LOAN AGREEMENT

                          Dated as of October 30, 2000

                                     between

                            ELECTRIC LIGHTWAVE, INC.

                                   as Borrower


                         CITIZENS COMMUNICATIONS COMPANY
                                       as

                                     Lender




<PAGE>


                  LOAN   AGREEMENT,   dated  as  of  October   30,   2000  (this
"Agreement"),  among  ELECTRIC  LIGHTWAVE,  INC.,  a Delaware  corporation  (the
"Borrower") and CITIZENS  COMMUNICATIONS  COMPANY,  a Delaware  corporation (the
"Lender").


                  The  Borrower  has  requested  the Lender to extend  credit by
effectuating Advances (as herein defined) to the Borrower to enable the Borrower
to borrow and  re-borrow  on a  revolving  credit  basis,  on and after the date
hereof  and at any time and from  time to time  prior to the  Maturity  Date (as
herein  defined) a principal  amount not in excess of  $450,000,000  at any time
outstanding.  The proceeds of such  borrowings are to be used to provide working
capital and for other general corporate purposes of the Borrower.  The Lender is
willing to make Advances and  effectuate  loans to the Borrower on the terms and
subject to the conditions herein set forth.

                  Accordingly, the parties hereto hereby agree as follows:


                                   ARTICLE I

                        DEFINITIONS AND ACCOUNTING TERMS

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

         "Advance" means a "Working Capital Advance" or an "Interest Advance" as
         hereafter defined, by the Lender to the Borrower.

         "Affiliate"  means,  when  used with  respect  to a  specified  Person,
         another  Person  that  directly,  or  indirectly  through  one or  more
         intermediaries, controls or is controlled by or is under common control
         with  the  Person  specified  or any  Subsidiary  of that  person.  For
         purposes  of  this  definition,  "Control"  shall  mean  the  possessor
         directly  or  indirectly  of the  power  to (i) vote 25% or more of the
         securities  having  ordinary voting power for the election of directors
         of such Person, or (ii) direct or cause the direction of management and
         policies  of a  business,  whether  through  the  ownership  of  voting
         securities,   by  contract  or  otherwise,   and  either  alone  or  in
         conjunction with others or any group.

         "A Change in Control" shall be deemed to have occurred if:

         (a) any  Person  or  group  (within  the  meaning of  Rule 13d-5 of the
         Securities and Exchange Commission as  in effect  on the  date  hereof)
         other than a group in which the chief executive officer of the Borrower
         or an  entity  controlled by  such chief executive  officer  is  a par-
         ticipant shall own directly or  indirectly,  beneficially or of record,
         shares representing  more  than 49% of the  aggregate  ordinary  voting
         power of the Borrower represented by the issued and outstanding capital
         stock or has the power to Control the Borrower, or

         (b) a majority of the seats (other  than vacant  seats) on the board of
         directors  of the  Borrower  shall at any time  have been  occupied  by
         Persons who were  neither (i)  nominated  by the  management,  nor (ii)
         appointed by directors so nominated.

         "Borrowing"  means  the  making  of an  Advance  by the  Lender  to the
         Borrower.

         "Business  Day" means a day of the year on which banks are not required
         or authorized to close in New York City.

         "Closing Date" means October 30, 2000.

         "Code"  means  the  Internal  Revenue Code  of 1986, as the same may be
         amended from time to time.

         "Commission" means the Securities and Exchange Commission.

         "Commitment"  means  the  obligation of the Lender to make the Advances
         and Borrowings provided for in this Agreement.

         "Consolidated   Tangible   Assets"  means  total  assets  of  a  Person
         (including  such Person's  Subsidiaries)  determined on a  consolidated
         basis, less goodwill,  patents,  trademarks and other assets classified
         as intangible assets in accordance with GAAP.

         "Default" means an event, condition or default which with the giving of
         notice, the passage of time or both would be an Event of Default.

         "Default  Interest" shall be the rate of interest  specified in Section
         2.04(b).

         "ERISA" means the Employee  Retirement  Income Security Act of 1974, as
         amended from time-to-time, and any successor statute.

         "Event of Default"  has the  meaning assigned  to such term  in Article
         VII.

         "Exchange Act"  means the  Securities Exchange Act of 1934,  as amended
         from time to time.

         "Excluded Taxes" has the meaning assigned to such term in Section 2.08.

         "Financial  Officer" of any  corporation or other entity shall mean the
         President,  Executive  Vice-President,  Chief Financial Officer,  Chief
         Executive Officer,  Vice-President of Finance, Chief Accounting Officer
         or Treasurer of such corporation or other entity.

         "Financials" have the meaning assigned in Section 4.02.

         "GAAP" means  generally  accepted  accounting  principles in the United
         States of America as in effect as set forth in Section  1.03 applied on
         a consistent basis with the Financials.

         "Governmental  Approval" means any  authorization,  consent,  approval,
         license,  franchise,  lease, ruling, tariff, rate, permit, certificate,
         exemption  of,  or  filing  or  registration   with,  any  Governmental
         Authority  required  in  connection  with the  execution,  delivery  or
         performance by the Borrower of this Agreement.

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

         "Indebtedness"  of any  Person  means,  without  duplication,  (a)  all
         obligations  of such  Person  for  borrowed  money or with  respect  to
         deposits or advances of any kind,  (b) all  obligations  of such person
         evidenced by bonds, debentures,  notes or similar instruments,  (c) all
         obligations of such Person upon which interest  charges are customarily
         paid,  (d) all  obligations  of such Person under  conditional  sale or
         other  title  retention  agreements  relating  to  property  or  assets
         purchased by such Person,  (e) all obligations of such Person issued or
         assumed as the deferred  purchase price of property or services  (other
         than  customary  reservations  or retentions of title under  agreements
         with suppliers  entered into in the ordinary  course of business),  (f)
         all  Indebtedness of others secured by (or for which the holder of such
         indebtedness  has an existing  right,  contingent or  otherwise,  to be
         secured  by) any Lien on or payable out of the  proceeds of  production
         from,  property  owned or acquired by such  Person,  whether or not the
         obligations  secured  thereby have been assumed,  (g) all capital lease
         obligations  of such  Person,  (h) all  obligations  of such  person in
         respect  of  interest  rate  protection  agreements,  foreign  currency
         exchange   agreements  or  other  interest  or  exchange  rate  hedging
         arrangements, (i) all obligations of such Person as an account party in
         respect  of letters of credit and  bankers'  acceptances  and,  without
         duplication,  all drafts drawn thereunder (to the extent unreimbursed),
         (j) all  obligations  of such  person  with  respect  to all  preferred
         capital  stock issued by such Person and required by the terms  thereof
         to be redeemed or for which mandatory sinking fund payments are due, by
         a fixed date,  (k) the  principal  portion of all  obligations  of such
         person  under  off-balance  sheet  financing   arrangements,   (l)  the
         indebtedness  of any  partnership  or  unincorporated  joint venture in
         which  such  Person is a general  partner  or a joint  venturer  and is
         legally obligated or has a reasonable  expectation of being liable with
         respect thereto, and (m) any obligation, contingent or otherwise.

         "Interest  Advance"  means  an  Advance  made  or  deemed  to  be  made
         subsequent  to December 31, 2001 for the purpose of paying  interest on
         Working Capital Advances and any prior Interest Advances made.

         "Interest  Payment  Date" means the last  business day of each calendar
         month commencing with the calendar month in which an Advance is made.

         "Interest Rate" has the meaning assigned to it in Section 2.04.

         "Lien(s)" means any lien, claim,  charge,  pledge,  security  interest,
         deed of trust, mortgage or other encumbrance.

         "Loan Agreement" means this Agreement.

         "Loan Documents" means this Agreement and the Note.

         "Moody's"  means  Moody's  Investors  Service,  Inc,  or any  successor
         thereto.

         "Material  Adverse  Change" means a material  adverse change in (a) the
         business,  prospects,   operations,   results  of  operations,  assets,
         liabilities  or condition  (financial or otherwise) of the Borrower and
         its  Subsidiaries,  taken or as a whole, (b) the Borrower's  ability to
         perform its  obligations  under the Loan  Documents  or under the Third
         Party Loan  Agreements or either of them or (c) the rights and remedies
         of the Lender as determined by the Lender in its reasonable discretion.

         "Material  Adverse  Effect" means a material  adverse effect on (a) the
         business,  prospects,   operations,   results  of  operations,  assets,
         liabilities  or condition  (financial or otherwise) of the Borrower and
         its  Subsidiaries,  taken or as a whole, (b) the Borrower's  ability to
         perform its  obligations  under the Loan  Documents  or under the Third
         Party Loan Agreements or any of them, or (c) the rights and remedies of
         the Lender  hereunder  as  determined  by the Lender in its  reasonable
         discretion.

         "Maturity Date" means October 31, 2005.

         "Note" means the promissory  note of the Borrower  payable to the order
         of  the  Lender,  in  substantially  the  form  of  Exhibit  A  hereto,
         evidencing  the  aggregate  indebtedness  of the Borrower to the Lender
         resulting from Advances made by the Lender.

         "Notice of a  Borrowing" means either a Notice of Interest Advance or a
         Notice of Working Capital Advance.

         "Notice of Interest  Advance" has the meaning assigned to it in Section
         2.02(b).

         "Notice of Working Capital  Advance" has the meaning  assigned to it in
         Section 2.02(a).

         "Obligations" has the meaning assigned to it in Section 8.04.

         "Other  Taxes"  has  the  meaning  assigned  to it in  Section
         2.08(b).

         "PBGC" has the meaning assigned to it in Section 5.02(d).

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

         "Plan" means any pension plan (including a multi-employer plan) subject
         to the provisions of Title IV of ERISA or Section 412 of the Code which
         is maintained for or to which  contributions  are made for employees of
         the or any ERISA Affiliate.

         "Refund" has the meaning assigned to it in Section 2.08(e).

         "Subordinate  Debt"  means  unsecured   Indebtedness  incurred  by  the
         Borrower which is expressly subordinated and made junior to the payment
         and  performance  in  full of the  Advances  and any  other  loans  and
         advances  or  extensions  of credit made or to be made by Lender to the
         Borrower,  or to others for the  account of  Borrower,  pursuant to the
         terms of this Agreement,  together with interest  thereon and including
         all  indebtedness,  fees,  liabilities and obligations which may at any
         time be owing by Borrower to Lender  pursuant  to this  Agreement,  and
         contains terms and conditions satisfactory to Lender.

         "Subsidiary" means, to any Person, (a) any corporation more than 50% of
         whose capital stock of any class or classes having by the terms thereof
         ordinary  voting  power to elect a majority  of the  directors  of such
         corporation  (irrespective  of whether or not at the time, any class or
         classes of such  corporation  shall have or might have voting  power by
         reason of the  happening  of any  contingency)  is at the time owned by
         such  Person  directly  or  indirectly  through  Subsidiaries,  (b) any
         partnership,  association,  joint venture or other entity in which such
         Person  directly or  indirectly  through  Subsidiaries  has more than a
         fifty percent (50%) interest in the total capital,  total income and/or
         total  ownership  interests  of such  entity  at any  time  and (c) any
         partnership in which such Person is a general partner.

         "Taxes" means any federal,  state, local or foreign income,  sales use,
         transfer,  payroll,  personal property,  occupancy,  franchise or other
         tax,  levy,  impost,  fee,  imposition,  assessment or similar  charge,
         together with any interest or penalties thereof.

         "Third Party Loan Agreements" mean the following:

         (a) Credit  Agreement dated as of November 21, 1997 among  the
         Borrower and the Lender (as Parent Guarantor) and a consortium
         of banks of which Citibank, N. A., is the Administrative Agent
         and providing for extension of credit in the sum of four hund-
         red million dollars ($400,000,000),

         (b) Notes of the Borrower  aggregating the principal amount of
         three hundred twenty-five million dollars ($325,000,000) dated
         as of  April  15,  1999  and  due May 15,  2004  and  carrying
         interest  at the rate of 6.05% per annum,  issued  pursuant to
         the  Indenture of said date between the Borrower and Citibank,
         N.A., as Trustee and

         (c) various  capitalized  leases in  existence  on the date of
         this  Agreement  and  noted in the books  and  records  of the
         Borrower and including without limitation those capital leases
         reported on in the balance  sheet of the Borrower  dated as of
         September 30, 2000.

         "Working  Capital  Advances"  means an Advance  made during the Working
         Capital  Period to be utilized  either to (i) fund  working  capital or
         other general  corporate  purpose of the Borrower or (ii) fund interest
         payments due on Working Capital  Advances then  outstanding,  including
         Working  Capital  Advances  consisting  of payments of interest.  In no
         event may Working  Capital  Advances  exceed two hundred  sixty million
         dollars ($260,000,000).

         "Working  Capital  Period"  means the period  commencing on October 30,
         2000 and  expiring on  December  31, 2001 or such later date (but in no
         event later than December 31, 2002) that Lender may designate.

SECTION  1.02. COMPUTATION OF TIME PERIODS.  In  this Agreement in  the computa-
tion of  periods of  time from a  specified date to a later  specified date, the
word  "from"  means  "from  and  including" and  the words "to" and "until" each
means "to but excluding."

SECTION  1.03. ACCOUNTING TERMS.  Except as otherwise expressly provided herein,
all terms of an accounting or financial  nature shall be construed in accordance
with GAAP, as in effect from time to time; provided, however, that, for purposes
of determining compliance with any covenant set forth in Articles V and VI, such
terms shall be  construed  in  accordance  with GAAP as in effect on the date of
this  Agreement  applied  on a basis  consistent  with the  application  used in
preparing the audited financial statements referred to in Section 4.02.




                                   ARTICLE II

                        AMOUNTS AND TERMS OF THE ADVANCES

SECTION  2.01.  THE ADVANCES.

(a)      The Lender agrees,  on the terms and conditions  hereinafter set forth,
         to make Working Capital Advances and Interest  Advances to the Borrower
         from time to time on any  Business  Day during the period from the date
         hereof until the Maturity Date, on a revolving basis, provided that (i)
         the  aggregate  (of  Advances)  at any time may not at any time  exceed
         $450,000,000  and the  aggregate  of Working  Capital  Advances may not
         exceed $260,000,000,  and (ii) no Working Capital Advance shall be made
         subsequent to the Working Capital Period.

(b)      The initial Working  Capital Advance shall be in integral  multiples of
         $500,000, but in no event less than $1,000,000. Each additional Working
         Capital Advance shall be in integral multiples of $500,000, except that
         a Working Capital Advance made to pay interest on the then  outstanding
         Working Capital Advances shall be in the amount of said interest.  Each
         Interest  Advance shall be in an amount of the interest then due on the
         aggregate  of Working  Capital  Advances  and  Interest  Advances  then
         outstanding.

(c)      All Advances shall be evidenced by the Note to be executed and deliver-
         ed by Borrower, with appropriate insertions.

SECTION  2.02.  MAKING THE ADVANCES.

(a)      Working  Capital  Advance:  Each Working  Capital Advance shall be made
         during the Working  Capital  Period on notice to the Lender in the form
         of the Notice of Working Capital  Advance  attached as Exhibit B, given
         not later than 11:00  A.M.  (New York City time) on the fifth  Business
         Day prior to the date of the proposed Advance. Provided however that in
         the event that on a date which is five (5) days  immediately  preceding
         an Interest  Payment Date during the Working Capital Period,  no Notice
         of Working Capital Advance or no notice that the Borrower will pay such
         interest from other  sources has been received by Lender,  then subject
         to the provisions of subsection  (d),  Borrower shall be deemed to have
         given a  Notice  of  Working  Capital  Advance  in the  amount  of such
         interest on such date.

(b)      Interest  Advance: Each Interest Advance shall be made in the following
         manner:  Interest  Advances shall  only be made commencing with January
         1,  2002.  Each  Interest  Advance  shall be made on Notice in the form
         of the  Notice of  Interest Advance,  attached as Exhibit "C" given not
         later than 11:00 A.M.  (New York City time) on the fifth  Business  Day
         prior to each Interest Payment Date when interest is due  and shall re-
         quest an Interest Advance in the amount of interest to be due on   each
         such Interest  Payment Date.   Provided  however  that in the event the
         Lender shall not have received a Notice of Interest Advance or a notice
         from the Borrower  that such  interest  will be paid from other sources
         on a date no later than five days immediately  preceding such  Interest
         Payment Date,  then subject to the provisions  of sub-section (d),  the
         Borrower shall be deemed to have given the Lender a Notice of  Interest
         Advance  requesting an Interest Advance in the amount of said interest,
         and said Interest Advance shall be made by the Lender to the Borrower.

(c)      Within the limits and  provision of this  Agreement,  the Borrower may,
         from time to time, borrow, prepay pursuant to Section 2.05 and reborrow
         pursuant to Section 2.01 and 2.02.

(d)      In the event the Working Capital Period is extended beyond December 31,
         2001 then the Borrower shall have the option,  in its discretion during
         the period  commencing with January 1, 2002 and expiring on the date of
         the Working  Capital Period to request either an Interest  Advance or a
         Working  Capital  Advance and in the event interest is to be paid on an
         Interest  Payment Date and the  Borrower  has not  requested an advance
         pursuant  to  sub-section  (a) or (b)  and  has  not  sent  the  notice
         referenced in  sub-section  (a) or (b), the Borrower shall be deemed to
         have given a Notice of Interest Advance in the amount of such interest.

(e)      Each Notice  of a  Borrowing shall be  irrevocable  and binding  on the
         Borrower.  In the case of any  Borrowing, the Borrower shall  indemnify
         the Lender  against any loss,  cost or expense  incurred by  the Lender
         as a result of any failure to fulfill, on or before  the date specified
         in such  Notice of a  Borrowing,  the  applicable  conditions set forth
         in  Article  III, including,  without limitation,  any  loss (excluding
         loss of anticipated profits), cost or expense incurred by reason of the
         liquidation  or  reemployment  of deposits  or other funds  acquired by
         Lender to  fund  the Advance to  be made by the Lender as  part of such
         Borrowing.  The Borrower shall pay amounts owing to the Lender pursuant
         to this Section 2.02(b) within 30 days after receipt from the Lender of
         a certificate setting forth in reasonable detail the calculation of the
         amount  the  Lender is  entitled to  claim  under this  Section 2.02(b)
         (which  certificate  shall be conclusive and binding for all  purposes,
         absent manifest error).

SECTION  2.03.  REPAYMENT OF AN ADVANCE.  The  Borrower  hereby  promises to and
         shall pay to the Lender the entire  outstanding  principal  amount  to-
         gether with any interest then outstanding upon the Maturity Date.

SECTION  2.04.  INTEREST.

(a)      Ordinary  Interest.  The Borrower  shall pay interest on each  Interest
         Payment Date compounded  monthly on the unpaid principal amount of each
         Advance made by the Lender, from the date of such Advance until repaid,
         or if not repaid by the  Maturity  Date,  until the Maturity  Date,  at
         fifteen  percent  (15%) per  annum  computed  as  provided  in  Section
         2.07(b).

(b)      Default  Interest.  Additionally the Borrower shall pay interest on the
         unpaid amount of any interest or an Advance  hereunder that is not paid
         when  due,  at a rate per annum  during  the  period  from the due date
         thereof  to the  date on which  such  amount  is paid in full  equal to
         seventeen percent (17%) per annum,  compounded  monthly and computed as
         provided in Section 2.07(b).

SECTION  2.05.  PREPAYMENTS OF ADVANCES.

(a)      The Borrower shall have no right to prepay any principal  amount of any
         Advance  on any  Interest  Payment  Date  other  than  as  provided  in
         subsection (b) below.

(b)      The Borrower, upon at least one Business Day's notice to Lender stating
         the proposed date and aggregate principal amount of the prepayment, may
         prepay any principal amount of Advances then  outstanding,  in whole or
         in part. If such notice is given, the Borrower shall prepay said stated
         principal amount of the Advances, together with accrued interest to the
         date of such repayment on the principal  amount prepaid without premium
         or penalty; provided, however, that each partial prepayment shall be in
         an  aggregate  principal  amount not less than  $1,000,000  or integral
         multiples of $500,000 in excess thereof.

SECTION  2.06.  INCREASED COSTS.  If, due to either the  introduction  of or any
change in (to the extent any such  introduction  or change occurs after the date
hereof) or in the  interpretation  of any law or  regulation  there shall be any
increase  in the cost to The Lender of  agreeing  to make or making,  funding or
maintaining  the Advances,  the Borrower shall from time to time,  within thirty
(30) days after  delivery by the Lender to the Borrower of a  certificate  as to
the amount of (and specifying in reasonable detail the basis for) such increased
cost,  pay to the  Lender the  amount of the  increased  costs set forth in such
certificate (which certificate shall be conclusive and binding for all purposes,
absent manifest error); provided that, before making any such demand, the Lender
agrees to use reasonable efforts  (consistent with its internal policy and legal
and  regulatory  restrictions)  to avoid the need for,  or reduce the amount of,
such increased  cost which would not, in the reasonable  judgment of the Lender,
be otherwise disadvantageous to the Lender.

SECTION  2.07.  PAYMENTS AND COMPUTATIONS.

(a)      The  Borrower  shall  make each  payment  hereunder  and under the Note
         without  set-off or  counterclaim  not later than 11:00 A.M.  (New York
         City  time) on the day when due in U.S.  dollars  to the  Lender at its
         address referred to in Section 8.02 in same day funds.

(b)      All  computations  of  interest  shall be made by  Lender  pursuant  to
         Sections  2.04 and 2.05 on the basis of a 360 day year (12  thirty  day
         months),  in each case for the  actual  number of days  (including  the
         first day but excluding the last day) occurring in the period for which
         such interest is payable.  Each  determination by Lender of an interest
         payment due hereunder shall be conclusive and binding for all purposes,
         absent manifest error.

SECTION  2.08.  TAXES.

(a)      Any and all payments by the Borrower hereunder or under the  Note shall
         be made,  in  accordance  with  Section  2.07,  free and  clear  of and
         without deduction for any and all present or  future Taxes, deductions,
         charges or  withholdings  and all  liabilities  with  respect  thereto,
         excluding, in the case of the Lender, of the Lender's  taxes imposed on
         its income and franchise taxes imposed on it by the jurisdiction  under
         the laws of which the Lender is organized or any political  subdivision
         thereof ("Excluded  Taxes").  If the Borrower shall be required  by law
         to deduct any Taxes (other than Excluded  Taxes) from or in  respect of
         any sum payable hereunder or under the Note to the Lender, (i) the  sum
         payable  shall be  increased  as may be necessary so that after  making
         all required deductions (including deductions applicable to  additional
         sums payable  under this Section  2.08) the Lender  receives an  amount
         equal to the sum it would have  received  had no such  deductions  been
         made,  (ii) the  Borrower  shall  make such  deductions  and (iii)  the
         Borrower shall pay the full amount  deducted  to the relevant  taxation
         authority or other authority in accordance with applicable law.

(b)      In addition,  the Borrower  agrees to pay any present or future  stamp,
         documentary, privilege, intangible or similar Taxes or any other excise
         or property taxes, charges or similar levies which arise at any time or
         from time to time (other  than  Excluded  Taxes) from any payment  made
         hereunder  or  under  the  Note  or from  the  execution,  delivery  or
         registration  of, or otherwise  with respect to, the Loan  Documents or
         any of them hereinafter referred to as "Other Taxes").

(c)      The Borrower will  indemnify the Lender for the full amount of Taxes or
         Other Taxes (including,  without limitation,  any Taxes and Other Taxes
         imposed by any jurisdiction on amounts payable under this Section 2.08)
         paid by Lender and any  liability  (including  penalties,  interest and
         expenses)  arising  therefrom or with respect  thereto,  whether or not
         such Taxes or Other  Taxes were  correctly  or legally  asserted.   The
         Lender will use  reasonable  efforts to contest such a Tax or Other Tax
         that,  in  its  opinion,  is  incorrectly  asserted.  Payment  of  this
         indemnification shall be made within 30 days from the date Lender makes
         written demand therefor.

(d)      Within 30 days after the date of any  payment of Taxes or Other  Taxes,
         the Borrower will furnish to the Lender,  at its address referred to in
         Section 8.02, the original or a certified copy of a receipt  evidencing
         payment thereof.

(e)      If the Lender shall become aware that it is entitled to claim  a Refund
         (as  hereinafter  defined) from a taxing  authority,  the Lender shall
         promptly  notify the Borrower of the  availability  of such  Refund and
         shall,  within  30 days  after  receipt  of a written  request  by  the
         Borrower, make a claim to such taxing authority for such Refund at  the
         Borrower's  expense if, in the judgement of the Lender,  the making  of
         such claim will not be otherwise disadvantageous to the Lender. If  the
         Lender  receives a Refund from a taxing  authority,  it shall  promptly
         pay to the Borrower the amount so received  (but only to the extent  of
         indemnity  payments made, or additional  amounts paid, by the  Borrower
         under  this  Section  2.08 with  respect  to the taxes  or Other  Taxes
         giving  rise to such  Refund)  , net  of all  reasonable  out-of-pocket
         expenses  (including the net amount of taxes,  if any,  imposed on  the
         Lender). The Borrower, upon the request of the Lender, shall repay  the
         amount paid over to the Borrower (plus  penalties,  interest and  other
         charges)  to Lender in the event the Lender is  required to repay  such
         Refund to such taxing  authority.  Nothing  contained  in this  Section
         2.08 shall require the Lender to make available any of its tax  returns
         (or  any  other  information  that  it  deems  to be  confidential   or
         proprietary).  For purposes of this Section 2.08(e) a "Refund"  means a
         refund of Taxes or Other Taxes (other than any such refund in  the form
         of a tax credit) for which the Lender has been indemnified by  Borrower
         (or with  respect  to  which  Borrower  has  paid  additional  amounts)
         pursuant to this Section 2.8,  provided that the  entitlement  to  such
         refund arises solely from a manifest error in the amount of such  taxes
         or Other Taxes so paid.

(f)      Without  prejudice to the survival of any other  agreement of Borrower,
         the  agreements  and  obligations  of the  Borrower  contained  in this
         Section  2.08 shall  survive  the  payment  in full of all  obligations
         hereunder and under the Note.



                                  ARTICLE III

                             CONDITIONS OF LENDING

         The  obligations of the Lenders to make Advances  hereunder are subject
to the satisfaction, or waiver of, immediately prior to or concurrently with the
making of any Advance the following conditions:

SECTION  3.01.  FIRST BORROWING.  On the Closing Date:

(a)      The   Lender   shall  have  received  the  duly  executed Note and this
         Agreement;

(b)      The Lender shall have  received a favorable  written  opinion of either
         the  general  counsel  or  the  corporate  secretary  of  the  Borrower
         (provided  that such  corporate  secretary  is an attorney  admitted to
         practice law, and is in good  standing,  in a  jurisdiction  within the
         United  States of America)  dated the Closing Date and addressed to the
         Lender, to the effect set forth in Exhibit D hereto.

(c)      All legal matters incident to this Loan  Agreement and  the  Borrowings
         hereunder shall be satisfactory to the Lender;

(d)      The Lender shall have received:

         1. a copy of  the certificate or articles  of incorporation,  including
         all amendments thereto, of the Borrower,  certified as of a recent date
         by the Secretary of State of the state of Delaware, and  a  certificate
         as to the good  standing of the Borrower as of a recent date, from such
         Secretary of State;

         2. a  certificate  of the  Secretary or Assistant Secretary of Borrower
         dated the Closing Date and certifying  (A) that attached  thereto  is a
         true and complete  copy of the by-laws of the Borrower as in effect  on
         the  Closing  Date and at all times  since a date prior to the  date of
         the  resolutions  described  in  clause  (B) below,  (B) that  attached
         thereto is a true and complete copy of resolutions duly  adopted by the
         Board of Directors of the Borrower authorizing the execution,  delivery
         and  performance  of the Loan Documents to which it is a party  and the
         Borrowings  hereunder,   and  that  such  resolutions  have   not  been
         modified,  rescinded, or amended and are in full force  and effect, (C)
         that  neither the  certificate  or articles  of  incorporation  of  the
         Borrower has been amended since the date of the last amendment  thereto
         shown on the certificate of good standing  furnished pursuant to clause
         1. above, and (D) as to the incumbency and specimen  signature  of each
         officer executing any Loan Document or any other document delivered  in
         connection herewith on behalf of the Borrower;

         3. such other documents as Lender may reasonably request.

(e)      The Lender shall have  received a  certificate,  dated the Closing Date
         and  signed  by  a  Financial  Officer  of  the  Borrower,   confirming
         compliance  with the conditions  precedent set forth in paragraphs (a),
         (b) and (d) of this Section 3.01.

(f)      The  Lender  shall  have  received   evidence  that  all  governmental,
         shareholder  and  third  party  consents  and  approvals   required  in
         connection   with  the   transactions   and  the   related   financings
         contemplated  hereby and of the  expiration of all  applicable  waiting
         periods  without  any action  being taken by any  authority  that could
         restrain,  prevent or impose any material  adverse  conditions  on such
         transactions  or that could seek or threaten any of the foregoing,  and
         no law or regulation  shall be applicable  which in the judgment of the
         Lender could have such effect.

(g)      The Lender shall be satisfied  that there does not exist any pending or
         threatened action,  suit,  investigation or proceeding against Borrower
         or its assets  that could  reasonably  be  expected  to have a Material
         Adverse Effect.

(h)      The Lender is satisfied that,  after giving effect to the making of the
         Advances  made  on  the  Closing  Date,  the  Borrower  shall  have  no
         agreements or commitments  providing for the  advancement or lending of
         monies other than the Loan  Documents,  the Third Party Loan Agreements
         and  purchase  money  obligations  incurred in the  ordinary  course of
         business.

(i)      The Lender shall have received a certificate or  certificates  executed
         by a Financial  Officer of the Borrower as of  the Closing Date stating
         that (i)  after  giving  effect  to  the  making  of the  Advances  and
         Borrowings  under this Loan Agreement and  application of  the proceeds
         thereof,  the Borrower is in  compliance  with  all existing  financial
         obligations,  (ii)  all  governmental,   shareholder  and  third  party
         consents and approvals, if any, with respect  to the Loan Documents and
         the  transactions  contemplated  thereby  have been obtained,  (iii) no
         action, suit,  investigation or proceeding is  pending or threatened in
         any court or before  any  arbitrator  or  governmental  instrumentality
         that purports to affect  the Borrower or any  transaction  contemplated
         by  the  Loan  Documents,  if  such  action,  suit,  investigation   or
         proceeding  could  reasonably  be expected  to have a Material  Adverse
         Effect,  and  (iv)  immediately  after  giving  effect  to   this  Loan
         Agreement,  the Third Party Loan  Agreements  and all the  transactions
         contemplated therein to occur on such date, (A) no Default  or Event of
         Default exists, (B) and all representations  and  warranties  contained
         herein and in the other  Loan  Documents  are  true and  correct in all
         material respects.

(j)      The Lender shall have received instruments, agreements or   information
         as reasonably requested by Lender.

(k)      The Lender is satisfied that no Material  Adverse Change or development
         reasonably  likely  to  have a  Material  Adverse  Effect,  shall  have
         occurred,  no occurrence or event which is reasonably  likely to have a
         Material Adverse Effect shall have occurred and be continued, and on or
         prior to the Closing Date there shall not have  occurred a  substantial
         impairment of the financial  markets generally which, in the reasonable
         judgment of the Lender,  has  materially  and  adversely  affected  the
         transactions contemplated hereby.

SECTION  3.02.  ALL ADVANCES.  On the date of each Advance:

(a)      The  representations  and  warranties  set forth in Article IV shall be
         true and correct in all material respects on and as of the date of such
         Advance  with the same  effect as though  made on and as of such  date,
         except to the extent  such  representations  and  warranties  expressly
         relate to an  earlier  date in which  event  such  representations  and
         warranties  shall have been true and complete on and as of such earlier
         time.

(b)      The  Borrower  shall  be in  compliance  with  all  of  the  terms  and
         provisions set forth herein and in each other Loan Document on its part
         to be observed or performed,  and at the time of, and immediately after
         such Borrowing,  no Event of Default or Default shall have occurred and
         be continuing;

(c)      Each  Advance  shall be  deemed  to  constitute  a  representation  and
         warranty  by the  Borrower  on the  date  of such  Borrowing  as to the
         matters specified in paragraphs (a) and (b) of this Section 3.02.

(d)      The Note shall be modified to reflect any additional Borrowings and re-
         payments of any Borrowings.

                                  ARTICLE IV A

                   REPRESENTATIONS AND WARRANTIES OF BORROWER

         To induce  the Lender to enter  into this Loan  Agreement  and make the
Advances  referenced herein, the Borrower  represents and warrants to the Lender
that:

SECTION  4.01.  ORGANIZATION; POWERS; GOVERNMENTAL  APPROVALS.

(a)      The Borrower (i) is a  corporation  duly  organized,  validly  existing
         and in good standing under the laws of the State of Delaware, (ii)  has
         all  requisite  power  and  authority  to own its property  and  assets
         and to carry on its  business  as now  conducted, (iii) is qualified to
         do business in every jurisdiction where such qualification is required,
         except where the failure so to qualify would not have a Adverse  Effect
         and (iv) the Borrower's  execution,  delivery   and performance of this
         Agreement and the Loan Documents are within its corporate  powers, have
         been duly authorized  by all necessary  actions and do  not violate  or
         create a default  under law,  its organizational documents, or any con-
         tractual provision binding upon it.   This Agreement and the Notes con-
         stitute  legal,  valid and binding obligations of the Borrower.

(b)      All Governmental  Approvals have been duly obtained,  are in full force
         and are in effect without having been amended or modified in any manner
         that may impair the ability of the Borrower to perform its  obligations
         under  this  Agreement  or the  Note,  and are not the  subject  of any
         pending or overtly threatened appeal, stay or other challenge.



<PAGE>


SECTION  4.02.  FINANCIAL STATEMENTS AND SECURITIES LAW FILINGS.

The Borrower has furnished to Lender its most recent filings with the Commission
on Forms 10-K and 10-Q.  Each of the financial statements in such Forms 10-K and
10-Q,  and  each such  subsequent  filing,  has been,  and each of the financial
statements to be furnished pursuant to Section 5.02 (the "Financials")  will be,
prepared  in  accordance  with GAAP  applied  consistently  with  prior  periods
except  as  therein noted,  and presents  fairly  or will  present fairly in all
material respects  the consolidated  financial  position  of  the  Borrower,  as
the case may be, as of the date thereof and the results of the operations of the
Borrower for the period then ended  (subject in the case of unaudited  financial
statements to normal year-end  adjustments  and the absence of footnotes).  The
financial statements contained in Form 10K have been and will be audited by KPMG
Peat  Marwick  independent   certified  public  accountants  and  the  financial
statements  contained  in Form 10Q have been and will be prepared by a Financial
Officer of the Borrower (subject in the instance of Financials to the provisions
of Section 5.02).

SECTION  4.03.  NO MATERIAL ADVERSE CHANGE. From the date of the Borrower's most
recent financial  statements contained in its Annual Report on Form 10-K for the
fiscal year ended December 31, 1999 furnished to Lender pursuant to Section 4.02
through  the date of the  initial  Borrowing,  and  except as  described  in the
Borrower's  Quarterly Reports on Form l0-Q for the quarterly periods ended March
31, 2000, and June 30, 2000  furnished to Lender  pursuant to Section 4.02 prior
to the date hereof,  there has been no material adverse change in the condition,
financial or otherwise  of the Borrower and its  Subsidiaries  taken as a whole,
and  there has  occurred  no event or  condition  which is likely to result in a
Material Adverse Change in the Borrower and its Subsidiaries taken as a whole.

SECTION  4.04.  TITLE TO PROPERTIES: POSSESSION UNDER LEASES.

(a)      The Borrower and each of its Subsidiaries has good and marketable title
         to,  or valid  leasehold  interests  in,  all its  material  respective
         properties and assets and licenses,  easements, rights of way and other
         rights to use,  except for minor defects in title that do not interfere
         with its  respective  ability  to conduct  its  business  as  currently
         conducted or to utilize such  properties  and assets for their intended
         purposes. All such material properties and assets are free and clear of
         Liens, other than Liens expressly permitted by Section 6.01.

(b)      The  Borrower  and  each of its  Subsidiaries  has  complied  with  all
         obligations  under all  material  leases to which it is a party and all
         such leases are in full force and effect,  except where such failure to
         comply or maintain  such leases in full force and effect would not have
         a Material Adverse Effect. The Borrower enjoys peaceful and undisturbed
         possession  under all such  material  leases  except where such failure
         would not have a Material Adverse Effect.

SECTION  4.05.  LITIGATION: COMPLIANCE WITH LAWS.

(a)      There  is  no  action,   suit,  or  proceeding,   or  any  governmental
         investigation  or any  arbitration,  in each  case  pending  or, to the
         knowledge of the Borrower,  threatened, against the Borrower, except as
         disclosed in the  Borrower's  Annual Report on Form 10-K for the fiscal
         year ended December 31, 1999 or its Quarterly  Reports on Form 10-Q for
         the quarterly periods ended March 31, 2000, and June 30, 2000 furnished
         to Lender  pursuant to Section 4.02 prior to the date hereof that could
         reasonably be expected to have a Material Adverse Effect or result in a
         Material Adverse Change.

(b)      The Borrower is not in violation of any law, rule, or regulation, or in
         default with respect to any judgment, writ, injunction or decree of any
         Governmental   Authority,   where  such   violation  or  default  could
         reasonably be anticipated to result in a Material  Adverse Effect.  The
         Borrower has no  knowledge  of any order or notice of any  governmental
         investigation  or of any  violation  or claim of  violation of any law,
         regulation,   notice  judgment,   rule,  order  or  other  governmental
         pronouncement.

SECTION  4.06.  AGREEMENTS.

(a)      The Borrower is not a party to any  agreement or  instrument or subject
         to any corporate  restriction that has resulted, or could reasonably be
         anticipated to result in a Material Adverse Effect.

(b)      The Borrower is not in default in any manner under any provision of any
         indenture or other agreement or instrument evidencing indebtedness,  or
         any other material agreement or instrument to which it is a party or by
         which  it or any of  its  properties  or  assets  are or may be  bound,
         including  without  limitation the Third Party Loan  Agreements,  where
         such default could  reasonably be  anticipated  to result in a Material
         Adverse Effect Change or have a Material Adverse Effect. Borrower knows
         of no dispute with  respect to the Borrower or any of its  Subsidiaries
         regarding  any   agreement,   instrument  or  commitment   which  could
         reasonably be expected to have a Material Adverse Effect.

SECTION  4.07.  TAX  RETURNS.  The  Borrower has filed or caused to be filed all
federal,  state and local tax returns  required to have been filed by it and has
paid or caused to be paid all taxes shown to be due and payable on such  returns
or on any  assessments  received by it, except taxes that are being contested in
good faith by appropriate  proceedings and for which the Borrower shall have set
aside on its books adequate reserves.

SECTION  4.08.  OTHER  INDEBTEDNESS.  Except for  Indebtedness  incurred  in the
ordinary course of its business and except for the  Indebtedness  incurred under
the Third Party Loan Agreements, the Borrower has no Indebtedness.

SECTION  4.09.  GOVERNMENTAL APPROVALS. All Governmental Approvals required for
the transaction  contemplated by this Agreement have been given.

SECTION  4.10.  NO MATERIAL MISSTATEMENTS.  No statement,  information,  report,
financial statement,  exhibit, or schedule furnished by or on behalf of Borrower
to Lender in connection with negotiation of this Agreement or included herein or
delivered  pursuant  hereto  contained,  contains,  or will contain any material
misstatement of fact or intentionally omitted,  omits, or will omit to state any
material  fact  necessary to make the  statements  therein,  in the light of the
circumstances under which they were, are, or will be made, not misleading. There
is no fact now known to any officer of the  Borrower or any of its  Subsidiaries
which has, or could  reasonably be expected to have a Material  Adverse  Effect,
which fact has not been set forth in the  Financials,  the financial  statements
referenced  in  Section  4.02,  or any  certificate,  opinion  or other  written
statement made or furnished by the Borrower to the Lender.

SECTION  4.11.  EMPLOYEE BENEFIT PLANS.

(a)      Each Plan is in compliance  with ERISA,  except for such  noncompliance
         that has not  resulted,  and could not  reasonably  be  anticipated  to
         result, in a Material Adverse Effect.

(b)      No Plan has an  accumulated  or waived  funding  deficiency  within the
         meaning of Section 412 or Section 415 of the Code,  except for any such
         deficiency  that  has  not  resulted,   and  could  not  reasonably  be
         anticipated to result, in a Material Adverse Effect.

(c)      No proceedings  have been instituted to terminate any Plan,  except for
         such proceedings where the termination of a Plan has not resulted,  and
         could not reasonably be anticipated  to result,  in a Material  Adverse
         Effect.


                                  ARTICLE IV B

                    REPRESENTATIONS AND WARRANTIES OF LENDER

SECTION  4.12.  The Lender  represents and warrants that no Taxes or Other Taxes
will be  incurred  on the date  hereof  in  connection  with the  execution  and
delivery of the Loan Documents.


                                   ARTICLE V

                              AFFIRMATIVE COVENANTS

         Borrower  covenants  and agrees with the Lender  that,  so long as this
Agreement  remains in effect or the  principal of or interest on any Advance (or
any portion thereof), or any other expenses or amounts payable hereunder,  shall
be unpaid, the Borrower will:

SECTION  5.01.  EXISTENCE, BUSINESSES AND PROPERTIES.

(a)      Preserve and maintain, and cause each Subsidiary to preserve and  main-
         tain its corporate existence, rights and franchises.

(b)      pay,  and  cause  each  Subsidiary  to  pay,  prior  to  same  becoming
         delinquent,  (i)  all  Taxes,  including  without  limitation,   taxes,
         assessments  and  governmental  charges  imposed  upon it or  upon  its
         property,  and (ii) all claims (including,  without limitation,  claims
         for labor,  materials,  supplies,  or services) which might, if unpaid,
         become a Lien upon its property,  unless, in each case, the validity or
         amount  thereof is being  disputed in good faith,  and the Borrower and
         each Subsidiary has maintained adequate reserves with respect thereto;

(c)      maintain  and  cause  each  Subsidiary  to  maintain  or  cause  to  be
         maintained insurance with financially sound and reputable insurers,  or
         self-insurance,  with  respect to its  properties  and against  loss or
         damage of the kinds customarily  insured against by reputable companies
         in the same or similar  businesses,  such insurance to be of such types
         and in such amounts (with such deductible  amounts) as is customary for
         such companies under similar circumstances, and

(d)      comply with and cause each  Subsidiary to comply with all acts,  rules,
         regulations,    directions   and   ordinances   of   any   legislative,
         administrative   or  judicial  body  or  official   applicable  to  the
         operations of its business.

SECTION  5.02.  FINANCIAL STATEMENTS, REPORTS,  ETC.  Furnish  to the Lender:

(a)      as soon as available  and in any event within 120 days after the end of
         each  fiscal  year,  (i)  consolidated  balance  sheets and the related
         statements of income and cash flows of Borrower as of the close of such
         fiscal  year  (which  requirement  shall  be  deemed  satisfied  by the
         delivery of the Annual Report on Form 10-K (or any successor  form) for
         such  year) all which have been  audited by KPMG Peat  Marwick or other
         independent  public  accountants  of recognized  national  standing and
         accompanied  by an opinion of such  accountants to the effect that such
         consolidated  financial  statements  present  fairly  in  all  material
         respects the financial  condition and results of operations of Borrower
         in accordance with GAAP consistently applied.

(b)      within 65 days after the end of each of the first three fiscal quarters
         of each  fiscal  year,  (i)  consolidated  balance  sheets and  related
         statements of income and cash flows of Borrower as of the close of such
         fiscal  quarter and the then elapsed  portion of the fiscal year (which
         requirement shall be deemed satisfied by the delivery of the Borrower's
         Quarterly  Report  on  Form  10-Q  (or any  successor  form)  for  such
         quarter),  each certified by a Financial  Officer as fairly  presenting
         the  financial  condition  and  results of  operations  of  Borrower in
         accordance with GAAP consistently  applied,  subject to normal year-end
         audit adjustments.

(c)      promptly  upon the mailing or filing  thereof  copies of all  financial
         statements,  reports  and proxy  statements  mailed  to the  Borrower's
         public shareholders,  and copies of all registration  statements (other
         than those on Form S-8) and Form  8-K's (to the  extent  that such Form
         8-K's disclose actual or potential adverse developments with respect to
         the  Borrower  or could  reasonably  be  anticipated  to  constitute  a
         Material  Adverse  Effect) filed with the  Commission (or any successor
         thereto) or any national securities  exchange;

(d)      promptly  after  (i) the  occurrence  thereof,  notice  of   any  ERISA
         Termination Event  or "prohibited  transaction",  as such terms are de-
         fined  in Section  4975  of  the Code, with respect  to any  Plan  that
         results, or could  reasonably  be anticipated to result,  in a Material
         Adverse  Effect,  which notice shall specify the nature thereof and the
         Borrower's  proposed  response thereto,  and  (ii) actual copies of any
         notice  of  Pension  Benefit Guaranty  Corporation's  (PBGC)  intention
         to terminate or to have a trustee appointed to administer any Plan; and

(e)      promptly,  from time to time,  such other  information,  regarding  its
         operations,  business  affairs and financial  condition,  or compliance
         with the terms of this Loan  Agreement,  as the Lender  may  reasonably
         request.

SECTION  5.03.  LITIGATION AND OTHER NOTICES.   Furnish  to  the  Lender  prompt
         written notice of the following:

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

(b)      the filing or commencement  of, or notice of intention of any person to
         file or commence, any action, suit or proceeding,  whether at law or in
         equity or by or before any Governmental Authority, against the Borrower
         which is reasonably  likely to be adversely  determined  and which,  if
         adversely  determined,  could  reasonably be anticipated to result in a
         Material Adverse Effect; and

(c)      any  development  with respect to the Borrower that has resulted in, or
         could  reasonably  be  anticipated  to result  in, a  Material  Adverse
         Effect.

SECTION  5.04.  MAINTAINING RECORDS.  Maintain  all financial records  in accor-
dance with GAAP and, upon  reasonable notice, permit the Lender to visit and in-
spect the financial records of the  Borrower at reasonable times and as often as
requested and to make extracts from and copies of such  financial  records,  and
permit any  representatives  designated  by the Lender to discuss  the  affairs,
finances and condition of the Borrower  with the  appropriate  officers  thereof
and, with Borrower's consent, the Borrower's independent accountants.

SECTION  5.05.  USE OF  PROCEEDS.  Cause the  proceeds  of any  Working  Capital
Advance (other than a Working  Capital Advance which is utilized to pay interest
obligations)  to be used to  provide  working  capital  and  for  other  general
corporate  purposes  of the  Borrower  and cause the  proceeds  of any  Interest
Advance to be used for the payment of interest on Advances as same  becomes due.
Without  limitation  of the  foregoing,  in no event  shall any  portion of such
proceeds be used by the Borrower for the purpose of  purchasing  or carrying any
"Margin  Stock" (as defined in  Regulation  U of the Board of  Governors  of the
Federal  Reserve  System) or for any other purpose which violates the provisions
of  Regulation  or X of said  Board of  Governors  or for any other  purpose  in
violation of any applicable statute or regulation or the terms and conditions of
this Loan Agreement.


                                   ARTICLE VI

                               NEGATIVE COVENANTS

         Borrower  covenants  and agrees with the Lender  that,  so long as this
Loan  Agreement  shall  remain in effect or the  principal of or interest on any
Advance  (or any portion  thereof),  or any other  expenses  or amounts  payable
hereunder, shall be unpaid, it will not permit any of its Subsidiaries to:

SECTION  6.01.  ASSET  SALES.  Sell,  assign,  or  otherwise  dispose  of assets
(whether in one transaction or a series of transactions), if after giving effect
to such  transaction,  Borrower  or one or more of its  Subsidiaries  will  have
disposed of, in the aggregate,  assets  representing more than 25% of Borrower's
Consolidated Tangible Assets.

SECTION  6.02.  LIENS. Mortgage,  assign, pledge, transfer or  otherwise  permit
any Lien or judgment (whether as a result of a purchase money or title retention
transaction,  or other security  interest,  or otherwise) to exist on any of its
assets or properties,  whether real, personal or mixed, whether now or hereafter
acquired,  except for Liens on fixed assets securing purchase money Indebtedness
provided the total of all such  Indebtedness  to all such Persons taken together
shall not  exceed an  aggregate  principal  amount of  $150,000  at any one time
outstanding,   and  provided   that  any  such  Lien  attaches  to  such  assets
concurrently either or within thirty (30) days after the acquisition thereof and
only to the assets to be or being acquired.

SECTION  6.03.  MERGERS.  Merge or consolidate with any Person, or enter into or
effect any recapitalization,  reorganization or other transaction of like effect
or dissolve,  or except as permitted  by Section 6.01 of this  Agreement,  sell,
assign,  lease, or otherwise  dispose of (whether in one transaction or a series
of transactions)  all or  substantially  all of its assets (whether now owned or
hereafter acquired) to any Person without Lender's consent.

ARTICLE  6.04.  ADDITIONAL  INDEBTEDNESS.   Incur or  create  any  liability  or
Indebtedness  other than (i) trade payables  incurred in the ordinary  course of
the  Borrower's or the  particular  Subsidiary's  business,  (ii) purchase money
indebtedness  of the type and in the  aggregate  amount as referenced in Section
6.02 or Subordinated Debt on terms and conditions acceptable to Lender, or (iii)
pursuant to any of the Third Party Loan Agreements.

ARTICLE  6.05.  TRANSACTIONS WITH  AFFILIATES.  Sell or transfer any property or
assets to, or purchase or acquire any  property  or assets  from,  or  otherwise
engage in any other  transactions  with, any of its Affiliates,  except that, so
long as no Default or Event of Default  shall have  occurred and be  continuing,
the Borrower  may engage in any of the  foregoing  transactions  in the ordinary
course of business at prices and on terms and  conditions  not less favorable to
the Borrower than terms and conditions that could be obtained on an arm's length
basis from  unrelated  third  parties or as  otherwise  may be  required  by any
Federal or state Governmental Authority.

SECTION  6.06.  NO GUARANTIES.  Assume,  guarantee, endorse, or otherwise become
liable upon the obligations of any other Person,  including  without  limitation
any  affiliate or  subsidiary  of  Borrower,  except (i) by the  endorsement  of
negotiable instruments in the ordinary course of business and (ii) in connection
with the incurrence of Indebtedness permitted pursuant to Section 6.04.

SECTION  6.07.  DIVIDENDS  OF  DISTRIBUTIONS.    Make  any   dividend  or  other
distribution  except that a Subsidiary may make dividend or other  distributions
to the Borrower.

SECTION  6.08.  NO  INVESTMENTS. Make other investments other than (i) interest-
bearing  demand or time  deposit  (including  certificates of deposit) which are
insured  by  the  Federal Deposit Insurance Corporation or a similar federal in-
surance program or as the Lender may approve, or (ii) money market funds approv-
ed by Lender. Such approvals shall not be unreasonably withheld.


                                  ARTICLE VII

                               EVENTS OF DEFAULT

SECTION  7.01.  DEFAULTS.  An Event of default  ("Event of Default")  under this
Agreement  shall be deemed to exist if any one or more of the  following  events
occurs and is continuing, whatever the reason, therefore:

(a)      any  representation or warranty made or deemed made in or in connection
         with this Loan Agreement or Advances hereunder,  or any representation,
         warranty,  statement,  or information  contained in any written report,
         certificate,  financial  statement,  or other  instrument  furnished in
         connection with or pursuant to this Loan Agreement, shall prove to have
         been false or misleading in any material  respect when so made,  deemed
         made, or furnished;

(b)      failure to pay or default shall be made in the payment of any principal
         of any  Advance  (or any  portion  thereof)  when and as the same shall
         become due and  payable,  whether at the due date  thereof or at a date
         fixed  or  for  prepayment  thereof  or  by  acceleration   thereof  or
         otherwise;

(c)      failure to pay or default  shall be made in the payment of any interest
         on any Advance (or any portion  thereof) or any fee or any other amount
         (other  than an amount  referred  to in (b)  above)  due under any Loan
         Document,  when and as the same shall become due and payable,  and such
         default shall  continue  unremedied  for a period of five Business Days
         following the Lender's notification;

(d)      failure to pay or default  shall be made in the due  observance or per-
         formance of any covenant, condition, or agreement contained in  Article
         V or Article VI;

(e)      default  shall  be made in the due  observance  or  performance  of any
         covenant,  condition,  or agreement  contained herein (other than those
         specified in (b), (c), or (d) above) and such default  shall,  continue
         unremedied  for a period of 30 days  after the  earlier to occur of (i)
         the Borrower obtaining knowledge thereof and (ii) the date that written
         notice thereof shall have been given to Borrower;

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

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

(h)      The  Borrower  fails  to pay when  due,  or  within  any  grace  period
         applicable  thereto by the terms thereof any indebtedness  under either
         of the  Third  Party  Loan  Agreements  or  other  Indebtedness  of the
         Borrower aggregating $5,000,000 or more;

(i)      The Borrower shall fail to observe or perform any covenant or agreement
         contained  in  any  single  agreement  or  instrument  relating  to any
         Indebtedness in excess of $5,000,000,  singly or in the aggregate, with
         respect to all other  Indebtedness,  in each case within any applicable
         grace  period,  or any other  event  shall  occur if the effect of such
         failure  or other  event is to  accelerate,  or to permit the holder of
         such  Indebtedness  or any other person to accelerate,  the maturity of
         such  Indebtedness;  or any such  Indebtedness  shall be required to be
         prepaid (other than by a regularly scheduled required prepayment or the
         exercise by the  Borrower of its right to make a voluntary  prepayment)
         in whole or in part prior to the stated maturity;

(j)      a judgment  or order for the  payment of money in excess of  $5,000,000
         and having a Material Adverse Effect shall be rendered against Borrower
         and such judgment or order shall continue unsatisfied (in the case of a
         money  judgment)  and in effect  for a period of 30 days  during  which
         execution  shall not be  effectively  stayed or  deferred  (whether  by
         action of a court, by agreement, or otherwise); and

(k)      there shall have occurred A Change in Control.  or

         In the event of any Event of  Default,  then,  and in every  such event
(other than an event with respect to the Borrower  described in paragraph (f) or
(g) above),  and at any time  thereafter  during the  continuance of such event,
Lender, shall by notice to Borrower,  shall take either or both of the following
actions,  at the same or different times: (i) terminate forthwith the Commitment
and (ii) declare the Advances then  outstanding  to be forthwith due and payable
in whole or in part,  whereupon  the principal of the Advances so declared to be
due and payable,  together with accrued  interest thereon and any unpaid accrued
fees and all other  liabilities of the Borrower accrued  hereunder and under any
other  Loan  Document,   shall  become   forthwith  due  and  payable,   without
presentment,  demand, protest, or any other notice of any kind, all of which are
hereby  expressly  waived by the Borrower,  anything  contained herein or in any
other  Loan  Document  to the  contrary  notwithstanding;  and in any event with
respect to the Borrower  described in paragraph (f) or (g) above, the Commitment
shall   automatically   terminate   and  the  principal  of  the  Advances  then
outstanding,  together with accrued interest thereon and any unpaid accrued fees
and all other  liabilities of the Borrower accrued hereunder and under any other
Loan Document,  shall automatically become due and payable, without presentment,
demand,  protest,  or any  other  notice of any  kind,  all of which are  hereby
expressly waived by the Borrower, anything contained herein or in any other Loan
Document to the contrary notwithstanding.

SECTION  7.02.  FURTHER REMEDIES.  Upon the occurrence of any one or more Events
of Default,  the Lender may proceed to protect and enforce its rights under this
Agreement  and the other Loan  Documents  by  exercising  such  remedies  as are
available to the Lender in respect thereof under  applicable law, either by suit
in equity or by action at law, or both, whether for specific  performance of any
provision  contained in this  Agreement or any of the other Loan Documents or in
aid of the exercise of any power  granted in this  Agreement or any of the other
Loan Documents.


                                  ARTICLE VIII

                                 MISCELLANEOUS

SECTION  8.01 . AMENDMENTS, ETC. No amendment or waiver of any provision of this
Agreement, nor consent to any departure by the Borrower therefrom,  shall in any
event be  effective  unless the same shall be in writing  and signed by Borrower
and the Lender,  and then such waiver or consent shall be effective  only in the
specific instance and for the specific purpose for which given.

SECTION  8.02.  NOTICES,  ETC. All notices and other communications provided for
hereunder shall be in writing (including telecopier, telegraphic, telex or cable
communication) and personally delivered,  mailed, (registered or certified mail)
return receipt  requested),  facsimiled or delivered by carrier (such as Federal
Express),  if to the  Borrower at Three High Ridge Park,  Stamford,  Connecticut
06905, Attention: Don Armour, Vice President of Finance, (Facsimile number (203)
614-4625); and if to the Lender, at Three High Ridge Park, Stamford, Connecticut
06905, Attention: Scott N. Schneider, Executive Vice President (Facsimile number
(203) 614-5130).  Such notices and  communications  shall be deemed delivered at
the following times:

(a)      If mailed, on  the third business  day immediately succeeding  posting,
         with postage pre-paid.

(b)      If by facsimile,  on the day transmitted,  if confirmed,  provided such
         day is a business day of the recipient,  and if not, on the immediately
         succeeding business day.

(c)      If personally delivered, on such day.

(d)      If  transmitted  by  carrier,  on the  second  business  day  following
         delivery  to the carrier for  delivery  on the  immediately  succeeding
         business day.

SECTION  8.03.  NO  WAIVER;  REMEDIES.  No  failure on the part of the Lender to
exercise,  and no delay in  exercising,  any right  hereunder  or under the Note
shall operate as a waiver thereof;  nor shall any single or partial  exercise of
any such right preclude any other or further exercise thereof or the exercise of
any other right.  The remedies  herein provided are cumulative and not exclusive
of any remedies provided by law.

SECTION  8.04.  RIGHT  OF  SET-OFF.  Upon  (i) the  occurrence  and  during  the
continuance  of any Event of Default under Article VII or (ii) the making of the
request or the granting of the consent specified by Article VII to authorize the
Lender to declare the Note due and payable pursuant to the provisions of Article
VII,  Lender is  hereby  authorized  at any time and from  time to time,  to the
fullest  extent  permitted  by law,  to set off and apply  any and all  deposits
(general or special, time or demand,  provisional or final) at any time held and
other  Indebtedness  at any time owing by the Lender or such Affiliate to or for
the credit or the account of Borrower (all such deposits and other  indebtedness
being herein called  "Obligations")  against any and all of the  obligations  of
Borrower now or hereafter  existing  under this Loan Agreement and the Note held
by the Lender,  whether or not the Lender  shall have made any demand under this
Loan Agreement or such Note and although the Obligations  may be unmatured.  The
Lender  agrees  promptly  to notify  the  Borrower  after any such  set-off  and
application  made by the Lender,  provided  that the failure to give such notice
shall not affect the validity of such set-off and application. The rights of the
Lender under this Section are in addition to other rights and remedies which the
Lender may have.

SECTION  8.05.  BINDING  EFFECT.  This Agreement shall become  effective when it
shall have been executed by Borrower and Lender,  except that the Borrower shall
not have the right to assign  its rights  hereunder  or any  interest  herein or
delegate any of its obligations  hereunder  without the prior written consent of
Lender.

SECTION  8.06   GOVERNING LAW; SUBMISSION TO JURISDICTION.  This  Agreement  and
the  Note shall  be  governed  by,  and  construed  in accordance  with, the law
of the  State  of New  York,  applicable  to  agreements  made  and  fully to be
performed  therein and without any  reference to any rules of conflicts of laws.
The  Borrower  hereby  submits to the  nonexclusive  jurisdiction  of the United
States District Court for the Southern  District of New York and of any New York
state court  sitting in New York City for the purposes of all legal  proceedings
arising out of or relating to this  Agreement or the  transactions  contemplated
hereby.  The Borrower  irrevocably  waives,  to the fullest extent  permitted by
applicable law, any objection that it may now or hereafter have to the laying of
the venue of any such proceeding  brought in such a court and any claim that any
such  proceeding  brought in such a court has been  brought  in an  inconvenient
forum.

SECTION  8.07.  SEVERABILITY.  In case any provision in this Agreement or in any
Note shall be held to be invalid, illegal or unenforceable, such provision shall
be severable  from the rest of this  Agreement or the Note,  as the case may be,
and the validity,  legality and enforceability of the remaining provisions shall
not in any way be affected or impaired  thereby.  In such instance  Borrower and
Lender shall exert their best  efforts to negotiate  and agree upon a substitute
provision  providing  the  same  rights  and  obligations  as the  unenforceable
provision, which will not be invalid, illegal or unenforceable.

SECTION  8.08.  EXECUTION IN COUNTERPARTS.  This  Loan Agreement may be executed
in the  number of  counterparts and  by  different parties  hereto  in  separate
counterparts,  each of which when so executed  shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.

SECTION  8.09.  SURVIVAL.  The  obligations of the Borrower under Sections 2.08,
shall survive the repayment of the Advances.  In addition,  each  representation
and  warranty  made,  or  deemed to be made by any  Notice of a Working  Capital
Advance or a Notice of an  Interest  Advance  herein or  pursuant  hereto  shall
survive the making of such representation and warranty, and the Lender shall not
be deemed to have waived, by reason of making any Advance,  any Default or Event
of Default that may arise by reason of such representation or warranty provision
have been  false or  misleading,  notwithstanding  that the  Lender may have had
notice or knowledge or reason to believe  that such  representation  or warranty
was false or misleading at the time the Advance was made.

SECTION  8.10.  SENIOR DEBT. The Advances  pursuant to this  Agreement  shall be
deemed to be senior debt of the Borrower, and accordingly shall be senior to and
have priority over all  Indebtedness  of the Borrower  other than trade accounts
payable incurred in the Borrower's ordinary course of business and other than to
the extent any of the Third Party Loan  Agreements  requires the Advances  under
this  Agreement to be  subordinated  to such Third Party Loan  Agreement and all
indebtedness and obligations  thereunder,  in which event this Agreement and the
Advances  under this Agreement are and shall be deemed to be subordinate to such
Third Party Loan Agreement and the obligations and  indebtedness of the Borrower
thereunder.

SECTION  8.11.  WAIVER OF JURY  TRIAL.  EACH OF  BORROWER,  AND  LENDER  HEREBY
IRREVOCABLY  WAIVES,  TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND
ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT, THE NOTE OR THE TRANSACTIONS CONTEMPLATED HEREBY.

SECTION  8.12.  CONFIDENTIALITY.  The  Lender  agrees  to hold all  non-public
information  obtained pursuant to the provisions of this Agreement in accordance
with its  customary  procedure  for handling  confidential  information  of this
nature,  provided that nothing  herein shall prevent the Lender from  disclosing
such information,  (i) upon the order of any court or  administrative  agency or
otherwise  to the extent  required  by  statute,  rule,  regulation  or judicial
process,  (ii) upon the  request  or demand  of any other  regulatory  agency or
authority,  (iii) which had been publicly  disclosed other than as a result of a
disclosure by the Lender  prohibited by this Agreement,  (iv) in connection with
any  litigation  to which  the  Lender  is a party,  or in  connection  with the
exercise of any remedy  hereunder or under any Note,  (v) to the Lender's  legal
counsel and independent  auditors and accountants and (vi) subject to provisions
substantially  similar  to those  contained  in this  Section,  to any actual or
proposed participant or assignee.

SECTION  8.13.  PAYMENT OF EXPENSES,  INDEMNIFICATION.   The borrower  agrees to
pay all the reasonable  out-of-pocket costsand expenses of:

(a)      the Lender in  connection  with the (i) the  negotiation,  preparation,
         execution  and delivery and  administration  of this  agreement and the
         other loan  documents  and the documents  and  instruments  referred to
         therein (including without limitation, the reasonable fees and expenses
         of counsel to the Lender),  and (ii) any  amendment,  waiver or consent
         relating hereto and thereto and

(b)      the Lender in connection with the enforcement of the Loan Documents and
         the documents and instruments referred to therein,  including,  without
         limitation,  in connection  with any such  enforcement,  the reasonable
         fees and  disbursements  of counsel for the Lender.  The Borrower shall
         indemnify,  defend and hold  harmless  the  Lender  and its  directors,
         officers,  agents,  employees  and counsel from and against (x) and all
         losses,  claims,  damages,  liabilities,   deficiencies,  judgments  or
         expenses  incurred  by any of them  (except  to the  extent  that it is
         finally  judicially  determined  to have  resulted from their own gross
         negligence  or willful  misconduct)  arising out of or by reason of any
         litigation,  investigation,  claim or proceeding which arises out of or
         in any way related to

         1. this Agreement,

         2. any actual or proposed use by  the  Borrower of the proceeds of  the
         Advances and

         3. the Lender's entering into this Agreement, the other Loan  Documents
         or any other agreements and documents relating hereto, including, with-
         out limitation, amounts  paid in settlement,  court costs and the  fees
         and disbursements of counsel  incurred  in  connection  with  any  such
         litigation,  investigation, claim or proceeding or any  advice rendered
         in  connection  with  any  such  litigation,  investigation,  claim  or
         proceeding or any advice rendered in connection with compliance of  the
         foregoing,

         and (y) any such losses, claims,  damages,  liabilities,  deficiencies,
         judgments or expenses incurred in connection with any remedial or other
         action  taken  by  the  Borrower  or  the  Lender  in  connection  with
         compliance by the Borrower or any of its Subsidiaries,  or any of their
         respective  properties,  with any federal, state or local environmental
         laws,  acts,  rules,  regulations,   orders,  directions,   ordinances,
         criteria or  guidelines.  If and to the extent that the  obligations of
         the Borrower  hereunder are unenforceable for any reason,  the Borrower
         hereby  agrees to make the  maximum  contribution  to the  payment  and
         satisfaction of such obligations  which is permissible under applicable
         law. The Borrower's  obligations  under this Section 8.13 shall survive
         any  termination of this Agreement and the other Loan Documents and the
         payment  in  full of the  Advances,  and  are in  addition,  and not in
         substitution  of,  any  other of their  obligations  set  forth in this
         Agreement. In addition,  Borrower shall, upon demand, pay to the Lender
         all reasonable  costs and expenses  (including the reasonable  fees and
         disbursements of counsel and other  professionals)  paid or incurred by
         the Lender in (A) enforcing or defending its rights under or in respect
         of this  Agreement,  the other Loan  Documents or any other document or
         instrument  now or  hereafter  executed  and  delivered  in  connection
         herewith, and (B) in collecting the Advances.

SECTION  8.14.. ENTIRE AGREEMENT,  SUCCESSORS AND ASSIGNS.  This Agreement along
with the other Loan Documents constitute the entire agreement among the Borrower
and the Lender,  supersedes any prior  agreements among them, and shall bind and
benefit  the  Borrower  and the  Lender  and  their  respective  successors  and
permitted  assigns.  The Borrower  shall not assign this Agreement or any of its
rights hereunder or delegate its obligations hereunder.

         IN WITNESS WHEREOF

         The  Borrower  and the Lender  have caused  this Loan  Agreement  to be
executed and  delivered by their proper and duly  authorized  officers as of the
date first above written:


                                         ELECTRIC LIGHTWAVE, INC.


                                         By
                                         ---------------------------------------
                                         Its

ATTEST


------------------------------------
             Secretary

                                        CITIZENS COMMUNICATIONS COMPANY

                                        By
                                        ----------------------------------------
                                        Its


ATTEST


------------------------------------
             Secretary


<PAGE>


                                   EXHIBIT A

                                  FORM OF NOTE

                                                  Dated:  As of October 30, 2000


         FOR VALUE  RECEIVED,  the  undersigned,  ELECTRIC  LIGHTWAVE,  INC.,  a
Delaware  corporation (the  "Borrower"),  HEREBY PROMISES TO PAY to the order of
Citizens  Communications  Company (the  "Lender")  on the  Maturity  Date (as so
defined in the Loan  Agreement)  the principal sum of U.S.  $450,000,000  or, if
less,  the  aggregate  principal  amount of  Advances  made by the Lender to the
Borrower  pursuant to the certain  Loan  Agreement  dated the date hereof by and
between the Borrower and the Lender (the "Loan  Agreement").  Terms  capitalized
but not  defined  herein  shall  have  the  meanings  given  to them in the Loan
Agreement.  Payment shall be made at the principal offices of the Lender,  Three
High Ridge Park,  Stamford,  Connecticut 06905. The Loan Agreement,  among other
things,  (i)  provides  for the making of Advances by the Lender to the Borrower
from time to time in an aggregate  amount not to exceed at any time  outstanding
the U.S. dollar amount first above  mentioned,  the indebtedness of the Borrower
resulting from each such Advance being evidenced by this Note, and (ii) contains
provisions for prepayments on account of principal  hereof prior to the maturity
hereof upon the terms and conditions therein specified.

         The Borrower promises to pay interest on the unpaid principal amount of
each Working Capital Advance and each Interest  Advance on each Interest Payment
Date, and on the Maturity Date to pay any interest then remaining unpaid, at the
interest  rate  specified in the Loan  Agreement  computed from the date of such
Advance, and additionally agrees to pay Default Interest as provided in the Loan
Agreement.

         Both  principal  and interest are payable in lawful money of the United
States of America to Lender,  in same day funds. Each Advance made by the Lender
to the Borrower pursuant to the Loan Agreement, and all payments made on account
of principal thereof, shall be recorded by the Lender and, prior to any transfer
hereof,  endorsed  on the  grid  attached  hereto  which  is part of this  Note;
provided  that  the  failure  of the  Lender  to make any  such  recordation  or
endorsement shall not affect the obligations of the Borrower  hereunder or under
the Loan Agreement.

         This note is the Note  referred to in, and is entitled to the  benefits
of, the certain Loan Agreement.

         The Borrower hereby waives presentment,  demand,  protest and notice of
any kind.  No  failure  to  exercise,  and no delay in  exercising,  any  rights
hereunder  on the part of the holder  hereof  shall  operate as a waiver of such
rights.
         This Note shall be governed by, and construed in accordance  with,  the
law of the State of New York, United States of America, applicable to agreements
made and fully to be performed therein and without any reference to any rules of
conflicts of laws.


                                   ELECTRIC LIGHTWAVE, INC.



                                   By______________________________
                                   Its



<PAGE>
<TABLE>
<CAPTION>


                       ADVANCES AND PAYMENTS OF PRINCIPAL


<S>                      <C>                    <C>                    <C>                     <C>
------------------------ ---------------------- ---------------------- ----------------------- ---------------------
                           Amount of Advance     Amount of Principal      Unpaid Principal       Notation Made By
         Date                                      Paid or Prepaid            Balance
------------------------ ---------------------- ---------------------- ----------------------- ---------------------

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

------------------------ ---------------------- ---------------------- ----------------------- ---------------------
</TABLE>


                                  Form of Note


<PAGE>


                                   EXHIBIT B

                       NOTICE OF WORKING CAPITAL ADVANCE


                                     [Date]



Citizens   Communications Company
Three High Ridge Park
Stamford, Connecticut 06905

Ladies and Gentlemen:

The undersigned,  Electric  Lightwave, Inc., refers to the Loan Agreement, dated
October 30, 2000 (the "Loan  Agreement",  the terms defined therein,  being used
herein as therein  defined),  between the  undersigned  as Borrower and Citizens
Communications   Company,   as  Lender.   Borrower   hereby  gives  you  notice,
irrevocably, pursuant to Section 2.02 of the Loan Agreement that the undersigned
hereby requests a Working Capital Advance under the Loan Agreement,  and in that
connection sets forth below the information relating to such Advance as required
by Section 2.02(a) of the Loan  Agreement:

         (i) The Business Day of the proposed Advance is                       ;
                                                        -----------------------
        (ii) The aggregate amount of the proposed Advance is $                 .
                                                              ------------------

The undersigned hereby certifies that the following  statements are true on  the
date hereof,  and  will  be  true  on the  date  of the  proposed  Advance:

   (A) the representations and warranties  contained in Article IV are correct,
   before and after giving  effect to the proposed  Advance and to the  applica-
   tion  of the proceeds  therefrom,  as though made on and as of such date; and

   (B) no event has occurred and is continuing,  or would result from such  pro-
   posed  Advance or  from the  application  of  the proceeds  therefrom,  which
   constitutes a Default or an Event of  Default.

                                        Very truly yours,


                                        ELECTRIC LIGHTWAVE, INC.

                                        By     ___________________________


                                        Title: ___________________________

<PAGE>


                                   EXHIBIT C

                           NOTICE OF INTEREST ADVANCE

                                        [Date]

Citizens Communications Company
Three High Ridge Park
Stamford, Connecticut 06905

Ladies and Gentlemen:

The undersigned,  Electric Lightwave,  Inc., refers to the Loan Agreement, dated
October 30, 2000 (the "Loan  Agreement",  the terms defined therein,  being used
herein as therein  defined),  between the  undersigned  as Borrower and Citizens
Communications  Company,  as  Lender.  The  Borrower  hereby  gives you  notice,
irrevocably, pursuant to Section 2.02 of the Loan Agreement that the undersigned
hereby  requests  an  Interest  Advance  under the Loan  Agreement,  and in that
connection sets forth below the information relating to such Advance as required
by Section 2.02(a) of the Loan  Agreement:

         (i) The Business Day of the proposed Advance is ----------------------;

         (ii) The  aggregate  amount  of the  proposed  Advance  is $----------.

The undersigned hereby certifies that the following  statements are true on  the
date hereof,  and  will  be  true  on the  date  of the  proposed  Advance:

  (A) the representations and warranties  contained in  Article IV are  correct,
  before and after giving  effect to the proposed Advance and to the application
  of the proceeds therefrom, as though made on and as of such date; and

  (B) no  event has  occurred and is  continuing, or would result from such pro-
  posed  Advance  or from  the application of the proceeds  therefrom, which
  constitutes a Default or an Event of Default.

                                Very truly yours,

                                ELECTRIC LIGHTWAVE, INC.

                                By     ___________________________

                                Title:
                                       ___________________________

<PAGE>


                                   EXHIBIT D

                  [Form of Opinion of Counsel of the Borrower]

                                                              ____________, 2000

Citizens Communications  Company
Three  High Ridge  Park
Stamford,  Connecticut  06905-1390

Ladies and  Gentlemen:

This  opinion is  rendered in  connection  with the Loan Agreement (the "Loan
Agreement") dated as of October 30, 2000,  between Electric Lightwave, Inc. (the
"Borrower") and Citizens  Communications Company, a  Delaware  Corporation  (the
"Lender"), providing for loans to be made by Lender to Borrower in an  aggregate
principal amount not exceeding  $450,000,000.  Terms defined in the Loan Agree-
ment are used herein as therein defined.

I  am  [We are] the  General Counsel  of the  Borrower and,  in that capacity in
connection  with the foregoing, I [we] have examined the Loan Agreement and  the
Notes.  I [we] have also examined  originals or copies,  certified or  otherwise
identified  to my  [our] satisfaction,  of such  documents,  corporate  records,
certificates of public officials and other instruments,  and have conducted such
other  investigations  of fact and law, as I have deemed  necessary or advisable
for purposes of this  opinion.

     Based on the foregoing,  I am [we are] of the opinion  that:

          1.   Borrower (a) is a corporation  duly organized,  validly  existing
               and  in  good  standing  under  the  laws  of  the  state  of its
               incorporation,  (b) has the requisite  power and authority to own
               its  property  and  assets  and to carry on its  business  as now
               conducted  and (c) is  qualified  to do business in every  juris-
               diction where such  qualification  is required,  except where the
               failure so to qualify would not have a Material Adverse Effect.

          2.   The  execution,  delivery and  performance by the Borrower of the
               Loan Agreement and the Note (a) have been duly  authorized by all
               necessary corporate action on the part of Borrower and do not and
               will not  require the  consent or  approval  of  shareholders  of
               Borrower,  other than such  consents as have been  obtained,  (b)
               will not  violate  (i) any  provision  of law,  statute,  rule or
               regulation or the Certificate of  Incorporation or the By-Laws of
               the Borrower or (ii) any order of any court or of any other agent
               of government binding upon the Borrower (c) will not violate,  be
               in conflict with,  result in a breach of or constitute  (alone or
               with  notice  or  lapse  of time or  both) a  default  under  any
               indenture,  agreement or other  instrument to which the or any of
               its  properties or assets are or may be bound and will not result
               in the creation or imposition of any lien,  charge or encumbrance
               of any  nature  whatsoever  upon any  property  or  assets of the
               Borrower.

          3.   All  consents  or  approvals   of,  or  other   actions  by,  any
               governmental  agency,  authority or  regulatory  body required in
               connection  with the execution,  delivery and  performance by the
               Borrower  of the Loan  Agreement  and the  Note  have  been  duly
               obtained and are in full force and effect,  without  amendment or
               modification,   and  are  not  the  subject  of  any  pending  or
               threatened  proceedings seeking to amend,  modify, or rescind all
               or any portion of the terms thereof, or any stay.

          4.   The Loan  Agreement  and the Note  have been  duly  executed  and
               delivered by the Borrower and constitute legal, valid and binding
               obligations  of  the  Borrower  stated  to  be a  party  thereto,
               enforceable  against the Borrower in accordance with their terms,
               except  as  such  enforceability  may be  limited  by  applicable
               bankruptcy, reorganization, insolvency, moratorium and other laws
               affecting   the  rights  of  creditors   generally   and  general
               principles of equity.

          5.   There are no actions,  suits,  or proceedings at law or in equity
               or by or  before  any  governmental  instrumentality,  regulatory
               authority,  or  other  agency  pending  or,  to  the  best  of my
               knowledge,  threatened against the Borrower (a) which involve the
               Loan Agreement or any of the transactions contemplated thereby or
               (b) which, if adversely determined,  could reasonably be expected
               to have a Material Adverse Effect,  or (ii) impair in any respect
               the  validity  or  enforceability  of, or the  ability  of any to
               perform its obligations under, the Loan Agreement or the Note.

          6.   The  Borrower is not in  violation of any law, or in default with
               respect to any  judgment,  writ,  injunction,  decree,  rule,  or
               regulation   of   any   court   or    governmental    agency   or
               instrumentality, where such violation or default could have (i) a
               Material  Adverse  Effect,  or (ii)  impair  in any  respect  the
               validity or  enforceability  of, or the  ability the  Borrower to
               perform its obligations under, the Loan Agreement or the Notes.

          7.   The  Borrower  is not an  "investment  company"  as defined in or
               subject to regulation  under the Investment  Company Act of 1940,
               as amended.

                                                Very truly yours,




DZR