Exhibit 10.7 to
Form 10-Q










                                 $200,000,000


                               CREDIT AGREEMENT


                          Dated as of October 8, 1996

                                     among


                       ASCENT ENTERTAINMENT GROUP, INC.
                                as the Borrower

                                      and


                           THE LENDERS NAMED HEREIN

                                      and


                          NATIONSBANK OF TEXAS, N.A.
                          as the Administrative Agent











<PAGE>



                            Exhibits and Schedules


Exhibits


Exhibit A         -     Form of Administrative Questionnaire
Exhibit B         -     Form of Assignment and Acceptance
Exhibit C         -     Form of Borrowing Request
Exhibit D         -     Form of Application for a Letter of Credit
Exhibit E         -     Form of Compliance Certificate

Schedules


Schedule 1.01     -     Films Not Included in Film Cash Flow
Schedule 2.01     -     Lenders and Commitments
Schedule 3.08     -     Subsidiaries
Schedule 3.09     -     Litigation
Schedule 3.10     -     Restrictive Material Agreements
Schedule 3.18     -     Insurance
Schedule 3.20     -     Environmental Matters
Schedule 3.23     -     Film Inventory
Schedule 6.01     -     Subsidiary Indebtedness
Schedule 6.02     -     Liens
Schedule 6.04     -     Investments
Schedule 6.03     -     Permitted Sale Leaseback
Schedule 6.05     -     Capital  Stock owned by the  Borrower  Permitted
to be Sold


<PAGE>






------------------------------------------------------------------------
                                       3
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                               TABLE OF CONTENTS


      ARTICLE I

                                  Definitions

      SECTION 1.01.     Defined Terms......................................  1
      SECTION 1.02.     Terms Generally.................................... 23

      ARTICLE II

                                  The Credits

      SECTION 2.01.     Commitments........................................ 23
      SECTION 2.02.     Loans.............................................. 23
      SECTION 2.03.     Borrowing Procedure................................ 25
      SECTION 2.04.     Evidence of Debt; Repayment of Loans............... 26
      SECTION 2.05.     Fees............................................... 26
      SECTION 2.06.     Interest on Loans.................................. 28
      SECTION 2.07.     Default Interest................................... 28
      SECTION 2.08.     Alternate Rate of Interest......................... 28
      SECTION 2.09.     Termination      and      Reduction     of
                        Commitments; Extension of Maturity Date............ 29
      SECTION 2.10.     Conversion and Continuation of Borrowings.......... 30
      SECTION 2.11.     Prepayment......................................... 31
      SECTION 2.12.     Reserve     Requirements;     Change    in
            Circumstances.................................................. 32
      SECTION 2.13.     Change in Legality................................. 34
      SECTION 2.14.     Indemnity.......................................... 35
      SECTION 2.15.     Pro Rata Treatment................................. 35
      SECTION 2.16.     Sharing of Setoffs................................. 35
      SECTION 2.17.     Payments........................................... 36
      SECTION 2.18.     Taxes.............................................. 36
      SECTION 2.19.     Assignment  of  Commitments  Under Certain
                        Circumstances; Duty to Mitigate.................... 40
      SECTION 2.20.     Letters of Credit.................................. 41

      ARTICLE III

                        Representations and Warranties

      SECTION 3.01.     Organization; Powers............................... 45
      SECTION 3.02.     Authorization...................................... 46
      SECTION 3.03.     Enforceability..................................... 46
      SECTION 3.04.     Governmental Approvals............................. 46
      SECTION 3.05.     Financial Statements............................... 46
      SECTION 3.06.     No Material Adverse Change......................... 47
      SECTION 3.07.     Title  to  Properties;   Possession  Under
            Leases       47
      SECTION 3.08.     The Subsidiaries and On Command Corp............... 47
      SECTION 3.09.     Litigation; Compliance with Laws................... 47
      SECTION 3.10.     Agreements......................................... 48
      SECTION 3.11.     Federal Reserve Regulations........................ 48
      SECTION 3.12.     Investment  Company  Act;  Public  Utility
                        Holding Company Act................................ 48
      SECTION 3.13.     Use of Proceeds.................................... 48
      SECTION 3.14.     Tax Returns........................................ 48
      SECTION 3.15.     No Material Misstatements.......................... 49
      SECTION 3.16.     Employee Benefit Plans............................. 49
      SECTION 3.17.     Solvency........................................... 49
      SECTION 3.18.     Insurance.......................................... 50
      SECTION 3.19.     Labor Matters...................................... 50
      SECTION 3.20.     Environmental Matters.............................. 50
      SECTION 3.21.     Ownership of the Franchises........................ 51
      SECTION 3.22.     Strikes............................................ 51
      SECTION 3.23.     Film Inventory..................................... 52
      SECTION 3.24.     Survival    of     Representations     and
            Warranties, etc................................................ 52

      ARTICLE IV

                             Conditions of Lending

      SECTION 4.01.     All Credit Events.................................. 52
      SECTION 4.02.     First Credit Event................................. 53

      ARTICLE V

                             Affirmative Covenants

      SECTION 5.01.     Existence; Businesses and Properties............... 56
      SECTION 5.02.     Insurance.......................................... 56
      SECTION 5.03.     Obligations and Taxes.............................. 56
      SECTION 5.04.     Financial Statements, Reports, etc................. 57
      SECTION 5.05.     Litigation and Other Notices....................... 58
      SECTION 5.06.     Employee Benefits.................................. 58
      SECTION 5.07.     Maintaining     Records;     Access     to
                        Properties and Inspections......................... 59
      SECTION 5.08.     Use of Proceeds.................................... 59
      SECTION 5.09.     Compliance with Environmental Laws................. 59
      SECTION 5.10.     Compliance with Material Contracts................. 60
      SECTION 5.11.     Arena/Complex Construction......................... 60
      SECTION 5.12.     NBA and NHL Obligations............................ 60
      SECTION 5.13.     Operation of Franchises............................ 60
      SECTION 5.14.     Services Contracts................................. 60
      SECTION 5.15.     Key  Man   Life   Insurance/NBA   and  NHL
                        Financial Information.............................. 60
      SECTION 5.16.     Arena/Complex Notice............................... 61

      ARTICLE VI

                              Negative Covenants

      SECTION 6.01.     Indebtedness....................................... 61
      SECTION 6.02.     Liens.............................................. 62
      SECTION 6.03.     Sale and Lease Back Transactions................... 64
      SECTION 6.04.     Investments,   Acquisitions,   Loans   and
            Advances     64
      SECTION 6.05.     Mergers,   Consolidations   and  Sales  of
            Assets       65
      SECTION 6.06.     Dividends        and        Distributions;
                     Restrictions on Ability of Subsidiaries
             to Pay Dividends................................... 66
      SECTION 6.07.     Transactions with Affiliates....................... 66
      SECTION 6.08.     Limitation on Restrictive Agreements............... 67
      SECTION 6.09.     Coverage Ratio..................................... 67
      SECTION 6.10.     Financial  Covenants  Regarding On Command
            Corp         68
      SECTION 6.11.     Film Inventory..................................... 68
      SECTION 6.12.     Amendments to Organizational Documents.  .......... 69

      ARTICLE VII

                               Events of Default


      ARTICLE VIII

                           The Administrative Agent

      ARTICLE IX

                                 Miscellaneous

      SECTION 9.01.     Notices............................................ 77
      SECTION 9.02.     Survival of Agreement.............................. 78
      SECTION 9.03.     Binding Effect..................................... 78
      SECTION 9.04.     Successors and Assigns............................. 79
      SECTION 9.05.     Expenses; Indemnity................................ 82
      SECTION 9.06.     Right of Setoff.................................... 83
      SECTION 9.07.     Applicable Law..................................... 83
      SECTION 9.08.     Waivers; Amendment................................. 84
      SECTION 9.09.     Interest Rate Limitation........................... 84
      SECTION 9.10.     NBA Consent Letter and NHL Consent Letter.......... 85
      SECTION 9.11.     ENTIRE AGREEMENT................................... 85
      SECTION 9.12.     WAIVER OF JURY TRIAL............................... 85
      SECTION 9.13.     Severability....................................... 86
      SECTION 9.14.     Counterparts....................................... 86
      SECTION 9.15.     Headings........................................... 86
      SECTION 9.16.     Jurisdiction;   Consent   to   Service  of
            Process      86
      SECTION 9.17.     Confidentiality.................................... 87
      SECTION 9.18.     Proposed    Merger   of   Ascent   Network
            Services, Inc.................................................. 87



<PAGE>


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

------------------------------------------------------------------------
                       ASCENT ENTERTAINMENT GROUP, INC.

                                 $200,000,000

                               CREDIT AGREEMENT


      This CREDIT  AGREEMENT  (this  "Agreement"),  dated as of October 8, 1996,
among ASCENT ENTERTAINMENT GROUP, INC., a Delaware corporation (the "Borrower"),
the Lenders (as defined in Article I hereof),  and NATIONSBANK OF TEXAS, N.A., a
national banking  association,  as issuing bank (in such capacity,  the "Issuing
Bank"),  and as  administrative  agent (in such  capacity,  the  "Administrative
Agent") for the Lenders.

      The Borrower has requested the Lenders to (a) extend secured credit in the
form of Revolving Loans (such term and each other  capitalized term used but not
defined herein having the meaning given it in Article I hereof), at any time and
from time to time prior to the Maturity Date, in an aggregate  principal  amount
at any time  outstanding  not in excess of  $200,000,000,  (b) issue  letters of
credit,  in an aggregate  face amount at any time  outstanding  not in excess of
$15,000,000 and (c) support payment obligations  incurred in the ordinary course
of business by the Borrower and its Subsidiaries.  The proceeds of the Revolving
Loans  are to be  used  to  refinance  existing  indebtedness  and  for  general
corporate  purposes of the Borrower  and its  Subsidiaries,  including,  without
limitation, working capital and strategic acquisitions permitted under the terms
hereof.

      The Lenders are  willing to extend  such credit to the  Borrower,  and the
Issuing  Bank is  willing  to issue  letters  of credit  for the  account of the
Borrower,  in each case on the terms and  subject  to the  conditions  set forth
herein. Accordingly, the parties hereto agree as follows:


                                   ARTICLE I

                                  Definitions

      Defined  Terms.  As used in this  Agreement,  the following  terms
shall have the meanings specified below:

      "ABR Borrowing" shall mean a Borrowing comprised of ABR Loans.

      "ABR Loan" shall mean any Loan bearing interest at the Alternate Base Rate
in accordance with the provisions of Article II hereof.



<PAGE>


------------------------------------------------------------------------
      "Adjusted LIBO Rate" shall mean, with respect to any Eurodollar  Borrowing
for any Interest Period, a simple per annum interest rate equal to the lesser of
(a) the Highest  Lawful Rate and (b) the sum of (i) the quotient of (x) the LIBO
Rate divided by (y) one minus the LIBOR Reserve Percentage, stated as a decimal,
plus (ii) the  Applicable  Percentage.  The  Adjusted  LIBO Rate shall  apply to
Interest Periods of one, two, three or six months,  or, if determined  available
by the  Administrative  Agent,  twelve  months.  The Adjusted LIBO Rate shall be
subject to availability  with respect to the Lenders and to Section 2.13 hereof.
Once  determined,  the  Adjusted  LIBO Rate shall  remain  unchanged  during the
applicable  Interest  Period,  except for changes to reflect  adjustments in the
LIBOR Reserve Percentage.
------------------------------------------------------------------------

      "Administrative  Agent Fees" shall have the meaning  assigned to such term
in Section 2.05(b) hereof.

      "Administrative  Questionnaire" shall mean an Administrative Questionnaire
in the form of Exhibit A hereto.

      "Advertising Agreements" shall mean all material agreements between Ascent
Sports, Avalanche Sub or Nuggets Sub and any other Person in any manner relating
to signage or  advertising  in,  around or relating to the Arena,  or, after its
completion, the Arena/Complex.

      "Affiliate"  shall mean,  when used with  respect to a  specified  Person,
another Person that directly,  or indirectly through one or more intermediaries,
Controls  or is  Controlled  by or is  under  common  Control  with  the  Person
specified.

      "Alternate  Base Rate" shall mean,  for any day, a rate per annum (rounded
upwards,  if necessary,  to the next 1/100 of 1%) equal to the lesser of (a) the
Highest Lawful Rate and (b) sum of (i) the Applicable Percentage,  plus (ii) the
greater of (A) the Prime Rate in effect on such day,  and (B) the Federal  Funds
Effective  Rate in  effect  on such day plus 1/2 of 1%.  If for any  reason  the
Administrative  Agent  shall  have  determined  (which  determination  shall  be
conclusive  absent  manifest  error) that it is unable to ascertain  the Federal
Funds  Effective Rate for any reason,  including the inability or failure of the
Administrative  Agent to obtain  sufficient  quotations in  accordance  with the
terms of the  definition  thereof,  the Alternate  Base Rate shall be determined
without regard to clause (B) of the preceding sentence,  until the circumstances
giving rise to such inability no longer exist.  Any change in the Alternate Base
Rate due to a change in the Prime Rate or the Federal Funds Effective Rate shall
be  effective  on the  effective  date of such  change in the Prime  Rate or the
Federal Funds Effective Rate, respectively. The term "Prime Rate" shall mean the
rate  of  interest  per  annum  publicly  announced  from  time  to  time by the
Administrative Agent as its prime rate in effect at its office in Dallas, Texas;
each  change in the Prime Rate  shall be  effective  on the date such  change is
publicly  announced as being effective.  The term "Federal Funds Effective Rate"
shall mean, for any day, the weighted average of the rates on overnight  Federal
funds  transactions  with  members of the  Federal  Reserve  System  arranged by
Federal funds brokers,  as published on the next succeeding  Business Day by the
Federal  Reserve Bank of Dallas,  Texas or, if such rate is not so published for
any day that is a Business  Day, the average of the  quotations  for the day for
such transactions  received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
      "Applicable  Law" shall mean (a) in respect of any Person,  all provisions
of Laws of tribunals  applicable  to such Person,  and all orders and decrees of
all  courts and  arbitrators  in  proceedings  or actions to which the Person in
question is a party and (b) in respect of  contracts  made or  performed  in the
State of Texas,  "Applicable  Law" also means the laws of the  United  States of
America,  including,  without limiting the foregoing, 12 USC Sections 85 and 86,
as  amended  to the date  hereof  and as the same may be amended at any time and
from time to time  hereafter,  and any other  statute  of the  United  States of
America now or at any time hereafter  prescribing  the maximum rates of interest
on  loans  and  extensions  of  credit,  and the  laws of the  State  of  Texas,
including, without limitations,  Articles 5069-1.04 and 5069-1.07(a),  Title 79,
Revised Civil Statutes of Texas,  1925, as amended ("Art.  1.04"), and any other
statute of the State of Texas now or at any time hereafter  prescribing  maximum
rates of interest on loans and  extensions  of credit;  provided  however,  that
pursuant to Article  5069-15.10(b),  Title 79,  Revised Civil Statutes of Texas,
1925, as amended,  the Borrower  agrees that the provisions of Chapter 15, Title
79,  Revised Civil Statutes of Texas,  1925, as amended,  shall not apply to the
Loans hereunder.

      "Applicable  Percentage"  shall  mean,  for any day,  with  respect to any
Eurodollar Revolving Loan or ABR Loan, the applicable percentage set forth below
under the caption "Eurodollar Margin" or "ABR Margin", as the case may be, based
upon  the  ratio  of (a) the  product  of the  Borrower's  and its  consolidated
Subsidiaries' EBITDA for the most recently completed four fiscal quarters to (b)
Consolidated  Cash Interest Expense for the most recently  completed four fiscal
quarters (the "Determining Ratio"), then in effect for purposes hereof:

                              Eurodollar        ABR
Determining Ratio               Margin          Margin

Category 1                    2.50%             1.50%

Less than 1.10 to 1.00

Category 2                    2.00%       1.00%

Greater than or equal to
1.10 to 1.00 but less than
2.00 to 1.00

Category 3

Greater than or equal to            1.75%       0.75%
2.00 to 1.00

      Except as set forth below, the Determining  Ratio utilized for purposes of
determining  the Eurodollar  Margin and ABR Margin shall be that in effect as of
the last day of the most  recent  fiscal  quarter of the  Borrower in respect of
which financial statements have been delivered pursuant to this Agreement.  From
the date hereof until the earliest to occur of the initial delivery of financial
statements  pursuant to Section 5.04(a) or (b) hereof, the Borrower's failure to
timely  deliver  such  financial  statements  or the  occurrence  of an Event of
Default,  the  Determining  Ratio shall be deemed to be within Category 1 above.
The  Applicable  Percentage  from time to time in  effect  shall be based on the
Determining Ratio from time to time in effect, and each change in the Applicable
Percentage  resulting  from a change in (or the  initial  establishment  of) the
Determining Ratio shall be effective with respect to all Loans,  Commitments and
Letters  of  Credit  outstanding  on and  after  the  date  of  delivery  to the
Administrative  Agent of the financial  statements and certificates  required by
Section  5.04(a) or (b) hereof  indicating such change to and including the date
immediately preceding the next date of delivery of such financial statements and
certificates indicating another such change.  Notwithstanding the foregoing, (a)
at any time  during  which the  Borrower  has  failed to deliver  the  financial
statements and certificates required by Section 5.04(a) or (b) hereof, or (b) at
any time after the occurrence and during the continuance of an Event of Default,
the Determining  Ratio shall be deemed to be in Category 1 above for purposes of
determining the Applicable Percentage.

      "Application"  shall  mean  any  stand-by  letter  of  credit  application
delivered to the  Administrative  Agent for or in connection  with any Letter of
Credit pursuant to Section 2.20 hereof, in the  Administrative  Agent's standard
form for stand-by letters of credit,  the form of which, on the Closing Date, is
attached as Exhibit D hereto.

      "Arena"  shall  mean the  arena  owned by the City and  County  of
Denver,  in Denver,  Colorado,  commonly known as "William H. McNichols,
Jr. Sports Arena".

      "Arena/Complex"  shall mean the  proposed  multi-purpose  sports arena and
entertainment  complex  which  is  expected  to  include,  among  other  things,
facilities for basketball, hockey, live concerts and other shows, television and
audio  production and  post-production  facilities and integrated  office space,
retail stores and restaurants.

      "Art.  1.04"  has  the  meaning  specified  in the  definition  of
"Applicable Law".

      "Ascent Sports" shall mean Ascent Sports, Inc., a Delaware corporation and
wholly owned Subsidiary of the Borrower.

      "Ascent  Sports  Holdings"  shall  mean  Ascent  Sports  Holdings,
Inc.,  a  Delaware  corporation  and  wholly  owned  Subsidiary  of  the
Borrower.

      "Asset  Disposition"  shall mean the sale or  disposition  of assets  (not
including Capital Stock owned by the Borrower or any Subsidiary of the Borrower)
for fair market value in cash outside the ordinary course of business.

      "Assignment  and  Acceptance"  shall  mean an  assignment  and  acceptance
entered  into by a Lender and an assignee,  and  accepted by the  Administrative
Agent,  in the form of Exhibit B hereto or such other form as shall be  approved
by the Administrative Agent.

      "Avalanche  Sub" shall mean Colorado  Avalanche,  LLC, a Colorado  limited
liability  corporation  and wholly owned  indirect  Subsidiary  of the Borrower,
which such Subsidiary owns and operates the Colorado  Avalanche,  a franchise of
the NHL.

      "Avalanche License  Agreement" shall mean the User Agreement,  between the
City and County of Denver and Avalanche Sub,  related to Avalanche  Sub's rights
to use and occupancy of the Arena.

      "Avalanche  License  Documents" shall mean the Avalanche License Agreement
and each other material  agreement  related to Avalanche Sub's rights to the use
and occupancy of the Arena,  or, after its  completion,  the similar  agreements
related to the Arena/Complex.

      "Beacon" shall mean Beacon  Communications  Corp., a Delaware  corporation
and wholly owned Subsidiary of the Borrower.

      "Board" shall mean the Board of Governors of the Federal Reserve System of
the United States of America.

      "Borrowing"  shall  mean  Loans of a single  Type made by the  Lenders  in
accordance  with the  terms  hereof  on a  single  date and as to which a single
Interest Period is in effect.

      "Borrowing   Base"  shall  mean  (a)  until  (i)  the   Borrower  and  the
Administrative  Agent shall have received an executed NBA Consent  Letter and an
executed NHL Consent Letter in form and substance  reasonably  acceptable to the
Administrative  Agent  and (ii)  100% of the  Capital  Stock of  Ascent  Sports,
Avalanche Sub, Nuggets Sub and Ascent Network Services, Inc. has been pledged to
the  Administrative  Lender on behalf of the  Lenders to secure the  Obligations
pursuant to documentation  substantially similar in form to the pledge agreement
executed on the Closing Date (and all such Capital Stock and corresponding stock
powers  executed in blank shall have been  delivered to the Bank),  $125,000,000
and (b) thereafter,  on any date of determination,  the sum of (i) $100,000,000,
plus (ii) 50% of the  product  of (A) the  number  of  shares of the  Borrower's
Capital  Stock of On Command  Corp.  times (B) the most  recently  quoted public
price of such Capital Stock.  Notwithstanding  anything  herein to the contrary,
(I) effective on any date of execution of any such Guarantee, the Borrowing Base
shall  be  automatically  reduced  by the  maximum  amount  of  any  outstanding
completion  Guarantee of the Borrower  executed in accordance  with the terms of
Section 6.01(f) hereof, and (II) effective on the date that is two Business Days
after the  Administrative  Agent gives the Borrower  written notice thereof from
time to time (which such notice  must be within  seven  Business  Days after the
Administrative Agent's receipt of written notice from the Borrower regarding the
receipt of such amounts),  the Borrowing Base shall be automatically  reduced by
amounts equal to (x) the Net Cash Proceeds of each Asset Disposition consummated
by the  Borrower  or any  Subsidiary  of the  Borrower  during  the term of this
Agreement  which requires a reduction in the Borrowing  Base in accordance  with
the terms of Section 6.05(b) hereof,  and (y) the difference  between  aggregate
cash proceeds  received by the Borrower or any Subsidiary of the Borrower during
the term of this  Agreement  from any and each  expansion of the NHL or NBA less
the amount,  if any,  of the  Borrower's  good faith best  estimate of all taxes
attributable  to such cash expansion  proceeds which it in good faith expects to
be paid in such taxable year or in the next taxable year.

      "Borrowing  Request"  shall mean a request by the  Borrower in  accordance
with the terms of Section 2.03 hereof and substantially in the form of Exhibit C
hereto.

      "Broadcast  Rights"  shall mean (a) any and all  rights of Ascent  Sports,
Avalanche Sub or Nuggets Sub to broadcast,  disseminate or publish, or to permit
the broadcast,  dissemination or publication of, by means of television,  radio,
cable, satellite or other electronic transmissions or recordings, any activities
of either Franchise;  (b) any and all rights to license,  sell, lease, convey or
otherwise transfer any of the foregoing described in clause (a); (c) any and all
rights  of  Ascent  Sports,  Avalanche  Sub  or  Nuggets  Sub,  pursuant  to any
agreement,  contract,  transaction  or  understanding,  as a result of which any
Person  is or  becomes  entitled  to  broadcast,  disseminate  or  publish  such
activities;  and (d) any and all renewals and extensions of any of the foregoing
and any and all amendments and supplements thereto.

      "Broadcasting  Agreements"  shall  mean  all  material  agreements  now or
hereafter granting the Broadcast Rights by and between Ascent Sports,  Avalanche
Sub or Nuggets Sub and any other Person.

      "Business Day" shall mean any day other than a Saturday,  Sunday or day on
which banks in Dallas, Texas or New York, New York are authorized or required by
Law to close; provided,  however, that when used in connection with a Eurodollar
Revolving  Loan,  the term  "Business  Day" shall also  exclude any day on which
banks are not open for  dealings  in dollar  deposits  in the  London  interbank
market.

      "Capital Lease  Obligations"  of any Person shall mean the  obligations of
such  Person  to pay  rent  or  other  amounts  under  any  lease  of (or  other
arrangement  conveying  the  right  to use)  real  or  personal  property,  or a
combination  thereof,  which  obligations  are  required  to be  classified  and
accounted  for as capital  leases on a balance  sheet of such Person under GAAP,
and the  amount of such  obligations  shall be the  capitalized  amount  thereof
determined in accordance with GAAP.

      "Capital Stock" shall mean, as to any Person, the equity interests in such
Person, including, without limitation, the shares of each class of capital stock
of any Person  that is a  corporation  and each class of  partnership  interests
(including  without  limitation,  general,  limited and preference units) in any
Person that is a partnership.

      A "Change in  Control"  shall be deemed to have  occurred if any Person or
group (within the meaning of Rule 13d-5 of the  Securities  Exchange Act of 1934
as in  effect  on the  date  hereof)  shall  (a)  own  directly  or  indirectly,
beneficially or of record,  shares of Capital Stock of the Borrower representing
a majority of the aggregate  ordinary voting power, or (b) control a majority of
the seats on the  Board of  Directors  of the  Borrower,  or (c) have  effective
voting  control of the  Borrower,  unless (i) such  Person or group is COMSAT or
(ii) such Person or group has a long term senior  unsecured debt rating of A- or
A3 or better from Standard & Poor's Ratings  Group,  a Division of  McGraw-Hill,
Inc. or from Moody's Investors Service, Inc.,  respectively,  and such Person or
group is otherwise  acceptable to the  Administrative  Agent as evidenced by its
prior written consent to such change (which such consent may not be unreasonably
withheld or delayed).

      "Closing Date" shall mean the date of the first Credit Event.

      "Code" shall mean the Internal  Revenue Code of 1986, as amended from time
to time.

      "Collateral"  shall mean first priority and perfected Liens in (a) 100% of
the Capital Stock of all  Subsidiaries  of the Borrower,  except Nuggets Sub and
the Avalanche Sub and (b) all of the Borrower's and each  Subsidiary's  interest
in the Capital Stock of On Command Corp.

      "Commitment"  shall mean,  with respect to each Lender,  the commitment of
such Lender to make Loans hereunder as set forth on Schedule 2.01 hereto,  or in
the  Assignment  and  Acceptance  pursuant  to which  such  Lender  assumed  its
Commitment, as applicable,  provided that, effective on any date of execution of
any such Guarantee,  each Lender's Commitment shall be automatically  reduced by
the amount of any such Lender's Pro Rata Percentage of the maximum amount of any
outstanding completion Guarantee of the Borrower executed in accordance with the
terms of Section  6.01(f)  hereof,  and further,  as the same may be (a) reduced
from time to time  pursuant to Section  2.09 hereof or pursuant to Section  2.19
hereof and (b) reduced or increased from time to time pursuant to assignments by
or to such Lender pursuant to Section 9.04 hereof.

      "Commitment  Fee" shall have the meaning  assigned to such term in Section
2.05(d) hereof.

      "Compliance    Certificate"   shall   mean   a   compliance   certificate,
substantially in the form of Exhibit E hereto,  and certifying that there exists
no Default or Event of Default at the time of delivery thereof.

      "COMSAT" shall mean COMSAT Corporation,  a corporation organized under the
Laws of the District of Columbia.

      "COMSAT  Agreements"  shall mean the  Services  Agreement,  the  Corporate
Agreement and the Tax Sharing  Agreement,  in each case between the Borrower and
COMSAT, in the forms delivered to the Lenders,  as such agreements may hereafter
be amended as permitted  by, and in  accordance  with,  the  provisions  of this
Agreement.

      "Concession   Agreements"  shall  mean  all  material  agreements  now  or
hereafter existing covering or affecting the sale of food, beverage, merchandise
or  other  goods  at  or  near  the  Arena,   or,  after  its  completion,   the
Arena/Complex,  and any and all  amendments  thereto or  substitutions  therefor
between Ascent Sports, Avalanche Sub or Nuggets Sub and any other Person.

      "Consolidated  Cash  Interest  Expense"  shall  mean,  for any  period  of
determination,  the gross interest  expense of the Borrower and its Subsidiaries
for such period  determined on a  consolidated  basis in  accordance  with GAAP,
excluding  any amounts not paid or not  required  (whether  during or after such
period)  to be paid in cash.  For  purposes  of the  foregoing,  gross  interest
expense shall be determined after giving effect to any net cash payments made or
received by the Borrower with respect to rate protection agreements entered into
as a hedge  against  interest rate  exposure.  Gross  interest  expense shall be
calculated in  accordance  with GAAP as in effect and applied by the Borrower on
the date of this  Agreement and,  accordingly,  shall exclude the effects of any
changes in GAAP or its application by the Borrower after the date hereof.

      "Consolidated   Total  Indebtedness"  shall  mean,  for  any  Person,  all
Indebtedness  of such  Person  and its  consolidated  subsidiaries  (other  than
Indebtedness  referred  to in  clause  (h)  of the  definition  of  such  term),
determined on a consolidated basis in accordance with GAAP;  provided,  however,
that  Consolidated   Total  indebtedness  of  the  Borrower  shall  not  include
Non-Recourse  Arena Financing or Non-Recourse  Film  Indebtedness,  in each case
incurred in compliance with the provisions of this Agreement.

      "Control" shall mean the possession,  directly or indirectly, of the power
to direct or cause the  direction  of the  management  or  policies of a Person,
whether  through the ownership of voting  securities,  by contract or otherwise,
and "Controlling" and "Controlled" shall have the meanings correlative thereto.

      "Corporate Restructuring" shall mean that series of transactions described
in the S-4 Registration Statement.

      "Coverage  Ratio"  shall  mean,  on any  date  for  the  Borrower  and its
Subsidiaries on a consolidated basis, the ratio of (a) the sum of (i) EBITDA for
the four most recently  completed  consecutive  fiscal  quarters,  plus (ii) the
Revolver  Availability on the date of  determination,  to (b) the product of (i)
Consolidated  Total  Indebtedness  of the Borrower and its  Subsidiaries on such
date times (ii) the current  weighted  average rate of interest being charged to
the Borrower on such date.

      "Credit  Event"  shall have the  meaning  assigned to such term in Section
4.01 hereto.

      "Debtor  Relief Laws" shall mean  applicable  bankruptcy,  reorganization,
moratorium,  or similar Laws, or principles of equity  affecting the enforcement
of creditors' rights generally.

      "Default"  shall mean any event or condition  which upon notice,  lapse of
time or both would constitute an Event of Default.

      "dollars" or "$" shall mean lawful  money of the United  States of
America.

      "EBITDA" shall mean, with respect to any Person and its  subsidiaries on a
consolidated  basis for any period,  the  consolidated net income of such Person
and its subsidiaries for such period, computed in accordance with GAAP, plus, to
the extent  deducted  in  computing  such  consolidated  net income and  without
duplication,  the sum of (a) income  tax  expense,  (b)  interest  expense,  (c)
depreciation  and  amortization  expense (but excluding the amortization of Film
Inventory),  (d)  allocation  of income to  minority  interests  in  earnings of
consolidated  subsidiaries and (e) extraordinary losses (including restructuring
provisions)  during such period  minus,  to the extent added in  computing  such
consolidated net income and without duplication,  (y) extraordinary gains during
such period and (z)  allocation  of losses to minority  interests in earnings of
consolidated subsidiaries. EBITDA shall be calculated in accordance with GAAP as
in  effect  and  applied  by the  Borrower  on the date of this  Agreement  and,
accordingly, shall exclude the effects of any changes in GAAP or its application
by the Borrower after the date hereof.

      "Environment"  shall  mean  ambient  air,  surface  water and  groundwater
(including  potable water,  navigable  water and wetlands),  the land surface or
subsurface  strata,  the workplace or as otherwise  defined in any Environmental
Law.

      "Environmental  Claim"  shall  mean any  written  accusation,  allegation,
notice of violation,  claim,  demand,  order,  directive,  consent decree,  cost
recovery  action or other cause of action by, or on behalf of, any  Governmental
Authority or any Person for damages,  injunctive or equitable  relief,  personal
injury (including sickness,  disease or death),  Remedial Action costs, tangible
or intangible property damage,  natural resource damages,  nuisance,  pollution,
any adverse effect on the Environment caused by any Hazardous  Material,  or for
fines,  penalties  or  restrictions,  resulting  from  or  based  upon:  (a) the
existence,  or the continuation of the existence, of a Release (including sudden
or  non-sudden,  accidental  or  non-accidental  Releases);  (b) exposure to any
Hazardous Material; (c) the presence,  use, handling,  transportation,  storage,
treatment or disposal of any Hazardous Material; or (d) the violation or alleged
violation of any Environmental Law or Environmental Permit.

      "Environmental  Law" shall mean any and all applicable  present and future
treaties,  Laws, codes,  judgments,  injunctions,  notices or binding agreements
issued,  promulgated or entered into by any Governmental Authority,  relating in
any way to the  Environment,  preservation or reclamation of natural  resources,
the management,  Release or threatened  Release of any Hazardous  Material or to
health and safety matters,  including the Comprehensive  Environmental Response,
Compensation  and Liability Act of 1980, as amended by the Superfund  Amendments
and  Reauthorization  Act of  1986,  42  U.S.C.  " 9601  et  seq.  (collectively
"CERCLA"), the Solid Waste Disposal Act, as amended by the Resource Conservation
and Recovery Act of 1976 and  Hazardous  and Solid Waste  Amendments of 1984, 42
U.S.C.  " 6901 et seq., the Federal Water  Pollution  Control Act, as amended by
the Clean  Water Act of 1977,  33  U.S.C.  " 1251 et seq.,  the Clean Air Act of
1970, 42 U.S.C. " 7401 et seq., as amended,  the Toxic Substances Control Act of
1976, 15 U.S.C. " 2601 et seq., the Occupational  Safety and Health Act of 1970,
as amended by 29 U.S.C.  " 651 et seq.,  the  Emergency  Planning and  Community
Right-to-Know  Act of 1986, 42 U.S.C.  " 11001 et seq.,  the Safe Drinking Water
Act of 1974, as amended by 42 U.S.C. " 300(f) et seq.,  the Hazardous  Materials
Transportation  Act, 49 U.S.C. " 5101 et seq.,  and any similar or  implementing
state or local law, and all amendments or regulations promulgated thereunder.

      "Environmental  Permit"  shall mean any permit,  approval,  authorization,
certificate,  license,  variance,  filing or permission  required by or from any
Governmental Authority pursuant to any Environmental Law.

      "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
the same may be amended from time to time.

      "ERISA  Affiliate"  shall  mean any  trade  or  business  (whether  or not
incorporated) that, together with the Borrower,  is treated as a single employer
under  Section  414(b) or (c) of the Code, or solely for purposes of Section 302
of ERISA and  Section  412 of the Code,  is treated as a single  employer  under
Section 414 of the Code.

      "ERISA Event" shall mean (a) any "reportable event", as defined in Section
4043 of ERISA or the regulations issued thereunder,  with respect to a Plan; (b)
the  adoption of any  amendment  to a Plan that would  require the  provision of
security pursuant to Section 401(a)(29) of the Code or Section 307 of ERISA; (c)
the existence with respect to any Plan of an  "accumulated  funding  deficiency"
(as defined in Section 412 of the Code or Section 302 of ERISA),  whether or not
waived;  (d) the filing pursuant to Section 412(d) of the Code or Section 303(d)
of ERISA of an  application  for a waiver of the minimum  funding  standard with
respect to any Plan; (e) the incurrence of any liability under Title IV of ERISA
upon the termination of any Plan or the withdrawal or partial  withdrawal of the
Borrower or any of its ERISA Affiliates from any Plan or Multiemployer Plan; (f)
the receipt by the Borrower or any ERISA  Affiliate  from the PBGC of any notice
relating to the intention to terminate any Plan or Plans or to appoint a trustee
to administer any Plan;  (g) the receipt by the Borrower or any ERISA  Affiliate
of  any  notice   concerning  the  imposition  of  Withdrawal   Liability  or  a
determination  that a Multiemployer  Plan is, or is expected to be, insolvent or
in  reorganization,  within  the  meaning  of  Title  IV of  ERISA;  and (h) the
occurrence of a "prohibited  transaction"  with respect to which the Borrower or
any of its  Subsidiaries  is a  "disqualified  person"  (within  the  meaning of
Section  4975 of the Code) or with  respect  to which the  Borrower  or any such
Subsidiary could otherwise be liable.

      "Eurodollar   Borrowing"  shall  mean  a  Borrowing  comprised  of
Eurodollar Revolving Loans.

      "Eurodollar  Revolving  Loans" shall mean Revolving Loans bearing interest
at a rate  determined by reference to the Adjusted LIBO Rate in accordance  with
the provisions of Article II hereof.

      "Event of Default" shall have the meaning assigned to such term in Article
VII hereof.

      "Facility  Fee" shall have the  meaning  assigned  to such term in Section
2.05(a) hereof.

      "Fee  Letters"  shall mean that certain Fee Letter dated  October 8, 1996,
between the Borrower  and the  Administrative  Agent,  and any other fee letters
executed from time to time among the Borrower,  the Administrative Agent and the
Lenders,  as each may be amended,  extended,  increased,  revised or substituted
from time to time.

      "Fees" shall mean the Facility  Fees,  the  Commitment  Fees,  the
Administrative  Agent Fees, the L/C  Participation  Fees and the Issuing
Bank Fees.

      "Film Cash Flow" shall mean,  for the period from the date hereof  through
any date of  determination,  positive or negative  earnings  before interest and
taxes  generated by Motion  Picture  projects  included in Film Inventory on the
balance sheet of the Borrower and its  Subsidiaries,  provided that revenues and
losses  attributable to those film projects listed on Schedule 1.01 hereto shall
not be included in the calculation of Film Cash Flow.

      "Film  Inventory"  shall mean film  inventory on the balance  sheet of the
Borrower and its Subsidiaries from time to time.

      "Financial  Officer"  of any  corporation  shall mean the chief  financial
officer,   principal  accounting  officer,   Treasurer  or  Controller  of  such
corporation.
      "Franchise" shall mean either the NBA Franchise or the NHL Franchise,  and
"Franchises" means both such franchises.

      "GAAP" shall mean generally accepted accounting principles.

      "Game"  shall  mean any  game  participated  in by  either  Franchise  and
conducted  pursuant to the  governance of or consented to by the NBA or the NHL,
including any promotional,  exhibition,  regular season, playoff or championship
game.

      "Governmental  Authority" shall mean any Federal,  state, local or foreign
court or governmental agency, authority, instrumentality or regulatory body.

      "Guarantee" of or by any Person shall mean any  obligation,  contingent or
otherwise,  of such  Person  guaranteeing  or  having  the  economic  effect  of
guaranteeing any Indebtedness of any other Person (the "primary obligor") in any
manner,  whether  directly or  indirectly,  and including any obligation of such
Person,  direct or indirect,  (a) to purchase or pay (or advance or supply funds
for the purchase or payment of) such  Indebtedness or to purchase (or to advance
or supply  funds for the  purchase  of) any  security  for the  payment  of such
Indebtedness,  (b) to purchase or lease property, securities or services for the
purpose  of  assuring  the owner of such  Indebtedness  of the  payment  of such
Indebtedness  or (c) to maintain  working  capital,  equity capital or any other
financial  statement  condition  or  liquidity  of the primary  obligor so as to
enable the primary  obligor to pay such  Indebtedness,  and (d) to guaranty  the
obligations,  payments by or performance of, a Person that is not a wholly owned
direct or indirect Subsidiary of the Borrower;  provided, however, that the term
Guarantee  shall not include (i)  endorsements  for collection or deposit in the
ordinary  course of business,  (ii) any  obligation,  contingent  or  otherwise,
incurred in the  ordinary  course of  business,  to pay any amounts  pursuant to
valid and binding actor's agreements in respect of any Motion Pictures,  whether
or not the Person to whom such  obligation is owed uses the obligation to secure
Indebtedness  or services,  or (iii) any  obligation,  contingent  or otherwise,
incurred in the  ordinary  course of business,  to purchase  any Motion  Picture
after its completion  pursuant to valid and binding  production or  distribution
agreements in respect of any Motion Pictures,  whether or not the Person to whom
such obligation is owed uses the obligation to secure Indebtedness or services.

      "Guarantors"  shall mean:  Ascent Network  Services,  Inc.,  Ascent Sports
Holdings,  Ascent  Sports,  Ascent  Arena  Corporation,   Beacon,  Beacon  Music
Publishing,  Inc., Club Pictures, Inc. and Daily Double Music Co., and all other
wholly owned direct or indirect Subsidiaries of the Borrower from time to time.

      "Hazardous  Materials" shall mean all explosive or radioactive  substances
or wastes, hazardous or toxic substances or wastes, pollutants, solid, liquid or
gaseous  wastes,  including  petroleum  or  petroleum  distillates,  asbestos or
asbestos-containing    materials,    polychlorinated   biphenyls   ("PCBs")   or
PCB-containing  materials or equipment,  radon gas, infectious or medical wastes
and all other  substances  or wastes of any  nature  regulated  pursuant  to any
Environmental Law.

      "Highest  Lawful Rate" shall mean at the  particular  time in question the
maximum  rate of  interest  which,  under  Applicable  Law,  any  Lender is then
permitted to charge on the  Obligations.  If the maximum rate of interest which,
under Applicable Law, any Lender is permitted to charge on the Obligations shall
change after the date  hereof,  the Highest  Lawful Rate shall be  automatically
increased  or  decreased,  as the  case  may  be,  from  time  to time as of the
effective  time of each change in the Highest  Lawful Rate without notice to the
Borrower.  For purposes of determining the Highest Lawful Rate under  Applicable
Law,  the  applicable  rate  ceiling  shall be (a) the  indicated  rate  ceiling
described in and computed in accordance with the provisions of Section (a)(1) of
Art. l.04; or (b) provided notice is given as required in Section (h)(1) of Art.
1.04,  either the annualized  ceiling or quarterly  ceiling computed pursuant to
Section (d) of Art. 1.04; provided, however, that at any time the indicated rate
ceiling,  the annualized ceiling or the quarterly ceiling, as applicable,  shall
be less  than  18% per  annum or more  than 24% per  annum,  the  provisions  of
Sections  (b)(1) and (2) of said Art.  1.04 shall  control for  purposes of such
determination, as applicable.

      "Indebtedness"  of any Person  shall mean,  without  duplication,  (a) all
obligations  of such Person for borrowed  money or with respect to deposits with
such Person or advances to such Person of any kind, (b) all  obligations of such
Person evidenced by bonds,  debentures,  notes or similar  instruments,  (c) all
obligations  of such Person  under  conditional  sale or other  title  retention
agreements  relating to property or assets  purchased  by such  Person,  (d) all
obligations  of such Person issued or assumed as the deferred  purchase price of
property or services  (excluding trade accounts payable and accrued  obligations
incurred in the ordinary  course of business),  (e) all  Indebtedness  of others
secured by (or for which the holder of such  Indebtedness has an existing right,
contingent  or  otherwise,  to be  secured  by) any  Lien on  property  owned or
acquired by such Person,  whether or not the  obligations  secured  thereby have
been  assumed,  (f)  all  Guarantees  by such  Person,  (g)  all  Capital  Lease
Obligations of such Person, (h) all net obligations of such Person in respect of
interest rate protection  agreements,  foreign currency  exchange  agreements or
other interest or exchange rate hedging  arrangements and (i) all obligations of
such  Person as an account  party in  respect to letters of credit and  bankers'
acceptances.  The  Indebtedness of any Person shall include the  Indebtedness of
any partnership in which such Person is a general partner.

      "Interest  Payment  Date"  shall mean,  with  respect to any Loan or other
amount payable  hereunder,  each March 31, June 30, September 30 and December 31
of each year during the term of this Agreement.

      "Interest  Period"  shall  mean (a) as to any  Eurodollar  Borrowing,  the
period  commencing on the date of such  Borrowing and ending on the  numerically
corresponding day (or, if there is no numerically corresponding day, on the last
day)  in the  calendar  month  that  is 1, 2, 3 or 6  months  thereafter,  or if
determined available by the Administrative  Agent, 12 months thereafter,  as the
Borrower may elect and (b) as to any ABR Borrowing, the period commencing on the
date of such  Borrowing  and ending on the  earliest of (i) the next  succeeding
March 31, June 30, September 30 or December 31, (ii) the Maturity Date and (iii)
the date such  Borrowing  is  converted  to a Borrowing  of a different  Type in
accordance  with  Section  2.10 hereof or repaid or prepaid in  accordance  with
Section 2.11 hereof; provided, however, that if any Interest Period would end on
a day other than a Business Day,  such Interest  Period shall be extended to the
next succeeding Business Day unless, in the case of a Eurodollar Borrowing only,
such next  succeeding  Business Day would fall in the next  calendar  month,  in
which case such Interest  Period shall end on the next  preceding  Business Day.
Interest shall accrue from and including the first day of an Interest  Period to
but excluding the last day of such Interest Period.

      "Issuing Bank" shall mean  NationsBank  (or any Affiliate  thereof) or any
other Lender that may become an Issuing Bank pursuant to Section 2.20(i) hereof,
in each case with respect to Letters of Credit issued by it.

      "Issuing  Bank  Fees"  shall  have the  meaning  assigned  to such term in
Section 2.05(c) hereof.

      "Law" shall mean any applicable  constitution,  statute,  law,  ordinance,
regulation, rule, order, writ, injunction, or decree of any tribunal.

      "L/C  Commitment"  shall mean the  commitment of the Issuing Bank to issue
Letters of Credit pursuant to Section 2.20 hereof.

      "L/C  Disbursement"  shall  mean a  payment  or  disbursement  made by the
Issuing Bank pursuant to a Letter of Credit.

      "L/C Exposure" shall mean at any time the sum of (a) the aggregate undrawn
amount of all outstanding  Letters of Credit at such time plus (b) the aggregate
principal amount of all L/C  Disbursements  that have not yet been reimbursed at
such time.  The L/C  Exposure  of any Lender at any time shall mean its Pro Rata
Percentage of the aggregate L/C Exposure at such time.

      "L/C  Participation  Fee" shall have the meaning  assigned to such term in
Section 2.05(c) hereof.

      "Lenders"  shall mean (a) the  financial  institutions  listed on Schedule
2.01 hereto (other than any such financial  institution  that has ceased to be a
party hereto  pursuant to an Assignment  and  Acceptance)  and (b) any financial
institution  that has  become  a party  hereto  pursuant  to an  Assignment  and
Acceptance.
      "Letter of Credit"  shall mean any  letter of credit  issued  pursuant  to
Section 2.20 hereof.

      "LIBO Rate" shall mean,  for any  Eurodollar  Borrowing  for any  Interest
Period  therefor,  the rate per annum  (rounded  upwards,  if necessary,  to the
nearest one-one  hundredth  (1/100th) of one percent (1%)) appearing on Telerate
Page 3750 (or any  successor  page) as the  London  interbank  offered  rate for
deposits in United States dollars at approximately  11:00 a.m. (London time) two
Business Days prior to the first day of such Interest Period.  If for any reason
such rate is not available,  the term "LIBO Rate" shall mean, for any Eurodollar
Borrowing for any Interest Period therefor, the rate per annum (rounded upwards,
if necessary,  to the nearest one-one  hundredth  (1/100th) of one percent (1%))
appearing on Reuters Screen LIBO page as the London  interbank  offered rate for
deposits in United States dollars at approximately  11:00 a.m. (London time) two
Business  Days  prior  to the  first  day of  such  Interest  Period  for a term
comparable to such Interest Period; provided,  however, if more than one rate is
specified  on  Reuters  Screen  LIBO  Page,  the  applicable  rate  shall be the
arithmetic mean of all such rates.

      "LIBOR  Reserve  Percentage"  shall  mean,  with  respect to any  Interest
Period,  the percentage which is in effect on the first day of such period under
Regulation D of the Board of Governors of the Federal  Reserve  System,  as such
regulation may be amended from time to time, as the maximum reserve  requirement
(including,  without limitation, any basic, supplemental,  emergency or marginal
reserves) applicable to any Lender with respect to eurocurrency  liabilities (as
that term is defined in Regulation D). The Adjusted LIBO Rate for any Eurodollar
Borrowing shall be adjusted for any change in the LIBOR Reserve Percentage.

      "Lien" shall mean,  with respect to any asset,  (a) any mortgage,  deed of
trust,  lien,  pledge,  encumbrance,  charge or security  interest in or on such
asset,  (b) the  interest  of a vendor or a lessor  under any  conditional  sale
agreement,  capital lease or title  retention  agreement (or any financing lease
having  substantially the same economic effect as any of the foregoing) relating
to such asset and (c) in the case of securities,  any purchase  option,  call or
similar right of a third party with respect to such securities.

      "Loan" shall mean the Revolving Loans made in accordance with the terms of
this agreement.

      "Loan Papers" shall mean this Agreement,  the promissory  notes evidencing
the Loans, all pledge agreements,  guaranties of the Obligations executed by the
Guarantors,  Fee  Letters,  financing  statements,  all  Letters of Credit,  all
Applications and all other agreements  between the Borrower or any Subsidiary of
the Borrower and the  Administrative  Agent related to any Letter of Credit, all
Assignment  and  Acceptances,  post-closing  letters,  and all other  documents,
instruments, agreements, or certificates executed or delivered from time to time
by any  Person  in  connection  with  this  Agreement  or as  security  for  the
Obligations hereunder,  granting Collateral or otherwise, as each such agreement
may be amended, modified, substituted, replaced or extended from time to time.

      "Margin Stock" shall have the meaning  assigned to such term in Regulation
U.

      "Material  Adverse  Effect" shall mean (a) a materially  adverse effect on
the business,  assets,  operations,  or financial condition of the Borrower, the
Subsidiaries of the Borrower and On Command Corp. and its Subsidiaries  taken as
a whole,  (b) material  impairment of the ability of the Borrower to perform any
of its  obligations  under this  Agreement  or under any other Loan Paper or (c)
material  impairment of the  enforceability  of this  Agreement,  any other Loan
Paper or the Loans.

      "Maturity Date" shall mean,  subject to Section  2.09(e) hereof,  the date
that is 364 days after the date hereof,  or such earlier date as the Obligations
are due and  payable in full  (whether  by  scheduled  reduction,  acceleration,
termination or otherwise).

      "Maximum  Amount"  means the  maximum  amount  of  interest  which,  under
Applicable Law, the Administrative Agent or any Lender is permitted to charge on
the Obligations.

      "Motion  Pictures"  shall mean motion pictures  produced for  distribution
through theaters and broadcast or cable television.

      "Multiemployer Plan" shall mean a multiemployer plan as defined in Section
4001(a)(3) of ERISA.

      "National Media  Contracts"  shall mean radio or television or other media
agreements  now existing or entered into in the future  respecting the broadcast
of the Games to  audiences  beyond the local  areas in which games are played or
the local areas of the  visiting  team,  whether  such games are regular  season
games or otherwise,  and whether transmission of such broadcast is over-the-air,
over cable,  by pay per view or by any other means of  transmission  (except for
those  contracts  that are the subject of a Superstation  Agreement),  including
each  agreement  between  (a) the NBA or any  Affiliate  of the NBA,  on its own
behalf and as agent for each of the Teams,  and any other Person and (b) the NHL
or any  Affiliate  of the NHL,  on its own  behalf  and as agent for each of the
Teams,  and any  other  Person,  in each  case,  as  each  may be  supplemented,
modified,  amended or restated from time to time in the manner provided  therein
and all successor contracts that may in the future be entered into.

      "NationsBank"  shall mean  NationsBank of Texas,  N.A., a national
banking association.

      "NBA" shall mean the National Basketball Association, a joint venture, and
each successor and assign thereof.

      "NBA Consent  Letter" shall mean the letter  agreement  among the Borrower
and certain of its Subsidiaries,  the Administrative  Agent (on behalf of itself
and  the  Lenders),   NBA,  NBA  Properties,   Inc.  and  NBA  Market  Extension
Partnership, approving the transactions evidenced by the Loan Papers and setting
forth  certain  restrictions  with respect to the  Administrative  Agent and the
Lenders exercise of their rights hereunder.

      "NBA  Documents"  shall mean,  collectively,  (a) the Amended and Restated
Joint  Venture  Agreement  made as of January 1, 1989 among  Nuggets Sub and the
other joint  venturers  in the NBA, and (b) the  Constitution  and Bylaws of the
NBA, as the same may be  renewed,  extended,  modified or replaced  from time to
time.

      "NBA Franchise" shall mean the NBA franchise known as the "Denver Nuggets"
and all rights of Nuggets Sub and Ascent Sports  pursuant to the agreements with
the NBA related thereto.

      "NBC Contract"  shall mean the Service  Contract dated September 15, 1983,
between  COMSAT General  Corporation  (now Ascent  Network  Services,  Inc.) and
National Broadcasting Company, Inc., as amended from time to time.

      "Net Cash Proceeds"  shall mean with respect to any Asset  Disposition (i)
the gross  amount of any cash paid to or received by the  Borrower or any of its
Subsidiaries  in respect of such Asset  Disposition  (including  (a) payments of
principal or interest,  or cash proceeds from the sale or other  disposition  in
respect of noncash  consideration  permitted under Section 6.05 hereof,  and (b)
insurance  proceeds,  condemnation  awards  and  payments  from  time to time in
respect of installment  obligations,  if applicable),  less (ii) the amount,  if
any, of (x) the Borrower's good faith best estimate of all taxes attributable to
such Asset  Disposition which it in good faith expects to be paid in the taxable
year in which such Asset  Disposition  shall occur or in the next taxable  year,
(y)  reasonable  and customary  fees,  discounts,  commissions,  costs and other
expenses  (other  than those  payable to the  Borrower or any  Affiliate  of the
Borrower),  which are incurred in connection with such Asset Disposition and are
payable by the  Borrower  or any of its  Subsidiaries  and (z) in the case of an
Asset  Disposition  that is a sale,  transfer or other  disposition of assets or
properties,  proceeds  required to discharge  Liens in respect of such assets or
properties permitted by Section 6.02 hereof.

      "NHL"  shall  mean  the  National   Hockey   League,   an   unincorporated
association, and each successor and assign thereof.

      "NHL Consent  Letter" shall mean the letter  agreement  among the Borrower
and certain of its Subsidiaries,  the Administrative  Agent, each Lender and the
NHL,  approving the transactions  evidenced by the Loan Papers and setting forth
certain  restrictions with respect to the  Administrative  Agent and the Lenders
exercise of their rights hereunder.

      "NHL Documents" shall mean, collectively,  (a) the Consent Agreement, made
as of July 1,  1995  among  National  Hockey  League,  le  Club  de  Hockey  Les
Nordiques,  Les Nordiques de Quebec 1988,  2627-9455 Quebec Inc.,  Marcel Aubut,
COMSAT Hockey Enterprises,  COMSAT Video Enterprises, Inc., COMSAT Denver, Inc.,
COMSAT  Entertainment  Group,  Inc., and COMSAT  Corporation and the other joint
venturers  in the NHL,  and (b) the  Constitution  and Bylaws of the NHL, as the
same may be renewed, extended, modified or replaced from time to time.

      "NHL  Franchise"  shall  mean the NHL  franchise  known  as the  "Colorado
Avalanche"  and all rights of Avalanche  Sub and Ascent  Sports  pursuant to the
agreements with the NHL related thereto.

      "Non-Recourse  Arena  Financing" shall mean  Indebtedness  incurred by the
Denver Arena Company,  LLC in connection with the financing of the Arena/Complex
(i) as to which  neither the Borrower nor any other  Subsidiary  of the Borrower
(A) provides credit support (including any undertaking,  agreement or instrument
which  would  constitute  Indebtedness)  or has  given  or  made  other  written
assurances  regarding repayment (except with respect to the limited construction
Guarantee  permitted by Section 6.01(f)  hereof),  (B) is directly or indirectly
personally  liable  (except with respect to the limited  construction  Guarantee
permitted by Section  6.01(f) hereof) or (C) constitutes the lender and (ii) the
obligees of which will have recourse  solely against the assets  comprising such
project (including rights of Denver Arena Company,  LLC as a lessor under leases
thereto) for repayment of the principal of and interest on such Indebtedness and
fees,  indemnities,  expense  reimbursements or other amounts of whatever nature
accrued or payable in connection with such  Indebtedness  and that has terms and
provisions  reasonably  satisfactory  in form and  substance to, and approved in
writing by, the  Administrative  Agent in respect of the matters  referred to in
clause (i) or clause (ii) above.

      "Non-Recourse  Film  Indebtedness"   shall  mean  Indebtedness  of  Beacon
incurred  solely for the purpose of  financing  Motion  Pictures (i) as to which
neither the  Borrower  nor any other  Subsidiary  of the  Borrower  (A) provides
credit support  (including any undertaking,  agreement or instrument which would
constitute Indebtedness) or has given or made other written assurances regarding
repayment,  (B) is directly or indirectly  personally  liable or (C) constitutes
the lender and (ii) the obligees of which will have  recourse  for  repayment of
the principal of and interest on such  Indebtedness  and any fees,  indemnities,
expense reimbursements or other amounts of whatever nature accrued or payable in
connection  with such  Indebtedness  solely  against (x) the  negatives for such
Motion Pictures, (y) ownership, distribution or exploitation rights with respect
to  such  Motion  Pictures  or  (z)  standby  letters  of  credit   constituting
Indebtedness which itself qualifies as Non-Recourse Film Indebtedness.

      "Nuggets  License  Agreement"  shall mean the User Agreement,  dated as of
July 15, 1992, as amended, between the City and County of Denver and Nuggets Sub
related to Nuggets Sub's right to use and occupancy of the Arena.
      "Nuggets License  Documents" shall mean the Nuggets License  Agreement and
each other  material  agreement  related to Nuggets  Sub's rights to the use and
occupancy of the Arena, or, after its completion, the similar agreements related
to the Arena/Complex.

      "Nuggets  Sub"  shall  mean  Denver  Nuggets,  L.P.,  a  Delaware  limited
partnership  and wholly owned  indirect  Subsidiary of the Borrower,  which such
Subsidiary owns and operates the Denver Nuggets, a franchise of the NBA.

      "Obligations" shall mean all present and future obligations,  indebtedness
and liabilities,  and all renewals and extensions of all or any part thereof, of
the  Borrower  and each  Obligor to the  Lenders  and the  Administrative  Agent
arising from, by virtue of, or pursuant to this Agreement, any of the other Loan
Papers and any and all renewals and extensions  thereof or any part thereof,  or
future amendments thereto,  all interest accruing on all or any part thereof and
reasonable  attorneys'  fees  incurred  by  the  Administrative  Agent  for  the
preparation  of  this  Agreement  and  consummation  of  this  credit  facility,
execution  of waivers,  amendments  and  consents,  and in  connection  with the
enforcement  or  the  collection  of all or any  part  thereof,  and  reasonable
attorneys'  fees incurred by the Lenders in connection  with the  enforcement or
the collection of all or any part of the  Obligations  during the continuance of
an Event of Default,  in each case whether such  obligations,  indebtedness  and
liabilities are direct, indirect, fixed, contingent, joint, several or joint and
several.  Without  limiting  the  generality  of  the  foregoing,  "Obligations"
includes all amounts which would be owed by the Borrower, each other Obligor and
any other  Person  (other than the  Administrative  Agent or the Lenders) to the
Administrative  Agent or the Lenders under any Loan Paper, but for the fact that
they are  unenforceable  or not  allowable due to the existence of a bankruptcy,
reorganization or similar proceeding  involving the Borrower,  any other Obligor
or any other Person  (including all such amounts which would become due or would
be secured but for the filing of any petition in bankruptcy, or the commencement
of any insolvency,  reorganization or like proceeding of the Borrower, any other
Obligor or any other Person under any Debtor Relief Law).

      "Obligor" shall mean (a) the Borrower, (b) each Guarantor,  (c) each other
Person  liable  for  performance  of any of the  Obligations  and (d) each other
Person the Property of which now or hereafter  secures the performance of any of
the Obligations.

      "OCC  Agreements"  shall mean the  Services  Agreement  and the  Corporate
Agreement,  in each case between the Borrower and On Command Corp., in the forms
delivered  to the  Lenders,  as such  agreements  may  hereafter  be  amended as
permitted by, and in accordance with, the provisions of this Agreement.

      "On  Command  Corp."  shall  mean  On  Command  Corporation,   a  Delaware
corporation,  approximately  57.0% of whose outstanding  Capital Stock is owned,
directly or indirectly, by the Borrower on the Closing Date.
      "On Command Corp.  Loan  Facility"  shall mean a revolving  credit
facility made  available to On Command Corp.  pursuant to  documentation
dated the Closing  Date, in an amount not to exceed  $125,000,000,  by a
group of financial  institutions  with the  Administrative  Agent as the
administrative agent thereunder.

      "Parking  Agreements" shall mean all material  agreements now or hereafter
existing  covering or affecting  Game patron  parking at or near the Arena,  or,
after its  completion,  the  similar  agreements  related  to the  Arena/Complex
(including  shuttle and remote parking),  and any and all amendments  thereto or
substitutions  therefor and any and all other  agreements of a similar nature or
providing  similar services between Ascent Sports,  Avalanche sub or Nuggets Sub
and any other Person.

      "PBGC" shall mean the Pension Benefit Guaranty Corporation referred to and
defined in ERISA.

      "Permitted Investments" shall mean:

      (a) direct obligations of, or obligations the principal of and interest on
which are unconditionally guaranteed by, the United States of America (or by any
agency thereof to the extent such  obligations  are backed by the full faith and
credit of the United States of America),  in each case maturing  within one year
from the date of acquisition thereof;

      (b)  investments  in  commercial  paper  maturing  within 270 days
from  the  date of  acquisition  thereof  and  having,  at such  date of
acquisition,  the  highest  credit  rating  obtainable  from  Standard &
Poor's Ratings Group,  a Division of  McGraw-Hill,  Inc. or from Moody's
Investors Service, Inc.;

      (c) investments in certificates of deposit,  banker's acceptances and time
deposits maturing within one year from the date of acquisition thereof issued or
guaranteed  by or placed  with,  and money  market  deposit  accounts  issued or
offered by, any domestic  office of any commercial  bank which bank or office is
organized  under the Laws of the United  States of America or any State  thereof
which has a combined capital and surplus and undivided  profits of not less than
$250,000,000; and

      (d) fully  collateralized  repurchase  agreements  with a term of not more
than 30 days for underlying securities of the type described in clause (a) above
entered into with any institution meeting the qualifications specified in clause
(c) above.

      "Person" shall mean any natural person, corporation, business trust, joint
venture,  association,  company,  partnership  or  government,  or any agency or
political subdivision thereof.

      "Plan"  shall  mean  any  employee  pension  benefit  plan  (other  than a
Multiemployer  Plan)  subject to the  provisions of Title IV of ERISA or Section
112 of the Code or Section 307 of ERISA and in respect of which the  Borrower or
any ERISA Affiliate is (or if such plan were terminated would under Section 4069
of ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA.

      "Player Contracts" shall mean any and all player contracts existing by and
between Nuggets Sub or Avalanche Sub and the professional  basketball players or
professional  hockey  players whose  aggregate  annual  compensation  package is
contractually  in excess of $1,000,000 from time to time employed by Nuggets Sub
or  Avalanche  Sub,   respectively,   and  any  and  all  material   amendments,
modifications,  restatements or replacements of or substitutions  for any of the
foregoing.

      "Preferred  Stock",  as applied to the Capital  Stock of any  corporation,
shall mean Capital Stock of any class or classes (however  designated)  which is
preferred as to the payment of dividends,  or as to the  distribution  or assets
upon  any  voluntary  or  involuntary  liquidation  or  dissolution  of any such
corporation,   over  shares  of  Capital  Stock  of  any  other  class  of  such
corporation.

      "Pro Rata  Percentage" of any Lender at any time shall mean the percentage
of the Total Commitment represented by such Lender's Commitment.

      "Register"  shall have the  meaning  given  such term in  Section  9.04(d)
hereof.

      "Regulation  G" shall mean  Regulation G of the Board as from time to time
in effect and all official rulings and interpretations thereunder or thereof.

      "Regulation  U" shall mean  Regulation U of the Board as from time to time
in effect and all official rulings and interpretations thereunder or thereof.

      "Regulation  X" shall mean  Regulation X of the Board as from time to time
in effect and all official rulings and interpretations thereunder or thereof.

      "Related  Contracts"  shall mean all material  contracts  and  agreements,
other than the License Agreements,  Services Contracts and the Player Contracts,
by and between  Ascent  Sports,  Avalanche Sub or Nuggets Sub and other Persons,
including, without limitation, leases and related agreements related to training
facilities,  non-Arena training facilities, non-Arena offices, non-Arena realty,
suites  and  boxes,  suites  and boxes  marketing,  option  agreements,  and all
material   amendments,   modifications,   restatements  or  replacements  of  or
substitutions for any of the foregoing.

      "Release" shall mean any spilling,  leaking, pumping,  pouring,  emitting,
emptying,  discharging,   injecting,  escaping,  leaching,  dumping,  disposing,
depositing,  dispersing,  emanating or migrating of any  Hazardous  Material in,
into, onto or through the Environment.

      "Remedial Action" shall mean (a) "remedial action" as such term is defined
in CERCLA, 42 U.S.C. Section 9601(24), and (b) all other actions required by any
Governmental Authority or voluntarily undertaken to: (i) cleanup, remove, treat,
abate or in any other way address  any  Hazardous  Material in the  Environment;
(ii) prevent the Release or threat of Release,  or minimize the further  Release
of any  Hazardous  Material  so it does not  migrate or  endanger or threaten to
endanger public health, welfare or the Environment; or (iii) perform studies and
investigations in connection with, or as a precondition to, (i) or (ii) above.

      "Required Lenders" shall mean, at any time, (i) Lenders having Commitments
representing  at least 51% of the sum of all  Commitments at such time, (ii) for
purposes  of  acceleration  pursuant  to clause  (ii) of the last  paragraph  of
Article  VII,  Lenders  having  Loans,  L/C  Exposures  and  unused  Commitments
representing at least 51% of the sum of all Loans outstanding,  L/C Exposure and
unused  Commitments or (iii) if the Commitments have terminated,  Lenders having
Loans  and L/C  Exposure  representing  at  least  51% of the  sum of all  Loans
outstanding and L/C Exposure.

      "Responsible  Officer" of any corporation shall mean any executive officer
or  Financial  Officer  of such  corporation  and any other  officer  or similar
official thereof  responsible for the  administration of the obligations of such
corporation in respect of this Agreement and the other Loan Papers.

      "Revolver  Availability"  shall mean,  on any date of  determination,  the
lesser  of (a) the  difference  between  the  Total  Commitment  minus the Total
Exposure,  and (b) the  difference  between the  Borrowing  Base minus the Total
Exposure.

      "Revolving  Loans" shall mean the revolving  loans made  available
by the Lenders to the  Borrower  pursuant to the Total  Commitments  and
Section  2.01  hereof.   Each  Revolving  Loan  shall  be  a  Eurodollar
Revolving Loan or an ABR Revolving Loan.

      "Services   Contracts"  shall  mean  the  Broadcasting   Agreements,   the
Concession Agreements,  the Advertising Agreements,  the Parking Agreements, and
any and all material  extensions,  amendments,  modifications,  replacements and
substitutions for any of the above.

      "S-4 Registration Statement" shall mean that certain Form S-4 Registration
Statement,  as filed  by On  Command  Corp.  with the  Securities  and  Exchange
Commission  on August 16, 1996,  as amended on September 4, 1996,  September 26,
1996 and as further amended on October 7, 1996.

      "Sports   Subs"  shall  mean  Ascent   Sports  and  Ascent  Sports
Holdings.

      "Subsidiary" shall mean, with respect to any Person (herein referred to as
the  "parent"),  any  corporation,  partnership,  association  or other business
entity of which securities or other ownership  interests  representing more than
50% of the equity or more than 50% of the ordinary voting power or more than 50%
of the general partnership interests are, at the time any determination is being
made,  owned,  controlled or held, by the parent or one or more  subsidiaries of
the parent or by the parent and one or more subsidiaries of the parent, provided
that,  so long as the On Command  Corp.  Loan  Facility is in existence  and the
Administrative  Agent  is the  administrative  agent  thereunder,  when the term
"Subsidiary"  is used with  respect to the  Borrower,  it shall be deemed by the
parties hereto not to include On Command Corp. and its Subsidiaries.

      "Superstation  Agreements" shall mean all material agreements now existing
or entered  into in the future  between the NBA or NHL and/or  individual  Teams
regarding  the  sharing  with  the  other  Teams  of  revenues  received  by the
individual  Teams with  respect to  agreements  to  broadcast  basketball  games
outside  of the local  areas of such  Teams or the local  areas of the  visiting
teams entered into by such Teams with  individual  broadcasters,  as each may be
supplemented,  modified,  amended  or  restated  form time to time in the manner
provided therein and all material successor contracts that may in the further be
entered into.

      "Team"  shall  mean  any  joint  venturer  of the  NBA,  or of the  NHL as
applicable in the context used.

      "Total  Commitment"  shall mean, at any time, the aggregate  amount of the
Lenders' Commitments, as in effect at such time.

      "Total  Exposure" shall mean, with respect to the Lenders at any time, the
aggregate  principal  amount at such time of all outstanding  Revolving Loans of
the  Lenders,  plus  the  aggregate  amount  at such  time of all  Lenders'  L/C
Exposure.

      "Transactions"  shall have the  meaning  assigned  to such term in Section
3.02 hereof.

      "Type", when used in respect of any Loan or Borrowing,  shall refer to the
Rate by reference to which interest on such Loan or on the Loans comprising such
Borrowing is determined.  For purposes hereof, the term "Rate" shall include the
Adjusted LIBO Rate and the Alternate Base Rate.

      "Wholly  Owned  Subsidiary"  of any Person shall mean a subsidiary of such
Person of which securities  (except for directors'  qualifying  shares) or other
ownership  interests  representing  100% of the  outstanding  Capital  Stock  or
partnership interests, as the case may be, are, at the time any determination is
being made,  owned by such Person or one or more Wholly  Owned  Subsidiaries  of
such Person or by such Person and one or more Wholly Owned  Subsidiaries of such
Person.

      "Withdrawal  Liability" shall mean liability to a Multiemployer  Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.

      Terms  Generally.  The  definitions in Section 1.01 shall apply equally to
both the singular and plural  forms of the terms  defined.  Whenever the context
may require, any pronoun shall include the corresponding masculine, feminine and
neuter forms. The words "include", "includes" and "including" shall be deemed to
be  followed  by the  phrase  "without  limitation".  All  references  herein to
Articles,  Sections,  Exhibits  and  Schedules  shall be  deemed  references  to
Articles and Sections of, and Exhibits and Schedules to, this  Agreement  unless
the context shall  otherwise  require.  Except as otherwise  expressly  provided
herein,  all terms of an  accounting  or financial  nature shall be construed in
accordance with GAAP, as in effect from time to time;  provided,  however,  that
for purposes of determining  compliance with the covenants  contained in Article
VI hereof,  all accounting  terms herein shall be interpreted and all accounting
determinations  hereunder  shall be made in accordance with GAAP as in effect on
the  date  of  this  Agreement  and  applied  on a  basis  consistent  with  the
application used in the financial statements referred to in Section 3.05 hereof.


                                  ARTICLE II

                                  The Credits

      Commitments.  Subject to the terms and  conditions  and  relying  upon the
representations  and warranties herein set forth, each Lender agrees,  severally
and not jointly,  to make Revolving Loans to the Borrower,  at any time and from
time to time on or after  the date  hereof,  and until  the  earlier  of (a) the
Maturity  Date,  and (b) the  termination  of the  Commitment  of such Lender in
accordance with the terms hereof,  in an aggregate  principal amount at any time
up to the lesser of (i) such Lender's Commitment and (ii) such Lender's Pro Rata
Percentage of the  Borrowing  Base,  provided  that,  the Borrower  agrees that,
notwithstanding  anything  in this  Agreement  or in any other Loan Paper to the
contrary,  (A) no Lender shall at any time be obligated to make any Loan if such
Loan would  result in such  Lender's  Total  Exposure  exceeding  such  Lender's
Commitment, and (B) Total Exposure shall never exceed the Borrowing Base. Within
the  limits  set forth in the  preceding  sentence  and  subject  to the  terms,
conditions and  limitations  set forth herein,  the Borrower may borrow,  pay or
prepay and reborrow Revolving Loans.

      Loans.N 2.02.     Loans

      (a) Each Loan  shall be made as part of a  Borrowing  consisting  of Loans
made by the Lenders  ratably in accordance  with their  respective  Commitments;
provided,  however, that the failure of any Lender to make any Loan shall not in
itself  relieve any other Lender of its  obligation to lend  hereunder (it being
understood,  however, that no Lender shall be responsible for the failure of any
other Lender to make any Loan required to be made by such other Lender).  Except
for Loans deemed made pursuant to Section 2.02(f) hereof,  the Loans  comprising
any Borrowing shall be in an aggregate  principal amount that is (i) an integral
multiple  of  $1,000,000  and not  less  than  $3,000,000  or (ii)  equal to the
remaining available balance of the applicable Commitments or the Borrowing Base.

      (b) Subject to Sections 2.08 and 2.13 hereof,  each other  Borrowing shall
be comprised entirely of ABR Loans or Eurodollar Revolving Loans as the Borrower
may request pursuant to Section 2.03 hereof, as applicable;  provided,  however,
that  Borrowings  on the Closing Date shall be comprised  entirely of ABR Loans.
Each Lender may at its option make any Eurodollar  Revolving Loan by causing any
domestic  or  foreign  branch or  Affiliate  of such  Lender to make such  Loan;
provided that any exercise of such option shall not affect the obligation of the
Borrower  to repay  such Loan in  accordance  with the terms of this  Agreement.
Borrowings of more than one Type may be outstanding at the same time;  provided,
however,  that the Borrower shall not be entitled to request any Borrowing that,
if made,  would  result in more than twelve  Eurodollar  Borrowings  outstanding
hereunder  at any  time.  For  purposes  of  the  foregoing,  Borrowings  having
different  Interest  Periods,  regardless  of whether they  commence on the same
date, shall be considered separate Borrowings.

      (c) Each  Lender  shall make each Loan to be made by it  hereunder  on the
proposed date thereof by wire transfer of  immediately  available  funds to such
account in Dallas,  Texas as the  Administrative  Agent may  designate not later
than 12:00 noon, Dallas,  Texas time, and the Administrative Agent shall by 3:00
p.m.,  Dallas,  Texas time,  credit the amounts so received to an account in the
name of the Borrower, maintained with the Administrative Agent and designated by
the Borrower in the applicable  Borrowing  Request or, if a Borrowing  shall not
occur on such date because any condition  precedent  herein  specified shall not
have been met, return the amounts so received to the respective Lenders.

      (d) Unless the  Administrative  Agent  shall have  received  notice from a
Lender  prior  to the  date of any  Borrowing  that  such  Lender  will not make
available to the  Administrative  Agent such Lender's portion of such Borrowing,
the  Administrative  Agent may assume  that such  Lender  has made such  portion
available  to the  Administrative  Agent  on  the  date  of  such  Borrowing  in
accordance  with  paragraph  (c)  above and the  Administrative  Agent  may,  in
reliance  upon such  assumption,  make  available to the Borrower on such date a
corresponding  amount.  If the  Administrative  Agent  shall  have so made funds
available  then, to the extent that such Lender shall not have made such portion
available to the  Administrative  Agent, such Lender and the Borrower  severally
agree  to  repay  to  the   Administrative   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  Administrative  Agent  at (i) in the case of the  Borrower,  the
interest rate applicable at the time to the Loans  comprising such Borrowing and
(ii) in the case of such Lender, a rate determined by the  Administrative  Agent
to  represent  its cost of overnight or  short-term  funds (which  determination
shall be conclusive  absent manifest  error).  If such Lender shall repay to the
Administrative  Agent such  corresponding  amount,  such amount shall constitute
such Lender's Loan as part of such Borrowing for purposes of this Agreement.

      (e) The Borrower  acknowledges that if the Borrower requests any Borrowing
with an Interest Period that would end after the Maturity Date, a Breakage Event
(as defined in Section  2.14  hereof)  will occur on the  Maturity  Date and the
Borrower will be obligated to indemnify the Lenders in accordance with the terms
of Section 2.14 hereof.

      (f) If the Issuing  Bank shall not have  received  from the  Borrower  the
payment  required to be made by Section 2.20(e) hereof within the time specified
in such Section,  the Issuing Bank will promptly notify the Administrative Agent
of the L/C Disbursement and the  Administrative  Agent will promptly notify each
Lender of such L/C Disbursement and its Pro Rata Percentage thereof. Each Lender
shall pay by wire transfer of immediately  available funds to the Administrative
Agent not later than 2:00 p.m.,  Dallas,  Texas time,  on such date (or, if such
Lender shall have received such notice later than 12:00  (noon),  Dallas,  Texas
time,  on any day,  not later  than  10:00  a.m.,  Dallas,  Texas  time,  on the
immediately  following  Business Day), an amount equal to such Lender's Pro Rata
Percentage of such L/C  Disbursement (it being understood that such amount shall
be deemed to  constitute  an ABR Loan of such Lender and such  payment  shall be
deemed to have  reduced the L/C  Exposure),  and the  Administrative  Agent will
promptly pay to the Issuing Bank amounts so received by it from the Lenders. The
Administrative  Agent will promptly pay to the Issuing Bank any amounts received
by it from the  Borrower  pursuant to Section  2.20(e)  hereof prior to the time
that any Lender  makes any payment  pursuant  to this  paragraph  (f);  any such
amounts  received  by the  Administrative  Agent  thereafter  will  be  promptly
remitted by the  Administrative  Agent to the Lenders  that shall have made such
payments and to the Issuing Bank, as their  interests may appear.  If any Lender
shall not have made its Pro Rata Percentage of such L/C  Disbursement  available
to the  Administrative  Agent as provided  above,  such Lender and the  Borrower
severally agree to pay interest on such amount,  for each day from and including
the date such amount is required to be paid in accordance with this paragraph to
but excluding the date such amount is paid, to the  Administrative  Agent at (i)
in the  case of the  Borrower,  a rate per  annum  equal  to the  interest  rate
applicable to ABR Loans pursuant to Section 2.06 hereof, and (ii) in the case of
such Lender,  for the first such day, the Federal Funds  Effective Rate, and for
each day thereafter, the Alternate Base Rate.

      Borrowing Procedure.  In order to request a Borrowing (other than a deemed
Borrowing  pursuant to Section  2.02(f)  hereof,  as to which this  Section 2.03
shall  not  apply),   the  Borrower  shall  hand  deliver  or  telecopy  to  the
Administrative  Agent a duly  completed  Borrowing  Request (a) in the case of a
Eurodollar  Borrowing,  not later than 11:00 a.m.,  Dallas,  Texas  time,  three
Business  Days  before  a  proposed  Borrowing,  and  (b) in the  case of an ABR
Borrowing,  not later than 10:00 a.m., Dallas, Texas on the date (which shall be
a  Business  Day) of a  proposed  Borrowing.  Each  Borrowing  Request  shall be
irrevocable,  shall be signed by or on behalf of the Borrower and shall  specify
the following information:  (i) whether the Borrowing then being requested is to
be a Eurodollar  Borrowing or an ABR  Borrowing  (it being  understood  that the
Borrowing on the Closing Date shall be an ABR Borrowing);  (ii) the date of such
Borrowing  (which shall be a Business Day); (iii) the number and location of the
account to which  funds are to be  disbursed  (which  shall be an  account  that
complies with the requirements of Section  2.02(c))  hereof;  (iv) the amount of
such Borrowing;  and (v) if such Borrowing is to be a Eurodollar Borrowing,  the
Interest Period with respect thereto. If no election as to the Type of Borrowing
is specified in any such notice,  then the requested  Borrowing  shall be an ABR
Borrowing.  If no Interest  Period with respect to any  Eurodollar  Borrowing is
specified in any such notice, then the Borrower shall be deemed to have selected
an  Interest  Period of one month's  duration.  The  Administrative  Agent shall
promptly  advise the Lenders of any notice  given  pursuant to this Section 2.03
hereof (and the contents thereof), and of each Lender's portion of the requested
Borrowing.

      Evidence of Debt; Repayment of Loans.epayment of Loans

      (a)  The  Borrower   hereby   unconditionally   promises  to  pay  to  the
Administrative  Agent for the account of each  Lender the then unpaid  principal
amount of each Revolving Loan on the Maturity Date.

      (b) Each Lender shall  maintain in accordance  with its usual  practice an
account or accounts  evidencing the  indebtedness of the Borrower to such Lender
resulting  from each Loan made by such Lender from time to time,  including  the
amounts of principal and interest payable and paid such Lender from time to time
under this Agreement.

      (c) The  Administrative  Agent  shall  maintain  accounts in which it will
record  (i) the amount of each Loan made  hereunder,  the Type  thereof  and the
Interest Period applicable thereto, (ii) the amount of any principal or interest
due and  payable or to become due and payable  from the  Borrower to each Lender
hereunder and (iii) the amount of any sum received by the  Administrative  Agent
hereunder from the Borrower and each Lender's share thereof.

      (d) The entries made in the accounts maintained pursuant to paragraphs (b)
and (c) above shall be prima facie  evidence of the existence and amounts of the
obligations therein recorded;  provided however,  that the failure of any Lender
or the Administrative Agent to maintain such accounts or any error therein shall
not in any manner affect the  obligations  of the Borrower to repay the Loans in
accordance with their terms.

      (e) As evidence of the Loans  hereunder,  on the Closing Date the Borrower
shall  deliver  to each  Lender  one  promissory  note  evidencing  its Pro Rata
Percentage of the Loans made hereunder.  Such promissory note will evidence each
Lenders' Pro Rata  Percentage of the Revolving  Loan and L/C Exposure,  and each
Lenders' exposure under any Competitive Loan, if any.

      Fees.ON 2.05.     Fees

      (a) The Borrower agrees to pay to each Lender,  through the Administrative
Agent,  such  Facility  Fees as are set forth in any Fee Letters (the  "Facility
Fees") in accordance with such terms set forth in the Fee Letters.

      (b) The Borrower agrees to pay to the  Administrative  Agent,  for its own
account, the administrative fees set forth in its Fee Letter at the times and in
the amounts specified therein (the "Administrative Agent Fees").

      (c)  The  Borrower  agrees  to  pay  (i)  to  each  Lender,   through  the
Administrative  Agent, on the last day of March, June, September and December of
each  year and on the date on  which  the  Commitment  of such  Lender  shall be
terminated as provided herein, a fee (an "L/C Participation  Fee") calculated on
such Lender's Pro Rata  Percentage  of the average daily  aggregate L/C Exposure
(excluding the portion thereof  attributable to unreimbursed L/C  Disbursements)
during the preceding  quarter (or shorter period commencing with the date hereof
or ending with the Maturity Date or the date on which all Letters of Credit have
been canceled or have expired and the Commitments of all Lenders shall have been
terminated) at a rate equal to the Applicable  Percentage from time to time used
to determine the interest rate on Borrowings  comprised of Eurodollar  Revolving
Loans pursuant to Section 2.06 hereof, and (ii) to the Issuing Bank with respect
to each  Letter of Credit the  standard  fronting,  issuance  and  drawing  fees
specified  from time to time by the  Issuing  Bank (the  "Issuing  Bank  Fees").
Subject to Section 9.09 hereof and Applicable  Law, all L/C  Participation  Fees
and Issuing  Bank Fees shall be  computed  on the basis of the actual  number of
days elapsed in a year of 365 or 366 days, as applicable.

      (d) Subject to Section  9.09 hereof,  the  Borrower  agrees to pay to each
Lender,  through  the  Administrative  Agent,  on the last day of  March,  June,
September  and December of each year and on the date on which the  Commitment of
such Lender shall be terminated as provided  herein,  the Borrower  shall pay to
the  Administrative  Agent  for the  account  of  Lenders  commitment  fees (the
"Commitment  Fees")  equal to the sum of (i) on the average  daily amount of the
excess,  if any, of (A) the lesser of the Total Commitment or the Borrowing Base
over (B) the Total  Exposure,  at the per annum  rate of .50%,  plus (ii) to the
extent the Borrowing Base is less than the Total  Commitment,  the average daily
amount of the excess,  of (A) the Total  Commitment over (B) the Borrowing Base,
at the per annum  rate of .25%,  commencing  with the first  such date after the
Closing Date,  and  continuing  until the Commitment has been reduced to zero or
terminated.  Notwithstanding anything in this Agreement to the contrary, in each
determination  of the Borrowing Base and the Total Commitment in connection with
this Section 2.05(d),  the amount of any completion  Guarantee deducted from the
Borrowing  Base and the Total  Commitment in accordance  with the  definition of
each  such  term  shall  be  added  back to the  Borrowing  Base  and the  Total
Commitment, respectively. Subject to Section 9.09 hereof and Applicable Law, all
Commitment  Fees shall be  computed  on the basis of the  actual  number of days
elapsed in a year of 365 or 366 days, as applicable.

      (e) All Fees  shall be paid on the dates  due,  in  immediately  available
funds,  to the  Administrative  Agent for  distribution,  if and as appropriate,
among the Lenders,  except that the Issuing Bank Fees shall be paid  directly to
the Issuing Bank.  Once paid,  none of the Fees shall be  refundable,  except in
accordance with the provisions of Section 9.09 hereof.

      Interest on Loans.Interest on Loans

      (a) Subject to the provisions of Section 2.07 hereof, the Loans comprising
each ABR  Borrowing  shall bear  interest  (computed  on the basis of the actual
number of days elapsed over a year of 365 or 366 days,  as the case may be, when
the Alternate  Base Rate is determined by reference to the Prime Rate and over a
year of 360 days at all other times) at a rate per annum equal to the  Alternate
Base  Rate.  If the  amount of  interest  payable  in  respect  of any  interest
computation  period is limited to the Highest Lawful Rate in accordance with the
definition of Alternate Base Rate, and the amount of interest payable in respect
of any  subsequent  interest  computation  period would be less than the Maximum
Amount,  then the amount of  interest  payable  in  respect  of such  subsequent
interest  computation  period  shall be  automatically  increased to the Maximum
Amount;  provided that at no time shall the aggregate  amount by which  interest
paid has been increased pursuant to this sentence exceed the aggregate amount by
which  interest has been reduced had the Alternate Base Rate not been limited to
the Highest Lawful Rate.

      (b) Subject to the provisions of Section 2.07 hereof, the Loans comprising
each  Eurodollar  Borrowing  shall bear  interest  (computed on the basis of the
actual number of days elapsed over a year of 360 days) at a rate per annum equal
to the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing.

      (c) Interest on each Loan shall be payable on the Interest  Payment  Dates
applicable  to such Loan and on the last day of each  Interest  Period except as
otherwise  provided in this  Agreement.  The  applicable  Alternate Base Rate or
Adjusted LIBO Rate for each Interest Period or day within an Interest Period, as
the case may be,  shall be  determined  by the  Administrative  Agent,  and such
determination shall be conclusive absent manifest error.

      Default  Interest.  Notwithstanding  any other provision of this Agreement
and the other Loan Papers except  Section 9.09 hereof to the contrary,  if there
shall exist any Event of Default  hereunder,  the Borrower shall pay interest on
the  Obligations  to but excluding the date of actual  payment (after as well as
before  judgment)  at a rate per annum  equal to the  lesser of (a) the  Highest
Lawful Rate and (b) a rate per annum (computed on the basis of the actual number
of days  elapsed  over a year  of 365 or 366  days,  as the  case  may be,  when
determined  by  reference  to the Prime  Rate and over a year of 360 days at all
other times) equal to the sum of the Alternate Base Rate plus 1.00%.

      Alternate Rate of Interest.  In the event,  and on each occasion,  that on
the day two Business Days prior to the commencement of any Interest Period for a
Eurodollar  Borrowing the Administrative Agent shall have determined that dollar
deposits in the principal amounts of the Loans comprising such Borrowing are not
generally  available in the London interbank  market, or that the rates at which
such dollar  deposits are being offered will not  adequately  and fairly reflect
the cost to the Required Lenders of making or maintaining  Eurodollar  Revolving
Loans during such Interest  Period,  or that  reasonable  means do not exist for
ascertaining the Adjusted LIBO Rate, the Administrative  Agent shall, as soon as
practicable thereafter, give written or telecopy notice of such determination to
the Borrower and the Lenders. In the event of any such determination,  until the
Administrative  Agent shall have  advised the  Borrower and the Lenders that the
circumstances  giving  rise to such notice no longer  exist,  any request by the
Borrower  for a  Eurodollar  Borrowing  pursuant to Section 2.03 hereof shall be
deemed  to be a  request  for  an  ABR  Borrowing.  Each  determination  by  the
Administrative Agent hereunder shall be conclusive absent manifest error.

      SECTION 2.09.     Termination  and  Reduction  of  Commitments;
ExtensTermination and Reduction of  Commitments;  Extension of Maturity
Date.

      (a) The Commitments and the L/C Commitment shall  automatically  terminate
on the Maturity Date (and the same may be extended  pursuant to paragraph (f) of
this Section).

      (b) Upon at least  three  Business  Days'  prior  irrevocable  written  or
telecopy notice to the  Administrative  Agent  (specifying the Commitments to be
terminated or reduced and the amount of reduction), the Borrower may at any time
in whole permanently terminate, or from time to time in part permanently reduce,
the  Commitments;  provided,  however,  that (i) each  partial  reduction of the
Commitments  shall be in an  integral  multiple of  $1,000,000  and in a minimum
amount of $5,000,000  and (ii) the Total  Commitment  shall not be reduced to an
amount that is less than the Total Exposure.

      (c) If, as a result of a reduction  described in paragraph (b) above,  the
Total Exposure  exceeds the Total  Commitments,  then the Borrower shall, on the
date of such  reduction,  repay Loans in  accordance  with this  Agreement in an
aggregate principal amount sufficient to eliminate such excess.

      (d) Each  reduction  in the  Commitments  hereunder  shall be made ratably
among the Lenders in accordance with their respective Commitments.  The Borrower
shall  pay,  to the  Administrative  Agent  for the  account  of the  applicable
Lenders,  on the date of each  termination or reduction,  the Commitment Fees on
the amount of the  Commitments so terminated or reduced accrued to but excluding
the date of such termination or reduction.

      (e) The Borrower may, by giving written notice to the Administrative Agent
(which shall  promptly  deliver a copy to each of the Lenders) not fewer than 15
days prior to the then current  Maturity Date (the  "Existing  Maturity  Date"),
extend the  Maturity  Date to the date that  occurs 364 days after the  Existing
Maturity  Date (or if such  364th day is not a  Business  Day,  the  immediately
preceding Business Day);  provided,  however,  that the Borrower may effect only
two extensions  pursuant to this Section  2.09(e)  hereof.  Notwithstanding  the
foregoing,  the  extension of the Existing  Maturity Date shall not be effective
with respect to any Lender  unless (i) no Default or Event of Default shall have
occurred  and be  continuing  on both the  date of the  notice  requesting  such
extension and on the Existing Maturity Date and (ii) each of the representations
and warranties set forth in Article III hereof (including,  without  limitation,
those set forth in Section 3.06 hereof and Section  3.09  hereof)  shall be true
and correct in all material respects on and as of each of the date of the notice
requesting such extension and the Existing Maturity Date with the same force and
effect  as if  made on and as of each  such  date,  except  to the  extent  such
representations and warranties expressly relate to an earlier date.

      Conversion and Continuation of Borrowings.ion of Borrowings

      (a) The Borrower  shall have the right at any time upon prior  irrevocable
notice to the  Administrative  Agent (x) not later  than 12:00  (noon),  Dallas,
Texas time,  one Business  Day prior to  conversion,  to convert any  Eurodollar
Borrowing into an ABR Borrowing,  (y) not later than 10:00 a.m.,  Dallas,  Texas
time,  three Business Days prior to conversion or  continuation,  to convert any
ABR  Borrowing  into  a  Eurodollar  Borrowing  or to  continue  any  Eurodollar
Borrowing as a Eurodollar  Borrowing for an additional  Interest Period, and (z)
not later than 10:00 a.m.,  Dallas,  Texas time,  three  Business  Days prior to
conversion,  to convert  the  Interest  Period  with  respect to any  Eurodollar
Borrowing to another  permissible  Interest Period,  subject in each case to the
following:

            (i) each conversion or continuation shall be made pro rata among the
      Lenders in accordance with the respective  principal  amounts of the Loans
      comprising the converted or continued Borrowing;

            (ii) if  less  than  all the  outstanding  principal  amount  of any
      Borrowing shall be converted or continued,  then each resulting  Borrowing
      shall satisfy the  limitations  specified in Sections  2.02(a) and 2.08(b)
      hereof  regarding the principal amount and maximum number of Borrowings of
      the relevant Type;

            (iii)  each  conversion  shall be  effected  by each  Lender and the
      Administrative  Agent by recording  for the account of such Lender the new
      Loan of such Lender  resulting from such  conversion and reducing the Loan
      (or portion  thereof)  of such Lender  being  converted  by an  equivalent
      principal  amount;  accrued interest on any Eurodollar  Revolving Loan (or
      portion thereof) being converted shall be paid by the Borrower at the time
      of conversion;

            (iv) if any  Eurodollar  Borrowing is converted at a time other than
      the end of the Interest Period applicable thereto, the Borrower shall pay,
      upon  demand,  any  amounts due to the  Lenders  pursuant to Section  2.14
      hereof;

            (v)   any  portion of a  Borrowing  maturing  or required to
      be repaid in less  than one  month  may not be  converted  into or
      continued as a Eurodollar Borrowing;

            (vi) any portion of a Eurodollar  Borrowing that cannot be converted
      into or continued as a Eurodollar  Borrowing by reason of the  immediately
      preceding  clause  shall  be  automatically  converted  at the  end of the
      Interest Period in effect for such Borrowing into an ABR Borrowing; and

            (vii) after the occurrence  and during the  continuance of a Default
      or an Event of Default,  no  outstanding  Loan may be converted  into,  or
      continued for an  additional  interest  period as, a Eurodollar  Revolving
      Loan.

      (b) Each notice  pursuant to this  Section 2.10 shall be  irrevocable  and
shall refer to this  Agreement  and specify (i) the  identity  and amount of the
Borrowing  that the Borrower  requests be converted or  continued,  (ii) whether
such  Borrowing is to be converted to or continued as a Eurodollar  Borrowing or
an ABR Borrowing,  (iii) if such notice requests a conversion,  the date of such
conversion  (which shall be a Business Day) and (iv) if such  Borrowing is to be
converted to or continued as a Eurodollar  Borrowing,  the Interest  Period with
respect  thereto.  If no Interest  Period is  specified  in any such notice with
respect to any  conversion to or  continuation  as a Eurodollar  Borrowing,  the
Borrower  shall be deemed to have  selected  an  Interest  Period of one month's
duration.  The Administrative Agent shall advise the Lenders of any notice given
pursuant to this Section 2.10 and of each  Lender's  portion of any converted or
continued  Borrowing.  If the Borrower shall not have given notice in accordance
with this  Section  2.10 to continue any  Borrowing  into a subsequent  Interest
Period  (and shall not  otherwise  have  given  notice in  accordance  with this
Section 2.10 to convert such Borrowing), such Borrowing shall, at the end of the
Interest Period applicable thereto (unless repaid pursuant to the terms hereof),
automatically be continued into a new Interest Period as an ABR Borrowing.
      Prepayment. .     Prepayment

      (a) The Borrower shall have the right at any time and from time to time to
prepay any  Borrowing,  in whole or in part,  upon at least two  Business  Days'
prior written or telecopy  notice (or  telephone  notice  promptly  confirmed by
written or  telecopy  notice) to the  Administrative  Agent  before  11:00 a.m.,
Dallas, Texas time; provided,  however, that each partial prepayment shall be in
an  amount  that  is an  integral  multiple  of  $1,000,000  and not  less  than
$3,000,000.

      (b) In the event of any termination of the Commitments, the Borrower shall
repay  or  prepay  all  its  outstanding   Borrowings  (and   irrevocably   cash
collateralize  the L/C Exposure in the manner  contemplated  by Section  2.20(j)
hereof) on the date of such  termination.  In the event of any partial reduction
of the Commitments, then (i) at or prior to the effective date of such reduction
or  termination,  the  Administrative  Agent shall  notify the  Borrower and the
Lenders  of the  aggregate  amount  of  outstanding  Revolving  Loans  or  Total
Exposure, as the case may be, after giving effect thereto and (ii) if the sum of
the aggregate  amount of outstanding  Revolving Loans or Total Exposure,  as the
case may be, at the time would  exceed the lesser of the Total  Commitments  and
the Borrowing Base,  after giving effect to such reduction or termination,  then
the  Borrower  shall,  on the date of such  reduction or  termination,  repay or
prepay Borrowings in an amount sufficient to eliminate such excess.

      (c)  Whenever and on each  occasion  that the Total  Exposure  exceeds the
lesser of (i) the Total  Commitments  and (ii) the Borrowing  Base, the Borrower
will  immediately  prepay the Revolving Loans by the amount  necessary to reduce
the Total Exposure to an amount less than or equal to the Total  Commitments and
the Borrowing Base.

      (d) In the event the amount of any  prepayment  required  to be made above
shall exceed the aggregate  principal  amount of the applicable  outstanding ABR
Loans (the amount of any such excess  being  called the  "Escrow  Amount"),  the
Borrower  shall have the right,  in lieu of making such  prepayment  in full, to
prepay all the  outstanding  applicable ABR Loans and to deposit an amount equal
to the Escrow Amount with the Administrative  Agent in a cash collateral account
maintained by and in the sole dominion and control of the Administrative  Agent.
Any amounts so deposited shall be held by the Administrative Agent as collateral
for the  Obligations  and applied to the  prepayment of  outstanding  Eurodollar
Revolving Loans at the end of the current Interest Periods  applicable  thereto.
On any Business Day on which (x)  collected  amounts  remain on deposit in or to
the credit of such cash  collateral  account after giving effect to the payments
made on such day and (y) the Borrower shall have delivered to the Administrative
Agent a written request or telephonic request (which shall be promptly confirmed
in writing) that such remaining  collected  amounts be invested in the Permitted
Investments  specified in such request,  the Administrative  Agent shall use its
reasonable efforts to invest such remaining  collected amounts in such Permitted
Investments;  provided,  however,  that  the  Administrative  Agent  shall  have
continuous  dominion and full control  over any such  investments  (and over any
interest  that  accrues  thereon) to the same extent  that it has  dominion  and
control  over such cash  collateral  account and no Permitted  Investment  shall
mature after the end of the Interest  Period for which it is to be applied.  The
Borrower  shall  not have the  right to  withdraw  any  amount  from  such  cash
collateral  account until such Eurodollar  Revolving Loans and accrued  interest
thereon  are paid in full or if a Default  or Event of  Default  then  exists or
would result.

      (e) Each notice of prepayment  shall specify the  prepayment  date and the
principal amount of each Borrowing (or portion thereof) to be prepaid,  shall be
irrevocable and shall commit the Borrower to prepay such Borrowing by the amount
stated therein on the date stated therein.  All  prepayments  under this Section
2.11 shall be subject to Section 2.14 hereof but  otherwise  without  premium or
penalty. All prepayments under this Section 2.11 shall be accompanied by accrued
interest on the principal amount being prepaid to the date of payment.

      SECTION 2.12.     Reserve Requirements; Change in Circumstances.

      (a)  Notwithstanding  any other provision of this Agreement,  if after the
date  of this  Agreement  any  change  in any  Law or in the  interpretation  or
administration   thereof  by  any  Governmental   Authority   charged  with  the
interpretation  or  administration  thereof  (whether or not having the force of
Law) shall change the basis of taxation of payments to any Lender or the Issuing
Bank of the principal of or interest on any  Eurodollar  Revolving  Loan made by
such Lender or any Fees or other amounts payable  hereunder  (other than changes
in  respect of taxes  imposed  on the  overall  net  income  (including  without
limitation  franchise  taxes on net income,  branch  profit taxes and  alternate
minimum income taxes) of such Lender or the Issuing Bank by the  jurisdiction in
which such  Lender or the  Issuing  Bank is  incorporated  or has its  principal
office or by any political  subdivision or taxing authority  therein),  or shall
impose,  modify or deem  applicable  any  reserve,  special  deposit  or similar
requirement  against  assets of,  deposits  with or for the account of or credit
extended by any Lender or the Issuing Bank (except any such reserve  requirement
which is reflected in the Adjusted  LIBO Rate) or shall impose on such Lender or
the Issuing Bank or the London  interbank  market any other condition  affecting
this Agreement or Eurodollar  Revolving  Loans made by such Lender or any Letter
of Credit or participation therein, and the result of any of the foregoing shall
be to  increase  the  cost to such  Lender  or the  Issuing  Bank of  making  or
maintaining any Eurodollar  Revolving Loan or increase the cost to any Lender of
issuing or  maintaining  any Letter of Credit or  purchasing  or  maintaining  a
participation  therein or to reduce the amount of any sum received or receivable
by such Lender or the Issuing Bank hereunder  whether of principal,  interest or
otherwise,  by an  amount  deemed  by  such  Lender  or the  Issuing  Bank to be
material,  then the Borrower will pay to such Lender or the Issuing Bank, as the
case may be, upon demand such  additional  amount or amounts as will  compensate
such Lender or the Issuing Bank, as the case may be, for such  additional  costs
incurred or reduction suffered.

      (b) If any  Lender or the  Issuing  Bank shall  have  determined  that the
adoption  after the date hereof of any Law,  agreement  or  guideline  regarding
capital adequacy, or any change after the date hereof in any such Law, agreement
or  guideline  (regardless  of  whether  the  change in such Law,  agreement  or
guideline has been adopted) or in the  interpretation or administration  thereof
by any Governmental  Authority charged with the interpretation or administration
thereof,  or compliance by any Lender (or any lending  office of such Lender) or
the Issuing Bank or any Lender's or the Issuing Bank's holding  company with any
request or directive regarding capital adequacy (whether or not having the force
of Law) of any  Governmental  Authority has or would have the effect of reducing
the rate of return on such  Lender's  or the  Issuing  Bank's  capital or on the
capital of such Lender's or the Issuing  Bank's  holding  company,  if any, as a
consequence of this Agreement or the Loans made or  participations in Letters of
Credit  purchased by such Lender pursuant hereto or the Letters of Credit issued
by the Issuing Bank  pursuant  hereto to a level below that which such Lender or
the Issuing Bank or such Lender's or the Issuing  Bank's  holding  company could
have achieved but for such applicability, adoption, change or compliance (taking
into consideration such Lender's or the Issuing Bank's policies and the policies
of such Lender's or the Issuing Bank's  holding  company with respect to capital
adequacy) by an amount deemed by such Lender or the Issuing Bank to be material,
then from time to time the  Borrower  shall  pay to such  Lender or the  Issuing
Bank, as the case may be, such  additional  amount or amounts as will compensate
such Lender or the Issuing Bank or such Lender's or the Issuing  Bank's  holding
company for any such reduction suffered.

      (c) A  certificate  of a  Lender  or the  Issuing  Bank  setting  forth in
reasonable  detail the basis for computation of the amount or amounts  necessary
to  compensate  such  Lender or the  Issuing  Bank or its  holding  company,  as
applicable, as specified in paragraph (a) or (b) above shall be delivered to the
Borrower and shall be conclusive  absent manifest error.  The Borrower shall pay
such Lender or the Issuing Bank the amount shown as due on any such  certificate
delivered by it within 10 days after its receipt of the same.

      (d)  Failure  or delay on the part of any  Lender or the  Issuing  Bank to
demand  compensation for any increased costs or reduction in amounts received or
receivable  or reduction in return on capital  shall not  constitute a waiver of
such Lender's or the Issuing Bank's right to demand such compensation; provided,
however,  that in no event shall the  Borrower be  obligated to make any payment
under this  Section  2.12 in respect of increased  costs  incurred  prior to the
period  commencing 90 days prior to the date on which demand for compensation in
respect of such increased  costs is first made. In addition,  the Borrower shall
not incur liability for additional  amounts with respect to changes in the basis
of  taxation  described  above for periods of time before such Lender or Issuing
Bank  becomes  aware  of the  change  in such  basis  except  in the case of any
retroactive  application of such a change.  The protection of this Section shall
be  available  to each Lender and the Issuing  Bank  regardless  of any possible
contention of the invalidity or inapplicability or the Law, agreement, guideline
or other change or condition that shall have occurred or been imposed.
      Change in Legality.hange in Legality

      (a) Notwithstanding  any other provision of this Agreement,  if, after the
date  hereof,  any  change  in any Law or  regulation  or in the  interpretation
thereof  by any  Governmental  Authority  charged  with  the  administration  or
interpretation thereof shall make it unlawful for any Lender to make or maintain
any  Eurodollar  Revolving  Loan  or  to  give  effect  to  its  obligations  as
contemplated  hereby with respect to any  Eurodollar  Revolving  Loan,  then, by
written notice to the Borrower and to the Administrative Agent:

            (i) such Lender may declare that Eurodollar Revolving Loans will not
      thereafter (for the duration of such  unlawfulness) be made by such Lender
      hereunder (or be continued for additional  Interest  Periods and ABR Loans
      will not  thereafter  (for such  duration)  be converted  into  Eurodollar
      Revolving Loans),  whereupon any request for a Eurodollar Borrowing (or to
      convert  an ABR  Borrowing  to a  Eurodollar  Borrowing  or to  continue a
      Eurodollar  Borrowing for an additional interest Period) shall, as to such
      Lender only, be deemed a request for an ABR Loan (or a request to continue
      an ABR Loan as such for an  additional  Interest  Period  or to  convert a
      Eurodollar  Revolving  Loan into an ABR Loan, as the case may be),  unless
      such declaration shall be subsequently withdrawn; and

            (ii)  such  Lender  may  require  that  all  outstanding  Eurodollar
      Revolving  Loans made by it be converted to ABR Loans,  in which event all
      such Eurodollar  Revolving Loans shall be  automatically  converted to ABR
      Loans as of the effective date of such notice as provided in paragraph (b)
      below.

In the event any Lender shall  exercise its rights under (i) or (ii) above,  all
payments and  prepayments of principal that would otherwise have been applied to
repay the Eurodollar Revolving Loans that would have been made by such Lender or
the converted Eurodollar Revolving Loans of such Lender shall instead be applied
to repay the ABR Loans  made by such  Lender in lieu of, or  resulting  from the
conversion of, such Eurodollar Revolving Loans.

      (b) For  purposes of this  Section  2.13,  a notice to the Borrower by any
Lender  shall be  effective as to each  Eurodollar  Revolving  Loan made by such
Lender, if lawful,  on the last day of the Interest Period currently  applicable
to such  Eurodollar  Revolving  Loan;  in all other cases such  notice  shall be
effective on the date of receipt by the Borrower.

      Indemnity.  The Borrower  shall  indemnify each Lender against any loss or
expense that such Lender may sustain or incur as a consequence of (a) any event,
other  than a default  by such  Lender  in the  performance  of its  obligations
hereunder, which results in (i) such Lender receiving or being deemed to receive
any amount on account of the principal of any Eurodollar Revolving Loan prior to
the end of the Interest  Period in effect  therefor,  (ii) the conversion of any
Eurodollar  Revolving  Loan to an ABR Loan,  or the  conversion  of the Interest
Period with respect to any Eurodollar Revolving Loan, in each case other than on
the last day of the Interest Period in effect therefor,  or (iii) any Eurodollar
Revolving Loan to be made by such Lender  (including  any  Eurodollar  Revolving
Loan to be made  pursuant to a conversion  or  continuation  under  Section 2.10
hereof)  not being made  after  notice of such Loan shall have been given by the
Borrower  hereunder  for any reason  other than  default by a Lender (any of the
events  referred to in this clause (a) being  called a "Breakage  Event") or (b)
any  default in the  making of any  payment or  prepayment  required  to be made
hereunder.  In the case of any Breakage Event, such loss shall include an amount
equal to the excess, as reasonably determined by such Lender, of (i) its cost of
obtaining  funds for the  Eurodollar  Revolving Loan that is the subject of such
Breakage  Event for the period from the date of such Breakage  Event to the last
day of the  Interest  Period in effect (or that  would have been in effect)  for
such Loan over (ii) the amount of interest  likely to be realized by such Lender
in  redeploying  the funds  released or not utilized by reason of such  Breakage
Event for such period.  A  certificate  of any such Lender shall be delivered to
the Borrower and shall be  conclusive  absent  manifest  error,  so long as such
certificate  sets forth in  reasonable  detail any amount or amounts  which such
Lender is entitled to receive  pursuant  to this  Section  2.14 and the basis of
computation of the amount or amounts necessary to compensate such Lender.

      Pro Rata  Treatment.  Except as required  under Section 2.13 hereof,  each
Borrowing,  each  payment or  prepayment  of principal  of any  Borrowing,  each
payment  of  interest  on the  Loans,  each  payment  of the  Facility  Fees and
Commitment  Fees,  each reduction of the  Commitments and each conversion of any
Borrowing to or  continuation  of any Borrowing as a Borrowing of any Type shall
be  allocated  pro rata among the Lenders in  accordance  with their  respective
applicable  Commitments  (or,  if such  Commitments  shall have  expired or been
terminated,  in  accordance  with  the  respective  principal  amounts  of their
outstanding  Loans).  Each Lender agrees that in computing such Lender's portion
of any  Borrowing to be made  hereunder,  the  Administrative  Agent may, in its
discretion,  round each Lender's percentage of such Borrowing to the next higher
or lower whole dollar amount.

      Sharing of  Setoffs.  Each  Lender  agrees  that if it shall,  through the
exercise  of a right of  banker's  lien,  setoff  or  counterclaim  against  the
Borrower,  or pursuant to a secured  claim under  Section 506 of Title 11 of the
United  States Code or other  security or interest  arising from, or in lieu of,
such secured claim, received by such Lender under any Debtor Relief Law or other
similar Law or otherwise,  or by any other means,  obtain payment  (voluntary or
involuntary) in respect of any Loan or Loans or L/C  Disbursement as a result of
which the unpaid principal portion of its Revolving Loans and  participations in
L/C  Disbursements  shall be  proportionately  less  than the  unpaid  principal
portion of the Revolving Loans and  participations  in L/C  Disbursements of any
other Lender,  it shall be deemed  simultaneously  to have  purchased  from such
other  Lender at face value,  and shall  promptly  pay to such other  Lender the
purchase price for, a  participation  in the Revolving Loans and L/C Exposure of
such  other  Lender,  so that  the  aggregate  unpaid  principal  amount  of the
Revolving Loans and L/C Exposure and  participations  in Revolving Loans and L/C
Exposure  held by each Lender shall be in the same  proportion  to the aggregate
unpaid principal amount of all Revolving Loans and L/C Exposure then outstanding
as the principal  amount of its Revolving  Loans and L/C Exposure  prior to such
exercise  of banker's  lien,  setoff or  counterclaim  or other event was to the
principal  amount of all Revolving Loans and L/C Exposure  outstanding  prior to
such exercise of banker's lien, setoff or counterclaim or other event; provided,
however,  that if any such  purchase or purchases or  adjustments  shall be made
pursuant  to this  Section  2.16  and the  payment  giving  rise  thereto  shall
thereafter be  recovered,  such  purchase or purchases or  adjustments  shall be
rescinded to the extent of such  recovery  and the  purchase  price or prices or
adjustment  restored without interest.  The Borrower  expressly  consents to the
foregoing  arrangements  and agrees that any Lender holding a participation in a
Revolving Loan or L/C Disbursement deemed to have been so purchased may exercise
any and all rights of banker's lien,  setoff or counterclaim with respect to any
and all moneys owing by the  Borrower to such Lender by reason  thereof as fully
as if such Lender had made a Loan directly to the Borrower in the amount of such
participation.

      Payments..17.     Payments

      (a) The  Borrower  shall  make each  payment  (including  principal  of or
interest on any Borrowing or any L/C  Disbursement or any Fees or other amounts)
hereunder not later than 12:00 (noon),  Dallas, Texas time, on the date when due
in immediately available dollars, without setoff, defense or counterclaim.  Each
such payment (other than Issuing Bank Fees,  which shall be paid directly to the
Issuing Bank,) shall be made to the  Administrative  Agent at its offices at 901
Main, 64th Floor, Dallas, Texas 75202.

      (b)  Whenever  any  payment  (including  principal  of or  interest on any
Borrowing or any Fees or other amounts) hereunder shall become due, or otherwise
would occur,  on a day that is not a Business  Day,  such payment may be made on
the next succeeding  Business Day, and such extension of time shall in such case
be included in the computation of interest or Fees, if applicable.

      Taxes.N 2.18.     Taxes

      (a) Any and all  payments  by the  Borrower  hereunder  shall be made,  in
accordance with Section 2.17 hereof, free and clear of and without deduction for
any and all current or future taxes,  levies,  imposts,  deductions,  charges or
withholdings,  and all  liabilities  with respect  thereto  excluding (i) income
taxes imposed on the net income  (including  without  limitation,  branch profit
taxes and  alternative  minimum income taxes of the  Administrative  Agent,  any
Lender or the Issuing Bank (or any transferee or assignee  thereof,  including a
participation  holder (any such entity a  "Transferee")),  (ii) franchise  taxes
imposed on the net income of the Administrative Agent, any Lender or the Issuing
Bank (or Transferee),  in each case by the jurisdiction  under the Laws of which
the  Administrative  Agent,  such Lender or the Issuing Bank (or  Transferee) is
organized or any political  subdivision  thereof or by the jurisdiction in which
the  applicable  lending or issuing  office of the  Administrative  Agent,  such
Lender,  or the  Issuing  Bank  (or  Transferee)  is  located  or any  political
subdivision thereof (all such nonexcluded taxes,  levies,  imposts,  deductions,
charges,  withholdings  and  liabilities,  collectively or  individually,  being
called  "Taxes").  If the Borrower shall be required to deduct any Taxes from or
in respect of any sum payable hereunder to the Administrative  Agent, any Lender
or the Issuing Bank (or and Transferee),  (i) the sum payable shall be increased
by the amount  (an  "additional  amount")  necessary  so that  after  making all
required deductions  (including deductions applicable to additional sums payable
under this Section 2.18) the  Administrative  Agent,  such Lender or the Issuing
Bank or  Transferee),  as the case may be, shall  receive an amount equal to the
sum it would have received had no such  deductions  been made, (ii) the Borrower
shall make such  deductions  and (iii) the  Borrower  shall pay the full  amount
deducted to the relevant  Governmental  Authority in accordance  with Applicable
Law.

      (b) In addition,  the Borrower agrees to pay to the relevant  Governmental
Authority  in  accordance  with  Applicable  Law any current or future  stamp or
documentary  taxes or any other  excise or  property  taxes,  charges or similar
levies  that  arise  from and  payment  made  hereunder  or from the  execution,
delivery or  registration  of, or  otherwise  with  respect  to, this  Agreement
("Other Taxes").

      (c) The Borrower will indemnify the Administrative  Agent, each Lender and
the Issuing  Bank (or  Transferee)  for the full amount of Taxes and Other Taxes
paid  by  the  Administrative  Agent,  such  Lender  or  the  Issuing  Bank  (or
Transferee),  as the  case  may be,  and any  liability,  (including  penalties,
interest and  expenses  (including  reasonable  attorney's  fees and  expenses))
arising  therefrom or with respect  thereto,  whether or not such Taxes or Other
Taxes were correctly or legally asserted by the relevant Governmental Authority.
A  certificate  as to the amount of such  payment or  liability  prepared by the
Administrative  Agent,  a Lender or the  Issuing  Bank (or  Transferee),  or the
Administrative  Agent on its  behalf,  absent  manifest  error,  shall be final,
conclusive  and binding for all  purposes.  Such  indemnification  shall be made
within  30 days  after  the date the  Administrative  Agent,  any  Lender or the
Issuing Bank (or Transferee), as the case may be, makes written demand therefor.

      (d) If  the  Administrative  Agent,  a  Lender  or the  Issuing  Bank  (or
Transferee) receives a refund in respect of any Taxes or Other Taxes as to which
it has been  indemnified  by the  Borrower or with respect to which the Borrower
has paid  additional  amounts  pursuant to this Section 2.18, it shall within 30
days from the date of such receipt pay over to the Borrower (a) such refund (but
only to the extent of indemnity  payments  made, or additional  amounts paid, by
the  Borrower  under this  Section 2.18 with respect to the Taxes or Other Taxes
giving  rise  to  such  refund),  net  of  all  out-of-pocket  expenses  of  the
Administrative  Agent,  such Lender or the Issuing Bank (or  Transferee) and (b)
interest  paid by the  relevant  Governmental  Authority  with  respect  to such
refund;  provided,   however,  that  the  Borrower,  upon  the  request  of  the
Administrative  Agent,  such Lender or the Issuing Bank (or  Transferee),  shall
repay the amount paid over to the Borrower  (plus  penalties,  interest or other
charges)  to the  Administrative  Agent,  such  Lender or the  Issuing  Bank (or
Transferee) in the event the  Administrative  Agent,  such Lender or the Issuing
Bank (or  Transferee)  is  required to repay such  refunds to such  Governmental
Authority.  If the Borrower  determines  in good faith that a  reasonable  basis
exists  for  contesting  any Tax or Other Tax,  the  Administrative  Agent,  the
Lender,  Issuing Bank or  Transferee,  as applicable,  shall  cooperate with the
Borrower  in  challenging  such Tax or Other Tax at the  Borrower's  expense  if
requested   by  the  Borrower   (it  being   understood   and  agreed  that  the
Administrative  Agent,  the Lender,  Issuing Bank or Transferee,  as applicable,
shall have no obligation to contest or responsibility for contesting such Tax or
Other Tax).

      (e) As soon as practicable after the date of any payment of Taxes or Other
Taxes by the Borrower to the relevant Governmental Authority,  the Borrower will
deliver to the Administrative  Agent, at its address referred to in Section 9.01
hereof,  the original or a certified copy of any receipt actually issued by such
Governmental Authority evidencing payment thereof.

      (f) Each  Lender (or  Transferee)  that is  organized  under the Laws of a
jurisdiction  other than the United States, any State thereof or the District of
Columbia  (a  "Non-U.S.   Lender")   shall  deliver  to  the  Borrower  and  the
Administrative Agent two copies of either United States Internal Revenue Service
Form 1001 or Form 4224, or, in the case of a Non-U.S.  Lender claiming exemption
from U.S.  Federal  withholding  tax under Section  871(h) or 881(c) of the Code
with respect to payments of "portfolio interest",  a Form W-8, or any subsequent
versions thereof or successors thereto (and, if such Non-U.S.  Lender delivers a
Form W-8, a certificate containing  representations regarding the status of such
Non-U.S.  Lender as not being a bank for purposes of Section 881(c) of the Code,
as  not  being  a  10-percent   shareholder   (within  the  meaning  of  Section
871(h)(3)(B) of the Code) of the Borrower and as not being a controlled  foreign
corporation  related to the Borrower (within the meaning of Section 864(d)(4) of
the  Code)),  properly  completed  and duly  executed  by such  Non-U.S.  Lender
claiming complete  exemption from, or reduced rate of, U.S. Federal  withholding
tax on  payments  by the  Borrower  under this  Agreement.  Such forms  shall be
delivered  by each  Non-U.S.  Lender on or before the date it becomes a party to
this Agreement (or, in the case of a Transferee that is a participation  holder,
on or before the date such participation holder becomes a Transferee  hereunder)
and on or before the date, if any, such Non-U.S.  Lender  changes its applicable
lending  office by  designating  a  different  lending  office  (a "New  Lending
Office").  In addition,  each Non-U.S.  Lender shall deliver such forms promptly
upon the  obsolescence  or invalidity of any form  previously  delivered by such
Non-U S. Lender.  Notwithstanding any other provision of this Section 2.18(f), a
Non-U.S.  Lender  shall not be  required  to deliver  any form  pursuant to this
Section 2.18(f) that such Non-U.S. Lender is not legally able to deliver.

      (g) The Borrower shall not be required to indemnify any Non-U.S. Lender or
to pay any  additional  amounts  to any  Non-U.S.  Lender,  in respect of United
States  Federal  withholding  tax pursuant to paragraph  (a) or (c) above to the
extent that (i) the obligation to withhold amounts with respect to United States
Federal withholding tax existed on the date such Non-U.S.  Lender became a party
to this  Agreement  (or,  in the case of a  Transferee  that is a  participation
holder, on the date such participation holder became a Transferee hereunder) or,
with respect to payments to a New Lending Office, the date such Non-U.S.  Lender
designated  such New Lending Office with respect to a Loan;  provided,  however,
that this  paragraph  (g) shall not apply (x) to any  Transferee  or New Lending
Office  that  becomes  a  Transferee  or New  Lending  Office  as a result of an
assignment,  participation,  transfer or designation  made at the request of the
Borrower and (y) to the extent the indemnity  payment or additional  amounts any
Transferee, or any Lender (or Transferee),  acting through a New Lending Office,
would be  entitled  to receive  (without  regard to this  paragraph  (g)) do not
exceed the indemnity  payment or  additional  amounts that the Person making the
assignment,  participation  or  transfer to such  Transferee,  or the Lender (or
Transferee)  making the designation of such New Lending Office,  would have been
entitled to receive in the absence of such assignment,  participation,  transfer
or designation or (ii) the obligation to pay such  additional  amounts would not
have  arisen  but for a failure  by such  Non-U.S.  Lender  to  comply  with the
provisions of paragraph (g) above.

      (h) Nothing contained in this Section 2.18 shall require any Lender or the
Issuing Bank (or any Transferee) or the  Administrative  Agent to make available
any  of  its  tax  returns  (or  any  other  information  that  it  deems  to be
confidential or proprietary).

      (i) Each Bank represents  that, to the best of its knowledge,  it is not a
party  to any  "conduit  financing  arrangement"  as  defined  under  applicable
Treasury Regulations promulgated under the Code.

      (j)  Any  Non-U.S.   Lender  that  could  become  completely  exempt  from
withholding  of any tax,  assessment  or other  charge or levy  imposed by or on
behalf of the United States of America or any taxing  authority  thereof  ("U.S.
Taxes") in respect of payment of any  obligations  due to such  Non-U.S.  Lender
under this Agreement  ("Lender  Obligations") if the Lender  Obligations were in
registered  form for U.S.  Federal  income tax purposes may request the Borrower
(through the  Administrative  Agent),  and the  Borrower  agrees  thereupon,  to
exchange  any  promissory   note(s)   evidencing  such  Lender  Obligations  for
promissory  note(s)  registered  as provided in  subsection  (k) below (each,  a
"Registered  Note").  Registered Notes may not be exchanged for promissory notes
that are not Registered Notes.

      (k) From and after the time, if any, when any Lender requests a Registered
Note, the Borrower shall  maintain,  or cause to be maintained,  a register (the
"Register")  on which it enters the name of the  registered  owner of the Lender
Obligation(s)  evidenced by each  Registered  Note.  A  Registered  Note and the
Lender Obligation(s)  evidenced thereby may be assigned or otherwise transferred
in whole or in part only by  registration of such assignment or transfer of such
Registered Note and the Lender  Obligation(s)  evidenced thereby on the Register
(and each  Registered  Note shall  expressly  so  provide).  Any  assignment  or
transfer of all or part of such Lender  Obligation(s) and the Registered Note(s)
evidencing  the same shall be registered on the Register only upon surrender for
registration of assignment or transfer of the Registered Note(s) evidencing such
Lender  Obligation(s),  duly endorsed by (or accompanied by a written instrument
of assignment or transfer duly executed by) the Registered  Noteholder  thereof,
and thereupon one or more new Registered Note(s) in the same aggregate principal
amount shall be issued to the designated  assignee(s) or transferee(s)  pursuant
to, in accordance with, and subject to the restrictions of, Section 9.04 hereof.
Prior to the due presentment  for  registration of assignment or transfer of any
Registered  Note,  the  Borrower  and the  Administrative  Agent shall treat the
Person in whose  name  such  Lender  Obligation(s)  and the  Registered  Note(s)
evidencing  the same is  registered  as the owner  thereof  for the  purpose  of
receiving all payments thereon and for all other purposes,  notwithstanding  any
notice to the contrary.  The Register  shall be available for  inspection by the
Administrative Agent and any Lender at any reasonable time upon reasonable prior
notice.

      SECTION 2.19.     Assignment   of   Commitments   Under  Certain
CircumAssignment of Commitments  Under Certain  Circumstances;  Duty to
Mitigate.

      (a) In the event (i) any Lender or the Issuing Bank delivers a certificate
requesting  compensation pursuant to Section 2.12 hereof, (ii) any Lender or the
Issuing  Bank  delivers a notice  described  in Section 2.13 hereof or (iii) the
Borrower is required to pay any  additional  amount to any Lender or the Issuing
Bank or any Governmental  Authority on account of any Lender or the Issuing Bank
pursuant to Section  2.18  hereof,  the  Borrower  may, at its sole  expense and
effort (including with respect to the processing and recordation fee referred to
in Section 9.04(b)  hereof),  upon notice to such Lender or the Issuing Bank and
the  Administrative  Agent,  require such Lender or the Issuing Bank to transfer
and assign, without recourse (in accordance with and subject to the restrictions
contained in Section 9.04 hereof), all of its interests,  rights and obligations
under this Agreement to an assignee that shall assume such assigned  obligations
which  assignee may be another  Lender,  if a Lender  accepts such  assignment);
provided  that (x) such  assignment  shall not  conflict  with any Law,  rule or
regulation  or  order  of any  court  or  other  Governmental  Authority  having
jurisdiction,  (v) the Borrower shall have received the prior written consent of
the Administrative Agent (and, if a Commitment is being assigned, of the Issuing
Bank), which consent shall not unreasonably be withheld, and (z) the Borrower or
such  assignee  shall have paid to the  affected  Lender or the Issuing  Bank in
immediately  available  funds an amount equal to the sum of the principal of and
interest  accrued  to the date of such  payment  on the  outstanding  Loans  and
participations  in L/C Disbursements of such Lender or the Issuing Bank plus all
Fees and other  amounts  accrued  for the  account of such Lender or the Issuing
Bank hereunder (including any amounts under Section 2.12 hereof and Section 2.14
hereof); provided further that, if prior to any such transfer and assignment the
circumstances  or event that  resulted in such  Lender's  or the Issuing  Bank's
claim for  compensation  under  Section 2.12 hereof or notice under Section 2.13
hereof or the amounts paid pursuant to Section 2.18 hereof,  as the case may be,
cease to cause such  Lender or the  Issuing  Bank to suffer  increased  costs or
reductions in amounts  received or receivable or reduction in return on capital,
or cease to have the consequences  specified in Section 2.13, or cease to result
in  amounts  being  payable  under  Section  2.18  hereof,  as the  case may be,
including  as a result of any action  taken by such Lender or the  Issuing  Bank
pursuant to  paragraph  (b) below),  or if such Lender or the Issuing Bank shall
waive its right to claim  further  compensation  under  Section  2.12  hereof in
respect  of such  circumstances  or event or shall  withdraw  its  notice  under
Section 2.13 hereof or shall waive its right to further  payments  under Section
2.18 hereof in respect of such  circumstances or event, as the case may be, then
such Lender or the  Issuing  Bank shall not  thereafter  be required to make any
such transfer and assignment hereunder.

      (b) If (i) any Lender or the Issuing Bank shall request compensation under
Section  2.12  hereof,  (ii) any Lender or the  Issuing  Bank  delivers a notice
described  in Section  2.13 hereof or (iii) the  Borrower is required to pay any
additional  amount  to  any  Lender  or the  Issuing  Bank  or any  Governmental
Authority  on account of any Lender or the  Issuing  Bank,  pursuant  to Section
2.18,  then such Lender or the Issuing Bank shall use reasonable  efforts (which
shall not require such Lender or the Issuing Bank to incur an unreimbursed  loss
or unreimbursed  cost or expense or otherwise take any action  inconsistent with
its  internal  policies  or legal  or  regulatory  restrictions  or  suffer  any
disadvantage  or  burden  deemed  by it to  be  significant)  (x)  to  file  any
certificate or document  reasonably  requested in writing by the Borrower or (y)
to assign its rights and  delegate and  transfer  its  obligations  hereunder to
another of its offices,  branches or  affiliates,  if such filing or  assignment
would reduce its claims for compensation  under Section 2.12 hereof or enable it
to withdraw its notice  pursuant to Section 2.13 hereof or would reduce accounts
payable pursuant to Section 2.18 hereof, as the case may be, in the future.  The
Borrower hereby agrees to pay all reasonable costs and expenses  incurred by any
Lender or the Issuing  Bank in  connection  with any such filing or  assignment,
delegation and transfer.

      Letters of Credit.Letters of Credit

      General. The Borrower may request the issuance of a Letter of Credit, in a
form  reasonably  acceptable to the  Administrative  Agent and the Issuing Bank,
appropriately  completed,  for the account of the Borrower, at any time and from
time to time while the Commitments  remain in effect.  This Section shall not be
construed to impose an  obligation  upon the Issuing Bank to issue any Letter of
Credit that is inconsistent with the terms and conditions of this Agreement.

      (b)  Notice  of   Issuance,   Amendment,   Renewal,   Extension;   Certain
ConditNotice of Issuance,  Amendment, Renewal, Extension; Certain Conditions. In
order to  request  the  issuance  of a Letter of Credit  (or to amend,  renew or
extend an  existing  Letter of  Credit),  the  Borrower  shall  hand  deliver or
telecopy to the Issuing Bank and the Administrative Agent (reasonably in advance
of the requested date of issuance,  amendment, renewal or extension) a completed
Application  and a notice  requesting  the  issuance  of a Letter of Credit,  or
identifying the Letter of Credit to be amended, renewed or extended, the date of
issuance,  amendment,  renewal or  extension,  the date on which such  Letter of
Credit is to expire (which shall comply with paragraph (c) below), the amount of
such Letter of Credit, the name and address of the beneficiary  thereof and such
other  information  as shall be necessary  to prepare such Letter of Credit.  In
connection  with a request for the issuance of a Letter of Credit,  in the event
of any inconsistency  between the terms of any Application and the provisions of
this Agreement, the provisions of this Agreement shall be controlling.  A Letter
of Credit  shall be  issued,  amended,  renewed  or  extended  only if, and upon
issuance,  amendment, renewal or extension of each Letter of Credit the Borrower
shall be deemed to  represent  and warrant  that,  after  giving  effect to such
issuance,  amendment, renewal or extension (A) the L/C Exposure shall not exceed
$15,000,000 and (B) the sum of the Total Exposure shall not exceed the lesser of
(i) the Total Commitment and (ii) the Borrowing Base. The Issuing Bank shall not
enter into any amendment of an  outstanding  Letter of Credit which has not been
requested or approved in writing by the Borrower.

      Expiration  Date.  Each  Letter  of  Credit  shall  expire at the close of
business on the  earlier of the date one year after the date of the  issuance of
such  Letter of  Credit  and the date that is five  Business  Days  prior to the
Maturity  Date,  unless  such  Letter of Credit  (i)  expires by its terms on an
earlier date or (ii) has a one-year  tenor and provides for the renewal  thereof
for additional  one-year  periods,  so long as such periods  referred to in this
clause (ii) shall not in any event  expire at a date later than the date that is
five Business Days prior to the Maturity Date.

      Participations.  By the  issuance  of a Letter of Credit and  without  any
further action on the part of the Issuing Bank or the Lenders,  the Issuing Bank
hereby  grants to each Lender,  and each such Lender  hereby  acquires  from the
applicable  Issuing Bank, a participation in such Letter of Credit equal to such
Lender's Pro Rata Percentage of the aggregate amount available to bc drawn under
such Letter of Credit,  effective upon the issuance of such Letter of Credit. In
consideration and in furtherance of the foregoing, each Lender hereby absolutely
and unconditionally  agrees to pay to the Administrative  Agent, for the account
of the Issuing Bank, such Lender's Pro Rata Percentage of each L/C  Disbursement
made by the Issuing Bank and not  reimbursed  by the  Borrower  forthwith on the
date due as provided in Section 2.02(f)  hereof.  Each Lender  acknowledges  and
agrees that its obligation to acquire participations  pursuant to this paragraph
in respect of Letters of Credit is absolute and  unconditional  and shall not be
affected  by  any   circumstance   whatsoever,   including  the  occurrence  and
continuance  of a Default  or an Event of  Default,  and that each such  payment
shall  be  made  without  any  offset,   abatement,   withholding  or  reduction
whatsoever.

      Reimbursement.  If the  Issuing  Bank shall make any L/C  Disbursement  in
respect  of a Letter of Credit,  the  Borrower  shall pay to the  Administrative
Agent an amount  equal to such L/C  Disbursement  not later than two hours after
the Borrower  shall have  received  notice from the Issuing Bank that payment of
such draft will be made,  or, if the Borrower  shall have  received  such notice
later than 10:00 a.m.,  Dallas,  Texas time, on any Business Day, not later than
10:00 a.m., Dallas, Texas time, on the immediately following Business Day.

      Obligations  Absolute.   The  Borrower's   obligations  to  reimburse  L/C
Disbursements   as  provided  in   paragraph   (e)  above  shall  be   absolute,
unconditional  and  irrevocable,  and shall be performed  strictly in accordance
with the terms of this Agreement,  under any and all  circumstances  whatsoever,
and irrespective of:

            (i)   any lack of validity or  enforceability  of any Letter
      of  Credit  or any  other  Loan  Paper,  or any term or  provision
      therein;

            (ii)  any   amendment   or  waiver  of  or  any  consent  to
      departure  from  all or any of the  provisions  of any  Letter  of
      Credit or this Agreement;

            (iii) the  existence  of any claim,  setoff,  defense or other right
      that the Borrower,  any other party  guaranteeing,  or otherwise obligated
      with, the Borrower,  any  Subsidiary of the Borrower,  On Command Corp. or
      any of its  Subsidiaries,  or other  Affiliate of any thereof or any other
      Person may at any time have  against the  beneficiary  under any Letter of
      Credit,  the Issuing Bank, the  Administrative  Agent or any Lender or any
      other  Person,  whether in  connection  with this  Agreement  or any other
      related or unrelated agreement or transaction;

            (iv) any draft or other document  presented under a Letter of Credit
      proving to be forged,  fraudulent,  invalid or insufficient in any respect
      or any statement therein being untrue or inaccurate in any respect;

            (v)  payment by the  Issuing  Bank under a Letter of Credit  against
      presentation  of a draft or other  document  that does not comply with the
      terms of such Letter of Credit; and

            (vi) any  other act or  omission  to act or delay of any kind of the
      Issuing Bank, the Lenders, the Administrative Agent or any other Person or
      any other event or circumstance whatsoever,  whether or not similar to any
      of the  foregoing,  that might,  but for the  provisions  of this Section,
      constitute a legal or equitable  discharge of the  Borrower's  obligations
      hereunder.

      The  foregoing  shall not be  construed  to excuse the  Issuing  Bank from
liability  to the  Borrower  to the extent of any direct  damages (as opposed to
consequential  damages,  claims in  respect  of which are  hereby  waived by the
Borrower to the extent  permitted by  Applicable  Law)  suffered by the Borrower
that are caused by the Issuing Bank's gross  negligence or wilful  misconduct in
determining  whether  drafts  and other  documents  presented  under a Letter of
Credit comply with the terms thereof; it is understood that the Issuing Bank may
accept   documents   that  appear  on  their  face  to  be  in  order,   without
responsibility   for  further   investigation,   regardless  of  any  notice  or
information  to the  contrary  and,  in making any  payment  under any Letter of
Credit (i) the Issuing Bank's exclusive  reliance on the documents  presented to
it under  such  Letter of Credit as to any and all  matters  set forth  therein,
including  reliance  on the amount of any draft  presented  under such Letter of
Credit,  whether or not the amount due to the beneficiary  thereunder equals the
amount of such draft and whether or not any document  presented pursuant to such
Letter of Credit proves to be insufficient  in any respect,  if such document on
its face appears to be in order,  and whether or not any other  statement or any
other document  presented  pursuant to such Letter of Credit proves to be forged
or invalid or any  statement  therein  proves to be  inaccurate or untrue in any
respect  whatsoever and (ii) any noncompliance in any immaterial  respect of the
documents presented under such Letter of Credit with the terms thereof shall, in
each case, be deemed not to constitute  wilful misconduct or gross negligence of
the Issuing Bank

      Disbursement  Procedures.  The Issuing Bank shall,  promptly following its
receipt  thereof,  examine all  documents  purporting  to represent a demand for
payment under a Letter of Credit. The Issuing Bank shall as promptly as possible
give telephonic notification, confirmed by telecopy, to the Administrative Agent
and the  Borrower of such  demand for  payment and whether the Issuing  Bank has
made or will make an L/C Disbursement  thereunder;  provided that any failure to
give or delay in giving  such  notice  shall not  relieve  the  Borrower  of its
obligation  to  reimburse  the Issuing  Bank and the Lenders with respect to any
such L/C Disbursement.  The Administrative Agent shall promptly give each Lender
notice thereof.

      Interim  Interest.  If the Issuing Bank shall make any L/C Disbursement in
respect of a Letter of Credit,  then,  unless the Borrower shall  reimburse such
L/C  Disbursement  in full on such date,  the unpaid  amount  thereof shall bear
interest for the account of the Issuing  Bank,  for each day from and  including
the date of such L/C  Disbursement,  to but excluding the earlier of the date of
payment by the Borrower or the date on which  interest  shall commence to accrue
thereon as provided in Section 2.08(f) hereof,  at the rate per annum that would
apply to such amount if such amount were an ABR Loan.

      Resignation or Removal of the Issuing Bank. The Issuing Bank may resign at
any time by giving 90 days' prior written  notice to the  Administrative  Agent,
the Lenders and the Borrower,  and may be removed at any time by the Borrower by
notice to the Issuing Bank, the Administrative Agent and the Lenders. Subject to
the next  succeeding  paragraph,  upon the acceptance of any  appointment as the
Issuing  Bank  hereunder  by a Lender  that  shall  agree to serve as  successor
Issuing  Bank,  such  successor  shall succeed to and become vested with all the
interests,  rights and obligations of the retiring Issuing Bank and the retiring
Issuing  Bank  shall be  discharged  from its  obligations  to issue  additional
Letters  of Credit  hereunder.  At the time such  removal or  resignation  shall
become effective, the Borrower shall pay all accrued and unpaid fees pursuant to
Section  2.05(c)  hereof.  The acceptance of any appointment as the Issuing Bank
hereunder by a successor Lender shall be evidenced by an agreement  entered into
by such successor, in a form satisfactory to the Borrower and the Administrative
Agent,  and,  from and  after the  effective  date of such  agreement,  (i) such
successor  Lender  shall  have all the rights and  obligations  of the  previous
Issuing Bank under this Agreement and (ii) references herein to the term Issuing
Bank,  shall be deemed to refer to such  successor  or to any  previous  Issuing
Bank, or to such successor and all previous  Issuing Banks, as the context shall
require.  After the  resignation or removal of the Issuing Bank  hereunder,  the
retiring Issuing Bank shall remain a party hereto and shall continue to have all
the rights and  obligations of an Issuing Bank under this Agreement with respect
to Letters of Credit  issued by it prior to such  resignation  or  removal,  but
shall not be required to issue additional Letters of Credit.

      Cash  Collateralization.  If any  Event  of  Default  shall  occur  and be
continuing,  the Borrower shall, on the Business Day it receives notice from the
Administrative  Agent or the Required  Lenders (or, if the maturity of the Loans
has been accelerated,  Lenders holding  participations in outstanding Letters of
Credit  representing  greater than 50% of the  aggregate  undrawn  amount of all
outstanding Letters of Credit thereof and of the amount to be deposited, deposit
in an account with the Administrative  Agent, for the benefit of the Lenders, an
amount in cash equal to the L/C Exposure as of such date.  Such deposit shall be
held by the  Administrative  Agent as collateral for the payment and performance
of the  obligations of the Borrower  under this  Agreement.  The  Administrative
Agent shall have exclusive  dominion and control,  including the exclusive right
of  withdrawal,  over such account and, if so requested by the  Borrower,  shall
invest the deposits  therein in Permitted  Investments.  Other than any interest
earned on the  investment  of such  deposits  in  Permitted  Investments,  which
investments   shall  be  made  at  the  option  and  sole   discretion   of  the
Administrative  Agent, such deposits shall not bear interest or profits, if any,
on such  investments  shall  accumulate in such account.  Moneys in such account
shall (i) automatically be applied by the Administrative  Agent to reimburse the
Issuing Bank for L/C Disbursements for which it has not been reimbursed, (ii) be
held for the satisfaction of the  reimbursement  obligations of the Borrower for
the L/C  Exposure  at such time and (iii) if the  maturity of the Loans has been
accelerated (but subject to the consent of the Lenders holding participations in
outstanding  Letters of Credit  representing  greater than 50% of the  aggregate
undrawn  amount of all  outstanding  Letters of  Credit),  be applied to satisfy
other obligations of the Borrower under this Agreement.


                                  ARTICLE III

                        Representations and Warranties

      The Borrower  represents  and warrants to the  Administrative  Agent,  the
Issuing Bank and each of the Lenders that:

      Organization; Powers. The Borrower and each of its Subsidiaries (except as
hereinafter provided) (a) is a corporation duly organized,  validly existing and
in good standing under the Laws of the jurisdiction of its organization, (b) has
all requisite power and authority to own its property and assets and to carry on
its business as now conducted and as proposed to be conducted,  (c) is qualified
to do business in, and is in good  standing in,  every  jurisdiction  where such
qualification  is  required,  except  where the failure so to qualify  could not
reasonably be expected to result in a Material  Adverse Effect,  and (d) has the
corporate  power and authority to execute,  deliver and perform its  obligations
under this  Agreement,  the other Loan Papers,  as  appropriate,  and each other
agreement or instrument  contemplated  thereby to which it is or will be a party
and to borrow  hereunder.  Denver Arena Company,  LLC and Avalanche Sub are each
limited  liability   companies  duly  organized  pursuant  to  its  Articles  of
Organization and the laws of the State of Colorado, validly existing and in good
standing under the Laws of such State. Nuggets Sub is a limited partnership duly
organized under the laws of the State of Delaware.

      Authorization.  The execution, delivery and performance by the Borrower of
this Agreement,  the promissory  note, the borrowing by the Borrower  hereunder,
the granting by the Borrower  and the other  Obligors of all Liens  securing the
Obligations,   and  the  execution  of  all  Loan  Papers   (collectively,   the
"Transactions")  (a) have been duly  authorized  by all  requisite  partnership,
membership,  corporate and, if required,  stockholder action, as applicable, and
(b) will not (i) violate (A) any provision of Law, statute,  rule or regulation,
or of the  certificate  or  articles  of  incorporation  or  other  constitutive
documents,  by-laws or  organizational  documents  of the Borrower or any of its
Subsidiaries,  (B) any order of any Governmental  Authority or (C) any provision
of any indenture,  material agreement or other material  instrument to which the
Borrower or any  Subsidiary  of the Borrower or On Command  Corp.  or any of its
Subsidiaries  is a party or by which any of them or any of their  property is or
may be bound,  provided  that, for the first 90 days after the Closing Date, the
Borrower  may still be pursuing  the consent of the NBA and the NHL,  (ii) be in
conflict  with,  result in a breach of or  constitute  (alone or with  notice or
lapse of time or both) a default under,  or give rise to any right to accelerate
or to require the prepayment,  repurchase or redemption of any obligation  under
any such  indenture,  agreement  or other  instrument  or  (iii)  result  in the
creation  or  imposition  of any Lien upon or with  respect to any  property  or
assets now owned or hereafter  acquired by the Borrower or any Subsidiary of the
Borrower or On Command Corp. or any of its Subsidiaries.

      Enforceability. This Agreement has been duly executed and delivered by the
Borrower and constitutes a legal,  valid and binding  obligation of the Borrower
enforceable  against the Borrower in accordance  with its terms.  All other Loan
Papers have been duly  executed  and  delivered  by the Borrower and each of the
Obligors,  as appropriate,  and each  constitutes  the legal,  valid and binding
obligation of the Borrower and each Obligor, as appropriate, enforceable against
the Borrower and each Obligor, as appropriate, in accordance with its terms.

      Governmental Approvals. No action, consent or approval of, registration or
filing  with or any other  action by any  Governmental  Authority  is or will be
required in connection with the Transactions,  except for such as have been made
or obtained and are in full force and effect.

      Financial Statements. The Borrower has heretofore furnished to the Lenders
its  consolidated  balance  sheets and  statements of income and equity and cash
flow (a) as of and for the fiscal year ended  December 31, 1995,  audited by and
accompanied  by the  opinion  of  Deloitte  & Touche,  LLP,  independent  public
accountants,  and (b) as of and for the fiscal  quarter  and the  portion of the
fiscal year ended June 30, 1996, certified by its chief financial officer.  Such
financial  statements  present  fairly the  financial  condition  and results of
operations and cash flows of the Borrower and its  consolidated  Subsidiaries as
of such dates and for such  periods.  Such balance  sheets and the notes thereto
disclose all material liabilities, direct or contingent, of the Borrower and its
consolidated  Subsidiaries  as of the dates thereof.  Such financial  statements
were prepared in accordance with GAAP applied on a consistent basis.

      No Material  Adverse Change.  There has been no material adverse change in
the business, assets, operations, financial condition, or material agreements of
the  Borrower,  any  of  its  Subsidiaries,  On  Command  Corp.  and  any of its
Subsidiaries, taken as a whole, since June 30, 1996.

      Title to Properties; Possession Under Leases.sion Under Leases

      (a) Each of the  Borrower  and its  Subsidiaries  has good and  marketable
title to, or valid  leasehold  interests  in, all its  material  properties  and
assets, except for minor defects in title that do not interfere with its ability
to conduct its business as currently conducted or to utilize such properties and
assets for their intended purposes.  All such material properties and assets are
free and clear of Liens,  other than Liens  expressly  permitted by Section 6.02
hereof.

      (b)  Each of the  Borrower  and its  Subsidiaries  has  complied  with all
material  obligations  under all material  leases to which it is a party and all
such  leases  are in  full  force  and  effect.  Each  of the  Borrower  and its
Subsidiaries enjoys peaceful and undisturbed  possession under all such material
leases.

      (c) Each of the Borrower and its Subsidiaries owns or possesses,  or could
obtain  ownership or possession of, on terms not  materially  adverse to it, all
patents, trademarks, service marks, trade names, copyrights, licenses and rights
with respect thereto necessary for the present conduct of its business,  without
any known  conflict  with the  rights of  others,  and free from any  burdensome
restrictions,   except  where  such  conflicts  and   restrictions   could  not,
individually  or in the  aggregate,  reasonably  be  expected to have a Material
Adverse Effect.

      The Subsidiaries  and On Command Corp.  Schedule 3.08 hereto sets forth as
of the date hereof a list of all  Subsidiaries  of the  Borrower  and On Command
Corp.  and  its  Subsidiaries,  and the  percentage  ownership  interest  of the
Borrower  or On  Command  Corp.,  as the  case may be,  therein.  As of the date
hereof, the shares of Capital Stock or other ownership interests so indicated on
Schedule 3.08 are fully paid and  non-assessable  and are owned by the Borrower,
directly or indirectly, free and clear of all Liens.

      Litigation; Compliance with Laws.pliance with Laws

      (a)  Except  as set  forth on  Schedule  3.09  hereof,  there  are not any
actions,  suits  or  proceedings  at  Law  or in  equity  or by  or  before  any
Governmental  Authority  now  pending  or,  to the  knowledge  of the  Borrower,
threatened  against or affecting the Borrower or any  Subsidiary of the Borrower
or On Command Corp.  or any of its  Subsidiaries,  or any business,  property or
rights of any such Person, or the NBA or NHL or any of their related entities in
which the Borrower or any  Subsidiary of the Borrower owns any Capital Stock (i)
that involve this Agreement or the  Transactions  or (ii) as to which there is a
reasonable  possibility  of an  adverse  determination  and that,  if  adversely
determined,  could reasonably be expected,  individually or in the aggregate, to
result in a Material Adverse Effect.

      (b) None of the Borrower or any of the  Subsidiaries of the Borrower or On
Command Corp. or any of its  Subsidiaries,  or any of their respective  material
properties  or assets is in violation  of, nor will the  continued  operation of
their material properties and assets as currently conducted violate, any Law, or
is in default with respect to any judgment, writ, injunction, decree or order of
any Governmental Authority,  where such violation or default could reasonably be
expected to result in a Material Adverse Effect.

      Agreements.0.     Agreements

      (a) Neither the Borrower nor any of the  Subsidiaries  of the Borrower nor
On Command  Corp.  nor any of its  Subsidiaries  is a party to any  agreement or
subject to any corporate restriction that, since December 31, 1995, has resulted
or would reasonably be expected to result in a Material  Adverse Effect,  except
as disclosed on Schedule 3.10 hereof.

      (b) Neither the Borrower nor any of the  Subsidiaries  of the Borrower nor
On Command Corp. nor any of its  Subsidiaries  is in default in any manner under
any  provision of any  indenture or other  agreement  or  instrument  evidencing
Indebtedness,  or any other  material  agreement or  instrument to which it is a
party or by which it or any of its  properties  or  assets  are or may be bound,
where such default could  reasonably be expected to result in a Material Adverse
Effect.

      Federal Reserve Regulations.serve Regulations

      (a) Neither the  Borrower nor any of the  Subsidiaries  of the Borrower is
engaged principally,  or as one of its important activities,  in the business of
extending credit for the purpose of buying or carrying Margin Stock.

      (b) No part of the  proceeds  of any Loan or any Letter of Credit  will be
used, whether directly or indirectly,  and whether immediately,  incidentally or
ultimately, for any purpose that entails a violation of, or that is inconsistent
with, the provisions of the Regulations of the Board,  including Regulation G, U
or X.

      SECTION   3.12.   Investment   Company   Act;   Public   Utility   Holding
CompanInvestment  Company Act; Public Utility  Holding Company Act.  Neither the
Borrower nor any  Subsidiary of the Borrower is (a) an  "investment  company" as
defined in, or subject to regulation  under, the Investment  Company Act of 1940
or (b) a "holding  company" as defined in, or subject to regulation  under,  the
Public Utility Holding Company Act of 1935.

      Use of Proceeds.  The Borrower will use the proceeds of the Loans and will
request the issuance of Letters of Credit only for the purposes specified in the
preamble to this Agreement.

      Tax Returns. Each of the Borrower, its Subsidiaries,  On Command Corp. and
its  Subsidiaries  has  filed or  caused to be filed  all  Federal,  state,  and
material local and foreign tax returns or materials  required to have been filed
by it and has paid or caused to be paid all taxes due and  payable by it and all
assessments  received by it, except taxes that are being contested in good faith
by  appropriate  proceedings  and for which the Borrower or On Command  Corp. or
such Subsidiary of the Borrower or On Command Corp.,  as applicable,  shall have
set aside on its books adequate reserves.

      No Material Misstatements.  None of (a) the S-4 Registration Statement (at
the time it is declared  effective under the Securities Act of 1933), or (b) any
other written  information,  report,  financial  statement,  exhibit or schedule
prepared by the Borrower and furnished to the Administrative Agent or any Lender
in connection  with the  negotiation of this Agreement and the other Loan Papers
or in  connection  with  any of the  Corporate  Restructuring  transactions,  or
included  herein  or  delivered  pursuant  hereto  contained  (in  the  case  of
subsection  (a) above) and  contained,  contains or will contain (in the case of
subsection  (b) above)  when  furnished  any  material  misstatement  of fact or
omitted,  omits or will omit when furnished to state any material fact necessary
to make the statements  therein,  in the light of the circumstances  under which
they were, are or will be made, not misleading.

      Employee  Benefit Plans.  Each of the Borrower and its ERISA Affiliates is
in compliance in all material  respects with the applicable  provisions of ERISA
and the Code and the regulations and published  interpretations  thereunder.  No
ERISA Event has  occurred or is  reasonably  expected to occur that,  when taken
together  with all other such ERISA  Events,  could  reasonably  be  expected to
result in  liability of the  Borrower or any of its  Subsidiaries  or On Command
Corp. or any of its Subsidiaries which would be material to the Borrower and its
Subsidiaries on a consolidated basis.

      Solvency..17.     Solvency

      (a) Immediately  after the  consummation of the Transactions and the other
transactions to occur on the Closing Date and  immediately  following the making
of each Loan made and the  issuance  of each  Letter of Credit  issued and after
giving effect to the application of the proceeds thereof,  (i) the fair value of
the  assets  of  the  Borrower  and  the  Subsidiaries  of  the  Borrower  on  a
consolidated basis, at a fair valuation,  will exceed the debts and liabilities,
direct,  subordinated,   contingent  or  otherwise,  of  the  Borrower  and  the
Subsidiaries  of the  Borrower on a  consolidated  basis;  (ii) the present fair
saleable  value of the  property of the  Borrower  and the  Subsidiaries  of the
Borrower on a  consolidated  basis will be greater  than the amount that will be
required to pay the probable  liability of the Borrower and the  Subsidiaries of
the  Borrower  on a  consolidated  basis on their  debts and other  liabilities,
direct,  subordinated,   contingent  or  otherwise,  as  such  debts  and  other
liabilities become absolute and matured; (iii) the Borrower and the Subsidiaries
of the  Borrower  on a  consolidated  basis will be able to pay their  debts and
liabilities,  direct,  subordinated,  contingent or otherwise, as such debts and
liabilities  become  absolute  and  matured;  and  (iv)  the  Borrower  and  the
Subsidiaries of the Borrower on a consolidated  basis will not have unreasonably
small capital with which to conduct the  businesses in which they are engaged as
such businesses are now conducted and are proposed to be conducted following the
Closing Date.

      (b) The  Borrower  does not intend to, and does not believe that it or any
of its  Subsidiaries  will,  incur debts beyond its ability to pay such debts as
they  mature,  taking into account the timing and amounts of cash to be received
by it or any such Subsidiary and the timing and amounts of cash to be payable on
or in respect of its Indebtedness or the Indebtedness of any such Subsidiary.

      Insurance.  Schedule  3.18 hereto sets forth a true,  complete and correct
description of all insurance  maintained by or for the Borrower or for or by its
Subsidiaries  as of the date hereof and the Closing  Date. As of each such date,
such insurance is in full force and effect and all premiums have been duly paid.
The Borrower and its  Subsidiaries  have  insurance in such amounts and covering
such risks and liabilities as are in accordance with normal industry practice.

      Labor  Matters.  As of the date hereof and the Closing Date,  there are no
strikes,  lockouts or slowdowns  against the Borrower or any  Subsidiary  of the
Borrower  pending or, to the knowledge of the Borrower,  threatened  which could
reasonably be expected to have a Material  Adverse  Effect.  The hours worked by
and payments  made to employees  of the  Borrower  and the  Subsidiaries  of the
Borrower have not been in violation of the Fair Labor Standards Act or any other
applicable Federal,  state, local or foreign Law dealing with such matters.  All
payments due from the Borrower or any  Subsidiary of the Borrower,  or for which
any claim may be made against the Borrower or any Subsidiary of the Borrower, on
account of wages and employee  health and welfare  insurance and other benefits,
have been paid or accrued as a  liability  on the books of the  Borrower or such
Subsidiary.  The  consummation of the Transactions to be consummated on or prior
to the Closing Date will not give rise to any right of  termination  or right of
renegotiation on the part of any union under any collective bargaining agreement
to which the Borrower or any Subsidiary of the Borrower is bound.

      Environmental Matters.  Except as set forth in Schedule 3.20:

      (a) The  properties  owned,  operated  or leased by the  Borrower  and the
Subsidiaries  of the Borrower  (the  "Properties")  do not contain any Hazardous
Materials in amounts or  concentrations  which (i) constitute,  or constituted a
violation  of, or (ii) could  reasonably  be expected to give rise to  liability
under,  Environmental Laws, which violations and liabilities,  in the aggregate,
could reasonably be expected to result in a Material Adverse Effect;

      (b) All  Environmental  Permits have been  obtained and are in effect with
respect to the Properties and operations of the Borrower and the Subsidiaries of
the  Borrower,  and the  Properties  and all  operations of the Borrower and the
Subsidiaries  of the Borrower are in compliance,  and in the last two years have
been in compliance,  with all Environmental Laws and all necessary Environmental
Permits,  except to the extent that such non-compliance or failure to obtain any
necessary permits, in the aggregate,  could not reasonably be expected to result
in a Material Adverse Effect;

      (c) Neither the Borrower nor any of the  Subsidiaries  of the Borrower has
received any notice of an Environmental  Claim in connection with the Properties
or the  operations of the Borrower or the  Subsidiaries  of the Borrower or with
regard to any Person whose liabilities for environmental matters the Borrower or
the  Subsidiaries of the Borrower has retained or assumed,  in whole or in part,
contractually,  which, in the aggregate,  could reasonably be expected to result
in a Material  Adverse  Effect,  nor do the Borrower or the  Subsidiaries of the
Borrower  have  knowledge  that any such  notice  will be  received  or is being
threatened;

      (d) Hazardous Materials have not been transported from the Properties, nor
have Hazardous Materials been generated,  treated,  stored or disposed of at, on
or under any of the Properties in a manner that could  reasonably be expected to
give rise to liability under any Environmental Law, nor have the Borrower or the
Subsidiaries  of the Borrower  retained or assumed any liability  contractually,
with  respect to the  generation,  treatment,  storage or disposal of  Hazardous
Materials, which transportation,  generation, treatment, storage or disposal, or
retained or assumed liabilities,  in the aggregate, could reasonably be expected
to result in a Material Adverse Effect.

      Ownership of the Franchises.of the Franchises

      (a) NBA Franchise. Nuggets Sub is , on the Closing Date, the owner of, and
have good and marketable  title to, the NBA Franchise,  and the NBA Franchise is
in compliance  with all of the rules and regulations of, and is in good standing
with, the NBA, and all agreements  related thereto. A true, correct and complete
copy of the NBA Documents in effect on the Closing  Date,  together with any all
amendments,  supplements or other material agreements relating thereto have been
delivered to the Administrative Agent.
      (b) NHL  Franchise.  Avalanche Sub is, on the Closing Date,  the owner of,
and have good and marketable title to, the NHL Franchise,  and the NHL Franchise
is in  compliance  with all of the  rules  and  regulations  of,  and is in good
standing with, the NHL, and all agreements  related thereto. A true, correct and
complete copy of the NHL Documents in effect on the Closing Date,  together with
any all amendments,  supplements or other material  agreements  relating thereto
have been delivered to the Administrative Agent.

      Strikes. There are (a) no labor disputes or grievances pending against the
NBA, the NHL, the Sports Subs, Nuggets Sub or Avalanche Sub, the Borrower or any
Subsidiary of the Borrower,  (b) no unfair labor practice  charges or grievances
pending or in process or, to the knowledge of the Borrower,  threatened by or on
behalf of any  employee or group of  employees  of the NBA,  the NHL, the Sports
Subs,  Nuggets Sub or  Avalanche  Sub,  the  Borrower or any  Subsidiary  of the
Borrower,  or (c) no written  complaints  received by Sports Subs,  Nuggets Sub,
Avalanche Sub, the Borrower or any other Subsidiary of the Borrower,  or, to the
knowledge  of  the  Borrower,   threatened,   or,  with  respect  to  unresolved
complaints, on file, with any tribunal alleging employment discrimination by the
NBA, the NHL, the Borrower or any  Subsidiary of the  Borrower,  pursuant to the
provisions of any collective  bargaining  agreement,  which, in each case, could
reasonably be expected to cause a Material Adverse Effect.

      Film   Inventory.   Film   Inventory   of  the  Borrower  and  its
Subsidiaries on the Closing Date is set forth on Schedule 3.23 hereto.

      SECTION 3.24. Survival of Representations and Warranties, etc. Survival of
Representations  and Warranties,  etc. All  representations  and warranties made
under this Agreement and the other Loan Papers shall be deemed to be made at and
as of the Closing  Date and at and as of the date of each  Revolving  Loan,  and
each shall be true and correct  when made,  except to the extent (a)  previously
fulfilled in accordance with the terms hereof, (b) subsequently inapplicable, or
(c)  previously  waived in writing by the  Administrative  Agent and the Lenders
with respect to any particular factual  circumstance.  The  representations  and
warranties  made under this  Agreement and the other Loan Papers shall be deemed
applicable to each  Subsidiary of the Borrower and On Command Corp.  and each of
its  Subsidiaries,  as  applicable,  as of the formation or  acquisition of such
Subsidiary  and at and as of each date the  representations  and  warranties are
remade pursuant to this provision. All representations and warranties made under
this  Agreement and the other Loan Papers shall  survive,  and not be waived by,
the  execution  hereof  by  the  Administrative   Agent  and  the  Lenders,  any
investigation or inquiry by the  Administrative  Agent or any Lender,  or by the
making of any Loan under this Agreement and the other Loan Papers.


                                  ARTICLE IV

                             Conditions of Lending

      The  obligations  of the Lenders to make Loans and of the Issuing  Bank to
issue  Letters  of Credit  hereunder  are  subject  to the  satisfaction  of the
following conditions:

      All Credit Events. On the date of each Borrowing,  and on the date of each
issuance of a Letter of Credit (each such event being called a "Credit Event"):

      (a)  The  Administrative  Agent  shall  have  received  a  notice  of such
Borrowing  as required by Section  2.03 hereof,  as  applicable  (or such notice
shall have been deemed given in accordance with Section 2.03 hereof), or, in the
case  of  the  issuance  of a  Letter  of  Credit,  the  Issuing  Bank  and  the
Administrative  Agent shall have  received a duly  completed  Application  and a
notice  requesting  the  issuance of such Letter of Credit,  required by Section
2.20(b) hereof.

      (b) The  representations  and  warranties  set forth in Article III hereof
shall be true and correct in all material respects on and as of the date of such
Credit Event with the same effect as though made on and as of such date,  except
to the extent such representations and warranties expressly relate to an earlier
date,  and there shall have  occurred no event which  caused a Material  Adverse
Effect.

      (c) The Borrower shall be in compliance in all material  respects with the
terms and  provisions  set forth herein on its part to be observed or performed,
and at the time of and immediately  after such Credit Event, no Event of Default
or Default shall have occurred and be continuing.

      Each  Credit  Event shall be deemed to  constitute  a  representation  and
warranty  by the  Borrower  on the date of such  Credit  Event as to the matters
specified in paragraphs (b) and (c) of this Section 4.01.

      First Credit Event.  On the Closing Date:

      (a) The Administrative Agent shall have received, on behalf of itself, the
Lenders and the Issuing  Bank,  a favorable  written  opinion of (i) the General
Counsel of the  Borrower,  (ii) Latham & Watkins,  counsel for the  Borrower and
each of its Subsidiaries, and (iii) Latham & Watkins, in its capacity as counsel
to the Borrower and each of its  Subsidiaries  in connection  with the Corporate
Restructuring,  in each case (y) dated the Closing  Date,  and (z) covering such
other matters  relating to this Agreement,  the  Transactions  and the Corporate
Restructuring as the Administrative  Agent shall reasonably request, and in form
and substance  acceptable to the Administrative  Agent and its counsel,  and the
Borrower hereby requests and instructs such counsel to deliver such opinion. The
opinions  shall be addressed to the Issuing Bank, the  Administrative  Agent and
the Lenders.

      (b) All legal  matters  incident to this  Agreement,  the  Borrowings  and
extensions of credit hereunder shall be reasonably  satisfactory to the Lenders,
to the Issuing Bank and to the Administrative Agent.

      (c)  The  Administrative  Agent  shall  have  received  (i) a copy  of the
certificate or articles of incorporation,  including all amendments  thereto, of
the Borrower and each of its Subsidiaries,  certified as of a recent date by the
Secretary of State of the state of its organization, and a certificate as to the
good standing of the Borrower and each of its  Subsidiaries as of a recent date,
from such  Secretary of State;  (ii) a certificate of the Secretary or Assistant
Secretary  of the  Borrower  dated  the  Closing  Date and  certifying  (A) that
attached  thereto is a true and complete copy of the by-laws of the Borrower and
each of its Subsidiaries as in effect on the Closing Date and at all times since
a date prior to the date of the resolutions  described in clause (B) below,  (B)
that attached thereto is a true and complete copy of resolutions duly adopted by
the Board of Directors of the Borrower and each of its Subsidiaries  authorizing
the execution,  delivery and performance of this Agreement,  the Loan Papers and
the borrowings  hereunder,  as appropriate,  and that such  resolutions have not
been  modified  rescinded or amended and are in full force and effect,  (C) that
the  certificate  or articles of  incorporation  of the Borrower and each of its
Subsidiaries  have not been amended since the date of the last amendment thereto
shown on the  certificate  of good  standing  furnished  pursuant  to clause (i)
above, (D) as to the incumbency and specimen signature of each officer executing
this Agreement,  each Loan Paper, or any other document  delivered in connection
herewith on behalf of the  Borrower  and each of its  Subsidiaries  and (E) that
attached  thereto is a true and complete  copy of each of the COMSAT  Agreements
and OCC  Agreements  as in effect on the Closing Date;  (iii) a  certificate  of
another officer as to the incumbency and specimen  signature of the Secretary or
Assistant Secretary  executing the certificate  pursuant to (ii) above; and (iv)
such other  documents  as the Lenders,  the Issuing  Bank or Donohoe,  Jameson &
Carroll, P.C., counsel for the Administrative Agent, may reasonably request.

      (d) The Administrative Agent shall have received a Compliance Certificate,
dated the  Closing  Date and  signed by a  Financial  Officer  of the  Borrower,
confirming  compliance with (i) the conditions precedent set forth in paragraphs
(b) and (c) of Section 4.01 hereof,  with  paragraphs (f), (g), (i), (j) and (k)
of this  Section  4.02,  (ii) with the  Borrowing  Base and (iii) the  financial
covenants set forth in Sections  6.09,  6.10 and 6.11 hereof,  and certifying to
the fact that there  exists no  Default  or Event of Default  under the terms of
this  Agreement,  and  consummating  the  Agreement and making the initial Loans
hereunder would not cause a Default or Event of Default.

      (e) Each Lender and the  Administrative  Agent shall have received payment
in full of all Fees and other amounts due and payable on or prior to the Closing
Date,  including  reimbursement  or  payment  of  all  reasonable  out-of-pocket
expenses required to be reimbursed or paid by the Borrower hereunder.

      (f) All  indebtedness of the Borrower owed to the syndication of financial
institutions  under its existing revolving credit facility shall be paid in full
by the end of the Closing Date.

      (g) The Borrower shall have  delivered duly executed and completed  copies
by the Borrower and each of the Subsidiaries of the Borrower, as applicable,  to
each of the Lenders of each of the following  documents and agreements,  in form
and  substance  satisfactory  to each Lender:  this  Agreement,  applicable  Fee
Letters,   pledge  agreements   pledging  100%  of  the  Capital  Stock  of  all
Subsidiaries of the Borrower except the Capital Stock of Avalanche Sub,  Nuggets
Sub, Ascent Network Services,  Inc. and Ascent Sports to secure the Obligations,
a pledge  agreement  pledging all the Capital Stock of On Command Corp. owned by
the Borrower or any of its Subsidiaries to secure the Obligations and guaranties
of the Obligations executed by all Subsidiaries of the Borrower except Avalanche
Sub and Nuggets Sub.  Each such pledge  agreement  delivered on the Closing Date
shall be accompanied by stock certificates  evidencing 100% of the Capital Stock
of each such pledged  entity  (except On Command  Corp.,  which such stock shall
evidence not less than 57% of the Capital Stock of On Command  Corp.),  together
with stock  powers  executed  in blank.  The  Borrower  shall have  delivered  a
promissory note to each Lender, in form and substance  satisfactory to each such
Lender and any other Loan Papers reasonably required by any Lender in connection
with this Agreement.

      (h) All governmental  and third party approvals  necessary or advisable in
connection with the Corporate Restructuring, the Transactions and the continuing
operations of the Borrower and its  Subsidiaries  and On Command  Corp.  and its
Subsidiaries  shall have been obtained and be in full force and effect,  and all
applicable  waiting periods shall have expired without any action being taken or
threatened  by any  Governmental  Authority  which  would  restrain,  prevent or
otherwise  impose  adverse  conditions  on the  Corporate  Restructuring  or the
Transactions.

      (i)  Except  as  contemplated  by  the  Corporate  Restructuring  and  the
Transactions,  or as  specifically  contemplated  hereby,  there  shall not have
occurred  any  material  change  in the  capitalization  (whether  in debt or in
equity),   corporate  structure  or  assets  of  the  Borrower  or  any  of  its
Subsidiaries  and On Command  Corp. or any of its  Subsidiaries,  since June 30,
1996.

      (j) No action,  suit,  litigation  or similar  proceeding by or before any
Governmental  Authority  shall  exist  or,  in  the  case  of  litigation  by  a
Governmental   Authority,   be   threatened,   with  respect  to  the  Corporate
Restructuring or the Transactions contemplated thereby or otherwise, which would
be likely in the reasonable  opinion of the Required  Lenders to have a Material
Adverse Effect.

      (k) The structure and documentation of the Corporate Restructuring and the
Transactions contemplated thereby, and all corporate and other proceedings taken
or to be  taken  and all  documents  incidental  thereto,  shall  be  reasonably
satisfactory  in form and  substance  to the  Administrative  Agent and Donohoe,
Jameson & Carroll,  P.C., counsel for the Administrative  Agent, and each Lender
shall have received copies of all such documents as such Lender,  acting through
the Administrative Agent, may reasonably request. All transactions  necessary to
consummate the Corporate Restructuring shall have been completed.

      (l) The  Lenders  shall  have  received  a  certification  from the  chief
financial officer of the Borrower, in form and substance reasonably satisfactory
to the Lenders,  as to the solvency of the  Borrower and its  Subsidiaries  on a
consolidated  basis after giving effect to the Corporate  Restructuring  and the
consummation of the other transactions contemplated hereby.

      (m) The Administrative Agent shall have received evidence  satisfactory to
the Administrative  Agent that each Person necessary for the pledge of the stock
in the  Sports  Subs,  except  the  NBA  and  the  NHL,  has  consented  to such
transactions.

      (n)  The  Administrative  Agent  shall  have  received  copies  of all NBA
Documents,  NHL  Documents,  Broadcasting  Agreements  (other than  Superstation
Agreements  and  National  Media  Contracts  copies of which are not provided to
Teams by the NBA or NHL),  Concession  Agreements,  Avalanche License Documents,
Nuggets License Documents, Parking Agreements, Player Contracts, Related
Contracts and Advertising Agreements.

      (o) The  Administrative  Agent shall have received copies of a description
in detail  satisfactory  to the  Administrative  Agent  describing  all material
pending litigation and, to the knowledge of the Borrower,  threatened litigation
in which each Obligor,  the NBA and the NHL and the related NBA and NHL entities
in which the Borrower or any  Subsidiary  of the Borrower owns any Capital Stock
is a defendant.

      (p)   The  On  Command   Corp.   Loan   Facility  must  have  been
consummated or must be consummated simultaneously with the Transaction.


                                   ARTICLE V

                             Affirmative Covenants

      The  Borrower  covenants  and agrees with each Lender that so long as this
Agreement shall remain in effect and until the Commitments  have been terminated
and the Obligations  shall have been paid in full and all Letters of Credit have
been  canceled  or have  expired  and all  amounts  drawn  thereunder  have been
reimbursed in full, the Borrower  will, and will cause each of its  Subsidiaries
to:

      Existence; Businesses and Properties.es and Properties

      (a) Do or cause to be done all things  necessary  to  preserve,  renew and
keep in full force and effect its legal existence, except as otherwise expressly
permitted under Section 6.05 hereof.

      (b) Do or cause to be done  all  things  necessary  to  obtain,  preserve,
renew, extend and keep in full force and effect the rights,  licenses,  permits,
franchises,  authorizations,  patents,  copyrights,  trademarks  and trade names
material to the conduct of its  business;  comply in all material  respects with
all  applicable  Laws,  rules,   regulations  and  decrees  and  orders  of  any
Governmental  Authority,  whether now in effect or hereafter enacted; and at all
times  maintain  and  preserve  all  property  material  to the  conduct of such
business and keep such property in good repair,  working order and condition and
from time to time make,  or cause to be made,  all needful  and proper  repairs,
renewals,  additions,  improvements and replacements  thereto necessary in order
that the business carried on in connection  therewith may be properly  conducted
at all times.

      Insurance.  Keep its  insurable  properties  insured  in  accordance  with
industry  standards at all times by  financially  sound and reputable  insurers;
maintain such other insurance,  to such extent and against such risks, including
(a) fire and other risks insured against by extended  coverage,  as is customary
with  companies  in the  same or  similar  businesses  operating  in the same or
similar  locations,  (b) public liability  insurance against claims for personal
injury or death or property  damage  occurring  upon, in, about or in connection
with the use of any  properties  owned,  occupied or  controlled  by it, and (c)
key-man and player  disability and life insurance in minimum  amounts and in the
form required by the NBA and NHL, but in no event in amounts less than or having
coverage  less than  standard  practice  for  Teams;  and  maintain  such  other
insurance as may be required by Law.

      Obligations  and Taxes.  Pay and  discharge  promptly  when due all taxes,
assessments  and  governmental  charges  or levies  imposed  upon it or upon its
income or profits or in respect  of its  property  before the same shall  become
delinquent or in default, as well as all lawful claims for labor,  materials and
supplies  or  otherwise  that,  if  unpaid,  might give rise to a Lien upon such
properties  or any part  thereof;  provided,  however,  that  such  payment  and
discharge  shall not be  required  with  respect  to any such  tax,  assessment,
charge,  levy or  claim  so long as the  validity  or  amount  thereof  shall be
contested in good faith by appropriate  proceedings  and the Borrower shall have
set aside on its books adequate reserves with respect thereto in accordance with
GAAP  and  such  contest  operates  to  suspend   collection  of  the  contested
obligation, tax, assessment or charge and enforcement of a Lien.

      Financial   Statements,   Reports,   etc.   In  the  case  of  the
Borrower, furnish to the Administrative Agent and each Lender:

      (a) within 105 days after the end of each fiscal  year,  its  consolidated
and  consolidating  balance  sheet and related  consolidated  and  consolidating
statements  of income and cash flow,  showing  the  financial  condition  of the
Borrower and its  consolidated  Subsidiaries as of the close of such fiscal year
and the results of their  operations  during such year, and a comparison of such
financial  position and results of operations as of the  corresponding  date and
for the  previous  fiscal  year,  all audited  (in the case of the  consolidated
financial  statements)  by Deloitte & Touche,  LLP or other  independent  public
accountants of recognized  national standing  acceptable to the Required Lenders
and accompanied by an opinion of such accountants  (which shall not be qualified
in any  material  respect)  to  the  effect  that  such  consolidated  financial
statements  fairly present the financial  condition and results of operations of
the  Borrower  and its  consolidated  Subsidiaries  on a  consolidated  basis in
accordance with GAAP consistently applied;

      (b)  within  60 days  after  the end of each  of the  first  three  fiscal
quarters  of each  fiscal  year,  its  consolidated  balance  sheet and  related
consolidated  statements  of  earnings  and  cash  flow  showing  the  financial
condition of the Borrower and its  consolidated  Subsidiaries as of the close of
such  fiscal  quarter  and the  results of their  operations  during such fiscal
quarter and the then  elapsed  portion of the fiscal year,  and a comparison  of
such financial  position and results of operations as of the corresponding  date
and for the corresponding  periods in the previous fiscal year, all certified by
one of its Financial  Officers as fairly presenting the financial  condition and
results of operations  of the Borrower and its  consolidated  Subsidiaries  on a
consolidated  basis in accordance  with GAAP  consistently  applied,  subject to
normal year-end audit adjustment;

      (c) (i)  concurrently  with any  delivery of  financial  statements  under
sub-paragraph  (a) above,  a certificate  of the  accounting  firm opining on or
certifying  such  statements  (which  certificate  may be limited to  accounting
matters and disclaim  responsibility for legal interpretations)  certifying that
no Event of Default has occurred in Sections 6.01,  6.02(j),  6.03,  6.04, 6.05,
6.06,  6.09, 6.10 and 6.11 hereof;  and (ii)  concurrently  with any delivery of
financial  statements  under  sub-paragraph  (a)  or  (b)  above,  a  Compliance
Certificate of a Financial  Officer of the Borrower  certifying that no Event of
Default or Default has  occurred  or, if such an Event of Default or Default has
occurred,  specifying the nature and extent  thereof and any  corrective  action
taken  or  proposed  to  be  taken  with  respect   thereto  and  setting  forth
computations in reasonable detail (which detail shall be reasonably satisfactory
to  the  Administrative  Agent)  demonstrating  compliance  with  the  covenants
contained in Sections 6.01,  6.03,  6.04,  6.06,  6.09, 6.10 and 6.11 hereof and
showing the Borrowing Base;

      (d)  promptly  after the same  become  publicly  available,  copies of all
periodic and other reports,  proxy  statements,  registration  statements (other
than on Form S-8) and  other  similar  materials  filed by the  Borrower  or any
Subsidiary of the Borrower with the Securities and Exchange  Commission,  or any
Governmental  Authority  succeeding  to  any or all  of  the  function  of  said
Commission,  or with any national securities exchange,  or distributed generally
to its shareholders, as the case may be; and

      (e)  promptly,  from time to time,  such other  information  regarding the
operations,  business  affairs and  financial  condition  of the Borrower or any
Subsidiary of the Borrower,  On Command Corp.,  the  Subsidiaries  of On Command
Corp.,  the NBA, the NHL, any of the related entities of the NBA or NHL in which
the Borrower or any Subsidiary of the Borrower or On Command Corp. or any of its
Subsidiaries  owns any  Capital  Stock,  or  compliance  with the  terms of this
Agreement and the other Loan Papers, as the  Administrative  Agent or any Lender
may reasonably request.

      Litigation  and  Other  Notices.  Furnish  to  the  Administrative
Agent,  the Issuing Bank and each Lender  prompt  written  notice of the
following:

      (a) any Event of  Default  or  Default,  specifying  the nature and extent
thereof  and the  corrective  action (if any) taken or proposed to be taken with
respect thereto;

      (b) the (i) filing or commencement  of, or any written threat or notice of
intention of any Person to file or  commence,  any action,  suit or  proceeding,
whether at Law or in equity or by or before any Governmental  Authority, or (ii)
the making of any written  claim,  in either  case  against  the  Borrower,  any
Affiliate of the Borrower, the NBA or the NHL, as to which there is a reasonable
possibility of an adverse determination and which if adversely determined, could
reasonably be expected to result in a Material Adverse Effect;

      (c)  any  development  (including,  without  limitation,  developments  in
pending  litigation,  developments in pending or threatened labor disruption and
loss or, to the knowledge of the Borrower,  threatened loss, of either Franchise
or any  Broadcasting  Agreement or other  material NHL Document or NBA Document)
that has resulted in, or could  reasonably  be expected to result in, a Material
Adverse Effect; and

      (d) receipt or  anticipated  receipt by the Borrower or any  Subsidiary of
the Borrower of the proceeds of any and each expansion of the NHL or the NBA.
      Employee Benefits. (a) Comply in all material respects with the applicable
provisions of ERISA and the Code and (b) furnish to the Administrative Agent (i)
as soon as possible after, and in any event within 10 days after any Responsible
Officer of the Borrower or any ERISA Affiliate knows or has reason to know that,
any ERISA Event has occurred that,  alone or together with any other ERISA Event
could  reasonably  be  expected  to result in  liability  of the  Borrower in an
aggregate amount exceeding  $55,000,000,  a statement of a Financial  Officer of
the Borrower  setting  forth  details as to such ERISA Event and the action,  if
any, that the Borrower proposes to take with respect thereto.

      SECTION   5.07.   Maintaining   Records;    Access   to   Properties   and
InspecMaintaining  Records;  Access to Properties and  Inspections.  Keep proper
books  of  record  and  account  in which  full,  true and  correct  entries  in
conformity  with GAAP and all  requirements  of Law are made of all dealings and
transactions in relation to its business and activities.  The Borrower will, and
will cause each of its Subsidiaries  and On Command Corp. and its  Subsidiaries,
to, permit any  representatives  designated by the  Administrative  Agent or any
Lender, upon reasonable prior written notice, to visit and inspect the financial
records and the  properties of the Borrower or any Subsidiary of the Borrower or
On  Command  Corp.  or its  Subsidiaries  at  reasonable  times  and as often as
reasonably  requested  and to make  extracts  from and copies of such  financial
records,  and permit any representatives  designated by the Administrative Agent
or any Lender to discuss the affairs,  finances and condition of the Borrower or
any  Subsidiary of the Borrower or On Command  Corp. or any of its  Subsidiaries
with the officers thereof and (with the concurrence of the Administrative Agent)
independent  accountants  therefor  (provided that the Borrower has the right to
have a  representative  present for any meeting with the Borrower's  independent
accountants).

      Use of Proceeds. Use the proceeds of the Loans and request the issuance of
Letters  of  Credit  only for the  purposes  set forth in the  preamble  to this
Agreement.

      Compliance with Environmental Laws.nvironmental Laws

      (a)  Comply,  and  exercise  best  efforts to cause all  lessees and other
Persons  occupying its Properties to comply,  in all material  respects with all
Environmental  Laws and Environmental  Permits  applicable to its operations and
Properties;  and obtain and renew all material  Environmental  Permits necessary
for its operations and Properties; and conduct any Remedial Action to the extent
required by and in accordance with Environmental Laws; provided,  however,  that
none of the Borrower or any of its  Subsidiaries  shall be required to undertake
any  Remedial  Action  to the  extent  that  its  obligation  to do so is  being
contested in good faith and by proper  proceedings and appropriate  reserves are
being maintained with respect to such circumstances.

      (b) If a Default  caused by reason of a breach of  paragraph  (a) above or
Section 3.20 hereof shall have occurred and be continuing, at the request of the
Required Lenders through the Administrative Agent, provide to the Lenders within
45 days  after  such  request,  at the  expense  of the  Borrower,  a "Phase  1"
environmental site assessment report for the Properties which are the subject of
such default  prepared by an  environmental  consulting  firm  acceptable to the
Administrative  Agent and  indicating  the  presence  or  absence  of  Hazardous
Materials  and the  estimated  cost of any  compliance  or  Remedial  Action  in
connection with such Properties.

      Compliance  with Material  Contracts.  Except as set forth in Section 6.07
hereof,  maintain in full force and effect  (including  exercising any available
renewal option), and without amendment or modification,  each material contract,
unless the  failure so to maintain  any such  material  contract or  replacement
contract or contracts  thereof (or any amendment or modification  thereto) could
not, individually or in the aggregate, be reasonably expected to have a Material
Adverse Effect.

      Arena/Complex Construction.  The Borrower shall provide the Administrative
Agent and each Lender with  quarterly  written  reports  regarding the status of
plans/budget/financing   and  other  information   regarding  the  Arena/Complex
Construction,  which such information must be in detail reasonably acceptable to
the Administrative Agent.

      NBA and NHL  Obligations.  The Borrower  shall  timely  perform all of its
obligations  under  the  NBA  Documents  and the NHL  Documents,  and all  other
obligations  relating to the NBA and NHL which are binding on it,  except  where
the failure to so perform would not result in a Material Adverse Effect.

      Operation of Franchises.  Each of Ascent Sports,  Ascent Sports  Holdings,
Nuggets Sub,  Avalanche Sub and the Borrower shall take any and all action which
is necessary or  appropriate  to keep each of the  Franchises  in full force and
effect and in good  standing,  shall conform to and duly observe in all material
respects the requirements of the NBA Documents and NHL Documents,  respectively,
and shall promptly notify the Administrative Agent of any violation,  or alleged
violation thereof, and shall provide the Administrative Agent with copies of all
written  documents or notices relating  thereto.  Each of Ascent Sports,  Ascent
Sports  Holdings,  Nuggets Sub,  Avalanche Sub and the Borrower  shall  actively
promote and conduct,  and use its best  efforts to promote and  conduct,  ticket
sales for its  basketball  operations  and hockey  operations  (both  season and
individual Game tickets).

      Services Contracts. Each of Ascent Sports, Ascent Sports Holdings, Nuggets
Sub,  Avalanche Sub and the Borrower shall comply and use all reasonable efforts
to compel  compliance  by third  parties  through  appropriate  means,  with all
material terms and  conditions of all Services  Contracts and to maintain all of
the  foregoing in full force and effect,  except where the failure to so perform
would not result in a Material Adverse Effect.

      SECTION 5.15.     Key Man Life  Insurance/NBA  and NHL  Financial
InformKey Man Life Insurance/NBA and NHL Financial Information.

      (a)  Within 30 days  after the  Closing  Date,  the  Borrower  shall  have
provided  the  Administrative  Agent with copies of all key-man  life  insurance
contracts  which  exist  for  any  of the  employees  of the  Borrower  and  its
Subsidiaries, and

      (b) Within 10 days after receipt by the Borrower or any  Subsidiary of the
Borrower  of  such   information,   the   Borrower   shall  have   provided  the
Administrative Agent with copies of all financial statements for each of the NBA
and the NHL and the  related NBA and NHL  entities in which the  Borrower or any
Subsidiary of the Borrower  owns any Capital Stock to the extent such  financial
statements are provided to the Teams.

      Arena/Complex  Notice.  Not  later  than 30  Business  Days  prior  to the
commencement of construction on the Arena/Complex,  the Borrower shall give each
Lender written notice of the date of such intended commencement of construction,
together  with a summary  in  reasonable  detail of all  final  financing  plans
regarding  such  construction.  Upon request of the  Administrative  Agent,  the
Borrower shall promptly  provide the  Administrative  Agent with such additional
information regarding such construction as requested by the Administrative Agent
or any Lender.


                                  ARTICLE VI

                              Negative Covenants

      The Borrower  covenants  and agrees with each Lender that, so long as this
Agreement shall remain in effect and until the Commitments  have been terminated
and the  Obligations  have been paid in full and all Letters of Credit have been
canceled or have expired and all amounts drawn  thereunder  have been reimbursed
in full:

      Indebtedness.  The  Borrower  will  not,  and  will  not  cause or
permit any of its  Subsidiaries  of the Borrower or On Command  Corp. or
its  Subsidiaries  to, issue any Preferred  Stock,  or to issue,  incur,
create, assume or permit to exist any Indebtedness, except:

      (a)  Indebtedness  of the Borrower and any  Subsidiary of the Borrower for
borrowed  money  existing  on the date  hereof  and set forth in  Schedule  6.01
hereto, but not any extensions, renewals or replacements of such Indebtedness;

      (b) Indebtedness of any Subsidiary of the Borrower owed to the Borrower or
to a Wholly Owned Subsidiary of the Borrower (except Denver Arena Company,  LLC)
that does not  otherwise  violate any  provision of this  Agreement or any other
Loan Paper;

      (c) so long as there exists no Default or Event of Default both before and
after  giving  effect  to the  incurrence  of such  Indebtedness,  Denver  Arena
Company, LLC may incur Non-Recourse Arena Financing;

      (d) so long as there exists no Default or Event of Default both before and
after giving  effect to the  incurrence of such  Indebtedness,  Beacon may incur
Non-Recourse Film Indebtedness;

      (e) On Command Corp. and its Subsidiaries may incur Indebtedness under the
On Command Corp. Loan Facility, and, additionally, On Command Corp. may, so long
as there  exists no  Default or Event of Default  both  before and after  giving
effect to each such  issuance  or  incurrence,  (i) issue  Preferred  Stock in a
maximum amount equal to $50,000,000, provided that such Preferred Stock must not
have terms more  onerous than the terms in this  Agreement  and the Loan Papers,
and may not mature, require redemption or otherwise be redeemed or retired until
three  years  after  the  Obligations  hereunder  are  repaid  in  full  and the
Commitments  have been terminated,  and (ii) incur  Indebtedness up to a maximum
outstanding amount of $50,000,000, provided that such Indebtedness must not have
terms more onerous than the terms in this Agreement and the Loan Papers;

      (f) so long as there exists no Default or Event of Default both before and
after  giving  effect to the  execution  of such  Guarantee,  the  Borrower  may
Guarantee the completion of the construction of the Arena/Complex, provided that
(i) such Guarantee may not be in an aggregate  amount in excess of  $25,000,000;
and  (ii) the  amount  of any  such  Guarantee  reduces  the  Borrowing  Base in
accordance with the terms of the definition thereof;

      (g) so long as there exists no Default or Event of Default both before and
after giving effect to the incurrence of such Indebtedness,  the Borrower or any
Subsidiary  of the Borrower may incur  Capital  Lease  Obligations  in a maximum
aggregate amount not to exceed $10,000,000 at any one time outstanding;

      (h) so long as there exists no Default or Event of Default both before and
after giving effect to the issuance of such  Preferred  Stock,  the Borrower may
issue Preferred  Stock,  provided that the terms of such Preferred Stock require
payment-in-kind  only until such date that is two years after the Maturity Date;
and

      (i) in addition to  Indebtedness  permitted by subsections (a) through (h)
above,  so long as there  exists no Default or Event of Default  both before and
after giving  effect to the  incurrence of such  Indebtedness,  the Borrower may
incur other unsecured Indebtedness up to a maximum amount outstanding at any one
time of  $10,000,000,  provided  that  the  weighted  average  of the per  annum
interest rates on such Indebtedness may not exceed 12%.

      Notwithstanding  anything in this  Agreement or in any other Loan Paper to
the contrary,  Ascent Sports Holdings may not operate as any business other than
a holding company for Capital Stock.

      Liens.  The  Borrower  will not,  and will not cause or permit  any of its
Subsidiaries to, create, incur, assume or permit to exist any Lien on any of its
property or assets  (including  on the stock or other  securities of any Person,
including  any  Subsidiary  of  the  Borrower  and  On  Command  Corp.  and  its
Subsidiaries) now owned or hereafter  acquired by it or them or on any income or
revenues or rights in respect of any thereof, except:

      (a)  Liens on  property  or assets of the  Borrower  and its  Subsidiaries
existing on the date hereof and set forth in Schedule 6.02 hereto; provided that
such Liens  shall  secure only those  obligations  which they secure on the date
hereof;

      (b) any Lien  existing on any  property or asset prior to the  acquisition
thereof by the Borrower or any  Subsidiary  of the  Borrower;  provided that (i)
such  Lien  is not  created  in  contemplation  of or in  connection  with  such
acquisition and (ii) such Lien does not apply to any other property or assets of
such Subsidiary;

      (c)   Liens for  taxes  not yet due or which  are being  contested
in compliance with Section 5.03 hereof;

      (d) carriers', warehousemen's,  mechanics', materialmen's,  repairmen's or
other like  Liens  arising  in the  ordinary  course of  business  and  securing
obligations  that  are not due and  payable  or which  are  being  contested  in
compliance  with  Section  5.03  hereof,  which,  in  the  aggregate,   are  not
substantial  in  amount  and do not  materially  detract  from the  value of the
property  subject thereto or materially  interfere with the ordinary  conduct of
the business of the Borrower or any of its Subsidiaries;

      (e)  pledges  and  deposits  made in the  ordinary  course of  business in
compliance with workmen's compensation,  unemployment insurance and other social
security Laws or regulations;

      (f) deposits to secure the  performance of bids,  trade  contracts  (other
than for Indebtedness), leases (other than Capital Lease Obligations), statutory
obligations, surety and appeal bonds, performance bonds and other obligations of
a like nature incurred in the ordinary course or business;

      (g) zoning restrictions, easements, rights-of-way,  restrictions on use of
real property and other similar encumbrances  incurred in the ordinary course of
business  which,  in the  aggregate,  are not  substantial  in amount and do not
materially  detract from the value of the property subject thereto or materially
interfere  with the  ordinary  conduct of the business of the Borrower or any of
its Subsidiaries;

      (h) Liens  granted by Denver Arena  Company,  LLC  securing any  permitted
Non-Recourse  Arena Financing or the City and County of Denver's interest in the
Arena/Complex,  but only to the  extent  such Liens are  limited to the  realty,
fixtures,  equipment and other assets  comprising the  Arena/Complex  (including
rights as a lessor under leases relating thereto);

      (i)  Liens  granted  by Beacon  securing  Non-Recourse  Film  Indebtedness
permitted  hereby,  but only to the extent such Liens are limited and apply only
to the film negatives for the Motion  Pictures  financed with such  Indebtedness
and any rights of the Borrower or the Subsidiaries of the Borrower of ownership,
distribution or exploitation of such Motion Pictures;

      (j)   Liens  securing  Capital Lease  Obligations  permitted to be
incurred in accordance  with the provisions of Section  6.01(g)  hereof;
and

      (k)   Liens arising under the Loan Papers.

      Sale and Lease Back  Transactions.BacThe  Borrower  will not, and will not
cause or permit any of its Subsidiaries to, enter into any arrangement, directly
or  indirectly,  with any Person whereby it shall sell or transfer any property,
real or personal, used or useful in its business, whether now owned or hereafter
acquired,  and thereafter rent or lease such property or other property which it
intends to use for  substantially  the same  purpose or purposes as the property
being sold or transferred,  provided that, (a) nothing herein shall be deemed to
prevent the Borrower and its Subsidiaries  from entering into operating  leases,
(b) Denver Arena Company,  LLC may enter into any such transaction with the City
of Denver  regarding the real estate for the  Arena/Complex,  and (c) so long as
there exists no Default or Event of Default both before and after giving  effect
thereto, the Borrower may consummate the sale leaseback transaction described on
Schedule 6.03 hereto.

      Investments,  Acquisitions,  Loans and Advances. The Borrower es will not,
and will not cause or  permit  any of its  Subsidiaries  to,  purchase,  hold or
acquire any Capital Stock,  evidences of indebtedness  (other than  restructured
receivables)  or other  securities  of,  make or  permit  to exist  any loans or
advances to, or make or permit to exist any investment or any other interest in,
or make any  acquisition  of assets of any other Person as a going  concern,  or
create any Subsidiary (each, an "Investment"), except:

      (a)   Investments  existing  on the  date  hereof  in the  Capital
Stock set forth on Schedule 6.04 hereto;

      (b)   Permitted Investments;

      (c) so long as there exists no Default or Event of Default both before and
after giving effect thereto, Investments by the Borrower in the Arena/Complex in
an aggregate  amount for the Borrower not in excess of  $30,000,000  in form and
substance  substantially  the same as the Investments made in the  Arena/Complex
prior to the Closing Date, or in form and substance otherwise  acceptable to the
Required Lenders;

      (d) (i)  Investments  consisting  of loans or advances to employees of the
Borrower or the Wholly Owned Subsidiaries,  provided that such loans or advances
are made in the  ordinary  course of business  and in  accordance  with  company
policy,  and provided further that the proceeds of such loan or advance are used
to finance employee related expenses  (including  relocation expenses and travel
and  entertainment  expenses),  and (ii) so long as there  exists no  Default or
Event of  Default  both  before and after  giving  effect  thereto,  Investments
pursuant to promissory notes to a Wholly Owned  Subsidiary  (except Denver Arena
Company,  LLC), provided that such loans or advances are not subordinated to any
other  Indebtedness or other  obligations of such Subsidiary and rank pari passu
with all senior, unsecured Indebtedness of such Subsidiary;

      (e) so long as there exists no Default or Event of Default both before and
after  giving  effect  thereto,   non  cash   Investments  by  the  Borrower  in
acquisitions,  provided that (i) the Borrower must use its common  Capital Stock
as consideration  for each such acquisition and (ii) in no event shall more than
20% of the outstanding Capital Stock of the Borrower in the aggregate be used by
the Borrower for such acquisitions over the life of this Agreement;

      (f) so long as there exists no Default or Event of Default both before and
after  giving  effect  to  any  such  Investment,  the  Borrower  or  any of its
Subsidiaries  (except Denver Arena Company,  LLC) may purchase shares of Capital
Stock of On Command Corp., so long as such shares are  immediately  delivered to
the Administrative Agent together with stock powers executed in blank and a duly
completed  and executed  pledge  agreement  in the form  executed on the Closing
Date, pledging such shares to the Administrative Agent and the Lenders to secure
the Obligations;

      (g)  promissory  notes  delivered  on or  prior  to the  Closing  Date  in
connection with the Corporate Restructuring, which such promissory notes may not
have maturities in excess of one year; and

      (h) in addition to those  permitted  Investments in (a) through (g) above,
so long as there  exists no Default or Event of  Default  both  before and after
giving effect to any such Investment,  other Investments made by the Borrower up
to a maximum amount outstanding at any one time of $10,000,000.

      Mergers,  Consolidations  and Sales of Assets.  The Borrower  will
not, and will not cause or permit any of its Subsidiaries to:

      (a) merge into or consolidate with any Person,  or permit any other Person
to merge into or consolidate  with it, provided that, if there exists no Default
or Event of  Default at the time  thereof or  immediately  after  giving  effect
thereto  (i) any  Wholly  Owned  Subsidiary  may merge  into the  Borrower  in a
transaction in which the Borrower is the surviving corporation,  (ii) any Wholly
Owned  Subsidiary  may merge into or  consolidate  with any other  Wholly  Owned
Subsidiary  in a  transaction  in which the  surviving  entity is a Wholly Owned
Subsidiary  and no Person other than the  Borrower or a Wholly Owned  Subsidiary
receives  any   consideration,   provided   further  that  any  such  merger  or
consolidation  may not include any  Subsidiary  that  incurred the  Non-Recourse
Arena Financing; or

      (b) sell,  transfer,  lease or otherwise dispose of (in one transaction or
in a series of transactions)  all or any substantial part of its assets (whether
now  owned  or  hereafter  acquired)  or any  amount  of  Capital  Stock  of any
Subsidiary of the Borrower or On Command Corp., except that (i) the Borrower and
any  Subsidiary  of the Borrower  may sell or dispose of inventory  and obsolete
equipment  in the ordinary  course of business,  (ii) so long as there exists no
Default or Event of Default  both  before and after  giving  effect  thereto the
Borrower or any of its Subsidiaries may (A) make an Asset  Disposition,  so long
as (I) the cumulative  aggregate  consideration for all such Asset  Dispositions
after the date hereof shall not exceed $10,000,000, and (II) such assets are not
used in the  operation  of the Nuggets Sub or the  Avalanche  Sub or the related
Teams,  and (B) in addition to Asset  Dispositions  permitted by subsection  (A)
above,  make an  Asset  Disposition,  so long  as (I) the  cumulative  aggregate
consideration  for all  such  Asset  Dispositions  after  the date  hereof  (but
excluding  the proceeds  from sales of those assets  described on Schedule  6.05
hereto)  shall not  exceed  $10,000,000,  (II) such  assets  are not used in the
operation  of the Nuggets Sub or the  Avalanche  Sub or the related  Teams,  and
(III) the Borrowing  Base is reduced by the Net Cash Proceeds of each such Asset
Disposition,  (iii) so long as there  exists no Default or Event of Default both
before and after giving effect  thereto the Borrower or any of its  Subsidiaries
may sell the Capital Stock  described on Schedule  6.05 hereto,  (iv) so long as
there exists no Default or Event of Default both before and after giving  effect
thereto,  the Borrower or the Denver Arena Company, LLC may sell the real estate
used for the  Arena/Complex  to the City and  County of  Denver,  (v) so long as
there exists no Event of Default both before and after  giving  effect  thereto,
any Wholly Owned  Subsidiary of the Borrower may transfer all or any part of its
assets to the Borrower,  and (vi) so long as there exists no Default or Event of
Default both before and after giving effect thereto, the Borrower may consummate
the  sale   leaseback   transaction   described   on   Schedule   6.03   hereto.
Notwithstanding  anything  to the  contrary  herein or in any other Loan  Paper,
under no  circumstance  may the Borrower or any Subsidiary of the Borrower sell,
dispose of or transfer any of the Capital Stock of On Command Corp. or any other
Capital  Stock  owned by the  Borrower,  any  Subsidiary  of the  Borrower or On
Command  Corp.  and its  Subsidiaries,  except the Capital  Stock  described  on
Schedule 6.05 hereto.

      SECTION 6.06. Dividends and Distributions; Restrictions on AbilitDividends
and Distributions; Restrictions on Ability of Subsidiaries to Pay Dividends. The
Borrower  will not,  and will not cause or permit  any of its  Subsidiaries  to,
declare  or  pay,  directly  or  indirectly,  any  dividend  or make  any  other
distribution (by reduction of capital or otherwise),  whether in cash, property,
securities or a combination  thereof,  with respect to any shares of its Capital
Stock or directly or indirectly  redeem,  purchase,  retire or otherwise acquire
for value (or permit any  Subsidiary of the Borrower to purchase or acquire) any
shares of any class of its  Capital  Stock or set aside any  amount for any such
purpose; provided,  however, that (i) any Subsidiary of the Borrower may declare
and pay dividends or make other distributions to another Wholly Owned Subsidiary
or to the  Borrower,  (ii) the  Borrower  may declare and pay  dividends or make
other  distributions that consist solely of common stock of the Borrower,  (iii)
the  Borrower  may make  redemptions  or  repurchases  of its  Capital  Stock in
connection with employee stock options upon termination of such employment,  for
an aggregate amount of  consideration  paid from and after the date hereof of up
to $10,000,000, in connection with any employee stock option or incentive plans,
and (iv) the Borrower may make dividends of Preferred  Stock in accordance  with
the terms and provisions of Section 6.01(h) hereof.

      Transactions with Affiliates.  Except as permitted in Section 6.06 hereof,
the Borrower will not, and will not cause or permit any of its  Subsidiaries to,
sell or transfer  any property or assets to, or purchase or acquire any property
or assets from, or otherwise  engage in any other  transactions  with, or permit
any Subsidiary of the Borrower to sell or transfer any property or assets to, or
purchase or acquire any  property or assets  from,  or  otherwise  engage in any
other transactions with any of its Affiliates (including, without limitation, On
Command Corp. and its Subsidiaries),  except that the Borrower or any Subsidiary
of the Borrower may engage in any of the foregoing  transactions in the ordinary
course of business as  currently  conducted  or to be conducted at prices and on
terms and conditions not less favorable to the Borrower or such  Subsidiary than
could be  obtained  on an arm's  length  basis  from  unrelated  third  parties;
provided,  however,  that the foregoing  shall not preclude the Borrower nor any
Subsidiary of the Borrower from  performing and complying  with its  obligations
under (a) the COMSAT  Agreements and the OCC  Agreements in accordance  with the
terms thereof on the date hereof or, so long as any such amendment (or extension
to  additional  services,  in the  case  of the  Services  Agreement)  does  not
materially  adversely  affect the  interests of the  Administrative  Agent,  the
Issuing Bank or the Lenders,  as the same may be hereafter  amended (or extended
to additional  services) or (b) the  transactions  necessary to  consummate  the
Corporate Restructuring. Notwithstanding anything in this Agreement or the other
Loan Papers to the contrary,  it is understood by all parties hereto that all or
any of the COMSAT  Agreements or OCC Agreements may be terminated by the parties
thereto at any time during the term of this Agreement.
      Limitation on Restrictive Agreements.  The Borrower will not, and will not
cause or permit any of its Subsidiaries to, enter into any indenture, agreement,
instrument,   financing  document  or  other  arrangement  which,   directly  or
indirectly,  contains any financial covenants or prohibits or restrains,  or has
the  effect  of  prohibiting  or  restraining,  or  imposes  materially  adverse
conditions upon: (a) the incurrence of Indebtedness,  (b) the granting of Liens,
(c) the making or  granting  of  Guarantees,  (d) the  payment of  dividends  or
distributions,  (e) the purchase, redemption or retirement of any Capital Stock,
(f) the making of loans or  advances,  or (g)  transfers or sales of property or
assets  (including  Capital  Stock) by the Borrower or any of its  Subsidiaries,
other than  restrictions on the granting of Liens on, or the transfer of, assets
that are encumbered by Liens permitted under clauses (b), (h) and (i) of Section
6.02 hereof with  respect to the  property or assets  covered by such Lien only,
provided that,  notwithstanding the foregoing, (i) Denver Arena Company, LLC may
enter into restrictive  agreements  relating solely to the Denver Arena Company,
LLC and the Arena/Complex,  each exclusively in connection with the Non-Recourse
Arena  Financing,  the  Arena/Complex  or the interest of the City and County of
Denver in the Arena/Complex,  (ii) Beacon may enter into restrictive  agreements
relating  solely to Beacon,  its  Subsidiaries  and the related Motion  Pictures
invested in by Beacon and its Subsidiaries,  each exclusively in connection with
Non-Recourse Film  Indebtedness,  and (iii) the Borrower may enter into any such
restrictive  agreements  relating to any Preferred Stock permitted under Section
6.01(h) hereof so long as no such  restrictive  agreement  shall be effective or
binding on the Borrower or any of its Subsidiaries  until the earlier of (A) the
Maturity Date and (B) the payment in full of the Obligations and the termination
of the Commitments.

      Coverage Ratio.  The Borrower will not permit the Coverage Ratio as of the
last day of any fiscal  quarter  ending  during any period set forth below to be
less than the ratio set forth below for such period:

            Quarter Ending Ratio                        Ratio

            From the Closing Date to
            through December 31, 1997                       1.50      to
1.00

            January 1, 1998 and thereafter                        1.10
to 1.00

      Financial  Covenants  Regarding On Command  Corp.  The Borrower rp
will not  permit  On  Command  Corp.  to  violate  any of the  following
covenants  until the  Obligations  are repaid in full and the Commitment
has been terminated and there exists no L/C Exposure:

            (a)  Beginning  with the first  fiscal  quarter of 1997,  On Command
      Corp.'s EBITDA, as of the last day of any fiscal quarter ending during the
      term of this  Agreement  for  the  most  recently  completed  four  fiscal
      quarters,  may not be less than  $50,000,000,  provided that, for the 1997
      fiscal year only, On Command Corp.'s EBITDA shall be calculated using only
      the completed fiscal quarters ending in 1997, annualized; and

            (b) as of the last  day of any  fiscal  quarter  ending  during  any
      period set forth below,  the ratio of On Command Corp.'s (a)  Consolidated
      Total  Indebtedness plus any Preferred Stock issued by On Command Corp. to
      (b) EBITDA for the most recently  completed  four fiscal  quarters may not
      exceed the ratio set forth below for such period:

            Quarter Ending Ratio                Ratio

            Closing Date through                3.00 to 1.00
            December 31, 1997

            January 1, 1998 and                       2.50 to 1.00
            thereafter

            In the event that On  Command  Corp.  shall  complete,  directly  or
      through a Subsidiary of On Command  Corp.,  a permitted  acquisition,  the
      ratio of Consolidated  Total Indebtedness of On Command Corp. to EBITDA of
      On Command Corp. shall be determined thereafter,  to the extent necessary,
      by computing  such ratio on a pro forma basis as if such  acquisition  had
      been completed on the first day of the period of four  consecutive  fiscal
      quarters  ending on the dates  indicated above occurring after the date of
      such acquisition.

      Film Inventory. The Borrower will not, and will not cause or permit any of
its  Subsidiaries to cause or permit,  gross Film Inventory on the balance sheet
of the Borrower and its consolidated  Subsidiaries  less the sum of (a) deferred
revenues associated with such Film Inventory,  plus (b) contractually guaranteed
pre-sales  that  have been  secured  to be more  than  $60,000,000  at any time,
provided  that,  the  $60,000,000  limitation  shall be  adjusted  quarterly  by
increasing or decreasing such number by Film Cash Flow,  which such number shall
remain as adjusted  until the following  quarter at which point the  $60,000,000
limitation shall be readjusted by Film Cash Flow.

      Amendments to  Organizational  Documents.  The Borrower will not, and will
not cause or permit any of its  Subsidiaries to, enter into any amendment of any
term or  provision,  or accept any  consent or waiver  with  respect to any such
provision,  of its articles of  incorporation,  by-laws,  or its  organizational
documents,  as  applicable,  in any manner that is  material  and adverse to the
Lenders.


                                  ARTICLE VII

                               Events of Default

      In  case of the  happening  of any of the  following  events  ("Events  of
Default"):

      (a) any  representation or warranty made or deemed made by the Borrower or
any of its  Subsidiaries in or in connection with this Agreement or in any other
Loan  Paper,  or in  connection  with any  agreement  related  to the  Corporate
Restructuring or the borrowings or issuances of Letters of Credit hereunder;  or
any representation,  warranty, statement or written information contained in any
report,  certificate,  financial  statement or other instrument  prepared by the
Borrower or any  Subsidiary of the Borrower and furnished by the Borrower or any
Subsidiary of the Borrower in connection  with or pursuant to this  Agreement or
any other  Loan  Paper,  shall  prove to have been  false or  misleading  in any
material respect when so made, deemed made or furnished;

      (b) default  shall be made in the payment of any  principal of any Loan or
the  reimbursement of principal with respect to any L/C Disbursement when and as
the same shall become due and  payable,  whether at the due date thereof or at a
date fixed for prepayment thereof or by acceleration thereof or otherwise;

      (c) default  shall be made in the  payment of any  interest on any Loan or
any Fee or L/C  Disbursement  or any other amount (other than an amount referred
to in (b) above) due under this  Agreement or any other Loan Paper,  when and as
the  same  shall  become  due and  payable,  and  such  default  shall  continue
unremedied for a period of five Business Days;

      (d) default  shall be made in the due  observance  or  performance  by the
Borrower or any  Subsidiary  of the Borrower or On Command  Corp.  or any of its
Subsidiaries,  as applicable, of any covenant,  condition or agreement contained
in Sections 5.01(a), 5.05 or 5.08 hereof or in Article VI hereof;

      (e) default  shall be made in the due  observance  or  performance  by the
Borrower or any  Subsidiary  of the Borrower or On Command  Corp.  or any of its
Subsidiaries,  as applicable, of any covenant,  condition or agreement contained
in this  Agreement  (other than those  specified in (b), (c) or (d) above) or in
any Loan Paper and such default  shall  continue  unremedied  for a period of 15
days after  notice  thereof from the  Administrative  Agent or any Lender to the
Borrower;

      (f) the Borrower or any Subsidiary of the Borrower, or On Command Corp. or
any  Subsidiary  of On  Command  Corp.  shall (i) fail to pay any  principal  or
interest,  regardless  of  amount,  due  in  respect  of any  Indebtedness  in a
principal amount in excess of $10,000,000, when and as the same shall become due
and  payable,  or (ii) fail to  observe  or perform  any other  term,  covenant,
condition or agreement  contained in any agreement or  instrument  evidencing or
governing any such Indebtedness if the effect of any failure referred to in this
clause (ii) is to cause, or to permit the holder or holders of such indebtedness
or a trustee on its or their behalf  (with or without the giving of notice,  the
lapse of time or both) to cause,  such  Indebtedness  to become due prior to its
stated maturity;

      (g)  an  involuntary  proceeding  shall  be  commenced  or an  involuntary
petition shall be filed in a court of competent  jurisdiction seeking (i) relief
in respect of the Borrower,  any  Subsidiary of the Borrower or On Command Corp.
or any Subsidiary of On Command Corp., or of a substantial  part of the property
or assets of the Borrower, a Subsidiary of the Borrower or On Command Corp. or a
Subsidiary of On Command Corp., under Title 11 of the United States Code, as now
constituted  or  hereafter  amended,  or any  other  Federal,  state or  foreign
bankruptcy,  insolvency,  receivership or similar Law, (ii) the appointment of a
receiver, trustee, custodian, sequestrator,  conservator or similar official for
the  Borrower,  any  Subsidiary  of the  Borrower  or On  Command  Corp.  or any
Subsidiary  of On Command  Corp.  or for a  substantial  part of the property or
assets of the  Borrower,  a Subsidiary  of the Borrower or On Command Corp. or a
Subsidiary  of On Command Corp. or (iii) the  winding-up or  liquidation  of the
Borrower,  any  Subsidiary of the Borrower or On Command Corp. or any Subsidiary
of On Command Corp.; and such proceeding or petition shall continue  undismissed
for 60 days or an order or decree  approving  or ordering  any of the  foregoing
shall be entered;

      (h) the  Borrower,  any  Subsidiary of the Borrower or On Command Corp. or
any Subsidiary of On Command Corp. shall (i) voluntarily commence any proceeding
or file any petition seeking relief under Title 11 of the United States Code, as
now  constituted or hereafter  amended,  or any other Federal,  state or foreign
bankruptcy,  insolvency,  receivership  or  similar  Law,  (ii)  consent  to the
institution  of, or fail to  contest  in a timely and  appropriate  manner,  any
proceeding or the filing of any petition described in (g) above, (iii) apply for
or consent to the appointment of a receiver, trustee,  custodian,  sequestrator,
conservator or similar official for the Borrower, any Subsidiary of the Borrower
or On Command Corp.  or any  Subsidiary of On Command Corp. or for a substantial
part of the property or assets of the Borrower,  any  Subsidiary of the Borrower
or On Command Corp. or any Subsidiary of On Command  Corp.,  (iv) file an answer
admitting the material  allegations  of a petition  filed against it in any such
proceeding,  (v) make a general  assignment  for the benefit of creditors,  (vi)
become unable, admit in writing its inability or fail generally to pay its debts
as they become due or (vii) take any action for the purpose of effecting  any of
the foregoing;

      (i) one or more judgments for the payment of money in an aggregate  amount
in excess of $10,000,000 shall be rendered against the Borrower,  any Subsidiary
of the Borrower or On Command Corp. or any  Subsidiary of On Command  Corp.,  or
any combination  thereof and the same shall remain  undischarged for a period of
30 consecutive days during which execution shall not be effectively  stayed,  or
any action shall be legally taken by a judgment  creditor to levy upon assets or
properties  of the  Borrower,  or any  Subsidiary  of the Borrower or On Command
Corp. or any Subsidiary of On Command Corp. to enforce any such judgment;

      (j) an ERISA Event shall have occurred that,  when taken together with all
other such ERISA Events,  could reasonably be expected to result in liability of
the  Borrower,  any  Subsidiary  of the  Borrower  or On  Command  Corp.  or any
Subsidiary of On Command  Corp.,  or any  combination  thereof,  in an aggregate
amount exceeding $10,000,000;

      (k) there shall have occurred a Change in Control of the Borrower;  or the
Borrower  shall fail to own directly or indirectly,  beneficially  or of record,
shares of Capital  Stock of On Command Corp.  representing  50.1% or more of the
aggregate  ordinary voting power of On Command Corp.; or the Borrower shall fail
to control,  directly or indirectly,  a majority of the Board of Directors of On
Command  Corp.,  provided  that,  if  the  Borrower  fails  to own  directly  or
indirectly beneficially or of record shares of Capital Stock of On Command Corp.
representing less than 50.1% but more than 45%, and such failure is not a result
of the sale by the  Borrower  or any of its  Subsidiaries  of any such shares of
Capital Stock,  no Default or Event of Default shall occur under this subsection
(k) until such date that is 30 days after the date of occurrence;

      (l) On Command Corp. or any of its Subsidiaries shall: (i) fail to pay any
principal or interest,  regardless  of amount,  due in respect of the On Command
Corp.  Loan  Facility,  when and as the same shall become due and payable taking
into account any applicable period of grace thereunder,  or (ii) fail to observe
or perform any other term,  covenant,  condition or  agreement  contained in any
agreement or  instrument  evidencing  or  governing  the On Command  Corp.  Loan
Facility  if the effect of any  failure  referred  to in this  clause (ii) is to
cause,  or to permit the holder or holders of such  indebtedness or a trustee on
its or their behalf (with or without the giving of notice,  the lapse of time or
both) to cause, such Indebtedness to become due prior to its stated maturity;

      (m) any of the  following  shall  occur:  (i) This  Agreement,  any pledge
agreement,  guarantee  or  promissory  note  executed  in  connection  with this
Agreement (collectively,  the "Material Agreements"),  or any material provision
of any thereof  shall,  for any reason,  not be valid and binding on the Obligor
signatory  thereto,  or not be in full force and effect, or shall be declared to
be null and  void;  or (ii)  the  validity  or  enforceability  of any  Material
Agreement shall be contested by any Obligor, any Subsidiary of the Borrower,  or
On Command  Corp. or any of its  Subsidiaries,  or any of their  Affiliates;  or
(iii) any Obligor shall deny in writing that it has any or further  liability or
obligation  under its  respective  Material  Agreements;  or (iv) any default or
breach under any provision of any Material  Agreement  shall  continue after the
applicable grace period, if any, specified in such Material Agreement;

      (n) any of the following shall have occurred: (i) Any Loan Paper shall for
any reason  (other than pursuant to the terms  thereof)  cease to create a valid
and  perfected  first  priority Lien in the  Collateral  purported to be covered
thereby  (except as permitted by the terms of this  Agreement or consented to by
the  Lenders);  or (ii) at any time  after  the date  that is 90 days  after the
Closing Date, less than 100% of the Capital Stock of all of the  Subsidiaries of
the Borrower shall be pledged to secure the Obligations,  or (iii) less than all
of the issued and outstanding Capital Stock of On Command Corp. that is owned by
the Borrower or any  Subsidiary  of the Borrower  shall be pledged to secure the
Obligations;

      (o) there  shall be a breach,  violation  or  default  under any  material
provision  of any of the  NBA  Documents  or the  NHL  Documents,  or any  other
material agreement relating to the operation of either Franchise;  or either the
NBA Franchise or the NHL Franchise is transferred, sold, or the governing bodies
of  either  the  NBA or the NHL  shall  dissolve,  or no  longer  function  as a
governing  body,  or either  league  shall  fail to  continue  substantially  in
accordance with past practices; or any material contract with any international,
regional  or local  company  which  has a  television,  radio  or  cable-related
contractual  relationship  with the NBA, the NHL, Nuggets Sub,  Avalanche Sub or
the  Sports  Subs,  or with any other  Person for the  benefit  of Nuggets  Sub,
Avalanche  Sub,  the NBA  Franchise  or the NHL  Franchise  shall  be  violated,
breached or in default, or any such Person party thereto shall fail to honor any
such  contract,  if the effect of such failure  results or could  reasonably  be
expected to have a Material Adverse Effect; or the NBA or NHL shall enter into a
collective bargaining agreement or change its governing agreements and documents
binding  the  NBA  Franchise  or the  NHL  Franchise  in a  manner  which  could
reasonably  be  expected  to have a  material  adverse  effect on  Nuggets  Sub,
Avalanche  Sub, the Sports Subs or the  Borrower,  or  materially  and adversely
affect the  Borrower's  ability to perform and meet the terms of this  Agreement
and the other Loan Papers,  provided  that,  in any case, if the sum of (A) fair
market value of the Capital Stock of On Command  Corp.  owned by the Borrower on
such date, plus (B) 50% the fair market value of the unaffected Franchise on the
Closing Date is in excess of $250,000,000, there shall exist no Default or Event
of Default under the terms of this subsection (o);

      (p) there  shall  occur  either of the  following  events:  (i) failure of
construction to begin on the Arena/Complex prior to August 31, 1997; or (ii) the
commencement of construction on the Arena/Complex at any time pursuant to terms,
conditions, plans, budget or financing that are not substantially similar in the
aggregate to those set forth in that certain letter from Mr. W.D.  Minami of the
Borrower to Mr. G. Meador of the  Administrative  Agent,  dated as of October 2,
1996,  provided  that,  to the extent the Borrower has fully  complied  with the
provisions  of Section  5.16 hereof and the  Required  Lenders did not object in
writing  prior  to the  date ten  Business  Days  before  the  proposed  date of
construction  that such plans are not  substantially  similar to those set forth
above,  then any such plans  disclosed in  accordance  with the terms of Section
5.16 hereof shall be deemed to be acceptable to the Required Lenders;

      (q)  either  (i) there  shall  occur  any sale of a  majority  or  greater
interest in any franchise under the NHL for an aggregate  purchase price that is
less than  $35,000,000  (which shall be grossed up to reflect a 100% interest in
such  franchise  and  shall  include  in the  amount of  consideration  paid any
franchise  transfer  or  relocation  fees  assessed  or  imposed by the NHL as a
condition to such sale); or (ii) the average price of all such sales (and in any
event at least two such sales) made  subsequent to the Closing Date (which shall
be grossed up to reflect a 100% interest in such  franchise and shall include in
the amount of  consideration  paid any  franchise  transfer or  relocation  fees
assessed or imposed by the NHL as a condition to such sale),  shall be less than
$55,000,000,  provided that, in either case, if the sum of (A) fair market value
of the Capital  Stock of On Command  Corp.  owned by the  Borrower on such date,
plus (B) 50% of the fair market  value of the NBA  Franchise on the Closing Date
is in excess of  $250,000,000,  there shall exist no Default or Event of Default
under the terms of this subsection (q);

      (r)  either  (i) there  shall  occur  any sale of a  majority  or  greater
interest in any franchise under the NBA for an aggregate  purchase price that is
less than  $45,000,000  (which shall be grossed up to reflect a 100% interest in
such  franchise  and  shall  include  in the  amount of  consideration  paid any
franchise  transfer  or  relocation  fees  assessed  or  imposed by the NBA as a
condition to such sale); or (ii) the average price of all such sales (and in any
event at least two such sales) made  subsequent to the Closing Date (which shall
be grossed up to reflect a 100% interest in such  franchise and shall include in
the amount of  consideration  paid any  franchise  transfer or  relocation  fees
assessed or imposed by the NBA as a condition to such sale),  shall be less than
$70,000,000,  provided that, in either case, if the sum of (A) fair market value
of the Capital  Stock of On Command  Corp.  owned by the  Borrower on such date,
plus (B) 50% of the fair market  value of the NHL  Franchise on the Closing Date
is in excess of  $250,000,000,  there shall exist no Default or Event of Default
under the terms of this subsection (r);

      (s) there shall occur any  amendment  to any NBA  Document or NHL Document
which could reasonably be expected to result in a Material Adverse Effect;

      (t) either of the following  events shall have occurred:  (i) the Borrower
shall  not  have  received  the  written   consent  of  the  NBA  regarding  the
Transactions  within  the 90 day  period  after the  Closing  Date;  or (ii) the
Borrower  shall not have  received the written  consent of the NHL regarding the
Transactions within the 90 day period after the Closing Date;

      (u) the Borrower and its Subsidiaries shall have failed, within the 90 day
period after the Closing Date, to either (i) pledge 100% of the Capital Stock of
Ascent Sports,  Avalanche Sub, Nuggets Sub and Ascent Network Services,  Inc. to
the Administrative  Agent to secure the Obligations by amending the schedules to
the existing pledge agreement, or (ii) deliver such pledge agreement(s) together
with all stock  certificates  evidencing  such  pledged  stock and stock  powers
executed in blank to the Administrative Agent; or

      (v) at any time that the debt  limitation on the Borrower in the Corporate
Agreement  with COMSAT  operates to limit the ability of the  Borrower to make a
borrowing  hereunder  at a time when the  Borrower  needs  such  ability to meet
operating  expenses  or  capital  requirements  in  each  case  approved  by the
Borrower's Board of Directors (as such approval may be amended),  provided that,
no amendment to any such approval may be made once operating expenses or capital
requirements  have been  incurred or made,  or to avoid a Default or an Event of
Default under this subsection (v);

then,  and in every such event (other than an event with respect to the Borrower
described in paragraph (g) or (h) above),  and at any time thereafter during the
continuance of such event, the  Administrative  Agent may, and at the request of
the Required  Lenders shall,  by notice to the Borrower,  take either or both of
the following actions,  at the same or different times: (i) terminate  forthwith
the Commitments, (ii) declare the Loans then outstanding to be forthwith due and
payable in whole or in part, whereupon the principal of the Loans so declared to
be due and  payable,  together  with  accrued  interest  thereon  and any unpaid
accrued Fees and all other liabilities of the Borrower accrued hereunder,  shall
become forthwith due and payable,  without presentment,  demand,  protest or any
other  notice  of any  kind,  all of which are  hereby  expressly  waived by the
Borrower,  anything  contained herein to the contrary  notwithstanding  or (iii)
require cash collateral as  contemplated  by Section 2.20(j) hereof;  and in any
event with respect to the Borrower  described in paragraph (g) or (h) above, the
Commitments  shall  automatically  terminate and the principal of the Loans then
outstanding,  together with accrued  interest hereon and any unpaid accrued Fees
and all other liabilities of the Borrower accrued hereunder, shall automatically
become due and payable, without presentment, demand, protest or any other notice
of any kind, all of which are hereby expressly waived by the Borrower,  anything
contained herein to the contrary notwithstanding.


                                 ARTICLE VIII

                           The Administrative Agent

      In order to expedite the  transactions  contemplated by this Agreement and
the other Loan Papers,  NationsBank is hereby appointed to act as Administrative
Agent on behalf of the  Lenders and the  Issuing  Bank.  Each of the Lenders and
each  assignee  of  any  such  Lender,   hereby   irrevocably   authorizes   the
Administrative  Agent to take such  actions on behalf of such Lender or assignee
or the Issuing Bank and to exercise such powers as are specifically delegated to
the Administrative Agent by the terms and provisions hereof,  together with such
actions and powers as are  reasonably  incidental  thereto.  The  Administrative
Agent is hereby  expressly  authorized  by the  Lenders  and the  Issuing  Bank,
without hereby limiting any implied  authority,  (a) to receive on behalf of the
Lenders and the Issuing  Bank all  payments of  principal of and interest on the
Loans, all payments in respect of L/C Disbursements and all other amounts due to
the Lenders hereunder,  and promptly to distribute to each Lender or the Issuing
Bank its proper share of each payment so received;  (b) to give notice on behalf
of each of the Lenders to the Borrower of any Event of Default specified in this
Agreement of which the  Administrative  Agent has actual  knowledge  acquired in
connection  with its agency  hereunder;  and (c) to  distribute  to each  Lender
copies of all notices, financial statements and other materials delivered by the
Borrower pursuant to this Agreement and the other Loan Papers as received by the
Administrative Agent.

      Neither  the  Administrative  Agent  nor any of its  directors,  officers,
employees  or agents  shall be liable as such for any action taken or omitted by
any of them except for its or his own gross negligence or wilful misconduct,  or
be  responsible  for any  statement,  warranty or  representation  herein or the
contents of any document  delivered in  connection  herewith,  or be required to
ascertain or to make any inquiry concerning the performance or observance by the
Borrower of any of the terms,  conditions,  covenants  or  agreements  contained
herein. The Administrative Agent shall not be responsible to the Lenders for the
due execution,  genuineness,  validity,  enforceability or effectiveness of this
Agreement,  the other Loan Papers or any other  instruments or  agreements.  The
Administrative  Agent  shall in all  cases  be fully  protected  in  acting,  or
refraining from acting,  in accordance with written  instructions  signed by the
Required Lenders and, except as otherwise  specifically  provided  herein,  such
instructions and any action or inaction pursuant thereto shall be binding on all
the Lenders.  The Administrative Agent shall, in the absence of knowledge to the
contrary,  be entitled to rely on any  instrument or document  believed by it in
good  faith to be genuine  and  correct  and to have been  signed or sent by the
proper  Person  or  Persons.  Neither  the  Administrative  Agent nor any of its
directors,  officers,  employees or agents shall have any  responsibility to the
Borrower on account of the failure of or delay in  performance  or breach by any
Lender or the Issuing Bank of any of its obligations  hereunder or to any Lender
or the  Issuing  Bank on account of the  failure of or delay in  performance  or
breach by any other  Lender or the issuing  Bank or the Borrower of any of their
respective  obligations hereunder or in connection herewith.  The Administrative
Agent may execute any and all duties hereunder by or through agents or employees
and shall be  entitled to rely upon the advice of legal  counsel  selected by it
with respect to all matters  arising  hereunder  and shall not be liable for any
action  taken or suffered in good faith by it in  accordance  with the advice of
such counsel.

      The Lenders  hereby  acknowledge  that the  Administrative  Agent shall be
under  no duty to take  any  discretionary  action  permitted  to be taken by it
pursuant to the  provisions of this  Agreement or any other Loan Paper unless it
shall be requested in writing to do so by the Required Lenders.

      Subject to the  appointment  and acceptance of a successor  Administrative
Agent as  provided  below,  the  Administrative  Agent may resign at any time by
notifying the Lenders and the Borrower. Upon any such resignation,  the Required
Lenders shall have the right to appoint a successor.  If no successor shall have
been  so  appointed  by the  Required  Lenders  and  shall  have  accepted  such
appointment within 30 days after the retiring  Administrative Agent gives notice
of its resignation, then the retiring Administrative Agent may, on behalf of the
Lenders, appoint a successor Administrative Agent which shall be a bank having a
combined  capital and surplus of at least  $500,000,000  or an  Affiliate of any
such bank.  Upon the  acceptance  of any  appointment  as  Administrative  Agent
hereunder by a successor bank, such successor shall succeed to and become vested
with  all  the  rights,   powers,   privileges   and  duties  of  the   retiring
Administrative  Agent and the retiring  Administrative Agent shall be discharged
from its duties and  obligations  hereunder.  After the  Administrative  Agent's
resignation  hereunder,  the  provisions of this Article and Section 9.05 hereof
shall  continue  in effect for its  benefit in respect of any  actions  taken or
omitted to be taken by it while it was acting as Administrative Agent.

      With respect to the Loans made by it hereunder,  the Administrative  Agent
in its individual  capacity and not as Administrative  Agent shall have the same
rights and powers as any other  Lender  and may  exercise  the same as though it
were  not  the  Administrative  Agent,  and  the  Administrative  Agent  and its
Affiliates may accept deposits from,  lend money to and generally  engage in any
kind of business  with the  Borrower  or any  Subsidiary  of the  Borrower or On
Command Corp. or any of its  Subsidiaries,  or other Affiliate  thereof as if it
were not the Administrative Agent.

      Each Lender agrees (a) to reimburse the  Administrative  Agent, on demand,
in the amount of its pro rata share (based on its  Commitment  hereunder) of any
expenses  incurred for the benefit of the Lenders by the  Administrative  Agent,
including  reasonable counsel fees and compensation of agents and employees paid
for  services  rendered  on  behalf  of the  Lenders,  that  shall not have been
reimbursed  by  the  Borrower  and  (b)  to  indemnify  and  hold  harmless  the
Administrative Agent and any of its directors, officers, employees or agents, on
demand,  in the  amount of such pro rata  share,  from and  against  any and all
liabilities, taxes, obligations, losses, damages, penalties, actions, judgments,
suits,  costs,  expenses or disbursements of any kind or nature  whatsoever that
may be Imposed on,  incurred by or  asserted  against it in its  capacity as the
Administrative  Agent or any of them in any way  relating  to or arising  out of
this  Agreement  or any other Loan Paper or any action taken or omitted by it or
any of them under this Agreement or any other Loan Paper, to the extent the same
shall not have been reimbursed by the Borrower; provided that no Lender shall be
liable to the Administrative  Agent or any such other indemnified Person for any
portion of such liabilities,  obligations,  losses, damages, penalties, actions,
judgments,  suits, costs, expenses or disbursements are determined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted from
the gross negligence or wilful misconduct of the Administrative  Agent or any of
its directors, officers, employees or agents.

      Each Lender  acknowledges that it has,  independently and without reliance
upon the  Administrative  Agent, or any other Lender 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 the other Loan  Papers.  Each Lender
also  acknowledges  that it will,  independently  and without  reliance upon the
Administrative  Agent  or any  other  Lender  and  based on such  documents  and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this  Agreement
and the other Loan Papers,  or any related  agreement or any document  furnished
hereunder or thereunder.

                                  ARTICLE IX

                                 Miscellaneous

      Notices.  Notices and other communications provided for herein shall be in
writing and shall be delivered by hand or overnight  courier service,  mailed by
certified or registered mail or sent by telecopy, as follows:

      (a)   if to the Borrower, to it at:

            Ascent Entertainment Group, Inc.
            One Tabor Center, Suite 2800
            1200 17th Street
            Denver, Colorado  80202
            Attention:        W. D. Minami
                     Vice President, Chief Financial Officer
                              and Treasurer
            Telephone:        (303) 626-7030
            Telecopy No.:     (303) 595-0823

      With a copy to:

            Ascent Entertainment Group, Inc.
            One Tabor Center, Suite 2800
            1200 17th Street
            Denver, Colorado  80202
            Attention:        Arthur Aaron, Esq.
                              Vice     President-Business     &    Legal
                           Affairs/Corporate Secretary
                            Telephone: (303) 626-7040
                          Telecopy No.: (303) 595-0127

      (b)   if to the Administrative Agent, to it at:

            NationsBank of Texas, National Association
            NationsBank Plaza
            901 Main Street, 64th Floor
            Dallas, Texas  75202
            Telephone No.:    (214) 508-0860
            Telecopier No.:   (214) 508-9390
            Attention:        Mr. Gregory I. Meador
                              Vice President

            With a copy to:

            Donohoe, Jameson & Carroll, P.C.
            3400 Renaissance Tower
            1201 Elm Street
            Dallas, Texas  75270
            Telephone No.:    (214) 698-3814
            Telecopier No.:   (214) 744-0231
            Attention:        Melissa Ruman Stewart

      (c) if to a Lender, to it at its address (or telecopy number) set forth on
the signature pages hereto or in the Assignment and Acceptance pursuant to which
such Lender shall have become a party hereto.

All notices and other  communications  given to any party  hereto in  accordance
with the  provisions of this Agreement and the other Loan Papers shall be deemed
to have been  given on the date of  receipt if  delivered  by hand or  overnight
courier  service or sent by  telecopy  or on the date five  Business  Days after
dispatch by certified or registered mail if mailed, in each case delivered, sent
or mailed (properly addressed) to such party as provided in this Section 9.01 or
in  accordance  with the latest  unrevoked  direction  from such party  given in
accordance with this Section 9.01.

      Survival of Agreement.  All  covenants,  agreements,  representations  and
warranties  made  by  the  Borrower  herein  and in the  certificates  or  other
instruments  prepared  or  delivered  in  connection  with or  pursuant  to this
Agreement and the other Loan Papers shall be considered to have been relied upon
by the Lenders and the Issuing Bank and shall  survive the making by the Lenders
of the  Loans and the  issuance  of  Letters  of  Credit  by the  Issuing  Bank,
regardless  of any  investigation  made by the Lenders or the Issuing Bank or on
their  behalf,  and  shall  continue  in full  force  and  effect as long as the
principal of or any accrued  interest on any Loan or any Fee or any other amount
payable under this Agreement or any other Loan Paper is  outstanding  and unpaid
or any Letter of Credit is outstanding and so long as the  Commitments  have not
been  terminated.  The provisions of Sections 2.12.  2.14,  2.18 and 9.05 hereof
shall remain operative and in full force and effect regardless of the expiration
of the term of this Agreement, the consummation of the transactions contemplated
hereby,  the repayment of any of the Loans,  the expiration of the  Commitments,
the expiration of any Letter of Credit,  the invalidity or  unenforceability  of
any  term or  provision  of this  Agreement  or any  other  Loan  Paper,  or any
investigation  made by or on behalf of the  Administrative  Agent, any Lender or
the Issuing Bank.

      Binding Effect.  This Agreement shall become  effective when it shall have
been  executed  by the  Borrower  and the  Administrative  Agent  and  when  the
Administrative  Agent shall have received  counterparts hereof which, when taken
together,  bear  the  signatures  of  each  of the  other  parties  hereto,  and
thereafter  shall be binding upon and inure to the benefit of the parties hereto
and their respective permitted successors and assigns.

      Successors and Assigns.ssors and Assigns

      (a) Whenever in this  Agreement or any other Loan Paper any of the parties
hereto is referred to, such  reference  shall be deemed to include the permitted
successors and assigns of such party, and all covenants, promises and agreements
by or on behalf of the Borrower,  the Administrative  Agent, the Issuing Bank or
the Lenders that are contained in this Agreement and the other Loan Papers shall
bind and inure to the benefit of their respective successors and assigns.

      (b) Each  Lender may assign to one or more  assignees  all or a portion of
its interests,  rights and  obligations  under this Agreement and the other Loan
Papers  (including  all or a portion of its Commitment and the Loans at the time
owing to it); provided, however, that (i) except in the case of an assignment to
a Lender or an Affiliate of such Lender, (x) the Borrower and the Administrative
Agent (and, in the case of any  assignment  of a  Commitment,  the Issuing Bank)
must give their prior written  consent to such  assignment  (which consent shall
not be  unreasonably  withheld)  and (y) the  amount  of the  Commitment  of the
assigning Lender subject to each such assignment  (determined as of the date the
Assignment  and Acceptance  with respect to such  assignment is delivered to the
Administrative Agent) shall not be less than $5,000,000 (or, if less, the entire
remaining  amount  of such  Lender's  Commitment)  and  will not  result  in the
unassigned portion, if any, of the assigning Lender's Commitment being less than
$5,000,000  (provided,  however, that the $5,000,000 amounts referred to in this
clause (i) shall be reduced  ratably in  accordance  with any  reductions in the
Total  Commitment)  (ii) the parties to each such  assignment  shall execute and
deliver to the Administrative Agent an Assignment and Acceptance,  together with
a processing and recordation  fee of $3,500 and (iii) the assignee,  if it shall
not be a Lender,  shall deliver to the  Administrative  Agent an  Administrative
Questionnaire.  Upon acceptance and recording  pursuant to paragraph (e) of this
Section 9.04, from and after the effective date specified in each Assignment and
Acceptance,  which effective date shall be at least five Business Days after the
execution thereof,  (A) the assignee  thereunder shall be a party hereto and, to
the extent of the interest assigned by such Assignment and Acceptance,  have the
rights  and  obligations  of a Lender  under this  Agreement  and the other Loan
Papers  and (B) the  assigning  Lender  thereunder  shall,  to the extent of the
interest  assigned by such  Assignment  and  Acceptance,  be  released  from its
obligations  under this Agreement and the other Loan Papers (and, in the case of
an  Assignment  and  Acceptance  covering  all or the  remaining  portion  of an
assigning  Lender's  rights and  obligations  under this Agreement and the other
Loan  Papers,  such  Lender  shall  cease to be a party  hereto  and to the Loan
Papers,  but shall  continue to be entitled  to the  benefits of Sections  2.12,
2.14,  2.18 and 9.05 hereof,  as well as to any Fees accrued for its account and
not yet paid).  The Borrower  shall,  at its expense,  issue to the assignor and
assignee new promissory notes, as applicable,  in the respective amounts of each
such  Lender's  Pro  Rata  Percentage  in the  Loans,  each  in the  form of the
promissory notes delivered by the Borrower on the Closing Date.

      (c)  By  executing  and  delivering  an  Assignment  and  Acceptance,  the
assigning  Lender  thereunder  and the  assignee  thereunder  shall be deemed to
confirm to and agree with each other and the other  parties  hereto as  follows:
(i) such assigning  Lender warrants that it is the legal and beneficial owner of
the interest being assigned thereby free and clear of any adverse claim and that
its  Commitment,  and the outstanding  balances of its Revolving  Loans, in each
case  without  giving  effect  to  assignments  thereof  which  have nor  become
effective,  are as set forth in such Assignment and  Acceptance;  (ii) except as
set  forth in (i)  above,  such  assigning  Lender  makes no  representation  or
warranty  and  assumes  no  responsibility   with  respect  to  any  statements,
warranties or  representations  made in or in connection  with this Agreement or
any other Loan Paper,  or the  execution,  legality,  validity,  enforceability,
genuineness,  sufficiency or value of this Agreement or any other Loan Paper, or
any other instrument or document  furnished  pursuant  hereto,  or the financial
condition of the Borrower or any  Subsidiary of the Borrower or On Command Corp.
or any Subsidiary of On Command Corp.,  or the  performance or observance by the
Borrower,  any  Subsidiary of the Borrower or On Command Corp. or any Subsidiary
of On Command Corp. of any of its obligations  under this Agreement or any other
Loan Paper, or any other instrument or document furnished pursuant hereto; (iii)
such assignee  represents  and warrants  that it is legally  authorized to enter
into such  Assignment and  Acceptance;  (iv) such assignee  confirms that it has
received  a copy of this  Agreement,  together  with  copies of the most  recent
financial  statements  referred  to in Section  3.05 or  delivered  pursuant  to
Section  5.04  and  such  other  documents  and  information  as it  has  deemed
appropriate  to make its own credit  analysis  and  decision  to enter into such
Assignment  and  Acceptance;  (v) such assignee will  independently  and without
reliance  upon the  Administrative  Agent,  such  assigning  Lender or any other
Lender and based on such documents and information as it shall deem  appropriate
at the time,  continue to make its own credit  decisions in taking or not taking
action  under this  Agreement  and the other  Loan  Papers;  (vi) such  assignee
appoints and authorizes the Administrative Agent to take such action as agent on
its behalf and to exercise  such powers under this  Agreement and the other Loan
Papers as are  delegated  to the  Administrative  Agent by the terms  hereof and
thereof,  together with such powers as are reasonably  incidental  thereto;  and
(vii) such assignee  agrees that it will perform in accordance  with their terms
all the  obligations  which by the terms of this  Agreement  and the other  Loan
Papers are required to be performed by it as a Lender.

      (d) The Administrative  Agent,  acting for this purpose as an agent of the
Borrower,  shall  maintain  at its  offices  in  Dallas,  Texas  a copy  of each
Assignment and Acceptance  delivered to it and a register for the recordation of
the names and  addresses of the Lenders,  and the  Commitment  of, and principal
amount of the Loans owing to, each Lender pursuant to the terms hereof from time
to time (the  "Register").  The entries in the Register  shall be conclusive and
the Borrower,  the  Administrative  Agent,  the Issuing Bank and the Lenders may
treat each Person whose name is recorded in the  Register  pursuant to the terms
hereof as a Lender  hereunder  for all purposes of this  Agreement and the other
Loan Papers,  notwithstanding  notice to the  contrary.  The  Register  shall be
available for  inspection by the Borrower,  the Issuing Bank and any Lender,  at
any reasonable time and from time to time upon reasonable prior notice.

      (e)  Upon  its  receipt  of a duly  completed  Assignment  and  Acceptance
executed by an assigning Lender and an assignee, an Administrative Questionnaire
completed in respect of the assignee  (unless the  assignee  shall  already be a
Lender  hereunder),  the processing and recordation fee referred to in paragraph
(b) above and, if required,  the written  consent of the  Borrower,  the Issuing
Bank and the Administrative  Agent to such assignment,  the Administrative Agent
shall (i) accept such  Assignment and  Acceptance,  (ii) record the  information
contained  therein in the Register and (iii) give prompt  notice  thereof to the
Lenders and the Issuing  Bank. No  assignment  shall be effective  unless it has
been recorded in the Register as provided in this paragraph (e).

      (f) Each Lender may without the consent of the Borrower,  the Issuing Bank
or the  Administrative  Agent sell  participations to one or more banks or other
entities in all or a portion of its rights and obligations  under this Agreement
and the other Loan Papers  (including all or a portion of its Commitment and the
Loans owing to it); provided,  however, that (i) such Lender's obligations under
this  Agreement  and the other Loan Papers  shall  remain  unchanged,  (ii) such
Lender shall  remain  solely  responsible  to the other  parties  hereto for the
performance of such obligations, (iii) the participating banks or other entities
shall be entitled to the benefit of the cost protection  provisions contained in
Sections  2.12,  2.14 and 2.18 hereof to the same extent as if they were Lenders
and (iv) the  Borrower,  the  Administrative  Agent,  the  Issuing  Bank and the
Lenders  shall  continue  to deal  solely  and  directly  with  such  Lender  in
connection with such Lender's  rights and  obligations  under this Agreement and
the other Loan  Papers,  and such Lender  shall retain the sole right to enforce
the obligations of the Borrower  relating to the Loans or L/C  Disbursements and
to  approve  any  amendment,  modification  or waiver of any  provision  of this
Agreement and the other Loan Papers  (other than  amendments,  modifications  or
waivers  decreasing any fees payable  hereunder or the amount of principal of or
the rate at which  interest  is payable on the Loans,  extending  any  scheduled
principal payment date or date fixed for the payment of interest on the Loans or
increasing or extending the Commitments).

      (g) Any Lender or  participant  may, in connection  with any assignment or
participation or proposed  assignment or participation  pursuant to this Section
9.04.   disclose  to  the  assignee  or  participant  or  proposed  assignee  or
participant any information relating to the Borrower furnished to such Lender by
or on behalf of the Borrower;  provided  that,  prior to any such  disclosure of
information  designated by the Borrower as  confidential,  each such assignee or
participant  or proposed  assignee or  participant  shall  execute an  agreement
whereby  such  assignee  or  participant   shall  agree  (subject  to  customary
exceptions) to preserve the confidentiality of such confidential  information on
terms no less  restrictive  than those  applicable  to the  Lenders  pursuant to
Section 9.16 hereof.

      (h) Any  Lender may at any time  assign  all or any  portion of its rights
under this  Agreement  and the other Loan  Papers to a Federal  Reserve  Bank to
secure  extensions  of  credit  by such  Federal  Reserve  Bank to such  Lender;
provided  that no  such  assignment  shall  release  a  Lender  from  any of its
obligations  hereunder  or  substitute  any such Bank for such Lender as a party
hereto. In order to facilitate such an assignment to a Federal Reserve Bank, the
Borrower shall, at the request of the assigning Lender, duly execute and deliver
to the assigning  Lender a promissory note or notes evidencing the Loans made to
the Borrower by the assigning Lender hereunder.

      (i) The Borrower  shall not assign or delegate any of its rights or duties
hereunder  without the prior written consent of the  Administrative  Agent,  the
Issuing Bank and each Lender, and any attempted  assignment without such consent
shall be null and void.

      (j) In the event  that  Standard & Poor's  Ratings  Group,  a Division  of
McGraw-Hill, Inc., Moody's Investors Service, Inc., and Thompson's BankWatch (or
Insurance  Watch  Ratings  Service,  in the case of Lenders  that are  insurance
companies (or Best's Insurance  Reports,  if such insurance company is not rated
by  Insurance  Watch  Ratings  Service))  shall,  after the date that any Lender
becomes a Lender,  downgrade the longterm  certificate  deposit  ratings of such
Lender, and the resulting ratings shall be below BBB-, Baa3 and C (or BB, in the
case of a Lender that is an insurance company (or B, in the case of an insurance
company not rated by Insurance  Watch Ratings  Service)),  then the Issuing Bank
shall have the right, but not the obligation, at its own expense, upon notice to
such Lender and the Administrative Agent, to replace (or to request the Borrower
to use its  reasonable  efforts to replace)  such  Lender  with an assignee  (in
accordance  with and subject to the  restrictions  contained  in  paragraph  (b)
above),  and such Lender hereby agrees to transfer and assign  without  recourse
(in accordance with and subject to the  restrictions  contained in paragraph (b)
above) all its interests, rights and obligations in respect of its Commitment to
such assignee;  provided,  however,  that (i) no such assignment  shall conflict
with any Law,  rule and  regulation or order of any  Governmental  Authority and
(ii) the Issuing  Bank or such  assignee,  as the case may be, shall pay to such
Lender  in  immediately  available  funds  on the  date of such  assignment  the
principal  of and  interest  accrued to the date of payment on the Loans made by
such Lender hereunder and all other amounts accrued for such Lender's account or
owed to it hereunder.

      Expenses; Indemnity.penses; Indemnity

      (a) The  Borrower  agrees  to pay all  reasonable  out-of-pocket  expenses
incurred by the Administrative Agent and the Issuing Bank in connection with the
syndication of the credit facilities provided for herein and the preparation and
administration of this Agreement and the other Loan Papers or in connection with
any amendments,  modifications  or waivers of the provisions  hereof (whether or
not the  transactions  hereby or thereby  contemplated  shall be consummated) or
incurred  by the  Administrative  Agent or any  Lender  in  connection  with the
enforcement  or protection of its rights in connection  with this  Agreement and
the Loan  Papers,  or in  connection  with the Loans  made or  Letters of Credit
issued  hereunder,  including the reasonable fees,  charges and disbursements of
Donohoe,  Jameson & Carroll, P.C., counsel for the Administrative Agent, and, in
connection with any such enforcement or protection, the reasonable fees, charges
and  disbursements  of any other  counsel  for the  Administrative  Agent or any
Lender.

      (b) The Borrower agrees to indemnify the Administrative Agent, each Lender
and the Issuing Bank, each Affiliate of any of the foregoing Persons and each of
their  respective  directors,  officers,  employees and agents (each such Person
being called an  "Indemnitee")  against,  and to hold each  Indemnitee  harmless
from, any and all losses,  claims,  damages,  liabilities and related  expenses,
including  reasonable counsel fees,  charges and  disbursements,  incurred by or
asserted against any Indemnitee arising out of, in any way connected with, or as
a result of (i) the  execution or delivery of this  Agreement and the other Loan
Papers or any agreement or instrument  contemplated  thereby, the performance by
the  parties  thereto  of  their  respective   obligations   thereunder  or  the
consummation  of  the  Transactions  and  the  other  transactions  contemplated
thereby,  (ii) the use of the  proceeds  of the Loans or  issuance of Lenders of
Credit,  (iii)  the  Corporate   Restructuring  or  any  transactions  connected
therewith or (iv) any claim, litigation, investigation or proceeding relating to
any of the foregoing, whether or not any Indemnitee is a party thereto; provided
that such indemnity shall not, as to any Indemnitee,  be available to the extent
that  such  losses,  claims,  damages,   liabilities  or  related  expenses  are
determined  by a court of  competent  jurisdiction  by final  and  nonappealable
judgment to have resulted from the gross negligence or wilful  misconduct of, or
breach of contract by, such Indemnitee.

      (c) The provisions of this Section 9.05 shall remain operative and in full
force and effect regardless of the expiration of the term of this Agreement, the
other Loan Papers, the consummation of the transactions contemplated hereby, the
repayment of any of the Loans, the expiration of the Commitments, the expiration
of any Letter of  Credit,  the  invalidity  or  unenforceability  of any term or
provision of this Agreement,  any other Loan Paper, or any investigation made by
or on behalf of the  Administrative  Agent,  any Lender or the Issuing Bank. All
amounts due under this Section 9.05 shall be payable on written demand therefor.

      Right of  Setoff.  If an Event  of  Default  shall  have  occurred  and be
continuing,  each Lender is hereby authorized at any time and from time to time,
to the  fullest  extent  permitted  by Law,  to set off  and  apply  any and all
deposits (general or special, time or demand,  provisional or final) at any time
held and  other  indebtedness  at any time  owing by such  Lender  to or for the
credit or the account of the Borrower  against any of and all the obligations of
the Borrower now or hereafter  existing  under this Agreement and the other Loan
Papers held by such  Lender,  irrespective  of whether or not such Lender  shall
have made any demand under this Agreement and although such  obligations  may be
unmatured.  The rights of each Lender under this Section 9.06 are in addition to
other rights and remedies  (including  other rights of setoff) which such Lender
may have.

      Applicable  Law.  THIS  AGREEMENT  AND THE  OTHER  LOAN  PAPERS  SHALL  BE
CONSTRUED  IN  ACCORDANCE  WITH AND  GOVERNED  BY THE LAWS OF THE STATE OF TEXAS
(EXCEPT, IN THE CASE OF CERTAIN OF THE OTHER LOAN PAPERS, TO THE EXTENT THE LAWS
OF ANOTHER  JURISDICTION  GOVERN THE  PERFECTION  AND  EFFECT OF  PERFECTION  OR
NON-PERFECTION  OF, CERTAIN LIENS).  EACH LETTER OF CREDIT SHALL BE GOVERNED BY,
AND SHALL BE CONSTRUED IN ACCORDANCE  WITH THE LAWS OR RULES  DESIGNATED IN SUCH
LETTER OF CREDIT OR IF NO SUCH LAWS OR RULES ARE DESIGNATED, THE UNIFORM CUSTOMS
AND PRACTICE FOR DOCUMENTARY CREDITS (1993 REVISION),  INTERNATIONAL  CHAMBER OF
COMMERCE,  PUBLICATION  NO. 500 (THE "UNIFORM  CUSTOMS")  AND, AS TO MATTERS NOT
GOVERNED BY THE UNIFORM CUSTOMS, THE LAWS OF THE STATE OF TEXAS.

      Waivers; Amendment.aivers; Amendment

      (a) No failure  or delay of the  Administrative  Agent,  any Lender or the
Issuing  Bank in  exercising  any power or right  hereunder  shall  operate as a
waiver  thereof,  nor shall any single or partial  exercise of any such right or
power, or any abandonment or  discontinuance of steps to enforce such a right or
power,  preclude  any other or further  exercise  thereof or the exercise of any
other right or power. The rights and remedies of the  Administrative  Agent, the
Issuing Bank and the Lenders  hereunder are  cumulative and are not exclusive of
any  rights  or  remedies  that  they  would  otherwise  have.  No waiver of any
provision of this Agreement or any other Loan Paper, or consent to any departure
by the Borrower  therefrom shall in any event be effective unless the same shall
be permitted by paragraph  (b) below,  and then such waiver or consent  shall be
effective only in the specific  instance and for the purpose for which given. No
notice or demand on the  Borrower in any case shall  entitle the Borrower to any
other or further notice or demand in similar or other circumstances.

      (b) Neither this  Agreement nor any provision  hereof or in any other Loan
Paper may be waived,  amended or modified  except  pursuant to an  agreement  or
agreements  in writing  entered into by the  Borrower and the Required  Lenders;
provided,  however,  that no such  agreement  shall (i) decrease  the  principal
amount of, or extend the maturity of or any scheduled  principal payment date or
date for the payment of any  interest on any Loan or any date for  reimbursement
of an L/C Disbursement, or waive or excuse any such payment or any part thereof,
or decrease  the rate of interest on any Loan or L/C  Disbursement,  without the
prior written consent of each Lender affected  thereby (ii) change or extend the
Commitment  or decrease the  Commitment  Fees or the Facility Fees of any Lender
without the prior written  consent of such Lender,  or (iii) amend or modify the
provisions of Sections 2.15 or 9.04(i) hereof, the provisions of this Section or
the definition of the term "Required Lenders", without the prior written consent
of each Lender;  provided further that no such agreement shall amend,  modify or
otherwise affect the rights or duties of the Administrative Agent or the Issuing
Bank hereunder without the prior written consent of the Administrative  Agent or
the Issuing  Bank,  and  provided  further  that to the extent any Wholly  Owned
Subsidiary is merged into the Borrower,  the Administrative  Agent is authorized
by each  Lender to release (i) all Capital  Stock of such  merged  Wholly  Owned
Subsidiary  pledged  to secure the  Obligations  and (ii) any  guarantee  of the
Obligations hereunder executed by any such merged Wholly Owned Subsidiary.

      Interest Rate Limitation. It is not the intention of any party to any Loan
Papers to make an agreement violative of the Laws of any applicable jurisdiction
relating  to usury.  In no event  shall  the  Borrower  or any  other  Person be
obligated  to  pay  any  amount  in  excess  of  the  Maximum  Amount.   If  the
Administrative  Agent or any Lender  ever  receives,  collects  or  applies,  as
interest,  any such excess,  such amount which would be excessive interest shall
be deemed a partial repayment of principal and treated hereunder as such; and if
principal is paid in full, any remaining excess shall be paid to the Borrower or
the other Person entitled  thereto.  In determining  whether or not the interest
paid or payable,  under any specific  contingency,  exceeds the Maximum  Amount,
each Obligor,  the  Administrative  Agent and each Lender shall,  to the maximum
extent permitted under Applicable Law, (a) characterize any nonprincipal payment
as an expense,  fee or premium  rather than as interest,  (b) exclude  voluntary
prepayments  and the effect  thereof,  and (c) amortize,  prorate,  allocate and
spread in equal  parts,  the total  amount of  interest  throughout  the  entire
contemplated  term  of the  Obligation  so that  the  interest  rate is  uniform
throughout the entire term of the Obligation; provided that if the Obligation is
paid  and  performed  in full  prior to the end of the  full  contemplated  term
thereof, and if the interest received for the actual period of existence thereof
exceeds the Maximum Amount, the Administrative Agent or Lenders, as appropriate,
shall  refund to the  Borrower the amount of such excess or credit the amount of
such  excess  against  the total  principal  amount  owing,  and, in such event,
neither  the  Administrative  Agent  nor any  Lender  shall  be  subject  to any
penalties  provided  by any Laws for  contracting  for,  charging  or  receiving
interest in excess of the Maximum Amount.  This Section 9.09 shall control every
other  provision  of  all  agreements  among  the  parties  to the  Loan  Papers
pertaining to the transactions contemplated by or contained in the Loan Papers.

      NBA Consent Letter and NHL Consent Letter. Each of the Loan Papers will be
subject to the  provisions of the NBA Consent  Letter and the NHL Consent Letter
from  and  after  the date on  which  each is  obtained.  Without  limiting  the
generality of the preceding sentence,  neither the Administrative  Agent nor any
Lender  (whether  acting through the  Administrative  Agent or otherwise)  shall
exercise,  enforce  or  attempt  to  exercise  or  enforce  any of its rights or
remedies  under any of the Loan Papers except in accordance  with and subject to
the  NBA  Consent  Letter  and  the  NHL  Consent  Letter.  Each  Lender  hereby
irrevocably authorizes, and each holder of any promissory note by the acceptance
of such note shall be deemed irrevocably to authorize,  the Administrative Agent
to execute,  deliver and perform on its behalf the NBA Consent  Letter,  the NHL
Consent Letter and all amendments, modifications,  extensions, waivers and other
acts in connection with the NBA Consent Letter and the NHL Consent Letter as the
Administrative  Agent shall deem  appropriate,  and all third  parties  shall be
entitled  to rely on the  Administrative  Agent's  taking of any such  action or
execution of any such document as conclusive  evidence of its authority to do so
on behalf of the Lenders.

      SECTION 9.11.     ENTIRE   AGREEMENT.   THIS   AGREEMENT  AND  THE
OTHER LOAN  PAPERS  REPRESENT  THE FINAL  AGREEMENT  BETWEEN THE PARTIES
AND MAY NOT BE  CONTRADICTED  BY EVIDENCE OF PRIOR,  CONTEMPORANEOUS  OR
SUBSEQUENT  ORAL  AGREEMENT OF THE PARTIES.  THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.

      WAIVER OF JURY TRIAL.  EACH PARTY  HERETO  HEREBY  WAIVES,  TO THE FULLEST
EXTENT  PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY  LITIGATION  DIRECTLY OR  INDIRECTLY  ARISING OUT OF, UNDER OR IN
CONNECTION  WITH THIS  AGREEMENT OR ANY OTHER LOAN PAPER.  EACH PARTY HERETO (A)
CERTIFIES  THAT NO  REPRESENTATIVE,  AGENT OR  ATTORNEY  OF ANY OTHER  PARTY HAS
REPRESENTED,  EXPRESSLY  OR  OTHERWISE,  THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION,  SEEK TO ENFORCE THE FOREGOING  WAIVER AND (B) ACKNOWLEDGES
THAT IT AND THE OTHER  PARTIES  HERETO  HAVE  BEEN  INDUCED  TO ENTER  INTO THIS
AGREEMENT AND THE OTHER LOAN PAPERS BY, AMONG OTHER THINGS,  THE MUTUAL  WAIVERS
AND CERTIFICATIONS IN THIS SECTION 9.12.

      Severability.  In the event any one or more of the provisions contained in
this  Agreement  or in any other Loan Paper should be held  invalid,  illegal or
unenforceable in any respect,  the validity,  legality and enforceability of the
remaining  provisions  contained  herein  and  therein  shall  not in any way be
affected  or impaired  thereby (it being  understood  that the  invalidity  of a
particular  provision  in a particular  jurisdiction  shall not in and of itself
affect the validity of such  provision in any other  jurisdiction).  The parties
shall  endeavor in good-faith  negotiations  to replace the invalid,  illegal or
unenforceable  provisions  with valid  provisions  the economic  effect of which
comes as close as  possible  to that of the  invalid,  illegal or  unenforceable
provisions.

      Counterparts.  This  Agreement  may be  executed in  counterparts  (and by
different  parties  hereto  on  different  counterparts),  each of  which  shall
constitute an original but all of which when taken together  shall  constitute a
single contract,  and shall become effective as provided in Section 9.03 hereof.
Delivery  of  an  executed   signature  page  to  this  Agreement  by  facsimile
transmission  shall be as effective as delivery of a manually signed counterpart
of this Agreement.

      Headings.  Article and  Section  headings  and the Table of Contents  used
herein are for convenience of reference only, are not part of this Agreement and
are not to affect  the  construction  of, or to be taken into  consideration  in
interpreting, this Agreement.

      Jurisdiction; Consent to Service of Process.ervice of Process

      (a) The Borrower  hereby  irrevocably  and  unconditionally  submits,  for
itself and its property,  to the  nonexclusive  jurisdiction  of any Texas State
court or Federal court of the United States of America sitting in Dallas,  Texas
and any appellate  court from any thereof,  in any action or proceeding  arising
out of or relating to this Agreement or any other Loan Paper, or for recognition
or  enforcement  of  any  judgment,  and  each  of  the  parties  hereto  hereby
irrevocably  and  unconditionally  agrees that all claims in respect of any such
action or proceeding  may be heard and determined in such Texas State or, to the
extent  permitted  by Law, in such  Federal  court.  Each of the parties  hereto
agrees  that a  final  judgment  in any  such  action  or  proceeding  shall  be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner  provided by Law.  Nothing in this Agreement or in any other
Loan Paper shall  affect any right that the  Administrative  Agent,  the Issuing
Bank or any Lender may otherwise have to bring any action or proceeding relating
to this Agreement or any other Loan Paper against the Borrower or its properties
in the courts of any jurisdiction.

      (b) The Borrower hereby  irrevocably and  unconditionally  waives,  to the
fullest extent it may legally and  effectively do so, any objection which it may
now or hereafter  have to the laying of venue of any suit,  action or proceeding
arising  out of or  relating  to this  Agreement  or any other Loan Paper in any
Dallas,  Texas  State  or  Federal  court.  Each of the  parties  hereto  hereby
irrevocably  waives,  to the fullest extent  permitted by Law, the defense of an
inconvenient  forum to the  maintenance of such action or proceeding in any such
court.

      (c) Each party to this  Agreement  and any other  Loan  Paper  irrevocably
consents  to service of process in the manner  provided  for  notices in Section
9.01 hereof.  Nothing in this  Agreement or any other Loan Paper will affect the
right of any party to this Agreement or any other Loan Paper to serve process in
any other manner permitted by Law.

      Confidentiality.  The  Administrative  Agent, the Issuing Bank and each of
the Lenders  agrees to keep  confidential  (and to use its best efforts to cause
its respective agents and  representatives to keep confidential) the Information
(as defined below) and all copies  thereof,  extracts  therefrom and analyses or
other materials based thereon, except that the Administrative Agent, the Issuing
Bank or any Lender shall be permitted to disclose Information (a) to such of its
respective   officers,    directors,    employees,    agents,   affiliates   and
representatives as need to know such Information, (b) to the extent requested by
any regulatory  authority,  (c) to the extent  otherwise  required by Applicable
Laws and  regulations  or by any  subpoena  or  similar  legal  process,  (d) in
connection  with any suit,  action or proceeding  relating to the enforcement of
its rights  hereunder or (e) to the extent such Information (i) becomes publicly
available  other  than as a result  of a  breach  of this  Section  9.17 or (ii)
becomes available to the Administrative  Agent the Issuing Bank or any Lender on
a nonconfidential basis from a source other than the Borrower.  For the purposes
of  this   Section,   "Information"   shall  mean  all   financial   statements,
certificates,  reports,  agreements  and  information  (including  all analyses,
compilations and studies prepared by the Administrative  Agent, the Issuing Bank
or any Lender based on any of the foregoing) that are received from the Borrower
and related to the Borrower,  any  shareholder  of the Borrower or any employee,
customer or supplier of the Borrower,  other than any of the foregoing that were
available  to the  Administrative  Agent,  the  Issuing  Bank or any Lender on a
nonconfidential basis prior to its disclosure thereto by the Borrower, and which
are in  the  case  of  Information  provided  after  the  date  hereof,  clearly
identified  at the time of  delivery as  confidential.  The  provisions  of this
Section 9.17 shall remain  operative and in full force and effect  regardless of
the expiration and term of this Agreement.

      SECTION 9.18.  Proposed Merger of Ascent Network  Services,  Inc. Proposed
Merger of Ascent Network Services, Inc.. The parties hereto acknowledge that the
Borrower currently anticipates that it may desire to merge or consolidate Ascent
Network Services, Inc. into the Borrower (the "Proposed Merger"), or to dividend
or distribute all or substantially all of the assets of Ascent Network Services,
Inc.  to  the  Borrower  (the  "Proposed  Distribution")  on  some  future  date
(maintaining  the Borrower as the surviving  corporation).  Notwithstanding  any
term or provision in this  Agreement or in any Loan Paper to the contrary,  each
Lender  agrees that, so long as there exists no Event of Default both before and
immediately   after  giving   effect  to  such   Proposed   Merger  or  Proposed
Distribution,  as the case may be, the Borrower shall be permitted to consummate
such Proposed Merger or Proposed  Distribution.  Each Lender further agrees that
the Administrative Agent is hereby authorized, upon the consummation of any such
Proposed  Merger,  to release  and/or  cancel the  Guarantee  of Ascent  Network
Services, Inc. of the Obligations hereunder, and to release the Capital Stock of
Ascent  Network  Services,  Inc.  that was pledged by the Borrower to secure the
Obligations  hereunder.  As a further  condition to each Lender's consent to any
Proposed Merger or Proposed Distribution, at such time as the Proposed Merger or
Proposed  Distribution  becomes  effective,   Borrower  agrees  to  provide  the
Administrative Agent with a collateral assignment of the NBC Contract, or a Lien
on the NBC  Contract (or on the  proceeds  thereof and rights of Ascent  Network
Services,   Inc.   therein),   in  form  and  substance   satisfactory   to  the
Administrative  Agent,  to the extent  permitted by Applicable Law and the terms
and provisions of the NBC Contract.

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<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.


THE BORROWER:                       ASCENT ENTERTAINMENT GROUP, INC.,



                                    By:   W. D. Minami
                                    Its:  Vice     President,      Chief
                                          Financial      Officer     and
                                          Treasurer


THE ADMINISTRATIVE AGENT:


                         NATIONSBANK OF TEXAS, NATIONAL
                                    ASSOCIATION,    as    Administrative
                                    Agent





                                    By:   Gregory I. Meador
                                    Its:  Vice President



THE LENDERS:

PRO RATA PERCENTAGE           NATIONSBANK OF TEXAS, NATIONAL
ON THE CLOSING DATE:          ASSOCIATION, individually as a Lender
    100%


Address:
901 Main Street
64th Floor
Dallas, Texas  75202
                                    By:   Gregory I. Meador
Attn: Gregory I. Meador             Its:  Vice President
Telephone:  (214) 508-0860
Telecopy:   (214) 508-9390