Exhibit 10.20

                               FAXSAV INCORPORATED
                               -------------------
                          LOAN AND SECURITY AGREEMENT
                          ---------------------------
                                 March 27, 1998
                                 --------------

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                                TABLE OF CONTENTS

1.    DEFINITIONS AND CONSTRUCTION .....................................   1
      1.1   Definitions ................................................   1
      1.2   Accounting and Other Terms .................................   8

2.    LOANS AND TERMS OF PAYMENT .......................................   9
      2.2   Overadvances ...............................................   9
      2.3   Interest Rates, Payments, and Calculations .................   9
      2.4   Crediting Payments .........................................  10
      2.5   Fees .......................................................  10
      2.6   Additional Costs ...........................................  11
      2.7   Term .......................................................  11

3.    CONDITIONS OF LOANS ..............................................  11
      3.1   Conditions Precedent to Initial Advance ....................  11
      3.2   Conditions Precedent to all Advances .......................  12

4.    CREATION OF SECURITY INTEREST ....................................  12
      4.1   Grant of Security Interest .................................  12
      4.2   Delivery of Additional Documentation Required ..............  13
      4.3   Right to Inspect ...........................................  13

5.    REPRESENTATIONS AND WARRANTIES ...................................  13
      5.1   Due Organization and Qualification .........................  13
      5.2   Due Authorization; No Conflict .............................  13
      5.3   No Prior Encumbrances ......................................  13
      5.4   Merchantable Inventory .....................................  13
      5.5   Intellectual Property ......................................  13
      5.6   Name; Location of Chief Executive Office ...................  14
      5.7   Litigation .................................................  14
      5.8   No Material Adverse Change in Financial Statements .........  14
      5.9   Solvency ...................................................  14
      5.10  Regulatory Compliance ......................................  14
      5.11  Environmental Condition ....................................  14
      5.12  Taxes ......................................................  15
      5.13  Subsidiaries ...............................................  15
      5.14  Government Consents ........................................  15
      5.15  Full Disclosure ............................................  15

6.    AFFIRMATIVE COVENANTS ............................................  15
      6.1   Good Standing ..............................................  15
      6.2   Government Compliance ......................................  15
      6.3   Financial Statements, Reports, Certificates ................  16
      6.4   Inventory; Returns .........................................  16
      6.5   Taxes ......................................................  17
      6.6   Insurance ..................................................  17

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      6.7   Principal Depository .......................................  17
      6.8   Liquidity ..................................................  17
      6.9   Total Liabilities to Net Worth Ratio .......................  18
      6.11  Maximum Churn Rate .........................................  18
      6.12  Further Assurances .........................................  18

7.    NEGATIVE COVENANTS ...............................................  18
      7.1   Dispositions ...............................................  18
      7.2   Changes in Business, Ownership, or Management,
              Business Locations .......................................  19
      7.3   Mergers or Acquisitions ....................................  19
      7.4   Indebtedness ...............................................  19
      7.6   Distributions ..............................................  19
      7.7   Investments ................................................  19
      7.8   Transactions with Affiliates ...............................  19
      7.9   Subordinated Debt ..........................................  19
      7.10  Inventory ..................................................  20
      7.11  Compliance .................................................  20

8.    EVENTS OF DEFAULT ................................................  20
      8.1   Payment Default ............................................  20
      8.2   Covenant Default ...........................................  20
      8.3   Material Adverse Change ....................................  20
      8.4   Attachment .................................................  21
      8.5   Insolvency .................................................  21
      8.6   Other Agreements ...........................................  21
      8.7   Subordinated Debt ..........................................  21
      8.8   Judgments ..................................................  21
      8.9   Misrepresentations .........................................  21

9.    BANK'S RIGHTS AND REMEDIES .......................................  22
      9.1   Rights and Remedies ........................................  22
      9.2   Power of Attorney ..........................................  23
      9.3   Accounts Collection ........................................  23
      9.4   Bank Expenses ..............................................  23
      9.5   Bank's Liability for Collateral ............................  24
      9.6   Remedies Cumulative ........................................  24
      9.7   Demand; Protest ............................................  24

10.   NOTICES ..........................................................  24

11.   CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER .......................  25

12.   GENERAL PROVISIONS ...............................................  26
      12.1  Successors and Assigns .....................................  26
      12.2  Indemnification ............................................  26
      12.3  Time of Essence ............................................  26

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      12.4  Severability of Provisions .................................  26
      12.5  Amendments in Writing, Integration .........................  26
      12.6  Counterparts ...............................................  26
      12.7  Survival ...................................................  27
      12.8  Countersignature ...........................................  27

Exhibits and Schedules
      Exhibits
      A - Description of Collateral
      B - Loan Payment/Advance Telephone Request Form
      C - Borrowing Base Certificate
      D - Compliance Certificate
      E - Promissory Note

      Schedules
      ---------
      A - Disclosure Schedule

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      This LOAN AND SECURITY AGREEMENT is entered into as of March 27, 1998, by
and between SILICON VALLEY BANK ("Bank"), a California-chartered bank with its
principal place of business at 3003 Tasman Drive, Santa Clara, California 95054
with a loan production office located at 40 William Street, Wellesley,
Massachusetts 02181 doing business under the name "Silicon Valley East", and
FAXSAV INCORPORATED (f/k/a Digitran Corporation), a Delaware corporation with
its principal place of business located at 399 Thornall Street, Edison, New
Jersey ("Borrower").

                                    RECITALS

      1. Borrower and Bank are parties to a Credit Agreement dated July 7, 1995,
as amended as of April 15, 1996, August 12, 1996 and November 15, 1996 (the
"1995 Loan Agreement") pursuant to which Borrower issued to Bank its Promissory
Note (Equipment Line of Credit Loans) dated as of April 15, 1996 in the initial
principal amount of $750,000.

      2. Borrower and Bank are also parties to a Loan and Security Agreement
dated as of September 28, 1997 (the "1997 Loan Agreement") pursuant to which the
Bank committed to make further advances in a principal amount up to $800,000 to
finance equipment purchases by Borrower.

      3. Borrower wishes to obtain additional credit from time to time from
Bank, and Bank additional desires to extend credit to Borrower on the terms set
forth herein. This Agreement sets forth the terms on which Bank will advance
additional credit to Borrower, and Borrower will repay the amounts owing to
Bank.

                                    AGREEMENT

      The parties agree as follows:

1. DEFINITIONS AND CONSTRUCTION

      1.1 Definitions. As used in this Agreement, the following terms shall have
the following definitions:

            "Accounts" means all presently existing and hereafter arising
accounts, contract rights, and all other forms of obligations owing to Borrower
arising out of the sale or lease of goods (including, without limitation, the
licensing of software and other technology) or the rendering of services by
Borrower, whether or not earned by performance, and any and all credit
insurance, guaranties, and other security therefor, as well as all merchandise
returned to or reclaimed by Borrower and Borrower's Books relating to any of the
foregoing.

            "Advance" or "Advances" means a loan advance under the Equipment
Line.

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            "Affiliate" means, with respect to any Person, any Person that owns
or controls directly or indirectly such Person, any Person that controls or is
controlled by or is under common control with such Person, and each of such
Person's senior executive officers, directors, partners and, for any Person that
is a limited liability company, such Persons, managers and members.

            "Aggregate Equipment Advance Obligations" means the outstanding
aggregate principal amount of Equipment Advances under this Agreement together
with the outstanding aggregate principal amount of advances under the 1995 Loan
Agreement and the 1997 Loan Agreement.

            "Availability Expiration Date" has the meaning set forth in Section
2.1(a).

            "Bank Expenses" means all: reasonable costs or expenses (including
reasonable attorneys' fees and expenses) incurred in connection with the
preparation, negotiation, administration, and enforcement of the Loan Documents;
and Bank's reasonable attorneys' fees and expenses incurred in amending,
enforcing or defending the Loan Documents, (including fees and expenses of
appeal or review, or those incurred in any Insolvency Proceeding) whether or not
suit is brought.

            "Borrower's Books" means all of Borrower's books and records
including, without limitation: ledgers; records concerning Borrower's assets or
liabilities, the Collateral, business operations or financial condition; and all
computer programs, or tape files, and the equipment, containing such
information.

            "Borrowing Base" means, as of any applicable date, ninety percent
(90%) of Borrower's Net Revenue for the immediately preceding month. For
purposes hereof, "Net Revenue" means Borrower's gross revenues from sales less
returns and allowances.

            "Business Day" means any day that is not a Saturday, Sunday, or
other day on which banks in the State of California or The Commonwealth of
Massachusetts are authorized or required to close.

            "Capital Event" means any of the following capitalization events:

                  (i) issuance by Borrower of any securities (including, without
            limitation, common stock, preferred stock, convertible
            stock/debentures, options, warrants and the like;

                  (ii) debentures, including, without limitation, notes, or
            subordinated debt;

            or

                  (iii) any other infusion of capital in any form whatsoever,

"Capital Event" does not include the (a) issuance of options to purchase common
stock of Borrower (or common stock issued upon exercise of such options)
pursuant to Borrower's

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stock option plan, or (b) issuance of common stock upon the exercise of any
warrants outstanding as of the date hereof.

            "Closing Date" means the date of this Agreement.

            "Code" means the Massachusetts Uniform Commercial Code.

            "Collateral" means the property described on Exhibit A attached
hereto.

            "Committed Equipment Line" means credit extensions of up to Five
Hundred Thousand Dollars ($500,000) hereunder.

            "Contingent Obligation" means, as applied to any Person, any direct
or indirect liability, contingent or otherwise, of that Person with respect to
(i) any indebtedness, lease, dividend, letter of credit or other obligation of
another, including, without limitation, any such obligation directly or
indirectly guaranteed, endorsed, co-made or discounted or sold with recourse by
that Person, or in respect of which that Person is otherwise directly or
indirectly liable; (ii) any obligations with respect to undrawn letters of
credit issued for the account of that Person; and (iii) all obligations arising
under any interest rate, currency or commodity swap agreement, interest rate cap
agreement, interest rate collar agreement, or other agreement or arrangement
designated to protect a Person against fluctuation in interest rates, currency
exchange rates or commodity prices; provided, however, that the term "Contingent
Obligation" shall not include endorsements for collection or deposit in the
ordinary course of business. The amount of any Contingent Obligation shall be
deemed to be an amount equal to the stated or determined amount of the primary
obligation in respect of which such Contingent Obligation is made or, if not
stated or determinable, the maximum reasonably anticipated liability in respect
thereof as determined by such Person in good faith; provided, however, that such
amount shall not in any event exceed the maximum amount of the obligations under
the guarantee or other support arrangement.

            "Copyrights" means any and all copyright rights, copyright
applications, copyright registrations and like protections in each work or
authorship and derivative work thereof, whether published or unpublished and
whether or not the same also constitutes a trade secret, now or hereafter
existing, created, acquired or held.

            "Daily Balance" means the amount of the Obligations owed at the end
of a given day.

            "Debt Service Ratio" shall mean, for any fiscal period, the ratio of
(a) Net Income (Net Loss) plus the sum of depreciation and amortization for such
period, plus Interest Expense for such period to (b) the sum of Interest
Expense, the current portion of Long-Term Indebtedness and obligations of the
Borrower and its Subsidiaries in respect of any capital leases under GAAP.

            "Eligible Equipment" means any item of equipment that the Borrower
has requested that the Bank finance the purchase of through an Equipment Advance
under this

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Agreement, and which, both on the date of such request and the date of such
loan, meets the following requirements:

            (a) such equipment is not (i) a motor vehicle, airplane or similar
      mode of transportation, (ii) a fixture or leasehold improvement, or (iii)
      intended by the Borrower to become a fixture or leasehold improvement;

            (b) No more than twenty-five percent (25%) of the aggregate purchase
      price of Eligible Equipment financed hereunder may consist of software;

            (c) such equipment has been purchased by the Borrower from the
      manufacturer or a distributor thereof, has not been put in service by any
      Person prior to the date of the invoice furnished to the Borrower by such
      manufacturer or distributor, and has an invoice date after November 30,
      1997;

            (d) such equipment is owned solely by the Borrower and is not
      subject to any leasehold interest, assignment, claim, lien or security
      interest, other than a security interest in favor of the Bank pursuant to
      the 1997 Loan Agreement; and

            (e) such equipment is in the possession of the Borrower and is
      located at the principal office of Borrower in the State of New Jersey or
      another jurisdiction of which the Borrower has given the Bank written
      notice.

            "Equipment" means all present and future machinery, equipment,
tenant improvements, furniture, fixtures, vehicles, tools, parts and attachments
in which Borrower has any interest.

            "Equipment Advance" has the meaning set forth in Section 2.1.

            "ERISA" means the Employment Retirement Income Security Act of 1974,
as amended, and the regulations thereunder.

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

            "Indebtedness" means (a) all indebtedness for borrowed money or the
deferred purchase price of property or services, including without limitation
reimbursement and other obligations with respect to surety bonds and letters of
credit, (b) all obligations evidenced by notes, bonds, debentures or similar
instruments, (c) all obligations in respect of capital leases under GAAP and (d)
all Contingent Obligations.

            "Insolvency Proceeding" means any proceeding commenced by or against
any person or entity under any provision of the United States Bankruptcy Code,
as amended, or under any other bankruptcy or insolvency law, including
assignments for the benefit of

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                                      -5-


creditors, formal or informal moratoria, compositions, extension generally with
its creditors, or proceedings seeking reorganization, arrangement, or other
relief.

            "Interest Expense" means, for any fiscal period, the aggregate
amount of interest required to be paid in cash during such period on
Indebtedness of Borrower and its Subsidiaries (on a consolidated basis and
without duplication).

            "Inventory" means all present and future inventory in which Borrower
has any interest, including merchandise, raw materials, parts, supplies, packing
and shipping materials, work in process and finished products intended for sale
or lease or to be furnished under a contract of service, of every kind and
description now or at any time hereafter owned by or in the custody or
possession, actual or constructive, of Borrower, including such inventory as is
temporarily out of its custody or possession or in transit and including any
returns upon any accounts or other proceeds, including insurance proceeds,
resulting from the sale or disposition of any of the foregoing and any documents
of title representing any of the above.

            "Investment" means any beneficial ownership of (including stock,
partnership interest or other securities) any Person, or any loan, advance or
capital contribution to any Person.

            "IRC" means the Internal Revenue Code of 1986, as amended, and the
regulations thereunder.

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

            "Loan Documents" means, collectively, this Agreement, any note or
notes executed by Borrower, and any present or future agreement entered into
between Borrower and/or for the benefit of Bank in connection with this
Agreement, all as amended, extended or restated from time to time.

            "Long-Term Indebtedness" means Indebtedness of the Borrower and its
Subsidiaries that is characterized as long-term under GAAP.

            "Mask Works" means all mask work or similar rights available for the
protection of semiconductor chips, now owned or hereafter acquired.

            "Material Adverse Effect" means a material adverse effect on (i) the
business operations or condition (financial or otherwise) of Borrower and its
Subsidiaries taken as a whole or (ii) the ability of Borrower to repay the
Obligations or otherwise perform its obligations under the Loan Documents.

            "Maturity Date" means February 26, 2001.

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                                      -6-


            "Negotiable Collateral" means all of Borrower's present and future
letters of credit of which it is a beneficiary, notes, drafts, instruments,
securities, documents of title, and chattel paper.

            "Net Income" or "Net Loss" shall have the respective meanings
ascribed to such terms under GAAP.

            "Note" means that certain promissory note of the Borrower, payable
to the order of the Bank, the form of which is attached hereto as Exhibit E.

            "Obligations" means all debt, principal, interest, Bank Expenses and
other amounts owed to Bank by Borrower pursuant to this Agreement, the 1995 Loan
Agreement, the 1997 Loan Agreement, or any other agreement, whether absolute or
contingent, due or to become due, now existing or hereafter arising, including
any interest that accrues after the commencement of an Insolvency Proceeding and
including any debt, liability, or obligation owing from Borrower to others that
Bank may have obtained by assignment or otherwise.

            "Patents" means all patents, patent applications and like
protections including without limitation improvements, divisions, continuations,
renewals, reissues, extensions and continuations-in-part of the same.

            "Payment Date" means the 26th day of each month commencing on the
first such date after the Closing Date and ending on the Maturity Date.

            "Periodic Payments" means all installments or similar recurring
payments that Borrower may now or hereafter become obligated to pay to Bank
pursuant to the terms and provisions of any instrument, or agreement now or
hereafter in existence between Borrower and Bank.

            "Permitted Indebtedness" means:

            (a) Indebtedness of Borrower in favor of Bank arising under this
      Agreement, any other Loan Document, the 1995 Agreement or the 1997
      Agreement;

            (b) Indebtedness existing on the Closing Date and disclosed in the
      Schedule A;

            (c) Subordinated Debt;

            (d) Indebtedness to trade creditors incurred in the ordinary course
      of business; and

            (e) Indebtedness secured by Permitted Liens.

            "Permitted Investment" means:

            (a) Investments existing on the Closing Date disclosed in the
      Schedule; and

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                                      -7-


            (b) (i) marketable direct obligations issued or unconditionally
      guaranteed by the United States of America or any agency or any State
      thereof maturing within one (1) year from the date of acquisition thereof,
      (ii) commercial paper maturing no more than one (1) year from the date of
      creation thereof and currently having the highest rating obtainable from
      either Standard & Poor's Corporation or Moody's Investors Service, Inc.,
      and (iii) certificates of deposit maturing no more than one (1) year from
      the date of investment therein issued by Bank.

            (c) Depository accounts at the Bank or maintained at other banks
      listed on Schedule A or otherwise disclosed to the Bank in writing
      subsequent to the date hereof.

            "Permitted Liens" means the following:

            (a) Any Liens existing on the Closing Date and disclosed in Schedule
      A or arising under this Agreement or the other Loan Documents;

            (b) Liens for taxes, fees, assessments or other governmental charges
      or levies, either not delinquent or being contested in good faith by
      appropriate proceedings and as to which adequate reserves are maintained
      on Borrower's Books in accordance with GAAP, provided the same have no
      priority over any of Bank's security interests;

            (c) Liens (i) upon or in any Equipment acquired or held by Borrower
      or any of its Subsidiaries to secure the purchase price of such Equipment
      or indebtedness incurred solely for the purpose of financing the
      acquisition of such Equipment, or (ii) existing on such Equipment at the
      time of its acquisition, provided that the Lien is confined solely to the
      property so acquired and improvements thereon, and the proceeds of such
      Equipment;

            (d) Leases or subleases and licenses or sublicenses granted to
      others in the ordinary course of Borrower's business not interfering in
      any material respect with the business of Borrower and its Subsidiaries
      taken as a whole, and any interest or title of a lessor, licensor or under
      any lease or license provided that such leases, subleases, licenses and
      sublicenses do not prohibit the grant of the security interest granted
      hereunder; and

            (e) Liens incurred in connection with the extension, renewal or
      refinancing of the indebtedness secured by Liens of the type described in
      clauses (a) through (c) above, provided that any extension, renewal or
      replacement Lien shall be limited to the property encumbered by the
      existing Lien and the principal amount of the indebtedness being extended,
      renewed or refinanced does not increase.

            "Person" means any individual, sole proprietorship, partnership,
limited liability company, joint venture, trust, unincorporated organization,
association, corporation, institution, public benefit corporation, firm, joint
stock company, estate, entity or governmental agency.

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            "Prime Rate" means the variable rate of interest, per annum, most
recently announced by Bank, as its "prime rate," whether or not such announced
rate is the lowest rate available from Bank.

            "Responsible Officer" means each of the Chief Executive Officer, the
President, the Chief Financial Officer and the Controller or Borrower.

            "Schedule A" means the schedule of exceptions attached hereto.

            "Subordinated Debt" means any debt incurred by Borrower that is
subordinated to the debt owing by Borrower to Bank on terms acceptable to Bank
(and identified as being such by Borrower and Bank).

            "Subsidiary" means with respect to any Person, corporation,
partnership, company association, joint venture, or any other business entity of
which more than fifty percent (50%) of the voting stock or other equity
interests is owned or controlled, directly or indirectly, by such Person or one
or more Affiliates of such Person.

            "Tangible Net Worth" means as of any applicable date, the
consolidated total assets of Borrower and the Subsidiaries minus, without
duplication, (i) the sum of any amounts attributable to (a) goodwill, (b)
intangible items such as unamortizied debt discount and expenses, patents, trade
and service marks and names, copyrights and research and development expenses
except prepaid expenses, and (c) all reserves not already deducted from assets,
and (ii) Total Liabilities.

            "Total Liabilities" means as of any applicable date, any date as of
which the amount thereof shall be determined, all obligations that should, in
accordance with GAAP be classified as liabilities on the consolidated balance
sheet of Borrower, including in any event all Indebtedness, but specifically
excluding Subordinated Debt.

            "Trademarks" means any trademark and service marks rights, whether
registered or not, applications to register and registration of the same and
like protections, and the entire goodwill of the business of Assignor connected
with and symbolized by such trademarks.

            "Unrestricted Cash" means all cash and cash equivalents (determined
in accordance with GAAP) which are not subject to a Lien other than to the Bank
and excluding any amounts due, allocated or reserved for taxes.

            1.2 Accounting and Other Terms. All accounting terms not
specifically defined herein shall be construed in accordance with GAAP and all
calculations and determinations made hereunder shall be made in accordance with
GAAP. When used herein, the term "financial statements" shall include the notes
and schedules thereto. The terms

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"including"/"includes" shall always be read as meaning "including (or includes)
without limitation", when used herein or in any other Loan Document.

2. LOANS AND TERMS OF PAYMENT

            2.1 Equipment Advances.

            (a) Subject to and upon the terms and conditions of this Agreement,
at any time from the date hereof through September 26, 1998 (the "Availability
Expiration Date"), Bank agrees to make advances (each an "Equipment Advance" and
collectively, the "Equipment Advances") to Borrower in an aggregate outstanding
amount not to exceed the Committed Equipment Line. To evidence the Equipment
Advances, Borrower shall deliver to Bank a promissory note on the form of
Exhibit E hereto (the "Note"). The Equipment Advances shall be used only to
purchase or refinance Eligible Equipment and shall not exceed one hundred
percent (100%) of the aggregate invoice amount of such Eligible Equipment
approved from time to time by Bank, excluding taxes, shipping, warranty charges,
freight discounts and installation expense.

            (b) Interest shall accrue from the date of each Equipment Advance at
the rate specified in Section 2.3(a) and shall be payable monthly for each month
through the month in which the Availability Expiration Date falls. Any Equipment
Advances that are outstanding on the Availability Expiration Date will be
payable in thirty (30) equal monthly installments of principal plus all accrued
interest thereon, beginning on the Payment Date of each month following the
Availability Expiration Date and ending on the Maturity Date. Equipment
Advances, once repaid, may not be reborrowed.

            (c) When Borrower desires to obtain an Equipment Advance, Borrower
shall notify Bank (which notice shall be irrevocable) by facsimile transmission
to be received no later than 3:00 p.m. Pacific time one (1) Business Day before
the day on which the Equipment Advance is to be made. Such notice shall be
substantially in the form of Exhibit B. The notice shall be signed by a
Responsible Officer or its designee and include a copies of the invoices for the
Eligible Equipment to be financed.

            2.2 Overadvances. If, at any time or for any reason (i) the
aggregate outstanding principal amount of Equipment Advances owed by Borrower to
Bank hereunder is greater than the Committed Equipment Line or (ii) the amount
of the Aggregate Equipment Advance Obligations owed by Borrower to the Bank is
greater than the current Reserve Position, Borrower shall immediately pay to
Bank, in cash, the amount of such excess.

            2.3 Interest Rates Payments, and Calculations.

            (a) Interest Rate. Except as set forth in Section 2.3(b), all
Equipment Advances shall bear interest, on the average Daily Balance, at a rate
equal to one (1) percent per annum above the Prime Rate.

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            (b) Default Rate. All Obligations shall bear interest, from and
after the occurrence of an Event of Default, at a rate equal to five (5) percent
per annum above the interest rate applicable immediately prior to the occurrence
of the Event of Default.

            (c) Payments. Interest hereunder shall be due and payable on each
Payment Date. Borrower hereby authorizes Bank to debit any accounts with Bank,
including, without limitation, Account Number 0700347170 for payments of
principal and interest due on the Obligations and any other amounts owing by
Borrower to Bank. Bank will notify Borrower of all debits which Bank has made
against Borrower's accounts. Any such debits against Borrower's accounts in no
way shall be deemed a set-off. Any interest not paid when due shall be
compounded by becoming a part of the Obligations, and such interest shall
thereafter accrue interest at the rate then applicable hereunder.

            (d) Computation. In the event the Prime Rate is changed from time to
time hereafter, the applicable rate of interest hereunder shall be increased or
decreased effective as of 12:01 a.m., California time, on the day the Prime
Rate is changed, by an amount equal to such change in the Prime Rate. All
interest chargeable under the Loan Documents shall be computed on the basis of a
three hundred sixty (360) day year for the actual number of days elapsed.

            2.4 Crediting Payments. Prior to the occurrence of an Event of
Default, Bank shall credit a wire transfer of funds, check or other item of
payment to such deposit account or Obligation as Borrower specifies. After the
occurrence of an Event of Default, the receipt by Bank of any wire transfer of
funds, check, or other item of payment, whether directed to Borrower's deposit
account with Bank or to the Obligations or otherwise, shall be immediately
applied to conditionally reduce Obligations, but shall not be considered a
payment in respect of the Obligations unless such payment is of immediately
available federal funds or unless and until such check or other item of payment
is honored when presented for payment. Notwithstanding anything to the contrary
contained herein, any wire transfer or payment received by Bank after 12:00 noon
Pacific time shall be deemed to have been received by Bank as of the opening of
business on the immediately following Business Day. Whenever any payment to Bank
under the Loan Documents would otherwise be due (except by reason of
acceleration) on a date that is not a Business Day, such payment shall instead
be due on the next Business Day, and additional fees or interest, as the case
may be, shall accrue and be payable for the period of such extension.

            2.5 Fees. Borrower shall pay to Bank the following:

            (a) Facility Fee. A Facility Fee equal Twenty-Five Hundred Dollars
($2,500.00) shall be due on the Closing Date, which fee shall be fully earned
and nonrefundable;

            (b) Financial Examination and Appraisal Fees. Bank's customary fees
and out-of-pocket expenses for Bank's audits of Borrower's Accounts, and for
each appraisal of Collateral and financial analysis and examination of Borrower
performed from time to time by Bank or its agents;

<PAGE>
                                      -11-


            (c) Bank Expenses. Upon demand from Bank, including, without
limitation, upon the date hereof, all Bank Expenses (including attorney's fees
of up to $5,000 plus disbursements) incurred through the date hereof, including
reasonable attorneys' fees and expenses, and, after the date hereof, all Bank
Expenses, including reasonable attorneys fees as and when they become due;
provided that all attorneys fees and expense reimbursement is subject to the
receipt by FaxSav of reasonable supporting documentation.

            2.6 Additional Costs. In case any law, regulation, treaty or
official directive or the interpretation or application thereof by any court or
any governmental authority charged with the administration thereof or the
compliance with any guideline or request of any central bank or other
governmental authority (whether or not having the force of law):

            (a) subjects Bank to any tax with respect to payments of principal
or interest or any other amounts payable hereunder by Borrower or otherwise with
respect to the transactions contemplated hereby (except for taxes on the overall
net income of Bank imposed by the United States of America or any political
subdivision thereof);

            (b) imposes, modifies or deems applicable any deposit insurance,
reserve, special deposit or similar requirement against assets held by, or
deposits in or for the account of, or loans by, Bank; or

            (c) imposes upon Bank any other condition with respect to its
performance under this Agreement, and the result of any of the foregoing is to
increase the cost to Bank, reduce the income receivable by Bank or impose any
expense upon Bank with respect to any loans, Bank shall notify Borrower thereof.
Borrower agrees to pay to Bank the amount of such increase in cost, reduction in
income or additional expense as and when such cost, reduction or expense is
incurred or determined, upon presentation by Bank of a statement of the amount
and setting forth Bank's calculation thereof, all in reasonable detail, which
statement shall be deemed true and correct absent manifest error.

            2.7 Term. Except as otherwise set forth herein, this Agreement shall
become effective on the Closing Date and, subject to Section 12.7, shall
continue in full force and effect for a term ending on the Maturity Date.
Notwithstanding the foregoing, Bank shall have the right to terminate its
obligation to make Credit Extensions under this Agreement immediately and
without notice upon the occurrence and during the continuance of an Event of
Default. Notwithstanding termination of this Agreement, Bank's Lien on the
Collateral shall remain in effect for so long as any Obligations are
outstanding.

3. CONDITIONS OF LOANS

            3.1 Conditions Precedent to Initial Advance. The obligation of Bank
to make the initial Advance is subject to the condition precedent that Bank
shall have received, in form and substance satisfactory to Bank, the following:

<PAGE>
                                      -12-


            (a) this Agreement and the Note;

            (b) a certificate of the Secretary of Borrower with respect to
articles, bylaws, incumbency and resolutions authorizing the execution and
delivery of this Agreement;

            (c) an opinion of Borrower's counsel;

            (d) confirmatory financing statements (Forms UCC-1);

            (e) insurance certificate;

            (f) payment of the fees and Bank Expenses then due specified in
Section 2.5 hereof; and

            (g) Certificate of Legal Existence and Foreign Qualification for the
states of Delaware and New Jersey; and

            (h) such other documents, and completion of such other matters, as
Bank may reasonably deem necessary or appropriate.

            3.2 Conditions Precedent to all Advances. The obligation of Bank to
make each Advance, including the initial Advance, is further subject to the
following conditions:

            (a) timely receipt by Bank of the Payment/Advance Form as provided
in Section 2.1;

            (b) timely receipt of a Borrowing Base Certificate as of a recent
date appropriately completed and indicating a Reserve Position in an amount at
least equal to the requested Advance; and

            (c) the representations and warranties contained in Section 5 shall
be true and correct in all material respects on and as of the date of such
Payment/Advance Form and on the effective date of each Advance as though made at
and as of each such date, and no Event of Default shall have occurred and be
continuing, or would result from such Advance. The making of each Advance shall
be deemed to be a representation and warranty by Borrower on the date of such
Advance as to the accuracy of the facts referred to in this Section 3.2(b).

4. CREATION OF SECURITY INTEREST

            4.1 Grant of Security Interest. Borrower hereby grants and pledges
(and confirms its previous grant and pledge to Bank under the 1997 Agreement) of
a continuing security interest in all presently existing and hereafter acquired
or arising Collateral in order to secure prompt payment of any and all
Obligations (including without limitation any and all obligations of Borrower to
Bank hereunder) and in order to secure prompt performance by Borrower of each of
its covenants and duties under the Loan Documents. Except as set forth

<PAGE>
                                      -13-


in Schedule A, such security interest constitutes a valid, first priority
security interest in the presently existing Collateral, and will constitute a
valid, first priority security interest in Collateral acquired after the date
hereof. Borrower acknowledges that Bank may place a "hold" on any Deposit
Account pledged as Collateral to secure the Obligations. Notwithstanding
termination of this Agreement, Bank's Lien on the Collateral shall remain in
effect for so long as any Obligations are outstanding.

            4.2 Delivery of Additional Documentation Required. Borrower shall
from time to time execute and deliver to Bank, at the request of Bank, all
Negotiable Collateral, all financing statements and other documents that Bank
may reasonably request, in form satisfactory to Bank, to perfect and continue
perfected Bank's security interests in the Collateral and in order to fully
consummate all of the transactions contemplated under the Loan Documents.

            4.3 Right to Inspect. Bank (through any of its officers, employees,
or agents) shall have the right, upon reasonable prior notice, from time to time
during Borrower's usual business hours, to inspect Borrower's Books and to make
copies thereof and to check, test, and appraise the Collateral in order to
verify Borrower's financial condition or the amount, condition of, or any other
matter relating to, the Collateral.

5. REPRESENTATIONS AND WARRANTIES

      Borrower represents and warrants as follows:

            5.1 Due Organization and Qualification. Borrower and each Subsidiary
is a corporation duly existing and in good standing under the laws of its state
of incorporation and qualified and licensed to do business in, and is in good
standing in, any state in which the failure to do so would have a Material
Adverse Effect. The Borrower has no Subsidiaries.

            5.2 Due Authorization; No Conflict. The execution, delivery, and
performance of the Loan Documents are within Borrower's powers, have been duly
authorized, and are not in conflict with nor constitute a breach of any
provision contained in Borrower's Certificate of Incorporation or Bylaws, nor
will they constitute an event of default under any material agreement to which
Borrower is a party or by which Borrower is bound. Borrower is not in default
under any agreement to which it is a party or by which it is bound, which
default could have a Material Adverse Effect.

            5.3 No Prior Encumbrances. Borrower has good and indefeasible title
to the Collateral, free and clear of Liens, except for Permitted Liens.

            5.4 Merchantable Inventory. All Inventory of Borrower is in all
material respects of good and marketable quality, free from all material
defects.

            5.5 Intellectual Property. Borrower is the sole owner of the
Intellectual Property Collateral, except for non-exclusive licenses granted by
Borrower to its customers

<PAGE>
                                      -14-


in the ordinary course of business. To the best of Borrower's knowledge, no part
of the Intellectual Property Collateral infringes or violates the rights of any
other Person.

            5.6 Name; Location of Chief Executive Office. Except as disclosed in
Schedule A, Borrower has not done business and will not without at least thirty
(30) days prior written notice to Bank do business under any name other than
that specified on the signature page hereof. The chief executive office of
Borrower is located at the address indicated in Section 10 hereof.

            5.7 Litigation. Except as set forth in Schedule A, there are no
actions or proceedings pending, or, to Borrower's knowledge, threatened by or
against Borrower or any Subsidiary before any court or administrative agency in
which an adverse decision could have a Material Adverse Effect or a material
adverse effect on Borrower's interest or Bank's security interest in the
Collateral. Borrower does not have knowledge of any such pending or threatened
actions or proceedings.

            5.8 No Material Adverse Change in Financial Statements. All
consolidated financial statements related to Borrower and any Subsidiary that
have been delivered by Borrower to Bank fairly present in all material respects
Borrower's consolidated financial condition as of the date thereof and
Borrower's consolidated results of operations for the period then ended. Since
the date of the most recent of such financial statements submitted to Bank on or
about the Closing Date, there has been no development or event which has had or
could reasonably be expected to have a Material Adverse Effect.

            5.9 Solvency. The fair saleable value of Borrower's assets
(including goodwill minus disposition costs) exceeds the fair value of its
liabilities; the Borrower is not left with unreasonably small capital after the
transactions contemplated by this Agreement; and Borrower is able to pay its
debts (including trade debts) as they mature.

            5.10 Regulatory Compliance. Borrower and each Subsidiary has met the
minimum funding requirements of ERISA with respect to any employee benefit plans
subject to ERISA. No event has occurred resulting from Borrower's failure to
comply with ERISA that is reasonably likely to result in Borrower's incurring
any liability that could have a Material Adverse Effect. Borrower is not an
"investment company" or a company "controlled" by an "investment company" within
the meaning of the Investment Company Act of 1940. Borrower is not engaged
principally, or as one of its the important activities, in the business of
extending credit for the purpose of purchasing or carrying margin stock (within
the meaning of Regulations G, T and U of the Board of Governors of the Federal
Reserve System). Borrower has complied with all the provisions of the Federal
Fair Labor Standards Act. Borrower has not violated any statutes, laws,
ordinances or rules applicable to it, violation of which could have a Material
Adverse Effect.

            5.11 Environmental Condition. None of Borrower's or any Subsidiary's
properties or assets has ever been used by Borrower or any Subsidiary or, to the
best of Borrower's knowledge, by previous owners or operators, in the disposal
of, or to produce, store, handle, treat, release, or transport, any hazardous
waste or hazardous substance other than in accordance with applicable law; to
the best of Borrower's knowledge, none of

<PAGE>
                                      -15-


Borrower's properties or assets has ever been designated or identified in any
manner pursuant to any environmental protection statute as a hazardous waste or
hazardous substance disposal site, or a candidate for closure pursuant to any
environmental protection statute; no lien arising under any environmental
protection statute has attached to any revenues or to any real or personal
property owned by Borrower or any Subsidiary; and neither Borrower nor any
Subsidiary has received a summons, citation, notice, or directive from the
Environmental Protection Agency or any other federal, state or other
governmental agency concerning any action or omission by Borrower or any
Subsidiary resulting in the release, or other disposition of hazardous waste or
hazardous substances into the environment.

            5.12 Taxes. Borrower and each Subsidiary has filed or caused to be
filed all tax returns required to be filed on a timely basis, and has paid, or
has made adequate provision for the payment of, all taxes reflected therein,
except those being contested in good faith by proper proceedings with adequate
reserves under GAAP.

            5.13 Subsidiaries. Borrower does not own any stock, partnership
interest or other equity securities of any Person, except for Permitted
Investments.

            5.14 Government Consents. Borrower and each Subsidiary has obtained
all consents, approvals and authorizations of, made all declarations or filings
with, and given all notices to, all governmental authorities that are necessary
for the continued operation of Borrower's business as currently conducted,
except where the failure to do so would not have a Material Adverse Effect.

            5.15 Full Disclosure. No representation, warranty or other statement
made by Borrower in any certificate or written statement furnished to Bank
contains any untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements contained in such certificates or
statements not misleading.

6. AFFIRMATIVE COVENANTS

      Borrower covenants and agrees that, until payment in full of all
outstanding Obligations, and for so long as Bank may have any commitment to make
a Credit Extension hereunder, Borrower shall do all of the following:

            6.1 Good Standing. Borrower shall maintain its and each of its
Subsidiaries' corporate existence and good standing in its jurisdiction of
incorporation and maintain qualification in each jurisdiction in which the
failure to so qualify could have a Material Adverse Effect. Borrower shall
maintain, and shall cause each of its Subsidiaries to maintain, to the extent
consistent with prudent management of Borrower's business, in force all
licenses, approvals and agreements, the loss of which could have a Material
Adverse Effect.

            6.2 Government Compliance. Borrower shall meet, and shall cause each
Subsidiary to meet, the minimum funding requirements of ERISA with respect to
any employee benefit plans subject to ERISA. Borrower shall comply, and shall
cause each Subsidiary to comply, with all statutes, laws, ordinances and
government rules and

<PAGE>
                                      -16-


regulations to which it is subject, noncompliance with which could have a
Material Adverse Effect or a material adverse effect on the Collateral or the
priority of Bank's Lien on the Collateral.

            6.3 Financial Statements. Reports. Certificates. Borrower shall
deliver to Bank: (a) as soon as available, but in any event within thirty (30)
days after the end of each month, (except month end which is also a quarter end
which shall be covered by timely submission to the Bank of Borrower's report on
SEC Form 1OQ in accordance with clause (c) below), a Borrower prepared
consolidated balance sheet and income statement covering Borrower's consolidated
operations during such period, in a form and certified by an officer of Borrower
reasonably acceptable to Bank; (b) as soon as available, but in any event within
ninety (90) days after the end of Borrower's fiscal year, audited consolidated
financial statements of Borrower prepared in accordance with GAAP, consistently
applied, together with an unqualified opinion on such financial statements of an
independent certified public accounting firm reasonably acceptable to Bank; (c)
within five (5) days of filing, copies of all statements, reports and notices
sent or made available generally by Borrower to its security holders or to any
holders of Subordinated Debt and all reports on Form 10-K, 10-Q and 8-K filed
with the Securities and Exchange Commission; (d) promptly upon receipt of notice
thereof, a report of any legal actions pending or threatened against Borrower or
any Subsidiary that could result in damages or costs to Borrower or any
Subsidiary of One Hundred Thousand Dollars ($100,000) or more; and (e) such
budgets, sales projections, operating plans or other financial information as
Bank may reasonably request from time to time.

      Within 30 days after the last day of each month, Borrower shall deliver to
Bank a Borrowing Base Certificate signed by a Responsible Officer in
substantially the form of Exhibit C hereto.

      Within 30 days after the last day of each month (except in the case of
month ends which are also quarter ends, then at the time of submission of
Borrower's report on SEC Form 10-Q pursuant to clause (c) above), Borrower shall
deliver to Bank with the monthly financial statements a Compliance Certificate
signed by a Responsible Officer in substantially the form of Exhibit D hereto.

      Bank shall have a right from time to time hereafter to audit Borrower's
Accounts at Borrower's expense, provided that such audits will be conducted no
more often than every six (6) months unless an Event of Default has occurred and
is continuing.

            6.4 Inventory; Returns. Borrower shall keep all Inventory in good
and marketable condition, free from all material defects. Returns and
allowances, if any, as between Borrower and its account debtors shall be on the
same basis and in accordance with the usual customary practices of Borrower, as
they exist at the time of the execution and delivery of this Agreement. Borrower
shall promptly notify Bank of all returns and recoveries and of all disputes and
claims, where the return, recovery, dispute or claim involves more than Fifty
Thousand Dollars ($50,000).

<PAGE>
                                      -17-


            6.5 Taxes. Borrower shall make, and shall cause each Subsidiary to
make, due and timely payment or deposit of all material federal, state, and
local taxes, assessments, or contributions required of it by law, and will
execute and deliver to Bank, on demand, appropriate certificates attesting to
the payment or deposit thereof; and Borrower will make, and will cause each
Subsidiary to make, timely payment or deposit of all material tax payments and
withholding taxes required of it by applicable laws, including, but not limited
to, those laws concerning F.I.C.A., F.U.T.A., state disability, and local,
state, and federal income taxes, and will, upon request, furnish Bank with proof
satisfactory to Bank indicting that Borrower or a Subsidiary has made such
payments or deposits; provided that Borrower or a Subsidiary need not make any
payment if the amount or validity of such payment is (i) contested in good faith
by appropriate proceedings, (ii) is reserved against (to the extent required by
GAAP) by Borrower and (iii) no lien other than a Permitted Lien results.

            6.6 Insurance.

            (a) Borrower, at its expense, shall keep the Collateral insured
against loss or damage by fire, theft, explosion, sprinklers, and all other
hazards and risks, and in such amounts, as ordinarily insured against by other
owners in similar businesses conducted in the locations where Borrower's
business is conducted on the date hereof. Borrow shall also maintain insurance
relating to Borrower's ownership and use of the Collateral in amounts and of a
type that are customary to businesses similar to Borrower's.

            (b) All such policies of Insurance shall be in such form, with such
companies, and in such amounts as reasonably satisfactory to Bank. All such
policies of property insurance shall contain a lender's loss payable
endorsement, in a form satisfactory to Bank, showing Bank as an additional loss
payee thereof and all liability insurance policies shall show the Bank as an
additional insured, and shall specify that the insurer must give at least twenty
(20) days notice to Bank before canceling its policy for any reason. At Bank's
request, Borrower shall deliver to Bank certified copies of such policies of
insurance and evidence of the payments of all premiums therefor. All proceeds
payable under any such policy shall, at the option of Bank, be payable to Bank
to be applied on account of the Obligations.

            6.7 Principal Depository. Borrower shall maintain its principal
depository and operating accounts with Bank.

            6.8 Liquidity. Beginning as of the month ending March 31, 1998,
Borrower shall maintain, as of the day of the last day of each calendar month, a
ratio of Unrestricted Cash, plus the amount of the Borrowing Base based upon the
Borrowing Base Certificate for such month end, to the Aggregate Equipment
Advance Obligations, of at least 1.75 to 1.0, increasing to 2.0 to 1.0 upon the
occurrence of any Capital Event, provided, however, the requirements of this
Section 6.8 shall terminate from and after the Borrower shall have delivered to
the Bank financial statements and compliance certificates evidencing that it has
maintained a minimum Debt Service Ratio is 1.5 to 1.0 for two consecutive
fiscal quarters.

<PAGE>
                                      -18-


            6.9 Total Liabilities to Net Worth Ratio. Beginning as of month
ending March 31, 1998, Borrower shall maintain, as of the last day of each
calendar month, a ratio of Total Liabilities less Subordinated Debt to Tangible
Net Worth of not more than the following amounts, for each month during the
corresponding periods.

      March 31, 1998............................................2.0 to 1.0
      Beginning April 30, 1998 through June 30, 1998 ...........3.0 to 1.0
      Beginning July 31, 1998 and monthly thereafter ...........2.0 to 1.0

            6.10 Tangible Net Worth. Borrower shall maintain, as of the last day
of each calendar month, a Tangible Net Worth of not less than the following
amounts, for the corresponding periods:

      Months ending March 31, 1998 through June 30, 1998     $2,500,000.00

                   Month ending September 30, 1998, and for
                   each fiscal monthly thereafter, an
                   amount equal to $3,000,000.00, plus
                   seventy-five (75.0%) of cumulative (from
                   July 1, 1998 forward) monthly Net Income
                   (with no reduction for Net Losses)

            6.11 Maximum Churn Rate The Borrower will not permit Customer
Cancellations during any month to exceed five percent (5 %) of Borrower's
Aggregate Customer Base at the end of the immediately preceding month. For
purposes hereof, "Customer Cancellations" means the number of customers who have
cancelled or communicated their intent to cancel their contractual arrangements
with Borrower and "Aggregate Customer Base" means the total number of customers
of the Borrower.

            6.12 Further Assurances. At any time and from time to time Borrower
shall execute and deliver such further instruments and take such further action
as may reasonably be requested by Bank to effect the purposes of this Agreement.

7. NEGATIVE COVENANTS

      Borrower covenants and agrees that, so long as any Credit Extension
hereunder shall be available and until payment in full of the outstanding
Obligations or for so long as Bank may have any commitment to make any Advances,
Borrower will not do any of the following:

            7.1 Dispositions. Convey, sell, lease, transfer or otherwise dispose
of (collectively, a "Transfer"), or permit any of its Subsidiaries to Transfer,
all or any part of its business or property, other than Transfers: (i) of
Inventory in the ordinary course of business; (ii) of non-exclusive licenses and
similar arrangements for the use of the property of Borrower or its Subsidiaries
in the course of business; (iii) that constitute payment of normal and usual
operating expenses in the ordinary course of business; or (iv) of worn-out or
obsolete Equipment.

<PAGE>
                                      -19-


            7.2 Changes in Business, Ownership, or Management, Business
Locations. Engage in any business, or permit any of its Subsidiaries to engage
in any business, other than the businesses currently engaged in by Borrower and
any business substantially similar or related thereto (or incidental thereto),
or suffer a change in Borrower's ownership or management. Borrower will not,
without at least thirty (30) days prior written notification to Bank, relocate
its chief executive office or add any new offices or business locations.

            7.3 Mergers or Acquisitions. Merge or consolidate, or permit any of
its Subsidiaries to merge or consolidate, with or into any other business
organization, or acquire, or permit any of its Subsidiaries to acquire, all or
substantially all of the capital stock or property of another Person; provided
that any Subsidiary may merge into Borrower or any wholly-owned Subsidiary of
Borrower; and provided further that Borrower or Subsidiary may acquire the
business of another Person or merge with another Person so long as (a) no Event
of Default has occurred and is continuing or would otherwise result therefrom,
(b) the other Person is in the same or a related line of business, (c) Borrower
or the Subsidiary is the surviving corporation, (d) there would be no resulting 
change in management of Borrower or the Subsidiary, and (e) the acquisition or 
merger would not result in a change in excess of 25% of the net worth of the 
Borrower or the Subsidiary.

            7.4 Indebtedness. Create, incur, assume or be or remain liable with
respect to any Indebtedness, or permit any Subsidiary so to do, other than
Permitted Indebtedness.

            7.5 Encumbrances. Create, incur, assume or suffer to exist any Lien
with respect to any of its property, or assign or otherwise convey any right to
receive income, including the sale of any Accounts, or permit any of its
Subsidiaries so to do, except for Permitted Liens.

            7.6 Distributions. Pay any dividends or make any other distribution
or payment on account of or in redemption, retirement or purchase of any capital
stock.

            7.7 Investments. Directly or indirectly acquire or own, or make any
Investment in or to any Person, or permit any of its Subsidiaries so to do,
other than Permitted Investments.

            7.8 Transactions with Affiliates. Directly or indirectly enter into
or permit to exist any material transaction with any Affiliate of Borrower
except for transactions that are in the ordinary course of Borrower's business,
upon fair and reasonable terms that are no less favorable to Borrower than would
be obtained in an arm's length transaction with a nonaffiliated Person.

            7.9 Subordinated Debt. Make any payment in respect of any
Subordinated Debt, or permit any of its Subsidiaries to make any such payment,
except in compliance with the terms of such Subordinated Debt, or amend any
provision contained in any documentation relating to the Subordinated Debt
without Bank's prior written consent.

<PAGE>
                                      -20-


            7.10 Inventory. Store the Inventory with a bailee, warehouseman, or
similar party unless Bank has received a pledge of any warehouse receipt
covering such Inventory. Except for Inventory sold in the ordinary course of
business and except for such other locations as Bank may approve in writing,
Borrower shall keep the Inventory only at the location set forth in Section 10
hereof and such other locations of which Borrower gives Bank prior written
notice and as to which Borrower signs and files a financing statement where
needed to perfect Bank's security interest.

            7.11 Compliance. Become an "investment company" or a company
controlled by an "investment company," within the meaning of the Investment
Company Act of 1940, or become principally engaged in, or undertake as one of
its important activities, the business of extending credit for the purpose of
purchasing or carrying margin stock, or use the proceeds of any Advance for such
purpose; fail to meet the minimum funding requirements of ERISA; permit a
Reportable Event or Prohibited Transaction, as defined in ERISA, to occur; fail
to comply with the Federal Fair Labor Standards Act or violate any other law or
regulation, which violation could have a Material Adverse Effect or a material
adverse effect on the Collateral or the priority of Bank's Lien on the
Collateral; or permit any of its Subsidiaries to do any of the foregoing.

8. EVENTS OF DEFAULT

            Any one or more of the following events shall constitute an Event of
Default by Borrower under this Agreement:

            8.1 Payment Default. If Borrower fails to pay, when due, any of the
Obligations.

            8.2 Covenant Default.

            (a) If Borrower fails to perform any obligation under Sections 6.3,
6.6 through 6.12 or violates any of the covenants contained in Article 7 of this
Agreement, or

            (b) If Borrower fails or neglects to perform, keep, or observe any
other material term, provision, condition, covenant, or agreement contained in
this Agreement, in any of the Loan Documents, or in any other present or future
agreement between Borrower and Bank and as to any default under such other term,
provision, condition, covenant or agreement that can be cured, has failed to
cure such default within ten (10) days after the occurrence thereof; provided,
however, that if the default cannot by its nature be cured within the ten (10)
day period or cannot after diligent attempts by Borrower be cured within such
ten (10) day period, and such default is likely to be cured within a reasonable
time, then Borrower shall have an additional reasonable period (which shall not
in any case exceed thirty (30) days) to attempt to cure such default, and within
such reasonable time period the failure to have cured such default shall not be
deemed an Event of Default (provided that no Advances will be required to be
made during such cure period);

            8.3 Material Adverse Change. If there (i) occurs a change in the
business, operations, or condition (financial or otherwise) of the Borrower
which has a Material

<PAGE>
                                      -21-


Adverse Effect, or (ii) is a material impairment of the prospect of repayment of
any portion of the Obligations or (iii) is a material impairment of the value or
priority of Bank's security interests in the Collateral;

            8.4 Attachment. If any material portion of Borrower's assets is
attached, seized, subjected to a writ or distress warrant, or is levied upon, or
comes into the possession of any trustee, receiver or person acting in a similar
capacity and such attachment, seizure, writ or distress warrant or levy has not
been removed, discharged or rescinded within thirty (30) days, or if Borrower is
enjoined, restrained, or in any way prevented by court order from continuing to
conduct all or any material part of its business affairs, or if a judgment or
other claim becomes a lien or encumbrance upon any material portion of
Borrower's assets, or if a notice of lien, levy, or assessment is filed of
record with respect to any of Borrower's assets by the United States Government,
or any department, agency, or instrumentality thereof, or by any state, county,
municipal, or governmental agency, and the same is not paid within thirty (30)
days after Borrower receives notice thereof, provided that none of the foregoing
shall constitute an Event of Default where such action or event is stayed or an
adequate bond has been posted pending a good faith contest by Borrower (provided
that no Equipment Advances will be required to be made during such cure period);

            8.5 Insolvency. If Borrower becomes insolvent, or if an Insolvency
Proceeding is commenced by Borrower, or if an Insolvency Proceeding is commenced
against Borrower and is not dismissed or stayed within thirty (30) days
(provided that no Advances will be made prior to the dismissal of such
Insolvency Proceeding);

            8.6 Other Agreements. If there is a default in any agreement to
which Borrower is a party with a third party or parties resulting in a right by
such third party or parties, whether or not exercised, to accelerate the
maturity of any Indebtedness in an amount in excess of One Hundred Thousand
Dollars ($100,000) or that could have a Material Adverse Effect;

            8.7 Subordinated Debt. If Borrower makes any payment on account of
Subordinated Debt, except to the extent such payment is allowed under any
subordination agreement entered into with Bank;

            8.8 Judgments. If a judgment or judgments for the payment of money
in an amount, individually or in the aggregate, of at least Fifty Thousand
Dollars ($50,000) shall be rendered against Borrower and shall remain
unsatisfied and unstayed for a period of ten (10) days (provided that no
Equipment Advances will be made prior to the satisfaction or stay of such
judgment); or

            8.9 Misrepresentations. If any material misrepresentation or
material misstatement exists now or hereafter in any warranty or representation
set forth herein or in any certificate or writing delivered to Bank by Borrower
or any Person acting on Borrower's behalf pursuant to this Agreement or to
induce Bank to enter into this Agreement or any other Loan Document.

<PAGE>
                                      -22-


9. BANK'S RIGHTS AND REMEDIES

            9.1 Rights and Remedies. Upon the occurrence and during the
continuance of an Event of Default, Bank may, at its election, without notice of
its election and without demand, do any one or more of the following, all of
which are authorized by Borrower:

            (a) Declare all Obligations, whether evidenced by this Agreement,
the 1995 Loan Agreement, the 1997 Loan Agreement or by any of the other Loan
Documents, or otherwise, immediately due and payable (provided that upon the
occurrence of an Event of Default described in Section 8.5 all Obligations shall
become immediately due and payable without any action by Bank);

            (b) Cease advancing money or extending credit to or for the benefit
of Borrower under this Agreement or under any other agreement between Borrower
and Bank;

            (c) Settle or adjust disputes and claims directly with account
debtors for amounts, upon terms and in whatever order that Bank reasonably
considers advisable;

            (d) Without notice to or demand upon Borrower, make such payments
and do such acts as Bank considers necessary or reasonable to protect its
security interest in the Collateral. Borrower agrees to assemble the Collateral
if Bank so requires, and to make the Collateral available to Bank as Bank may
designate. Borrower authorizes Bank to enter the premises where the Collateral
is located, to take and maintain possession of the Collateral, or any part of
it, and to pay, purchase, contest, or compromise any encumbrance, charge, or
lien which in Bank's determination appears to be prior or superior to its
security interest and to pay all expenses incurred in connection therewith. With
respect to any of Borrower's premises, Borrower hereby grants Bank a license to
enter such premises and to occupy the same, without charge, in order to exercise
any of Bank's rights or remedies provided herein, at law, in equity, or
otherwise;

            (e) Without notice to Borrower set off and apply to the Obligations
any and all (i) balances and deposits of Borrower held by Bank, or (ii)
indebtedness at any time owing to or for the credit or the account of Borrower
held by Bank;

            (f) Ship, reclaim, recover, store, finish, maintain, repair, prepare
for sale, advertise for sale, and sell (in the manner provided for herein) the
Collateral. Bank is hereby granted a non-exclusive, royalty-free license or
other right, solely pursuant to the provisions of this Section 9.1, to use,
without charge, Borrower's labels, patents, copyrights, mask works, rights of
use of any name, trade secrets, trade names, trademarks, service marks, and
advertising matter, or any property of a similar nature, as it pertains to the
Collateral, in completing production of, advertising for sale, and selling any
Collateral and, in connection with Bank's exercise of its rights under this
Section 9.1, Borrower's rights under all licenses and all franchise agreements
shall inure to Bank's benefit;

            (g) Sell the Collateral at either a public or private sale, or both,
by way of one or more contracts or transactions, for cash or on terms, in such
manner and at such places (including Borrower's premises) as Bank determines is
commercially reasonable, and

<PAGE>
                                      -23-


apply the proceeds thereof to the Obligations in whatever manner or order it
deems appropriate; 

            (h) Bank may credit bid and purchase at any public sale, or private
sale as permitted by law;

            (i) Any deficiency that exists after disposition of the Collateral
as provided above will be paid immediately by Borrower; and

            (j) Bank shall have a non-exclusive, royalty-free license to use the
Intellectual Property Collateral to the extent reasonably necessary to permit
Bank to exercise its rights and remedies upon the occurrence of an Event of
Default.

            9.2 Power of Attorney. Effective only upon the occurrence and during
the continuance of an Event of Default, Borrower hereby irrevocably appoints
Bank (and any of Bank's designated officers, or employees) as Borrower's true
and lawful attorney to: (a) send requests for verification of Accounts or notify
account debtors of Bank's security interest in the Accounts; (b) endorse
Borrower's name on any checks or other forms of payment or security that may
come into Bank's possession; (c) sign Borrower's name on any invoice or bill of
lading relating to any Account, drafts against account debtors, schedules and
assignments of Accounts, verifications of Accounts, and notices to account
debtors; (d) make, settle, and adjust all claims under and decisions with
respect to Borrower's policies of insurance; and (e) settle and adjust disputes
and claims respecting the accounts directly with account debtors, for amounts
and upon terms which Bank determines to be reasonable; (f) to file, in its sole
discretion, one or more financing or continuation statements and amendments
thereto, relative to any of the Collateral without the signature of Borrower
where permitted by law; provided Bank may exercise such power of attorney to
sign the name of Borrower on any of the documents described in Section 4.2
regardless of whether an Event of Default has occurred. The appointment of Bank
as Borrower's attorney in fact, and each and every one of Bank's rights and
powers, being coupled with an interest, is irrevocable until all of the
Obligations have been fully repaid and performed and Bank's obligation to
provide advances hereunder is terminated.

            9.3 Accounts Collection. Upon the occurrence and during the
continuance of an Event of Default, Bank may notify any Person owing funds to
Borrower of Bank's security interest in such funds and verify the amount of such
Account. Borrower shall collect all amounts owing to Borrower for Bank, receive
in trust all payments as Bank's trustee, and if requested or required by Bank,
immediately deliver such payments to Bank in their original form as received
from the account debtor, with proper endorsements for deposit.

            9.4 Bank Expenses. If Borrower fails to pay any amounts or furnish
any required proof of payment due to third persons or entities, as required
under the terms of this Agreement, then Bank may do any or all of the following:
(a) make payment of the same or any part thereof; (b) set up such reserves under
the Equipment Line as Bank deems necessary to protect Bank from the exposure
created by such failure; or (c) obtain and maintain insurance policies of the
type discussed in Section 6.6 of this Agreement, and take any action

<PAGE>
                                      -24-


with respect to such policies as Bank deems prudent. Any amounts so paid or
deposited by Bank shall constitute Bank Expenses, shall be immediately due and
payable, and shall bear interest at the then applicable rate hereinabove
provided, and shall be secured by the Collateral. Any payments made by Bank
shall not constitute an agreement by Bank to make similar payments in the future
or a waiver by Bank of any Event of Default under this Agreement.

            9.5 Bank's Liability for Collateral. So long as Bank complies with
reasonable banking practices, Bank shall not in any way or manner be liable or
responsible for: (a) the safekeeping of the Collateral; (b) any loss or damage
thereto occurring or arising in any manner or fashion from any cause; (c) any
diminution in the value thereof; or (d) any act or default of any carrier,
warehouseman, bailee, forwarding agency, or other person whomsoever. All risk of
loss, damage or destruction of the Collateral shall be borne by Borrower.

            9.6 Remedies Cumulative. Bank's rights and remedies under this
Agreement, the Loan Documents, and all other agreements shall be cumulative.
Bank shall have all other rights and remedies not expressly set forth herein
inconsistent herewith as provided under the Code, by law, or in equity. No
exercise by Bank of one right or remedy shall be deemed an election, and no
waiver by Bank of any Event of Default on Borrower's part shall be deemed a
continuing waiver. No delay by Bank shall constitute a waiver, election, or
acquiescence by it. No waiver by Bank shall be effective unless made in a
written document signed on behalf of Bank and then shall be effective only in
the specific instance and for the specific purpose for which it was given.

            9.7 Demand; Protest. Borrower waives demand, protest, notice of
protest, notice of default or dishonor, notice of payment and nonpayment, notice
of any default, nonpayment at maturity, release, compromise, settlement,
extension, or renewal of accounts, documents, instruments, chattel paper, and
guarantees at any time held by Bank on which Borrower may in any way be liable.

10.   NOTICES

            Unless otherwise provided in this Agreement, all notices or demands
by any party relating to this Agreement or any other agreement entered into in
connection herewith shall be in writing and (except for financial statements and
other informational documents which may be sent by first-class mail, postage
prepaid) shall be personally delivered or sent by a recognized overnight
delivery service, by certified mail, postage prepaid, return receipt requested,
or by telefacsimile to Borrower or to Bank, as the case may be, at its addresses
set forth below:

       If to Borrower:
                       FaxSav Incorporated
                       399 Thornall Street
                       Edison, New Jersey 08837
                       Attn: Mr. Peter Macaluso, CFO
                       Fax:(908) 906-1008

<PAGE>
                                      -25-


       with a Copy to:
                       Brobeck, Phleger & Harrison
                       1633 Broadway - 47th floor
                       New York, New York 10019
                       Attn: Brian B. Mangolis, Esq.
                       Fax: (212) 586-7878

       If to Bank:
                       Silicon Valley Bank
                       3003 Tasman Drive
                       Santa Clara, California 95054
                       Attn: Amy Young, Vice President
                       FAX: (408) 496-2429

       With copies to:
                       Silicon Valley East
                       40 William Street
                       Wellesley, Massachusetts 02181
                       Attn: Jane A. Braun, Vice President
                       FAX:(617) 431-9906

                       Sullivan & Worcester LLP
                       One Post Office Square
                       Boston, MA 02109
                       Attn:  Dennis J. White, Esq.
                       Fax:(617) 338-2880

      The parties hereto may change the address at which they are to receive
notices hereunder, by notice in writing in the foregoing manner given to the
other.

11.   CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER

      THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE COMMONWEALTH OF MASSACHUSETTS TO PRINCIPLES OF CONFLICTS OF
LAW. EACH OF BORROWER AND BANK HEREBY SUBMITS TO THE EXCLUSIVE JURISDICTION OF
THE STATE AND FEDERAL COURTS LOCATED IN THE COMMONWEALTH OF MASSACHUSETTS, BUT
IF FOR ANY REASON THE BANK IS DENIED ACCESS TO SUCH COURTS, THEN IN SUCH EVENT
THE STATE AND FEDERAL COURTS LOCATED IN THE COUNTY OF SANTA CLARA, STATE OF
CALIFORNIA. BORROWER AND BANK EACH HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A
JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY OF
THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING
CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR
STATUTORY CLAIMS. EACH PARTY RECOGNIZES AND AGREES THAT THE FOREGOING WAIVER
CONSTITUTES A MATERIAL INDUCEMENT FOR IT TO ENTER INTO

<PAGE>
                                      -26-


THIS AGREEMENT. EACH PARTY REPRESENTS AND WARRANTS THAT IT HAS REVIEWED THIS
WAIVER WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS
JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.

12.   GENERAL PROVISIONS

            12.1 Successors and Assigns. This Agreement shall bind and inure to
the benefit of the respective successors and permitted assigns of each of the
parties; provided, however, that neither this Agreement nor any rights hereunder
may be assigned by Borrower without Bank's prior written consent, which consent
may be granted or withheld in Bank's sole discretion. Bank shall have the right
without the consent of or notice to Borrower to sell, transfer, negotiate, or
grant participation in all or any part of, or any interest in, Bank's
obligations, rights and benefits hereunder.

            12.2 Indemnification. Borrower shall indemnify, defend, protect and
hold harmless Bank and its officers, employees, and agents against: (a) all
obligations, demands, claims, and liabilities claimed or asserted by any other
party in connection with the transactions contemplated by the Loan Documents;
and (B) all losses or Bank Expenses in any way suffered, incurred, or paid by
Bank as a result of or in any way arising out of, following, or consequential to
transactions between Bank and Borrower whether under the Loan Documents, or
otherwise (including without limitation reasonable attorneys fees and expenses),
except for losses caused by Bank's gross negligence or willful misconduct.

            12.3 Time of Essence. Time is of the essence for the performance of
all obligations set forth in this Agreement.

            12.4 Severability of Provisions. Each provision of this Agreement
shall be severable from every other provision of this Agreement for the purpose
of determining the legal enforceability of any specific provision.

            12.5 Amendments in Writing, Integration. This Agreement cannot be
amended or terminated except by a writing signed by Borrower and Bank. All prior
agreements, understandings, representations, warranties, and negotiations
between the parties hereto with respect to the subject matter of this Agreement,
if any, are merged into this Agreement and the Loan Documents, provided,
however, the 1995 Loan Agreement and the 1997 Loan Agreement shall continue in
full force and effect in accordance with their terms except that the definition
of "Borrowing Base" set forth therein shall be superseded by the definition of
such term in this Agreement and that the financial covenants set forth therein
which shall be superseded in their entirety by the financial covenants set forth
in Sections 6.8 through 6.12 above.

            12.6 Counterparts. This Agreement may be executed in any number of
counterparts and by different parties on separate counterparts, each of which,
when executed and delivered, shall be deemed to be an original, and all of
which, when taken together, shall constitute but one and the same Agreement.

<PAGE>
                                      -27-


            12.7 Survival. All covenants, representations and warranties made in
this Agreement shall continue in full force and effect so long as any
Obligations remain outstanding. The obligations of Borrower to indemnify Bank
with respect to the expenses, images, losses, costs and liabilities described in
Section 12.2 shall survive until all applicable statute of limitations periods
with respect to actions that may be brought against Bank have run; provided that
so long as the obligations referred to in the first sentence of this Section
12.7 have been satisfied, and Bank has no commitment to make any Advance or to
make any other loans to Borrower, Bank shall release all security interests
granted hereunder and redeliver all Collateral held by it in accordance with
applicable law.

            12.8 Countersignature. This agreement shall become effective only
when it shall have been executed by Borrower and Bank, provided, however, in no
event shall this agreement become effective until signed by an officer of the
Bank in California.

      IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.

                                   FAXSAV INCORPORATED


                                   By: /s/ Peter S. Macaluso
                                       ------------------------------------
                                       Name: Peter S. Macaluso
                                       Title: Vice President and CFO


                                   SILICON VALLEY BANK, doing business
                                      as SILICON VALLEY EAST


                                   By: /s/ Jane A. Braun
                                       ------------------------------------
                                       Name:  Jane A. Braun
                                       Title: Vice President


                                   SILICON VALLEY BANK


                                   By:
                                       ------------------------------------
                                       Name:
                                       Title:
                                       (signed in Santa Clara, California)

<PAGE>

                                    EXHIBIT A

      The Collateral shall consist of all right, title and interest of Borrower
in and to the following:

      (a) All goods and equipment now owned or hereafter acquired, including,
without limitation, all machinery, fixtures, vehicles (including motor vehicles
and trailers), and any interest in any of the foregoing, and all attachments,
accessories, accessions, replacements, substitutions, additions, and
improvements to any of the foregoing, wherever located;

      (B) All inventory, now owned or hereafter acquired, including, without
limitation, all merchandise, raw materials, parts, supplies, packing and
shipping materials, work in process and finished products including such
inventory as is temporarily out of Borrower's custody or possession or in
transit and including any returns upon any accounts or other proceeds, including
insurance proceeds, resulting from the sale or disposition of any of the
foregoing and any documents of title representing any of the above;

      (c) All contract rights and general intangibles now owned or hereafter
acquired, including, without limitation, goodwill, leases, license agreements,
franchise agreements, blueprints, drawings, purchase orders, customer lists,
route lists, claims, literature, reports, catalogs, income tax refunds, payments
of insurance and rights to payment of any kind;

      (d) All now existing and hereafter arising accounts, contract rights,
royalties, license rights and all other forms of obligations owing to Borrower
arising out of the sale or lease of goods, the licensing of technology or the
rendering of services by Borrower, whether or not earned by performance, and any
and all credit insurance, guaranties, and other security therefor, as well as
all merchandise returned to or reclaimed by Borrower;

      (e) All documents, cash, deposit accounts, securities, investment
property, letters of credit, certificates of deposit, instruments and chattel
paper now owned or hereafter acquired;

      (f) All copyright rights, copyright applications, copyright registrations
and like protections in each work for authorship and derivative work thereof,
whether published or unpublished, now owned or hereafter acquired; all trade
secret rights, including all rights to unpatented inventions, know-how,
operating manuals, license rights and agreements and confidential information,
now owned or hereafter acquired; all mask work or similar rights available for
the protection of semiconductor chips, now owned or hereafter acquired; all
claims for damages by way or any past, present and future infringement of any of
the foregoing; and

      (g) Any and all claims, rights and interests in any of the above and all
substitutions for, additions and accessions to and proceeds thereof.

      (h) All Borrower's Books relating to the foregoing and any and all claims,
rights and interest in any of the above and all substitutions for, additions and
accessions to and proceeds thereof.

<PAGE>

                                    EXHIBIT B
                   LOAN PAYMENT/ADVANCE TELEPHONE REQUEST FORM

              DEADLINE FOR SAME DAY PROCESSING IS 3:00 P.M., P.S.T.

TO: CENTRAL CLIENT SERVICE DIVISION                 DATE:________________

FAX#: ______________________________                TIME:________________

FROM: FAXSAV INCORPORATED 
      -------------------------------------------------------------------
                              CLIENT NAME (BORROWER)

REQUESTED BY:____________________________________________________________
                         AUTHORIZED SIGNER'S NAME

AUTHORIZED SIGNATURE: ___________________________________________________

PHONE NUMBER: ___________________________________________________________

FROM ACCOUNT #______________________    TO ACCOUNT # ____________________

REQUESTED TRANSACTION TYPE                 REQUEST DOLLAR AMOUNT
--------------------------                 ---------------------

PRINCIPAL INCREASE (ADVANCE)               $
PRINCIPAL PAYMENT (ONLY)                   $
INTEREST PAYMENT (ONLY)                    $
PRINCIPAL AND INTEREST (PAYMENT)           $

OTHER INSTRUCTIONS:

      All representations and warranties of Borrower stated in the Loan and
Security Agreement are true, correct and complete in all material respects as of
the date of the telephone request for and Advance confirmed by this Advance
Request; provided, however, that those representations and warranties expressly
referring to another date shall be true, correct and complete in all material
respects as of such date.

                         =======================================================
                                              BANK USE ONLY

                         TELEPHONE REOUEST:

                         The following person is authorized to request the loan
                         payment transfer/loan advance on the advance designated
                         account and is known to me.

                         Authorized Requester___________________________________
                         Received By (Bank)_____________________________________
                         Authorized Signature (Bank)____________________________
                         Phone No.______________________________________________
                         =======================================================

<PAGE>

                                    EXHIBIT C
                           BORROWING BASE CERTIFICATE

Borrower:  FaxSav Incorporated

Bank:      Silicon Valley Bank

            1.    Net Revenue(1) for month ending __/__ /__.      $____________

            2.    Borrowing Base: Loan Value of Net Income
                  (90% of #1)                                     $____________

The undersigned represents and warrants that the foregoing is true, complete and
correct, and that the information reflected in this Borrowing Base Certificate
complies with the representations and warranties set forth in the Loan and
Security Agreement between the undersigned and Silicon Valley Bank

COMMENTS:

By:
    -------------------------------
    Authorized Signer


----------
(1)   Net Revenue means gross revenues from sales less returns and allowances.

<PAGE>

                                    EXHIBIT D
                             COMPLIANCE CERTIFICATE

TO:      SILICON VALLEY BANK

FROM:    FAXSAV INCORPORATED

      The undersigned authorized officer of FaxSav Incorporated hereby certifies
that in accordance with the terms and conditions of the Loan and Security
Agreement between Borrower and Bank (the "Agreement"). (i) Borrower is in
complete compliance for the period ending ______ with all required covenants 
except as noted below and (ii) all representations and warranties of Borrower 
stated in the Agreement are true and correct in all material aspects as of the
date hereof. Attached herewith are the required documents supporting the above
certification. The Officer further certifies that these are prepared in
accordance with Generally Accepted Accounting Principles (GAAP) and are
consistently applied from one period to the next except as explained in an
accompanying letter or footnotes. The Officer expressly acknowledges that h no
borrowings may be requested by the Borrower at any time or date of determination
that Borrower is not in compliance with any of the terms of the Agreement, and
that such compliance is determined not just at the date this certificate is
delivered.

      Please indicate compliance status by circling Yes/No under "Complies"
column.

<TABLE>
<CAPTION>
Reporting Covenant                        Required                             Complies   
------------------                        --------                             --------   
<S>                             <C>                                          <C>       <C>
Monthly financial statements    Monthly within 30 days (except               Yes       No
                                quarter ends by furnishing SEC                           
                                report in timely manner)                                 
                                                                                         
Annual (CPA Audited)            FYE within 90 days                           Yes       No
10Q and 10K and other SEC       Within 5 days after filing with SEC          Yes       No
Reports                                                                     
</TABLE>


<TABLE>
<CAPTION>
Financial Covenant                        Required              Actual         Complies
------------------                        --------             ------          --------

<S>                             <C>                          <C>             <C>       <C>
Liquidity Ratio (tested         1.75:1.0 (2.0:1.0            $_______ to     Yes       No 
monthly) of Unrestricted        upon a Capital Event)**      $_______ or                
Cash, plus Borrowing Base to                                 _____:1.0                  
Aggregate Equipment Advance                                  
Obligations (Terminates upon
a Debt Service Coverage
Event)*

Debt Service Coverage Ratio     1.5:1.0                      $_______ to     Yes       No 
(tested quarterly). Ratio of                                 $_______ or                  
EBIDTA to Long-Term                                          _____:1.0                    
Indebtedness, Interest and                                   
Capital Lease Obligation
(triggered only upon
Borrower's meeting this test
for two consecutive
quarters, a "Debt Service
Coverage Event")*
</TABLE>

<PAGE>

                                       -2-


<TABLE>
<CAPTION>

<S>                                  <C>                         <C>               <C>            <C>
Tangible Net Worth (tested monthly)  $2.5 million through        $_________ plus   Yes            No
                                     6/30/98; $3.0 million       $_________,Total 
                                     at 7/31/98 plus 75% of                        of $_______ 
                                     Net Income (with no 
                                     offset for losses) there-
                                     after.)

Leverage, (tested monthly) Total     2.0:1.0 at 3/31/98;          $_____ to        Yes            No
Liabilities less Subordinated Debt   3.0:1.0 at 4/30/98           $_____ or
to Tangible Net Worth                through 6/30/98;             ___:1.0
                                     2.0:1.0 at 7/31/98
                                     and thereafter

Maximum Churn Rate (tested
monthly) Monthly                     5%                           ___%             Yes            No
Customer Cancellations as a
percentage of Total Customer
Base
</TABLE>

*|_|  check here if a Debt Service Coverage Event has occurred and indicate the
      date thereof: __/__/__

**|_| check here if a Capital Event has incurred and indicate the date thereof:
      __/__/__.

Comments Regarding Exceptions: See Attached.

Sincerely,


-------------------------------
Signature
Title
Date

<PAGE>

                                    EXHIBIT E
                                 PROMISSORY NOTE

<PAGE>

                                 PROMISSORY NOTE

$500,000.00                                             Wellesley, Massachusetts
                                                            As of March 27, 1998

      For value received, the undersigned, FAXSAV INCORPORATED, a Delaware
corporation (the "Borrower"), promises to pay to SILICON VALLEY BANK (the
"Bank") at the office of the Bank located at 3003 Tasman Drive, Santa Clara,
California 95054, or to its order, the lesser of (a) Five Hundred Thousand
Dollars ($500,000) or (b) the outstanding principal amount hereunder, on
September 26, 1998 in thirty (30) consecutive equal monthly installments payable
on the 26th day of each month, commencing April 26, 1998 and ending February 26,
2001 (the "Maturity Date"), together with interest on the principal amount
hereof from time to time outstanding at a fluctuating rate per annum equal to
the Prime Rate (as defined below) plus 1 % until the Maturity Date, payable
monthly in arrears on fifth first day of each calendar month occurring after the
date hereof and on the Maturity Date. The Borrower promises to pay on demand
interest at a per annum rate of interest equal to 5% per annum in excess of the
rate otherwise then in effect on any overdue principal (and to the extent
permitted by law, overdue interest). The Bank's "Prime Rate" is the per annum
rate of interest from time to time announced and made effective by the Bank as
its Prime Rate (which rate may or may not be the lowest rate available from the
Bank at any given time).

      Computations of interest shall be made by the Bank on the basis of a year
of 360 days for the actual number of days occurring in the period for which such
interest is payable.

      This note is the Note referred to in the loan and security agreement of
even date herewith between the Bank and the Borrower (together with all related
schedules), as the same may be amended, modified or supplemented from time to
time (the "Loan and Security Agreement"), and is entitled to the benefits
thereof and of the other Loan Documents referred to therein, and is subject to
optional and mandatory prepayment as provided therein. This note is secured
inter alia by the Loan and Security Agreement.

      Upon the occurrence of any Event of Default under, and as defined in, the
Loan and Security Agreement, at the option of the Bank, the principal amount
then outstanding of and the accrued interest on the advances under this note and
all other amounts payable under this note shall become immediately due and
payable, without notice (including, without limitation, notice of intent to
accelerate), presentment, demand, protest or other formalities of any kind, all
of which are hereby expressly waived by the Borrower.

      The Bank shall keep a record of the amount and the date of the making of
each advance pursuant to the Loan and Security Agreement and each payment of
principal with respect thereto by maintaining a computerized record of such
information and printouts of

<PAGE>
                                      -2-


such computerized record, which computerized record, and the printouts thereof,
shall constitute prima facie evidence of the accuracy of the information so
endorsed.

      The undersigned agrees to pay all reasonable costs and expenses of the
Bank (including, without limitation, the reasonable fees and expenses of
attorneys) in connection with the enforcement of this note and the other Loan
Documents and the preservation of their respective rights hereunder and
thereunder.

      No delay or omission on the part of the Bank in exercising any right
hereunder shall operate as a waiver of such right or of any other right of the
Bank, nor shall any delay, omission or waiver on any one occasion be deemed a
bar to or waiver of the same or any other right on any future occasion. The
Borrower and every endorser or guarantor of this note regardless of the time,
order or place of signing waives presentment, demand, protest and notices of
every kind and assents to any one or more extensions or postponements of the
time of payment or any other indulgences, to any substitutions, exchanges or
releases of collateral for this note, and to the additions or releases of any
other parties or persons primarily or secondarily liable.

      THIS NOTE HAS BEEN DELIVERED TO THE BANK AND ACCEPTED BY THE BANK IN THE
STATE OF CALIFORNIA.

      THE BORROWER HEREBY EXPRESSLY WAIVES ANY RIGHT IT MAY NOW OR HEREAFTER
HAVE TO A JURY TRIAL IN ANY SUIT, ACTION OR PROCEEDING WHICH ARISES OUT OF OR BY
REASON OF THIS NOTE, ANY LOAN DOCUMENT (AS DEFINED IN THE LOAN AND SECURITY
AGREEMENT), OR THE TRANSACTIONS CONTEMPLATED HEREBY.

      BY ITS EXECUTION AND DELIVERY OF THIS NOTE, THE BORROWER ACCEPTS FOR
ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE
NON-EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN THE COMMONWEALTH OF MASSACHUSETTES, BUT IF FOR ANY REASON THE
BANK IS DENIED ACCESS TO SUCH COURTS, THEN IN SUCH EVENT THE STATE AND FEDERAL
COURTS LOCATED IN THE COUNTY OF SANTA CLARA, STATE OF CALIFORNIA, IN ANY ACTION,
SUIT OR PROCEEDING OF ANY KIND AGAINST IT WHICH ARISES OUT OF OR BY REASON OF
THIS NOTE, ANY LOAN DOCUMENT (AS DEFINED IN THE LOAN AND SECURITY AGREEMENT), OR
THE TRANSACTIONS CONTEMPLATED HEREBY, IN ADDITION TO ANY OTHER COURT IN WHICH
SUCH ACTION, SUIT OR PROCEEDING MAY BE BROUGHT, IRREVOCABLY AGREES TO BE BOUND
BY ANY FINAL JUDGMENT RENDERED BY ANY SUCH COURT IN ANY SUCH ACTION, SUIT OR
PROCEEDING IN WHICH IT SHALL HAVE BEEN SERVED WITH PROCESS IN THE MANNER
HEREINAFTER PROVIDED, SUBJECT TO EXERCISE AND EXHAUSTION OF ALL RIGHTS OF APPEAL
AND TO THE EXTENT THAT IT MAY LAWFULLY DO SO, WAIVES AND AGREES NOT TO ASSERT,
BY WAY OF MOTION, AS A DEFENSE OR OTHERWISE, IN SUCH ACTION, SUIT OR PROCEEDING
ANY CLAIMS THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF SUCH COURT,
THAT ITS

<PAGE>
                                      -3-


PROPERTY IS EXEMPT OR IMMUNE FROM ATTACHMENT OR EXECUTION, THAT THE ACTION, SUIT
OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM OR THAT THE VENUE THEREOF IS
IMPROPER, AND AGREES THAT PROCESS MAY BE SERVED UPON IT IN ANY SUCH ACTION, SUIT
OR PROCEEDING IN THE MANNER PROVIDED BY CHAPTER 223A OF THE GENERAL LAWS OF
MASSACHUSETTS, RULE 4 OF THE MASSACHUSETTS RULES OF CIVIL PROCEDURE OR RULE 4 OF
THE FEDERAL RULES OF CIVIL PROCEDURE.

      ALL RIGHTS AND OBLIGATIONS HEREUNDER SHALL BE GOVERNED BY THE LAW OF THE
COMMONWEALTH OF MASSACHUSETTS AND THIS NOTE SHALL BE DEEMED TO BE UNDER SEAL.

                                       FAXSAV INCORPORATED


                                       By:
                                          ------------------------------
                                       Name:
                                            ----------------------------

<PAGE>

                     DISBURSEMENT REQUEST AND AUTHORIZATION

Borrower: FaxSav Incorporated                          Bank: Silicon Valley Bank

LOAN TYPE. This is a Variable Rate, Equipment Line of Credit of a principal
amount up to $500,000.

PRIMARY PURPOSE OF LOAN. The primary purpose of this loan is for business.

SPECIFIC PURPOSE. The specific purpose of this loan is to finance equipment
purchases.

DISBURSEMENT INSTRUCTIONS. Borrower understands that no loan proceeds will be
disbursed until all of Bank's conditions for making the loan have been
satisfied. Please disburse the loan proceeds as follows:

                                                                  Equipment Line
                                                                  --------------

      Amount paid to Borrower directly                                $_____
      Undisbursed Funds                                               $_____

      Principal                                                       $_____

CHARGES PAID IN CASH. Borrower has paid or will pay in cash as
agreed the following charges:

      Prepaid Finance Charges Paid in Cash:                           $_____
            $2.500 Loan Fee
            ------         
               N/A Accounts Receivables Audit
Other Charges Paid in Cash:                                           $_____
            $_____ UCC Search Fees
            $_____ UCC Filing Fees
               N/A Patent Filing Fees
               N/A Trademark Filing Fees
               N/A Copyright Filing Fees
            $_____ Outside Counsel Fees and Expenses (ESTIMATE, DO NOT LEAVE 
BLANK)

      Total Charges Paid in Cash                                      $_____

AUTOMATIC PAYMENTS. Borrower hereby authorizes Bank automatically to deduct from
Borrower's account numbered ________________ the amount of any loan payment. If
the funds in the account are insufficient to cover any payment, Bank shall not
be obligated to advance funds to cover the payment.

<PAGE>
                                      -2-


FINANCIAL CONDITION. BY SIGNING THIS AUTHORIZATION, BORROWER REPRESENTS AND
WARRANTS TO BANK THAT THE INFORMATION PROVIDED ABOVE IS TRUE AND CORRECT AND
THAT THERE HAS BEEN NO ADVERSE CHANGE IN BORROWER'S FINANCIAL CONDITION AS
DISCLOSED IN BORROWER'S MOST RECENT FINANCIAL STATEMENT TO BANK. THIS
AUTHORIZATION IS DATED AS OF _____________, 19__.

BORROWER:


--------------------------
Authorized Officer