Exhibit 10(a)
                                                                 --------------
                                                                
                                                                 EXECUTION COPY





                                  $4,000,000,000

                           REVOLVING CREDIT AGREEMENT

                           dated as of April 30, 1997


                                      Among


                         MCI COMMUNICATIONS CORPORATION,


                         BANK OF AMERICA NATIONAL TRUST
                            AND SAVINGS ASSOCIATION,
                            as Competitive Bid Agent
                              and Operating Agent,


                                 CITIBANK, N.A.,
                              as Syndication Agent


                            THE CHASE MANHATTAN BANK
                                       and
                           NATIONSBANK OF TEXAS, N.A.,
                           as Co-Documentation Agents


                           THE CO-AGENTS NAMED HEREIN,


                                       and


                       THE SEVERAL FINANCIAL INSTITUTIONS
                                 PARTIES HERETO

                                   Arranged by

                          BANCAMERICA SECURITIES, INC.



<PAGE>









                                TABLE OF CONTENTS

         Section                                                           Page


                                    ARTICLE I
                                   DEFINITIONS

         1.01     Defined Terms                                               1
         1.02     Other Definitional Provisions                              15

                                   ARTICLE II
                              THE CREDIT FACILITIES

         2.01     Commitments to Make Pro Rata Advances                      15
             (a)  Commitments                                                15
             (b)  Types of Pro Rata Advances                                 16
         2.02     Competitive Bid Advances                                   16
             (a)  Competitive Bid Advances                                   16
             (b)  Competitive Bid Borrowing Requests                         16
             (c)  Offers of Competitive Bid Advances                         17
             (d)  Responses by the Company to Offers                         17
             (e)  Notice of Cancellation                                     19
             (f)  Notice of Acceptance                                       19
             (g)  Determining the Competitive Bid Eurodollar Rate            19
             (h)  Inability to Determine Competitive Bid Eurodollar Rate     20
             (i)  Borrowing and Reborrowing                                  20
             (j)  Repayments                                                 21
             (k)  Interest                                                   21
             (l)  Insufficient Competitive Bid Advances                      21
         2.03     Evidence of Debt                                           22
         2.04 Procedure for Pro Rata Borrowings                              22
         2.05     Refunding Borrowings                                       23
         2.06     Optional Termination or Reduction of Commitments           23
         2.07     Optional Prepayments of Pro Rata Advances                  24
         2.08     Repayment of Advances                                      24
         2.09     Termination Date                                           24
         2.10     Fees                                                       25
             (a)  Facility Fee                                               25
             (b)  Additional Fees                                            25
         2.11     Interest                                                   25
             (a)  Interest on Pro Rata Advances                              25


<PAGE>



                                                                          

                          

                           
             (b)  Interest on Competitive Bid Advances                       25
             (c)  Interest on Overdue Amounts                                25
             (d)  Additional Interest on Eurodollar Rate Advances            25
             (e)  Payment of Interest on Pro Rata Advances                   26
             (f)  Maximum Interest Rate                                      26
         2.12     Computation of Interest, Fees and Other Amounts            26
         2.13     Inability to Determine Interest Rate for Pro
                      Rata Advances                                          27
         2.14     Pro Rata Treatment and Payments                            28
             (a)  Payments by the Company                                    28
             (b)  Payments by the Banks to the Operating Agent               29
         2.15     Taxes                                                      30
         2.16     Illegality                                                 34
         2.17     Requirements of Law                                        35
         2.18     Funding Losses                                             37

                                   ARTICLE III
                         REPRESENTATIONS AND WARRANTIES

         3.01     Corporate Existence and Power                              38
         3.02     Corporate Authorization; No Contravention                  39
         3.03     Governmental Authorization                                 39
         3.04     Binding Effect                                             39
         3.05     No Legal Bar                                               39
         3.06     Litigation                                                 40
         3.07     No Default                                                 40
         3.08     ERISA Compliance                                           40
         3.09     Use of Proceeds; Margin Regulations                        41
         3.10     Title to Properties                                        41
         3.11     Taxes                                                      42
         3.12     Financial Condition                                        42
         3.13     Environmental Matters                                      43
         3.14     Investment Company Act                                     43
         3.15     Communications Act                                         43
         3.16     Senior Indebtedness                                        43

                                   ARTICLE IV
                              CONDITIONS PRECEDENT

         4.01     Conditions to Initial Advances                             44
             (a)  Credit Agreement and the Notes                             44
             (b)  Corporate Documents of the Company                         44
             (c)  By-Laws of the Company                                     44
             (d)  Board Resolutions of the Company                           44
             (e)  Incumbency Certificate for the Company                     44
             (f)  Legal Opinion for the Company                              44
             (g)  Payment of Fees and Expenses                               45
             (h)  Certificate                                                45
             (i)  Financial Statements                                       45
             (j)  MCI Telecom Certificate                                    45
             (k)  Existing Agreement                                         45
             (l)  Other Documents                                            45
         4.02     Conditions to All Advances                                 45
             (a)  Borrowing Notice                                           45
             (b)  Continuation of Representations and Warranties             46
             (c)  No Existing Default                                        46

                                    ARTICLE V
                              AFFIRMATIVE COVENANTS

         5.01     Financial Statements                                       46
         5.02     Certificates; Other Information                            47
         5.03     Preservation of Corporate Existence, etc                   48
         5.04     Maintenance of Property                                    48
         5.05     Insurance                                                  48
         5.06     Payment of Obligations                                     49
         5.07     Compliance with Laws                                       49
         5.08     Inspection of Property and Books and Records               49
         5.09     Hazardous Materials                                        50
         5.10     Notices                                                    50
         5.11     Consultation after GAAP Changes                            51
         5.12     Maintenance of Telecommunications Business                 52

                                   ARTICLE VI
                               NEGATIVE COVENANTS

         6.01     Limitation on Liens                                        52
         6.02     Sale or Lease of Assets                                    53
         6.03     Consolidations and Mergers                                 54
         6.04     Transactions with Affiliates                               55
         6.05     Compliance with ERISA                                      55
         6.06     Use of Proceeds                                            55
         6.07     Ratio of Total Liabilities to Total Capitalization         56
         6.08     MCI Telecom Liabilities                                    56
         6.09     No Restriction on Dividends of MCI Telecom                 56

                                   ARTICLE VII
                                EVENTS OF DEFAULT

             (a)  Non-Payment of Principal                                   57
             (b)  Non-Payment of Interest and Facility Fee                   57
             (c)  Non-Payment of Other Amounts                               57
             (d)  Representation or Warranty                                 57
             (e)  Certain Article VI Defaults                                57
             (f)  Other Covenant Defaults                                    58
             (g)  Other Defaults                                             58
             (h)  Cross-Default                                              58
             (i)  Bankruptcy or Insolvency                                   59
             (j)  Involuntary Proceedings                                    59
             (k)  ERISA                                                      59
             (l)  Monetary Judgments                                         60
             (m)  Change in Control                                          60

                                  ARTICLE VIII
                                   THE AGENTS

         8.01     Appointment of the Agents                                  61
         8.02     Delegation of Duties of the Agents                         61
         8.03     Liability of the Agents                                    61
         8.04     Reliance by the Agents                                     62
         8.05     Notice of Default                                          62
         8.06     Credit Decision                                            62
         8.07     Indemnification                                            63
         8.08     Bank of America in its Individual or Separate
                  Capacity                                                   64
         8.09     Successor Agents                                           64
         8.10     Syndication Agent, Co-Documentation Agents, Co-Agents      64

                                   ARTICLE IX
                                  MISCELLANEOUS

         9.01     Amendments and Waivers                                     65
         9.02     Notices                                                    65
         9.03     No Waiver; Cumulative Remedies                             67
         9.04     Costs and Expenses                                         67
         9.05     Indemnity                                                  68
         9.06     Successors and Assigns                                     68
         9.07     Assignments, Participations, etc.                          69
         9.08     Confidentiality                                            71
         9.09     Sharing; Set-off                                           71
         9.10     Notification of Addresses, Lending Offices, etc            72
         9.11     Delivery of Documents and Notices                          72
         9.12     Counterparts; Effectiveness                                73
         9.13     Severability                                               73
         9.14     Jurisdiction                                               73
         9.15     Waiver of Trial by Jury                                    73
         9.16     Governing Law                                              74




<PAGE>


                             SCHEDULES AND EXHIBITS



SCHEDULES:


SCHEDULE I        Commitments
SCHEDULE II       Lending Offices, Addresses for
                  Notices, etc. (1.01, 9.02)
SCHEDULE III      Pending Litigation (3.06)
SCHEDULE IV       Environmental Matters (3.13)
SCHEDULE V        Existing Liens (6.01(a))

EXHIBITS:

EXHIBIT A         Form of Pro Rata Note 
EXHIBIT B         Form of Competitive  Bid Note 
EXHIBIT C-1       Form of Pro Rata  Borrowing  Request  
EXHIBIT C-2       Form of Competitive Bid Borrowing Request 
EXHIBIT D         Form of Competitive Bid Advance Offer 
EXHIBIT E         Form of Competitive Bid Advance Confirmation 
EXHIBIT F-1       Form of Opinion of the General Counsel to the Company
EXHIBIT F-2       Form of Opinion of Special New York Counsel to the Company
EXHIBIT G         Form of Assignment Notice and Acceptance
EXHIBIT H         Form of Confidentiality Agreement




<PAGE>















                           REVOLVING CREDIT AGREEMENT


         REVOLVING  CREDIT  AGREEMENT  dated as of April  30,  1997,  among  MCI
COMMUNICATIONS  CORPORATION, a Delaware corporation (the "Company"), the several
financial  institutions  parties to this Agreement  (collectively,  the "Banks";
individually,  a "Bank"), BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION
("Bank of America"),  as Competitive  Bid Agent and Operating  Agent,  CITIBANK,
N.A., as Syndication  Agent,  THE CHASE MANHATTAN BANK and NATIONSBANK OF TEXAS,
N.A., as Co-Documentation Agents, and the Co-Agents named herein.

         WHEREAS, the Company requested BancAmerica  Securities,  Inc. to act as
Arranger   (as   hereinafter   defined)  to  assemble  a  syndicate  of  lending
institutions  to make  available  to the  Company a revolving  credit  facility,
comprising a pro rata facility and a competitive bid facility; and

         WHEREAS,  the Banks have agreed to make available to the Company such a
revolving  credit  facility,  upon the  terms and  conditions  set forth in this
Agreement; and

         WHEREAS, in connection with the competitive bid facility referred to in
Section  2.02  below  the  Banks  wish to  appoint  Bank  of  America  as  their
competitive  bid agent (in such  capacity,  Bank of America shall be hereinafter
referred  to as the  "Competitive  Bid  Agent"),  and in  connection  with other
aspects of this  Agreement  the Banks  wish to appoint  Bank of America as their
operating agent (in such capacity, Bank of America shall be hereinafter referred
to as the "Operating Agent").

         NOW, THEREFORE, the parties hereto hereby agree as follows:


                                    ARTICLE I

                                   DEFINITIONS



<PAGE>



                                                                               


                                                                                
1.01                Defined Terms. As used in this  Agreement,  the following
terms have the following  meanings (such meanings to be equally applicable to 
both the singular and plural forms of the terms defined):

                    "Absolute  Bid"  means a  proposal  for the making of one or
more  Competitive  Bid  Advances  at a fixed rate (other  than  Competitive  Bid
Eurodollar Advances) under Section 2.02.

                    "Advances" means Pro Rata Advances and Competitive Bid
Advances.

                    "Affiliate"  means,  with  respect to any Person,  any other
Person (other than a Subsidiary)  which,  directly or indirectly,  is in control
of, is  controlled  by, or is under common  control  with such Person.  A Person
shall be deemed to control another Person if such controlling  Person possesses,
directly  or  indirectly,  the power to direct  or cause  the  direction  of the
management and policies of such Person,  whether through the ownership of voting
securities,  by  contract  or  otherwise.  Any  director,  executive  officer or
beneficial  owner of ten  percent  (10%) or more of the shares of capital  stock
having power to vote for the  election of  directors of a Person (or  comparable
interests  in the case of a Person  other  than a  corporation)  shall,  for the
purposes  of  this   Agreement,   be  deemed  an   Affiliate   of  such  Person.
Notwithstanding the foregoing,  under no circumstances shall either Agent or any
Bank be  deemed to be an  Affiliate  of the  Company  or any  Subsidiary  of the
Company.

                    "Agents" means the Competitive Bid Agent and the Operating 
Agent.

                    "Agreement"  means  this  Revolving  Credit  Agreement, as
amended, supplemented or modified from time to time.

                    "Applicable  Margin" means,  with respect to Eurodollar Rate
Advances, 0.14% per annum.

                    "Arranger"  means BA  Securities in its capacity as arranger
of the  syndication  of the  revolving  credit  facility  contemplated  by  this
Agreement.

                    "Assignee" has the meaning ascribed to such term in Section 
9.07(a).
                    "Assignment Effective Date" has the meaning ascribed to such
 term in Section 9.07(a).

                    "Assignment  Notice  and  Acceptance"  means  an  assignment
notice and  acceptance  entered into by a Bank and an Assignee,  and accepted by
the Operating Agent, in substantially the form of Exhibit G hereto.

                    "Availability Period" means the period from the Effective 
Date to the Termination Date.

                    "BA  Securities"  means  BancAmerica  Securities,   Inc., a
Delaware corporation and a wholly-owned  subsidiary of BankAmerica  Corporation.
BA Securities is a registered broker-dealer and permitted to underwrite and deal
in certain Ineligible Securities (as defined in Section 6.06(c)).

                    "Bank of America" means Bank of America National Trust and 
Savings Association.

                    "Borrowing" means a Competitive Bid Borrowing or a Pro Rata
 Borrowing.

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

                    "Capitalized  Lease  Obligation"  means, with respect to any
Person,  a lease obligation of such Person which would be required under GAAP to
be capitalized on the books of such Person.

                    "COBRA" has the meaning ascribed to such term in Section 
3.08.

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

                    "Commitment" means, with respect to any Bank, its obligation
to make  Pro  Rata  Advances  to the  Company  pursuant  to  Section  2.01 in an
aggregate  amount not to exceed at any one time outstanding the amount set forth
opposite such Bank's name on Schedule I, as such amount may be changed from time
to time as provided  herein  (collectively,  with respect to all the Banks,  the
"Commitments").
                    "Commitment Percentage" means, with respect to any Bank, the
percentage of the aggregate Commitments constituted by such Bank's Commitment.

                    "Competitive  Bid Advance"  means an extension of credit by
a Bank to the Company under Section 2.02.

                    "Competitive  Bid  Advance  Confirmation"  has the  meaning
ascribed  to such term in  Section 2.02(d).

                    "Competitive  Bid Advance Offer" has the meaning ascribed to
such term in Section 2.02(c).

                    "Competitive  Bid  Agent"  means  Bank  of  America  in  its
capacity as competitive bid agent for the Banks hereunder in connection with the
competitive bid facility  established under Section 2.02, as contemplated by the
second WHEREAS clause, and any successor agent.

                    "Competitive  Bid  Borrowing"  means a  borrowing  hereunder
consisting  of one or more  Competitive  Bid Advances made to the Company on the
same day by one or more Banks pursuant to Section 2.02.

                    "Competitive Bid Borrowing Request" has the meaning ascribed
to such term in Section 2.02(b).

                    "Competitive Bid Eurodollar Advance" means a Competitive Bid
Advance that shall bear or bears interest based on a Competitive  Bid Eurodollar
Rate.

                    "Competitive Bid Eurodollar Rate" means, with respect to any
Competitive Bid Eurodollar  Advance, a rate of interest  determined  pursuant to
Section 2.02(g).

                    "Competitive  Bid  Note"  means  a  promissory  note  of the
Company substantially in the form of Exhibit B hereto.

                    "Contingent  Obligation"  means, with respect to any Person,
any  direct  or  indirect   liability   of  that  Person  with  respect  to  any
Indebtedness,  lease,  dividend,  letter  of  credit  or other  obligation  (the
"primary obligations") of another Person (the "primary obligor"),  including any
obligation  of  such  Person,  whether  or  not  contingent,  (a)  to  purchase,
repurchase  or  otherwise  acquire  such  primary  obligations  or any  property
constituting direct or indirect security therefor,  or (b) to advance or provide
funds (i) for the payment or discharge of any such primary  obligation,  or (ii)
to  maintain  working  capital  or equity  capital  of the  primary  obligor  or
otherwise to maintain the net worth or solvency or any balance sheet item, level
of income or  financial  condition  of the  primary  obligor or (c) to  purchase
property, securities or services primarily for the purpose of assuring the owner
of any such  primary  obligation  of the ability of the primary  obligor to make
payment of such primary  obligation  or (d) otherwise to assure or hold harmless
the owner of any such primary  obligation  against loss in respect thereof.  The
amount of any Contingent Obligation shall be deemed to be an amount equal to the
stated or determinable amount of the primary obligation in respect of which such
Contingent  Obligation  is made or, if not stated or  determinable,  the maximum
reasonably anticipated liability in respect thereof as determined by the Company
in good faith.

                    "Contractual Obligations" means, with respect to any Person,
any  provision  of any  security  issued  by such  Person  or of any  agreement,
undertaking, contract, indenture, mortgage, deed of trust or other instrument to
which such Person is a party or by which it or any of its property is bound.

                    "Default" means any of the events  specified in Article VII,
whether or not any requirement  for the giving of notice,  the lapse of time, or
both, or any other condition, event or act has been satisfied.

                    "DOL" means the United States Department of Labor.

                    "Dollars" and "$" each mean lawful currency of the United 
States.

                    "Domestic  Lending Office" means, with respect to each Bank,
the office of such Bank in the United  States  designated as such in Schedule II
or such  other  office of such Bank in the  United  States as such Bank may from
time to time specify to the Company and the Operating Agent.

                    "Effective Date" means April 30, 1997.

                    "ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time and any regulation promulgated thereunder.

                    "ERISA  Affiliate" means, with respect to the Company or any
Subsidiary,  all trades or businesses (whether or not incorporated) under common
control with the Company or such Subsidiary and which, together with the Company
or any Subsidiary, are treated as a single employer under Section 414(b), 414(c)
or 414(m) of the Code.

                    "ERISA  Event"  means,  with  respect to the  Company or any
ERISA  Affiliate  (a) a  Reportable  Event  (other than a  Reportable  Event not
subject to the  provision  for 30-day  notice to the PBGC under the  regulations
issued under ERISA); or (b) the withdrawal of the Company or any ERISA Affiliate
from a Plan  during  a plan  year in which it was a  "substantial  employer"  as
defined in Section  4001(a)(2) of ERISA; or (c) the filing of a notice of intent
to terminate a Plan,  if such Plan is  underfunded,  or the  treatment of a Plan
amendment as a termination  under Section 4041 of ERISA;  or (d) the institution
of  proceedings to terminate a Plan by the PBGC; or (e) the imposition of a lien
under Section 412 of the Code or Section 302 of ERISA; or (f) any other event or
condition which might reasonably be expected to constitute grounds under Section
4042 of ERISA  for the  termination  of,  or the  appointment  of a  trustee  to
administer, any Plan or to result in the imposition of any liability under Title
IV of ERISA other than PBGC premiums due but not  delinquent  under Section 4007
of ERISA.

                    "Eurocurrency  Liabilities" has the meaning ascribed to such
term in Regulation D of the Federal Reserve Board.

                    "Eurodollar Business Day" means a day that is a Business Day
and is also a day on which banks are open for business in London and dealings in
Dollar deposits are carried on in the London interbank Eurodollar market.

                    "Eurodollar  Lending  Office"  means,  with  respect to each
Bank,  the office of such Bank  designated  as such in Schedule II or such other
office of such Bank as such Bank may from time to time  specify  to the  Company
and the Operating Agent.

                    "Eurodollar  Rate"  means,  with  respect  to each  Interest
Period for Eurodollar Rate Advances  comprising the same Pro Rata  Borrowing,  a
rate per annum equal to the  average  (rounded  upwards,  if  necessary,  to the
nearest  whole  multiple of  one-sixteenth  of one percent  (1/16 of 1%)) of the
rates of interest per annum  notified to the Operating  Agent by each  Reference
Bank as the rate at which  Dollar  deposits for such  Interest  Period and in an
amount comparable to the amount of the Eurodollar Rate Advance of such Reference
Bank during such  Interest  Period  would be offered by its  Eurodollar  Lending
Office to major  banks in the  London  interbank  Eurodollar  market at or about
11:00  a.m.  (London  time) on the  second  Eurodollar  Business  Day before the
commencement of such Interest Period.

                    "Eurodollar  Rate  Advance"  means a Pro Rata  Advance  that
shall bear or bears interest based on the Eurodollar Rate.

                    "Eurodollar  Reserve  Percentage" means, with respect to the
Interest  Period  for any  Eurodollar  Rate  Advance  of any Bank,  the  reserve
percentage  applicable  during  such  Interest  Period (or if more than one such
percentage shall be so applicable, the daily average of such percentages for the
days in  such  Interest  Period  for  which  any  such  percentage  shall  be so
applicable)  under  regulations  issued from time to time by the Federal Reserve
Board for determining the maximum reserve requirement  (including any emergency,
supplemental or other marginal  reserve  requirement) for such Bank with respect
to liabilities  or assets  consisting of or including  Eurocurrency  Liabilities
having a term  equal to such  Interest  Period  in an amount  comparable  to the
amount of such Eurodollar Rate Advance.

                    "Event of  Default"  means any of the  events  specified  in
Article VII, provided,  however,  that any requirement for the giving of notice,
the  lapse  of time,  or both,  or any  other  condition,  event or act has been
satisfied.

                    "Existing  Agreement"  means  the  $2,000,000,000  Revolving
Credit  Agreement,  dated as of  September  26,  1996,  as amended or  otherwise
modified from time to time prior to the date hereof, among the Company,  Bank of
America, BA Securities and the several financial institutions parties thereto.

                    "Federal  Funds Rate"  means,  for any period,  the rate set
forth  in  the  weekly  statistical  release  designated  as  H.15(519),  or any
successor  publication,  published by the Federal  Reserve Board  (including any
such successor,  "H.15(519)")  for such day opposite the caption  "Federal Funds
(Effective)".  If on any  relevant  day  such  rate  is  not  yet  published  in
H.15(519),  the rate for  such  day  will be the  rate  set  forth in the  daily
statistical  release  designated as the Composite 3:30 p.m.  Quotations for U.S.
Government Securities,  or any successor  publication,  published by the Federal
Reserve Bank of New York (including any such successor, the "Composite 3:30 p.m.
Quotations")  for such day under the caption  "Federal Funds Effective Rate". If
on any  relevant  day the  appropriate  rate  for such  previous  day is not yet
published in either  H.15(519) or the Composite 3:30 p.m.  Quotations,  the rate
for such day will be the arithmetic  mean of the rates for the last  transaction
in overnight  Federal funds  arranged prior to 9:00 a.m. (New York time) on that
day by each of three (3) leading  brokers of Federal funds  transactions  in New
York City selected by the Operating Agent.

                    "Federal  Reserve Board" means the Board of Governors of the
Federal Reserve System or any successor thereto.

                    "GAAP" means generally accepted accounting principles in the
United States in effect from time to time.

                    "Governmental Authority" means any nation or government, any
state or other  political  subdivision  thereof and any central bank thereof and
any  entity  exercising   executive,   legislative,   judicial,   regulatory  or
administrative functions of or pertaining to government,  and any corporation or
other  entity  owned or  controlled,  through  stock  or  capital  ownership  or
otherwise, by any of the foregoing.

                    "Hazardous  Materials"  means  those  substances  which  are
regulated by or form the basis of liability under any Hazardous Materials Laws.

                    "Hazardous Materials Claims" has the meaning ascribed to 
such term in Section 5.10(d).

                    "Hazardous   Materials   Laws"   means   the   Comprehensive
Environmental  Response,  Compensation,  and Liability Act (42  U.S.C.ss.9601 et
seq.), the Hazardous Material Transportation Act (49 U.S.C.ss.1801 et seq.), the
Resource  Conservation and Recovery Act (42  U.S.C.ss.6901 et seq.), the Federal
Water Pollution  Control Act (33  U.S.C.ss.1251  et seq.), the Clean Air Act (42
U.S.C.ss.1251 et seq.), the Toxic  Substances  Control Act (15  U.S.C.ss.2601 et
seq. and the  Occupational  Safety and Health Act (29  U.S.C.ss.651 et seq.), as
such laws have been amended or supplemented and any analogous future federal, or
present  or future  state or local,  statutes  and the  regulations  promulgated
thereunder.

                    "Indebtedness"  means,  with respect to any Person,  (a) all
obligations of such Person for borrowed money (including  reimbursement  and all
other  obligations with respect to surety bonds,  letters of credit and bankers'
acceptances,  whether or not matured);  (b) all obligations  evidenced by notes,
bonds,  debentures or similar  instruments;  (c) all  obligations to pay for the
deferred  purchase price of property or services  except trade accounts  payable
and accrued  liabilities  arising in the ordinary  course of  business;  (d) all
indebtedness  created  or  arising  under any  conditional  sale or other  title
retention  agreement  with  respect to property  acquired  by such Person  (even
though the rights and remedies of the seller  under such  agreement in the event
of  default  are  limited to  repossession  or sale of such  property);  (e) all
obligations  under leases which have been or should be, in accordance with GAAP,
recorded as capital leases; and (f) all indebtedness  secured by any Lien on any
property  or asset  owned  or held by such  Person  regardless  of  whether  the
indebtedness  secured  thereby  shall  have been  assumed  by that  Person or is
non-recourse to the credit of such Person; provided,  however, that Indebtedness
shall not  include  obligations  of a Person  which are owed to a trust or other
special purpose entity all of whose common equity is beneficially  owned by such
Person.

                    "Indemnified Liabilities" has the meaning ascribed to such 
term in Section 9.05.

                    "Indemnified Person" has the meaning ascribed to such term 
in Section 9.05.

                    "Indentures"   means,    collectively,    the   Subordinated
Indenture,  dated as of October 15, 1989,  between the Company and Bankers Trust
Company, as Trustee, and the Junior Subordinated Indenture,  dated as of May 29,
1996, between the Company and Wilmington Trust Company, as Trustee, in each case
as the same may be amended or supplemented from time to time.

                    "Interest  Payment Date" means, with respect to any Pro Rata
Advance,  the last day of each Interest Period applicable to such Advance or, in
the case of a Reference  Rate  Advance,  each February 15, May 15, August 15 and
November 15 falling after the date of such Reference Rate Advance.

                    "Interest Period" means:

                    (a) with respect to any Eurodollar Rate Advance,  the period
commencing  on the date of such Advance and ending on the date one (1), two (2),
three (3), six (6) or, if  available  to all the Banks,  nine (9) or twelve (12)
months  thereafter,  as selected by the  Company in its notice of  borrowing  as
provided in Section 2.04; and

                    (b) with respect to any Competitive Bid Advance,  the period
specified  for such Advance in the related  Competitive  Bid  Borrowing  Request
under Section 2.02(a);

provided that:

                             (i)  if  any  Interest   Period   pertaining  to  a
         Eurodollar  Rate Advance or Competitive  Bid  Eurodollar  Advance would
         otherwise  end on a day which is not a Eurodollar  Business  Day,  that
         Interest  Period  shall be extended to the next  succeeding  Eurodollar
         Business Day unless the result of such extension would be to carry such
         Interest  Period  into  another  calendar  month  in which  event  such
         Interest  Period  shall  end on the  immediately  preceding  Eurodollar
         Business Day;

                             (ii) any Interest Period pertaining to a Eurodollar
         Rate Advance or Competitive  Bid Eurodollar  Advance shall,  subject to
         proviso (i) above,  end on the day in the calendar  month at the end of
         such Interest Period that shall numerically correspond to the first day
         of such  Interest  Period;  provided,  that if  there  shall be no such
         numerically  corresponding  day  in  such  last  calendar  month,  such
         Interest Period shall end on the last  Eurodollar  Business Day of such
         calendar month;

                             (iii)  if  any  Interest  Period  pertaining  to  a
         Competitive Bid Advance other than a Competitive Bid Eurodollar Advance
         would otherwise end on a day which is not a Business Day, such Interest
         Period shall be extended to the next succeeding Business Day; and

                             (iv)  any  Interest  Period  that  would  otherwise
         extend beyond the Termination Date shall end on the Termination Date.

                  "Lending  Office"  means,  with  respect to any Bank,  a 
Domestic  Lending  Office or  Eurodollar Lending Office of such Bank.

                  "LIBOR  Bid"  means a  proposal  for the making of one or more
Competitive Bid Eurodollar Advances under Section 2.02.

                  "Lien"   means   any   mortgage,   deed  of   trust,   pledge,
hypothecation,   assignment,   charge   or   segregated   deposit   arrangement,
encumbrance, lien (statutory or other) or preference, priority or other security
interest or preferential arrangement of any kind or nature whatsoever (including
those created by,  arising under or evidenced by any  conditional  sale or other
title retention  agreement or the filing of any financing  statement  naming the
owner of the asset to which  such Lien  shall  relate as debtor  (other  than in
connection  with a transaction in which such asset shall have been leased by the
named  debtor),  under the  Uniform  Commercial  Code or  comparable  law of any
jurisdiction).

                  "Loan Documents" means this Agreement and any Notes.

                  "Majority  Banks"  means at any time Banks having at least 51%
of  the  then  aggregate  amount  of  the  Commitments;  provided,  that  if the
Commitments  shall have been  terminated  in full,  but  Advances  shall  remain
outstanding,  "Majority Banks" shall mean Banks holding at least 51% of the then
aggregate unpaid amount of such outstanding Advances.

                  "Margin Stock" means "margin stock" as such term is defined in
Regulation U of the Federal Reserve Board.

                  "MCI Telecom" means MCI Telecommunications Corporation, a 
Delaware corporation.

                  "MCI Telecom  Liabilities"  means,  at any time, the aggregate
principal  amount  (without  duplication)  of all  Indebtedness  and  Contingent
Obligations  of MCI Telecom;  provided,  however,  that the  following  shall be
excluded from Contingent Obligations for purposes of this definition:

                  (a)        endorsements for collection or deposit in the 
ordinary course of business;

                  (b)        interest rate swap or cap agreements;

                  (c)        obligations in respect of  performance  bonds and 
letters of credit not supporting the payment of Indebtedness;

                  (d)        Contingent Obligations with respect to Indebtedness
 of the Company or any Subsidiary;

                  (e)        Contingent Obligations with respect to lease 
obligations;

                  (f)        recourse obligations with respect to the sales of 
customer receivables;

                  (g)        Contingent  Obligations  related  to  obligations  
of third  parties  (other  than the Company and its Subsidiaries) not in respect
 of Indebtedness and incurred in the ordinary course of business; and

                  (h) other Contingent  Obligations of MCI Telecom in an amount,
as to each such Contingent Obligation, less than $5,000,000.

                  "Merger"  means  the  merger  of the  Company  with  and  into
Tadworth  Corporation,  a Delaware corporation and a wholly-owned  subsidiary of
British  Telecommunications plc, a public limited company incorporated under the
laws of England and Wales, as disclosed in the Current Report on Form 8-K, dated
November  5,  1996,  filed by the  Company  with  the  Securities  and  Exchange
Commission.

                  "Multiemployer  Plan"  means,  as to the  Company or any ERISA
Affiliate,  at any time,  a  "multiemployer  plan" within the meaning of Section
4001(a)(3)  of ERISA and to which the Company or any ERISA  Affiliate is making,
or is obligated to make  contributions  or has made, or been  obligated to make,
contributions.

                  "Notes" means any Pro Rata Notes and Competitive Bid Notes.

                  "Operating  Agent"  means Bank of America in its  capacity  as
operating agent for the Banks hereunder, and any successor operating agent.

                  "Other Taxes" has the meaning ascribed to such term in Section
 2.15(b).

                  "Participant" has the meaning ascribed to such term in Section
 9.07(b).

                  "Payment  Office"  means  Bank  of  America  NT&SA-S.F.,  ABA
Routing  No.  121-000-358,  Credit BANCONTROL  Account No.  12338-15237,  
Ref.: MCI  Communications  Corp., or such other payment office designated by
the Operating Agent and notified to the Borrower and the Banks.

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

                  "Person"  means  an  individual,   partnership,   corporation,
limited  liability  company,   business  trust,  joint  stock  company,   trust,
unincorporated association, joint venture or Governmental Authority.

                  "Plan"  means,  with  respect  to the  Company  or  any  ERISA
Affiliate,  at any time, an employee  pension benefit plan as defined in Section
3(2) of ERISA  (including a Multiemployer  Plan) which is covered by Title IV of
ERISA or subject to the minimum funding  standards under Section 412 of the Code
and is maintained for employees of the Company or any ERISA Affiliate.

                  "Pro Rata  Advance"  means an extension of credit by a Bank to
the  Company  under  Section  2.01,  which may be a  Reference  Rate  Advance or
Eurodollar Rate Advance.

                  "Pro Rata Borrowing" means a borrowing hereunder consisting of
Pro Rata Advances  made to the Company on the same day by the Banks  pursuant to
Article II.

                  "Pro Rata Borrowing  Request" has the meaning ascribed to such
term in Section 2.04.

                  "Pro Rata Note" means a  promissory  note of the Company 
substantially  in the form of Exhibit A hereto.
                  "Reference  Banks" means Bank of America,  The Bank of Nova 
Scotia,  The Chase  Manhattan  Bank, Citibank, N.A., Mellon Bank, N.A. and 
NationsBank of Texas, N.A.

                  "Reference Rate" means the higher of:

                  (a)        the rate of interest  publicly  announced  from 
time to time by Bank of America in San Francisco, California, as its reference 
rate; and

                  (b)        one-half of one percent (1/2 of 1%) per annum plus
 the Federal Funds Rate.

                  The  rate  referred  to in (a)  above is a rate set by Bank of
America based upon various factors including Bank of America's costs and desired
return,  general  economic  conditions  and  other  factors,  and is  used  as a
reference  point for pricing some loans,  which may be priced at, above or below
such announced rate. Any change in such rate shall take effect at the opening of
business on the day specified in the public announcement of such change.

                  "Reference  Rate Advance"  means a Pro Rata Advance that shall
bear or bears interest based on the Reference Rate.

                  "Refunding Borrowing" means a Borrowing hereunder which, after
application of the proceeds thereof, results in no net increase in the aggregate
outstanding principal amount of the Advances made by the Banks.

                  "Reportable Event" means "reportable event" as defined in 
Section 4043 of ERISA.

                  "Requirement  of Law" means,  with respect to any Person,  the
certificate of incorporation  and by-laws or other  organizational  or governing
documents  of  such  Person,  and  any  law,  treaty,   rule  or  regulation  or
determination of an arbitrator or a court or other  Governmental  Authority,  in
each case applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.

                  "Responsible Officer" means the Chairman,  the Chief Executive
Officer or the  President of the Company or, with respect to financial  matters,
the Chief Financial Officer, the Controller or the Treasurer of the Company.
                  "Right of Way Agreements" has the meaning ascribed to such 
term in Section 3.10.

                  "Specified Amount" has the meaning ascribed to such term in 
Section 2.02(d)(B).

                  "Subsidiary"   means,  with  respect  to  any  Person,  (i)  a
corporation  of which shares of stock having  ordinary  voting power (other than
stock  having such power only by reason of the  happening of a  contingency)  to
elect a majority of the board of directors or other managers of such corporation
are at the time  owned,  or the  management  of which is  otherwise  controlled,
directly or  indirectly  through one or more  intermediaries,  or both,  by such
Person and (ii) any  partnership  of which such  Person or any  Subsidiary  is a
general  partner or any  partnership  more than 50% of the equity  interests  of
which are owned, directly or indirectly,  by such Person or by one or more other
Subsidiaries,  or by such  Person  and one or more  other  Subsidiaries.  Unless
otherwise  qualified,  all references to a "Subsidiary" or to  "Subsidiaries" in
this Agreement shall refer to a Subsidiary or  Subsidiaries of the Company,  and
all  references to the corporate  form of a Subsidiary  shall be deemed,  in the
case of any Subsidiary that shall be a partnership,  to refer to the partnership
form thereof.

                  "Taxes" has the meaning ascribed to such term in Section 
2.15(a).

                  "Termination Date" means the earlier to occur of:

                  (a)        April 28, 1998; and

                  (b)        the date on which the Commitments shall terminate 
in accordance with the provisions of this Agreement.

                  "Total  Capital" means, at any time, the amount of the capital
stock  account  plus (or  minus  in the case of a  deficit)  the  amount  of the
additional  paid-in  capital and retained  earnings,  consolidated in accordance
with GAAP, of the Company and its consolidated Subsidiaries, after deducting the
aggregate  amount of all minority  interests in the capital stock and surplus of
consolidated  Subsidiaries,  less the aggregate net book value (after  deducting
any reserves  applicable  thereto) of all items of the following character which
are  included in the  consolidated  assets of the  Company and its  consolidated
Subsidiaries:
                  (a)   franchises,    licenses,    permits,   patents,   patent
applications,  copyrights,  trademarks,  trade names,  service marks,  goodwill,
experimental or organizational expense, and other like intangibles but excluding
rights of way treated as assets;

                  (b)        deferred  charges and prepaid  expenses  (other 
than prepaid  interest,  prepaid rent, insurance and taxes);

                  (c)        unamortized debt discount and expense;

                  (d)        assets  which are pledged or  deposited  as 
security  for or for the purpose of paying any obligations, contingent or 
otherwise, which are not included in consolidated liabilities; and

                  (e) amounts in respect of capital stock,  promissory notes and
other securities  issued by the Company or one of its consolidated  Subsidiaries
and held in its treasury.

                  "Total   Liabilities"   means,  at  any  time,  the  aggregate
principal  amount  (without  duplication)  of all  Indebtedness  and  Contingent
Obligations of the Company and its consolidated Subsidiaries,  on a consolidated
basis;  provided,  however, that the following shall be excluded from Contingent
Obligations for purposes of this definition:

                  (a)        endorsements for collection or deposit in the 
ordinary course of business;

                  (b)        interest rate swap or cap agreements;

                  (c)        obligations in respect of  performance  bonds and 
letters of credit not supporting the
payment of Indebtedness;

                  (d)        Contingent Obligations with respect to Indebtedness
 of the Company or any Subsidiary;

                  (e)        Contingent Obligations with respect to lease 
obligations;

                  (f)        recourse obligations with respect to the sales of 
customer receivables;

                  (g)        Contingent   Obligations   related  to   
obligations  of  third  parties  (other  than Subsidiaries) not in respect of 
Indebtedness and incurred in the ordinary course of business;

                  (h)  Contingent  Obligations  of any  corporation  that  shall
become a consolidated  Subsidiary after the date of this Agreement to the extent
such Contingent  Obligations existed at the time of the acquisition and were not
created in anticipation thereof by or with the agreement of the Company; and

                  (i)  other  Contingent  Obligations  of  the  Company  or  any
consolidated  Subsidiary in an amount,  as to each such  Contingent  Obligation,
less than $5,000,000.

                  "Transferee" has the meaning ascribed to such term in Section
 9.08.

                  "Unfunded Benefit Liabilities" means, with respect to any Plan
at any time,  the amount (if any) by which (i) the present  value of all benefit
liabilities under such Plan,  determined based on actuarial  assumptions used to
determine  accumulated benefit obligations under Accounting  Principle 87 of the
Financial  Accounting Standards Board, exceeds (ii) the fair market value of all
Plan assets  allocable  to such  benefits,  all  determined  as of the then most
recent  valuation  date for such Plan,  but only to the extent  that such excess
represents a potential  liability  of the Company or any ERISA  Affiliate to the
PBGC or such Plan under Title IV of ERISA.

                  "United States" means the United States of America.

                  "Withholding  Form" means Internal  Revenue  Service Form 4224
(or any successor thereto), Internal Revenue Service Form 1001 (or any successor
thereto), Internal Revenue Service Form W-8 (or any successor thereto), Internal
Revenue  Service  Form W-9 (or any  successor  thereto),  or any other  Internal
Revenue  Service form pursuant to which a Person may claim an exemption from (or
reduction of)  withholding of United States federal income tax on the receipt of
payment of principal, interest or fees, as the context may require.

                  "WUI" means Western Union International, Inc., a Delaware 
corporation.

         1.02     Other Definitional Provisions

                  (a) Unless otherwise  specified  herein,  all terms defined in
this Agreement  shall have the defined  meanings when used in any certificate or
other document made or delivered pursuant hereto.

                  (b) All accounting terms not expressly defined herein shall be
construed,  except  where the  context  otherwise  requires,  and all  financial
computations  required  under this Agreement  shall be made, in accordance  with
GAAP;  provided,  that no change in GAAP after the date of this Agreement  shall
have the effect of  causing a Default  or Event of  Default  if such  Default or
Event of Default  would not have  occurred in the absence of such change in GAAP
(except to the extent that an amendment as contemplated by Section 5.11 shall be
agreed to by the requisite parties hereto).

                  (c) The words "hereof",  "herein" and "hereunder" and words of
similar  import when used in this  Agreement  shall refer to this Agreement as a
whole  and not to any  particular  provision  of this  Agreement,  and  section,
schedule  and  exhibit   references  are  to  this  Agreement  unless  otherwise
specified.  The  meaning of defined  terms  shall be equally  applicable  to the
singular and plural forms of the defined terms.

                  (d)  The term "including" is not limiting and means "including
 without limitation."

                                   ARTICLE II

                              THE CREDIT FACILITIES

 .        2.01     Commitments to Make Pro Rata Advances

     (a) Commitments.  Each Bank severally  agrees,  on the terms and conditions
hereof,  to make Pro  Rata  Advances  to the  Company  from  time to time on any
Business  Day (or,  in the case of  Eurodollar  Rate  Advances,  any  Eurodollar
Business Day) during the Availability Period in an aggregate principal amount at
any  one  time  outstanding  not to  exceed  its  Commitment  Percentage  of the
Commitments at such time;  provided,  that the aggregate principal amount of all
Pro Rata Advances and Competitive Bid Advances outstanding at any time shall not
exceed the Commitments at such time. During the Availability Period, the Company
may borrow under Sections  2.01(a) and 2.04,  prepay and repay Pro Rata Advances
to the extent  permitted by Sections  2.07 and 2.08 and  reborrow in  accordance
with Sections 2.01(a), 2.04 and 2.05 and the other terms and conditions hereof.

     (b) Types of Pro Rata Advances.  Each Pro Rata  Borrowing  shall consist of
(i) Eurodollar  Rate Advances or (ii) Reference Rate Advances,  provided that no
Eurodollar  Rate  Advance  shall  be made  less  than  one  month  prior  to the
Termination  Date.  Eurodollar  Rate Advances  shall be made by each Bank at its
Eurodollar Lending Office and Reference Rate Advances shall be made by each Bank
at its Domestic Lending Office.

 .        2.02     Competitive Bid Advances

     (a) Competitive Bid Advances.  Each Bank severally  agrees that the Company
may borrow Competitive Bid Advances under this Section 2.02 from time to time on
any Business Day (or, in the case of Competitive  Bid Eurodollar  Advances,  any
Eurodollar  Business Day) during the Availability Period in the manner set forth
below;  provided,  that  (I) the  aggregate  principal  amount  of all Pro  Rata
Advances and Competitive  Bid Advances  outstanding at any time shall not exceed
the  Commitments at such time, (II) except as provided in Section  2.02(l),  the
Company shall not request that a Competitive Bid Advance be made on the same day
on which a Pro Rata Advance is to be made  hereunder,  and (III) the Company may
not deliver a Competitive Bid Borrowing Request within five (5) Business Days of
any other Competitive Bid Borrowing Request hereunder; provided that the Company
and the  Competitive  Bid Agent may agree  from time to time to a period of less
than five (5) Business Days between Competitive Bid Borrowing Requests.

     (b) Competitive Bid Borrowing Requests. The Company may request Competitive
Bid Advances under this Section 2.02 to be made on any Business Day (in the case
of an Absolute Bid) or Eurodollar Business Day (in the case of a LIBOR Bid) that
is not also the day  requested by the Company for a Pro Rata Advance  hereunder,
except as provided in Section 2.02(l),  by giving a notice  substantially in the
form of Exhibit C-2 (a "Competitive  Bid Borrowing  Request") to the Competitive
Bid Agent,  not later than (1) in the case of LIBOR Bids,  11:00 a.m.  (New York
City time) at least four (4)  Eurodollar  Business Days prior to the date of the
proposed  Competitive Bid Advances,  or (2) in the case of Absolute Bids,  11:00
a.m. (New York City time) at least one (1) Business Day prior to the date of the
proposed  Competitive  Bid Advances,  containing  the  information  specified in
Exhibit  C-2 and  specifying  for not more than three (3)  alternative  proposed
Competitive  Bid  Advances  (A) the  aggregate  amount and date of the  proposed
Competitive  Bid  Advances,  which  aggregate  amount shall be a minimum of Five
Million Dollars  ($5,000,000) or a multiple of One Million Dollars  ($1,000,000)
in excess of Five Million  Dollars  ($5,000,000),  (B) the final  maturity  date
thereof  (which shall not be less than one (1) month in the case of a LIBOR Bid,
or seven (7) days in the case of an  Absolute  Bid,  from the date the  proposed
Competitive Bid Advances are to be made and shall not occur after the earlier of
(i) the Termination Date or (ii) the date six (6) months, in the case of a LIBOR
Bid, or one hundred  eighty  three (183) days,  in the case of an Absolute  Bid,
after the date of the  requested  Competitive  Bid  Advances),  (C) the Interest
Period or Interest  Periods  and/or the interest  payment date or dates relating
thereto  and (D) any  other  terms  to be  applicable  to such  Competitive  Bid
Advances.  The  Competitive Bid Agent shall in turn promptly notify each Bank of
such information.

     (c)  Offers  of  Competitive  Bid  Advances.  Each  Bank  may,  in its sole
discretion,  elect irrevocably  (except as provided in Section 2.02(h)) to offer
to make one or more  Competitive Bid Advances (each in a minimum amount equal to
Five  Million  Dollars  ($5,000,000)  or  a  multiple  of  One  Million  Dollars
($1,000,000) in excess of Five Million Dollars  ($5,000,000)) at a rate or rates
of interest  (in the case of an Absolute  Bid) or at a margin or margins (in the
case of a LIBOR Bid) specified by such Bank in its sole  discretion by notifying
the  Competitive  Bid Agent by telephone,  immediately  confirmed by telecopier,
before (1) in the case of LIBOR  Bids,  10:00 A.M.  (New York City time) (if the
Bank shall be the Bank acting as the  Competitive  Bid Agent) or 10:15 A.M. (New
York City time) (in the case of each other Bank) three (3)  Eurodollar  Business
Days before the date of the proposed Competitive Bid Advance, or (2) in the case
of Absolute Bids,  9:30 A.M. (New York City time) (if the Bank shall be the Bank
acting as the  Competitive  Bid Agent) or 9:45 A.M. (New York City time) (in the
case of each other Bank) on the date of the  proposed  Competitive  Bid Advances
(which notice the Competitive Bid Agent shall transmit by telephone, immediately
confirmed by  telecopier,  to the Company  before (1) in the case of LIBOR Bids,
11:15 A.M.  (New York City time) three (3)  Eurodollar  Business Days before the
date of the proposed  Competitive  Bid Advances,  or (2) in the case of Absolute
Bids,  10:15 A.M.  (New York City time) on the date of the proposed  Competitive
Bid Advances),  of the maximum amount of each Competitive Bid Advance which such
Bank would be  willing  to make  (which  maximum  amount  shall be at least Five
Million Dollars  ($5,000,000) or a multiple of One Million Dollars  ($1,000,000)
in excess of Five Million Dollars  ($5,000,000)),  the rate or rates of interest
or  margin  or  margins  therefor  and  the  aggregate  maximum  amount  of  all
Competitive Bid Advances such Bank would be willing to make,  provided,  that no
more than two  alternative  interest  rates or margins  may be offered  for each
separate maturity date of Competitive Bid Advances.  Each Bank may offer to make
one or more  Competitive  Bid Advances in an aggregate  amount in excess of such
Bank's Commitment. Each such offer shall be in substantially the form of Exhibit
D hereto (a "Competitive Bid Advance Offer").

     (d) Responses by the Company to Offers.  The Company shall, in turn, by (1)
in the case of LIBOR Bids,  11:45 A.M. (New York City time) three (3) Eurodollar
Business Days before the date of the proposed  Competitive Bid Advances,  or (2)
in the case of Absolute Bids, 10:30 A.M. (New York City time) on the date of the
proposed Competitive Bid Advances, either

                  (A) cancel such  Competitive  Bid Borrowing  Request by giving
         the   Competitive   Bid  Agent  notice  by  telephone  to  that  effect
         immediately confirmed in writing, or

                  (B) accept one or more of the offers made by any Bank or Banks
         pursuant to  paragraph  (b) above,  in its sole  discretion,  by giving
         notice by telephone to the  Competitive Bid Agent of the amount of each
         Competitive  Bid Advance  (which  amount shall be equal to or less than
         the maximum amount notified to the Company by the Competitive Bid Agent
         on behalf of such Bank for such  Competitive  Bid  Advance  pursuant to
         paragraph (c) above but shall be at least equal to Five Million Dollars
         ($5,000,000)  (unless a lower amount is agreed to by the  Company,  the
         Competitive  Bid Agent and the Bank whose offer is being accepted) or a
         multiple of One Million Dollars  ($1,000,000) in excess of Five Million
         Dollars ($5,000,000)) to be made by each Bank, and reject any remaining
         offers  made by Banks  pursuant  to  paragraph  (b) above by giving the
         Competitive  Bid Agent  notice to that effect;  provided,  that (i) the
         aggregate principal amount of offered Competitive Bid Advances accepted
         by the Company shall not exceed the aggregate  principal  amount of the
         Competitive  Bid  Advances  requested  by it;  and (ii)  subject to the
         remainder of this Section  2.02(d) (B), if the Company is to accept any
         of such offers,  it must accept offers  strictly based upon pricing and
         no other  criteria  whatsoever.  If two or more Banks submit  offers at
         identical  pricing and the Company  shall accept any of such offers but
         does not wish (or is not permitted under (i) above) to borrow the total
         amount offered by such Banks,  the Company shall accept offers from all
         of such Banks in amounts allocated among them pro rata according to the
         amounts offered by such Banks. If the interest rate for any Competitive
         Bid Advance offered by any Bank shall exceed the maximum  interest rate
         permitted by law for loans of less than an amount specified by law (the
         "Specified  Amount"),  then (x) the Company may accept all or a portion
         (not less than the Specified  Amount) of such  Competitive  Bid Advance
         offered  by any other Bank to the  extent it shall  deem  necessary  or
         advisable to cause the aggregate  principal  amount of Competitive  Bid
         Advances  to be  made  to  equal  the  aggregate  principal  amount  of
         Competitive  Bid Advances  requested by the Company and (y) the Company
         may not accept a portion of a  Competitive  Bid  Advance  from any Bank
         which is less  than the  Specified  Amount  for  such  Competitive  Bid
         Advance.  Notwithstanding  anything  to the  contrary  in this  Section
         2.02(d)(B), the amount of the Competitive Bid Advance to be made by any
         Bank  may be  rounded  to the  nearest  One  Hundred  Thousand  Dollars
         ($100,000) in the discretion of the  Competitive  Bid Agent.  Each such
         notice of acceptance  by the Company shall be confirmed in writing,  in
         substantially  the form of Exhibit E hereto (a "Competitive Bid Advance
         Confirmation").

         Failure to give any such notice shall be deemed to be a cancellation by
         the Company of such Competitive Bid Borrowing Request.

     (e) Notice of  Cancellation.  If the Company  shall  cancel or be deemed to
cancel a Competitive Bid Borrowing  Request pursuant to paragraph (d) above, the
Competitive  Bid Agent  shall give  prompt  notice  thereof to the Banks and the
Competitive Bid Advances requested thereby shall not be made.

     (f) Notice of  Acceptance.  If the Company  shall accept one or more of the
offers  made  by any  Bank  or  Banks  pursuant  to  paragraph  (d)  above,  the
Competitive  Bid Agent shall in turn notify by  telephone  by (1) in the case of
LIBOR Bids,  12:30 P.M. (New York City time) three (3) Eurodollar  Business Days
before the date of such proposed Competitive Bid Advances, or (2) in the case of
Absolute  Bids,  10:45  A.M.  (New York City  time) on the date of the  proposed
Competitive Bid Advances, in each case with confirmation by telex or telecopier,
(A) each Bank which has made an offer as described in paragraph (c) above of the
date and aggregate  amount of such  Competitive  Bid Advances and whether or not
any offer or offers made by such Bank pursuant to paragraph (c) above shall have
been  accepted by the Company,  and (B) each Bank which is to make a Competitive
Bid  Advance of the amount of each  Competitive  Bid  Advance to be made by such
Bank and the terms of each such  Competitive  Bid Advance.  The  Competitive Bid
Agent  will  send  concurrently  to the  Operating  Agent a copy  of  each  such
confirmation  telex and will send to the  Operating  Agent (i) by 5:00 P.M. (New
York City time) two (2) Eurodollar Business Days before the date of any proposed
Competitive Bid Eurodollar Advances,  a listing of each LIBOR Bid accepted,  and
(ii) by 11:00 A.M.  (New York City time) on the date of any other  proposed type
of Competitive Bid Advances, a listing of each Absolute Bid accepted.  Each Bank
which is to make a Competitive Bid Advance shall,  prior to 12:00 Noon (New York
City time) on the date of such  Competitive Bid Advance  specified in the notice
received from the Competitive Bid Agent pursuant to the preceding sentence, make
available to the Operating  Agent at the Payment Office such Bank's  Competitive
Bid  Advance in same day funds.  After  receipt by the  Operating  Agent of such
funds and subject to the provisions of Article IV, the Operating Agent will make
such  funds  available  to the  Company as soon as  practicable  on such date in
accordance  with the prior  instructions  of the  Company  and in like  funds as
received by the Operating Agent.  Promptly after each Competitive Bid Advance is
made,  (x) the Operating  Agent will notify the  Competitive  Bid Agent and each
Bank of the amount of such  Competitive  Bid Advance and (y) the Competitive Bid
Agent will notify each Bank of the range of bids  submitted  and the highest bid
accepted, with respect to the related Competitive Bid Borrowing.

     (g) Determining  the Competitive Bid Eurodollar  rate. If the Company shall
accept,  pursuant to paragraph  (d)(B) above,  one or more of the offers made by
any Bank or Banks to make a Competitive Bid Eurodollar Advance,  the Competitive
Bid Agent will solicit from the Reference Banks  information for determining the
Competitive Bid Eurodollar  Rate  applicable to such  Competitive Bid Eurodollar
Advance.  The  Competitive  Bid Eurodollar  Rate for the Interest  Period of any
Competitive  Bid  Eurodollar  Advance shall be determined in the manner in which
the Eurodollar Rate would be determined for such Interest Period if such Advance
were a Eurodollar  Rate Advance to be made by the applicable  Reference Bank but
with the margin set forth in the offer of the relevant Bank. Each Reference Bank
agrees  promptly to furnish to the  Competitive  Bid Agent  information  for the
purpose of determining the relevant  Competitive Bid Eurodollar  Rate. If any of
the Reference Banks shall not furnish such timely information to the Competitive
Bid Agent  for  determination  of such  Competitive  Bid  Eurodollar  Rate,  the
Competitive  Bid Agent  shall,  subject to the  provisions  of clause (h) below,
determine  such   Competitive  Bid  Eurodollar  Rate  on  the  basis  of  timely
information  furnished by the remaining  Reference  Banks.  The  Competitive Bid
Agent shall as soon as practicable  notify the Company and the relevant Banks of
each  determination  of a Competitive Bid Eurodollar  Rate;  provided,  that any
failure to do so shall not relieve the Company of any liability hereunder.  Each
determination  of an interest rate by the Competitive Bid Agent pursuant to this
paragraph  (g) shall be  conclusive  and binding on the Company and the Banks in
the absence of manifest  error.  The Competitive Bid Agent shall, at the request
of the Company or any relevant Bank, deliver to the Company or such Bank, as the
case may be, a statement  showing the  quotations  used by the  Competitive  Bid
Agent in determining any interest rate pursuant to this paragraph (g).

     (h)  Inability to Determine  Competitive  Bid  Eurodollar  Rate.  If, on or
before any date on which a Competitive  Bid Eurodollar  Rate is to be determined
pursuant to paragraph  (g) above,  (i) the  Competitive  Bid Agent shall receive
notice  from two or more  Reference  Banks  that,  because of reasons  affecting
generally the London interbank  Eurodollar  market,  deposits in Dollars are not
being  offered by such  Reference  Banks to prime banks in the London  interbank
Eurodollar  market  for the  applicable  Interest  Period  or in the  applicable
amounts or (ii) the  Competitive Bid Agent shall receive notice at least one day
prior to the proposed  borrowing date from the Banks which are obligated to make
at least 66-2/3% of the relevant  Competitive Bid Eurodollar  Advances that such
Competitive  Bid Eurodollar  Rate will not  adequately  reflect the cost to such
Banks of making,  funding or maintaining for the applicable  Interest Period the
Competitive Bid Eurodollar  Advances to which such Interest Period shall relate,
the  Competitive  Bid Agent  shall  forthwith  give  notice of such event to the
Company and to each relevant  Bank,  whereupon such  Competitive  Bid Eurodollar
Advances  shall not be made. 

     (i) Borrowing and Reborrowing.  Within the limits and on the conditions set
forth in this Section 2.02,  the Company may from time to time borrow under this
Section  2.02,  repay  pursuant to paragraph  (j) below and reborrow  under this
Section 2.02.

     (j)  Repayments.  The Company  shall repay to the Operating  Agent,  at the
Payment  Office and  otherwise in accordance  with Section 2.14,  for account of
each Bank which  shall have made a  Competitive  Bid Advance and on the date for
the repayment  thereof (as  specified by the Company in the related  Competitive
Bid Borrowing Request  delivered  pursuant to paragraph (b) above) the principal
amount of such Competitive Bid Advance.  The Company shall not have the right to
prepay any Competitive Bid Advance.

     (k) Interest.  The Company shall pay to the Operating Agent, at the Payment
Office and otherwise in accordance  with Section 2.14,  for account of each Bank
which  shall  have  made a  Competitive  Bid  Advance,  interest  on the  unpaid
principal  amount  of  such  Competitive  Bid  Advance  from  the  date  of such
Competitive  Bid  Advance  to the date the  principal  of such  Competitive  Bid
Advance  shall  become  due, at the rate of interest  for such  Competitive  Bid
Advance specified therefor in the notice with respect thereto delivered pursuant
to paragraph  (c) above,  or  calculated  pursuant to  paragraph  (g) above with
respect to Competitive Bid Eurodollar Advances,  payable on the interest payment
date or dates  specified by the Company for such  Competitive Bid Advance in the
related  Competitive Bid Borrowing Request  delivered  pursuant to paragraph (b)
above.

     (l)  Insufficient  Competitive  Bid Advances.  If the  aggregate  principal
amount of offered Competitive Bid Advances accepted by the Company shall be less
than the aggregate principal amount of the Competitive Bid Advances requested by
the Company for the date designated in a Competitive Bid Borrowing Request,  the
Company  may  borrow  a  Reference  Rate  Advance  (in an  amount  equal  to the
difference  between  the  aggregate  principal  amount  of the  Competitive  Bid
Advances  requested  by the  Company  and  the  aggregate  principal  amount  of
Competitive  Bid  Advances  accepted  by the  Company  for such date)  under the
Commitments  on the terms and conditions  hereof on the date  designated in such
Competitive Bid Borrowing  Request,  by giving the Operating  Agent  irrevocable
notice in a Pro Rata  Borrowing  Request  (which  notice must be received by the
Operating  Agent prior to 11:00 A.M., New York City time) on the date designated
in such Competitive Bid Borrowing Request.  Upon receipt of such notice from the
Company,  the Operating Agent shall promptly notify each Bank thereof and of the
amount of such Bank's portion of the respective Pro Rata  Borrowing.  Subject to
the  provisions of Section 2.05,  each Bank will make the amount of its pro rata
share of each Borrowing  available to the Operating Agent for the account of the
Company  at the  Payment  Office  by 12:00  noon  (New  York  City  time) on the
borrowing  date requested by the Company in funds  immediately  available to the
Operating Agent. Unless any applicable condition specified in Article IV has not
been satisfied, the proceeds of all such Advances will then be made available to
the  Company by the  Operating  Agent at the  Payment  Office by  crediting  the
account of the Company in  accordance  with the Company's  payment  instructions
with the aggregate of the amounts made  available to the Operating  Agent by the
Banks and in like funds as received by the Operating Agent.

     2.03  Evidence  of Debt Each Bank,  with  respect to amounts  payable to it
hereunder,  and  the  Operating  Agent,  with  respect  to all  amounts  payable
hereunder,  shall maintain on its books in accordance  with its usual  practice,
loan accounts and control  accounts,  respectively,  setting forth each Advance,
the  applicable  interest rate and the amounts of principal,  interest and other
sums paid and payable by the Company  from time to time  hereunder  with respect
thereto. In the case of any dispute, action or proceeding relating to any amount
payable hereunder, the entries in each such account shall constitute prima facie
evidence  of  the  accuracy  of  the  information  so  recorded.  In  case  of a
discrepancy  between the entries in the  Operating  Agent's books and any Bank's
books, such Bank's books shall be considered  correct in the absence of manifest
error.  The obligation to repay a Pro Rata Advance or a Competitive  Bid Advance
shall also be evidenced  by a Pro Rata Note or a  Competitive  Bid Note,  as the
case may be.

     2.04 Procedure for Pro Rata Borrowings

                  (a) The  Company  may  make  Pro  Rata  Borrowings  under  the
Commitments  on any  Business  Day (or,  in the  case of any Pro Rata  Borrowing
consisting of Eurodollar Rate Advances,  on any Eurodollar  Business Day) during
the  Availability  Period,  provided,  that the Company shall give the Operating
Agent  irrevocable  notice in the form of  Exhibit  C-1 (a "Pro  Rata  Borrowing
Request")  (which notice must be received by the Operating  Agent prior to 11:00
A.M.,  New York City time) (i) three (3)  Eurodollar  Business Days prior to the
requested  borrowing  date for  Interest  Periods  less than or equal to six (6)
months or four (4)  Eurodollar  Business Days prior to the  requested  borrowing
date for Interest Periods greater than six (6) months, in the case of Eurodollar
Rate  Advances,  and (ii) one (1) Business Day prior to the requested  borrowing
date, in the case of Reference  Rate Advances  (except as otherwise  provided in
Section 2.02(l)), specifying:

                  (A) the amount of the Pro Rata Borrowing, which shall be in an
         aggregate minimum principal amount of Ten Million Dollars ($10,000,000)
         or any multiple of One Million Dollars ($1,000,000) in excess thereof;

                  (B)        the requested borrowing date;

                  (C)        whether the Pro Rata  Borrowing  is to be  
         comprised of  Eurodollar  Rate  Advances or Reference Rate Advances; 
         and

                  (D) in the case of Eurodollar  Rate Advances,  the duration of
         the  Interest  Period  applicable  to such  Advances  included  in such
         notice,  subject to the  definition of Interest  Period.  If the notice
         shall fail to  specify  the  duration  of the  Interest  Period for any
         Borrowing  comprised of Eurodollar Rate Advances,  such Interest Period
         shall be three  (3)  months,  subject  to the  definition  of  Interest
         Period.

                  (b)  Upon  receipt  of  such  notice  from  the  Company,  the
Operating  Agent shall  promptly  notify each Bank  thereof and of the amount of
such Bank's portion of the respective Pro Rata Borrowing.

                  (c) Subject to the provisions of Section 2.05,  each Bank will
make  the  amount  of its pro  rata  share of each  Borrowing  available  to the
Operating  Agent for the account of the  Company at the Payment  Office by 11:00
A.M.  (New York City time) on the  borrowing  date  requested  by the Company in
funds  immediately  available  to the  Operating  Agent.  Unless any  applicable
condition  specified in Article IV has not been  satisfied,  the proceeds of all
such Advances will then be made available to the Company by the Operating  Agent
at the Payment  Office by  crediting  the account of the Company on the books of
the Payment  Office with the  aggregate  of the amounts  made  available  to the
Operating  Agent by the Banks and in like  funds as  received  by the  Operating
Agent.

                  (d) The provisions of Section 2.04(a) notwithstanding,  if the
Company shall not have given a timely notice of a Pro Rata  Borrowing to be made
on the last day of any Interest Period for outstanding Eurodollar Rate Advances,
then  unless the  Operating  Agent shall have  received  notice that the Company
elects not to make a Pro Rata  Borrowing  on such day (such  notice to have been
received at least one (1)  Business Day prior to such day) the  Operating  Agent
shall  be  deemed  to have  received  a notice  of  borrowing  from the  Company
requesting  Reference Rate Advances to be made on such day in an amount equal to
the amount of such  outstanding  Advances  (reduced to the extent  necessary  to
reflect any reductions of the Commitments on or prior to such day).

     2.05  Refunding  Borrowings.  If any Bank  makes a new  Advance on a day on
which the Company is to repay all or any part of any  outstanding  Advance  from
such Bank,  such Bank shall  apply the  proceeds of its new Advance to make such
repayment,  and only an amount  equal to the  difference,  if any,  between  the
amount being  borrowed  and the amount  being repaid shall be made  available by
such Bank to the Operating  Agent as provided in Section 2.04 or remitted by the
Company to the Operating Agent as provided in Section 2.14, as the case may be.

     2.06  Optional   Termination  or  Reduction  of  Commitments.   During  the
Availability  Period,  the Company  may,  upon not less than three (3)  Business
Days'  prior  notice  to the  Operating  Agent,  terminate  the  Commitments  or
permanently reduce the Commitments by an aggregate minimum amount of Ten Million
Dollars  ($10,000,000)  or any multiple of One Million  Dollars  ($1,000,000) in
excess  thereof,  provided that (i) no such  reduction or  termination  shall be
permitted if, after giving effect thereto and to any prepayments of the Advances
made on the effective date thereof, the then outstanding principal amount of the
Advances would exceed the amount of the Commitments then in effect and (ii) once
reduced or terminated  pursuant to this Section 2.06, the Commitments may not be
reinstated. If the Commitments are terminated in their entirety pursuant to this
Section 2.06,  all fees accrued to but not including the effective  date of such
termination  shall be payable on the effective date of such termination  without
any premium or penalty.

     2.07 Optional Repayments of Pro Rata Advances.  The Company may (i) upon at
least two (2) Business  Days' notice to the Operating  Agent,  prepay  Reference
Rate Advances, in whole or in part, without premium or penalty, and (ii) subject
to  Section  2.18,  prepay  Eurodollar  Rate  Advances  upon at least  three (3)
Eurodollar Business Days' irrevocable notice to the Operating Agent,  specifying
the date and amount of  prepayment  and whether the  prepayment is of Eurodollar
Rate Advances or Reference Rate  Advances,  or a combination  thereof,  and if a
combination thereof the amount of prepayment  allocable to each. Upon receipt of
such notice,  the Operating  Agent shall promptly  notify each Bank thereof.  If
such notice  shall be given,  the  Company  shall make such  prepayment  and the
payment  amount  specified  in such notice  shall be due and payable on the date
specified  therein,  together  with accrued  interest to such date on the amount
prepaid unless,  notwithstanding the irrevocability of its notice of prepayment,
the  Company  shall  notify  the  Operating  Agent  prior  to the  date  of such
prepayment  that such  prepayment  will not be made (in which  case such  amount
shall not be due and  payable on such date and the  provisions  of Section  2.18
shall  apply).  Prepayments  shall be in a minimum  amount  equal to Ten Million
Dollars  ($10,000,000)  and in multiples of One Million Dollars  ($1,000,000) in
excess thereof.

     2.08  Repayment of Advances.  Each Pro Rata Advance shall  mature,  and the
principal amount thereof shall be due and payable,  on the Interest Payment Date
for such Pro Rata Advance (which shall in no event be later than the Termination
Date);  provided,  that  each  Reference  Rate  Advance  shall  mature,  and the
principal amount thereof shall be due and payable on, the Termination Date. Each
Competitive Bid Advance shall mature,  and the principal amount thereof shall be
due and payable, on a date determined as specified in Section 2.02(j).

     2.09     Termination Date

                  (a) The Commitments  shall terminate on the Termination  Date,
and any Advances then outstanding (together with accrued interest thereon) shall
be due and payable on such date without premium or penalty.  Upon termination of
the Commitments  pursuant to this Section 2.09, all fees and other amounts owing
hereunder or otherwise  accrued to but not including the effective  date of such
termination  shall be payable on the effective date of such termination  without
premium or penalty.

                  (b)        The Commitments once terminated pursuant to this 
Section 2.09 may not be reinstated.

     2.10     Fees

     (a)  Facility  Fee. The Company will pay to the  Operating  Agent,  for the
account of each Bank, a facility fee equal to 0.035% per annum and such facility
fee shall begin to accrue from and including the Effective Date to but excluding
the  Termination  Date on the sum of the daily  average  amounts of such  Bank's
Commitment,  regardless of utilization, payable (A) quarterly in arrears on each
February 15, May 15,  August 15 and November 15,  commencing on May 15, 1997 and
(B) on the Termination Date.

     (b)  Additional  Fees. The Company will pay (i) to each Agent an agency fee
payable in the amounts and on the dates separately agreed between such Agent and
the Company,  and (ii) to the Arranger,  an arrangement fee in the amount and on
the date separately agreed between BA Securities and the Company.

     2.11      Interest

     (a)  Interest  on Pro  Rata  Advances.  Each Pro Rata  Advance  shall  bear
interest on the unpaid  principal  amount thereof from the date of such Pro Rata
Advance  until  it  shall  become  due at a rate  per  annum  equal  to (i)  the
Eurodollar Rate for the Interest Period therefor plus the Applicable  Margin, in
the case of each Eurodollar Rate Advance,  and (ii) the Reference Rate in effect
from time to time, in the case of each Reference Rate Advance.

     (b) Interest on  Competitive  Bid Advances.  Each  Competitive  Bid Advance
shall bear interest from the date of such Competitive Bid Advance until the date
it shall  become due at a rate of interest  determined  as  specified in Section
2.02(k).

     (c)  Interest  on Overdue  Amounts.  If all or a portion  of the  principal
amount  of any  Advance,  any  interest  thereon  or any  other  amount  payable
hereunder  shall  not  be  paid  when  due  (whether  at  stated  maturity,   by
acceleration or otherwise), such overdue principal amount, such interest (to the
extent  permitted by applicable  law) or such other amount,  as the case may be,
shall,  without  limiting the rights of any of the Banks under Article VII, bear
interest at a rate per annum equal to the Reference  Rate in effect from time to
time plus 2% until paid in full and shall be payable on demand.

(d) Additional  Interest on Eurodollar  Rate Advances.  The Company shall pay to
each Bank,  upon written  notice from such Bank at least fifteen (15) days prior
to the relevant  Interest Payment Date, as long as such Bank shall,  pursuant to
regulations  of the Federal  Reserve  Board,  maintain  reserves with respect to
liabilities  or assets  consisting  of or  including  Eurocurrency  Liabilities,
additional  interest  on the unpaid  principal  amount of each  Eurodollar  Rate
Advance of such Bank, from the date of such Advance until such principal  amount
shall be paid in full,  at an interest  rate per annum equal at all times to the
remainder  obtained by  subtracting  (i) the  Eurodollar  Rate for the  Interest
Period for such Advance from (ii) the rate  obtained by dividing the  Eurodollar
Rate for such Interest Period by a percentage equal to 100% minus the Eurodollar
Reserve  Percentage  of such  Bank  for such  Interest  Period,  payable  on the
Interest Payment Date for such Advance. If a Bank shall fail to give such notice
at least fifteen (15) days prior to the relevant  Interest  Payment  Date,  such
additional  interest  shall be payable  fifteen  (15) days from  receipt of such
notice.  Such additional interest shall be determined by such Bank in accordance
with this  Section  2.11(d) and  reported to the Company  through the  Operating
Agent.


     (e)  Payment of Interest  on Pro Rata  Advances.  Interest on each Pro Rata
Advance shall be payable in arrears on each  Interest  Payment Date with respect
thereto;  provided, that with respect to any Eurodollar Rate Advance which shall
become due more than three  months after the date of such  Advance,  the Company
shall also pay interest on the dates falling three, six and nine months,  as the
case may be, after the date of such Advance.  Interest  shall also be payable on
the date of any  prepayment  of  Advances  for the  portion of the  Advances  so
prepaid and upon payment (including  prepayment) in full thereof and, if payable
under Section 2.11(c), interest shall be payable on demand.

     (f) Maximum  Interest Rate.  Anything herein or in any Note to the contrary
notwithstanding,  the  obligations of the Company to any Bank hereunder or under
any Note shall be subject to the limitation  that payments of interest shall not
be required  for any period for which  interest is  computed  hereunder,  to the
extent (but only to the extent) that  contracting  for or receiving such payment
by such Bank would be contrary to the  provisions of any law  applicable to such
Bank limiting the highest rate of interest that may be lawfully  contracted for,
charged or received by such Bank,  and in such event the Company  shall pay such
Bank interest at the highest rate permitted by applicable law.

        2.12     Computation of Interest, Fees and Other Amounts

                  (a) All interest  payable  hereunder with respect to Reference
Rate Advances shall be calculated on the basis of a year of 365/366 days for the
actual  days  elapsed.  All  other  interest,  fees and  other  amounts  payable
hereunder shall be calculated on the basis of a 360 day year for the actual days
elapsed.  The Operating Agent shall, as soon as practicable,  notify the Company
and the Banks of each  determination  of a Eurodollar  Rate,  provided  that any
failure  to do so shall not  relieve  the  Company of any  liability  under this
Agreement.  Any change in the interest rate applicable to an Advance  (including
the rate for additional  interest payable pursuant to Section 2.11(d)) resulting
from a change in the Eurodollar  Reserve  Percentage or the Reference Rate shall
become  effective  as of the opening of business on the day on which such change
in  the  Eurodollar  Reserve  Percentage  or the  Reference  Rate  shall  become
effective. The Operating Agent shall, as soon as practicable, notify the Company
and the  Banks  of the  effective  date  and the  amount  of each  such  change;
provided, that any failure to give any such notice shall not relieve the Company
of any liability under this Agreement.

                  (b) Each  determination  of an interest  rate by the Operating
Agent  pursuant to any  provision  of this  Agreement  shall be  conclusive  and
binding on the Company and the Banks in the absence of manifest error;  and each
determination  by a Bank of an  amount  payable  by the  Company  under  Section
2.11(d)  shall be  conclusive  and  binding  on the  Company  in the  absence of
manifest error.

                  (c)  If  any  Reference  Bank's   Commitment  shall  terminate
(otherwise  than upon  termination  of all the  Commitments)  or for any  reason
whatsoever  such  Reference  Bank  shall  cease  to be a  Bank  hereunder,  such
Reference Bank shall thereupon cease to be a Reference Bank, and if, as a result
of the  foregoing,  there shall only be one Reference Bank  remaining,  then the
Majority  Banks shall select a Bank,  acceptable to the Operating  Agent and the
Company, to be a Reference Bank, and the Operating Agent shall, by notice to the
Company and the Banks,  designate  such Bank as a  Reference  Bank so that there
shall at all  times be at least  two (2)  Reference  Banks;  provided  that such
designated Bank agrees to be a Reference Bank.

                  (d) Each  Reference Bank shall use its best efforts to furnish
quotations of rates to the Operating Agent as contemplated hereby. If any of the
Reference  Banks shall be unable or otherwise  fails to supply such rates to the
Operating  Agent upon its request,  the rate of interest  shall be determined on
the basis of the quotations of the remaining Reference Banks or Reference Bank.

     2.13  Inability to Determine  Interest Rate for Pro Rata  Advances.  In the
event  that  (a) any two (2)  Reference  Banks  or the  Operating  Agent  or the
Majority Banks shall have determined  (which  determination  shall be conclusive
and binding upon the Company) that for any reason, adequate and reasonable means
do not exist for  ascertaining  the Eurodollar  Rate for any requested  Interest
Period  with  respect  to a  proposed  Pro Rata  Advance  that the  Company  has
requested be made as a Eurodollar  Rate  Advance,  or (b) any two (2)  Reference
Banks or the  Operating  Agent or the  Majority  Banks  shall  determine  (which
determination  shall  be  conclusive  and  binding  upon the  Company)  that the
Eurodollar  Rate  applicable  pursuant  to  Section  2.11(a)  for any  requested
Interest Period with respect to a proposed Pro Rata Advance that the Company has
requested be made as a Eurodollar  Rate Advance does not  adequately  and fairly
reflect the cost to the  Majority  Banks of funding such Pro Rata  Advance,  the
Operating Agent shall forthwith give notice of such determination to the Company
and each  Bank at least one day prior to the  proposed  borrowing  date for such
Eurodollar  Rate  Advance.  If  such  notice  shall  be  given,  such  requested
Eurodollar  Rate Advance shall be made as a Reference  Rate Advance.  Until such
notice shall have been withdrawn by the Operating  Agent, no further  Eurodollar
Rate Advances may be requested by the Company.

        2.14     Pro Rata Treatment and Payments

        (a)        Payments by the Company

                    (i)  Except  as  otherwise  specifically  provided  in  this
         Agreement,  all  payments  (including  prepayments)  to be  made by the
         Company  on  account  of  principal,  interest  and fees  shall be made
         without  set-off  or  counterclaim  and shall be made to the  Operating
         Agent for the  account  of the Banks to which  such  payments  shall be
         owing, pro rata in accordance with the respective amounts then payable,
         at the Payment Office in Dollars and in immediately  available funds no
         later than 11:00 A.M. (New York City time).  The Operating  Agent shall
         distribute  such payments to the Banks to which such payments  shall be
         owing promptly upon receipt on the date of receipt and in like funds as
         received.  Any payment  that shall be received by the  Operating  Agent
         later than 11:00 A.M. (New York City time) shall be deemed to have been
         received on the immediately succeeding Business Day.

                    (ii) If any payment (other than a payment of principal of or
         interest on a Eurodollar  Rate Advance or  Competitive  Bid  Eurodollar
         Advance,  which shall be due on the last day of the applicable Interest
         Period)  shall be stated  to be  payable  on a day that  shall not be a
         Business Day, such payment shall be due on the next succeeding Business
         Day,  and such  extension of time shall in such case be included in the
         computation of interest or fees, as the case may be.

                    (iii)  Except as  provided  in Section  2.04(d),  unless the
         Operating  Agent shall have  received  notice from the Company prior to
         the date on which any payment shall be due to the Banks  hereunder that
         the Company will not make such payment in full, the Operating Agent may
         assume that the Company has made such payment in full to the  Operating
         Agent on such  date and the  Operating  Agent  may (but it shall not be
         required to), in reliance upon such assumption, cause to be distributed
         to each Bank on such due date an amount equal to the amount then due to
         such Bank.  If and to the extent that the  Company  shall not have made
         such payment in full to the Operating  Agent,  each Bank shall repay to
         the Operating Agent forthwith on demand the amount  distributed to such
         Bank,  together with interest  thereon for each day, from the date such
         amount  shall  have been  distributed  to such Bank until the date such
         Bank shall repay such  amount to the  Operating  Agent,  at the Federal
         Funds Rate as in effect on such day.

                    (iv) The  Operating  Agent  shall,  as soon as  practicable,
         notify the  Company  of the  amounts of  principal,  interest  and fees
         payable by the Company under this Agreement; provided, that the failure
         to give any such notice shall not relieve the Company of any  liability
         under this Agreement.

 .        (b)        Payments by the Banks to the Operating Agent

                    (i) On the date of each Pro Rata Borrowing,  each Bank shall
         make available to the Operating  Agent in immediately  available  funds
         for  the  account  of the  Company  an  amount  equal  to  such  Bank's
         Commitment  Percentage of any Pro Rata Borrowing as provided in Section
         2.04.

                    (ii)  Subject  to  the   provisions  of  Section  2.04,  the
         Operating Agent may (unless notified to the contrary by a Bank prior to
         a borrowing date) assume, with respect to each Pro Rata Borrowing, that
         each Bank has made available an amount equal to such Bank's  Commitment
         Percentage of such Pro Rata  Borrowing to the  Operating  Agent on such
         borrowing  date,  and the  Operating  Agent  may (but it  shall  not be
         required to), in reliance upon such  assumption,  make available to the
         Company a  corresponding  amount.  If and to the extent  that such Bank
         shall not have made such amount  available to the  Operating  Agent and
         the Operating Agent in such  circumstances  makes available such amount
         to the  Company,  such Bank shall  make such  amount  available  to the
         Operating Agent within two (2) Business Days after such borrowing date,
         together  with interest at the Federal Funds Rate for each day from and
         including  such borrowing  date. A certificate  of the Operating  Agent
         submitted  to any Bank with  respect to any  amounts  owing  under this
         Section  2.14(b) shall be  conclusive,  absent  manifest  error.  If an
         amount  equal to such  Bank's  Commitment  Percentage  of such Pro Rata
         Borrowing  shall not be made  available to the Operating  Agent by such
         Bank  within  two (2)  Business  Days after such  borrowing  date,  the
         Company shall pay such amount,  on demand, to the Operating Agent, with
         interest  thereon,  from such  borrowing date to the date of payment to
         the Operating  Agent, at the interest rate per annum  applicable at the
         time to the Advances  comprising  such Pro Rata  Borrowing (but no such
         payment by the Company shall be deemed to be a prepayment of an Advance
         for purposes of Section 2.18).

                    (iii) Nothing in this Section 2.14(b) shall relieve any Bank
         of its  obligation to make  available an amount equal to its Commitment
         Percentage  of any Pro Rata Advance,  but no Bank shall be  responsible
         for the  failure of any other  Bank to make the Pro Rata  Advance to be
         made by such other Bank on the date of any Pro Rata Borrowing.

 .        2.15       Taxes

                    (a) Subject to Section 2.15(g),  any and all payments by the
Company to the Banks or the Agents  under this  Agreement  or any Notes shall be
made free and clear of, and without  deduction or  withholding  for, any and all
present or future taxes, levies, imposts,  deductions,  charges or withholdings,
and all liabilities  with respect thereto,  excluding,  in the case of each Bank
and each Agent,  such taxes (including income taxes or franchise taxes) as shall
be  imposed on or  measured  by the net income of such Bank or such Agent by the
jurisdiction  under the laws of which such Bank or Agent, as the case may be, is
organized or maintains a Lending Office or by any political  subdivision thereof
(all such non-excluded taxes, levies, imposts, deductions, charges, withholdings
and liabilities being hereinafter referred to as "Taxes").

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

                    (c) Subject to Section  2.15(g),  the Company will indemnify
and hold harmless each Bank and each Agent for the full amount of Taxes or Other
Taxes (including any Taxes or Other Taxes imposed by any jurisdiction on amounts
payable under this Section  2.15),  as well as any recording or filing fees paid
in connection with this Agreement or any other Loan Document,  paid by such Bank
or such  Agent,  as the case may be,  and any  liability  (including  penalties,
interest,  additions  to tax and  expenses)  arising  therefrom  or with respect
thereto,  whether or not such Taxes or Other Taxes or  recording  or filing fees
were correctly or legally asserted.  This  indemnification  shall be made within
thirty  (30) days from the date  such  Bank or such  Agent,  as the case may be,
shall make written demand therefor.

                    (d) If the  Company  shall be  required  by law to deduct or
withhold  any  Taxes  or  Other  Taxes  from or in  respect  of any sum  payable
hereunder to any Bank or Agent, then, subject to Section 2.15(g),

                    (i) the sum payable  shall be  increased as may be necessary
         so that after  making all  required  deductions  (including  deductions
         applicable  to  additional  sums payable  under this Section 2.15) such
         Bank or Agent,  as the case may be, receives an amount equal to the sum
         it would have received had no such deductions been made,

                    (ii)        the Company shall make such deductions, and

                    (iii) the Company shall pay the full amount  deducted to the
         relevant  taxation  authority  or other  authority in  accordance  with
         applicable law.

Notwithstanding  any other provision of this Agreement,  if any Bank is entitled
to a reduction in the applicable withholding tax solely by reason of a filing of
a Withholding  Form, the Company may withhold from any interest  payment to such
Bank an amount  equivalent to the applicable  withholding  tax after taking into
account such reduction.  If the forms or other documentation required by Section
2.15(f) are not delivered to the Operating Agent,  then the Company may withhold
from any  interest  payment  to such  Bank  not  providing  such  forms or other
documentation  an  amount  equivalent  to the  applicable  withholding  tax.  In
addition,  the Company may also  withhold  from  periodic  payments to such Bank
(other than principal payments), to the extent the United States withholding tax
is not eliminated by obtaining a Withholding Form.

                    (e) Within thirty (30) days after the date of any payment by
the Company of Taxes or Other Taxes,  the Company will furnish to the  Operating
Agent the original or a certified copy of a receipt  evidencing payment thereof,
or other evidence of payment satisfactory to the Operating Agent.

                    (f) Each  Bank  which  shall be a  foreign  person (a person
other than a United States person for United States Federal income tax purposes)
hereby agrees that:

                    (i) it shall,  no later than the Effective  Date (or, in the
         case of a Bank which shall  become a party  hereto  pursuant to Section
         9.07  after the  Effective  Date,  the date upon  which such Bank shall
         become a party hereto)  deliver to the Operating Agent two (2) accurate
         and  complete  signed  originals  of  the  relevant   Withholding  Form
         indicating that such Bank is on the date of delivery  thereof  entitled
         to receive payments of principal,  interest and fees for the account of
         its Lending  Office or Lending  Offices under this  Agreement free from
         (or at a reduced rate of)  withholding  of United States Federal income
         tax (and,  if any  political  subdivision  of the United  States  shall
         impose  similar  withholding  requirements  with respect to payments to
         such Bank under this  Agreement and such Bank shall receive notice from
         the Company of the same,  such Bank shall deliver any applicable  forms
         to the Operating Agent promptly after receipt of such notice);

                    (ii) if at any time  such  Bank  shall  change  its  Lending
         Office or Lending  Offices or select an  additional  Lending  Office as
         herein  provided,  it shall,  at the same time or  reasonably  promptly
         thereafter,  deliver to the Operating  Agent in replacement  for, or in
         addition to, the Withholding Forms previously delivered by it hereunder
         two  (2)  accurate  and  complete  signed  originals  of  the  relevant
         Withholding Form,  indicating that such Bank is on the date of delivery
         thereof  entitled to receive  payments of principal,  interest and fees
         for the account of such changed or additional Lending Office under this
         Agreement  free from (or at a reduced  rate of)  withholding  of United
         States Federal income tax;

                    (iii) it shall,  before or promptly  after the occurrence of
         any  event  (including  the  passing  of time but  excluding  any event
         mentioned  in  (ii)  above)  requiring  a  change  in the  most  recent
         Withholding Form previously  delivered by such Bank and if the delivery
         of the same be lawful,  deliver to the Operating Agent two (2) accurate
         and complete original signed copies of the relevant Withholding Form in
         replacement for the forms previously delivered by such Bank;

                    (iv) if such Bank claims  exemption  from (or a reduced rate
         of)  withholding  tax under a United  States tax treaty by  providing a
         Withholding  Form and such Bank sells or grants a participation  of all
         or part of its rights under this Agreement,  such Bank shall notify the
         Operating  Agent of the percentage  amount in which it is no longer the
         beneficial owner under this Agreement. To the extent of this percentage
         amount, the Operating Agent shall treat such Bank's Withholding Form as
         no longer in compliance with this Section 2.15(f).  In the event a Bank
         claiming exemption (other than pursuant to a treaty) from United States
         withholding tax by filing a Withholding  Form with the Operating Agent,
         sells or grants a  participation  in its rights  under this  Agreement,
         such Bank agrees to undertake  sole  responsibility  for complying with
         the withholding tax  requirements  imposed by Sections 1441 and 1442 of
         the Code;

                    (v) if the Internal  Revenue Service or any authority of the
         United States of America or other jurisdiction  successfully  asserts a
         claim that the Operating Agent or the Company did not properly withhold
         tax from  amounts  paid to or for the account of any Bank  (because the
         appropriate  form was not  delivered or was not properly  executed,  or
         because such Bank failed to notify the  Operating  Agent of a change in
         circumstances   which  rendered  the  exemption  from  withholding  tax
         ineffective),  such Bank shall indemnify the Operating Agent and/or the
         Company,  as  applicable,  fully  for all  amounts  paid,  directly  or
         indirectly,  by the Operating Agent and/or the Company,  as applicable,
         as tax or otherwise,  including  penalties and interest,  and including
         any taxes  imposed by any  jurisdiction  on the amounts  payable to the
         Operating Agent and/or the Company,  as applicable under this paragraph
         (f),  together with all costs,  expenses and attorneys' fees (including
         the reasonable allocated costs for in-house staff counsel); and

                    (vi) it shall,  promptly upon the  Operating  Agent's or the
         Company's  reasonable request to that effect,  deliver to the Operating
         Agent such other forms or similar documentation as may be required from
         time to time by any applicable law, treaty, rule or regulation in order
         to establish such Bank's tax status for withholding purposes.

                    (g) The Company  will not be required to pay any  additional
amounts in respect  of United  States  Federal  income tax  pursuant  to Section
2.15(d)(i),  (ii) and (iii) to any Bank for the account of any Lending Office of
such Bank:

                    (i) if the obligation to pay such  additional  amounts would
         not have  arisen  but for a failure  by such  Bank to  comply  with its
         obligations,  if any, under Section  2.15(f) in respect of such Lending
         Office; or

                    (ii) if such Bank  shall  have  delivered  to the  Company a
         Withholding  Form in respect of such Lending Office pursuant to Section
         2.15(f) and such Bank shall not at any time be  entitled  to  exemption
         from  deduction or  withholding  of United States Federal income tax in
         respect of payments by the  Company  hereunder  for the account of such
         Lending  Office for any reason other than a change in United States law
         or  regulations  or any  applicable tax treaty or regulations or in the
         official  interpretation  of any such law, treaty or regulations by any
         Governmental    Authority   charged   with   the    interpretation   or
         administration  thereof  (whether or not having the force of law) after
         the date of delivery of such Withholding Form.

                    (h) If, at any time,  the Company  shall request any Bank to
deliver any forms or other documentation  pursuant to Section 2.15(f)(vi),  then
the Company shall, on demand of such Bank through the Operating Agent, reimburse
such Bank for any  reasonable  costs or  expenses  incurred  by such Bank in the
preparation or delivery of such forms or other documentation.

                    (i) Any Bank  requesting  payment  under this  Section  2.15
shall  notify the Company by providing  the Company with written  details of the
relevant  Taxes or Other  Taxes or  recording  or  filing  fees as  promptly  as
practicable  under the  circumstances  with a view to avoiding or mitigating any
Taxes or Other Taxes or  recording or filing fees that shall be capable of being
avoided or mitigated.

                    (j) If the  Company  shall  be  required  to pay  additional
amounts to any Bank  pursuant to Section  2.15(d),  then such Bank shall use its
best efforts  (consistent with legal and regulatory  restrictions) to change the
jurisdiction  of its  Lending  Office  so as to  eliminate  any such  additional
payment by the Company which may  thereafter  accrue if, in the judgment of such
Bank, such change shall not otherwise be disadvantageous to such Bank.

                    (k)  Each  Bank  also  agrees  to  take  any  other   action
(including  properly  claiming the benefit of any exemption from or reduction of
such Taxes) which in its judgment is  reasonable to avoid or reduce any Taxes or
Other Taxes (including penalties,  interest, additions to tax and expenses) that
might otherwise be payable; provided that such Bank shall not be required to (i)
take any action which in the reasonable  judgment of such Bank could directly or
indirectly result in any increased cost or expense or in any loss of opportunity
to such Bank unless the Company  shall have  provided to such Bank  indemnity or
reimbursement  therefor in form and substance  reasonably  satisfactory  to such
Bank or (ii) claim or apply any tax credit or deduction against or in respect of
such Taxes.

                    (l) The Operating Agent shall,  (i) promptly after receiving
from any Bank any form or other document  required under this Section 2.15, send
a copy thereof to the Company and (ii) promptly after receiving from the Company
any document  required  under this  Section 2.15 in respect of any Bank,  send a
copy thereof to such Bank.

                    (m) The  obligations  of the Company under this Section 2.15
shall not apply to Taxes or Other Taxes  arising in respect of  Competitive  Bid
Advances  except to the  extent  that  such  Taxes or Other  Taxes  shall be the
subject of Section 2.17.

                    (n)  Notwithstanding  anything  in  Section  2.15(c)  to the
contrary,  the  Company  shall  not be  liable  to any  Bank  for  any  fees  or
liabilities under this Section 2.15 resulting from any delay in paying any Taxes
or Other Taxes or recording or filing fees, if such fees or liabilities  accrued
after the  Company  has paid to such Bank the full amount of such Taxes or Other
Taxes  and any and all  such  fees or  liabilities  accrued  to the date of such
payment by the Company.

                    (o) The agreements and obligations of the Company  contained
in this Section 2.15 shall survive for ten (10) years after the  termination  of
the  Commitments  and the payment of the Advances and all other amounts  payable
under this Agreement.

 .        2.16       Illegality

                    (a) If the  introduction  of any  Requirement  of Law or any
change therein or in the  interpretation  or  application  thereof shall make it
unlawful  for  any  Bank  to  make  or  maintain  Eurodollar  Rate  Advances  or
Competitive Bid Eurodollar Advances,  then on notice thereof by such Bank to the
Company  through the Operating  Agent,  the Commitment of such Bank hereunder to
make Eurodollar  Rate Advances and the obligation,  if any, of such Bank under a
LIBOR Bid made under Section 2.02 to make  Competitive  Bid Eurodollar  Advances
shall  forthwith be suspended  until such notifying Bank shall have notified the
Operating  Agent and the  Company  that the  circumstances  giving  rise to such
determination  no longer exist (and if such notifying Bank shall  determine that
such  circumstances  no longer exist it shall so notify the Operating  Agent and
the  Company  promptly  after  determining  the  same).  During  such  period of
suspension as to any Bank, any Pro Rata Borrowing  consisting of Eurodollar Rate
Advances  by other Banks  shall,  if the  Company  shall so  request,  include a
Reference Rate Advance rather than a Eurodollar Rate Advance by the Bank subject
to such suspension.

                    (b) If it shall be unlawful to maintain any Eurodollar  Rate
Advance or Competitive  Bid Eurodollar  Advance until the maturity date thereof,
the Company  shall  prepay  such  Eurodollar  Rate  Advance or  Competitive  Bid
Eurodollar  Advance,  and shall pay to such Bank such amounts, if any, as may be
required  pursuant  to  Section  2.18,  no later than the last day on which such
Advance could be lawfully  maintained.  Concurrently  with any prepayment of any
Eurodollar Rate Advance pursuant hereto to any Bank, the Company may borrow from
such Bank a Reference  Rate  Advance for a period  ending on the same day as the
then current Interest Period for the Eurodollar Rate Advance so prepaid.

                    (c) Before giving any notice  pursuant to this Section 2.16,
the affected  Bank shall use its best efforts to designate a new Lending  Office
if such  designation  will avoid the need for giving  such notice or making such
demand  and will  not,  in the  judgment  of such  Bank,  subject  such  Bank to
additional costs or otherwise be disadvantageous to such Bank.

 .        2.17       Requirements of Law

                    (a) In the event that any  Requirement  of Law or any change
therein or in the  interpretation  or  application  thereof by any  Governmental
Authority or  compliance  by any Bank with any  directive,  guideline or request
from any Governmental  Authority of or in the United States,  the United Kingdom
or the  jurisdiction  in which such Bank shall maintain its  headquarters or any
Lending Office, whether or not having the force of law:

                    (i) shall after the date hereof  subject any Bank to any tax
         or taxes (including Taxes) of any kind whatsoever  (except for taxes on
         or measured  by the  overall net income of such Bank or its  applicable
         Lending  Office  and  taxes  otherwise  unrelated  to the  transactions
         contemplated by this  Agreement)  with respect to this  Agreement,  any
         Note or any Eurodollar  Rate Advances or Competitive  Bid Advances made
         by it, or change  the basis of  taxation  of  payments  to such Bank of
         principal,  fees, interest or any other amount payable hereunder (other
         than with respect to taxes unrelated to the  transactions  contemplated
         by this Agreement); or

                    (ii)  shall  after the date  hereof  impose,  modify or hold
         applicable any reserve,  special  deposit,  compulsory  loan or similar
         requirement  (other than reserve  requirements to which Section 2.11(d)
         shall apply) against assets held by,  deposits in or other  liabilities
         for the account of,  advances or loans by, or other credit extended by,
         or any other acquisition of funds by, any office of such Bank which are
         not  otherwise  included  in the  determination  of the  interest  rate
         applicable to any  Competitive  Bid Advance and are not included within
         the scope of paragraph (i) of this Section 2.17(a),

and the result of any of the  foregoing is to increase the cost to such Bank (or
its Lending  Office) of making,  renewing or  maintaining  any  Eurodollar  Rate
Advance  or  Competitive  Bid  Advance  or to  reduce  the  amount  received  or
receivable  hereunder  by such Bank (or its  Lending  Office) by or in an amount
that such Bank shall deem material,  then,  within thirty (30) days after demand
by such Bank (with a copy to the Operating  Agent),  the Company shall  promptly
pay such Bank any additional  amounts necessary to compensate such Bank for such
additional cost or reduction. A certificate as to any additional amounts payable
pursuant to the foregoing sentence submitted by any such Bank to the Company and
containing a description of the applicable  Requirement of Law,  interpretation,
application,   directive,  guideline  or  request  and  a  calculation  of  such
additional  amounts shall be conclusive in the absence of manifest error. If the
Company shall be required to pay any amount to any Bank pursuant to this Section
2.17(a),  then such Bank shall use its best efforts  (consistent  with legal and
regulatory  restrictions) to change the jurisdiction of its Lending Office so as
to eliminate any such payment by the Company which may thereafter  accrue if, in
the judgment of such Bank, such change shall not otherwise be disadvantageous to
such Bank.  This  covenant  shall survive for five (5) years (or, in the case of
the matters  referred to in (i) above,  ten (10) years) after the termination of
the  Commitments and payment of the Advances and all other amounts payable under
this Agreement.

                    (b) If any Bank shall have determined that the  introduction
of or any change in any  applicable  law, rule or regulation  regarding  capital
adequacy, or any change in administration thereof by any Governmental Authority,
central  bank  or  comparable   agency  charged  with  the   interpretation   or
administration thereof, or the compliance by any Bank (or its Lending Office) or
any corporation  controlling such Bank with any request,  guideline or directive
regarding  capital adequacy (whether or not having the force of law) of any such
authority,  central bank or  comparable  agency,  whether  introduced,  adopted,
promulgated  or issued  before,  on or after the date  hereof,  affects or would
affect the amount of capital  required or expected to be maintained by such Bank
or  any   corporation   controlling   such  Bank  and  such  Bank  (taking  into
consideration such Bank's or such corporation's policies with respect to capital
adequacy  and such  Bank's or such  corporation's  desired  return  on  capital)
determines  that the amount of such  capital is increased or such Bank's or such
corporation's  return on  capital is reduced  as a  consequence  of such  Bank's
obligations  under this  Agreement,  then, upon demand of such Bank, the Company
shall immediately pay to such Bank, from time to time as specified by such Bank,
additional  amounts  sufficient to compensate such Bank or such  corporation for
such  increase  or  reduction,  as the  case  may be.  A  certificate  as to any
additional  amounts payable pursuant to the foregoing  sentence submitted by any
such Bank to the  Company  and  containing  a  description  of such  law,  rule,
regulation,  change,  request,  guideline or directive and a calculation of such
additional  amounts shall be conclusive  in the absence of manifest  error.  The
Company  shall pay such  Bank the  amount  shown as due on any such  certificate
within  thirty  (30) days after its  receipt of the same.  This  covenant  shall
survive for five (5) years after the  termination of the Commitments and payment
of the Advances and all other amounts payable under this Agreement.

                    (c) In the event that the Company  becomes  obligated to pay
additional  amounts to any Bank pursuant to Section  2.17(b)  then,  unless such
Bank has theretofore removed or cured the conditions creating the cause for such
obligation to pay such additional  amounts,  after payment by the Company of all
amounts  owing to such Bank under Section  2.17(b),  the Company may designate a
Bank (not  similarly  affected  under Section  2.17(b)) or another bank which is
willing  to  become a Bank and is  acceptable  (which  acceptance  shall  not be
unreasonably  withheld) to the  Operating  Agent (such Bank or bank being herein
called a  "Replacement  Bank") to  purchase  the  Advances of such Bank and such
Bank's rights hereunder, without recourse to or warranty by, or expense to, such
Bank for a  purchase  price  equal to the  outstanding  principal  amount of the
Advances  payable  to such Bank plus any  accrued  but unpaid  interest  on such
Advances and accrued but unpaid fees and any other amounts  payable to such Bank
under this  Agreement,  and to assume  the  obligations  of such Bank  hereunder
pursuant to Section 9.07(a), and, upon such purchase,  such Bank shall no longer
be a party  hereto or have any rights  hereunder  and shall be  relieved  of all
obligations  to the  Company  hereunder  (except  for  such  rights  as  survive
repayment of the Advances), and the Replacement Bank shall succeed to the rights
(except  for such  rights of the  assigning  Bank as  survive  repayment  of the
Advances) and obligations of such Bank hereunder.

     2.18 Funding  Losses.  The Company  agrees to reimburse  each Bank and hold
such Bank harmless from any loss or expense which such Bank may sustain or incur
as a direct consequence of:
                    (a) default by the Company in the payment when due of the 
principal  amount of or interest on any Eurodollar Rate Advance or Competitive 
Bid Advance of such Bank,

                    (b) failure by the  Company to make a  Borrowing  (except to
the extent  that any Bank shall fail to  perform  its  obligation  to make funds
available to the Company for such Borrowing)  after the Company has given (or is
deemed to have given) a notice of borrowing in  accordance  with Section 2.02 or
2.04,

                    (c)      failure by the  Company to make any  prepayment  of
an Advance  after the  Company has given a notice in accordance with Section
 2.07, and/or

                    (d)      the  making  by  the  Company  of a  prepayment of 
a  Eurodollar  Rate  Advance  or a Competitive Bid Advance on a day which is not
the last day of the Interest Period with respect thereto,

including an amount equal to the excess,  if any, as  reasonably  determined  by
such Bank, of (i) its cost of obtaining funds for the Advance not paid when due,
or not borrowed or prepaid as scheduled, or prepaid on a day other than the last
day of its Interest  Period (based on the  Eurodollar  Rate or  Competitive  Bid
Eurodollar  Rate or interest rate based on an Absolute Bid, as  applicable)  for
the period  from the date of such  nonpayment,  failure to borrow or prepay,  or
prepayment,  as the case may be, to the last day of the Interest Period for such
Advance (or, in the case of a failure to borrow,  the  Interest  Period for such
Advance  which would have  commenced on the date of such  failure) over (ii) the
amount of  interest  (as  reasonably  determined  by such  Bank)  that  would be
realized by such Bank in reemploying the funds so prepaid or not paid,  borrowed
or prepaid for such period or Interest Period, as the case may be. A certificate
of any Bank  setting  forth  any  amount or  amounts  which  such Bank  shall be
entitled to receive  pursuant to this Section shall be delivered to the Company,
together with a reasonable  explanation  thereof, and shall be conclusive absent
manifest  error.  The Company shall pay such Bank the amount shown as due on any
such  certificate  within  thirty (30) days after its receipt of the same.  This
covenant shall survive for two (2) years after  termination  of the  Commitments
and payment of the Advances and all other amounts payable under this Agreement.



                                   ARTICLE III

                         REPRESENTATIONS AND WARRANTIES

         The Company hereby  represents and warrants to each Agent and each Bank
that:

     3.01  Corporate   Existence  and  Power..  Each  of  the  Company  and  its
Subsidiaries:Power

                    (a)      is duly  organized,  validly  existing and in good 
standing  under  the  laws of the jurisdiction of its incorporation;

                    (b)      has the  corporate  power and  authority  and the 
legal  right to own and  operate its property,  to lease any  property  it  
operates  as lessee and to conduct  the  business  in which it is  currently
engaged;

                    (c) is duly qualified as a foreign  corporation  and in good
standing  under  the laws of each  jurisdiction  where its  ownership,  lease or
operation   of  property  or  the  conduct  of  its   business   requires   such
qualification; and

                    (d)      is in compliance with all Requirements of Law,

except,  in the case of the Company or  Subsidiaries  of the Company and in each
case  referred  to in  paragraph  (c) or  paragraph  (d), to the extent that the
failure  to do so would not have a  material  adverse  effect  on the  business,
operations,  properties or condition (financial or otherwise) of the Company and
its Subsidiaries taken as a whole.

     3.02 Corporate Authorization; No Contravention. The execution, delivery and
performance by the Company of this  Agreement and the Notes and the  performance
by the Company of its obligations hereunder:

                    (a)      are  within  the  corporate  power and  authority  
of the  Company  and have been duly authorized by all necessary corporate 
action; and

                    (b)      do not contravene the terms of the Company's 
Restated  Certificate of Incorporation or Amended and Restated By-Laws, or
any amendment thereof.

     3.03  Governmental   Authorization.   No  approval,   consent,   exemption,
authorization,   or  other  action  by,  or  notice  to,  or  filing  with,  any
Governmental   Authority  is  necessary  or  required  in  connection  with  the
execution,  delivery, performance or (with respect to any Governmental Authority
of the United States  charged with  regulating  telecommunications)  enforcement
against the Company of this  Agreement  or the Notes,  except such  governmental
authorizations which have been duly obtained and are in full force and effect.

     3.04  Binding  Effect.  This  Agreement,   and  the  Notes  when  executed,
constitute the legal, valid and binding  obligations of the Company  enforceable
against  the  Company in  accordance  with  their  respective  terms,  except as
enforceability  may be limited by applicable  bankruptcy,  insolvency or similar
laws affecting the  enforcement of creditors'  rights  generally or by equitable
principles relating to enforceability.

     3.05  No  Legal  Bar.  The  execution,  delivery  and  performance  of this
Agreement and the Notes,  the  borrowings  hereunder and the use of the proceeds
thereof as presently  contemplated,  will not violate any  Requirement of Law or
any  Contractual  Obligation  of the  Company  and  will  not,  pursuant  to any
Requirement  of Law or  Contractual  Obligation,  result  in,  or  require,  the
creation or imposition of any Lien on any property or revenues of the Company or
any of its Subsidiaries to an extent that is material in relation to the Company
and its Subsidiaries taken as a whole. 

     3.06 Litigation

                    (a)  Except  as set  forth in  Schedule  III,  there  are no
actions,  suits,  proceedings,  claims  or  disputes  pending  or,  to the  best
knowledge of the  Company,  threatened  or  contemplated  at law, in equity,  in
arbitration or before any Governmental  Authority  against the Company or any of
its Subsidiaries or any of their respective properties:

                    (i)      with  respect  to this  Agreement  or any Note or 
         any other  transaction  contemplated hereby or thereby; or

                    (ii) which have a reasonable possibility of being determined
         adversely to the Company or such Subsidiary and if so determined  would
         have a material adverse effect on the business, operations,  properties
         or financial  condition of the Company and its Subsidiaries  taken as a
         whole or could have a  material  adverse  effect on the  ability of the
         Company to perform its obligations under this Agreement and the Notes.

                    (b) To the best  knowledge  of the Company,  no  injunction,
writ,  temporary  restraining order or other order of any nature has been issued
by any court or other  Governmental  Authority  purporting to enjoin or restrain
the  execution,  delivery  and  performance  of this  Agreement  or any  Note or
directing that the transactions provided for herein not be consummated as herein
provided.

     3.07 No Default.  No event has occurred and is  continuing  or would result
from the incurring of  obligations  by the Company  under this  Agreement or any
other Loan Document which constitutes a Default or an Event of Default.  Neither
the Company nor any of its  Subsidiaries  is in default under or with respect to
any Contractual Obligation or any order of any court, arbitrator or Governmental
Authority in any respect which, individually or together with all such defaults,
could be materially adverse to the business,  operations,  property or financial
or other condition of the Company and its Subsidiaries taken as a whole or which
could  materially  adversely  affect the  ability of the  Company to perform its
obligations under this Agreement and the Notes.

 .        3.08       ERISA Compliance

                    (a)      No ERISA Event has  occurred or is  reasonably  
expected to occur with  respect to any Plan;

                    (b)  Schedule B (Actuarial  Information)  to the most recent
annual  report (Form 5500 Series for 1994) with respect to each Plan,  copies of
which  have been  filed with the  Internal  Revenue  Service,  is  complete  and
accurate in all material respects and fairly presents the funding status of such
Plan,  and since the date of such Schedule B there has been no material  adverse
change in such funding status;

                    (c)      Neither the Company nor any ERISA  Affiliate  has 
incurred or  reasonably  expects to incur any withdrawal liability under ERISA 
to any Multiemployer Plan; and

                    (d) Neither the Company nor any ERISA Affiliate maintains or
has  established  any welfare benefit plan within the meaning of Section 3(1) of
ERISA which provides for continuing  benefits or coverage for any participant or
any  beneficiary  of a  participant  after  such  participant's  termination  of
employment,  except (i) health care  benefits  for  twenty-four  (24) months for
covered   dependents   following  the  death  of  a   participant   in  the  MCI
Communications  Corporation  Health and Welfare Plan, (ii) as may be required by
the Consolidated  Budget  Reconciliation Act of 1985, as amended ("COBRA"),  and
the  regulations  thereunder,  (iii) at the  expense of the  participant  or the
beneficiary of the participant, (iv) welfare benefit plans maintained by WUI for
retiree participants  presently numbering up to 326, and (v) severance pay plans
covering employees of the Company and its Subsidiaries; and the Company and each
of its ERISA Affiliates that maintains a welfare benefit plan within the meaning
of Section 3(1) of ERISA has complied in all material  respects  with the notice
and continuation coverage requirements of COBRA and the regulations thereunder;

to the  extent  that (a),  (b),  (c) or (d),  as the case may be,  would  have a
material adverse effect on the business, operations,  properties or financial or
other  condition of the Company and its  Subsidiaries  taken as a whole or could
have a material  adverse  effect on the  ability of the  Company to perform  its
obligations under this Agreement and the Notes.

     3.09 Use of  Proceeds;  Margin  Regulations.  The  proceeds of the Advances
shall be used for  general  corporate  purposes,  including  possible  liquidity
support for the issuance of commercial  paper by the Company.  No portion of the
Advances will be used,  directly or indirectly,  in any manner which might cause
such Advances or the application of the proceeds  thereof to violate  Regulation
U, Regulation T or Regulation X of the Federal Reserve Board as in effect on the
date of  such  Advances.  Following  the  application  of the  proceeds  of each
Advance,  not more than  twenty-five  percent  (25%) of the value of the  assets
(either  of the  Company  only  or of the  Company  and  its  Subsidiaries  on a
consolidated  basis)  subject to the  provisions of Section 6.01 or 6.02 will be
Margin Stock.

     3.10  Title to  Properties.  Except  as set forth in the  second  and third
sentences of this Section  3.10,  each of the Company and its  Subsidiaries  has
good record and marketable title in fee simple to, or valid leasehold  interests
or other  valid  rights in,  all their  respective  properties,  except for such
defects  in  title  as  could  not,  individually  or in the  aggregate,  have a
materially adverse effect on the business,  operations,  property,  prospects or
financial  condition of the Company and its Subsidiaries taken as a whole or the
ability of the Company to perform its  obligations  under this  Agreement or the
Notes. Significant portions of the fiber optic systems which comprise a material
part of the  communications  system  of the  Company  and its  Subsidiaries  are
constructed in or on real property  (primarily devoted to railways,  powerlines,
pipelines  and  highways)  to which the Company and certain of its  Subsidiaries
have  been  granted  various  rights  pursuant  to  easement,  license  or other
agreements  (collectively,  the "Right of Way  Agreements"),  which Right of Way
Agreements  generally do not contain warranties of title in favor of the Company
or any of its  Subsidiaries.  Neither the Company  nor any such  Subsidiary  has
performed any investigation into the title of the grantors of such rights in and
to such real  property  or into the  sufficiency  of such  title to enable  such
grantors to grant such rights to the  Company  and such  Subsidiaries  under the
Right of Way Agreements.  The properties of the Company and its Subsidiaries are
free and clear of all security interests,  Liens or rights of others,  except as
permitted by Section 6.01.

     3.11  Taxes.  The  Company  and its  Subsidiaries  have filed all  material
Federal and other tax returns and reports required to be filed and have paid all
material  Federal  and other  taxes,  assessments,  fees and other  governmental
charges  levied  or  imposed  upon  them or their  properties,  income or assets
otherwise  due and payable  except those for which  adequate  reserves have been
provided in accordance with GAAP.

     3.12 Financial Condition

                    (a) The audited  consolidated  balance  sheet of the Company
and its Subsidiaries as of December 31, 1996 and the related consolidated income
statement  and  statement  of cash flows for the fiscal year ended on such date,
accompanied  by  the  opinion  thereon  of  Price  Waterhouse  LLP,  independent
accountants:

                    (i)         were prepared in accordance with GAAP 
         consistently  applied  throughout the period covered thereby, except
         as otherwise noted therein;

                    (ii) are complete and accurate in all material  respects and
         a fair  presentation of the financial  condition of the Company and its
         Subsidiaries  as of the date  thereof and of the results of  operations
         for the period covered thereby; and

                    (iii) show all material  indebtedness and other liabilities,
         direct or  contingent,  of the Company and its  Subsidiaries  as of the
         date thereof (including liabilities for taxes and material commitments)
         to the extent required under GAAP to be disclosed therein.

                    (b) Since  December  31,  1996,  there has been no  material
adverse change in the business,  operations,  properties or condition (financial
or otherwise) or prospects of the Company and its Subsidiaries  taken as a whole
from those set forth in the financial statements referred to in Section 3.12(a).

     3.13 Environmental Matters. Except as set forth in Schedule IV, to the best
knowledge of the Company after reasonable inquiry:

                    (a)      the  operations  of the Company and each of its  
Subsidiaries  comply in all  material respects with all applicable Hazardous
Materials Laws;

                    (b)  none of the  operations  of the  Company  or any of its
Subsidiaries is the subject of federal or state investigation evaluating whether
any remedial action,  involving expenditures,  is needed to respond to a release
of any Hazardous Materials into the environment; and

                    (c)      neither the Company nor any of its Subsidiaries has
any material contingent  liability in connection with any release of any 
Hazardous Materials into the environment,

except,  in each case referred to above,  to the extent that any  noncompliance,
remedial  action or liability  would not have a material  adverse  effect on the
business,  operations,  properties or condition  (financial or otherwise) of the
Company and its Subsidiaries taken as a whole.

     3.14 Investment Company Act. The Company is not an "investment company", or
a company  "controlled"  by an "investment  company",  within the meaning of the
Investment Company Act of 1940, as amended.

     3.15  Communications Act. Neither any Bank nor either of the Agents nor any
Affiliate  of any thereof will  become,  solely by reason of entering  into this
Agreement or the consummation of any of the transactions  contemplated  thereby,
subject to regulation under (a) the Communications Act of 1934, as amended,  the
Telecommunications  Act of 1996,  as  amended,  or the  rules,  regulations  and
policies of the Federal  Communications  Commission under either thereof (except
for  direct or  derivative  obligations  to  furnish  nonburdensome  information
routinely  required of  similarly  situated  Persons)  or (b) any other  present
Federal  or  state  laws  relating  to  communications  services  or the  use or
operation of apparatus for the transmission of energy, communications or signals
by radio.

     3.16 Senior Indebtedness.  All of the obligations of the Company under this
Agreement and the Notes shall constitute "Senior Indebtedness" or "Senior Debt",
as defined in the respective Indentures and such obligations shall rank prior in
right of  payment,  to the extent and in the manner set forth in the  respective
Indentures,  to the payment of the  Company's  obligations  under,  or under any
securities  or  evidences  of  indebtedness  issued  pursuant  to the  terms and
provisions of, the respective  Indentures.  The obligations of the Company under
this  Agreement  and the Notes  shall rank senior to or at least pari passu with
all other unsecured indebtedness of the Company now or hereafter existing.


                                   ARTICLE IV

                              CONDITIONS PRECEDENT

     4.01  Conditions to Initial  Advances.  The obligation of each Bank to make
the initial  Advance  hereunder is subject to the  condition  that the Operating
Agent  shall  have  received  on or before the first  borrowing  date all of the
following,  in form and  substance  satisfactory  to the  Operating  Agent,  its
counsel and the Banks and in sufficient copies for each Bank:

     (a) Credit Agreement and the Notes. This Agreement,  the Pro Rata Notes and
the Competitive Bid Notes executed and delivered by a Responsible Officer;

     (b) Corporate  Documents of the Company.  Certified  copies of the Restated
Certificate  of  Incorporation  of the  Company  together  with a good  standing
certificate  from the  Secretary of State of Delaware,  each dated a recent date
prior to the Effective Date;

     (c) By-Laws of the Company.  Copies of the Amended and Restated  By-Laws of
the  Company  certified  as of the  Effective  Date as true and  complete by its
Secretary or an Assistant Secretary;

     (d) Board  Resolutions of the Company.  Certified copies of the resolutions
of the  Board  of  Directors  of  the  Company  approving  and  authorizing  the
execution,  delivery and  performance  by the Company of this  Agreement and the
Notes and authorizing  the borrowing of Advances,  certified as of the Effective
Date by the Secretary or an Assistant Secretary of the Company;

     (e) Incumbency  Certificate for the Company. A certificate of the Secretary
or Assistant  Secretary of the Company  certifying as of the Effective  Date the
names and true signatures of the officers of the Company  authorized to execute,
deliver  and perform  this  Agreement  and any Notes and to deliver  notices and
requests and other documents to be delivered on behalf of the Company hereunder;

     (f) Legal Opinion for the Company. An opinion of the General Counsel to the
Company,  dated the Effective Date and substantially in the form of Exhibit F-1,
and an opinion of Kramer, Levin, Naftalis & Frankel, special New York counsel to
the Company,  dated the Effective Date and  substantially in the form of Exhibit
F-2,  but in  each  case  also  covering  such  other  matters  incident  to the
transactions  contemplated  by  this  Agreement  as the  Operating  Agent  shall
reasonably require;

     (g) Payment of Fees and  Expenses.  Evidence  that the fees  payable to the
Agents and to the Arranger, as provided in Section 2.10, and any costs, expenses
and allocated  cost payable  under  Section  9.04(a) and billed at least fifteen
(15) days prior to the Effective Date, have been paid on the Effective Date;

     (h) Certificate. A certificate signed by a Responsible Officer, dated as of
the Effective Date, stating that:

                    (i)         the  representations  and  warranties  of the 
         Company  contained in Article III are true and correct on and as of 
         such date, as though made on and as of such date; and

                    (ii)        no event  has  occurred  and is  continuing,  
         or  would  result  from  the  initial Borrowing, which would 
         constitute a Default or Event of Default;

     (i) Financial Statements. Copies of all financial statements referred to in
Section 3.12(a);

     (j) MCI Telecom Certificate.  A certificate signed by a Responsible Officer
on behalf of the Company  stating that the aggregate book value of the assets of
MCI  Telecom  (net  of   intercompany   receivables)   was  equal  to  at  least
$15,000,000,000 as of December 31, 1996;

     (k) Existing Agreement.  Evidence that (i) the principal of and accrued and
unpaid  interest on all  "Advances" (as defined in the Existing  Agreement),  if
any,  outstanding  under the  Existing  Agreement,  and all  accrued  but unpaid
facility fees under the Existing Agreement,  have been paid in full and (ii) the
commitments of the financial  institutions  party to the Existing Agreement have
been terminated, in each case, on or before the Effective Date; and

     (l) Other  Documents.  Such other  approvals,  opinions or documents as the
Operating Agent or the Majority Banks may reasonably request.

     4.02  Conditions to All Advances.  The  obligation of each Bank to make any
Advance  to be made by it  hereunder  (including  its  initial  Advance  and any
Competitive  Bid Advance  that such Bank shall have  agreed to make  pursuant to
Section  2.02)  is  subject  to the  satisfaction  of the  following  conditions
precedent on the relevant borrowing date:

     (a) Borrowing Notice. In the case of each Pro Rata Borrowing, the Operating
Agent shall have received, or be deemed to have received, a notice of borrowing,
as required by Section 2.04(a).

     (b) Continuation of Representations and Warranties. The representations and
warranties of the Company  contained in Article III (except,  (i) in the case of
any Borrowing other than the initial Pro Rata Borrowing, the representations and
warranties of the Company contained in Section 3.12(b) and (ii) in the case of a
Refunding Borrowing other than any by which a Competitive Bid Borrowing shall be
refinanced by a Pro Rata Borrowing,  the  representations  and warranties of the
Company contained in Sections 3.06, 3.07, 3.08, 3.13 and 3.15) shall be true and
correct on and as of such  borrowing date with the same effect as if made on and
as of such borrowing date.

     (c) No Existing Default. No Default or Event of Default shall have occurred
and be continuing  on the  borrowing  date with respect to such Advance or after
giving effect to the Advance to be made on such  borrowing  date,  except in the
case of a  Refunding  Borrowing  (other  than  any by  which a  Competitive  Bid
Borrowing is refinanced by a Pro Rata  Borrowing)  provided that the Commitments
have not been terminated by the Majority Banks pursuant to Article VII.

Each borrowing by the Company  hereunder shall constitute a  representation  and
warranty by the Company hereunder as of the date of each such borrowing that the
conditions in this Section 4.02 have been satisfied.


                                    ARTICLE V

                              AFFIRMATIVE COVENANTS

         The Company hereby covenants and agrees that, so long as any Bank shall
have any Commitment hereunder,  or any Advance or other amount payable hereunder
shall remain unpaid, unless the Majority Banks waive compliance in writing:

     5.01  Financial  Statements.  The Company  shall  deliver to the  Operating
Agent, with copies for each Bank in form and substance  reasonably  satisfactory
to them:

                    (a) as soon as  available,  but not later  than one  hundred
(100)  days  after the end of each  fiscal  year of the  Company,  a copy of the
audited   consolidated  balance  sheet  of  the  Company  and  its  consolidated
Subsidiaries  as of the end of such  year and the  related  consolidated  income
statement  and  statement of cash flows for such fiscal year,  setting  forth in
each case in comparative  form the figures as of the end of and for the previous
year, all in reasonable detail and accompanied by the report of Price Waterhouse
LLP or another nationally  recognized  independent public accounting firm, which
report shall state that such  consolidated  financial  statements fairly present
the  financial  condition  and  results of  operations  of the  Company  and its
consolidated Subsidiaries in respect of such fiscal year in conformity with GAAP
applied  on a basis  consistent  with prior  years,  except as  otherwise  noted
therein.

                    (b) as soon as  available,  but in any event not later  than
fifty-five (55) days after the end of each of the first three fiscal quarters of
each fiscal year of the Company,  a copy of the unaudited  consolidated  balance
sheet of the Company  and its  consolidated  Subsidiaries  as of the end of such
quarter and the related  consolidated  income  statement  and  statement of cash
flows for such  quarter and (in the case of the second and third  quarters)  for
the period  from the  beginning  of the  current  fiscal year to the end of such
quarter,  setting  forth in each case in  comparative  form the  figures for the
corresponding  dates or periods of the previous year,  all in reasonable  detail
and certified on behalf of the Company by an appropriate  Responsible Officer as
being complete and correct in all material  respects and fairly  presenting,  in
accordance  with GAAP  except  as  otherwise  noted  therein,  the  consolidated
financial   condition   and  results  of  operations  of  the  Company  and  its
consolidated  Subsidiaries  in  respect  of such  quarter,  subject  to  changes
resulting from normal year-end audit adjustments.

     5.02  Certificates;  Other  Information.  The Company  shall furnish to the
Operating Agent, with copies for each Bank:

                    (a)   concurrently   with  the  delivery  of  the  financial
statements  referred to in Sections  5.01(a) and  5.01(b),  a  certificate  of a
Responsible  Officer on behalf of the Company (i) stating  that,  to the best of
such  officer's  knowledge,  no Default or Event of Default has  occurred and is
continuing  except as specified in such  certificate,  and (ii) setting forth in
reasonable detail the calculations required to establish whether the Company was
in compliance with Section 6.07; provided,  however, that such certificate shall
not  be  required  to  include  such  calculations  if,  as of the  date  of the
applicable financial  statements,  the ratio referred to in Section 6.07 is less
than or equal to 0.60 to 1.00;

                    (b)  promptly  after  the  same  are  sent,  copies  of  all
financial  statements  and reports which the Company sends to its  stockholders,
and promptly  after the same are filed,  copies of all financial  statements and
all publicly  available  regular,  periodic or special reports which the Company
shall make to, or file with,  the  Securities  and  Exchange  Commission  or any
successor or analogous Governmental Authority;

                    (c) promptly and in any event within five (5) Business  Days
after receipt thereof by the Company or any ERISA Affiliate from a Multiemployer
Plan,  a copy of each  notice  received  by the  Company or any ERISA  Affiliate
asserting a withdrawal  liability pursuant to Section 4202 of ERISA with respect
to the Company or any ERISA Affiliate;

                    (d)  annually,   concurrently   with  the  delivery  of  the
financial  statements  referred  to  in  Section  5.01(a),  a  certificate  of a
Responsible  Officer on behalf of the Company  stating that the  aggregate  book
value of the assets of MCI Telecom (net of  intercompany  receivables) as of the
last day of the  applicable  fiscal year was equal to at least  $15,000,000,000;
and

                    (e)   promptly,   such   additional   financial   and  other
information  as the Operating  Agent or the Majority Banks may from time to time
reasonably request.

     5.03 Preservation of Corporate Existence, etc. The Company shall, and shall
cause each of its Subsidiaries to:

                    (a)      preserve  and  maintain  in full  force and effect
its  corporate  existence  and good standing under the laws of its respective 
state of incorporation;

                    (b)  preserve  and  maintain  in full  force and  effect all
rights,  privileges,  qualifications,  rights of way,  licenses  and  franchises
necessary or desirable in the normal conduct of its business; and

                    (c)      comply with all of its Contractual Obligations,

except,  (i) as permitted by Section 6.03,  (ii) in the case of  Subsidiaries in
each case referred to in paragraphs  (a), (b) and (c) above,  and in the case of
the Company in each case  referred to in  paragraphs  (b) and (c) above,  to the
extent  that  failure  to do so would  not,  in the  aggregate,  have a material
adverse  effect on the business,  operations or financial or other  condition of
the  Company  and its  Subsidiaries  taken as a whole or on the  ability  of the
Company to pay and perform its  obligations  under this  Agreement and the Notes
and (iii) the  Company may  liquidate  or  dissolve  Subsidiaries  which have no
significant assets and do not function or produce any goods or services.

     5.04  Maintenance of Property.  The Company shall,  and shall cause each of
its  Subsidiaries to, maintain and preserve all of its property which is used or
useful in its business in good working  order and  condition,  ordinary wear and
tear  excepted,  and  make  all  necessary  repairs  thereto  and  renewals  and
replacements  thereof,  except  where the  failure  to do so would  not,  in the
aggregate, have a material adverse effect on the business, operations,  property
or financial or other condition of the Company and its  Subsidiaries  taken as a
whole or on the ability of the Company to pay and perform its obligations  under
this Agreement and the Notes.

     5.05 Insurance. The Company shall, and shall cause each of its Subsidiaries
to,  maintain or cause to be maintained,  with  financially  sound and reputable
insurers,  insurance with respect to its properties and business against loss or
damage of the kinds  customarily  insured against by Persons engaged in the same
or  similar  business,  of such  types and in such  amounts  as are  customarily
carried under similar  circumstances by such other Persons,  including  workers'
compensation  insurance,  public  liability  insurance,  property  and  casualty
insurance  and (to the extent  required by law) flood  insurance on its improved
real estate, except where the failure to do so would not, in the aggregate, have
a material adverse effect on the business, operations,  property or financial or
other condition of the Company and its  Subsidiaries  taken as a whole or on the
ability of the Company to pay and perform its  obligations  under this Agreement
and the Notes.

     5.06 Payment of Obligations. The Company shall, and shall cause each of its
Subsidiaries  to, pay and  discharge,  as the same shall become due and payable,
all their respective obligations and liabilities, including all tax liabilities,
assessments  and  governmental  charges or levies upon it or its  properties  or
assets,  unless  the same  are  being  contested  in good  faith by  appropriate
proceedings and adequate  reserves in accordance with GAAP are being  maintained
by the Company or such Subsidiary,  except where the failure to do so would not,
in the aggregate,  have a material  adverse effect on the business,  operations,
property or  financial or other  condition  of the Company and its  Subsidiaries
taken  as a whole  or on the  ability  of the  Company  to pay and  perform  its
obligations under this Agreement and the Notes.

     5.07 Compliance  with Laws. The Company shall,  and shall cause each of its
Subsidiaries to, comply in all material respects with all Requirements of Law of
any Governmental  Authority having jurisdiction over it or its business,  except
such

                    (a)      as may be contested in good faith or as to which a
 bona fide dispute may exist, or

                    (b) as to which  such  failure  to  comply  would not have a
material  adverse  effect on the  business,  operations,  properties,  assets or
condition  (financial or otherwise) of the Company and its Subsidiaries taken as
a whole or on the  ability of the  Company to pay and  perform  its  obligations
under this Agreement and the Notes.

     5.08 Inspection of Property and Books and Records.  The Company shall,  and
shall cause each of its Subsidiaries  to, maintain  adequate books of record and
account  in which  entries  that are  full,  true and  correct  in all  material
respects in conformity with GAAP  consistently  applied (with such exceptions as
may be  noted  in the  financial  statements  provided  to the  Operating  Agent
pursuant to Section 5.01 or in notices  provided to the Operating Agent pursuant
to Section  5.10(h))  shall be made of all  financial  transactions,  assets and
business of the  Company  and such  Subsidiaries.  After the  occurrence  of any
Default or Event of  Default,  the  Company  shall,  and shall cause each of its
Subsidiaries  to, permit  representatives  of the Operating Agent or any Bank to
visit  and  inspect  any  of  their  respective  properties,  to  examine  their
respective corporate, financial and operating records and make copies thereof or
abstracts  therefrom,  and to discuss  their  respective  affairs,  finances and
accounts  with their  respective  directors,  officers  and  independent  public
accountants,  all at the  expense of the  Company,  at any time  (during  normal
business  hours) and as often as may be desired,  without  advance notice to the
Company.

     5.09 Hazardous  Materials.  The Company shall,  and shall cause each of its
Subsidiaries  to,  conduct its  operations and keep and maintain its property in
compliance with all Hazardous  Materials Laws, except where the failure to do so
would not, in the  aggregate,  have a material  adverse  effect on the business,
operations,  property or  financial  or other  condition  of the Company and its
Subsidiaries  taken  as a whole  or on the  ability  of the  Company  to pay and
perform its obligations under this Agreement and the Notes.

     5.10  Notices.  The Company  shall  promptly  give notice to the  Operating
Agent:

                    (a) of the  occurrence of any Default or Event of Default of
which any officer  responsible  for any part of the  business of the Company and
its  Subsidiaries  involved  in such  Default  or Event of  Default  shall  have
knowledge, specifying the nature of such Default or Event of Default, the period
of  existence  thereof  and the action that the Company has taken or proposes to
take with respect thereto;

                    (b) of any  (i)  default  or  event  of  default  under  any
material  Contractual  Obligation of the Company or any of its  Subsidiaries  or
(ii) dispute,  litigation,  investigation,  proceeding  or suspension  which may
exist  at any  time  between  the  Company  or any of its  Subsidiaries  and any
Governmental  Authority  if such  default  or event  of  default  or an  adverse
determination  of  such  dispute,  litigation,   investigation,   proceeding  or
suspension could  materially  adversely affect the ability of the Company to pay
and perform its obligations under this Agreement and the Notes;

                    (c) of the commencement of, or any material  development in,
any  litigation  or  proceeding  (excluding  any  proceeding  with  respect to a
proposed or non-final tax  assessment)  affecting the Company or any  Subsidiary
(i) which, if adversely determined,  could have a material adverse effect on the
business,  operations  or  financial  or other  condition of the Company and its
Subsidiaries  taken as a whole or the  ability of the Company to pay and perform
its obligations  under any Loan Document;  or (ii) in which the relief sought is
an injunction or other stay of the performance of any Loan Document;

                    (d)  upon,  but in no event  later  than  fifteen  (15) days
after, becoming aware of (i) any and all enforcement,  cleanup, removal or other
governmental or regulatory actions  instituted,  completed or threatened against
the  Company  or any  Subsidiary  or any of  their  properties  pursuant  to any
applicable  Hazardous  Materials Laws, (ii) all claims made or threatened by any
third party against the Company or any Subsidiary  with respect to or because of
its or their property  relating to damage,  responsibility,  contribution,  cost
recovery  compensation,  loss or injury  resulting from any Hazardous  Materials
(the matters set forth in clauses (i) and (ii) above are hereinafter referred to
as  "Hazardous  Materials  Claims"),  and (iii)  any  environmental  or  similar
condition on any real  property  adjoining or in the vicinity of the property of
the Company or any Subsidiary that could reasonably be anticipated to cause such
property or any part thereof to be subject to any restrictions on the ownership,
occupancy, transferability or use of such property under any Hazardous Materials
Laws;  provided,  that no notice of any such action, claim or condition shall be
required under this paragraph (d) unless it could have a material adverse effect
on the business, operations, properties or condition (financial or otherwise) of
the  Company  and its  Subsidiaries  taken as a whole or on the  ability  of the
Company to pay and perform its obligations under this Agreement and the Notes;

                    (e) of any other  litigation  or  proceeding  affecting  the
Company or any of its Subsidiaries which the Company would be required to report
to the Securities and Exchange  Commission  pursuant to the Securities  Exchange
Act of 1934,  as amended,  within four (4) days after  reporting the same to the
Securities and Exchange Commission;

                    (f) of any ERISA  Event  affecting  the Company or any ERISA
Affiliate  promptly after the occurrence  thereof (but in no event more than ten
(10) days after the Company shall obtain knowledge of such ERISA Event) together
with (i) a  certificate  of the Company  setting forth the details of such ERISA
Event and the action which the Company or such ERISA Affiliate  proposes to take
with respect thereto, (ii) a copy of any notice with respect to such ERISA Event
that may be required to be filed with the PBGC, or (iii) any notice delivered by
the PBGC to the Company or any ERISA Affiliate with respect to such ERISA Event;
and

                    (g)      of any change in GAAP that would  materially 
affect the  calculation of the financial covenant in Section 6.07.

Each notice  pursuant to this Section shall be  accompanied  by a statement by a
Responsible  Officer setting forth details of the occurrence referred to therein
and  describing  the action  which the  Company  proposes  to take with  respect
thereto.

     5.11  Consultation  after GAAP Changes.  The Company shall,  promptly after
delivering any notice  pursuant to Section  5.10(h),  consult in good faith with
the Operating Agent and the Banks as to the  appropriateness  of amending any of
the covenants  contained in Article VI to reflect the changes in GAAP  described
in such notice;  provided,  that neither the Company nor the Operating Agent nor
any Bank shall be obligated to agree to any such amendment.

     5.12 Maintenance of Telecommunications Business. The Company shall maintain
the business of providing telecommunications services as a major business of the
Company  and its  Subsidiaries  taken as a whole and shall  cause MCI Telecom to
maintain such business as its principal business.


                                   ARTICLE VI

                               NEGATIVE COVENANTS

         The Company hereby covenants and agrees that, so long as any Bank shall
have any Commitment hereunder,  or any Advance or other amount payable hereunder
shall remain unpaid, unless the Majority Banks waive compliance in writing:

     6.01  Limitation on Liens.  The Company shall not,  directly or indirectly,
make, create,  incur, assume or suffer to exist any Lien upon or with respect to
any of the  capital  stock of MCI  Telecom,  nor shall it permit MCI Telecom to,
directly or indirectly,  make, create, incur, assume or suffer to exist any Lien
upon or with respect to any part of its property or assets, whether now owned or
hereafter acquired, except for:

                    (a) any Lien  existing on the property of MCI Telecom on the
date of this  Agreement  and set  forth  in  Schedule  V  securing  Indebtedness
outstanding on such date (or the refinancing or refunding of such Indebtedness);

                    (b)  Liens  for  taxes,  assessments  or other  governmental
charges which are not delinquent or remain payable without material penalty,  or
the validity of which is contested in good faith by appropriate  proceedings (to
the extent that it would be  appropriate  to contest the levy or  imposition  of
such tax as an alternative to payment) upon stay of execution or the enforcement
thereof and for which adequate reserves or other appropriate  provision has been
made in accordance with GAAP;

                    (c)  carriers',   warehousemen's,   mechanics',  landlords',
materialmen's, repairmen's or other similar Liens arising in the ordinary course
of business which are not material or, if material, are not delinquent or remain
payable  without  penalty  or which are  being  contested  in good  faith and by
appropriate proceedings;

                    (d)      pledges or deposits in connection with workers'  
compensation,  unemployment insurance and other social security legislation;

                    (e)  deposits  to  secure  the  performance  of bids,  trade
contracts (other than for borrowed money), leases, statutory obligations, surety
and appeal  bonds,  performance  bonds and other  obligations  of a like  nature
incurred in the ordinary course of business;

                    (f) easements, rights-of-way, restrictions 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
overall  value to MCI Telecom of all property and assets of MCI Telecom  subject
to such Liens or  interfere  with the  ordinary  conduct of the  business of MCI
Telecom;
                    (g) Liens on assets  acquired by MCI Telecom either directly
or through the  acquisition  of the owner of such assets  after the date of this
Agreement, if such Liens shall have existed at the time such assets or the owner
of such  assets was  acquired  and shall not have been  created in  anticipation
thereof by or with the agreement of MCI Telecom;

                    (h) Liens on assets (other than current assets)  acquired by
MCI  Telecom  after the date of this  Agreement  if such  Liens  shall have been
created  solely  for the  purpose  of  securing  Indebtedness  representing,  or
incurred to finance,  refinance or refund,  the cost of the  acquisition of such
assets or shall otherwise be created in  anticipation of such  acquisition by or
with the agreement of MCI Telecom; and

                    (i)  Liens  not  otherwise   permitted   hereunder  securing
obligations of MCI Telecom in an aggregate  amount not to exceed an amount equal
to 10% of the total  assets of MCI Telecom at any time,  provided  that,  at the
time any such Lien is  created  or  incurred,  the  aggregate  book value of the
assets  subject  to such Lien  shall not  exceed an amount  equal to 125% of the
amount of the obligation secured by such assets.

     6.02  Sale  or  Lease  of  Assets.  The  Company  shall  not,  directly  or
indirectly,  sell, convey, transfer or otherwise dispose of (whether in one or a
series of transactions)  any of the shares of capital stock of MCI Telecom,  nor
shall the Company permit MCI Telecom to,  directly or indirectly,  sell,  lease,
convey,  transfer  or  otherwise  dispose  of  (whether  in one or a  series  of
transactions) all or a material part of the assets,  business or property of MCI
Telecom  (including  accounts and notes receivable,  with or without  recourse),
whether now owned or hereafter  acquired,  or enter into any agreement to do any
of the foregoing, except:

                    (a)      dispositions  by MCI  Telecom of obsolete  or  
worn-out  property or real  property no longer used or useful in its business;

                    (b)      sales to local exchange carriers,  with or without
recourse,  of customer  receivables in the ordinary course of business;

                    (c)  dispositions  of assets  acquired,  either  directly or
through  the  acquisition  of the owner of such  assets,  after the date of this
Agreement;  provided,  that each such disposition shall be for fair and adequate
consideration; and

                    (d) dispositions (including sales pursuant to sale-leaseback
transactions)  by MCI Telecom not otherwise  permitted  hereunder which are made
for fair market value;  provided that the book value of all Disposed  Assets (as
hereinafter defined) disposed of pursuant to this Section 6.02(d) after the date
of this  Agreement  does not exceed 20% of the  greater of (i) the book value of
the assets of MCI Telecom as of December 31, 1996 and (ii) the book value of the
assets of MCI  Telecom as of the date of the most  recent  financial  statements
furnished to the Operating Agent pursuant to Section 5.01.

         For purposes of Section 6.02(d),  the term "Disposed Assets" shall mean
all  assets  of MCI  Telecom  other  than  cash  and  cash  equivalents,  equity
investments,  intercompany  receivables (but only if the receivables in question
are being  transferred to the Company or any of its  Subsidiaries),  franchises,
licenses, permits, patents, patent applications,  copyrights,  trademarks, trade
names,  goodwill,   experimental  or  organizational  expense,  and  other  like
intangibles (but excluding rights of way treated as assets).

     6.03 Consolidations and Mergers. The Company shall not, nor shall it permit
MCI Telecom to, merge,  consolidate  or combine  directly or indirectly  with or
into any Person except:

                    (a) MCI Telecom may merge,  consolidate  or combine  with or
into,  or transfer  assets to, any other  Person,  if  immediately  after giving
effect  thereto,  (i) no Default or Event of Default  would exist,  and (ii) MCI
Telecom  shall be the surviving  corporation  in such merger,  consolidation  or
combination;

                    (b) the Company may enter into the Merger, provided that (i)
the surviving corporation in the Merger assumes all of the Company's obligations
under the Credit  Agreement and the Notes pursuant to an agreement or instrument
satisfactory  in form and substance to the Majority  Banks and (ii)  immediately
after giving  effect to the Merger,  no Default or Event of Default would exist;
and

                    (c)  subject to clause (m) of Article  VII,  the Company may
merge,  consolidate  or combine with another  entity if (i) the Company shall be
the corporation  surviving the merger, or the corporation into which the Company
shall be merged or formed by any such  consolidation  shall assume the Company's
obligations  hereunder  and  under  the  Notes  in an  agreement  or  instrument
satisfactory  in form and substance to the Majority  Banks and (ii)  immediately
after giving effect thereto, no Default or Event of Default would exist.

     6.04  Transactions  with  Affiliates.  The Company  shall not, nor shall it
permit any of its Subsidiaries to, enter into any transaction with any Affiliate
of the Company or of any such  Subsidiary  that would be material in relation to
the  Company  and its  Subsidiaries  taken  as a whole  except  pursuant  to the
reasonable  requirements  of the business of the Company or such  Subsidiary and
upon  fair  and  reasonable  terms  no less  favorable  to the  Company  or such
Subsidiary  than would obtain in a comparable  arm's-length  transaction  with a
Person not an Affiliate of the Company or such Subsidiary.

     6.05  Compliance  with ERISA.  The Company shall not directly or indirectly
and shall not permit any ERISA Affiliate to directly or indirectly (i) terminate
any Plan  subject to Title IV of ERISA so as to result in any  material  (in the
opinion of the Majority  Banks)  liability of the Company or any ERISA Affiliate
to the  PBGC,  (ii)  permit  to exist any  ERISA  Event,  or any other  event or
condition,  which would  present  the risk of a material  (in the opinion of the
Majority Banks) liability of the Company or any ERISA Affiliate, or (iii) make a
complete or partial  withdrawal  (within the meaning of ERISA  Section 4201 from
any  Multiemployer  Plan so as to result in any  material (in the opinion of the
Majority Banks) liability of the Company or any ERISA Affiliate, (iv) enter into
any new Plan or modify  any  existing  Plan so as to  increase  its  obligations
thereunder  (except in the  ordinary  course of  business  consistent  with past
practice  or as a result of an  acquisition  of a  corporation  for  appropriate
consideration) which could result in any material(in the opinion of the Majority
Banks)  liability  of the  Company  or any ERISA  Affiliate,  or (v)  permit the
present value of all nonforfeitable  accrued benefits under each Plan (using the
actuarial  assumptions  required under Accounting  Principle 87 of the Financial
Accounting  Standards  Board  upon  termination  of a Plan)  materially  (in the
opinion of the  Majority  Banks) to exceed the fair market  value of Plan assets
allocable to such  benefits,  all determined (in the case of (iv) and (v)) as of
the most recent valuation date for each such Plan and, as to materiality (in the
case of (i), (ii), (iii),  (iv) and (v)),  determined in relation to the Company
and its Subsidiaries taken as a whole.

     6.06 Use of Proceeds

                    (a) Upon receipt thereof, the Company shall use the proceeds
of all  Advances  solely  for the  general  corporate  purposes  of the  Company
consistent with the  representations  and warranties and covenants  contained in
this Agreement (including liquidity support for commercial paper issuance).

                    (b) The Company  shall not use any portion of the  Advances,
directly or  indirectly:  (i) in a manner which would cause such Advances or the
application of the proceeds  thereof,  to violate  Regulation U, Regulation T or
Regulation  X of the Federal  Reserve  Board;  (ii) to buy or carry Margin Stock
unless (A) the value of all Margin  Stock owned by the Company at any time shall
not  exceed  twenty-five  percent  (25%) of the  aggregate  value of the  assets
subject to the  restrictions in Sections 6.01 and 6.02 and (B) prior to the date
of the related  Advance the Company  shall have  executed  and  delivered a duly
completed  purpose statement (Form U-1) as required under Regulation U; or (iii)
to make an uninvited acquisition of another corporation or business enterprise.

                    (c) The Company shall not,  directly or indirectly,  use any
portion of the Advances (i) knowingly to purchase Ineligible  Securities from BA
Securities  during  any  period  in which BA  Securities  makes a market in such
Ineligible  Securities,  (ii) knowingly to purchase  during the  underwriting or
placement period Ineligible Securities being underwritten or privately placed by
BA Securities,  or (iii) to make payments of principal or interest on Ineligible
Securities  underwritten  or privately  placed by BA Securities and issued by or
for the benefit of the Company or any Affiliate of the Company.  As used in this
Section,  "Ineligible Securities" means securities which may not be underwritten
or dealt in by member banks of the Federal  Reserve  System under  Section 16 of
the Banking Act of 1933 (12 U.S.C. 24, Seventh), as amended.

     6.07 Ratio of Total Liabilities to Total Capitalization.  The Company shall
not permit at any time during the period from and including  the Effective  Date
to but excluding the Termination Date, Total  Liabilities,  to exceed 0.68 times
the sum of the Company's Total Capital and Total Liabilities.

     6.08 MCI Telecom  Liabilities.  The Company shall not permit MCI Telecom to
incur, create, assume or suffer to exist any MCI Telecom Liabilities other than:

                    (a)      Indebtedness of MCI Telecom to the Company or to 
any other Subsidiary; and

                    (b) other MCI Telecom  Liabilities in an aggregate principal
amount not to exceed an amount  equal to 10% of the total  assets of MCI Telecom
at any time.

     6.09 No  Restriction  on Dividends of MCI  Telecom.  The Company  shall not
cause or permit MCI Telecom to enter into any agreement of any nature whatsoever
that would  restrict  the ability of such Person to declare or make any dividend
payment or other distribution of assets, properties or cash, rights, obligations
or  securities  on account  of any shares of any class of capital  stock of such
Person, or purchase, redeem or otherwise acquire for value any shares of capital
stock of such Person or any warrants, rights or options to acquire such shares.


                                   ARTICLE VII

                                EVENTS OF DEFAULT

         Upon the occurrence and during the continuation of any of the following
events:

     (a)  Non-Payment  of Principal.  The Company shall fail to pay when due any
portion  of the  principal  of any  Advance  and  such  default  shall  continue
unremedied  for a period  of three  (3)  Business  Days;  provided,  that if the
Operating  Agent or any Bank shall give  notice to the  Company of such  default
prior to the end of such period,  such default  shall become an Event of Default
under this  paragraph (a) if it shall continue  unremedied  beyond the day which
shall be the  earlier of (i) one (1)  Business  Day after such  notice  shall be
given to the Company or (ii) the last day of such period; or

     (b) Non-Payment of Interest and Facility Fee. The Company shall fail to pay
when due any portion of any  interest on any Advance or any facility fee payable
hereunder and such default shall  continue  unremedied  for a period of five (5)
Business  Days;  provided,  that if the  Operating  Agent or any Bank shall give
notice to the  Company of such  default  prior to the end of such  period,  such
default  shall become an Event of Default  under this  paragraph (b) if it shall
continue  unremedied  beyond the day which  shall be the  earlier of (i) one (1)
Business  Day after such  notice  shall be given to the Company or (ii) the last
day of such period; or

     (c)  Non-Payment of Other  Amounts.  The Company shall fail to pay when due
any portion of any other amount  payable under this  Agreement and not specified
in paragraph (a) or (b) above and such default  shall  continue  unremedied  for
fifteen (15) days after notice  thereof  shall have been given to the Company by
the Operating Agent or any Bank; or

     (d)  Representation  or Warranty.  Any  representation  or warranty made or
deemed  made by the Company  herein or which is  contained  in any  certificate,
document or  financial or other  statement  furnished by the Company at any time
under this Agreement shall prove to have been incorrect in any material  respect
on or as of the date made or deemed made; provided, that if the Company shall be
capable of taking  action that would result in such  representation  or warranty
becoming  correct in all  material  respects at a later date such failure of the
representation  or warranty to be correct shall not be an Event of Default under
this  paragraph  (c) until such failure  shall  continue for a period of fifteen
(15) days after  notice  thereof  shall  have been  given to the  Company by the
Operating Agent or any Bank; or

     (e)  Certain  Article VI  Defaults.  The  Company  shall fail to perform or
observe any term, covenant or agreement contained in Section 6.01 (other than by
reason of an attachment or involuntary  lien),  6.02, 6.03, 6.06 or 6.08; or the
Company  shall  fail to  perform  or observe  any term,  covenant  or  agreement
contained in Section 6.01 (if by reason of an attachment or involuntary Lien) or
6.07 and such default  shall  continue  unremedied  for a period of fifteen (15)
days; or

     (f) Other Covenant  Defaults.  The Company shall fail to perform or observe
any other term,  covenant or agreement contained in Article V or Article VI, and
such  default  shall  continue  unremedied  for a period  of thirty  (30)  days;
provided,  that the failure to perform or observe  Section  5.12 shall not be an
Event of Default until such failure shall  continue  unremedied  for a period of
thirty (30) days after  notice  thereof  shall have been given to the Company by
the Majority Banks; or

     (g) Other Defaults.  The Company shall fail to perform or observe any other
term, covenant or agreement contained in this Agreement,  and such default shall
continue unremedied for a period of fifteen (15) days after notice thereof shall
have been given to the Company by the Operating Agent or any Bank; or

     (h)  Cross-Default.  The Company or MCI Telecom  shall (i) fail to make any
payment in respect of any  Indebtedness  or  Contingent  Obligation  (other than
Indebtedness  hereunder or under any Notes) having an aggregate principal amount
outstanding of more than Fifty Million Dollars  ($50,000,000)  or the equivalent
in another  currency or  currencies  when due  (whether by  scheduled  maturity,
required prepayment,  acceleration,  demand, or otherwise);  (ii) default in the
observance or performance of any other  condition or covenant or any other event
shall  occur or any  condition  shall exist under any  agreement  or  instrument
relating to any Indebtedness or Contingent  Obligation  (other than Indebtedness
hereunder or under any Notes) having an aggregate  principal amount  outstanding
of more than  Seventy-Five  Million Dollars  ($75,000,000)  or the equivalent in
another currency or currencies, if the effect of the event or condition referred
to in this subclause (ii) shall be to cause,  or to permit the holder or holders
of  such  Indebtedness  or  beneficiary  or  beneficiaries  of  such  Contingent
Obligation  (or a  trustee  or agent on  behalf of such  holder  or  holders  or
beneficiary or beneficiaries)  to cause,  after any required giving of notice or
lapse of time or both,  such  Indebtedness  to be declared to be due and payable
prior to its stated maturity or such Contingent Obligation to become payable; or
(iii)  default  in the  observance  or  performance  of any other  condition  or
covenant or any other event shall occur or any  condition  shall exist under any
agreement or instrument  relating to any  Indebtedness or Contingent  Obligation
(other  than  Indebtedness  hereunder  or under any Notes)  having an  aggregate
principal amount outstanding of more than Fifty Million Dollars ($50,000,000) or
the equivalent in another currency or currencies,  if the effect of the event or
condition   referred  to  in  this  subclause  (iii)  shall  be  to  cause  such
Indebtedness  to be declared to be due and payable prior to its stated  maturity
or such Contingent Obligation to become payable; or

     (i) Bankruptcy or  Insolvency.  The Company or MCI Telecom shall (i) become
insolvent  or generally  fail to pay, or admit in writing its  inability to pay,
its debts as they become  due,  subject to  applicable  grace  periods,  if any,
whether at stated maturity or otherwise, (ii) commence any proceeding or case or
file any  petition  or  answer  under any  liquidation  or  reorganization  with
creditors or any other relief under any bankruptcy, reorganization, arrangement,
insolvency,  or other proceeding or case, whether Federal or State,  relating to
the  relief of  debtors,  (iii)  acquiesce  in the  appointment  of a  receiver,
trustee,  custodian or  liquidator  for itself or a  substantial  portion of its
property,  assets or  business  or effect a plan or other  arrangement  with its
creditors, (iv) admit the material allegations of a petition filed against it in
any bankruptcy,  reorganization,  arrangement, insolvency or other proceeding or
case, whether Federal or State,  relating to the relief of debtors,  or (v) take
action to effectuate any of the foregoing; or

     (j)  Involuntary  Proceedings.  Any  involuntary  proceeding or case or any
involuntary  petition  shall be  commenced  or filed  against the Company or MCI
Telecom  under  any  bankruptcy,  insolvency  or  similar  law  or  seeking  the
dissolution,  liquidation or reorganization of the Company or MCI Telecom or the
appointment of a receiver,  trustee,  custodian or liquidator for the Company or
MCI Telecom or any writ, judgment,  warrant of attachment,  execution or similar
process shall be issued or levied against a substantial part of the Company's or
MCI  Telecom's  assets  and  any  such  proceedings  or  petition  shall  not be
dismissed, or such writ, judgment,  warrant of attachment,  execution or similar
process  shall not be released,  vacated or fully bonded  within sixty (60) days
after commencement, filing or levy; or

     (k) ERISA. (i) any ERISA Event or a failure to make a required  installment
or other  payment  (within  the meaning of Section  412(n)(1)  of the Code) with
respect to a Plan shall have  occurred,  and, 30 days after notice thereof shall
have been given to the  Company  by the  Operating  Agent or any Bank,  (A) such
ERISA  Event or failure to make a required  payment (if  correctable)  shall not
have been corrected and (B) the then Unfunded  Benefit  Liabilities of such Plan
exceed Fifty  Million  Dollars  ($50,000,000)  (or in the case of an ERISA Event
involving  the  withdrawal  of a  "substantial  employer" (as defined in Section
4001(a)(2) of ERISA),  the withdrawing  employer's  proportionate  share of such
excess shall exceed such amount);  or (ii) the Company or any ERISA Affiliate as
employer  under a  Multiemployer  Plan  shall  have made a  complete  or partial
withdrawal  from  such   Multiemployer   Plan  and  the  Plan  sponsor  of  such
Multiemployer  Plan shall have  notified  such  withdrawing  employer  that such
employer  has  incurred a  withdrawal  liability  in an amount  exceeding  Fifty
Million  Dollars  ($50,000,000)  unless  within  thirty  (30)  days  after  such
notification either (a) such liability shall be paid, (b) the Company shall have
deposited with the Operating Agent an amount  sufficient (with earnings thereon)
to pay such liability in the installments  required by such  Multiemployer  Plan
when due, or (c)  following  a request  for review of such notice of  withdrawal
liability, the amount demanded in such notice shall be reduced to an amount less
than Fifty Million Dollars ($50,000,000); or

     (l) Monetary  Judgments.  One or more final  judgments or decrees  shall be
entered by a court or courts of  competent  jurisdiction  against the Company or
MCI Telecom involving in the aggregate a liability (not paid or fully covered by
insurance) of Fifty Million Dollars ($50,000,000),  or the equivalent in another
currency or currencies,  or more,  and the same shall not have been  discharged,
vacated,  stayed or bonded pending appeal within thirty (30) days from the entry
thereof; or

     (m) Change in Control.  (i) Any "person" or "group" of persons  (within the
meaning of Section 13 or 14 of the Securities  Exchange Act of 1934, as amended)
shall  acquire  "beneficial   ownership"  (within  the  meaning  of  Rule  13d-3
promulgated by the Securities  and Exchange  Commission  under said Act) of more
than 30% of the shares of capital stock of the Company  having the power to vote
for the  election  of  directors,  or (ii)  during any period of 12  consecutive
months,  commencing  before or after the date of this Agreement and ending after
the date of this Agreement, individuals who on the first day of such period were
directors of the Company (together with any replacement or additional  directors
who shall have been  nominated  or elected by a majority  of  directors  then in
office)  shall cease to  constitute  a majority of the board of directors of the
Company;  provided,  however,  that the  consummation  of the  Merger  shall not
constitute an Event of Default under this clause (m);

then, and in any such event,

         (A) the  Operating  Agent  shall  at the  request  of,  or may with the
consent of, the Majority Banks declare the Commitments terminated, whereupon the
Commitments shall terminate; and in addition,

         (B) the  Operating  Agent  shall at the  request  of,  and may with the
consent  of, the  Majority  Banks  declare  the unpaid  principal  amount of all
outstanding  Advances,  all  interest  accrued and unpaid  thereon and all other
amounts payable hereunder and under the Notes to be immediately due and payable,
without presentment, demand, protest or further notice of any kind, all of which
are hereby expressly waived by the Company;

provided,  that upon the occurrence of any event  specified in clause (i) or (j)
above (in the case of such clause (j) upon the  expiration of the sixty (60) day
period mentioned therein),  the Commitments shall immediately  terminate and the
unpaid principal  amount of all outstanding  Advances and all interest and other
amounts  as  aforesaid  shall   immediately   become  due  and  payable  without
presentment,  demand,  protest or further  notice of any kind,  all of which are
hereby  expressly  waived by the  Company,  and  without  any further act of the
Operating Agent or any Bank.


                                  ARTICLE VIII

                                   THE AGENTS

     8.01 Appointment of the Agents.  Each Bank hereby  irrevocably  (subject to
the provisions of Section 8.09)  appoints,  designates and authorizes each Agent
to take such action on its behalf under the  provisions of this Agreement and to
exercise such powers and perform such duties as are expressly delegated to it by
the terms of this  Agreement,  together  with such powers as shall be reasonably
incidental  thereto.  Notwithstanding any provision to the contrary elsewhere in
this Agreement, the Agents shall not have any duties or responsibilities, except
those expressly set forth herein,  or any fiduciary  relationship with any Bank,
and no implied covenants,  functions,  responsibilities,  duties, obligations or
liabilities  shall be read into this Agreement or otherwise exist against either
Agent.

     8.02 Delegation of Duties of the Agents.  Each Agent may execute any of its
duties under this Agreement by or through agents, employees or attorneys-in-fact
and shall be entitled to advice of counsel  concerning all matters pertaining to
such duties.  Neither of the Agents shall be  responsible  for the negligence or
misconduct  of any agent or  attorney-in-fact  that it selects  with  reasonable
care.

     8.03 Liability of the Agents. Neither any Agent nor any of their respective
officers, directors, employees, agents, attorneys-in-fact or Affiliates shall be
(i) liable  for any action  taken or omitted to be taken by any of them under or
in  connection  with this  Agreement  (except  for its own gross  negligence  or
willful  misconduct),  or (ii) responsible in any manner to any of the Banks for
any recitals,  statements,  representations or warranties made by the Company or
any officer thereof  contained in this Agreement or in any certificate,  report,
statement or other document  referred to or provided for in, or received by such
Agent  under  or  in   connection   with,   this   Agreement  or  the  validity,
effectiveness,  genuineness,  enforceability or sufficiency of this Agreement or
any Note or for any failure of the Company to perform its obligations  hereunder
or  thereunder.  Neither  Agent  shall be under  any  obligation  to any Bank to
ascertain  or to  inquire  as to the  observance  or  performance  of any of the
agreements  contained  in, or conditions  of, this  Agreement or any Note, or to
inspect  the  properties,  books  or  records  of  the  Company  or  any  of its
Subsidiaries.

     8.04  Reliance  by the Agents.  Each Agent  shall be entitled to rely,  and
shall be fully  protected  in relying,  upon any  writing,  resolution,  notice,
consent, certificate, affidavit, letter, cablegram, telegram, telecopy, telex or
teletype message,  statement, order or other document or conversation reasonably
believed by it to be genuine and correct and to have been  signed,  sent or made
by the proper Person or Persons and upon advice and  statements of legal counsel
(including   in-house  counsel  of  such  Agent  or  counsel  to  the  Company),
independent accountants and other experts selected by such Agent. Each Agent may
deem and treat the holder of any Advance as the owner  thereof for all  purposes
unless an Assignment  Notice and Acceptance with respect thereto shall have been
filed with the Operating  Agent.  Each Agent shall be fully justified in failing
or  refusing  to take any action  under  this  Agreement  unless it shall  first
receive such advice or concurrence of the Majority Banks (or all of the Banks if
so required by Section 9.01) as it shall deem  appropriate  or it shall first be
indemnified to its  satisfaction  by the Banks against any and all liability and
expense  (except  any  such  liability  or  expense  resulting  from  its  gross
negligence  or  willful  misconduct)  which may be  incurred  by it by reason of
taking or continuing  to take any such action.  Each Agent shall in all cases be
fully protected in acting, or in refraining from acting, under this Agreement in
accordance  with a request or consent of the Majority Banks (or all of the Banks
if so required by Section 9.01) pursuant to Article IX, and such request and any
action  taken or failure to act pursuant  thereto  shall be binding upon all the
Banks and all future holders of the Advances.

     8.05  Notice of  Default.  Neither  of the  Agents  shall be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default (except
that the  Operating  Agent  shall be  deemed to have  knowledge  of any Event of
Default  occurring by reason of a failure by the Company to make a payment to or
through the Operating Agent under this Agreement or any Note), unless such Agent
shall  have  received  notice  from a Bank  or the  Company  referring  to  this
Agreement,  describing  such  Default or Event of Default and stating  that such
notice is a "notice of  default".  In the event that the  Operating  Agent shall
receive  such a notice,  the  Operating  Agent shall give notice  thereof to the
Banks.  The Operating  Agent shall take such action with respect to such Default
or Event of Default as shall be requested by the  Majority  Banks in  accordance
with Article VII; provided, that unless and until the Operating Agent shall have
received such a request, the Operating Agent may (but shall not be obligated to)
take such  action,  or refrain  from taking such  action,  with  respect to such
Default or Event of Default as it shall deem  advisable in the best interests of
the Banks.

     8.06 Credit  Decision.  Each Bank expressly  acknowledges  that neither any
Agent  nor  any of  their  respective  Affiliates  nor  any  officer,  director,
employee, agent or attorney-in-fact of any of them have made any representations
or  warranties  to it and that no act by either of the Agents  hereafter  taken,
including  any  review  of the  affairs  of the  Company,  shall  be  deemed  to
constitute any  representation  or warranty by such Agent to any Bank. Each Bank
represents to the Agents that it has,  independently  and without  reliance upon
the Agents or any other Bank, and based on such documents and  information as it
has deemed  appropriate,  made its own appraisal of and  investigation  into the
business,   operations,    property,   financial   and   other   condition   and
creditworthiness  of the Company and made its own  decision to make its Advances
and to enter  into  this  Agreement.  Each Bank  also  represents  that it will,
independently  and without reliance upon either of the Agents or any other Bank,
and based on such documents and information as it shall deem  appropriate at the
time,  continue to make its own credit  analysis,  appraisals  and  decisions in
taking  or  not  taking   action  under  this   Agreement,   and  to  make  such
investigations  as it shall deem  necessary to inform itself as to the business,
operations,  prospects,  assets,  properties,  financial or other  condition and
creditworthiness of the Company. Except for notices, reports and other documents
expressly  required  to be  furnished  to the  Banks  by  either  of the  Agents
hereunder,  neither Agent shall have any duty or  responsibility  to provide any
Bank with any credit or other information  concerning the business,  operations,
prospects,   properties,   assets,   condition   (financial   or  otherwise)  or
creditworthiness  of the Company which may come into the possession of either of
the Agents or any of their respective officers,  directors,  employees,  agents,
attorneys-in-fact or Affiliates.

     8.07  Indemnification.  The  Banks  agree to  indemnify  each  Agent in its
capacity  as such (to the extent not  reimbursed  by or on behalf of the Company
and without limiting the obligation of the Company to do so), ratably  according
to their respective  Commitment  Percentages (or, if the Commitments  shall have
been  terminated  in  full,  but  Advances  shall  remain  outstanding,  ratably
according to the then aggregate  unpaid amount of  outstanding  Advances made by
them), from and against any and all liabilities,  obligations,  losses, damages,
penalties,  actions,  judgments,  suits, costs, expenses or disbursements of any
kind  whatsoever  which may at any time  (including  at any time  following  the
payment of the  Advances)  be imposed on,  incurred by or asserted  against such
Agent in any way relating to or arising out of this Agreement,  or any documents
contemplated by or referred to herein or the transactions contemplated hereby or
any action taken or omitted by such Agent under or in connection with any of the
foregoing;  provided, that no Bank shall be liable for the payment to such Agent
of any portion of such liabilities,  obligations,  losses,  damages,  penalties,
actions,  judgments,  suits, costs, expenses or disbursements resulting from the
gross negligence or willful misconduct of such Agent.  Without limitation of the
foregoing,  each  Bank  agrees  to  reimburse  each  Agent  (to the  extent  not
reimbursed by or on behalf of the Company and without limiting the obligation of
the Company to do so) promptly upon demand for its Commitment  Percentage of any
out-of-pocket  expenses (including  reasonable attorneys' fees and the allocated
cost  of  staff  counsel)   incurred  by  such  Agent  in  connection  with  the
preparation,  execution, delivery,  administration,  modification,  amendment or
enforcement (whether through  negotiations,  legal proceedings or otherwise) of,
or legal advice in respect of rights or  responsibilities  under, this Agreement
or any Note, except to the extent such expenses result from the gross negligence
or willful  misconduct of such Agent.  The agreements in this Section 8.07 shall
survive the  termination of the  Commitments and the payment of the Advances and
all other amounts payable under this Agreement.

     8.08 Bank of  America  in its  Individual  or  Separate  Capacity.  Bank of
America and its  Affiliates  may make loans to, issue  letters of credit for the
account of, accept  deposits  from,  acquire  equity  interests in and generally
engage in any kind of business  with the Company as though Bank of America  were
not acting as Competitive Bid Agent and Operating Agent hereunder.  With respect
to the  Advances  made or  renewed by it,  Bank of  America  shall have the same
rights and powers under this  Agreement as any Bank and may exercise the same as
though it were not acting as Competitive Bid Agent and Operating  Agent, and the
terms  "Bank" and  "Banks"  shall  include  Bank of  America  in its  individual
capacity.

     8.09 Successor  Agents.  Each Agent may, and at the request of the Majority
Banks  shall,  resign as an Agent upon thirty (30) days'  advance  notice to the
Banks,  whereupon the Majority Banks shall, after consultation with the Company,
appoint  from among the Banks a successor  agent for the Banks.  If no successor
Agent shall have been so appointed by the Majority Banks and shall have accepted
such  appointment  within thirty (30) days after the retiring  Agent's giving of
notice of  resignation,  then the  retiring  Agent may,  on behalf of the Banks,
appoint a successor  Agent,  having  combined  capital,  surplus  and  undivided
profits of not less than Two Hundred Million Dollars  ($200,000,000)  and having
its principal  office or a Lending Office in the United States of America.  Upon
such  successor  agent  succeeding  to the  rights,  powers  and  duties  of the
resigning  Agent,  the term  "Agent" or  "Competitive  Bid Agent" or  "Operating
Agent" or (where  applicable to its role as an Agent) "Bank of America",  as the
case may be, shall mean such successor agent effective upon its appointment, and
the former  Agent's  rights,  powers and duties as an Agent shall be terminated,
without any other or further act or deed on the part of such former Agent or any
of the  parties to this  Agreement  or any  holders of the  Advances.  After any
retiring  Agent's  resignation  hereunder as an Agent,  the  provisions  of this
Section 8.09 shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was an Agent  under  this  Agreement.  

     8.10 Syndication Agent,  Co-Documentation  Agents,  Co-Agents.  None of the
Banks  identified on the facing page or signature pages of this Agreement as the
"syndication  agent", a "co-documentation  agent" or a "co-agent" shall have any
right, power, obligation, liability, responsibility or duty under this Agreement
other  than  those  applicable  to all  Banks  as  such.  Without  limiting  the
foregoing,  none of the  Banks  so  identified  as the  "syndication  agent",  a
"co-documentation  agent" or a  "co-agent"  shall  have or be deemed to have any
fiduciary  relationship  with any Bank. Each Bank  acknowledges  that it has not
relied,  and will not rely,  on any of the Banks so  identified  in  deciding to
enter into this Agreement or in taking or not taking action hereunder.


                                   ARTICLE IX

                                  MISCELLANEOUS

     9.01  Amendments  and Waivers.  No amendment or waiver of any  provision of
this  Agreement  and no consent  with  respect to any  departure  by the Company
therefrom,  shall in any event be effective  unless the same shall be in writing
and  signed by the  Majority  Banks and the  Company  and such  waiver  shall be
effective only in the specific  instance and for the specific  purpose for which
given;  provided,  that no such waiver,  amendment,  or consent shall, unless in
writing and signed by all the Banks do any of the following:

                    (a)      increase the Commitment of any Bank or subject any
 Bank to any additional obligations;

                    (b)  postpone  or extend the  Termination  Date or any other
scheduled  maturity date for any payment of principal,  interest,  fees or other
amounts due hereunder or under any Note;

                    (c)      reduce the  principal  of, or the rate of  interest
on any  Advance or of any fees or other amounts payable hereunder or under
any Note;

                    (d)      change  the  Commitment  Percentages  or  the  
definition  of  Majority  Banks  or the percentage of Banks required to take 
any action under any Loan Document; or

                    (e)      amend this Section 9.01;

and provided,  further,  that no amendment,  waiver or consent shall,  unless in
writing  and signed by an Agent in addition to the  Majority  Banks,  affect the
rights or duties of such Agent under this Agreement.

     9.02 Notices. All notices,  requests and other communications  provided for
hereunder shall be in writing (including telegraphic, telex, telecopier or cable
communication) and mailed, telegraphed, telexed or delivered to the Company, the
Banks and the Agents as follows:

The Company:                    MCI Communications Corporation
                                     1801 Pennsylvania Avenue N.W.
                                     Washington, D.C. 20006
                                     Attention: Tom Quinn, Assistant Treasurer
                                     Telephone: (202) 887-2858
                                     Telecopier: (202) 887-2846

with copy to:                   MCI Communications Corporation
                                     1801 Pennsylvania Avenue N.W.
                                     Washington, D.C. 20006
                                     Attention: General Counsel
                                     Telephone: (202) 887-2016
                                     Telecopier: (202) 887-2047

The Banks:                           The addresses set forth opposite
                                         their respective names in Schedule II.

The Operating
         Agent:                 Notices pursuant to Article II
                                     (with copies of notices pursuant to
                                     Section 2.06 to the New York address
                                     set forth below):

                                     Bank of America National Trust
                                       and Savings Association,
                                       as Operating Agent
                                     1455 Market Street - 12th Floor
                                     San Francisco, California 94103
                                     Attention:  Agency Administrative
                                                              Services #5596
                                     Telecopier:  (415) 436-2700

                                     All other notices:

                                     Bank of America National Trust
                                       and Savings Association,
                                       as Operating Agent
                                     335 Madison Avenue - 5th Floor
                                     New York, New York 10017
                                     Attention:      Doug Bontemps
                                     Telephone:      (212) 503-8074
                                     Telecopier:     (212) 503-7984

The Competitive
 Bid Agent:                     Notices pursuant to Article II:

                                     Bank of America National Trust
                                       and Savings Association,
                                       as Competitive Bid Agent
                                     1455 Market Street - 12th Floor
                                     San Francisco, California 94103
                                     Attention:  Agency Administrative
                                                              Services #5596
                                     Telecopier:  (415) 436-2700

                                     All other notices:

                                     Bank of America National Trust
                                       and Savings Association,
                                       as Competitive Bid Agent
                                     335 Madison Avenue - 5th Floor
                                     New York, New York 10017
                                     Attention:      Doug Bontemps
                                     Telephone:      (212) 503-8074
                                     Telecopier:     (212) 503-7984

or, as to each party at such other  address as shall be designated by such party
in a written  notice to the other parties.  All such notices and  communications
shall,  when mailed,  telegraphed,  telexed,  cabled or sent by  telecopier  and
confirmed by telephone, be effective four (4) Business Days after deposit in the
mails, when delivered to the telegraph  company,  confirmed by telex answerback,
delivered to the cable  company,  or  transmitted by telecopier and confirmed by
telephone, respectively, except that notices pursuant to Article II or VII shall
not be effective until received by the Operating Agent or Competitive Bid Agent,
as the case may be.

     9.03 No Waiver; Cumulative Remedies. No failure to exercise and no delay in
exercising,  on the part of either of the Agents or any Bank, any right, remedy,
power or privilege  hereunder,  shall operate as a waiver thereof; nor shall any
single or partial exercise of any right,  remedy,  power or privilege  hereunder
preclude  any other or further  exercise  thereof or the  exercise  of any other
right, remedy, power or privilege. The rights,  remedies,  powers and privileges
herein provided are cumulative and not exclusive of any rights, remedies, powers
and privileges provided by law.

     9.04 Costs and Expenses. The Company agrees:

                    (a) to pay or reimburse the Agents, within fifteen (15) days
after demand, for all their reasonable out-of-pocket costs and expenses incurred
in  connection  with  the  preparation,  execution  and  delivery  of,  and  any
amendment,  supplement or modification  to, this Agreement and any Notes and any
other  documents  prepared  in  connection   herewith  or  therewith,   and  the
consummation of the transactions contemplated hereby and thereby,  including the
reasonable fees and  out-of-pocket  expenses of counsel to the Agents (including
the allocated cost of in-house counsel) with respect thereto; provided, that any
demand for payment or reimbursement of any of the foregoing shall be accompanied
by an itemized statement or statements  covering the related costs,  expenses or
allocated cost; and

                    (b) to pay or  reimburse  each Bank and each  Agent,  within
fifteen (15) days after  demand,  for all their costs and  expenses  incurred in
connection  with the  enforcement  or  preservation  of any rights  against  the
Company under this  Agreement or any Note,  whether  related to legal actions or
proceedings, bankruptcy or reorganization proceedings or other action, including
the fees and out-of-pocket  expenses of counsel (including the allocated cost of
in-house counsel) to each Agent and to each of the several Banks; provided, that
(i) any demand for payment or  reimbursement  of any of the  foregoing  shall be
accompanied by an itemized  statement or statements  covering the related costs,
expenses  or  allocated  cost  and  (ii) no such  costs  or  expenses  shall  be
reimbursed  for any legal action in which the  existence of any Default or Event
of  Default  shall  have  been  alleged  if in such  action  it shall  have been
determined that no such Default or Event of Default existed.

     9.05 Indemnity.  The Company agrees to pay, and indemnify and hold harmless
each Bank, each Agent and each of their respective officers,  directors,  agents
and employees  (each,  an  "Indemnified  Person") from and against,  any and all
other liabilities,  obligations,  losses, damages, penalties,  judgments, costs,
expenses or disbursements of any kind or nature  whatsoever  (including the fees
and  out-of-pocket  expenses  of  counsel  and the  allocated  cost of  in-house
counsel)  arising  from  any  claim,  action,  suit  or  proceeding  against  or
investigation  of  such  Indemnified  Person  with  respect  to  the  execution,
delivery, enforcement,  performance and administration of this Agreement and any
other Loan  Documents or otherwise  related to this Agreement or the Advances or
the use of the  proceeds  thereof  (whether or not any  Indemnified  Person is a
party thereto) (all the foregoing, collectively, the "Indemnified Liabilities");
provided, that the Company shall have no obligation hereunder to any Indemnified
Person with respect to Indemnified Liabilities arising from the gross negligence
or willful misconduct of such Indemnified Person. The agreements in Section 9.04
and this Section 9.05 shall survive  termination of the  Commitments and payment
of the Advances and all other amounts payable under this Agreement.

     9.06 Successors and Assigns. This Agreement shall be binding upon and inure
to the  benefit  of the  parties  hereto  and their  respective  successors  and
assigns,  except that the Company may not  (unless  permitted  by Section  6.03)
assign or transfer any of its rights or obligations under this Agreement without
the prior written consent of each Bank.

     9.07 Assignments, Participations, etc.

                    (a) Any Bank  (x) may,  with  the  written  consents  of the
Company and the Operating Agent,  which consent of the Operating Agent shall not
be  unreasonably  withheld,  at any time assign and  delegate to one (1) or more
banks or other Banks or to an Affiliate of such assigning Bank,  which Affiliate
shall not itself be a bank,  provided that such  Affiliate has a net worth of at
least Seventy-Five  Million Dollars  ($75,000,000),  and (y) may, with notice to
the  Operating  Agent and the  Company but without the consent of the Company or
either of the Agents,  assign and  delegate to any  Affiliate of such Bank which
shall itself be a bank having a combined capital,  surplus and undivided profits
of at least Seventy-Five Million Dollars ($75,000,000) (each such bank, assignee
Bank or Affiliate, as the case may be, being an "Assignee"),  all or any part of
the Advances or the  Commitments or any other rights or obligations of such Bank
hereunder in a minimum amount of Twenty Million Dollars ($20,000,000); provided,
that the Company and the Agents shall be entitled to continue to deal solely and
directly with such assigning  Bank in connection  with the interests so assigned
to an Assignee  until (i) the Operating  Agent shall have received an Assignment
Notice and  Acceptance  in the form of Exhibit G duly  executed by the assigning
Bank,  its Assignee and the Company,  (ii) the processing  fees described  below
shall have been paid and (iii) the  assigning  Bank shall have  delivered to the
Operating  Agent any Notes that shall be  subject to such  assignment.  From and
after the date (an  "Assignment  Effective  Date") on which the Operating  Agent
shall notify the Company and the  assigning  Bank that (i), (ii) and (iii) above
shall have  occurred  and all  consents (if any)  required  under the  preceding
sentence shall have been given:  (x) the Assignee  thereunder shall be deemed to
be a party hereto and, to the extent that rights and obligations hereunder shall
have been  assigned  to it pursuant to such  Assignment  Notice and  Acceptance,
shall  have the  rights  and  obligations  of a Bank  under  the Loan  Documents
(including  the right to receive any  facility  fee payable  pursuant to Section
2.10(a));  and (y) the  assigning  Bank  shall,  to the extent  that  rights and
obligations  hereunder  have been  assigned by it  pursuant  to such  Assignment
Notice  and  Acceptance,   relinquish  its  rights  and  be  released  from  its
obligations  under the Loan Documents (and, in the case of an Assignment  Notice
and  Acceptance  covering all or its  remaining  portion of an assigning  Bank's
rights and obligations  under the Loan Documents,  such Bank shall cease to be a
party  thereto,  except as to  Sections  2.15,  2.17 and 9.05).  Within ten (10)
Business  Days after its  receipt of notice by the  Operating  Agent that it has
accepted an executed Assignment Notice and Acceptance, the Company shall execute
and deliver to the Operating Agent in exchange for any surrendered  Notes, a new
Pro Rata Note to the order of the Assignee in an amount equal to the  Commitment
assumed  by it  pursuant  to such  Assignment  Notice and  Acceptance  and a new
Competitive  Bid Note to the order of the Assignee  and, if the  assigning  Bank
shall have retained a portion of its Commitment  hereunder,  a new Pro Rata Note
to the  order of the  assigning  Bank in an  amount  equal to the  amount of the
Commitment retained by it hereunder.  The assigning Bank or Assignee shall pay a
processing  fee to the  Operating  Agent in the amount of Two  Thousand  Dollars
($2,000) in respect of each assignment. The Company shall have no responsibility
for the  payment  of any such  fee.  Notwithstanding  the  foregoing,  any Bank,
without notice to or consent of the Company or the Operating  Agent, may assign,
as  collateral,  any of its rights  (including  rights to payments of  principal
and/or interest on the Notes) under this Agreement to any Federal Reserve Bank.

                    (b) Any Bank may at any time  sell to one (1) or more  banks
or  other  entities  (each  a  "Participant")  participating  interests  in  any
Advances,  the  Commitment  of such  Bank or any  other  interest  of such  Bank
hereunder; provided, that (i) such Bank's obligations under this Agreement shall
in such event remain unchanged,  (ii) such Bank shall remain solely  responsible
for the performance of such obligations,  (iii) the Company and the Agents shall
continue  to deal solely and  directly  with such Bank in  connection  with such
Bank's rights and obligations under this Agreement,  (iv) the Company shall have
no  responsibility   for  the  cost  of  effecting  or  administering  any  such
participation and (v) no Bank shall transfer,  grant or assign any participating
interest under which the Participant  shall have rights to approve any amendment
to, or any consent or waiver with respect to this Agreement except to the extent
such  amendment,  consent or waiver would (A) postpone or extend the Termination
Date or the  scheduled  maturity date of any Advance or the date for the payment
of the  principal  of or  interest  on  any  Advance  hereunder  in  which  such
Participant  shall be  participating,  (B) reduce any amount of principal of any
Advance hereunder in which such Participant  shall be participating,  (C) reduce
the interest rate applicable to any Advance  hereunder in which such Participant
shall be  participating,  or (D) reduce any fees payable hereunder in which such
Participant shall be participating.  In the case of any such participation,  the
Participant shall not have any rights under this Agreement, or any of the Notes,
and all amounts payable by the Company  hereunder shall be determined as if such
Bank had not sold such participation, except that the Company agrees that (a) if
amounts  outstanding  under this  Agreement or any of the Notes shall be due and
unpaid,  or shall have been  declared or shall have become due and payable  upon
the occurrence of an Event of Default,  each Participant shall be deemed to have
the right of set-off in respect of its  participating  interest in amounts owing
under this  Agreement  to the same extent as if the amount of its  participating
interest  were owing  directly to it as a lender under this  Agreement,  and (b)
each  Participant  shall be entitled to the benefits of Sections 2.15,  2.17 and
2.18 with  respect to its  participating  interest  in the  Commitments  and the
Advances outstanding from time to time;  provided,  that no Participant shall be
entitled to receive  any  greater  amount  pursuant  to such  Sections  than the
selling Bank would have been entitled to receive in respect of the amount of the
participating interest sold by such selling Bank to such Participant had no such
sale occurred.

     9.08  Confidentiality.  Each Bank  agrees  to take  normal  and  reasonable
precautions  and  exercise  due  care to  maintain  the  confidentiality  of all
non-public  information  provided to it by the Company or by the Operating Agent
on the  Company's  behalf in  connection  with this  Agreement  and  agrees  and
undertakes  that  neither  it nor  any of its  Affiliates  shall  use  any  such
information  for any purpose or in any manner other than in connection with this
Agreement (for purposes of this Agreement information may be treated by any Bank
as public if such  information  (a) was or becomes  generally  available  to the
public or (b) was or becomes available on a non-confidential basis from a source
other than the Company or its advisors provided that such source is not known by
such Bank to be bound by a  confidentiality  agreement with, or an obligation of
confidentiality to, the Company).  Any Bank may disclose such information (i) at
the  request  of  any  bank  regulatory  authority  or  in  connection  with  an
examination  of such Bank by any such  authority;  (ii)  pursuant to subpoena or
other court process, or to the extent required in connection with any litigation
between such Bank and the Company provided that such disclosure is subject to an
appropriate  protective order (obtained by the Company) if such protective order
is available;  (iii) when  otherwise  required to do so in  accordance  with the
provisions of any  applicable  law;  (iv) at the express  direction of any other
agency of any State of the United States of America or of any other jurisdiction
in which  such  Bank  conducts  its  business;  (v) to such  Bank's  independent
auditors and other  professional  advisors;  (vi) to such Bank's  Affiliates and
(vii) to any Participant or Assignee (each, a "Transferee")  and any prospective
Transferee;  provided,  that (A) prior to any  disclosure  by a Bank pursuant to
clause (ii), (iii),  (iv) or (v) such Bank shall, to the extent  practicable and
lawful,  provide  advance  notice to the Company of such  disclosure and (B) any
such  disclosure to a Transferee or prospective  Transferee  shall be subject to
the condition  that (I) unless a Default shall have occurred and be  continuing,
the  Company  shall  give  its  prior  written   consent  (which  shall  not  be
unreasonably   withheld)  to  disclosures  to  any  particular   Participant  or
prospective  Participant (any such consent shall apply to all such disclosures),
and (II) such Transferee or prospective  Transferee shall execute and deliver to
such Bank a confidentiality agreement substantially in the form of Exhibit H and
a copy of such agreement shall be sent by such Bank to the Company prior to such
disclosure  (but the  sending  of such copy to the  Company  shall not alter the
effect of any provision of Section 9.07(b)).

     9.09 Sharing; Set-off

                    (a) If any  Bank (a  "benefited  Bank")  shall  at any  time
receive any payment of all or part of the principal of any of its  Advances,  or
of any interest thereon, or of any fee payable hereunder, whether voluntarily or
involuntarily,  by set-off,  pursuant  to events,  cases or  proceedings  of the
nature  referred to in paragraph (i) or (j) of Article VII, or  otherwise,  in a
greater  proportion than that of any payment to any other Bank in respect of the
principal  of  such  other  Bank's  Advances,  or  interest  thereon,  or of any
corresponding  fee payable to such Bank  hereunder,  such  benefited  Bank shall
purchase  for cash from each such other Bank such  portion of such other  Bank's
Advance or Advances or interest or fees due as shall be  necessary to cause such
benefited  Bank to share the  excess  payment  ratably  with each of the  Banks;
provided,  that if all or any  portion of such  excess  payment or  benefits  is
thereafter  recovered by or on behalf of the Company from such  benefited  Bank,
such purchase shall be rescinded,  and the purchase price and benefits returned,
to the extent of such recovery,  but without  interest.  The Company agrees that
each Bank so  purchasing  a portion of another  Bank's  Advance may exercise all
rights of payment  (including rights of set-off) with respect to such portion as
fully as if such Bank were the direct holder of such portion.

                    (b) In  addition  to any  rights and  remedies  of the Banks
provided by law, upon the occurrence and during the  continuance of any Event of
Default each Bank shall have the right, without prior notice to the Company, any
such  notice  being  expressly  waived  by the  Company  to the  fullest  extent
permitted by applicable 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 Bank to or for the credit or the account
of the Company  against any and all  obligations of the Company now or hereafter
existing  under  this  Agreement  and the Notes and  Advances  held by such Bank
irrespective  of whether or not the Operating Agent or such Bank shall have made
demand under this  Agreement or any Note and although  such  obligations  may be
unmatured.  Each Bank agrees  promptly  to notify the Company and the  Operating
Agent after any such set-off and application made by such Bank;  provided,  that
the failure to give such notice  shall not affect the  validity of such  set-off
and application. The rights of each Bank under this Section 9.09 are in addition
to the other rights and remedies  (including other rights of set-off) which such
Bank may have under applicable law.

     9.10  Notification  of  Addresses,  Lending  Offices,  etc. Each Bank shall
notify the  Operating  Agent in writing of any  changes in the  address to which
notices to such Bank  should be  directed,  of  addresses  of any of its Lending
Offices,  of payment  instructions  in respect of all  payments to be made to it
hereunder and of such other  administrative  information as the Operating  Agent
shall reasonably request.

     9.11 Delivery of Documents and Notices.  Promptly after  receiving from the
Company any documents or notices delivered to the Operating Agent hereunder, the
Operating Agent will deliver a copy thereof to the Banks.

     9.12 Counterparts;  Effectiveness. This Agreement may be executed by one or
more of the parties to this Agreement on any number of separate counterparts and
all of said  counterparts  taken  together shall be deemed to constitute one and
the same  instrument.  This Agreement shall become  effective when the Operating
Agent  shall have  received  counterparts  hereof  signed by all of the  parties
hereto  (or,  in the case of any Bank from which a  counterpart  executed  by it
shall  not  have  been  received,   the  Operating  Agent  shall  have  received
telegraphic,  telex or other written confirmation from such Bank of execution of
a counterpart hereof by such Bank). A set of the copies of this Agreement signed
by all the parties shall be lodged with the Company and the Operating Agent.

     9.13 Severability.  The illegality or  unenforceability of any provision of
this Agreement or any instrument or agreement  required  hereunder  shall not in
any way  affect  or impair  the  legality  or  enforceability  of the  remaining
provisions of this Agreement or any instrument or agreement required hereunder.

     9.14 Jurisdiction. The Company hereby irrevocably and unconditionally:

                    (i) submits for itself and its  property in any legal action
or proceeding  relating to this  Agreement or any Note, or for  recognition  and
enforcement of any judgment in respect  thereof,  to the  non-exclusive  general
jurisdiction  of the  courts of the State of New York,  the courts of the United
States of America for the Southern  District of New York,  and appellate  courts
from any thereof;

                    (ii)  consents  that any such  action or  proceeding  may be
brought in such courts,  and waives any  objection  that it may now or hereafter
have to the venue of any such  action or  proceeding  in any such  court or that
such action or proceeding was brought in an inconvenient forum and agrees not to
plead or claim the same;

                    (iii)  agrees that  service of process in any such action or
proceeding  may be effected by mailing a copy thereof by registered or certified
mail (or any  substantially  similar  form of  mail),  postage  prepaid,  to the
Company  at its  address,  and to the  attention  of the  officer,  set forth in
Section 9.02 or at such other  address of which the  Operating  Agent shall have
been notified pursuant thereto; and

                    (iv) agrees that  nothing  herein  shall affect the right to
effect  service of process in any other  manner  permitted by law or shall limit
the right to sue in any other jurisdiction.

     9.15 Waiver of Trial by Jury. THE COMPANY,  THE AGENTS AND THE BANKS HEREBY
IRREVOCABLY AND UNCONDITIONALLY  WAIVE THE RIGHT TO TRIAL BY JURY IN ANY ACTION,
SUIT OR PROCEEDING  RELATED IN ANY WAY TO THIS  AGREEMENT OR ANY OF THE NOTES IN
WHICH THE  COMPANY,  EITHER OF THE  AGENTS OR ANY OF THE BANKS  SHALL BE ADVERSE
PARTIES.

     9.16 Governing  Law. THIS  AGREEMENT AND THE OTHER LOAN DOCUMENTS  SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE.




                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]




<PAGE>


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

                                        MCI COMMUNICATIONS CORPORATION


                                        By:
                                        Title:


                                        BANK OF AMERICA NATIONAL TRUST
                                        AND SAVINGS ASSOCIATION,
                                         as Competitive Bid Agent


                                        By:
                                        Title:


                                        BANK OF AMERICA NATIONAL TRUST
                                        AND SAVINGS ASSOCIATION,
                                         as Operating Agent


                                        By:
                                        Title:


                                        CITIBANK, N.A.,
                                         as Syndication Agent


                                        By:
                                        Title:


                                        THE CHASE MANHATTAN BANK,
                                         as Co-Documentation Agent


                                        By:
                                        Title:

                                        NATIONSBANK OF TEXAS, N.A.,
                                         as Co-Documentation Agent


                                        By:
                                        Title:


<PAGE>




                                        THE BANK OF NEW YORK,
                                         as Co-Agent


                                        By:
                                        Title:


                                        THE BANK OF NOVA SCOTIA,
                                         as Co-Agent


                                        By:
                                        Title:


                                        THE FIRST NATIONAL BANK OF
                                        CHICAGO, as Co-Agent


                                        By:
                                        Title:


                                        MELLON BANK, N.A., as Co-Agent


                                        By:
                                        Title:


                                        MORGAN GUARANTY TRUST COMPANY
                                        OF NEW YORK, as Co-Agent


                                        By:
                                        Title:








                                        THE BANKS:

                                        BANK OF AMERICA NATIONAL TRUST
                                        AND SAVINGS ASSOCIATION



                                        By:
                                        Title:


                                        THE CHASE MANHATTAN BANK


                                        By:
                                        Title:


                                        CITIBANK, N.A.


                                        By:
                                        Title:


                                        NATIONSBANK OF TEXAS, N.A.


                                        By:
                                        Title:


                                        THE BANK OF NEW YORK


                                        By:
                                        Title:


                                        BANK OF NOVA SCOTIA


                                        By:
                                        Title:

                                        THE FIRST NATIONAL BANK OF
                                        CHICAGO


                                        By:
                                        Title:



                                        MELLON BANK, N.A.


                                        By:
                                        Title:


                                        MORGAN GUARANTY TRUST COMPANY
                                        OF NEW YORK


                                        By:
                                        Title:


                                        THE FUJI BANK LIMITED,
                                        NEW YORK BRANCH


                                        By:
                                        Title:


                                        THE SUMITOMO BANK, LIMITED,
                                        NEW YORK BRANCH


                                        By:
                                        Title:


                                        THE BANK OF TOKYO-MITSUBISHI,
                                        LTD., NEW YORK BRANCH


                                        By:
                                        Title:


                                        WELLS FARGO BANK, N.A.


                                        By:
                                        Title:


                                        By:
                                        Title:


                                        COMERICA BANK


                                        By:
                                        Title:


                                        THE DAI-ICHI KANGYO BANK, LTD.


                                        By:
                                        Title:


                                        DEUTSCHE BANK AG, NEW YORK
                                        AND/OR CAYMAN ISLANDS BRANCHES


                                        By:
                                        Title:


                                        By:
                                        Title:

                                        WACHOVIA BANK OF GEORGIA, N.A.


                                        By:
                                        Title:


                                        BANQUE NATIONALE DE PARIS


                                        By:
                                        Title:


                                        By:
                                        Title:


                                        BARCLAYS BANK PLC


                                        By:
                                        Title:


                                        CIBC INC.


                                        By:
                                        Title:


                                        FIRST NATIONAL BANK OF MARYLAND


                                        By:
                                        Title:


                                        LTCB TRUST COMPANY


                                        By:
                                        Title:

                                        THE SANWA BANK LTD. -
                                        NEW YORK BRANCH


                                        By:
                                        Title:


                                        SUNTRUST BANK,
                                        CENTRAL FLORIDA, N.A.


                                        By:
                                        Title:


                                        By:
                                        Title:


                                        TORONTO-DOMINION (NEW YORK),
                                        INC.


                                        By:
                                        Title:


                                        THE TOYO TRUST & BANKING CO.,
                                        LTD., NEW YORK BRANCH


                                        By:
                                        Title:


                                        By:
                                        Title:


                                        UNION BANK OF SWITZERLAND,
                                        NEW YORK BRANCH


                                        By:
                                        Title:


                                        By:
                                        Title:


                                        SIGNET BANK


                                        By:
                                        Title: