EXHIBIT 10.39


                           LOAN AND SECURITY AGREEMENT


     This LOAN AND SECURITY AGREEMENT ("Agreement"), is dated as of December 31,
1998 (the "Closing Date"), by and between the following parties:


LENDER/SECURED PARTY: NTFC  CAPITAL  CORPORATION,  a  Delaware  corporation with
                    offices at 501 Corporate Centre Drive,  Franklin,  Tennessee
                    37067 ("Lender")


BORROWER/DEBTOR:    STARTEC  GLOBAL  COMMUNICATIONS   CORPORATION,   a  Maryland
                    corporation  with its  principal  place of business at 10411
                    Motor City Drive, Bethesda, Maryland ("Borrower")


This Agreement  includes the general terms and conditions  contained  herein and
all the exhibits and schedules  attached  hereto,  all of which are incorporated
herein.  In the event of an  express  conflict  between  the  general  terms and
conditions  and any exhibit or schedule,  the  additional  terms and  conditions
stated in the schedule shall control.

By  executing  this  Agreement,  Lender  agrees to make loans to  Borrower,  and
Borrower  agrees to borrow from Lender and to provide  collateral to secure such
loans, all on the terms and conditions set forth herein.


IN WITNESS  WHEREOF,  the parties  have  executed  this  Agreement by their duly
authorized representatives:


LENDER:                             BORROWER:
-------                             ---------

NTFC CAPITAL CORPORATION   STARTEC GLOBAL COMMUNICATIONS CORPORATION

BY:                                         BY:                                 
  --------------------------------            ----------------------------------
TITLE:                              TITLE:                                      
     -----------------------------        --------------------------------------
DATE:                               DATE:                                       
     -----------------------------       ---------------------------------------



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                                TABLE OF CONTENTS
                                -----------------
                                                                            Page
                                                                            ----
ARTICLE 1: DEFINITIONS
         1.01.    Certain Definitions......................................  1
         1.02.    Accounting Principles; Subsidiaries......................  8
         1.03.    UCC Terms................................................  8
         1.04.    General Construction; Captions...........................  8
         1.05.    References to Documents and Laws.........................  8

ARTICLE 2: LOANS
         2.01.    Commitment...............................................  9
         2.02.    Note and Payment Terms...................................  9
         2.03.    Procedures for Borrowing..................................10
         2.04.    Prepayments.............................................. 11
         2.05.    Computation of Interest.................................. 12
         2.06.    Payments................................................. 12
         2.07.    Indemnity................................................ 12
         2.08.    Use of Proceeds.......................................... 12
         2.09.    Fees..................................................... 12
         2.10.    Lender's Expenses........................................ 13

ARTICLE 3: COLLATERAL AND SECURITY AGREEMENT
         3.01.    Grant of Security Interest............................... 13
         3.02.    Priority of Security Interests........................... 14
         3.03.    Further Documentation; Pledge of Instruments............. 14
         3.04.    Further Identification of Collateral..................... 14
         3.05.    Remedies................................................. 14
         3.06.    Standard of Care......................................... 14
         3.07.    Advances to Protect Collateral........................... 15
         3.08.    License to Use........................................... 15
         3.09.    Subsidiary Guarantees.................................... 15

ARTICLE 4: REPRESENTATIONS AND WARRANTIES
         4.01.    Organization and Qualification........................... 15
         4.02.    Authority and Authorization.............................. 15
         4.03.    Execution and Binding Effect............................. 15
         4.04.    Governmental Authorizations.............................. 16
         4.05.    Regulatory Authorizations................................ 16
         4.06.    Material Agreement; Absence of Conflicts................. 16
         4.07.    No Restrictions.......................................... 16
         4.08.    Financial Statements..................................... 16
         4.09.    Financial Accounting Practices........................... 17
         4.10.    Accurate and Complete Disclosure......................... 17
         4.11.    No Event of Default; Compliance with Material 
                  Agreements............................................... 17
         4.12.    Litigation............................................... 17
         4.13.    Rights to Property....................................... 17
         4.14.    Financial Condition...................................... 17
      
   
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         4.15.    Taxes.................................................... 17
         4.16.    No Material Adverse Change............................... 18
         4.17.    No Regulatory Event...................................... 18
         4.18.    Trade Relations.......................................... 18
         4.19.    No Brokerage Fees........................................ 18
         4.20.    Margin Stocks; Regulations U and X .......................18
         4.21.    Intentionally Deleted.................................... 18
         4.22.    Intentionally Deleted.................................... 18
         4.23.    Security Interests....................................... 18
         4.24.    Place of Business........................................ 18
         4.25.    Location of Collateral................................... 19
         4.26.    Clear Title To Collateral................................ 19
         4.27.    Assumed Names............................................ 19
         4.28.    Intentionally Deleted.................................... 19
         4.29.    Nortel Purchase Agreement................................ 19
         4.30.    Subsidiaries of Borrower................................. 19

ARTICLE 5: CONDITIONS OF CLOSING
         5.01.    Closing Certificates..................................... 19
         5.02     Opinions of Counsel...................................... 19
         5.03.    Closing Documents........................................ 19
ARTICLE 6: CONDITIONS OF LENDING
         6.01.    Conditions for Initial Advance........................... 20
         6.02.    Conditions for All Advances.............................. 20
         6.03.    Affirmation of Representations and Warranties............ 22
         6.04.    Deadline for Funding Conditions.......................... 22

ARTICLE 7: AFFIRMATIVE COVENANTS
         7.01.    Reporting and Information Requirements................... 22
         7.02     Other Notices............................................ 23
         7.03.    Inspection Rights........................................ 23
         7.04.    Preservation of Corporate Existence and Qualification.... 24
         7.05.    Continuation of Business................................. 24
         7.06.    Insurance................................................ 24
         7.07.    Payment of Taxes, Charges, Claims and Current 
                  Liabilities.............................................. 25
         7.08.    Financial Accounting Practices........................... 26
         7.09.    Compliance with Laws..................................... 26
         7.10.    Use of Proceeds.......................................... 26
         7.11.    Government Authorizations; Regulatory Authorizations, 
                  Etc...................................................... 26
         7.12.    Contracts and Franchises................................. 27
         7.13.    Consents................................................. 27
         7.14.    Financial Covenants...................................... 27
         7.15.    Construction and Storage................................. 27
         7.16.    Upgrade Equipment........................................ 27


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ARTICLE 8: NEGATIVE COVENANTS
         8.01.    Additional Indebtedness.................................. 28
         8.02.    Restrictions on Liens and Sale of Collateral............. 28
         8.03.    Intentionally Deleted.................................... 28
         8.04.    Prohibition of Mergers, Acquisitions, Name, Office or 
                  Business Changes......................................... 28
         8.05.    Limitation on Equity Payments............................ 28
         8.06.    Limitation on Investments, Advances and Loans............ 28
         8.07.    Intentionally Deleted.................................... 29
         8.08.    Intentionally Deleted.................................... 29
         8.09.    Removal of Collateral.................................... 29
         8.10.    Assumed Names............................................ 29

ARTICLE 9: EVENTS OF DEFAULT
         9.01.    Events of Default........................................ 29
         9.02.    Consequences of an Event of Default...................... 31
         9.03.    Exercise of Rights....................................... 31
         9.04.    Rights of Secured Party.................................. 31
         9.05.    Notices, Etc. Waived..................................... 32
         9.06.    Additional Remedies...................................... 32
         9.07.    Application of Proceeds.................................. 33
         9.08.    Discontinuance of Proceedings............................ 33
         9.09.    Power of Attorney........................................ 33
         9.10.    Regulatory Matters....................................... 34

ARTICLE 10: GENERAL CONDITIONS/MISCELLANEOUS
         10.01.   Modifications and Waivers................................ 34
         10.02.   Advances Not Implied Waivers............................. 34
         10.03.   Deviation from Covenants................................. 35
         10.04.   Holidays................................................. 35
         10.05.   Records.................................................. 35
         10.06.   Notices.................................................. 35
         10.07.   FCC and PUC Approval..................................... 36
         10.08.   Lender Sole Beneficiary.................................. 36
         10.09.   Lender's Review of Information........................... 36
         10.10.   No Joint Venture......................................... 36
         10.11.   Severability............................................. 36
         10.12.   Rights Cumulative........................................ 37
         10.13.   Duration; Survival....................................... 37
         10.14.   Governing Law............................................ 37
         10.15.   Counterparts............................................. 37
         10.16.   Successors and Assigns................................... 37
         10.17.   Participation............................................ 38
         10.18.   Time of Essence.......................................... 38
         10.19.   Disclosures and Confidentiality.......................... 38
         10.20.   Jurisdiction and Venue................................... 39
         10.21.   Jury Waiver.............................................. 39
         10.22.   Limitation on Liability.................................. 40
         

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         10.23.   Borrower Waivers......................................... 40
         10.24.   Schedules................................................ 40
         10.25.   Agreement to Govern...................................... 40
         10.26.   Entire Agreement......................................... 40
         10.27.   Construction............................................. 41


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                           LOAN AND SECURITY AGREEMENT
                           ---------------------------

         THIS  LOAN  AND  SECURITY  AGREEMENT  ("Agreement")  is dated as of the
"Closing  Date" set forth on  Schedule 1 hereto,  by and  between  the entity or
entities  described  on Schedule 1 hereto  (collectively,  "Borrower")  and NTFC
CAPITAL  CORPORATION,  a Delaware  corporation  ("Lender"),  with offices at 501
Corporate Centre Drive, Franklin, Tennessee 37067.

                              B A C K G R O U N D:
                              --------------------

         A. Borrower has entered into a certain purchase agreement with Northern
Telecom  Inc.,  as  described  on Schedule 1 hereto,  providing  for  Borrower's
purchase of certain  telecommunications  equipment and the license of associated
software, all as described therein, and has requested Lender to extend credit to
Borrower to finance  such  purchase  and  license,  as  described  on Schedule 1
hereto,   and  to  make  credit   available   for  the  purchase  of  additional
telecommunications equipment, in each case as described herein.

         B. Lender is willing to extend  such credit to Borrower  upon the terms
and conditions set forth in this Agreement.

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

                             ARTICLE 1: DEFINITIONS
                             ----------------------

         1.01.  Certain  Definitions.  Certain  terms are  defined on Schedule 1
hereto.  In addition to other words and terms defined in the preamble  hereof or
elsewhere in this Agreement, or on the Schedules hereto, the following words and
terms shall have the following  meanings  unless the context  otherwise  clearly
requires:

          "Advance(s)":  any advance or loan of funds made by Lender to Borrower
pursuant to this Agreement.

          "Affiliate":  as applied to any Person,  any other Person  directly or
indirectly controlling, controlled by, or under common control with such Person.
For purposes of this  definition  and the definition of  "Subsidiary",  a Person
shall be deemed  to  control  another  Person if such  first  Person  possesses,
directly or indirectly,  the power to direct,  or to cause the direction of, the
management  and  policies of such other  Person,  whether  through  ownership of
voting securities,  by contract or otherwise. The "Affiliates" of Borrower shall
also include any Person that owns of record or  beneficially at least 10% of the
outstanding capital stock of Borrower (excluding capital stock issuable upon the
exercise of stock options).

          "Borrowing  Certificate":  a certificate  substantially in the form of
Exhibit B hereto.

          "Borrowing  Date":  any  Business  Day on which an  Advance is made to
Borrower hereunder.

          "Business  Day":  a day other than a Saturday,  Sunday or other day on
which commercial banks in Nashville, Tennessee are authorized or required by law
to close.

          "Calendar  Quarter":  each three-month period starting on each January
1,  April 1,  July 1, and


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October 1,  during the term of this  Agreement,  as  appropriately  adjusted  if
Borrower changes its fiscal year in accordance with this Agreement.

          "Carrier":   any   interexchange   carrier   or  other   provider   of
telecommunications  long distance  service,  or local exchange  company or other
provider of local telecommunications service.

          "Cash":  at  any  time,  the  cash,  cash  equivalents  or  marketable
investment grade securities held by Borrower free of any claims or encumbrances.

          "Cash Flow":  during any fiscal period of Borrower,  EBITDA,  less any
Equity  Payments  pursuant to Section  8.05  hereof or payments on  Subordinated
Indebtedness made during such period.

          "Certificate  of Financial  Condition":  a certificate  in the form of
Exhibit F hereto, executed by Borrower.

          "Change in  Control":  any change in the control of, or the actual and
then current ability or right to control,  a majority of the outstanding  shares
of voting  capital  stock of  Borrower or in the ability or right to control the
election of at least a majority of the board of directors of Borrower.

          "Closing Date": as defined on Schedule 1 hereto.

          "Code":  the  Internal  Revenue  Code of 1986  and the U. S.  Treasury
Regulations promulgated thereunder, all as amended from time to time.

          "Collateral": as defined in Section 3.01 hereof.

          "Commitment": as defined in Section 2.01 hereof.

          "Communications  Law":  any and all of (i) the  Communications  Act of
1934, as amended and any similar or successor federal statute, and the rules and
regulations of the FCC thereunder,  (ii) any applicable  state law governing the
provision of telecommunications  services,  and the rules and regulations of the
PUC, all as the same may be in effect from time to time.

          "Consent": a consent to a collateral assignment of the Nortel Purchase
Agreement,  a  consent  to  a  collateral  assignment  of  the  Vendor  Purchase
Agreement, a Landlord Consent, and/or a Mortgagee's Consent.

          "Contingent  Obligation":  as to any Person,  any  obligation  of such
Person guaranteeing, directly or indirectly, any Indebtedness, leases, dividends
or other obligations  ("primary  obligations") of any other Person (the "primary
obligor") in any manner,  whether  directly or  indirectly,  including,  without
limitation,  any obligation of such Person,  whether or not  contingent,  (a) to
purchase any such primary  obligation  or any  property  constituting  direct or
indirect security therefor,  (b) to advance or supply funds (i) for the purchase
or payment of any such primary obligation or (ii) to maintain working capital or
equity  capital of the primary  obligor or otherwise to maintain the solvency of
the primary obligor, (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 such  primary  obligation
against loss in respect thereof.


                                        2

<PAGE>


          "Debt  Service":  for any fiscal  period of  Borrower,  the sum of all
principal  and interest  payments  that Borrower is required to make during such
period on account of all of its Indebtedness including,  without limitation, (a)
amounts due during such period on account of  capitalized  leases,  (b) the then
current  portion  of any  long-term  Indebtedness,  including  any  Subordinated
Indebtedness,  (c) amounts due on short-term  Indebtedness,  and (d) amounts due
under this Agreement and the Note.

          "Default":  any of the conditions or occurrences  specified in Section
9.01,  whether or not any  requirement  for the  giving of notice,  the lapse of
time, or both, or any other condition has been satisfied.

          "Default  Rate":  a rate of interest  equal to the lesser of (i) three
percentage  points  in  excess  of  the  Interest  Rate,  or  (ii)  the  maximum
permissible rate under applicable law in effect at any time.

          "EBITDA": for any fiscal period,  Borrower's actual operating earnings
from  ongoing   operations  and  before   interest,   taxes,   depreciation  and
amortization for such fiscal period.

          "Equipment": as defined in Section 3.01 hereof.

          "Equity Payment":  other than as required in connection with the Units
Offering, or as required by the terms of the Units, any distribution of earnings
or capital to any stockholders of Borrower,  or any redemption of stock or other
ownership interests, either directly or indirectly,  whether in cash or property
or in obligations of Borrower.

          "Event of  Default":  any of the  events  specified  in  Section  9.01
hereof,  provided that any  requirement  for the giving of notice,  the lapse of
time, or both, or any other condition, under Section 9.01 or otherwise, has been
satisfied.

          "Exchange Act": means the Securities Exchange Act of 1934, as amended.

          "FCC": the Federal  Communications  Commission of the United States of
America, and any successor, in whole or in part, to its jurisdiction.

          "Financing Termination Date": as defined on Schedule 2.02 hereto.

          "First  Borrowing  Date":  the date of the first  Advance by  Borrower
hereunder.

          "Fixed  Charges":  with respect to any fiscal period of Borrower,  its
Debt Service, plus non-financed capital expenditures.

          "GAAP": subject to Section 1.02 hereof,  generally accepted accounting
principles in the United States of America (as such  principles  may change from
time to time) applied on a consistent  basis (except for changes in  application
in which Borrower's  independent  certified public accountants concur),  applied
both to classification of items and amounts.

          "General Intangibles": as defined in Section 3.01 hereof.

          "Governmental   Actions":   duly-authorized   actions   taken  by  any
Governmental Authority.

                                        3

<PAGE>


          "Governmental  Authority":  the United States federal government,  any
state or political  subdivision  thereof,  any city or municipal entity, and any
entity exercising executive, legislative,  judicial, regulatory,  administrative
or other quasi-governmental functions.

          "Indebtedness":   as  to  any  Person,   at  a  particular  time,  (a)
indebtedness  for borrowed money or for the deferred  purchase price of property
or  services  in  respect  of which  such  Person  is  liable,  contingently  or
otherwise,  as  obligor,  guarantor  or  otherwise,  or in respect of which such
Person otherwise  assures a creditor against loss, (b) obligations  under leases
which shall have been or should be, in accordance with GAAP, recorded as capital
leases in respect of which  obligations  such Person is liable,  contingently or
otherwise,  as  obligor,   guarantor  or  otherwise,  or  in  respect  of  which
obligations  such Person assures a creditor against loss (c) obligations of such
Person to purchase or  repurchase  accounts  receivable,  chattel paper or other
payment  rights  sold or  assigned  by such  Person,  and  (d)  indebtedness  or
obligations  of such Person under or with  respect to letters of credit,  notes,
bonds  or  other  debt  instruments;   provided,   however,  that  none  of  the
above-described  Indebtedness  shall  include or be deemed to include the Senior
Notes or any securities issued in connection with any refinancing thereof except
for the purpose of calculating the ratios specified in Schedule 7.14 hereto.

          "Initial Payment Date": as defined on Schedule 2.02 hereto.

          "Interest Rate": as defined on Schedule 2.02 hereto.

          "Landlord Consent":  a consent  substantially in the form of Exhibit E
hereto  or  in  other  form  acceptable  to  Lender,   to  be  executed  by  the
owner/landlord,  sublessor  and/or  licensor  (including  carriers)  of any real
property where any of the Equipment is to be located.

          "Law": any law, constitution,  statute,  regulation,  rule, ordinance,
order, injunction,  writ, decree or award of any Governmental Authority or court
of competent jurisdiction or of any arbitrator (including but not limited to the
Code, the UCC, any applicable tax law, product safety law,  occupational  safety
or health law or Communications Law).

          "Lender's Expenses": as defined in Section 2.10 hereof.

          "Lien":  any  mortgage,  pledge,  hypothecation,  lien  (statutory  or
other),  judgment lien, security interest,  security agreement,  charge or other
encumbrance, or other security arrangement of any nature whatsoever,  including,
without limitation,  any installment  contract,  conditional sale or other title
retention arrangement, any sale of accounts receivable or chattel paper, and any
assignment,  deposit  arrangement or lease intended as, or having the effect of,
security and the filing of any financing  statement  under the UCC or comparable
law of any jurisdiction.

          "Loan":  each of the loans and loan  facilities  described  in Section
2.01 hereof and all Advances pursuant hereto.

          "Loan Documents":  a collective reference to this Agreement, the Note,
the Security  Documents,  and all other documents,  instruments,  agreements and
certificates  evidencing or securing any advance hereunder or any obligation for
the payment or performance  thereof and/or  executed and delivered in connection
with any of the foregoing.

                                       4

<PAGE>


          "Mandatory Prepayments": as defined in Section 2.04(b) hereof.

          "Material  Adverse Effect":  or "Material  Adverse Change":  any fact,
circumstance  or condition that would  reasonably be expected to have a material
adverse effect on, or material  adverse change in, (i) the business,  operations
or financial  condition of Borrower and its  Subsidiaries,  taken  together as a
whole,  (ii) the  ability of  Borrower  to perform  its  obligations  under this
Agreement,  the Note, or the other Loan Documents,  or (iii) Lender's ability to
enforce the rights and remedies  granted under this  Agreement or the other Loan
Documents,  in all cases whether  attributable to a single circumstance or event
or an aggregation of circumstances or events.

          "Mortgagee's  Consent": a consent substantially in the form of Exhibit
E-1 hereto,  to be executed by any Person holding a lien on real property leased
or otherwise provided to Borrower, on which any of the Equipment is located.

          "Maturity  Date":  the date defined on Schedule 2.02 hereto,  on which
all principal due under the Note shall be finally due and payable.

          "Nortel": Northern Telecom Inc., a Delaware corporation.

          "Nortel  Equipment":   the  equipment  and  licensed  or  sub-licensed
software  manufactured  or supplied by Nortel to Borrower  with respect to which
Advances  hereunder are used  directly or indirectly to finance the  acquisition
cost  thereof at any time  pursuant  to the  Nortel  Purchase  Agreement  or any
purchase order issued by Borrower to Nortel or otherwise, including installation
and construction services provided by Nortel pursuant thereto.

          "Nortel Purchase Agreement":  the Nortel Purchase Agreement identified
on Schedule 4.29 hereto,  together with any amendments or  supplements  thereto,
and any other  purchase  agreement  between Nortel and Borrower and all purchase
orders and  invoices  issued  pursuant  thereto,  all subject to the approval of
Lender.

          "Note": collectively,  one or more promissory notes issued by Borrower
to  Lender   pursuant  to  this  Agreement,   and  all   extensions,   renewals,
modifications, replacements, amendments, restatements and refinancings thereof.

          "Obligations":  all  indebtedness,   liabilities  and  obligations  of
Borrower  to  Lender  of any  class  or  nature,  whether  arising  under  or in
connection  with this  Agreement  and/or the other Loan  Documents,  whether now
existing or  hereafter  incurred,  direct or indirect,  absolute or  contingent,
secured or  unsecured,  matured or  unmatured,  joint or  several,  whether  for
principal,   interest,  fees,  expenses,   lease  obligations,   indemnities  or
otherwise,  including,  without  limitation,  future  advances of any sort,  all
future advances made by Lender for taxes, levies, insurance and/or repairs to or
maintenance  of the  Collateral,  the unpaid  principal  amount of, and  accrued
interest on, the Note,  and any expenses of collection or protection of Lender's
rights, including reasonable attorneys' fees.

          "Organizational  Documents":  with  respect  to  a  corporation,   the
articles of  incorporation  and by-laws of such  corporation;  with respect to a
partnership,   the  certificate  of  partnership  (or  limited  partnership,  as
applicable) and partnership agreement, together with the analogous documents for
any  corporate  or 

                                       5

<PAGE>


partnership  general partner;  with respect to a limited liability company,  the
articles of  organization  and  operating  agreement of such  limited  liability
company; and in any case, any other document governing the formation and conduct
of business by such entity.

          "Payment Date": as defined on Schedule 2.02 hereto.

          "Payment Schedule": as defined on Schedule 2.02 hereto.

          "Permits": all consents, licenses, notices, approvals, authorizations,
filings,  orders,  registrations,  and  permits  required  by  any  Governmental
Authority  for  the  construction  and  operation  of the  Equipment  (excluding
Regulatory  Authorizations),   issued  or  obtained  as  and  when  required  in
accordance with all Requirements of Law.

          "Permitted  Encumbrances":  the Liens  permitted  under  Section  8.02
hereof.

          "Person":  an  individual,  corporation,  limited  liability  company,
partnership, business or other trust, unincorporated association, joint venture,
joint-stock company, Governmental Authority or any other entity.

          "Proceeds": as defined in Section 3.01 hereof.

          "PUC":  the  public  utilities  commission  for the state or any other
jurisdiction in which Borrower operates its  telecommunications  business or any
portion of the Equipment is located, or any successor agency, and any successor,
in whole or in part,  to its functions or  jurisdictions,  and any other Persons
specified as such on Schedule 1 hereto.

          "Purchase  Agreement":   individually  and  collectively,  the  Nortel
Purchase Agreement and the Vendor Purchase Agreement.

          "Regulatory Authorizations": all approvals, authorizations,  licenses,
filings, notices, registrations,  consents, permits, exemptions,  registrations,
qualifications, designations, declarations, or other actions or undertakings now
or hereafter  made by, to or in respect of any  telecommunications  Governmental
Authority, including, without limitation, any certificates of public convenience
and all grants,  approvals,  licenses,  filings and registrations from or to the
FCC or PUC or under any Communications Law necessary in order to enable Borrower
to own,  construct,  maintain and operate the Equipment,  and any authorizations
specified on Schedule 1 hereto.

          "Regulatory  Event":  any of the following events:  (i) Lender becomes
subject to regulation as a "carrier," a "telephone company," a "common carrier,"
a "public  utility"  or  otherwise  under  any  applicable  law or  governmental
regulation,  federal,  state or local,  solely  as a result of the  transactions
contemplated  by this Agreement and the other Loan  Documents,  or (ii) Borrower
becomes subject to regulation by any  Governmental  Authority in any way that is
materially  different from the regulation  existing at the Closing Date and that
could  materially  adversely affect  Borrower's  ability to perform its material
obligations under the Loan Documents or Lender's rights thereunder, or (iii) the
FCC  or PUC  issues  an  order  revoking,  denying  or  refusing  to  renew,  or
recommending the revocation,  denial or non-renewal of, any material  Regulatory
Authorization.

          "Required Consents":  the Governmental Authority approvals or consents
of other Persons  required

                                        6

<PAGE>


with respect to Borrower's execution, delivery and performance of this Agreement
and the other Loan Documents, as described in Section 4.04 hereto.

          "Requirement of Law": as to any Person, the  Organizational  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  properties or  transactions  or to
which such Person or any of its property or transactions  is subject,  including
all  provisions of all  applicable  state and federal  constitutions,  statutes,
rules,  regulations  and  orders of  Governmental  Authorities,  all  Permits or
Regulatory Authorizations issued to Borrower, and all Communications Laws.

          "Responsible Officer": with respect to a corporation, its President or
any Vice  President or  Treasurer;  with respect to a  partnership,  its general
partner (or the  President,  any Vice  President or  Treasurer of any  corporate
general partner, as applicable);  with respect to a limited liability company, a
member or manager (or the  President,  any Vice  President  or  Treasurer of any
corporate  member or manager),  or the  President  or any Vice  President of any
other Person.

          "SEC": the United States Securities and Exchange Commission.

          "Security  Documents":  this  Agreement,  the Consents,  all financing
statements,  and any other  documents  granting,  evidencing,  or perfecting any
security interest or Lien with respect to or securing any of the Obligations.

          "Senior  Notes":  means the  Borrower's  12% Series A Senior Notes due
2008,  issued  pursuant to an Indenture (the  "Indenture"),  dated as of May 21,
1998, between the Borrower and First Union National Bank.

          "Site(s)": any of the sites where Equipment is or is to be located.

          "Software"  and  "Software  Licenses":  any  software now or hereafter
owned by, or licensed to,  Borrower that is contained in the Equipment  supplied
by Nortel or any Vendor.

          "Subsidiary":  as to any Person,  any corporation or other entity that
is an Affiliate of such Person and of which shares of stock or equity  interests
having  ordinary  voting  power  with  respect  to the  election  of one or more
directors  or other  managers of such  corporation  are at the time  directly or
indirectly  owned or controlled by such Person  (regardless  of any  contingency
which does or may suspend or dilute the voting rights of such class).

          "Subordinated  Indebtedness":   Indebtedness  of  Borrower  for  money
borrowed for the use of Borrower,  payment of which is fully subordinated to the
payment of all  Obligations  of  Borrower  to Lender  upon terms and  provisions
reasonably acceptable to Lender.

          "Total  Debt":  at any time,  the  total  outstanding  liabilities  of
Borrower,   including,  without  limitation,   current  liabilities,  long  term
Indebtedness,  all lease obligations under finance leases,  capital leases,  all
Contingent Obligations, and all the Obligations.

          "UCC":  the Uniform  Commercial Code as the same may from time to time
be in effect in the State of New York, or the Uniform Commercial Code of another
jurisdiction,  to the extent it may be required to


                                       7

<PAGE>


apply to any item or items of Collateral.

          "Units": means 160,000 Units,  consisting of $160 million in aggregate
principal  amount of 12% Series A Senior Notes due 2008 and Warrants to Purchase
200,226 shares of common stock of the Borrower  offered and sold on or about May
21, 1998.

          "Units Offering":  means the offering of the Units on or about May 21,
1998 by the Borrower.

          "Vendor"  means any  manufacturer  or supplier of Vendor  Equipment or
licensor or supplier of Software, in each case other than Nortel.

          "Vendor  Equipment"  means  any  equipment,   upgrades,  switches  and
licensed or sub-licensed  Software  manufactured,  or supplied to Borrower, by a
Vendor.

          "Vendor Purchase Agreement": any purchase agreement, together with any
amendments or supplements thereto,  between a Vendor and Borrower or an assignor
of Borrower and all purchase orders and invoices issued pursuant thereto for the
sale of Vendor  Equipment,  all  subject to the  approval  of Lender,  not to be
unreasonably withheld or delayed.

          1.02.  Accounting  Principles;   Subsidiaries.   Except  as  otherwise
provided in this Agreement, all computations and determinations as to accounting
or financial  matters and all financial  statements to be delivered  pursuant to
this  Agreement  shall be made and prepared in accordance  with GAAP  (including
principles of consolidation where appropriate),  consistently  applied,  and all
accounting or financial terms shall have the meanings  ascribed to such terms by
GAAP.  If,  at any time,  Borrower  has any  Subsidiaries,  all  accounting  and
financial terms herein shall be deemed to include references to consolidated and
consolidating  principles,  and covenants,  representations  and agreements with
respect to Borrower and its properties  and activities  shall be deemed to refer
to Borrower and its consolidated Subsidiaries collectively.

         1.03.  UCC Terms.  Except as otherwise  provided or amplified  (but not
limited) herein,  terms used in this Agreement that are defined in the UCC shall
have the same meanings herein.

         1.04. General Construction;  Captions.  All definitions and other terms
used in this  Agreement  shall be equally  applicable to the singular and plural
forms thereof, and all references to any gender shall include all other genders.
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,  subsection,  schedule and
exhibit  references  are to  this  Agreement  unless  otherwise  specified.  The
captions and table of contents in this  Agreement  and the other Loan  Documents
are for convenience only, and in no way limit or amplify the provisions hereof.

         1.05.   References  to  Documents  and  Laws.  All  defined  terms  and
references  in this  Agreement or the other Loan  Documents  with respect to any
agreements, notes, instruments,  certificates or other documents shall be deemed
to refer  to such  documents  and to any  amendments,  modifications,  renewals,
extensions, replacements,  restatements, substitutions and supplements of and to
such documents. All references to statutes and related regulations shall include
any amendments thereof and any successor statutes and regulations.

                                ARTICLE 2: LOANS
                                ----------------


                                       8

<PAGE>


         2.01. Commitment.  Subject to the terms and conditions herein provided,
and so long as no Default  has  occurred  and is  continuing  hereunder,  Lender
agrees to lend to Borrower  from time to time before the  Financing  Termination
Date,  an  aggregate  principal  amount  not to exceed  the  amount set forth on
Schedule 2.01 hereto as the maximum  principal  amount (the  "Commitment").  All
Advances hereunder shall be used solely for the purchase of Nortel Equipment and
Vendor Equipment and related services  (exclusive of sales tax), and amounts not
exceeding the amount (if any)  specified on Schedule 2.01 hereto may be used for
legal fees,  charges,  expenses and closing costs and other expenses incurred by
Borrower  or  incurred by Lender and  payable by  Borrower  under  Section  2.10
hereof,  provided,  however,  that the  Borrower  may not use more  than  thirty
percent (30%) of the aggregate  principal  amount of all Advances made hereunder
for purchases of Vendor Equipment and related services,  provided, further, that
in each case such amount has been  approved  by Nortel  prior to the date of the
Advance therefor.

         2.02.    Note and Payment Terms.

                  (a)  Promissory  Note. The Loan shall be evidenced by the Note
         substantially  in the  form  of  Exhibit  A  hereto,  with  appropriate
         insertions.  The Note shall be  executed  by  Borrower,  payable to the
         order of Lender, and shall evidence the obligation of Borrower to repay
         all principal  amounts  advanced  under or pursuant to this  Agreement,
         together with interest and all other amounts due  thereunder.  The Note
         shall be dated the Closing  Date,  have a stated  maturity  that is the
         Maturity  Date,  and bear  interest at the Interest Rate from the First
         Borrowing  Date until the  principal  amount  and any other  amount due
         under  the  Note is paid in full  (whether  on the  Maturity  Date,  by
         acceleration or otherwise). All schedules attached to the Note shall be
         deemed a part thereof.  Any such schedule may be amended by Lender from
         time to time to reflect changes in the amounts includable thereon,  but
         the failure to attach any schedule shall not diminish the obligation of
         Borrower to repay all amounts due hereunder or on the Note.

                  (b) Interest  Payments.  Interest  shall continue to accrue on
         the principal  amount  outstanding on the Note at the Interest Rate and
         shall be payable,  in arrears, on each Payment Date, with the principal
         payments described below.

                  (c) Principal Payments. All principal amounts due with respect
         to the Note shall be payable in  installments  in  accordance  with the
         Payment  Schedule set forth on Schedule 2.02 hereto,  commencing on the
         Initial  Payment  Date and on each Payment  Date  thereafter  until the
         Maturity Date. The principal  payment  amounts shall be recalculated by
         Lender if any Advances  are made  hereunder  after the Initial  Payment
         Date,  based on the aggregate  amount of all Advances made at any time.
         Borrower and Lender  understand that this payment  schedule is intended
         to  amortize  fully  the  principal  amount  of the Note and any  other
         principal and interest  amounts  outstanding will be added to the final
         payment on the  Maturity  Date.  In any event,  the entire  outstanding
         principal  amount of the Note and all accrued but unpaid  interest  and
         all  other  outstanding  amounts  due  thereunder  shall be paid on the
         Maturity Date.

                  (d)  Late  Payments  and  Default  Rate.  Notwithstanding  the
         foregoing,  if Borrower  shall fail to pay,  within ten (10) days after
         the due date thereof,  any principal amount or interest or other amount
         payable under this  Agreement or under the Note,  Borrower shall pay to
         Lender,  to  defray  the  administrative  costs of  handling  such late
         payments,  an amount  equal to  interest on the amount  unpaid,  to the
         extent  permitted under applicable Law, at the Default Rate (instead of
         the  Interest


                                       9

<PAGE>


          Rate),  from the due date  until  such  overdue  principal  amount  or
          interest is paid in full (both before and after  judgment)  whether or
          not any notice of default in the payment  thereof  has been  delivered
          under Section 9.01 hereof. In addition, but without duplication,  upon
          the occurrence and during the continuance of an Event of Default,  all
          outstanding  principal and interest  hereunder  shall bear interest at
          the Default Rate (instead of the Interest Rate) until such amounts are
          paid in full or such Event of Default is waived in writing by Lender.

                  (e) Excess  Interest.  Notwithstanding  any  provision  of the
         Note, this Agreement or any other Loan Document to the contrary,  it is
         the intent of Lender and Borrower that Lender or any subsequent  holder
         of the Note shall never be entitled  to  receive,  collect,  reserve or
         apply,  as  interest,  any  amount  in excess  of the  maximum  rate of
         interest  permitted  to be charged  by  applicable  Law,  as amended or
         enacted  from time to time.  In the  event  Lender,  or any  subsequent
         holder of the Note, ever receives,  collects,  reserves or applies,  as
         interest,  any such  excess,  such  amount  which  would  be  excessive
         interest  shall be deemed a partial  prepayment  of principal due under
         the Note and treated as such, or, if the principal indebtedness and all
         other amounts due are paid in full,  any  remaining  excess funds shall
         immediately be applied to any other outstanding Obligations of Borrower
         due to Lender,  and if none is outstanding,  shall be paid to Borrower.
         In determining  whether or not the interest paid or payable,  under any
         specific  contingency,  exceeds the highest  lawful rate,  Borrower and
         Lender shall, to the maximum extent permitted under applicable Law, (a)
         exclude voluntary  prepayments and the effects thereof as it may relate
         to any fees charged by Lender, and (b) amortize, prorate, allocate, and
         spread,  in equal parts,  the total amount of interest  throughout  the
         entire term of the Note;  provided that if the indebtedness is paid and
         performed  in full  prior  to the  end of the  full  contemplated  term
         hereof, and if the interest received for the actual period of existence
         hereof exceeds the maximum lawful rate, Lender or any subsequent holder
         of the Note  shall  refund to  Borrower  the  amount of such  excess or
         credit the amount of such excess  against the principal  portion of the
         indebtedness,  as of the  date it was  received,  and,  in such  event,
         Lender shall not be subject to any  penalties  provided by any laws for
         contracting for, charging, reserving or receiving interest in excess of
         the maximum lawful rate.

         2.03.    Procedures for Borrowing.

                  (a) Timing of Advances.  Advances  shall not be made more than
         once per calendar  month,  and all Advances in any calendar month shall
         be made on the same Borrowing  Date.  Each Advance (other than the last
         Advance)  shall be in an  aggregate  principal  amount of not less than
         $25,000. No amounts may be borrowed hereunder on or after the Financing
         Termination  Date.  Lender is  hereby  authorized  to retain  from each
         Advance  all  amounts  of  Lender's  Expenses  accrued  and  unpaid  by
         Borrower,  for which  invoices have been sent to Borrower at least five
         (5) Business Days before such Advance.  In any event,  all  outstanding
         legal fees,  charges  and  expenses  not paid by Borrower  prior to any
         Borrowing Date shall be paid before any Advance is made or concurrently
         with such Advance.

                  (b) Borrowing  Certificates.  To request an Advance hereunder,
         Borrower shall send to Lender, at least five (5) Business Days prior to
         the requested Borrowing Date, a completed Borrowing Certificate,  along
         with  invoices and such other  supporting  documentation  as Lender may
         reasonably request. Lender is hereby authorized to add to any Borrowing
         Certificate  all  amounts  payable by  Borrower to Lender in respect of
         legal fees,  charges and expenses arising or incurred by Lender, to the
         extent  such fees,  charges  and  expenses  have then been  incurred or
         charged and may 


                                       10

<PAGE>


          be paid from proceeds of the Loan.

                  (c)  Transmission of Advances.  Advances shall be made by wire
         transfer  to  the  account(s)  specified  in the  applicable  Borrowing
         Certificate,  except that (i) proceeds of the Loan may be  transmitted,
         at Lender's option, directly to an Nortel or Vendor account for payment
         of any unpaid Nortel or Vendor  invoices,  and (ii)  Advances  shall be
         made to Borrower only to the extent that Borrower  provides Lender with
         satisfactory  evidence that the amount of such Advance has been paid to
         Nortel or the Vendor. No further  authorization  shall be necessary for
         any such direct disbursements,  and each such Advance shall satisfy pro
         tanto the obligations of Lender under this Agreement.

                  (d) Borrowing  Dates.  Advances shall be made by Lender on the
         Borrowing Date specified in the applicable Borrowing Certificate if all
         conditions  for such  Advance  have been  satisfied,  or on such  later
         Business  Day as all  conditions  for  such  Advance  shall  have  been
         satisfied, as determined by Lender.

                  (e)  Advances  After  Default.  At  its  option,   during  the
         continuance  of a Default,  Lender may, but shall not be obligated  to,
         make Advances to any Person  (including  without  limitation Nortel and
         any Vendor, suppliers,  sub-contractors and materialmen) to whom Lender
         in good faith determines  payment is due with respect to the Equipment,
         and any Advances so made shall be deemed made as of the Business Day on
         which the Person to whom payment is made  receives the same. No further
         authorization  from Borrower  shall be necessary to warrant such direct
         Advances,  and the execution of this Loan Agreement by Borrower  shall,
         and hereby does,  constitute an irrevocable  authorization and power of
         attorney to advance proceeds hereunder. All such Advances shall satisfy
         pro tanto the  obligations of Lender  hereunder and shall be secured by
         the Security Documents as fully as if made directly to Borrower.

         2.04.    Prepayments.

                  (a) Voluntary Prepayments. Borrower may, at its option, at any
         time and from time to time,  prepay the Loan in whole or in part,  upon
         at least  ten  (10)  Business  Days  prior  written  notice  to  Lender
         specifying  the date and amount of  prepayment,  in a minimum amount of
         $25,000,  plus the premium  described below, and all accrued but unpaid
         interest  thereon.  Such notice shall be irrevocable  and the principal
         amount  specified  in such notice  shall be due and payable on the date
         specified  together with accrued  interest on the amount  prepaid.  Any
         such  prepayment  shall be subject to a prepayment  premium  equal to a
         percentage of the amount prepaid as follows:  three percent (3%) if the
         prepayment is made prior to the first  anniversary of the Closing Date,
         two percent (2%) if the  prepayment  is made more than one (1), but not
         more two (2) years after the  Closing  Date,  one  percent  (1%) if the
         prepayment  is made more than two (2) but not more than three (3) years
         after the Closing Date, and without a premium if the prepayment is made
         more than three (3) years after the Closing Date.  Amounts  prepaid may
         not be reborrowed and shall be applied as provided in Section  2.04(c).
         Mandatory  Prepayments,  excess interest payments under Section 2.02(g)
         or prepayments made from insurance proceeds pursuant to Section 6.03 or
         with any  condemnation  proceeds  shall not be subject to a  prepayment
         premium.

                  (b)   Mandatory   Prepayment.   Upon  Lender's   demand,   all
         Obligations  arising from Advances for Equipment  financed for purchase
         under  the  Nortel  Purchase  Agreement  will  become  


                                       11

<PAGE>


          due and  payable  pursuant  to the  terms of the  Note if such  Nortel
          Agreement is terminated prior to the completion and acceptance of such
          Equipment.  Any such  Mandatory  Prepayments  shall  not  require  the
          payment of any premium or penalty.

                  (c)  Application  of  Prepayments.  Any  prepayments  shall be
         applied first to interest,  then to premium, then to expenses, and then
         to the  installments of principal in reverse  chronological  order from
         the Maturity Date.

         2.05.  Computation of Interest.  Interest shall be calculated  daily on
the basis of a 365-day  year for the actual  days  elapsed in the period  during
which it accrues.

         2.06.  Payments.  All payments and  prepayments  (if any) to be made in
respect of principal,  interest,  prepayment  premiums or other amounts due from
Borrower  hereunder  or under the Note shall be payable on or before  1:00 p.m.,
Nashville  time,  on the Business  Day when due,  without  presentment,  demand,
protest or notice of any kind, all of which are hereby expressly waived,  and an
action therefor shall immediately  accrue. Such payments shall be made to Lender
at Lender's office at 501 Corporate Centre Drive, Franklin,  Tennessee 37067, or
such other location  specified in writing by Lender,  in  immediately  available
funds, without setoff,  recoupment,  counterclaims or any other deduction of any
nature.

         2.07. Indemnity. Borrower hereby indemnifies Lender against any losses,
claims, penalties, expenses, actions, suits, obligations,  liabilities and Liens
(and all costs and expenses,  including  reasonable  attorneys' fees incurred in
connection  therewith),  that Lender has sustained or incurred or may sustain or
incur in connection with any of the Collateral, or the enforcement,  performance
or administration  of the Loan Documents,  or as a consequence of any Default by
Borrower in the performance or observance of any covenant or condition contained
in this  Agreement or the Loan  Documents,  including  without  limitation,  the
breach of any  representation  or warranty,  any failure of Borrower to pay when
due (by  acceleration  or otherwise) any principal,  interest,  fee or any other
amount due  hereunder  or under the Note,  and any failure of Borrower to comply
with all applicable  Requirements of Law (collectively,  "Claims") except to the
extent of any Claims  caused  solely by  Lender's  gross  negligence  or willful
misconduct.  Borrower's obligations under this Section 2.07 shall be part of the
Obligations  and shall be secured by the  Collateral.  Borrower agrees that upon
written  notice by Lender of the  assertion of any Claims,  Borrower  shall,  at
Lender's option,  either assume full responsibility for, or reimburse Lender for
the reasonable costs and expenses of, the defense thereof.  Lender shall have no
liability  for  consequential  or  incidental  damages of any nature unless such
damages arise as a result of Lender's  gross  negligence or willful  misconduct.
The  provisions  of this  Section  2.07 shall  survive the  termination  of this
Agreement and payment of the Obligations for a period of two years.

         2.08. Use of Proceeds.  The proceeds of the Advances hereunder shall be
used by Borrower  only for the purposes and in the amounts  described in Section
2.01 hereof,  and no amounts repaid may be reborrowed  (except for any voluntary
prepayments as permitted pursuant to Section 2.04(a).

          2.09.  Fees.  Borrower shall pay Lender the fees described on Schedule
2.09 hereto in connection with this Agreement.

         2.10. Lender's Expenses. Borrower agrees (a) to pay or reimburse Lender
for all its reasonable costs,  fees, charges and expenses incurred or arising in
connection  with the  negotiation,  review,  preparation  and  execution of this
Agreement,  the Loan  Documents,  any  commitment  or  proposal  letter,  or any


                                       12

<PAGE>


amendment,  supplement,  waiver,  modification  to,  or  restructuring  of  this
Agreement,  the  Obligations  or the other Loan  Documents,  including,  without
limitation, reasonable legal fees and disbursements,  expenses, document charges
and other charges and expenses of Lender in connection with this Agreement,  (b)
to pay or  reimburse  Lender for all its  reasonable  costs,  fees,  charges and
expenses  incurred  in  connection  with the  administration  of the Loan or the
enforcement,  protection  or  preservation  of any rights under or in connection
with this Agreement or any other Loan Documents,  including, without limitation,
reasonable  legal  fees  and  disbursements,  audit  fees and  charges,  and all
out-of-pocket expenses, (c) to pay, indemnify, and to hold Lender harmless from,
any and all recording and filing fees and taxes and any and all liabilities with
respect to, or resulting from any delay in paying, stamp, excise and other taxes
(excluding  income and  franchise  taxes and taxes of similar  nature),  if any,
which  may be  payable  or  determined  to be  payable  in  connection  with the
execution and delivery or  recordation or filing of, or  consummation  of any of
the transactions  contemplated by, or any amendment,  supplement or modification
of, or any waiver or consent  under or in respect  of,  this  Agreement  and the
other Loan Documents.  All of the amounts described in this Section are referred
to  collectively  as the  "Lender's  Expenses",  shall be payable upon  Lender's
demand,  and shall  accrue  interest  at the  Interest  Rate in effect when such
demand is made from five (5) days  after the date of demand  until paid in full.
All Lender's  Expenses,  and interest thereon,  shall be part of the Obligations
and shall be secured by the  Collateral.  The  agreements  in this  Section 2.10
shall  survive  repayment of the  Obligations.  All Lender's  Expenses  that are
outstanding  on any  Borrowing  Date  shall be paid  before or with any  Advance
relating thereto.  If Borrower has not paid to Lender the amount of all Lender's
Expenses  billed  to  Borrower  at least  five (5)  Business  Days  before  such
Borrowing  Date,  Lender shall be  authorized to retain from any Advance on such
Borrowing  Date  the  amount  of such  Lender's  Expenses  that  remain  unpaid.
Borrower's  obligation  to pay  Lender's  Expenses  shall not be  limited by any
limitation on the amount of the  Commitment  that may be designated as available
for such purposes,  and any amounts so designated  shall be used to pay Lender's
Expenses  accrued at the time of any Advance before any of Borrower's legal fees
or similar expenses.

                  ARTICLE 3: COLLATERAL AND SECURITY AGREEMENT
                  --------------------------------------------

         3.01. Grant of Security  Interest.  Borrower (as debtor) hereby assigns
to Lender as  collateral,  and grants to Lender (as secured  party) a continuing
security interest in and to, all of Borrower's right,  title and interest in and
to the  following  kinds and types of  property,  whether now owned or hereafter
acquired or arising,  wherever located, together with all substitutions therefor
and all  accessions,  replacements  and  renewals  thereof,  and in all proceeds
thereof (collectively, the "Collateral"):

                           (a) All Nortel Equipment  financed or refinanced with
                  proceeds  of an Advance and all Vendor  Equipment  financed or
                  refinanced  with proceeds of an Advance,  and in each case any
                  and all additions,  substitutions,  and  replacements to or of
                  any  of  the   foregoing,   together  with  all   attachments,
                  components,  parts,  improvements,  upgrades,  and  accessions
                  installed   thereon   or   affixed   thereto    (collectively,
                  "Equipment") and Borrower's  rights under each Nortel Purchase
                  Agreement and each Vendor Purchase  Agreement relating to such
                  Equipment;

                           (b) All general  intangibles and intangible  property
                  (including  all  contracts and contract  rights)  constituting
                  part of, or  provided  by or  through  Nortel or any Vendor in
                  connection  with,  the  Equipment  which are necessary for the
                  proper   operation  of  the  Equipment,   including   (without
                  limitation) amounts due under licenses, license rights, rights
                  in  intellectual   property,   Software,   Software  Licenses,
                  computer programming (including


                                       13

<PAGE>


                  source  codes,  object  codes  and all  other  embodiments  of
                  computer programming or information),  refunds, warranties and
                  indemnification rights directly used in the Equipment, and all
                  amounts owed at any time to Borrower by Lender or Nortel or by
                  a  Vendor  in  connection  with a  Vendor  Purchase  Agreement
                  relating to Equipment  (collectively,  "General Intangibles");
                  and

                           (c)  All   proceeds   and  products  of  any  of  the
                  foregoing,  including  without  limitation  (i)  any  and  all
                  proceeds of any  indemnity,  warranty  or guaranty  payable to
                  Borrower  from  time  to  time  with  respect  to  any  of the
                  Collateral,  and  (ii)  any and  all  payments  (in  any  form
                  whatsoever)  made or due and payable to Borrower  from time to
                  time  in  connection  with  any   requisition,   confiscation,
                  condemnation,  seizure or forfeiture of all or any part of the
                  Collateral by any Governmental Authority (or any Person acting
                  under   color  of   governmental   authority)   (collectively,
                  "Proceeds").

         3.02. Priority of Security Interests. The security interests granted by
Borrower to Lender are and shall be continuing and  indefeasible  first-priority
security  interests in the Collateral,  subject to no Liens except for Permitted
Encumbrances as defined and permitted under Section 8.02 hereof.

         3.03.  Further  Documentation;  Pledge of Instruments.  At any time and
from time to time, upon the written  request of Lender,  and at the sole expense
of Borrower,  Borrower shall promptly execute, deliver and record any documents,
instruments,  agreements and amendments,  and take all such further  action,  as
Lender may  reasonably  deem  necessary or  appropriate  in  obtaining  the full
benefits  of  this  Agreement  and of the  rights  and  powers  herein  granted,
including,  without  limitation,  the  filing  of any  financing  statements  or
amendments  under the UCC.  Borrower also hereby  authorizes  Lender to file any
such  financing  statement or amendment  thereto,  or with a copy or telecopy of
Borrower's  signature,  to the extent permitted by applicable Law, or to execute
any financing statement or amendment thereof on behalf of Borrower as Borrower's
attorney-in-fact.  If any amount payable under or in connection  with any of the
Collateral  shall  be or  become  evidenced  by any  promissory  note  or  other
instrument or any certificated securities,  such note, instrument or certificate
shall be immediately pledged and delivered to Lender hereunder, duly endorsed in
a manner satisfactory to Lender.

         3.04. Further  Identification of Collateral.  Borrower shall furnish to
Lender  from time to time  statements  and  schedules  further  identifying  and
describing  the  Collateral  and  such  other  reports  in  connection  with the
Collateral as Lender may reasonably request, all in reasonable detail.

         3.05.  Remedies.  Lender  shall have all the rights and  remedies  of a
secured  party under the UCC,  and shall be  entitled  to  exercise  any and all
remedies  available  under Article 9 hereof or otherwise  available at law or in
equity upon the occurrence of an Event of Default.

         3.06.  Standard  of Care.  Lender  shall be  deemed  to have  exercised
reasonable care in the custody and  preservation of any of the Collateral in its
possession if it treats the Collateral in the manner in which it would treat its
own  property  or  otherwise  takes  such  action for that  purpose as  Borrower
requests in writing,  but Lender's failure to comply with any such request shall
not of itself be deemed a failure to exercise reasonable care, and no failure of
Lender to preserve or protect any rights with respect to such Collateral against
prior  parties,  or to do any  act  with  respect  to the  preservation  of such
Collateral  not so requested by Borrower,  shall be deemed a failure to exercise
reasonable care in the custody or preservation of such Collateral.


                                       14

<PAGE>


         3.07.  Advances to Protect  Collateral.  All  expenses  of  protecting,
storing,   warehousing,   insuring,  handling,   maintaining  and  shipping  the
Collateral (including,  without limitation,  all rent payable by Borrower to any
landlord  of any  Site),  and,  any and all  taxes  shall be  borne  and paid by
Borrower.  Lender may (but shall not be obligated to) make advances to preserve,
protect or obtain any of the  Collateral,  including  advances to cure, with the
prior  consent of Borrower,  defaults  under any lease  agreements  for Sites or
advances  to pay taxes,  insurance  and the like,  and all such  advances  shall
become part of the Obligations owing to Lender hereunder and shall be payable to
Lender on demand, with interest thereon from the date of such advance until paid
at the Default Rate in effect on the date of such advance.

         3.08.  License to Use.  So long as an Event of  Default is  continuing,
Lender is hereby  granted a license or other right to use , in  connection  with
the  Equipment  and without  charge,  the  Software  and the  Software  Licenses
pertaining to the Equipment.

         3.09.  Subsidiary  Guarantees.  Payment of the  Borrower's  Obligations
shall also be  unconditionally  guaranteed  by any  existing  Subsidiary  of the
Borrower,  as well as all future  Subsidiaries of the Borrower,  pursuant to the
form of Guaranty Agreement attached as Exhibit G to this Agreement,  during such
time as, with  regard to any single  Subsidiary,  any such  single  Subsidiary's
assets  or  revenues  (whichever  applies  first)  meet  or  exceed  10%  of the
Borrower's  consolidated  assets or revenues (as  applicable)  as of the Closing
Date, as of the end of each of the Borrower's fiscal years thereafter,  or as of
the end of the  Borrower's  fiscal quarter  immediately  preceding any Borrowing
Date, or, with regard to any group of Subsidiaries, the combined combined assets
or revenues of any such group of Subsidiaries  (whichever applies first) meet or
exceed 15% of the Borrower's  consolidated assets or revenues (as applicable) as
of the  Closing  Date,  as of the  end of each of the  Borrower's  fiscal  years
thereafter,  or as of the  end  of the  Borrower's  fiscal  quarter  immediately
preceding any Borrowing Date.

                    ARTICLE 4: REPRESENTATIONS AND WARRANTIES
                    -----------------------------------------

         Borrower hereby represents and warrants to Lender as follows:

         4.01.  Organization  and  Qualification.  Borrower  is duly  organized,
validly  existing  and in good  standing  as a  corporation  under  the  laws of
Maryland. Borrower is duly qualified to do business and in good standing in each
jurisdiction in which the failure to receive or retain such qualification  would
have a Material Adverse Effect.

         4.02. Authority and Authorization. Borrower has all requisite corporate
right,  power and  authority to execute and deliver and perform its  obligations
under this Agreement, to make the borrowings provided for herein, and to execute
and deliver and to perform its obligations under the Note. Borrower's execution,
delivery  and  performance  of the Loan  Documents  have been  duly and  validly
authorized by all necessary corporate action on the part of Borrower.

         4.03.  Execution and Binding Effect.  This Agreement,  the Note and all
other  Loan  Documents  have  been  or will be duly  and  validly  executed  and
delivered by Borrower,  and  constitute  or, when  executed and  delivered  will
constitute,  the legal, valid and binding obligations of Borrower enforceable in
accordance with their respective  terms,  except as such  enforceability  may be
limited  by  bankruptcy,  insolvency,  reorganization,   fraudulent  conveyance,
receivership, moratorium or other Laws affecting creditors' rights generally.


                                       15

<PAGE>


         4.04. Governmental  Authorizations.  Except for the consents identified
on Schedule 4.04 hereto (the "Required  Consents"),  no authorization,  consent,
approval,   license,   exemption  or  other  action  by,  and  no  registration,
qualification,   designation,  declaration  or  filing  with,  any  Governmental
Authority  (other than the filing of UCC financing  statements and  continuation
statements) is or will be necessary in connection with execution and delivery of
this Agreement,  the Note or any other Loan Documents by Borrower,  consummation
of the transactions herein or therein contemplated, performance of or compliance
by Borrower with the terms and conditions hereof or thereof.

         4.05.  Regulatory  Authorizations.  The  Borrower  holds  all  material
authorizations,  permits  and  licenses  required  by the  FCC or the PUC or any
Communications  Law for the operation of the Equipment,  and all such Regulatory
Authorizations  are  in  full  force  and  effect,  are  subject  to no  further
administrative  or judicial review and are therefore final.  Lender will not, by
reason of the execution, delivery and performance (other than the enforcement of
remedies) of any of the Loan Documents,  be subject to the regulation or control
of either the FCC or the PUC. The Regulatory Authorizations will be described on
Schedule 4.05 within 30 days after the Closing Date.

         4.06.  Material  Agreements;  Absence of  Conflicts.  The execution and
delivery  of  this  Agreement,  the  Note  and the  other  Loan  Documents,  the
consummation  of  the  transactions  herein  or  therein  contemplated  and  the
performance of or compliance with the terms and conditions  hereof or thereof by
Borrower will not (a) materially  violate any applicable  Law; (b) conflict with
or  result  in a  material  breach  of or a  default  under  the  Organizational
Documents of Borrower or any material  agreement or instrument to which Borrower
is a party or by which Borrower or its properties is bound; or (c) result in the
creation or  imposition  of any Lien upon any  property  (now owned or hereafter
acquired) of Borrower except as otherwise contemplated by this Agreement, except
with respect to Permitted  Encumbrances or as contemplated by this Agreement and
the Security Documents or which would not have a Material Adverse Effect.

         4.07.  No  Restrictions.  Borrower  is not a party  or  subject  to any
contract  or  agreement   which   restricts   its  right  or  ability  to  incur
Indebtedness,  other than as set forth on Schedule 4.07,  none of which prohibit
Borrower's  execution of or  compliance  with this  Agreement.  Borrower has not
agreed or consented  to cause or permit in the future  (upon the  happening of a
contingency or otherwise) any of the Collateral,  whether now owned or hereafter
acquired, to be subject to a Lien that is not a Permitted Encumbrance.

         4.08. Financial  Statements.  Borrower has furnished to Lender the most
recent  annual or quarterly  financial  statements  of Borrower,  certified by a
Responsible Officer of Borrower, including balance sheets and related statements
of income and retained earnings and changes in financial position,  as described
on Schedule 4.08 hereof. Such financial statements (including the notes thereto)
present fairly the financial condition of Borrower on a consolidated basis as of
the end of each such  fiscal  period and the results of its  operations  and the
changes in its  financial  position  for the fiscal  period then  ended,  all in
conformity  with GAAP applied on a basis  consistent  with that of the preceding
fiscal  period.  Any pro forma  financial  statements  delivered  by Borrower to
Lender were prepared in good faith.



         4.09. Financial Accounting Practices. Borrower has made and kept books,
records and accounts which, in reasonable detail,  accurately and fairly reflect
its respective  transactions and dispositions of its assets,  and Borrower shall
maintain  a  system  of  internal  accounting  controls  sufficient  to  provide
reasonable  assurances  that (a)  transactions  are executed in accordance  with
management's general or specific authorization, (b) transactions are recorded as
necessary (i) to permit  preparation of financial  statements in conformity with
GAAP and (ii) to maintain  accountability  for  assets,  (c) access to assets is
permitted only in accordance with management's general or specific authorization
and (d) the  recorded  accountability  for assets is compared  with the existing
assets at reasonable  intervals and appropriate  action is taken with respect to
any differences.


                                       16

<PAGE>


         4.10. Accurate and Complete  Disclosure.  No representation or warranty
made by Borrower  under this  Agreement and no statement made by Borrower in any
financial  statement,  certificate,  report,  exhibit or document  furnished  by
Borrower to Lender pursuant to or in connection with this Agreement  (including,
without  limitation,  any  filings  with the SEC,  the FCC or the PUC) is or was
false or  misleading as of the date made in any material  respect  (including by
omission of material information necessary to make such representation, warranty
or statement not  misleading).  To the best of the knowledge of Borrower,  there
are no existing facts that would  reasonably be expected to result in a Material
Adverse Effect which has not been set forth in the financial statements referred
to in Section 4.08 hereof or  otherwise  disclosed in writing to Lender prior to
the First Borrowing Date.

         4.11.  No Event of Default;  Compliance  with Material  Agreements.  No
event has occurred and is continuing and no condition exists which constitutes a
Default or an Event of Default  after giving effect to the Advance to be made on
the First Borrowing Date. As of the date hereof, Borrower is not in violation of
any term of its material  agreements or instruments to which it is a party or by
which it or its properties is bound which would reasonably be expected to result
in a Material Adverse Effect.

         4.12. Litigation.  Except as set forth in Schedule 4.12 or as otherwise
disclosed by the  Borrower  pursuant to the  Exchange  Act,  there is no pending
action, suit or (to the best of Borrower's  knowledge)  threatened proceeding by
or before any Governmental Authority against or affecting Borrower or any of its
properties,  rights or licenses which, if adversely decided, would reasonably be
expected to result in a Material Adverse Effect.

         4.13. Rights to Property;  Intellectual Property. Borrower has good and
marketable title, subject only to the Permitted Encumbrances,  to the Collateral
and to all personal and real  property  purported to be owned by it as reflected
in the most recent  balance sheet  referred to in Section 4.08 hereof (except as
sold or otherwise  disposed of in the  ordinary  course of business as no longer
used or useful in the conduct of the  business).  Borrower owns or possesses the
right to use all  material  patents,  trademarks,  service  marks,  trade names,
copyrights,  know-how, franchises,  software and software licenses necessary for
the operation of its business.

         4.14. Financial Condition. Borrower's financial condition is accurately
described  in the  Certificate  of  Financial  Condition  executed  by  Borrower
pursuant hereto.

         4.15. Taxes.  Borrower's federal tax identification number is set forth
on Schedule 1 hereto. All tax returns required to be filed by Borrower have been
properly  prepared,  executed and filed,  and all taxes,  assessments,  fees and
other  governmental  charges  upon  Borrower  or  upon  any  of  its  respective
properties,  incomes,  sales or franchises which are shown to be due and payable
thereon have been paid,  other than taxes or assessments  the validity or amount
of which  Borrower is contesting in good faith.  The reserves and provisions for
taxes on the  books of  Borrower  are  adequate  for all open  years and for its
current fiscal period.


                                       17

<PAGE>


         4.16.  No  Material  Adverse  Change.  Since the date of the  financial
statements  referenced  in  Section  4.08,  there has been no  Material  Adverse
Change.

         4.17. No  Regulatory  Event.  No  Regulatory  Event has occurred and is
continuing.

         4.18.  Trade  Relations.  There  exists  no  actual  or, to the best of
Borrower's knowledge, threatened termination,  cancellation or limitation of the
business relationship between Borrower and any Carrier, any labor organizations,
any material  customer or any group thereof whose  agreements  with Borrower are
material to the business of Borrower,  or with any material Supplier,  and there
exists no present condition or state of facts or circumstances  which would have
a Material Adverse Effect or prevent Borrower from conducting its business after
the consummation of the transaction contemplated by this Agreement.

         4.19. No Brokerage Fees. Other than as described in this Agreement,  no
brokerage or other fee,  commission or compensation is to be paid by Borrower to
any Person in connection  with the loans to be made  hereunder.  Borrower hereby
indemnifies  Lender against any claims brought against Lender for brokerage fees
or  commissions  of any Person based on a written  agreement  with  Borrower and
agrees to pay all reasonable  expenses actually incurred by Lender in connection
with the  defense  of any  action or  proceeding  brought  to  collect  any such
brokerage fees or commissions.

         4.20.  Margin  Stock;  Regulations  U and X.  Borrower  is not  engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying margin stock. The making of the
Advances and the use of the proceeds thereof will not violate Regulations U or X
of the Board of Governors of the Federal Reserve System.

         4.21.    Intentionally Deleted.

         4.22.    Intentionally Deleted.

         4.23.  Security  Interests.  The  provisions  of  Article 3 hereof  are
effective to create in favor of Lender a legal, valid and enforceable Lien on or
security interest in all of the Collateral, and, when the recordings and filings
described  on  Schedule  4.23 hereto  have been  effected in the public  offices
listed on said Schedule  4.23,  this  Agreement and the Security  Documents will
create a perfected  first-priority security interest in all right, title, estate
and interest of Borrower in the Collateral, and subject to no other Liens except
for  Permitted  Encumbrances.  All action  necessary or desirable to protect and
perfect such  security  interest in each item of the  Collateral  will have been
duly taken prior to or on the First  Borrowing  Date. The recordings and filings
shown on said Schedule 4.23 are all the actions  necessary or advisable in order
to establish, protect and perfect the interest of Lender in the Collateral.

         4.24.  Place of Business.  The chief executive  offices of Borrower are
identified on Schedule 4.24 hereto.  Borrower's  principal  place of business in
the state(s)  where the  Equipment  is located is  identified  on Schedule  4.24
hereto.  Borrower's records concerning the Collateral are kept at one or both of
these addresses.

         4.25. Location of Collateral. The Collateral is and will be kept at the
locations  identified on Schedule 4.24 hereto or such other  locations as may be
permitted under Section 8.12.


                                       18

<PAGE>


         4.26. Clear Title To Equipment. Borrower is the sole owner of each item
of the Equipment,  having good and marketable  title thereto,  free and clear of
any and all Liens, claims, or rights of others, except for the security interest
granted herein to Lender and the other Permitted Encumbrances.

         4.27.  Assumed  Names.  Except as set forth on  Schedule  4.27  hereto,
Borrower does not conduct  business under any assumed names or trade names,  and
has not,  during  the  five  (5)  years  preceding  the date of this  Agreement,
conducted business under any other names, or any assumed names or trade names.

         4.28.    Intentionally Deleted.

         4.29.  Nortel Purchase  Agreement.  The Nortel  Purchase  Agreement for
Nortel  Equipment  already  acquired  has been duly  executed  and  delivered by
Borrower,  is in full force and effect,  and a true,  correct and complete  copy
thereof  (including all annexes,  attachments  and amendments  thereto) has been
delivered  to  Lender,  and there are no other  side  letters,  waivers or other
agreements known to Borrower affecting the terms thereof.

         4.30.  Subsidiaries of Borrower.  A true and correct list of all direct
and indirect  Subsidiaries  of the Borrower,  together with the  jurisdiction of
incorporation of each Subsidiary, appears on Schedule 4.30 to this Agreement.

                        ARTICLE 5: CONDITIONS OF CLOSING
                        --------------------------------

         On or before the Closing Date, the following conditions shall have been
satisfied:

         5.01 Borrower's Certificate. A certificate of Borrower signed by a duly
authorized   Responsible   Officer,   certifying   as  to  (i)  true  copies  of
Organizational  Documents of Borrower in effect on such date;  (ii)  evidence of
all corporate action taken by Borrower relative to this Agreement,  the Note and
the other Loan Documents; (iii) the names, true signatures and incumbency of the
Responsible  Officers  of  Borrower  authorized  to  execute  and  deliver  this
Agreement,  the Note and the other Loan  Documents;  (iv) a Certificate  of Good
Standing (or equivalent  certificate)  for Borrower duly issued by the Secretary
of State of  Maryland  and each  state in which  Borrower  intends to locate the
Equipment; and (v) such other matters as Lender shall request.

         5.02  Opinion of Counsel.  Lender shall have  received  dated as of the
Closing Date and in form and substance  satisfactory to Lender a written opinion
of counsel to Borrower, substantially in the Form of Exhibit C hereto.

         5.03.  Closing  Documents.  Lender shall have  received  the  following
documents, all in form and substance satisfactory to Lender:

                  (a)      Agreement. This Agreement, duly executed by Borrower;

                  (b)      Note. The Note, duly executed by Borrower;

                  (c)  Financing  Statements.  All  UCC-1  financing  statements
         necessary to perfect the Liens  granted  hereby,  each duly executed by
         Borrower,  and duly  recorded in all the  jurisdictions  identified  on
         Schedule 4.24 hereto;


                                       19

<PAGE>


                  (d) Guaranty Agreements.  A Guaranty Agreement,  duly executed
         by all of the  existing  Subsidiaries  of  the  Borrower,  in the  form
         attached as Exhibit G to this Agreement.

                  (e) Insurance. Policies and certificates of insurance required
         by Section 7.06, accompanied by evidence of the payment of the premiums
         therefor;

                  (f) Financial  Statements.  The financial statements described
         in Section 4.08 hereof;

                  (g)  Certificate  of Financial  Condition.  A  Certificate  of
         Financial  Condition,   duly  executed  by  a  Responsible  Officer  of
         Borrower.

                  (h)  Pre-Closing   Lien  Searches.   Lien  searches  from  all
         jurisdictions  reasonably  determined  by  Lender  to  be  appropriate,
         effective as of a date reasonably close to the Closing Date, reflecting
         no  other  Liens  (other  than  Permitted  Encumbrances)  on any of the
         Collateral.

                        ARTICLE 6: CONDITIONS OF LENDING
                        --------------------------------

         6.01.  Conditions for Initial Advance. On or before the First Borrowing
Date, the following conditions shall have been met to Lender's satisfaction:

                  (a)  Post-Closing  Lien  Searches.  Lender shall have received
         satisfactory  results of Lien searches in all jurisdictions  reasonably
         determined  by  Lender  to be  appropriate,  reflecting  the  filing of
         financing  statements in favor of Lender  pursuant  hereto and no other
         Liens other than Permitted Encumbrances.

                  (b) Required Consents. Lender shall have received satisfactory
         evidence of Borrower's obtaining the Required Consents.

         6.02. Conditions for All Advances. The obligation of Lender to make any
Advance  hereunder  is  subject to  Borrower's  performance  of its  obligations
hereunder  on or  before  the  Borrowing  Date  of  such  Advance,  and  to  the
satisfaction of the following further conditions on or before the Borrowing Date
for any Advance, including the first Advance:

                  (a)  Filings,  Registrations  and  Recordings.  Any  financing
         statements  or other  recordings  required  hereunder  shall  have been
         properly  filed,   registered  or  recorded  in  each  office  in  each
         jurisdiction required in order to create in favor of Lender a perfected
         first-priority Lien on the Collateral,  subject to no other Lien except
         Permitted  Encumbrances;  Lender  shall  have  received  acknowledgment
         copies of all such filings,  registrations and recordations  stamped by
         the appropriate filing officer;  and Lender shall have received results
         of searches of such filing offices, and satisfactory  evidence that any
         other Liens (other than Permitted  Encumbrances) on the Collateral have
         been duly released,  that all necessary  filing fees,  recording  fees,
         taxes and other  expenses  related to such filings,  registrations  and
         recordings have been paid in full.

                  (b) Borrowing  Certificate.  Lender shall have received a duly
         executed  Borrowing  Certificate  in the form of Exhibit B, including a
         detailed itemization of all costs of goods and services to be paid with
         the proceeds of the Advance and accompanied by supporting documentation
         satisfactory to Lender.


                                       20

<PAGE>


                  (c)  Reporting  Requirements.  Borrower  shall  have  provided
         Lender with all relevant reports and information required under Article
         7 hereof.

                  (d) No  Regulatory  Event.  No  Regulatory  Event  (in  either
         Borrower's or Lender's  reasonable  determination)  shall have occurred
         and be continuing or would exist upon the  consummation of transactions
         to occur on such Borrowing Date.

                  (e) No  Default  or Event of  Default.  No Default or Event of
         Default  shall have  occurred and be continuing or would exist upon the
         consummation of transactions to occur on such Borrowing Date.

                  (f) No Material  Adverse  Change.  No Material  Adverse Change
         shall  have  occurred,  or would  occur  after  giving  effect  to such
         Advance,  since the date of the last financial  statements delivered to
         Lender pursuant to Section 4.08 or 7.01 hereof.

                  (g)  Representations  and Warranties.  The representations and
         warranties contained in Article 4 hereof shall be true on and as of the
         date of each such Advance hereunder.

                  (h) Lender's  Expenses.  All closing costs, and other Lender's
         Expenses shall have been paid in full (or shall be paid first from such
         Advance as provided in Section 2.03 hereof).

                  (i) Opinion.  Lender shall have  received  from  Borrower such
         opinion of counsel for  Borrower  as may be  reasonably  acceptable  to
         Lender  in form  and  substance  with  respect  to the  perfection  and
         priority of the Liens  created by the  Security  Documents in each such
         jurisdictional location.

                  (j) Details,  Proceedings and Documents. All legal details and
         proceedings in connection  with the  transactions  contemplated by this
         Agreement  shall be reasonably  satisfactory to Lender and Lender shall
         have  received  all such  counterpart  originals  or certified or other
         copies  of such  documents  and  proceedings  in  connection  with such
         transactions,  in form and substance reasonably satisfactory to Lender,
         as Lender may from time to time request.

                  (k)  Consents.   Lender  shall  have  received  Consents  duly
executed by all parties and in form satisfactory to Lender.

                  (l) Fees.  Lender shall have received the fee(s)  described in
Section 2.09 hereof.

                  (m) Purchase  Agreement.  Lender shall have received a copy of
         the executed Nortel Purchase Agreement or any Vendor Purchase Agreement
         with respect to which  proceeds of an Advance  shall be used to acquire
         Nortel  Equipment  or other  Vendor  Equipment,  and Lender  shall have
         reviewed and approved the  Equipment to be acquired with proceeds of an
         Advance.

         6.03.  Affirmation of  Representations  and  Warranties.  Any Borrowing
Certificate  or other  request  for any Advance  hereunder  shall  constitute  a
representation  and  warranty  that  (a)  the   representations  and  warranties
contained in Article 4 hereof are true and correct on and as of the date of such
request  with  the  same  effect  as  though  made on and as of the date of such
request and (b) on the date of such request,  no Default or Event of Default has
occurred and is  continuing or exists or will occur or exist after giving effect
to such Advance (for this purpose such Advance being deemed to have been made on
the date of such request).  Failure of Lender to receive notice from Borrower to
the  contrary   before  such   Advance  is  made  shall   constitute  a  further
representation  and  warranty  by  Borrower  that  (x) the  representations  and
warranties of Borrower  contained in the first sentence of this Section 6.03 are
true and correct on and as of the date of such  Advance  with the same effect as
though  made on and as of the  date of such  Advance  and (y) on the date of the
Advance no Default or Event of Default has occurred and is  continuing or exists
or will occur or exist after giving effect to such Advance.


                                       21

<PAGE>


         6.04. Deadline for Funding Conditions.  Lender shall have no obligation
to make any Advances  hereunder if all of the  conditions set forth in Article 5
and in Sections  6.01 and 6.02 hereof have not been fully  satisfied  or waived,
and the first Advance made hereunder,  within the period of twelve (12) calendar
months following the Closing Date.

                        ARTICLE 7: AFFIRMATIVE COVENANTS
                        --------------------------------

         Borrower  hereby  agrees  that  as long as the  Commitment  remains  in
effect,  the Note remains  outstanding or unpaid or any other amount is owing to
Lender  hereunder or under any of the Loan  Documents,  Borrower  shall keep and
perform fully each and all of the following covenants:

         7.01.    Reporting and Information Requirements.

                  (a) Annual Audit Reports. As soon as practicable within ninety
         (90) days after the close of each  fiscal year of  Borrower,  but in no
         event  earlier  than the date on which the  appropriate  filing is made
         with the SEC, Borrower shall furnish or cause to be furnished to Lender
         audited  statements  of income,  statements  of cash flow and  retained
         earnings for such fiscal year and  Borrower's  balance  sheet as of the
         close of such fiscal year, and notes to each, all in reasonable detail,
         and beginning with Borrower's  second full fiscal year setting forth in
         comparative  form the  corresponding  figures for the preceding  fiscal
         year,  with  such  statements  and  balance  sheet to be  certified  by
         independent  certified  public  accountants  selected by  Borrower  and
         reasonably satisfactory to Lender.

                  (b) Quarterly  Reports.  Within forty-five (45) days after the
         end of each  fiscal  quarter,  Borrower  shall  furnish  to Lender  (i)
         unaudited  consolidated  statements of income,  statements of cash flow
         and retained  earnings for Borrower for such quarter and for the period
         from the beginning of Borrower's then current fiscal year to the end of
         such quarter,  and an unaudited  consolidated balance sheet of Borrower
         as of the end of the quarter, all in reasonable detail and certified by
         a Responsible  Officer of Borrower as  presenting  fairly the financial
         position of  Borrower as of the end of such  quarter and the results of
         its  operations  and the  changes in its  financial  position  for such
         quarter,  in  conformity  with  GAAP  (except  for  accompanying  notes
         thereto),  subject to year-end audit  adjustments;  provided,  however,
         that such  information  shall be furnished only on or after the date on
         which  the  appropriate  filing  is made  with the SEC,  and (ii)  upon
         Lender's request, an aging of accounts payable and accounts receivable.

                                       22

<PAGE>


                  (c) Compliance Certificates. Within thirty (30) days after the
         end of each  Calendar  Quarter,  Borrower  shall  deliver  to  Lender a
         certificate  dated as of the end of such  Calendar  Quarter,  signed on
         behalf of Borrower  by a  Responsible  Officer of Borrower  (i) stating
         that, as of the date  thereof,  no Event of Default has occurred and is
         continuing  or exists,  or if an Event of Default has  occurred  and is
         continuing  or  exists,  specifying  in detail the nature and period of
         existence  thereof  and  any  action  with  respect  thereto  taken  or
         contemplated   to  be  taken  by  Borrower;   (ii)  stating  that  such
         Responsible   Officer  has  reviewed  this   Agreement  and  that  such
         certificate is based on an examination made by or under the supervision
         of the Responsible  Officer  sufficient to assure that such certificate
         is accurate; and (iii) calculating and certifying Borrower's compliance
         with the financial covenants set forth in Section 7.15 hereof.

                  (d)  Other  Reports  and  Information.   Promptly  upon  their
         becoming  available  to  Borrower  and  otherwise  in  accordance  with
         applicable   Law   (including  the  Exchange  Act  and  the  rules  and
         regulations of the SEC), Borrower shall deliver to Lender copies of (i)
         all regular or special  reports or  effective  registration  statements
         which  Borrower  shall  file with the SEC and (ii) all  press  releases
         issued by or concerning Borrower.

                  (e) Further  Information.  Borrower will  promptly  furnish to
         Lender,  in accordance  with  applicable  Law,  such other  information
         (including any report by  independent  auditors) in such form as Lender
         may reasonably request.

         7.02 Other  Notices.  Promptly upon a  Responsible  Officer of Borrower
becoming  aware of any of the  following,  Borrower  shall  give  Lender  notice
thereof,  together with a written statement of a Responsible Officer of Borrower
setting forth the details  thereof and any action with respect  thereto taken or
contemplated to be taken by Borrower:

                  (a)      a Default or Event of Default;

                  (b)      any Material Adverse Change;

                  (c) a material  default or breach by Borrower  under any other
         material  contractual  obligation to which it is a party or by which it
         or its material properties is bound, if the consequences of such breach
         or default  are  material  to the  business,  operations  or  financial
         condition of Borrower;

                  (d)  any  event  that  Borrower  reasonably  determines  would
constitute a Regulatory Event;

                  (e) the commencement, existence or threat of any proceeding by
         or  before  any  Governmental  Authority  against  Borrower  which,  if
         adversely decided, would have a Material Adverse Effect; or

                  (f) any  Change  in  Control  or any  material  change  in the
management of Borrower.

         7.03. Inspection Rights. Borrower shall, upon reasonable notice, permit
such Persons as Lender may designate,  at Lender's sole expense (unless there is
continuing an Event of Default) to visit and inspect the Collateral or any other
properties of Borrower, to examine its books and records and discuss its affairs
with its  officers,  employees  and  independent  engineers at such times and as
often  as  Lender  may  reasonably  request.  Borrower  hereby  authorizes  such
officers,  employees,  and  independent  engineers  to discuss  with  Lender the
affairs of Borrower in a manner consistent with applicable Law.


                                       23

<PAGE>


         7.04. Preservation of Corporate Existence and Qualification. Other than
as   contemplated   in  connection   with  the  Borrower's   pending   corporate
reorganization  (as further  described  in the  Borrower's  filings with the SEC
pursuant to the Exchange Act),  the Borrower shall maintain its existence,  good
standing  and  rights  in  full  force  and  effect  in  its   jurisdiction   of
organization.  Borrower shall qualify to do business and remain qualified and in
good  standing and shall obtain all necessary  authorizations  to do business in
each  jurisdiction  in which  failure  to  receive  or retain  such would have a
Material Adverse Effect.

         7.05.  Continuation  of  Business.  Borrower  shall  continue to engage
solely in the  business  described on Schedule 1 hereto,  and shall  acquire and
maintain  in full  force and  effect  all  rights,  privileges,  franchises  and
licenses necessary for the operation and maintenance of its business (including,
without limitation any license or authorization required by the FCC or any PUC).

         7.06.    Insurance.

                  (a) With respect to the Equipment,  Borrower shall provide and
         maintain or cause to be maintained at all times insurance in such forms
         and  covering  such risks and hazards  and in such  amounts and with an
         insurance  carrier  with a Best rating of "A" or above,  licensed to do
         business in the states where Borrower and the Equipment are located, as
         may be  satisfactory to Lender,  as shown on Schedule 7.06 hereto,  and
         otherwise as may be required by the Security Documents.

                  (b) Borrower shall cause (i) all liability  insurance policies
         referred to in Section 7.06(a),  above, to name Lender as an additional
         insured,  (ii) all physical damage  insurance  policies  referred to in
         Section  7.06(a),  above,  to contain a lender's  or  mortgagee's  loss
         payable provision  reasonably  acceptable to Lender with respect to the
         Collateral, (iii) all insurance policies to provide that no assignment,
         cancellation,  modification,  reduction in amount or adverse  change in
         coverage  thereof  shall be  effective  until at least thirty (30) days
         after receipt by Lender of written notice  thereof,  (iv) all insurance
         policies  to  insure  the  interests  of  Lender  with  respect  to the
         Collateral  regardless of any breach of or violation by Borrower of any
         warranties,  declarations or conditions  contained therein and (v) such
         action to ensure that Lender shall have no  obligation or liability for
         premiums,  commissions,  assessments  or calls in connection  with such
         insurance.  Lender shall be under no  obligation to verify the adequacy
         or existence of any insurance  coverage.  Borrower shall furnish Lender
         copies  of,  or  acceptable  certificates  with  respect  to,  all such
         policies  prior to the Closing Date,  and shall  provide to Lender,  at
         least thirty days prior to each policy expiration date, evidence of the
         insurance being  maintained by Borrower in compliance with this Section
         7.06(b). Certificates for insurance required under subsection (i) above
         shall be in ACORD Form 27 (attached  hereto at Schedule 7.06),  and all
         certificates shall be satisfactory in form and substance to Lender.


                                       24


<PAGE>


                  (c) If the  Collateral  is  partially  or  totally  damaged or
         destroyed,  Borrower  shall  give  prompt  notice  to  Lender,  and all
         insurance proceeds, less the costs of collection thereof, shall be paid
         to or retained by Lender.  Settlements,  adjustments  or compromises of
         any claims for loss,  damage or destruction to the Collateral  shall be
         made by Borrower and Lender as long as no Event of Default has occurred
         and is  continuing,  and  otherwise  shall be made  solely  by  Lender.
         Borrower hereby  authorizes and directs any affected  insurance company
         to pay  such  proceeds  directly  to  Lender,  and to rely on  Lender's
         statement  as to  whether an Event of Default  has  occurred.  Borrower
         shall pay all costs of  collection  of  insurance  proceeds  payable on
         account  of such  damage  or  destruction.  If no  Default  or Event of
         Default has occurred and is  continuing  on the date the  Collateral is
         partially or totally damaged or destroyed,  Lender shall make available
         to Borrower the proceeds of any physical damage insurance actually paid
         to Lender in respect of such damage or destruction of the Collateral to
         pay the cost of restoration,  and Borrower shall proceed  promptly with
         the work of  restoration of the Collateral and shall pursue the work of
         restoration  diligently  to  completion.  If any  Default  or  Event of
         Default  has  occurred  and is  continuing  either  on the date of such
         damage or destruction or on the date such insurance  proceeds are paid,
         or if any Default or Event of Default  shall occur prior to  completion
         of such work of restoration, then Lender, at its option, may apply such
         insurance proceeds in payment of any of the Obligations,  in such order
         as Lender  may elect in its sole  discretion.  Any  insurance  proceeds
         remaining  after  completion of work or restoration  shall, at Lender's
         election,  be applied in accordance  with Section  2.04(c)  hereof (but
         without prepayment premium), or paid over to Borrower.  Upon completion
         of any  restoration,  Borrower  shall  deliver to Lender a  certificate
         stating that the restoration has been duly completed and accounting for
         the use of any insurance proceeds in such restoration.

         7.07.  Payment  of Taxes,  Charges,  Claims  and  Current  Liabilities.
Borrower shall pay or discharge:

                  (a) on or prior to the date on which penalties thereto accrue,
         all taxes,  assessments and other government  charges or levies imposed
         upon it or any of its properties or income;

                  (b)  on or  prior  to  the  date  when  due,  all  lawful  and
         uncontested claims of materialmen,  mechanics, carriers,  warehousemen,
         and other like  persons  which could  result in creation of a Lien upon
         any such property;

                  (c) on or prior to the date when due,  all  other  lawful  and
         uncontested claims which, if unpaid,  might result in the creation of a
         Lien upon any such  property  (other than  Permitted  Encumbrances)  or
         which, if unpaid,  would give rise to a claim entitled to priority over
         general  creditors of Borrower in a case under Title 11 (Bankruptcy) of
         the United States Code, as amended, or in any insolvency  proceeding or
         dissolution or winding-up involving Borrower; and

                  (d) all other current liabilities so that none is overdue more
than ninety (90) days.

         Notwithstanding the foregoing, Borrower shall be entitled to contest or
appeal the  requirements of any Law or Governmental  Authority or the payment of
any tax,  assessment,  charge,  levy or claim,  or any judgment  entered against
Borrower  (collectively,  in this Section 7.07, the "requirements"),  as long as
(i)  such  requirements  are  being  contested  in  good  faith  by  appropriate
proceedings diligently conducted;  (ii) Borrower has given Lender written notice
of such requirements and its intent to contest them, with supporting reasons for
such contest,  before the addition of any interest or penalties  that may accrue
on such requirements;  (iii) Borrower maintains adequate cash reserves and makes
other  appropriate  provisions  as may be  required  by GAAP to provide  for any
liability arising from such requirements;  (iv) the contesting of, or failure to
comply with, such requirements does not in any way impair Borrower's  ability or
authority  to  operate  all or any  part  of the  Collateral  or the  continuing
priority of Lender's security  interests in the Collateral;  (vi) the contesting
of, or  failure  to comply  with,  such  requirements  does not have a  Material
Adverse  Effect;  and  (vii) any  foreclosure,  attachment,  execution,  sale or
similar  proceeding against Borrower or any of its properties in connection with
any such requirements is duly stayed by posting of a bond or security deposit or
by other  action  sufficient  under  applicable  law to stay  such  foreclosure,
attachment, execution, sale or other proceedings.


                                       25

<PAGE>


         7.08.  Financial  Accounting  Practices.  Borrower  shall make and keep
books,  records and accounts which, in reasonable detail,  accurately and fairly
reflect its transactions and dispositions of its assets and maintain a system of
internal accounting  controls  sufficient to provide reasonable  assurances that
(a)  transactions  are  executed  in  accordance  with  management's  general or
specific authorization, (b) transactions are recorded as necessary (i) to permit
preparation of financial statements in conformity with GAAP and (ii) to maintain
accountability  for assets, (c) access to assets is permitted only in accordance
with  management's  general  or  specific  authorization  and (d)  the  recorded
accountability  for assets is compared  with the existing  assets at  reasonable
intervals and appropriate action is taken with respect to any differences.

         7.09.  Compliance  with Laws.  Borrower  shall  comply in all  material
respects with all Laws applicable to Borrower,  provided that Borrower shall not
be deemed to be in  violation of this Section 7.09 as a result of any failure to
comply  which  would not result in any  liability  or  exposure to Lender or any
fines,  penalties,  injunctive  relief or other  civil or  criminal  liabilities
which, in the aggregate, would have a Material Adverse Effect.

         7.10.  Use of  Proceeds.  Borrower  shall use the  proceeds of Advances
hereunder only as set forth in Section 2.01 hereof.

         7.11.  Government  Authorizations;   Regulatory  Authorizations,   Etc.
Borrower  shall  at all  times  obtain  and  maintain  in force  all  Regulatory
Authorizations  and all  other  authorizations,  permits,  consents,  approvals,
licenses,   exemptions   and   other   actions   by,   and  all   registrations,
qualifications,   designations,   declarations   and  other  filings  with,  any
Governmental  Authority  necessary in connection with the execution and delivery
of this  Agreement  or the  Note,  consummation  of the  transactions  herein or
therein contemplated, performance of or compliance with the terms and conditions
hereof or thereof or to ensure the legality,  validity and enforceability hereof
or thereof.

         7.12.  Contracts and Franchises.  Borrower shall comply in all material
respects with all material  agreements or  instruments to which it is a party or
by which it or any of its material  properties (now owned or hereafter acquired)
may be subject or bound and shall maintain any and all franchises it may have or
hereafter acquire, provided that Borrower shall not be deemed to be in violation
of this Section 7.12 as a result of any failure to comply with any  agreement if
one reasonably would expect such failure not to have a Material Adverse Effect.

         7.13.  Consents.   Borrower  shall  obtain  such  Landlord's  Consents,
Mortgagee's  Consents and other third party consents as Lender shall  reasonably
request after the Closing to protect its Liens and its access to the Collateral.

         7.14.  Financial  Covenants.  Borrower  shall comply with the financial
covenants set forth on Schedule 7.14 hereto.


                                       26

<PAGE>


         7.15.  Construction  and Storage.  The Collateral shall be installed in
material compliance with the Requirements of Law affecting the Collateral except
to the extent a failure to so comply would not have a Material Adverse Effect on
the construction or operation of the Collateral. All Equipment financed with the
proceeds  of the  Loan  shall be  safeguarded  and  stored  until  installed  in
appropriate storage facilities owned or leased by Borrower.  In the event of any
cessation of construction  for more than fifteen (15) successive  calendar days,
Borrower shall make adequate provision, reasonably acceptable to Lender, for the
protection  of all  materials  stored  on site  against  deterioration,  loss or
damage.

         7.16. Upgrade Equipment. Borrower shall update the Software used in the
Equipment  within two  releases  of the most  current  batch  change  supplement
release.  Borrower  shall  maintain  the  Equipment  in good  working  order  in
accordance  with  established  maintenance  procedures  such that the  Equipment
performs to published  specifications  and shall  upgrade its  functionality  to
include batch change supplements  releases  generally  available to customers of
Nortel  or  the  applicable  Vendor,  as the  case  may  be,  and  batch  change
supplements  upgrades  included in the original  purchase  price of the Purchase
Agreement in the form in effect on the date of the Closing Date.

                          ARTICLE 8: NEGATIVE COVENANTS
                          -----------------------------

         Borrower hereby agrees that so long as the Commitment hereunder remains
in effect or the Note  remains  outstanding  and  unpaid or any other  amount is
owing to Lender  hereunder or under any of the Loan  Documents,  Borrower  shall
not, directly or indirectly,  without the prior written consent of Lender, do or
permit to exist any of the following:

         8.01. Additional Indebtedness. Create, incur, assume or suffer to exist
at any one time any  Indebtedness  that would cause  Borrower not to comply with
the  ratios set forth in  Schedule  7.14  hereto;  provided,  however,  that the
Borrower  may  create,  incur,  assume or suffer to exist any  Indebtedness  (or
portion  thereof)  secured  by  the  Borrower's   accounts   receivable  without
application  of the ratios set forth in  Schedule  7.14  hereto and  without the
Lender's written consent.  As long as the Borrower would continue to comply with
the ratios set forth in Schedule 7.14 hereto,  the Borrower shall have the right
to  incur  (a)   Subordinated   Indebtedness;   (b)  unsecured,   unsubordinated
Indebtedness  with the Lender's prior written consent,  which consent the Lender
shall not withhold unreasonably; or (c) without the Lender's consent, unsecured,
unsubordinated  Indebtedness  with  interest  only payable prior to the Maturity
Date and  with  covenants,  terms  and  conditions  no less  favorable  from the
Lender's  perspective  as the covenants,  terms and conditions  contained in the
Senior  Notes  and the  Indenture,  including  (without  limitation)  conditions
prohibiting  or  restricting  Subsidiaries  from  loaning or  distributing  cash
dividends to Borrower or limiting redemptions prior to maturity.

         8.02. Restrictions on Liens and Sale of Collateral. Create or suffer to
exist any Lien on the  Collateral,  or any part  thereof,  whether  superior  or
subordinate to the Lien of the Security  Documents,  or assign,  convey, sell or
otherwise  dispose of or encumber  its interest in the  Collateral,  or any part
thereof (including, without limitation,  execution of any lease), nor permit any
such action to be taken,  except for the following  permitted  dispositions  and
encumbrances (the "Permitted  Encumbrances"):  (i) the Lien created hereby; (ii)
Liens for taxes not yet due, or which are being  contested  in good faith and by
appropriate proceedings in accordance with Section 7.07 hereof; (iii) carriers',
warehousemen's,  mechanics',  materialmen's,  repairmen's  or other  like  Liens
arising in the  ordinary  course of business  which are overdue for a period not
longer than thirty (30) days or which are being  contested  in good faith and by
appropriate  proceedings in accordance with Section 7.07 hereof; (iv) pledges or
liens in connection with workers' compensation, unemployment insurance and other
social  security  legislation;  (v) 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;   (vi)   easements,
rights-of-way,   restrictions  and  other  similar  encumbrances  that  are  not
substantial in amount,  and which do not in any case materially detract from the
value of the property  subject thereto or interfere with the ordinary conduct of
the business of Borrower;  (vii) judgment liens with respect to which  execution
has been stayed within ten (10) days by appropriate judicial proceedings and the
posting of adequate security which may not be any of the Collateral;  and (viii)
specific liens, if any, identified on Schedule 8.02 hereto. Any of the foregoing
Liens shall remain "Permitted  Encumbrances" as long as they are being contested
by Borrower in compliance with Section 7.07 hereof.


                                       27

<PAGE>


         8.03.    Intentionally Deleted.

         8.04.  Prohibition of Mergers,  Acquisitions,  Name, Office or Business
Changes, Etc.

                  (a)  Enter  into  or  become  the   subject  of  any   merger,
         acquisition or consolidation which would result in a Change in Control;
         liquidate,  wind up or dissolve  itself (or suffer any  liquidation  or
         dissolution); or convey, sell, lease, transfer or otherwise dispose of,
         in one transaction or a series of  transactions,  all or  substantially
         all of Borrower's assets, whether now owned or hereafter acquired.

                  (b)  Change its name or  corporate  structure  without  giving
         Lender at least thirty (30) days advance written notice of such change,
         and ensuring that any steps that Lender may  reasonably  deem necessary
         to continue the perfection and priority of Lender's security  interests
         in the Collateral shall have been taken.

                  (c) Change the fiscal year end of Borrower  from  December 31,
         except with the prior  written  consent of Lender,  which consent shall
         not be unreasonably withheld.

                  (d) Amend,  restate or otherwise  modify, or violate any terms
         of, its  Organizational  Documents without the prior written consent of
         Lender, which consent shall not be unreasonably withheld.

                  (e)   Enter   into   any   new   business   other   than   the
         telecommunications  business or other  similar  businesses  or make any
         material change in any of Borrower's business objectives,  purposes and
         operations from those currently  undertaken which would have a Material
         Adverse Effect.

         8.05.  Limitation on Equity Payments.  Make any Equity Payment,  except
that,  as long as no  Default or Event of  Default  is  continuing,  or would be
caused thereby,  and if no other provision  contained herein will be violated by
the  disbursement  of such Equity  Payment,  Borrower  may make Equity  Payments
described  on  Schedule  8.05  hereto.  Before  making  any  Equity  Payment  in
accordance  with  this  Section  8.05,   Borrower  shall  deliver  to  Lender  a
certificate  of a Responsible  Officer of Borrower,  setting forth in detail the
calculation  supporting  Borrower's  compliance  with the  financial  covenants,
stating  that no  Material  Adverse  Change has  occurred  since the date of the
latest financial  statement  delivered pursuant to Section 7.01(a),  and stating
that no Default or Event of Default has  occurred and is  continuing  or will be
caused by such Equity Payment.


                                       28

<PAGE>


         8.06.  Limitation  on  Investments,   Advances  and  Loans.  Except  in
connection  with the  Borrower's  pending  corporate  organization,  without the
Lender's prior written consent, organize, create, acquire, capitalize or own any
Subsidiaries engaged in any business other than the telecommunications  business
or similar businesses, or make or commit to make any advance, loan, guarantee of
any  Indebtedness,  extension of credit or capital  contribution  to, or hold or
invest in or purchase or otherwise acquire any stock, bonds,  notes,  debentures
or other  securities of, or make any other investment in, any Person not engaged
in the telecommunications business or similar businesses.

         8.07.    Intentionally Deleted.

         8.08.    Intentionally Deleted.

         8.09.  Removal  of  Collateral.  Remove or permit  the  removal  of any
material part of the Equipment  from the locations  identified on Schedule 4.24,
without  giving Lender thirty (30) days prior written notice of such removal and
ensuring that any steps Lender may deem necessary to continue the perfection and
priority of Lender's security interest in the Collateral shall have been taken.

         8.10.  Assumed Names.  Transact or engage in business under any assumed
name, fictitious name, tradestyle or "d/b/a" except those identified on Schedule
4.27.

                    ARTICLE 9: EVENTS OF DEFAULT AND REMEDIES
                    -----------------------------------------

         9.01. Events of Default.  An Event of Default shall mean the occurrence
or existence of one or more of the following events or conditions  (whatever the
reason for such Event of Default and whether voluntary,  involuntary or effected
by operation of Law):

                  (a) Payment Default. If Borrower fails to pay any sum, whether
         of principal or interest on the Note or any prepayment premiums, or any
         other amount due  hereunder  or under the Note within 10 calendar  days
         after such amount becomes due; or

                  (b)  False  Statement.  If any  statement,  representation  or
         warranty made by Borrower in any Loan Document or made in any financial
         statement, certificate, report, exhibit or document furnished to Lender
         pursuant to any Loan Document, proves to have been untrue,  incomplete,
         false or  misleading  in any material  respect as of the time when made
         (including by omission of material  information  necessary to make such
         representation, warranty or statement not misleading) and such untruth,
         falsity, misleading statement or omission shall not have been corrected
         or remedied to the  satisfaction  of Lender within thirty (30) calendar
         days after the earlier of  Borrower's  knowledge  thereof or receipt of
         written notice thereof from Lender; or

                  (c) Covenant Defaults. If Borrower defaults in the performance
         or observance of any covenant or agreement in this Agreement,  and such
         default continues for a period of 30 calendar days after the earlier of
         Borrower's  knowledge  thereof or receipt of written notice from Lender
         thereof,  except for violations of Section 7.14,  which shall become an
         Event  of  Default  at the end of 10 days;  except  for  violations  of
         Section  7.07(d),  which shall become an Event of Default at the end of
         the sixty  (60) day period  stated  therein;  and  except for  specific
         Defaults  listed  elsewhere in this Section 9.01, as to which no notice
         or cure period shall apply unless specified; or

                                       29

<PAGE>


                  (d)  Failure  of  Conditions.  If  Borrower  fails to meet any
         condition of lending under Article 6 hereof,  and such condition is not
         waived by Lender;

                  (e) Undischarged  Judgments.  If one or more judgments for the
         payment  of money has been  entered  against  Borrower  in an amount in
         excess of  $500,000,  and such  judgment  or  judgments  have  remained
         undischarged  and unstayed for a period of thirty (30)  calendar  days,
         unless the validity  thereof is contested  in  compliance  with Section
         7.07 hereof; or

                  (f)  Attachments,  etc.  If a writ or warrant  of  attachment,
         garnishment,  execution,  distraint or similar  process has been issued
         against   Borrower  or  any  of  its  properties   which  has  remained
         undischarged  and unstayed for a period of thirty (30) consecutive days
         and is not being contested in compliance with Section 7.07 hereof; or

                  (g) Default  Under Third Party  Agreements.  If a default,  or
         event or  condition  which  with  notice or lapse of time or both would
         become  a  default,  occurs  that  gives  the  creditor  the  right  to
         accelerate in respect of any other  obligation of Borrower for borrowed
         money  (including  lease  obligations) in the amount of $500,000 in the
         aggregate,  or under  any two or more  such  other  obligations  of any
         amount; or

                  (h)  Dissolution;   Etc.  If  Borrower   dissolves,   has  its
         Organizational  Document revoked,  winds up or liquidates itself or its
         business; or

                  (i) Involuntary Bankruptcy or Receivership  Proceedings.  If a
         receiver,  custodian,  liquidator, or trustee of Borrower, or of any of
         its property is appointed by the order or decree of any court or agency
         or supervisory  authority having  jurisdiction;  or an order is entered
         adjudicating Borrower as bankrupt or insolvent;  or any of the property
         of  Borrower  is  sequestered  by court  order;  or a petition is filed
         against Borrower under any state or federal bankruptcy, reorganization,
         arrangement,    insolvency,    readjustment   of   debt,   dissolution,
         liquidation,  or receivership law of any  jurisdiction,  whether now or
         hereafter in effect; or

                  (j) Voluntary Bankruptcy.  If Borrower takes affirmative steps
         to prepare to file, or files, a petition in voluntary  bankruptcy or to
         seek relief  under any  provision  of any  bankruptcy,  reorganization,
         arrangement,   insolvency,   readjustment  of  debt,  dissolution,   or
         liquidation  Law of any  jurisdiction,  whether  now  or  hereafter  in
         effect,  or consents to the filing of any petition against it under any
         such Law; or

                  (k)  Assignments  for Benefit of  Creditors,  Etc. If Borrower
         makes an assignment for the benefit of creditors,  or admits in writing
         its  inability  to pay its  debts  generally  as they  become  due,  or
         consents to the  appointment of a receiver,  trustee,  or liquidator of
         itself or of all or any part of its properties; or

                  (l) Non-compliance with Governmental Requirements. If Borrower
         fails to comply  with any  requirement  of any  Governmental  Authority
         within  thirty  (30)  calendar  days  after  notice in  writing of such
         requirement  shall have been  given to  Borrower  by such  Governmental
         Authority,  or such longer  period of time  permitted  Borrower by such
         Governmental Authority; or

                  (m) Regulatory Authorizations. If any Regulatory Authorization
         in  connection  with this  Agreement or any other Loan  Document or any
         such Regulatory  Authorization now or hereafter  necessary or advisable
         to make  this  Agreement  or the other  Loan  Documents  legal,  valid,
         enforceable and admissible in evidence or to permit Borrower to conduct
         its  business  is not  obtained  or has  ceased to be in full force and
         effect or has been  modified  or amended or has been held to be illegal
         or invalid or is revoked or terminated,  and is not being  contested by
         Borrower  in  compliance  with  Section  7.07  hereof  and  Lender  has
         reasonably  determined  in good  faith  (which  determination  shall be
         conclusive)  that such event or occurrence may have a Material  Adverse
         Effect or a  material  adverse  effect on  Lender's  rights  under this
         Agreement or any other Loan Documents; or


                                       30

<PAGE>


                  (n) Damage or  Destruction.  If the  proceeds of any  physical
         damage  insurance  actually  paid in  respect  of the  partial or total
         damage or destruction of the Collateral are  insufficient  to cover the
         cost of the  restoration  thereof  or if  Lender  determines  that such
         damage or destruction is so extensive that repair or restoration cannot
         be  expected  within a time period  short  enough to prevent a Material
         Adverse Effect;

                  (o)  Consents.  If  Borrower  fails  to  provide  any  Consent
         required  hereunder and Lender determines in its reasonable  discretion
         that such failure results in a material impairment of Lender's security
         for the Loan; or

                  (p)  Defaults  Under  Other Loan  Documents.  If any  default,
         misrepresentation or breach should occur under any Security Document or
         other  Loan  Document  and is not  cured  or  waived  within  the  time
         permitted  therein,  or any such Loan  Documents  should cease to be in
         full  force  and  effect,  or  any  party  thereto  should  assert  any
         unenforceability  of,  or deny  liability  on,  or admit  inability  to
         perform under, any such Loan Document.

         9.02.  Consequences  of an Event of  Default.  If any Event of  Default
shall occur and be continuing  or shall exist,  Lender shall be under no further
obligation to make Advances hereunder,  any remaining commitment hereunder shall
immediately  terminate,  with no further  notice,  and Lender  may, by notice to
Borrower,  declare the unpaid  principal  amount of the Note,  interest  accrued
thereon and all other amounts  owing by Borrower  hereunder or under the Note to
be immediately due and payable without presentment,  demand,  protest or further
notice of any kind,  all of which are  hereby  expressly  waived,  and an action
therefor shall immediately  accrue.  Such consequences shall occur automatically
upon the  occurrence  of an Event of Default under Section 9.01 (h), (i), (j) or
(k),  without any notice or demand.  Upon the occurrence of an Event of Default,
Lender may, in its sole discretion,  exercise any and all remedies  available to
it under this Article 9 or under any of the Loan  Documents or under  applicable
Law without further notice or period of grace or opportunity to cure.

         9.03. Exercise of Rights.  Subject to any requirements for FCC or other
Governmental  Authority upon the occurrence of any Event of Default, the rights,
powers and privileges  provided in this Section and all other remedies available
to Lender under this  Agreement or by statute or by rule of law may be exercised
by Lender at any time from time to time whether or not the Obligations  shall be
due and payable, and whether or not Lender shall have instituted any foreclosure
or other action for the enforcement of this Agreement or the Note. No failure to
exercise nor any delay in exercising on the part of Lender,  any right,  remedy,
power or  privilege  hereunder  or under any of the other Loan  Documents  shall
operate as a waiver  thereof,  nor shall any single or partial  exercise  of any
right, power or privilege  hereunder or thereunder  preclude any other or future
exercise thereof or the exercise of any other right, remedy, power or privilege.


                                       31

<PAGE>


         9.04.  Rights  of  Secured  Party;  Possession  or Sale of  Collateral.
Without  limiting the  generality  of the  foregoing,  Lender shall have all the
rights and remedies of a secured  party under the UCC,  and Lender may,  without
demand and without advertisement or notice, all of which Borrower waives, at any
time or  times,  sell and  deliver  any or all  Collateral  held by or for it at
public or private sale, for cash,  upon credit or otherwise,  at such prices and
upon such  terms as  Lender  deems  advisable,  in its sole  discretion,  and/or
collect,  or  enforce  the  collection  of,  the  Collateral.  Lender may be the
purchaser at any such sale.  Upon the occurrence of an Event of Default and upon
Lender's  request,  Borrower  shall  assemble,  at its own  expense,  any or all
Equipment and other  Collateral at a convenient  place  acceptable to Lender and
shall pay to Lender or reimburse Lender for, on demand,  all costs of collection
of  all  amounts  due,  and  enforcement  of  all  rights  hereunder,  including
reasonable  attorneys' fees and legal  expenses,  and expenses of any repairs to
any realty or other  property  to which any of such  Collateral  may be affixed.
Upon an Event of Default Lender may, to the full extent  permitted by applicable
law, without notice, advertisement, hearing or process of law of any kind, enter
upon any premises where any of the Collateral may be located and take possession
of and remove such Collateral.

         9.05.  Notices,  Etc.  Waived.  Except as  expressly  provided  in this
Article 9, Borrower hereby  expressly  waives,  to the full extent  permitted by
applicable law, presentment,  demand,  protest, any and all notices of any kind,
advertisements,  hearing or process of law in  connection  with the  exercise by
Lender of any of its  rights and  remedies  upon the  occurrence  of an Event of
Default. If any notification of intended disposition of any of the Collateral is
required by law, such notification shall be deemed reasonably and properly given
if given in  accordance  with Section 10.06 hereto at least ten (10) days before
such disposition.

         9.06.  Additional  Remedies.  Lender's remedies upon the occurrence and
during the continuance of an Event of Default shall include, in addition to, and
not in lieu of, such  remedies as are  available at law or in equity or provided
for in any of the Loan Documents, the following:

                  (a)  Foreclosure;  Receivership.  Lender  shall be entitled to
         file one or more suits at law or in equity to collect  the  Obligations
         and/or to foreclose on Lender's Liens on and security interests created
         by this  Agreement  or the  Security  Documents.  Lender  may  apply or
         require  Borrower to apply for any  necessary  transfers,  assignments,
         orders,  consents or  licenses  in  connection  with the  operation  or
         abandonment  of the  Collateral or any part  thereof,  and Lender shall
         also be entitled  as a matter of right and  without  notice and without
         requiring bond (notice and bond being hereby waived), without regard to
         the solvency or insolvency of Borrower at the time of  application  and
         without  regard to the value of the  Collateral at that time, to have a
         receiver  appointed  by a court of competent  jurisdiction  in order to
         manage,  protect,  and  preserve  the  Collateral  and to continue  the
         operation of the business of Borrower,  and to collect all revenues and
         profits  thereof and apply the same to the payment of all  expenses and
         other  charges  of such  receivership  until  the sale or  other  final
         disposition  of  the  Collateral.   Borrower  hereby  consents  to  the
         appointment of such receiver.

                  (b) Right to Cure. If Borrower  fails in any material  respect
         to perform or comply with any of its agreements  contained herein or in
         any of the other Loan  Documents,  Lender may take whatever  actions it
         may  deem   appropriate  to  perform  or  comply  or  otherwise   cause
         performance or compliance  with such  agreement,  all at the risk, cost
         and expense of Borrower.

                  (c)  Setoff.  If the  unpaid  principal  amount  of the  Note,
         interest  accrued  thereon  or  any  other  amount  owing  by  Borrower
         hereunder  or under the Note shall  have  become  due and  payable  (by
         acceleration or otherwise), Lender shall have the right, in addition to
         all other  rights  and  remedies  available  to it,  without  notice to
         Borrower,  to setoff against and to  appropriate  and apply to such due
         and payable  amounts any debt owing to, and any other funds held in any
         manner for the account of,  Borrower by Lender.  Such right shall exist
         whether  or not  Lender  shall  have  given  notice or made any  demand
         hereunder or under the Note, whether or not such debt owing to or funds
         held for the account of Borrower  is or are matured or  unmatured,  and
         regardless of the existence or adequacy of any Collateral,  guaranty or
         any other  security,  right or remedy  available  to  Lender.  Borrower
         hereby consents to and confirms the foregoing arrangements and confirms
         Lender's rights of setoff.


                                       32

<PAGE>


         9.07.  Application  of Proceeds.  Any proceeds of any of the Collateral
received by Lender  through sale or  disposition of the Collateral or otherwise,
may be  applied  by Lender  toward the  payment  of the  Obligations,  including
expenses in connection with the Collateral  (including reasonable fees and legal
expenses) in such order of application as Lender may from time to time elect.

         9.08.  Discontinuance  of  Proceedings.  If Lender  should  proceed  to
enforce any right or remedy under this Agreement or any other Loan Document, and
then discontinue or abandon such proceeding for any reason,  all rights,  powers
and remedies of Lender  hereunder  shall  continue as if no such  proceeding had
been taken.

         9.09. Power of Attorney. For the purpose of carrying out the provisions
and exercising the rights,  powers and privileges granted by the Loan Documents,
including,  without  limitation,  this Article 9,  Borrower  hereby  irrevocably
constitutes and appoints Lender its true and lawful attorney-in-fact to execute,
acknowledge  and deliver any instruments and do and perform any acts such as are
referred  to in the  Loan  Documents  during  the  continuance  of any  Event of
Default,  including,  without  limitation,  this  Article  9, in the name and on
behalf of Borrower,  from time to time in Lender's  reasonable  discretion after
the occurrence and during the continuance of an Event of Default,  in accordance
with the Loan  Documents  and any statute or rule of law. This power of attorney
is a power  coupled  with an  interest  and cannot be revoked.  Borrower  hereby
ratifies all that said attorney-in-fact shall lawfully do or cause to be done by
virtue and in accordance with the terms hereof.

   Without  limiting the  generality of the  foregoing,  Lender may,  during the
continuance of an Event of Default, do the following without notice to or assent
by Borrower to accomplish the purposes of this Agreement:

         (a) upon failure of Borrower to timely pay or discharge  taxes or Liens
         levied or placed on or threatened  against the  Collateral,  effect any
         repairs or any insurance called for by the terms of this Loan Agreement
         or any other  Loan  Document,  and pay all or any part of the  premiums
         therefor and the costs thereof;

         (b) (i) direct any party  liable for any payment on any  Collateral  to
         make  payment of any and all  monies  due and to become due  thereunder
         directly  to  Lender  or as Lender  shall  direct;  (ii) in the name of
         Borrower or its own name or otherwise,  take  possession of and endorse
         and  collect  any  checks,   drafts,  notes,   acceptances,   or  other
         instruments for the payment of monies due under,  or otherwise  receive
         payment of and receipt for any and all monies, claims and other amounts
         due and to become due at any time in  respect of or arising  out of any
         Collateral;  (iii) sign and  endorse any  invoices,  freight or express
         bills, bills of lading,  storage or warehouse receipts,  drafts against
         debtors, assignments,  verifications and notices in connection with the
         Collateral;   (iv)  commence  and  prosecute  any  suits,   actions  or
         proceedings at law or in equity in any court of competent  jurisdiction
         to collect all or any of the  Collateral and to enforce any other right
         in respect of any Collateral; (v) defend any suit, action or proceeding
         brought against  Borrower with respect to any Collateral;  (vi) settle,
         compromise  or adjust any suit,  action or proceeding  described  above
         upon  commercially  reasonable  terms under the  circumstances  and, in
         connection  therewith,  give such  discharges or releases as Lender may
         reasonably deem  appropriate;  and (vii) generally sell, use,  operate,
         transfer,  pledge, make any agreement with respect to or otherwise deal
         with any of the  Collateral  as fully and  completely  as though Lender
         were the  absolute  owner  thereof for all  purposes,  and, at Lender's
         option and Borrower's  expense,  at any time or from time to time after
         the occurrence and during the  continuance of an Event of Default,  all
         other  acts and  things  that  Lender  reasonably  deems  necessary  to
         protect,  preserve or realize upon the Collateral and Lender's security
         interest  therein,  in order to effect the intent of this Agreement and
         the other Loan Documents all as fully and effectively as Borrower might
         do.


                                       33

<PAGE>


         9.10. Regulatory Matters. Notwithstanding any provision to the contrary
contained  herein,  Lender  will not  exercise  any right or remedy  under  this
Agreement that requires prior FCC or PUC approval  without first  obtaining such
approval. If counsel to Lender reasonably determines that the consent of the FCC
or PUC is required in  connection  with any of the actions  that may be taken by
Lender in the  exercise of its rights  hereunder  or under any of the other Loan
Documents,  then Borrower, at its sole cost and expense,  agrees to use its best
efforts  to secure  such  consent  and to  cooperate  with  Lender in any action
commenced by Lender to secure such consent.  Upon the  occurrence and during the
continuation  of an Event of Default,  Borrower  shall  promptly  execute and/or
cause the execution of all  applications,  certificates,  instruments  and other
documents  and papers  that may be  required  in order to obtain  any  necessary
governmental  consent,  approval  or  authorization,  and if  Borrower  fails or
refuses to execute such documents,  the clerk of the court with jurisdiction may
execute such documents on behalf of Borrower.

                  ARTICLE 10: GENERAL CONDITIONS/MISCELLANEOUS
                  --------------------------------------------

         The following  conditions  shall be applicable  throughout  the term of
this Agreement:

         10.01.  Modifications  and  Waivers.  This  Agreement,  the other  Loan
Documents,  or any  provision  thereof may not be changed,  waived or terminated
orally,  but only by an instrument  in writing  signed by the party against whom
enforcement of the change,  waiver or termination is sought. No action or course
of dealing on the part of  Lender,  its  officers,  employees,  consultants,  or
agents, nor any failure or delay by Lender with respect to exercising any right,
power, or privilege of Lender under the Note, this Agreement,  or any other Loan
Document shall operate as a waiver thereof, except as otherwise provided in this
Agreement. Any waiver shall be effective only to the extent and for the instance
specifically  identified in such  writing,  and shall not be deemed to imply any
future  waivers or other waivers.  No amendment to the Loan  Documents  shall be
effective without written agreement signed by both Borrower and Lender.

         10.02.  Advances  Not Implied  Waivers.  No waiver of the  requirements
contained in any Loan Document shall be effective  unless in writing duly signed
by  Lender.  No  Advance  hereunder  shall  constitute  a  waiver  of any of the
conditions  of Lender's  obligation  to make further  Advances nor, in the event
Borrower  is unable to  satisfy  any such  condition,  shall any  waiver of such
condition have the effect of precluding  Lender from  thereafter  declaring such
inability  to be an Event of Default as herein  provided.  Any  Advance  made by
Lender and any sums expended by Lender  pursuant to the Loan Documents  shall be
deemed  to have  been  made  pursuant  to this  Agreement,  notwithstanding  the
existence of an uncured  Default or Event of Default.  No Advance at a time when
an Event of Default  exists shall  constitute a waiver of any right or remedy of
Lender  existing  by  reason  of  such  Event  of  Default,  including,  without
limitation,  the right to accelerate the maturity of the Indebtedness  evidenced
by the Note or to  foreclose  the Lien on the  Collateral  or to  refuse to make
further advances hereunder.


                                       34

<PAGE>


         10.03.  Deviation  from  Covenants.  The  procedure  to be  followed by
Borrower to obtain the  consent of Lender to any  deviation  from the  covenants
contained in this Agreement or any other Loan Document shall be as follows:

                  (a)  Borrower  shall send a written  notice to Lender  setting
         forth (i) the  covenant(s)  relevant to the matter,  (ii) the requested
         deviation from the covenant(s)  involved,  and (iii) the reason for the
         requested deviation from the covenant(s); and

                  (b)  Lender,  within a  reasonable  time,  will send a written
         notice to Borrower, permitting or refusing the request, but in no event
         will any deviation  from the  covenants of this  Agreement or any other
         Loan Document be effective without the express prior written consent of
         Lender. Lender's failure to provide such written notice shall be deemed
         a refusal of such request.

         10.04.  Holidays.  Except as otherwise  provided  herein,  whenever any
payment  or action  to be made or taken  hereunder  or under  the Note  shall be
stated to be due on a day which is not a Business  Day,  such  payment or action
shall be made or taken on the next following  Business Day and such extension of
time shall be included in computing interest or fees, if any, in connection with
such payment or action.

         10.05.  Records. From time to time, Lender may send Borrower statements
of the unpaid principal amount of the Note, the unpaid interest accrued thereon,
the Interest  Rate or rates  applicable  to such unpaid  principal  amount,  the
duration of such applicability,  and the amount remaining available on any Loan,
and each statement shall be deemed correct and conclusively  binding on Borrower
(absent  manifest  error)  unless  Borrower  notifies  Lender of an error in the
statement in writing  within thirty (30) days of the date of any such  statement
is provided to Borrower.

         10.06. Notices. All notices,  requests,  demands,  directions and other
communications  (collectively,  "notices") required under the provisions of this
Agreement  or  any  other  Loan   Document   shall  be  in  writing   (including
communication by facsimile  transmission)  unless otherwise  expressly permitted
hereunder  and shall be sent by hand,  by  registered  or certified  mail return
receipt requested,  by overnight courier service maintaining records of receipt,
or by facsimile transmission with confirmation in writing mailed first-class, in
all cases with  charges  prepaid,  and any such  properly  given notice shall be
effective upon the earlier of receipt or (i) when delivered by hand, or (ii) the
third  Business Day after being mailed,  or (iii) the following  Business Day if
sent by overnight courier service,  or (iv) when sent by facsimile,  answer back
received. All notices shall be addressed as follows:


                                       35

<PAGE>



                  If to Borrower, to the Notice Address set forth on Schedule 1,
with copies, if any, as set forth on Schedule 1.

                  If to Lender:     NTFC Capital Corporation
                                    501 Corporate Centre Drive
                                    Franklin, Tennessee 37067
                                    Attention: Manager, Credit
                                    Telecopy: (615) 771-6626

                  With a copy to:  NTFC Capital Corporation
                                   501 Corporate Centre Drive
                                   Franklin, Tennessee 37067
                                   Attention: Legal Department
                                   Telecopy: (615) 771-6187

         All notices shall be sent to the applicable party at the address stated
above or in accordance with the last unrevoked written direction from such party
to the other party hereto, given in accordance with the terms hereof.

         10.07.  FCC and PUC  Approval.  The  exercise of any rights or remedies
hereunder or under any other Loan Document by Lender that may require FCC or PUC
approval shall be subject to obtaining such approval. Pending the receipt of any
PUC or FCC approval,  Borrower shall not do anything to delay, hinder, interfere
with or obstruct  the exercise of Lender's  rights or remedies  hereunder or the
obtaining of such approvals.

         10.08.  Lender Sole  Beneficiary.  All  conditions of the obligation of
Lender to make any Advances hereunder are imposed solely and exclusively for the
benefit of Lender and its assigns  and no other  Person  shall have  standing to
require  satisfaction  of such  conditions in accordance  with their terms or be
entitled to assume  that Lender will refuse to make any  Advances in the absence
of strict compliance with any or all such conditions,  and no Person shall under
any  circumstances be deemed to be a beneficiary of such conditions,  any or all
of which  may be  freely  waived in whole or in part by Lender at any time if in
its sole  discretion it deems it advisable to do so.  Lender's  sole  obligation
hereunder  is to  make  the  Advances  if and to the  extent  required  by  this
Agreement or the Note.

         10.09. Lender's Review of Information. Borrower acknowledges and agrees
that any  review  or  analysis  by Lender of  financial  information,  operating
information,  marketing  data or other  information  provided to Lender by or on
behalf of Borrower  at any time is and shall be  conducted  solely for  Lender's
benefit and internal use and that Lender is under no duty or  obligation to make
the results of such review or analysis  available to  Borrower.  Borrower is not
relying, and will not rely, on Lender for financial or business advice.

         10.10.  No Joint  Venture.  Nothing in any of the Loan  Documents or in
this  Agreement  shall be deemed to constitute  any kind of  partnership,  joint
venture or fiduciary relationship between Lender and Borrower.

         10.11.  Severability.  The provisions of this Agreement are intended to
be  severable.  If any provision of this  Agreement or the other Loan  Documents
shall be held invalid or  unenforceable  in whole or in part in any jurisdiction
such provision shall, as to such  jurisdiction,  be ineffective to the extent of
such invalidity or unenforceability without in any manner affecting the validity
or enforceability  thereof in any other jurisdiction or the remaining provisions
hereof or thereof in any jurisdiction.


                                       36

<PAGE>


         10.12. Rights Cumulative.  All rights, powers and remedies herein given
to  Lender  are  cumulative  and not  alternative,  and are in  addition  to all
statutes or rules of law.

         10.13.  Duration;  Survival.  All  representations  and  warranties  of
Borrower  contained  herein or made in  connection  herewith  shall  survive the
making  of and  shall  not be  waived  by the  execution  and  delivery  of this
Agreement and the other Loan  Documents,  any  investigation  by Lender,  or the
making of any Advances  hereunder.  All  covenants  and  agreements  of Borrower
contained herein shall continue in full force and effect from and after the date
hereof so long as it may borrow hereunder and until payment in full of the Note,
interest  thereon,  all fees and all  other  Obligations  of  Borrower.  Without
limitation,  it is understood  that all obligations of Borrower to make payments
to or indemnify Lender shall survive the payment in full of the Notes and of all
other Obligations.

         10.14.  Governing Law. This  Agreement,  the Note and each of the other
Loan  Documents  shall be governed by and  construed  and enforced in accordance
with the  internal  laws of the  State of New York  (i.e.,  notwithstanding  any
conflict of law principles), except to the extent, if any, set forth on Schedule
2.02 hereto,  and except to the extent that the laws of jurisdictions  where the
Collateral is located may be required to apply to the Collateral.

         10.15.  Counterparts.  This  Agreement may be executed in any number of
counterparts  (by  facsimile  transmission  or  otherwise)  and by the different
parties hereto on separate counterparts,  each of which, when so executed, shall
be deemed an original,  but all such  counterparts  shall constitute but one and
the same instrument.

         10.16. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of Lender and Borrower and their respective  successors and
assigns; provided,  however, that Borrower may not assign or transfer any of its
rights or  obligations  hereunder or under the other Loan Documents (in whole or
in part)  without  the prior  written  consent  of Lender.  Lender  may  assign,
transfer or pledge any of its  respective  rights or  obligations  hereunder  or
under the other Loan Documents without notice to or the prior written consent of
Borrower.  Upon  receipt  of  written  notice  from  Lender of such  assignment,
Borrower shall promptly  acknowledge  receipt thereof in writing. If Borrower is
given written notice of any assignment,  it shall perform its  obligations  with
respect to this Agreement for the ratable benefit of the applicable assignee(s),
and,  if so  directed,  shall pay all  amounts  due or to become  due  hereunder
directly to the applicable  assignee(s) or to any other party designated by such
assignee(s).  Borrower  shall not assert  against any such assignee any set-off,
defense or  counterclaim  that  Borrower may have  against  Lender or any person
other than such assignee. Borrower shall also execute and deliver to Lender such
documentation  as any such assignee may  reasonably  require,  including but not
limited  to amended  promissory  notes and  acknowledgment  of or consent to the
assignment  which  may  require  Borrower  to make  certain  representations  or
reaffirmations  as to some of the basic terms and  covenants  contained  herein.
Lender  shall not be relieved of its  obligations  hereunder  as a result of any
such  sale,  assignment,   transfer,  grant  or  pledge,  unless  such  assignee
specifically  assumes all or part of Lender's future obligations  hereunder in a
writing,  a copy of which shall be delivered  to Borrower,  in which event after
the date of such assignment,  Borrower's  obligations to any such assignee shall
be  proportionately  as set forth  herein with  respect to Lender,  and Borrower
shall not look to Lender to perform any of such assignee's obligations hereunder
which arise after the date  thereof.  Any assignee  shall be entitled to rely on
Borrower's agreements as stated herein, as applicable, and shall be considered a
third party beneficiary thereof.  Except to the extent otherwise required by the
context of this Agreement,  the word "Lender" where used in this Agreement shall
mean and include any holder of any Note originally  issued to Lender  hereunder,
and any such holder of the Note shall be bound by and have the  benefits of this
Agreement the same as if such holder had been a signatory hereto.

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         10.17. Participation.  Lender shall have the right to enter into one or
more participation agreements, syndication agreements or similar agreements with
one or more  participating  lenders or other parties  approved by Lender on such
terms and  conditions as Lender shall deem  advisable.  Borrower shall furnish a
sufficient number of copies of reports and certificates to Lender so that Lender
and each participating lender shall receive a copy of each such document.

         10.18.  Time of Essence.  Time is of the essence of this  Agreement and
the Note and the other Loan Documents.

         10.19.   Disclosures and Confidentiality.

                  (a) Except as required by applicable Law, the Exchange Act, or
         the rules and  regulations  of the SEC,  Borrower  agrees  that it will
         obtain  Lender's  written  consent before using or generating any press
         release,  advertisement,  publicity  materials or other  publication in
         which the name or logo of Lender  or any of its  Affiliates  is used or
         may be reasonably inferred,  and will not distribute any such materials
         in the absence of such prior written approval.

                  (b) Except as required by applicable Law, the Exchange Act, or
         the rules and regulations of the SEC, Borrower agrees that it will not,
         directly or  indirectly,  disclose to any third party the terms of this
         Agreement or the other Loan Documents or prior or future correspondence
         relating thereto, or the transactions contemplated hereby, or any other
         information  regarding  Lender or its  Affiliates  learned by  Borrower
         during the course of negotiation  thereof. The term "third party" shall
         exclude only Borrower,  its Affiliates and their respective attorney(s)
         and certified  public  accountant(s).  This Section  10.19(b) shall not
         restrict the disclosure of  information if such  disclosure is required
         by law, by order of any court or by the order,  rule or  regulation  of
         any   Governmental   Authority,   including   without   limitation  any
         requirements  of the  SEC,  FCC,  any  PUC,  or any  state  or  federal
         securities  commissions (the "Commissions");  provided,  however, that,
         except for  disclosures  required by the SEC, FCC, PUC or  Commissions,
         Borrower  shall provide Lender with advance notice of any such required
         disclosure  of  information  so that  Lender  may  seek an  appropriate
         protective  order and/or waive  compliance with this Section.  Borrower
         shall not oppose any  action  taken by Lender to obtain an  appropriate
         protective order or other reliable  assurance that the information will
         be accorded confidential  treatment.  The obligations set forth in this
         Section 10.19(b) shall survive the termination of this Agreement.

                  (c) The disclosure of information by either Lender or Borrower
         will not be restricted under this Agreement if such information (i) has
         been or becomes  published  or is now, or in the future,  in the public
         domain through (A) no fault of the parties,  (B) disclosure  other than
         unauthorized  disclosure  by the  party  to  whom  the  information  is
         disclosed,  or (C) disclosure to third parties by the disclosing  party
         without  similar  restriction;  (ii) is properly  (other than  proposal
         letters,  commitment letters or other correspondence between Lender and
         Borrower) within the legitimate possession of the receiving party prior
         to disclosure hereunder;  (iii) subsequent to disclosure hereunder,  is
         lawfully  received  from a third party having  rights  therein  without
         restriction  of the  third  party's  or  receiving  party's  rights  to
         disseminate  the  information  and  without  notice of any  restriction
         against  its further  disclosure;  (iv) is  disclosed  with the written
         approval of the other party; (v) is or becomes publicly  available free
         of any obligation to keep it confidential.


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<PAGE>

                  (d) Borrower  authorizes Lender to discuss with and furnish to
         any  Affiliate  of  Lender,   to  any   Governmental   Authority   with
         jurisdiction over Lender, to any other Governmental Authority or to any
         assignee, successor,  participant,  successor, or prospective assignee,
         successor or participant,  all publicly-disclosed financial statements,
         audit reports and other  information  pertaining to Borrower and/or its
         Subsidiaries  whether  such  information  was  provided  by Borrower or
         prepared or obtained by Lender or third parties. Neither Lender nor any
         of its employees, officers, directors or agents make any representation
         or  warranty to any  existing or  prospective  assignee,  successor  or
         participant  regarding any audit reports or other  analyses of Borrower
         that Lender may  distribute,  whether such  information was provided by
         Borrower or prepared or obtained by Lender or third parties,  nor shall
         Lender or any of its employees, officers, directors or agents be liable
         to any Person  receiving  a copy of such  reports or  analyses  for any
         inaccuracy  or  omission  contained  in such  reports  or  analyses  or
         relating thereto.

                  (e)  Every  reference  in this  Agreement  to  disclosures  of
         Borrower to Lender  (except the  financial  statements),  to the extent
         that such  references  refer or are intended to refer to disclosures at
         or prior to the execution of this  Agreement,  shall be deemed strictly
         to refer only to written  disclosures  delivered to Lender concurrently
         with the execution of this  Agreement and referred to  specifically  in
         the Loan Documents.  The parties intend that such disclosures are to be
         limited  to  those  presented  in an  orderly  manner  at the  time  of
         executing this Agreement and are not to be deemed to include  expressly
         or impliedly any  disclosures  that  previously may have been delivered
         from time to time to Lender,  except to the extent  that such  previous
         disclosures are again presented to Lender in writing  concurrently with
         the execution of this Agreement.

         10.20.  Jurisdiction and Venue. BORROWER HEREBY IRREVOCABLY CONSENTS TO
THE JURISDICTION OF THE COURTS LOCATED IN DAVIDSON COUNTY, TENNESSEE,  INCLUDING
WITHOUT  LIMITATION  FEDERAL COURTS SITTING IN THE MIDDLE  DISTRICT OF TENNESSEE
AND THE CHANCERY COURT FOR DAVIDSON COUNTY,  TENNESSEE,  FOR ANY SUIT BROUGHT OR
ACTION COMMENCED IN CONNECTION WITH THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, OR
THE  OBLIGATIONS,  AND AGREES NOT TO CONTEST VENUE OR  JURISDICTION  IN ANY SUCH
COURTS. In any such litigation, Borrower waives personal service of any summons,
complaint or other process,  and agrees that the service  thereof may be made by
certified  or  registered  mail  direct to  Borrower at its address set forth in
Section 10.06 hereof. Within thirty (30) days after such mailing, Borrower shall
appear and answer to such summons,  complaint or other process.  Should Borrower
fail to appear or answer within the said 30-day period, then such party shall be
deemed in default and judgment may be entered against Borrower for the amount or
other relief as demanded in any summons,  complaint or other  process so served.
In the  alternative,  in its sole  discretion,  Lender may effect  service  upon
Borrower in any other form or manner  permitted  by law. The choice of forum set
forth  herein shall not be deemed to preclude  the  enforcement  of any judgment
obtained  in such  forum or the taking of any action  under  this  Agreement  to
enforce the same in any appropriate jurisdiction.

         10.21. Jury Waiver.  BORROWER AND LENDER HEREBY KNOWINGLY AND WILLINGLY
WAIVE THEIR RIGHTS TO DEMAND A JURY TRIAL IN ANY ACTION OR PROCEEDING  INVOLVING
THIS AGREEMENT,  ANY OTHER LOAN DOCUMENT,  THE OBLIGATIONS,  OR ANY RELATIONSHIP
BETWEEN  LENDER AND  BORROWER.  BORROWER  WARRANTS  AND  REPRESENTS  THAT IT HAS
REVIEWED THE  FOREGOING  WAIVERS WITH ITS LEGAL  COUNSEL AND HAS  KNOWINGLY  AND
VOLUNTARILY  WAIVED  ITS JURY TRIAL  RIGHTS  FOLLOWING  CONSULTATION  WITH LEGAL
COUNSEL.  IN THE EVENT OF  LITIGATION,  THIS AGREEMENT MAY BE FILED AS A WRITTEN
CONSENT TO A TRIAL BY THE COURT.

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<PAGE>


         10.22. Limitation on Liability. LENDER SHALL HAVE NO LIABILITY UNDER OR
IN  CONNECTION  WITH THIS  AGREEMENT  OR ANY OF THE  OTHER  LOAN  DOCUMENTS  FOR
SPECIAL, EXEMPLARY, PUNITIVE,  INCIDENTAL,  INDIRECT OR CONSEQUENTIAL DAMAGES OF
ANY SORT IN ANY SUIT  BROUGHT  OR  ACTION  COMMENCED  IN  CONNECTION  WITH  THIS
AGREEMENT,  THE OTHER LOAN  DOCUMENTS,  OR THE  OBLIGATIONS,  AND, EXCEPT TO THE
EXTENT  PROHIBITED  BY LAW,  EACH PARTY WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR
RECOVER  IN ANY  SUCH  ACTION  ANY  SPECIAL,  EXEMPLARY,  PUNITIVE,  INCIDENTAL,
INDIRECT OR CONSEQUENTIAL DAMAGES OF ANY SORT OTHER THAN ACTUAL DAMAGES.

         10.23.  Borrower Waivers. To the full extent permitted by law, Borrower
hereby  waives (i)  presentment,  demand and protest and notice of  presentment,
protest,  default,  non  payment,  maturity,  release,  compromise,  settlement,
extension or renewal of any or all commercial paper, accounts,  contract rights,
documents,  instruments, chattel paper and guaranties at any time held by Lender
on which  Borrower  may in any way be liable and hereby  ratifies  and  confirms
whatever Lender may do in this regard; (ii) notice prior to taking possession or
control of the Collateral or any bond or security which might be required by any
court prior to allowing Lender to exercise any of Lender's  remedies,  including
the issuance of an immediate writ of possession, except as expressly required in
any of the Loan  Documents;  (iii) any  marshalling  of assets,  or any right to
compel Lender to resort first to any Collateral or other Persons before pursuing
Borrower for payment of the  Obligations and any defenses based on suretyship or
impairment of Collateral;  (iv) the benefit of all valuation,  appraisement  and
exemption  laws;  (v) any right to  require  Lender to  terminate  its  security
interest  in  the  Collateral  or  in  any  other  property  of  Borrower  until
termination  of this  Agreement  and the execution by Borrower and by any person
whose loans to Borrower are used in whole or in part to satisfy the Obligations,
of an agreement  indemnifying Lender from any loss or damage Lender may incur as
the result of dishonored or  unsatisfied  items of any account debtor applied to
the Obligations;  and (vi) notice of acceptance  hereof.  Borrower  acknowledges
that the foregoing  waivers are a material  inducement to Lender's entering into
this  Agreement  and that Lender is relying  upon the  foregoing  waivers in its
future dealings with Borrower.

         10.24. Schedules. The Schedules and Exhibits attached to this Agreement
are an integral part hereof, and are hereby made a part of this Agreement.

         10.25.  Agreement to Govern.  In case of any conflict between the terms
of this  Agreement  and any of the  other  Loan  Documents,  the  terms  of this
Agreement (including all exhibits and schedules hereto) shall govern.

         10.26. Entire Agreement.  This Agreement,  the other Loan Documents and
other   documents,   agreements  and   certificates   executed  by  the  parties
contemporaneously  herewith or subsequent hereto constitute the entire agreement
of the parties and supersede all prior understandings and agreements, written or
oral, between the parties hereto relating to the subject matter hereof. Borrower
is not entering into this Agreement in reliance on statements or representations
made by any Person other than as set forth herein.


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<PAGE>


         10.27. Construction. The parties acknowledge that each party and/or its
legal counsel have reviewed and made  revisions to this  Agreement.  The rule of
construction  requiring the  resolution  of any  ambiguities  in this  Agreement
against the drafting party shall not apply to the construction of this Agreement
or any schedules or exhibits to this Agreement.

         [END OF GENERAL TERMS AND CONDITIONS. NEXT PAGE IS SCHEDULE 1.]

                        [SIGNATURES ARE ON COVER PAGE. ]



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