01. Basis for Determining  Interest Rate Inadequate or Unfair. If
     on or prior to the first day of any  Interest  Period  for any  Euro-Dollar
     Loan or Money Market LIBOR Loan:

          (a) the Agent is  advised  by the  Euro-Dollar  Reference  Banks  that
deposits in dollars (in the  applicable  amounts)  are not being  offered to the
Euro-Dollar Reference Banks in the market for such Interest Period, or

          (b) in the case of Euro-Dollar  Loans, Banks having 50% or more of the
aggregate  amount of the  Euro-Dollar  Loans  advise the Agent that the Adjusted
London Interbank Offered Rate as determined by the Agent will not adequately and
fairly  reflect the cost to such Banks of funding  their  Euro-Dollar  Loans for
such Interest Period,

the Agent  shall  forthwith  give  notice  thereof to the Company and the Banks,
whereupon  until the Agent  notifies the Company that the  circumstances  giving
rise to such  suspension no longer exist,  (i) the  obligations  of the Banks to
make Euro-Dollar  Loans or to convert  outstanding  Loans into Euro-Dollar Loans
shall be suspended and (ii) each outstanding Euro-Dollar Loan shall be converted
into a  Domestic  Loan on the  last  day of the  then  current  Interest  Period
applicable thereto. Unless the Borrower notifies the Agent at least two Domestic
Business Days before the date of any Fixed Rate  Borrowing for which a Notice of
Borrowing has  previously  been given that it elects not to borrow on such date,
(i) if such Fixed Rate Borrowing is a Committed Borrowing,  such Borrowing shall
instead be made as a Domestic Borrowing and (ii) if such Fixed Rate Borrowing is
a Money Market LIBOR  Borrowing,  the Money Market LIBOR Loans  comprising  such
Borrowing  shall bear  interest for each day from and including the first day to
but excluding the last day of the Interest Period applicable thereto at the Base
Rate for such day.

         Section 8.02.  Illegality.  If, on or after the date of this Agreement,
the adoption of any  applicable  law, rule or  regulation,  or any change in any
applicable  law,  rule or  regulation,  or any change in the  interpretation  or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration  thereof, or compliance
by any Bank (or its  Euro-Dollar  Lending  Office) with any request or directive
(whether or not having the force of law) of any such authority,  central bank or
comparable  agency  shall make it  unlawful or  impossible  for any Bank (or its
Euro-Dollar  Lending Office) to make,  maintain or fund its Euro-Dollar Loans to
the Borrower



<PAGE>



and such Bank shall so notify the Agent,  the Agent shall  forthwith give notice
thereof to the other Banks and the Company,  whereupon  until such Bank notifies
the Company and the Agent that the circumstances  giving rise to such suspension
no longer exist,  the obligation of such Bank to make  Euro-Dollar  Loans to the
Borrower,  or to convert  outstanding  Loans into  Euro-Dollar  Loans,  shall be
suspended.  Before giving any notice to the Agent pursuant to this Section, such
Bank shall designate a different  Euro-Dollar Lending Office if such designation
will avoid the need for giving such notice and will not, in the judgment of such
Bank, be otherwise  disadvantageous  to such Bank. If such notice is given, each
Euro-Dollar Loan of such Bank then outstanding  shall be converted to a Domestic
Loan either (a) on the last day of the then current  Interest Period  applicable
to such Euro-Dollar Loan if such Bank may lawfully continue to maintain and fund
such Loan to such day or (b)  immediately  if such Bank shall  determine that it
may not lawfully continue to maintain and fund such Loan to such day.

         Section 8.03. Increased Cost and Reduced Return. (a) If on or after (x)
the date hereof,  in the case of any  Committed  Loan or any  obligation to make
Committed  Loans or (y) the date of the related Money Market Quote,  in the case
of  any  Money  Market  Loan,  the  adoption  of any  applicable  law,  rule  or
regulation,  or any change in any  applicable  law, rule or  regulation,  or any
change in the  interpretation  or  administration  thereof  by any  governmental
authority,  central bank or comparable agency charged with the interpretation or
administration  thereof,  or compliance by any Bank (or its  Applicable  Lending
Office) with any request or  directive  (whether or not having the force of law)
of any such authority, central bank or comparable agency shall impose, modify or
deem applicable any reserve (including, without limitation, any such requirement
imposed by the Board of Governors of the Federal  Reserve System with respect to
any Euro-Dollar Loan any such requirement included in an applicable  Euro-Dollar
Reserve   Percentage),   special  deposit,   insurance   assessment  or  similar
requirement  against  assets of,  deposits with or for the account of, or credit
extended by, any Bank (or its Applicable  Lending Office) or shall impose on any
Bank (or its  Applicable  Lending  Office)  or on the United  States  market for
certificates  of  deposit  or the London  interbank  market any other  condition
affecting  its Fixed Rate Loans,  its Note or its  obligation to make Fixed Rate
Loans and the result of any of the  foregoing  is to  increase  the cost to such
Bank (or its Applicable  Lending Office) of making or maintaining any Fixed Rate
Loan, or to reduce the amount of any sum received or receivable by such Bank (or
its  Applicable  Lending  Office)  under this  Agreement  or under its Note with
respect thereto,  by an amount deemed by such Bank to be material,  then, within
15 days after demand by such Bank (with a copy to the Agent),  the Company shall
pay to such Bank such additional  amount or amounts as will compensate such Bank
for such increased cost or reduction.



<PAGE>



          (b) If any Bank shall have determined that, after the date hereof, the
adoption of any applicable law, rule or regulation  regarding  capital adequacy,
or any  change  in any  such  law,  rule or  regulation,  or any  change  in the
interpretation or administration thereof by any governmental authority,  central
bank or comparable  agency  charged with the  interpretation  or  administration
thereof,  or any request or directive regarding capital adequacy (whether or not
having  the  force of law) of any such  authority,  central  bank or  comparable
agency,  has or would have the effect of reducing  the rate of return on capital
of such  Bank  (or its  Parent)  as a  consequence  of such  Bank's  obligations
hereunder  to a level  below  that which  such Bank (or its  Parent)  could have
achieved  but for such  adoption,  change,  request or  directive  (taking  into
consideration its policies with respect to capital adequacy) by an amount deemed
by such Bank to be material, then from time to time, within 15 days after demand
by such Bank (with a copy to the Agent), the Company shall pay to such Bank such
additional  amount or amounts as will  compensate  such Bank (or its Parent) for
such reduction.

          (c) Each Bank will  promptly  notify the  Company and the Agent of any
event of which it has  knowledge,  occurring  after the date hereof,  which will
entitle such Bank to compensation  pursuant to this Section and will designate a
different Applicable Lending Office if such designation will avoid the need for,
or reduce the amount of, such compensation and will not, in the judgment of such
Bank,  be  otherwise  disadvantageous  to such Bank. A  certificate  of any Bank
claiming compensation under this Section and setting forth the additional amount
or amounts to be paid to it  hereunder  shall be  conclusive  in the  absence of
manifest  error.  In determining  such amount,  such Bank may use any reasonable
averaging and attribution methods.

         Section  8.04.  Taxes.  (a) Any and all  payments by the Company or the
Borrower to or for the account of any Bank or the Agent  hereunder  or under any
Note  shall be made  free and  clear of and  without  deduction  for any and all
present  or future  taxes,  duties,  levies,  imposts,  deductions,  charges  or
withholdings,  and all liabilities with respect thereto,  excluding, in the case
of each Bank and the Agent,  taxes imposed on its income,  and  franchise  taxes
imposed  on it, by the  jurisdiction  under  the laws of which  such Bank or the
Agent (as the case may be) is organized  or any  political  subdivision  thereof
and, in the case of each Bank,  taxes  imposed on its income,  and  franchise or
similar  taxes  imposed on it, by the  jurisdiction  of such  Bank's  Applicable
Lending  Office or any  political  subdivision  thereof  (all such  non-excluded
taxes,  duties,  levies,   imposts,   deductions,   charges,   withholdings  and
liabilities  being  hereinafter  referred to as "Taxes").  If the Company or the
Borrower  shall be required by law to deduct any Taxes from or in respect of any
sum payable  hereunder  or under any Note to any Bank or the Agent,  (i) the sum
payable  shall be  increased  as  necessary  so that after  making all  required
deductions (including deductions applicable to additional sums payable



<PAGE>



under this Section 8.04) such Bank or the Agent (as the case may be) receives an
amount equal to the sum it would have received had no such deductions been made,
(ii) such Person  shall make such  deductions,  (iii) such Person  shall pay the
full amount  deducted to the relevant  taxation  authority or other authority in
accordance  with applicable law and (iv) such Person shall furnish to the Agent,
at its address referred to in Section 10.01, the original or a certified copy of
a receipt evidencing payment thereof.

          (b) In addition, the Company agrees to pay any present or future stamp
or  documentary  taxes and any other  excise or  property  taxes,  or charges or
similar  levies which arise from any payment made hereunder or under any Note or
from the execution or delivery of, or otherwise  with respect to, this Agreement
or any Note (hereinafter referred to as "Other Taxes").

          (c) The Company  agrees to  indemnify  each Bank and the Agent for the
full amount of Taxes or Other Taxes (including, without limitation, any Taxes or
Other Taxes  imposed or asserted by any  jurisdiction  on amounts  payable under
this  Section  8.04) paid by such Bank or the Agent (as the case may be) and any
liability (including penalties, interest and expenses) arising therefrom or with
respect thereto. This indemnification shall be made within 15 days from the date
such Bank or the Agent (as the case may be) makes demand therefor.

          (d) Each Bank organized  under the laws of a jurisdiction  outside the
United  States,  on or prior to the date of its  execution  and delivery of this
Agreement in the case of each Bank listed on the  signature  pages hereof and on
or prior to the date on which it becomes a Bank in the case of each other  Bank,
and from time to time  thereafter  if  requested  in writing by the Company (but
only so long as such Bank remains  lawfully  able to do so),  shall  provide the
Company with Internal Revenue Service form 1001 or 4224, as appropriate,  or any
successor form prescribed by the Internal Revenue Service,  certifying that such
Bank is  entitled  to  benefits  under an income  tax treaty to which the United
States is a party  which  reduces  the rate of  withholding  tax on  payments of
interest or certifying that the income receivable  pursuant to this Agreement is
effectively  connected  with the  conduct of a trade or  business  in the United
States.  If the form  provided  by a Bank at the time such Bank first  becomes a
party to this Agreement indicates a United States interest  withholding tax rate
in excess of zero,  withholding  tax at such rate shall be  considered  excluded
from "Taxes" as defined in Section 8.04(a) imposed by the United States.

          (e) For any period with  respect to which a Bank has failed to provide
the Company with the  appropriate  form pursuant to Section 8.04(d) (unless such
failure is due to a change in treaty, law or regulation  occurring subsequent to
the date on which a form  originally  was  required to be  provided),  such Bank
shall not



<PAGE>



be entitled to  indemnification  under  Section  8.04(a)  with  respect to Taxes
imposed by the United States;  provided,  however,  that should a Bank, which is
otherwise  exempt from or subject to a reduced rate of withholding  tax,  become
subject to Taxes  because of its failure to deliver a form  required  hereunder,
the  Company  shall  take such steps as such Bank  shall  reasonably  request to
assist such Bank to recover such Taxes.

          (f) If the  Company or the  Borrower  is  required  to pay  additional
amounts to or for the account of any Bank  pursuant to this Section  8.04,  then
such Bank will change the jurisdiction of its Applicable Lending Office so as to
eliminate or reduce any such additional  payment which may thereafter  accrue if
such change, in the judgment of such Bank, is not otherwise  disadvantageous  to
such Bank.

         Section  8.05.  Domestic  Loans  Substituted  for Affected  Euro-Dollar
Loans.  If (i) the  obligation  of any  Bank to make  Euro-Dollar  Loans  to the
Borrower  has  been  suspended  pursuant  to  Section  8.02 or (ii) any Bank has
demanded compensation under Section 8.03 or 8.04 with respect to its Euro-Dollar
Loans and the Borrower shall, by at least five Euro-Dollar  Business Days' prior
notice to such Bank through the Agent,  have elected that the provisions of this
Section shall apply to such Bank, then,  unless and until such Bank notifies the
Company  that the  circumstances  giving rise to such  suspension  or demand for
compensation no longer exist:

          (a) all Loans to the  Borrower  which would  otherwise be made by such
Bank as (or continued as or converted into)  Euro-Dollar  Loans shall instead be
Domestic   Loans  (on   which   interest   and   principal   shall  be   payable
contemporaneously with the related Euro-Dollar Loans of the other Banks), and

          (b)  after  each of its  Euro-Dollar  Loans to the  Borrower  has been
repaid (or converted to a Domestic Loan),  all payments of principal which would
otherwise be applied to repay such  Euro-Dollar  Loans shall be applied to repay
its Domestic Loans instead.

If such Bank  notifies the Borrower that the  circumstances  giving rise to such
notice no longer apply, the principal amount of each such Domestic Loan shall be
converted  into a  Euro-Dollar  Loan on the  first  day of the  next  succeeding
Interest Period applicable to the related Euro-Dollar Loans of the other Banks.

         Section 8.06.  Substitution  of Bank. If (i) the obligation of any Bank
to make Euro-Dollar Loans has been suspended  pursuant to Section 8.02, (ii) any
Bank has  demanded  compensation  under  Section  8.03 or (iii) any Bank has not
signed an amendment or waiver which must be signed by all the Banks to become



<PAGE>



effective,  and such  amendment or waiver has been signed by the  Super-Majority
Banks,  the Company shall have the right,  with the assistance of the Agent,  to
seek a mutually satisfactory  substitute bank or banks (which may be one or more
of the Banks) to purchase the Notes and assume the Commitment of such Bank.



                                    ARTICLE 9
                                    Guaranty

         Section  9.01.  The  Guaranty.   The  Company  hereby   unconditionally
guarantees  the full and  punctual  payment  (whether at stated  maturity,  upon
acceleration  or otherwise) of the principal of and interest on each Note issued
by the Borrower pursuant to this Agreement, and the full and punctual payment of
all other amounts payable by the Borrower under this Agreement.  Upon failure by
the Borrower to pay punctually any such amount,  the Company shall  forthwith on
demand pay the amount  not so paid at the place and in the manner  specified  in
this Agreement.

         Section 9.02.  Guaranty  Unconditional.  The obligations of the Company
hereunder shall be unconditional, irrevocable and absolute and, without limiting
the generality of the foregoing, shall not be released,  discharged or otherwise
affected by:

                  (i) any extension, renewal, settlement,  compromise, waiver or
         release  in  respect  of any  obligation  of the  Borrower  under  this
         Agreement or any Note, by operation of law or otherwise;

                  (ii) any  modification  or amendment of or  supplement to this
         Agreement or any Note;

                  (iii) any release, impairment, non-perfection or invalidity of
         any direct or indirect  security  for any  obligation  of the  Borrower
         under this Agreement or any Note;

                  (iv) any  change  in the  corporate  existence,  structure  or
         ownership   of   the   Borrower,   or   any   insolvency,   bankruptcy,
         reorganization  or other similar  proceeding  affecting the Borrower or
         its assets or any resulting  release or discharge of any  obligation of
         the Borrower contained in this Agreement or any Note;




<PAGE>



                  (v) the existence of any claim,  set-off or other rights which
         the Company may have at any time against the Borrower,  the Agent,  any
         Bank  or any  other  Person,  whether  in  connection  herewith  or any
         unrelated transactions,  provided that nothing herein shall prevent the
         assertion   of  any  such  claim  by   separate   suit  or   compulsory
         counterclaim;

                  (vi) any invalidity or unenforceability relating to or against
         the  Borrower  for any  reason of this  Agreement  or any Note,  or any
         provision of applicable  law or  regulation  purporting to prohibit the
         payment by the Borrower of the  principal of or interest on any Note or
         any other amount payable by it under this Agreement; or

                  (vii) any other act or omission to act or delay of any kind by
         the  Borrower,  the  Agent,  any Bank or any other  Person or any other
         circumstance  whatsoever  which might,  but for the  provisions of this
         paragraph,  constitute a legal or equitable  discharge of the Company's
         obligations hereunder.

         Section 9.03.  Discharge  Only upon Payment in Full;  Reinstatement  In
Certain Circumstances.  The Company's obligations hereunder shall remain in full
force and effect until the  Commitments  shall have terminated and the principal
of and  interest on the Notes and all other  amounts  payable by the Company and
the Borrower under this Agreement shall have been  indefeasibly paid in full. If
at any time any payment of the principal of or interest on any Note or any other
amount  payable by the  Borrower  under this  Agreement  is rescinded or must be
otherwise restored or returned upon the insolvency, bankruptcy or reorganization
of the Borrower or otherwise,  the Company's  obligations hereunder with respect
to such payment shall be reinstated at such time as though such payment had been
due but not made at such time.

         Section 9.04.  Waiver by the Company.  The Company  irrevocably  waives
acceptance hereof, presentment,  demand, protest and any notice not provided for
herein,  as well as any requirement  that at any time any action be taken by any
Person against the Borrower or any other Person.

         Section 9.05.  Subrogation.  The Company irrevocably waives any and all
rights to which it may be  entitled,  by  operation  of law or  otherwise,  upon
making any payment hereunder to be subrogated to the rights of the payee against
the  Borrower  with  respect to such  payment or against  any direct or indirect
security therefor,  or otherwise to be reimbursed,  indemnified or exonerated by
or for the account of the Borrower in respect thereof.



<PAGE>



         Section 9.06. Stay of Acceleration.  In the event that  acceleration of
the time for payment of any amount  payable by the Borrower under this Agreement
or its Notes is stayed upon  insolvency,  bankruptcy  or  reorganization  of the
Borrower,  all such amounts otherwise subject to acceleration under the terms of
this Agreement shall nonetheless be payable by the Company  hereunder  forthwith
on demand by the Agent made at the request of the Required Banks.

         Section 9.07.  Release upon Separation.  So long as, immediately before
and after the consummation of the Separation, no Default shall have occurred and
be continuing, simultaneously with such consummation, USW-C, Inc. (to be renamed
U S WEST, Inc.) shall succeed to all of the rights,  duties and obligations of U
S WEST, Inc. (to be renamed  MediaOne Group,  Inc.) ("Old U S WEST")  hereunder,
whereupon  Old U S WEST  shall have no further  rights,  duties and  obligations
hereunder, in each case automatically, without any further action on the part of
any party hereto.



                                   ARTICLE 10
                                  Miscellaneous

         Section 10.01. Notices. All notices,  requests and other communications
to any  party  hereunder  shall  be in  writing  (including  bank  wire,  telex,
facsimile transmission or similar writing) and shall be given to such party: (x)
in the case of the  Company,  the  Borrower  or the  Agent,  at its  address  or
facsimile number set forth on the signature pages hereof, (y) in the case of any
Bank,  at its  address  or  facsimile  number  set  forth in its  Administrative
Questionnaire  or (z) in the case of any party,  such other address or facsimile
number as such  party may  hereafter  specify  for the  purpose by notice to the
Agent and the Company. Each such notice, request or other communication shall be
effective (i) if given by mail, 72 hours after such  communication  is deposited
in the mails with first class postage prepaid,  addressed as aforesaid,  (ii) if
given by  facsimile  transmission,  when such  facsimile is  transmitted  to the
facsimile  number  specified  pursuant  to this  Section  10.01  and  telephonic
confirmation  of  receipt  thereof is  received,  or (iii) if given by any other
means,  when delivered at the address  specified in this Section;  provided that
notices to the Agent under  Article 2 or Article 8 shall not be effective  until
received.

         Section 10.02. No Waivers. No failure or delay by the Agent or any Bank
in exercising  any right,  power or privilege  hereunder or under any Note shall
operate as a waiver  thereof  nor shall any single or partial  exercise  thereof
preclude  any other or further  exercise  thereof or the  exercise  of any other
right, power or



<PAGE>



privilege.  The rights and remedies herein provided shall be cumulative and not
exclusive of any rights or remedies provided by law.

         Section 10.03. Expenses; Indemnification. (a) The Company shall pay (i)
all  out-of-pocket  expenses of the Agent,  including fees and  disbursements of
special   counsel  for  the  Agent,  in  connection  with  the  preparation  and
administration  of this  Agreement,  any  waiver  or  consent  hereunder  or any
amendment  hereof or any  Default or alleged  Default  hereunder  and (ii) if an
Event of Default occurs,  all  out-of-pocket  expenses incurred by the Agent and
each Bank,  including fees and disbursements of counsel, in connection with such
Event of Default and collection,  bankruptcy,  insolvency and other  enforcement
proceedings resulting therefrom.

          (b) The Company  agrees to  indemnify  the Agent and each Bank,  their
respective  affiliates  and  the  respective  directors,  officers,  agents  and
employees  of the  foregoing  (each an  "Indemnitee")  and hold each  Indemnitee
harmless from and against any and all liabilities,  losses,  damages,  costs and
expenses of any kind,  including,  without  limitation,  the reasonable fees and
disbursements of counsel, which may be incurred by such Indemnitee in connection
with any investigative,  administrative or judicial  proceeding  (whether or not
such  Indemnitee  shall be  designated a party  thereto)  brought or  threatened
relating to or arising out of this  Agreement  or any actual or proposed  use of
proceeds of Loans  hereunder;  provided  that (i) no  Indemnitee  shall have the
right to be indemnified  hereunder for such Indemnitee's own gross negligence or
willful  misconduct as determined by a court of competent  jurisdiction and (ii)
the Company shall not be liable for any settlement entered into by an Indemnitee
without its consent (which shall not be unreasonably withheld).

          (c) Each  Indemnitee  agrees to give the Company prompt written notice
after  it  receives  any  notice  of the  commencement  of any  action,  suit or
proceeding for which such Indemnitee may wish to claim indemnification  pursuant
to  subsection  (b).  The Company  shall have the right,  exercisable  by giving
written notice within fifteen Domestic Business Days after the receipt of notice
from such Indemnitee of such commencement,  to assume, at the Company's expense,
the  defense  of any  such  action,  suit or  proceeding;  provided,  that  such
Indemnitee  shall have the right to employ separate  counsel in any such action,
suit or proceeding and to participate in the defense  thereof,  but the fees and
expenses of such separate counsel shall be at such  Indemnitee's  expense unless
(1) the Company shall have agreed to pay such fees and expenses; (2) the Company
shall have failed to assume the defense of such action,  suit or  proceeding  or
shall have failed to employ counsel  reasonably  satisfactory to such Indemnitee
in any such action,  suit or proceeding;  or (3) such Indemnitee shall have been
advised by  independent  counsel in writing  (with a copy to the  Company)  that
there may be



<PAGE>



one or more  defenses  available to such  Indemnitee  which are in conflict with
those available to the Company (in which case, if such  Indemnitee  notifies the
Company in writing that it elects to employ  separate  counsel at the  Company's
expense,  the  Company  shall be  obligated  to  assume  the  expense,  it being
understood,  however,  that the  Company  shall  not be  liable  for the fees or
expenses  of more than one  separate  firm of  attorneys,  which  firm  shall be
designated in writing by such Indemnitee).

         Section 10.04. Sharing of Set-offs.  Each Bank agrees that if it shall,
by exercising any right of set-off or counterclaim or otherwise, receive payment
of a  proportion  of the  aggregate  amount of  principal  and interest due with
respect to any Note held by it which is greater than the proportion  received by
any other Bank in respect of the aggregate  amount of principal and interest due
with  respect  to any Note held by such  other  Bank,  the Bank  receiving  such
proportionately  greater payment shall purchase such participations in the Notes
held by the other Banks,  and such other  adjustments  shall be made,  as may be
required so that all such payments of principal and interest with respect to the
Notes  held by the Banks  shall be shared by the Banks pro rata;  provided  that
nothing in this Section shall impair the right of any Bank to exercise any right
of set-off or  counterclaim  it may have and to apply the amount subject to such
exercise  to  the  payment  of  indebtedness  of the  Borrower  other  than  its
indebtedness  hereunder.  The  Borrower  agrees,  to the  fullest  extent it may
effectively do so under  applicable law, that any holder of a participation in a
Note,  whether or not  acquired  pursuant  to the  foregoing  arrangements,  may
exercise rights of set-off or counterclaim and other rights with respect to such
participation  as  fully  as if such  holder  of a  participation  were a direct
creditor of the Borrower in the amount of such participation.

         Section 10.05.  Amendments and Waivers. Any provision of this Agreement
or the Notes may be amended or waived if, but only if, such  amendment or waiver
is in writing and is signed by the Company,  the Borrower and the Required Banks
(and, if the rights or duties of the Agent are affected thereby,  by the Agent);
provided that no such amendment or waiver shall, unless signed by all the Banks,
(i)  increase  or  decrease  the  Commitment  of any Bank  (except for a ratable
decrease in the  Commitments of all Banks) or subject any Bank to any additional
obligation,  (ii) reduce the principal of or rate of interest on any Loan or any
fees hereunder,  except as provided below, (iii) postpone the date fixed for any
payment of principal of or interest on any Loan or any fees hereunder or for any
reduction or termination of any  Commitment,  (iv) amend or waive the provisions
of Article 9 or (v) change the percentage of the Commitments or of the aggregate
unpaid  principal  amount of the Notes,  or the number of Banks,  which shall be
required  for the Banks or any of them to take any action  under this Section or
any other provision of this Agreement.



<PAGE>



         Section  10.06.  Successors  and Assigns.  (a) The  provisions  of this
Agreement  shall be binding upon and inure to the benefit of the parties  hereto
and their respective successors and assigns, except that neither the Company nor
the  Borrower  may assign or  otherwise  transfer  any of its rights  under this
Agreement without the prior written consent of all Banks.

          (b) Any  Bank  may at any  time  grant  to one or more  banks or other
institutions (each a "Participant") participating interests in its Commitment or
any or all of its  Loans,  with (and  subject  to) the  written  consent  of the
Company  and the  Agent,  which  consents  shall not be  unreasonably  withheld;
provided  that if a  Participant  is an  affiliate  of such  grantor  Bank or is
another Bank, no such consent shall be required.  In the event of any such grant
by a Bank of a participating  interest to a Participant,  such Bank shall remain
responsible for the performance of its obligations  hereunder,  and the Company,
the Borrower and the Agent shall  continue to deal solely and directly with such
Bank in connection with such Bank's rights and obligations under this Agreement.
Any agreement pursuant to which any Bank may grant such a participating interest
shall provide that such Bank shall retain the sole right and  responsibility  to
enforce the  obligations  of the Company and the Borrower  hereunder  including,
without limitation,  the right to approve any amendment,  modification or waiver
of any provision of this Agreement;  provided that such participation  agreement
may  provide  that such Bank will not agree to any  modification,  amendment  or
waiver of this Agreement described in clause (i), (ii) or (iii) of Section 10.05
without  the  consent  of  the  Participant.   The  Borrower  agrees  that  each
Participant  shall, to the extent provided in its  participation  agreement,  be
entitled  to the  benefits  of  Article  8  with  respect  to its  participating
interest.  An assignment or other  transfer which is not permitted by subsection
(c) or (d) below but which is consented to in  accordance  with this  subsection
(b) shall be given effect for purposes of this Agreement only to the extent of a
participating interest granted in accordance with this subsection (b).

          (c) Any  Bank  may at any time  assign  to one or more  banks or other
institutions  (each an "Assignee")  all, or a proportionate  part of all, of its
rights and  obligations  under this  Agreement and the Notes,  and such Assignee
shall  assume  such  rights  and  obligations,  pursuant  to an  Assignment  and
Assumption  Agreement in substantially  the form of Exhibit G hereto executed by
such Assignee and such  transferor  Bank,  with (and subject to) the  subscribed
consent of the Company and the Agent,  which consents shall not be  unreasonably
withheld;  provided  that (i) if an Assignee is an affiliate of such  transferor
Bank or is another Bank, no such consent shall be required; (ii) such assignment
may,  but  need  not,  include  rights  of the  transferor  Bank in  respect  of
outstanding  Money Market Loans; and (iii) any assignment shall not be less than
$15,000,000,  or if less,  shall  constitute an assignment of all of such Bank's
rights and obligations



<PAGE>



under this Agreement and the Notes except for any rights  retained in accordance
with clause (ii) of this proviso. Upon execution and delivery of such instrument
and payment by such Assignee to such  transferor  Bank of an amount equal to the
purchase  price agreed  between such  transferor  Bank and such  Assignee,  such
Assignee  shall be a Bank party to this  Agreement and shall have all the rights
and  obligations of a Bank with a Commitment as set forth in such  instrument of
assumption,  and the  transferor  Bank shall be  released  from its  obligations
hereunder to a  corresponding  extent,  and no further  consent or action by any
party shall be required.  Upon the  consummation  of any assignment  pursuant to
this subsection (c), the transferor  Bank, the Agent and the Borrower shall make
appropriate  arrangements  so that,  if  required,  new Notes are  issued to the
Assignee. In connection with any such assignment,  the transferor Bank shall pay
to the Agent an administrative  fee for processing such assignment in the amount
of $2,500.  If the  Assignee  is not  incorporated  under the laws of the United
States of America or a state  thereof,  it shall  deliver to the Company and the
Agent  certification as to exemption from deduction or withholding of any United
States federal income taxes in accordance with Section 8.04.

          (d) Any Bank may at any time  assign all or any  portion of its rights
under this Agreement and its Notes to a Federal Reserve Bank. No such assignment
shall release the transferor Bank from its obligations hereunder.

          (e) No Assignee,  Participant or other transferee of any Bank's rights
shall be entitled to receive any greater payment under Section 8.03 or 8.04 than
such Bank  would  have been  entitled  to  receive  with  respect  to the rights
transferred,  unless such  transfer  is made with the  Company's  prior  written
consent or by reason of the  provisions of Section 8.02,  8.03 or 8.04 requiring
such Bank to  designate a different  Applicable  Lending  Office  under  certain
circumstances  or at a time when the  circumstances  giving rise to such greater
payment did not exist.

         Section 10.07.  Termination of Existing Credit Agreements.  The Company
and  each of the  Banks  that is also a  "Bank"  party  to the  Existing  Credit
Agreements  agrees  that the  "Commitments"  as defined in the  Existing  Credit
Agreements  shall be terminated in their entirety on the Effective Date. Each of
such Banks waives (a) any requirement of notice of such termination  pursuant to
Section 2.09 of the Existing Credit Agreements and (b) any claim to any facility
fees or other fees under the Existing Credit  Agreements for any day on or after
the  Effective  Date.  Each of the Company and the Borrower (i)  represents  and
warrants that (x) after giving effect to the preceding sentences of this Section
10.07, the commitments  under the Existing Credit  Agreements will be terminated
effective  not later than the Effective  Date,  (y) no loans are, as of the date
hereof,  or will be, as of the Effective  Date,  outstanding  under the Existing
Credit  Agreements and (ii) covenants that all accrued and unpaid  facility fees
and any


<PAGE>



other amounts due and payable under the Existing  Credit  Agreements  shall have
been paid on or prior to the Effective Date.

         Section  10.08.   Governing  Law;  Submission  to  Jurisdiction.   This
Agreement and each Note shall be governed by and  construed in  accordance  with
the laws of the State of New York.  Each of the Company and the Borrower  hereby
submits to the nonexclusive jurisdiction of the United States District Court for
the Southern District of New York and of any New York State court sitting in New
York City for  purposes of all legal  proceedings  arising out of or relating to
this Agreement or the transactions  contemplated hereby, and 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 10.09. Counterparts; Integration; Effectiveness. This Agreement
may be signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures  thereto and hereto were upon the same
instrument.  This Agreement  constitutes the entire agreement and  understanding
among  the  parties  hereto  and  supersedes  any and all prior  agreements  and
understandings,  oral or written,  relating to the subject matter  hereof.  This
Agreement  shall  become  effective  upon  receipt by the Agent of  counterparts
hereof signed by each of the Company, the Borrower, the Banks and the Agent (or,
in the case of any party as to which an executed counterpart shall not have been
received, receipt by the Agent in form satisfactory to it of telegraphic,  telex
or other  written  confirmation  from such party of execution  of a  counterpart
hereof by such party).

         Section 10.10. WAIVER OF JURY TRIAL. EACH OF THE COMPANY, THE BORROWER,
THE AGENT AND THE BANKS HEREBY  IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY
JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.

         Section 10.11. Confidentiality.  Each of the Agent and the Banks agrees
to use  its  reasonable  best  efforts  to  keep  confidential  any  information
delivered  or made  available  by the  Company  or the  Borrower  to it which is
clearly stated by the Company or the Borrower to be confidential;  provided that
nothing  herein  shall  prevent  the  Agent or any  Bank  from  disclosing  such
information  (i)  to  the  Agent  or any  other  Bank  in  connection  with  the
transactions  contemplated hereby, (ii) to its officers,  directors,  employees,
agents,  attorneys and accountants  who have a need to know such  information in
accordance  with customary  banking  practices and who receive such  information
having been made aware of the



<PAGE>



restrictions  set forth in this  Section,  (iii)  upon the order of any court or
administrative  agency, (iv) upon the request or demand of any regulatory agency
or authority  having  jurisdiction  over such party, (v) which has been publicly
disclosed,  (vi) which has been  obtained from any Person other than the Company
and its  Subsidiaries,  provided  that such  Person is not (x) known to it to be
bound by a confidentiality agreement with the Company or its Subsidiaries or (y)
known to it to be otherwise  prohibited from  transmitting the information to it
by a contractual,  legal or fiduciary  obligation,  (vii) in connection with the
exercise of any remedy  hereunder  or under the Notes or (viii) to any actual or
proposed participant or assignee of all or any of its rights hereunder which has
agreed in writing to be bound by the provisions of this Section.



<PAGE>



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


                                        U S WEST CAPITAL FUNDING, INC.


                                        By
                                            Name:
                                            Title:
                                            7800 East Orchard Road
                                            Englewood, Colorado  80111
                                            Facsimile number:  303-793-6307
                                            Telephone number:  303-793-6250
                                            Attention:  Rahn Porter


                                        U S WEST, INC.


                                        By
                                            Name:
                                            Title:
                                            7800 East Orchard Road
                                            Englewood, Colorado  80111
                                            Facsimile number:  303-793-6307
                                            Telephone number:  303-793-6250
                                            Attention:  Rahn Porter


                                        USW-C, INC.


                                        By
                                            Name:
                                            Title:
                                            7800 East Orchard Road
                                            Englewood, Colorado  80111
                                            Facsimile number:  303-793-6307
                                            Telephone number:  303-793-6250
                                            Attention: Sean Foley



<PAGE>




Commitments

$194,444,444                            MORGAN GUARANTY TRUST COMPANY
                                        OF NEW YORK


                                        By
                                            Name:
                                            Title:



$194,444,444                            BANK OF AMERICA NATIONAL TRUST
                                        AND SAVINGS ASSOCIATION


                                        By
                                            Name:
                                            Title:



$194,444,444                            THE CHASE MANHATTAN BANK


                                        By
                                            Name:
                                            Title:



$194,444,444                            MELLON BANK, N.A.


                                        By
                                            Name:
                                            Title:








<PAGE>



$186,666,667                            ABN AMRO BANK N.V.


                                        By
                                            Name:
                                            Title:


                                        By
                                            Name:
                                            Title:


$186,666,667                            THE BANK OF NEW YORK


                                        By
                                            Name:
                                            Title:


$186,666,667                            BANK ONE, COLORADO, N.A.


                                        By
                                            Name:
                                            Title:


$186,666,667                            CITIBANK, N.A.


                                        By
                                            Name:
                                            Title:


$186,666,667                            KEYBANK NATIONAL ASSOCIATION


                                        By
                                            Name:
                                            Title:



<PAGE>



 $186,666,667                           NATIONSBANK, N.A.


                                        By
                                            Name:
                                            Title:



$155,555,556                            COMMERZBANK AG LOS ANGELES
                                        BRANCH


                                        By
                                            Name:
                                            Title:


                                        By
                                            Name:
                                            Title:



$155,555,556                            FLEET NATIONAL BANK


                                        By
                                            Name:
                                            Title:



$112,777,778                            CANADIAN IMPERIAL BANK OF
                                        COMMERCE


                                        By
                                            Name:
                                            Title:






<PAGE>



$105,000,000                            BANKERS TRUST COMPANY


                                        By
                                            Name:
                                            Title:




$105,000,000                            THE FIRST NATIONAL BANK OF
                                        CHICAGO


                                        By
                                            Name:
                                            Title:



$105,000,000                            KREDIETBANK N.V.


                                        By
                                            Name:
                                            Title:


                                        By
                                            Name:
                                            Title:



$105,000,000                            THE ROYAL BANK OF SCOTLAND PLC


                                        By
                                            Name:
                                            Title:





<PAGE>



$105,000,000                            WELLS FARGO BANK, N.A.


                                        By
                                            Name:
                                            Title:


$58,333,333                             BANK OF HAWAII


                                        By
                                            Name:
                                            Title:


$58,333,333                             BARCLAYS BANK PLC


                                        By
                                            Name:
                                            Title:


$58,333,333                             BAYERISCHE LANDESBANK GIROZENTRALE
                                        CAYMAN ISLANDS BRANCH


                                        By
                                            Name:
                                            Title:


                                        By
                                            Name:
                                            Title:





<PAGE>



$58,333,333                             BAYERISCHE HYPOTHEKEN-UND
                                        WECHSEL-BANK AKTIENGESELLSCHAFT


                                        By
                                            Name:
                                            Title:


$58,333,333                             LEHMAN COMMERCIAL PAPER INC.


                                        By
                                            Name:
                                            Title:


$58,333,333                             MERRILL LYNCH CAPITAL
                                        CORPORATION


                                        By
                                            Name:
                                            Title:


$58,333,333                             NORWEST BANK COLORADO, NATIONAL
                                        ASSOCIATION


                                        By
                                            Name:
                                            Title:


$58,333,333                             THE TOKAI BANK, LIMITED


                                        By
                                            Name:
                                            Title:





<PAGE>



$58,333,333                             U.S. BANK NATIONAL ASSOCIATION


                                        By
                                            Name:
                                            Title:


$38,888,889                             BANQUE NATIONALE DE PARIS


                                        By
                                            Name:
                                            Title:


                                        By
                                            Name:
                                            Title:


$38,888,889                             ROYAL BANK OF CANADA


                                        By
                                            Name:
                                            Title:


$38,888,889                             ISTITUTO BANCARIO SAN PAOLO DI
                                        TORINO S.P.A.


                                        By
                                            Name:
                                            Title:


                                        By
                                            Name:
                                            Title:





<PAGE>



$11,666,667                             THE PROVIDENT BANK.


                                        By
                                            Name:
                                            Title:




Total Commitments:

$3,500,000,000
===========



<PAGE>



                                        MORGAN GUARANTY TRUST
                                            COMPANY OF NEW YORK, as
                                            Administrative Agent


                                        By
                                            Title:
                                            500 Stanton Christiana Road
                                            Newark, Delaware 19713
                                            Attention: Mark Connor
                                            Facsimile number:  302-634-1092
                                            Telephone number:  302-634-4218





<PAGE>



                                PRICING SCHEDULE


         The  "Euro-Dollar  Margin" and  "Facility Fee Rate" for any day are the
respective  percentages  set forth below in the  applicable row under the column
corresponding to the Status that exists on such day:

<TABLE>
<CAPTION>
<S>                    <C>           <C>           <C>            <C>           <C>            <C>


                       Level         Level         Level          Level         Level          Level
Status                  I             II           III             IV            V             VI
Euro-Dollar
Margin:
Usage less than 50%    .1475%        .155%         .175%          .215%         .245%          .300%
Usage more than or
  equal to 50%         .1975%        .205%         .225%          .265%         .295%          .350%
Facility Fee           .040%         .045%         .050%          .060%         .080%          .100%
Rate
=====================  ============  ============= =============  ============  =============  ============
</TABLE>


         For purposes of this Schedule,  the following  terms have the following
meanings:

         "Level I Status"  exists at any date after the  Separation  if, at such
date, the Borrower's  outstanding senior unsecured long-term debt securities are
rated A+ or higher by S&P or A1 or higher by Moody's.

         "Level II Status"  exists at any date after the  Separation if, at such
date, (i) the Borrower's  outstanding senior unsecured long-term debt securities
are rated A or higher by S&P or A2 or higher by Moody's  and (ii) Level I Status
does not exist.

         "Level III Status" exists (x) at any date prior to the Separation,  and
(y) at any date  after the  Separation  if,  at such  date,  (i) the  Borrower's
outstanding senior unsecured long-term debt securities are rated A- or higher by
S&P or A3 or higher by  Moody's  and (ii)  neither  Level I Status  nor Level II
Status exists.

         "Level IV Status"  exists at any date after the  Separation if, at such
date, (i) the Borrower's  outstanding senior unsecured long-term debt securities
are rated  BBB+ or higher by S&P or Baa1 or higher by  Moody's  and (ii) none of
Level I Status, Level II Status or Level III Status exists.



<PAGE>



         "Level V Status"  exists at any date after the  Separation  if, at such
date, (i) the Borrower's  outstanding senior unsecured long-term debt securities
are rated BBB or  higher  by S&P or Baa2 or higher by  Moody's  and (ii) none of
Level I Status, Level II Status, Level III Status or Level IV Status exists.

         "Level VI Status"  exists at any date after the  Separation if, at such
date, none of Level I Status, Level II Status, Level III Status, Level IV Status
or Level V Status exists.

         "Moody's"   means   Moody's   Investors   Service,   Inc.,  a  Delaware
corporation,  and its successors or, if such  corporation  shall be dissolved or
liquidated  or shall no longer  perform the  functions  of a  securities  rating
agency,  "Moody's" shall be deemed to refer to any other  nationally  recognized
securities  rating agency designated by the Required Banks, with the approval of
the Company, by notice to the Agent and the Company.

         "S&P" means Standard & Poor's  Ratings  Group, a New York  corporation,
and its successors or, if such  corporation  shall be dissolved or liquidated or
shall no longer perform the functions of a securities rating agency, "S&P" shall
be deemed to refer to any other nationally  recognized  securities rating agency
designated by the Required Banks, with the approval of the Company, by notice to
the Agent and the Company.

         "Status" refers to the determination of which of Level I Status,  Level
II Status,  Level III Status, Level IV Status, Level V Status or Level VI Status
exists at any date.

         "Usage" means at any date the  percentage  equivalent of a fraction (i)
the numerator of which is the sum of the aggregate  outstanding principal amount
of the Loans at such date,  after giving  effect to any  borrowing or payment on
such date,  and (ii) the  denominator  of which is the  aggregate  amount of the
Commitments  at  such  date,  after  giving  effect  to  any  reduction  of  the
Commitments on such date.  For purposes of this Schedule,  if for any reason any
Loans remain  outstanding  after  termination of the Commitments,  the Usage for
each date on or after the date of such termination shall be deemed to be greater
than 50%.

The credit  ratings to be  utilized  for  purposes  of this  Schedule  are those
assigned to the senior  unsecured  long-term  debt  securities  of the  Borrower
guaranteed by the Company, and any rating assigned to any other debt security of
the Borrower shall be  disregarded.  The rating in effect at any date is that in
effect at the close of business on such date.



<PAGE>



                                  SCHEDULE 4.07



                              Environmental Matters


         NONE.







<PAGE>




                                                                 EXHIBIT A

                                      NOTE

                                                           New York, New York
                                                           ________, 19__


         For  value  received,  U S  WEST  CAPITAL  FUNDING,  INC.,  a  Colorado
corporation (the "Borrower"),  promises to pay to the order of (the "Bank"), for
the account of its Applicable  Lending Office,  the unpaid  principal  amount of
each Loan made by the Bank to the  Borrower  pursuant  to the  Credit  Agreement
referred  to  below  on the  maturity  date  therefor  specified  in the  Credit
Agreement.  The Borrower promises to pay interest on the unpaid principal amount
of each  such Loan on the  dates  and at the rate or rates  provided  for in the
Credit  Agreement.  All such payments of principal and interest shall be made in
lawful  money of the United  States in Federal  or other  immediately  available
funds at the  office of  Morgan  Guaranty  Trust  Company  of New York,  60 Wall
Street, New York, New York.

         All Loans made by the Bank, the respective types and maturities thereof
and all  repayments of the principal  thereof shall be recorded by the Bank and,
if the Bank so elects in  connection  with any transfer or  enforcement  hereof,
appropriate notations to evidence the foregoing information with respect to each
such Loan then outstanding may be endorsed by the Bank on the schedule  attached
hereto,  or on a  continuation  of such  schedule  attached  to and  made a part
hereof; provided that the inaccuracy of, or the failure of the Bank to make, any
such recordation or endorsement shall not affect the obligations of the Borrower
hereunder or under the Credit Agreement.

         This  note  is one of  the  Notes  referred  to in the  364-Day  Credit
Agreement  dated as of May 8, 1998 among U S WEST  Capital  Funding,  Inc.,  U S
WEST, Inc.,  USW-C,  Inc., the banks listed on the signature pages thereof,  the
other agents named  therein and Morgan  Guaranty  Trust  Company of New York, as
Administrative  Agent (as the same may be amended from time to time, the "Credit
Agreement"). Terms defined in the Credit Agreement are used herein with the same
meanings.

         Reference  is made  to the  Credit  Agreement  for  provisions  for the
prepayment hereof and the acceleration of the maturity hereof.



<PAGE>



         U S  WEST,  Inc.,  has,  pursuant  to  the  provisions  of  the  Credit
Agreement,  unconditionally  guaranteed  the payment in full of the principal of
and interest on this Note.

                                            U S WEST CAPITAL FUNDING, INC.


                                            By
                                                  Title:





<PAGE>




                         LOANS AND PAYMENTS OF PRINCIPAL
<TABLE>
<CAPTION>
<S>       <C>            <C>                <C>           <C>                <C>    


------------------------------------------------------------------------------------------

 Date     Amount of      Type of Loan       Amount of     Maturity Date      Notation Made
             Loan                           Principal                              By
                                             Repaid
------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------

</TABLE>




<PAGE>




                                                                  EXHIBIT B


                       Form of Money Market Quote Request


                                                                  [Date]



To:      Morgan Guaranty Trust Company of New York
         (the "Agent")

From:    U S WEST Capital Funding, Inc.

Re:      364-Day Credit  Agreement (the "Credit  Agreement")  dated as of May 8,
         1998 among U S WEST Capital Funding, Inc., U S WEST, Inc., USW-C, Inc.,
         the Banks listed on the signature pages thereof, the other agents named
         therein and the Agent

         We hereby give notice pursuant to Section 2.03 of the Credit  Agreement
that we request  Money Market  Quotes for the  following  proposed  Money Market
Borrowing(s):

Date of Borrowing:  __________________

Principal Amount1                              Interest Period2

$

         Such Money Market Quotes should offer a Money Market [Margin] [Absolute
Rate].  [The applicable base rate is the London  Interbank  Offered Rate.] Terms
used herein have the meanings assigned to them in the Credit Agreement.


--------
     1Amount must be $25,000,000 or a larger multiple of $5,000,000.
     2Not less than one month (LIBOR  Auction) or not less than 7 days (Absolute
Rate Auction), subject to the provisions of the definition of Interest Period.



<PAGE>



         Terms used  herein  have the  meanings  assigned  to them in the Credit
Agreement.

                                    U S WEST CAPITAL FUNDING, INC.


                                    By________________________
                                        Title:





<PAGE>



                                                                    EXHIBIT C


                   Form of Invitation for Money Market Quotes



To:      [Name of Bank]

Re:      Invitation for Money Market Quotes to U S WEST Capital
         Funding, Inc. (the "Borrower")

         Pursuant to Section 2.03 of the 364-Day  Credit  Agreement  dated as of
May 8, 1998 among U S WEST Capital Funding,  Inc., U S WEST, Inc., USW-C,  Inc.,
the Banks parties  thereto,  the other agents named therein and the undersigned,
as Administrative  Agent, we are pleased on behalf of the Borrower to invite you
to submit Money Market Quotes to the Borrower for the following  proposed  Money
Market Borrowing(s):


Date of Borrowing:  __________________

Principal Amount                               Interest Period


$

         Such Money Market Quotes should offer a Money Market [Margin] [Absolute
Rate].  [The applicable base rate is the London Interbank  Offered Rate.] Please
respond to this  invitation  by no later than [10:30 A.M.] [9:15 A.M.] (New York
City time) on [date].

                                    MORGAN GUARANTY TRUST COMPANY
                                      OF NEW YORK, as Administrative Agent


                                    By______________________________
                                            Authorized Officer


<PAGE>



                                                                  EXHIBIT D


                           Form of Money Market Quote


To:      Morgan Guaranty Trust Company of New York,
         as Administrative Agent (the "Agent")

Re:      Money Market Quote to
         U S WEST Capital Funding, Inc. (the "Borrower")

         In  response  to  your  invitation  on  behalf  of the  Borrower  dated
_____________,  19__,  we hereby make the  following  Money  Market Quote on the
following terms:

1.       Quoting Bank:  ________________________________

2.       Person to contact at Quoting Bank: _____________________________

3.       Date of Borrowing: ____________________*

4.       We hereby offer to make Money Market Loan(s) in the following principal
         amounts, for the following Interest Periods and at the following rates:

<TABLE>
<CAPTION>
<S>              <C>             <C>                <C>    

Principal        Interest        Money Market
 Amount**        Period***       [Margin****]       [Absolute Rate*****]

$

$
</TABLE>

         [Provided,  that the aggregate  principal  amount of Money Market Loans
         for which the above offers may be accepted shall not exceed
         $____________.]**


----------
* As specified in the related Invitation.


         (notes continued on following page)



<PAGE>



         We understand  and agree that the offer(s) set forth above,  subject to
the  satisfaction  of the applicable  conditions set forth in the 364-Day Credit
Agreement  dated as of May 8, 1998 among U S WEST  Capital  Funding,  Inc.,  U S
WEST, Inc.,  USW-C,  Inc., the Banks listed on the signature pages thereof,  the
other agents named therein and yourselves, as Agent, irrevocably obligates us to
make the Money Market  Loan(s) for which any offer(s) are accepted,  in whole or
in part.

                                            Very truly yours,
                                            [NAME OF BANK]


Dated:_______________                       By:__________________________
                                               Authorized Officer





----------

** Principal amount bid for each Interest Period may not exceed principal amount
requested.  Specify  aggregate  limitation if the sum of the  individual  offers
exceeds the amount the Bank is willing to lend. Bids must be made for $5,000,000
or a larger multiple of $1,000,000. *** Not less than one month or not less than
7 days,  as  specified  in the  related  Invitation.  No more than five bids are
permitted  for each  Interest  Period.  ****  Margin  over or under  the  London
Interbank  Offered Rate determined for the applicable  Interest Period.  Specify
percentage  (to the  nearest  1/10,000  of 1%) and  specify  whether  "PLUS"  or
"MINUS".  ***** Specify rate of interest per annum (to the nearest 1/10,000th of
1%).



<PAGE>




                                                                     EXHIBIT E


                                   OPINION OF
                    COUNSEL FOR THE COMPANY AND THE BORROWER


To the Banks and the Administrative
  Agent Referred to Below
c/o Morgan Guaranty Trust Company
  of New York, as Administrative Agent
60 Wall Street
New York, New York  10260

Gentlemen and Ladies:

         I have acted as counsel for U S WEST,  Inc.,  USW-C,  Inc. and U S WEST
Capital  Funding,  Inc., in connection  with the 364-Day  Credit  Agreement (the
"Credit Agreement") dated as of May 8, 1998, among them, the banks listed on the
signature  pages  thereof,  the other agents named  therein and Morgan  Guaranty
Trust Company of New York, as Administrative  Agent. Terms defined in the Credit
Agreement are used herein as therein defined.  This opinion is being rendered to
you at the  instruction of the client  pursuant to Section 3.01(b) of the Credit
Agreement.

         I am familiar with the proceedings  taken by the Company,  USW-C,  Inc.
and the Borrower in connection with the authorization, execution and delivery of
the  Credit  Agreement  and  the  Notes,  and I have  examined  such  documents,
certificates,  and such  other  matters of fact and  questions  of law as I have
deemed relevant under the circumstances to express an informed opinion. Upon the
basis of the foregoing, I am of the opinion that:

         1. The Company and USW-C, Inc. are each  corporations  validly existing
and in good standing  under the laws of the State of Delaware,  and each has all
corporate powers and all governmental licenses, authorizations,  qualifications,
consents  and  approvals  required to carry on its  business  as now  conducted,
except  where the  absence of any such  license,  authorization,  qualification,
consent or approval would not have a material adverse effect on the consolidated
financial position or consolidated  results of operations of the Company and its
Consolidated Subsidiaries considered as one enterprise.




<PAGE>



         2. The execution,  delivery and performance by the Company, USW-C, Inc.
and the  Borrower of the Credit  Agreement  and by the Borrower of the Notes are
within  such  Person's  corporate  powers,  have  been  duly  authorized  by all
necessary corporate action, and require no action by or in respect of, or filing
with, any governmental body, agency or official.

         3. The execution,  delivery and performance by the Company, USW-C, Inc.
and the Borrower of the Credit  Agreement  and by the Borrower of the Notes will
not (i) result in a breach or  violation  of,  conflict  with,  or  constitute a
default  under,  the articles of  incorporation  or bylaws of such Person or any
material  law or  regulation  or any  material  order,  judgment,  agreement  or
instrument to which such Person is a party or by which such Person is bound,  or
(ii)  result  in the  creation  or  imposition  of any Lien on any asset of such
Person.

         4. The Credit  Agreement  constitutes a valid and binding  agreement of
the Company  USW-C,  Inc. and the Borrower  and the Notes  constitute  valid and
binding obligations of the Borrower, in each case enforceable in accordance with
its terms except as the same may be limited by bankruptcy, insolvency or similar
laws affecting creditors' rights generally and by general principles of equity.

         5. To my knowledge,  and except as disclosed in the Company's 1997 Form
10-K (as  amended  by Form  10-K/A) as filed with the  Securities  and  Exchange
Commission,  there is no action,  suit or proceeding pending against,  or to the
best of my knowledge  threatened  against or affecting the Company or any of its
Subsidiaries  before any court or arbitrator or any governmental body, agency or
official,  in which there is a  reasonable  possibility  of an adverse  decision
which could  materially  adversely affect the business,  consolidated  financial
position  or  consolidated   results  of  operations  of  the  Company  and  its
Consolidated  Subsidiaries,  considered as a whole, or which in any manner draws
into question the validity of the Credit Agreement or the Notes.

         6. The Borrower and each of the Company's other  corporate  Significant
Subsidiaries  are  corporations  validly existing and in good standing under the
laws of their jurisdictions of incorporation,  and have all corporate powers and
all  governmental  licenses,   authorizations,   qualifications,   consents  and
approvals  required to carry on its business as now conducted,  except where the
absence of any such license, authorization,  qualification,  consent or approval
would not have a material adverse effect on the consolidated  financial position
or  consolidated  results of  operations  of the  Company  and its  Consolidated
Subsidiaries considered as one enterprise.

         For purposes of my opinion set forth in numbered  paragraph 4 above,  I
have assumed that the laws of the State of New York, which are stated to govern



<PAGE>



the Credit Agreement and the Notes, are the same as the laws of the State of
Colorado.

         In rendering  the opinions  set forth  herein,  I have assumed that the
Credit Agreement and the Notes will conform to the specimens thereof examined by
me, that the  signatures on all documents  examined by me were genuine,  and the
authenticity  of all  documents  submitted  to me as  originals  or as copies of
originals, assumptions which I have not independently verified.

         This  opinion is  furnished  by me as counsel  for the  Company and the
Borrower and is solely for your  benefit and the benefit of any  Assignee  under
the Credit Agreement.  Without my prior written consent, this opinion may not be
relied upon by you or any Assignee in any other  context or by any other person.
This  opinion  may not be  quoted,  in  whole  or in  part,  or  copies  thereof
furnished, to any other person without my prior written consent, except that you
may furnish copies hereof (a) to your auditors and  attorneys,  (b) to any state
or federal authority having  regulatory  jurisdiction over you or the Company or
the  Borrower,  (c)  pursuant  to  order  or  legal  process  of  any  court  or
governmental  agency, (d) in connection with any legal action to which you are a
party arising out of the transactions  contemplated by the Credit Agreement, and
(e) to any Participant or proposed Participant in the Commitment of any Bank.

         This  opinion is limited to the  present  laws of the State of Colorado
and the General  Corporation Law of the State of Delaware,  to present  judicial
interpretations  thereof, and to the facts as they presently exist, and I assume
no  responsibility  as to the  applicability  or effect of the laws of any other
jurisdiction.  In rendering  this  opinion,  I assume no obligation to revise or
supplement  this opinion should the present laws of the State of Colorado or the
General  Corporation  Law of the State of  Delaware  be changed  by  legislative
action, judicial decision, or otherwise.

                                                     Very truly yours,


                                                     Thomas O. McGimpsey




<PAGE>



                                                                    EXHIBIT F


                                   OPINION OF
                     DAVIS POLK & WARDWELL, SPECIAL COUNSEL
                          FOR THE ADMINISTRATIVE AGENT




To the Banks and the Administrative Agent
  Referred to Below
c/o Morgan Guaranty Trust Company
  of New York, as Administrative Agent
60 Wall Street
New York, New York  10260

Dear Sirs:

         We have participated in the preparation of the 364-Day Credit Agreement
(the "Credit Agreement") dated as of May 8, 1998 among U S WEST Capital Funding,
Inc., U S WEST,  Inc.,  USW-C,  Inc.,  the banks listed on the  signature  pages
thereof (the "Banks"),  the other agents named therein and Morgan Guaranty Trust
Company of New York, as  Administrative  Agent (the "Agent"),  and have acted as
special counsel for the Agent for the purpose of rendering this opinion pursuant
to  Section  3.01(c)  of the  Credit  Agreement.  Terms  defined  in the  Credit
Agreement are used herein as therein defined.

         We have examined originals or copies, certified or otherwise identified
to our  satisfaction,  of such  documents,  corporate  records,  certificates of
public   officials  and  other   instruments   and  have  conducted  such  other
investigations  of fact and law as we have deemed  necessary  or  advisable  for
purposes of this opinion.

         Upon the basis of the foregoing,  we are of the opinion that,  assuming
that the execution,  delivery and performance by the Company and the Borrower of
the Credit  Agreement  and by the Borrower of the Notes are within such Person's
corporate  powers  and have  been duly  authorized  by all  necessary  corporate
action,  the Credit Agreement  constitutes a valid and binding  agreement of the
Company and the Borrower and the Notes constitute valid and binding  obligations
of the Borrower.




<PAGE>



         We are  members  of the Bar of the State of New York and the  foregoing
opinion is limited to the laws of the State of New York. In giving the foregoing
opinion,  we  express  no  opinion  as to the  effect (if any) of any law of any
jurisdiction  (except the State of New York) in which any Bank is located  which
limits the rate of interest that such Bank may charge or collect.

         This  opinion is rendered  solely to you in  connection  with the above
matter.  This  opinion  may not be relied  upon by you for any other  purpose or
relied  upon by or  furnished  to any other  person  without  our prior  written
consent.

                                                         Very truly yours,




<PAGE>




                                                                    EXHIBIT G



                       ASSIGNMENT AND ASSUMPTION AGREEMENT


         AGREEMENT  dated  as of  __________,  __  199_  among  [ASSIGNOR]  (the
"Assignor"),  [ASSIGNEE]  (the  "Assignee"),  U S WEST, Inc. (the "Company") and
MORGAN  GUARANTY  TRUST  COMPANY  OF NEW  YORK,  as  Administrative  Agent  (the
"Agent").

                                       W I T N E S S E T H

         WHEREAS,  this  Assignment and Assumption  Agreement (the  "Agreement")
relates  to the  364-Day  Credit  Agreement  dated as of May 8,  1998  among the
Company,  USW-C,  Inc., the Borrower  named therein,  the Assignor and the other
Banks party thereto, as Banks, the other agents named therein and the Agent (the
"Credit Agreement");

         WHEREAS,  as provided  under the Credit  Agreement,  the Assignor has a
Commitment  to  make  Loans  in  an  aggregate  principal  amount  at  any  time
outstanding not to exceed $__________;

         WHEREAS,  Committed  Loans  made  by  the  Assignor  under  the  Credit
Agreement in the aggregate  principal  amount of $__________  are outstanding at
the date hereof; and

         WHEREAS,  the  Assignor  proposes to assign to the  Assignee all of the
rights of the Assignor under the Credit Agreement in respect of a portion of its
Commitment thereunder in an amount equal to $__________ (the "Assigned Amount"),
together with a corresponding  portion of its outstanding  Committed  Loans, and
the  Assignee  proposes  to accept  assignment  of such  rights  and  assume the
corresponding obligations from the Assignor on such terms;

         NOW,  THEREFORE,  in  consideration  of the  foregoing  and the  mutual
agreements contained herein, the parties hereto agree as follows:

         SECTION 1.  Definitions. All capitalized terms not otherwise defined
herein shall have the respective meanings set forth in the Credit Agreement.


<PAGE>



         SECTION 2.  Assignment.  The Assignor  hereby  assigns and sells to the
Assignee  all of the rights of the  Assignor  under the Credit  Agreement to the
extent of the Assigned  Amount,  and the Assignee hereby accepts such assignment
from the Assignor and assumes all of the  obligations  of the Assignor under the
Credit  Agreement to the extent of the Assigned  Amount,  including the purchase
from the Assignor of the  corresponding  portion of the principal  amount of the
Committed  Loans made by the Assignor  outstanding at the date hereof.  Upon the
execution and delivery hereof by the Assignor, the Assignee, the Company and the
Agent and the payment of the amounts  specified in Section 3 required to be paid
on the date hereof (i) the Assignee shall, as of the date hereof, succeed to the
rights and be  obligated to perform the  obligations  of a Bank under the Credit
Agreement with a Commitment in an amount equal to the Assigned Amount,  and (ii)
the  Commitment of the Assignor  shall,  as of the date hereof,  be reduced by a
like amount and the  Assignor  released  from its  obligations  under the Credit
Agreement to the extent such obligations have been assumed by the Assignee.  The
assignment provided for herein shall be without recourse to the Assignor.

         SECTION 3.  Payments.  As  consideration  for the  assignment  and sale
contemplated in Section 2 hereof,  the Assignee shall pay to the Assignor on the
date hereof in Federal funds the amount  heretofore  agreed between them.3 It is
understood that  commitment  and/or facility fees accrued to the date hereof are
for the account of the Assignor and such fees  accruing  from and  including the
date hereof are for the account of the  Assignee.  Each of the  Assignor and the
Assignee  hereby  agrees to that if it  receives  any  amount  under the  Credit
Agreement  which is for the account of the other party hereto,  it shall receive
the same for the account of such other party to the extent of such other party's
interest therein and shall promptly pay the same to such other party.

         [SECTION 4.  Consent of the Company and the Agent.  This  Agreement  is
conditioned  upon the consent of the  Company and the Agent  pursuant to Section
10.06(c) of the Credit Agreement. The execution of this Agreement by the Company
and the Agent is evidence of this  consent.  Pursuant  to Section  10.06(c)  the
Company  agrees to cause the  Borrower to execute and deliver a Note  payable to
the order of the Assignee to evidence the assignment and assumption provided for
herein.]

         SECTION 5.  Non-Reliance on Assignor.  The Assignor makes no
representation or warranty in connection with, and shall have no responsibility
--------
     3 Amount  should  combine  principal  together  with  accrued  interest and
breakage compensation, if any, to be paid by the Assignee, net of any portion of
any upfront fee to be paid by the Assignor to the Assignee. It may be preferable
in an appropriate case to specify these amounts generically or by formula rather
than as a fixed sum.



<PAGE>



with respect to, the solvency, financial condition, or statements of the Company
or the Borrower,  or the validity and  enforceability  of the obligations of the
Company or the  Borrower  in respect of the Credit  Agreement  or any Note.  The
Assignee  acknowledges  that it has,  independently  and without reliance on the
Assignor,  and  based  on  such  documents  and  information  as it  has  deemed
appropriate,  made its own  credit  analysis  and  decision  to enter  into this
Agreement and will  continue to be  responsible  for making its own  independent
appraisal of the business,  affairs and  financial  condition of the Company and
the Borrower.

         SECTION 6.  Governing Law.  This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.

         SECTION 7. Counterparts.  This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.

         IN WITNESS  WHEREOF,  the  parties  have caused  this  Agreement  to be
executed and  delivered by their duly  authorized  officers as of the date first
above written.

                                               [ASSIGNOR]


                                               By
                                                  Title:


                                               [ASSIGNEE]


                                               By
                                                  Title:



                                               [U S WEST, INC.


                                               By
                                                  Title:




<PAGE>




                                               MORGAN GUARANTY TRUST
                                                  COMPANY OF NEW YORK, as
                                                  Administrative Agent


                                               By
                                                  Title:]







<PAGE>



                                                                  EXHIBIT H



                               EXTENSION AGREEMENT


US WEST Capital Funding, Inc.
US WEST, Inc.
7800 East Orchard Road
Englewood, Colorado  80111

Morgan Guaranty Trust Company of
  New York, as Administrative Agent
  under the Credit Agreement referred
  to below
60 Wall Street
New York, NY  10260

Gentlemen:

         The  undersigned  hereby agree to extend the  Revolving  Credit  Period
under the 364-Day Credit Agreement dated as of May 8, 1998 among US WEST Capital
Funding,  Inc., US WEST, Inc., USW-C, Inc., the Banks listed therein,  the other
agents  named  therein  and  Morgan  Guaranty  Trust  Company  of New  York,  as
Administrative  Agent (the "Credit  Agreement") for 364 days to ____________ __,
____. Terms defined in the Credit Agreement are used herein as therein defined.

         This  Extension  Agreement  shall be construed in  accordance  with and
governed by the law of the State of New York.  It may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.

                                            [NAME OF BANK]1


                                            By
                                                  Title:
--------
     1 Insert names of Banks which have  responded  affirmatively  in accordance
with Section 2.01(b) of the Credit Agreement.


<PAGE>





                                            [NAME OF BANK]1


                                            By
                                                  Title:


                                            [NAME OF BANK]*


                                            By
                                                  Title:


                                            [NAME OF BANK]*


                                            By
                                                  Title:


                                            [NAME OF BANK]*


                                            By
                                                  Title:

                                            [NAME OF BANK]*


                                            By
                                                  Title:
--------
     1 Insert names of Banks which have  responded  affirmatively  in accordance
with Section 2.01(b) of the Credit Agreement.



<PAGE>




Agreed and accepted:

US WEST CAPITAL FUNDING, INC.


By
    Title


US WEST, INC.


By
    Title


MORGAN GUARANTY TRUST COMPANY
  OF NEW YORK, as Administrative Agent


By
    Title