Exhibit 10.6


               CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED
                  BASED ON A REQUEST FOR CONFIDENTIAL TREATMENT

                   OMITTED PORTIONS HAVE BEEN SEPARATELY FILED
                   WITH THE SECURITIES AND EXCHANGE COMMISSION


                                                                  EXECUTION COPY

                       MEDIA GATEWAY SERVICES AGREEMENT IV


      This Media  Gateway  Services  Agreement  (the  "Agreement")  between  KMC
Telecom VIII LLC, a Delaware  limited  liability  company  whose address is 1545
Route  206,  Suite 300,  Bedminster,  NJ 07921  (collectively,  "KMC") and Qwest
Communications  Corporation,  a Delaware  corporation whose address is 700 Qwest
Tower,  555  Seventeenth  Street,  Denver,  Colorado  80202  ("QCC")  and  Qwest
Communications International,  Inc., a Delaware corporation whose address is 700
Qwest Tower, 555 Seventeenth Street,  Denver,  Colorado 80202 ("QCI") ("QCC" and
"QCI" being collectively  referred to as "Qwest"),  is effective as of March 31,
2001 (the "Effective Date").

      WHEREAS,  Qwest  desires to purchase  KMC's  Upgraded MGS Services for MGS
Circuits  ordered  under the MGS  Agreements  (both as  defined  below)  and KMC
desires to provide the Upgraded  MGS  Services to Qwest,  pursuant to the rates,
terms, and conditions of this Agreement; and

      WHEREAS,  KMC and Qwest wish to set forth the terms and  conditions  under
which Qwest is willing to purchase  and KMC is willing to provide  Upgraded  MGS
Services to Qwest.

      NOW, THEREFORE,  in consideration of the mutual promises,  covenants,  and
other  terms  and  conditions  contained  herein,  and other  good and  valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:

      DEFINITIONS:  The  following  capitalized  terms  shall  have the meanings
specified as follows:

      "MGS AGREEMENTS" mean that certain Media Gateway Service Agreement,  dated
August 31, 1999 among KMC  Telecom  Inc.,  KMC  Telecom II Inc,  KMC Telecom III
Inc., KMC Telecom of Virginia,  Inc. and QCC, that certain  Amended and Restated
Media  Gateway  Services  Agreement  II, dated as of March 31,  2000,  among KMC
Telecom V, Inc., QCC and QCI, as amended and that certain Media Gateway Services
Agreement  dated as of June 30, 2000 among KMC Telecom VI, Inc,  QCC and QCI, as
amended.

      "MGS CIRCUIT" means a DS0-level circuit  individually ordered by Qwest and
provided by an affiliate of KMC pursuant to the MGS Agreements to (i) allow data
or  voice  dial-up  users,   through  local  trunks  providing  two-way  traffic
capability,  to connect to the Qwest IP network via Media Gateway  servers owned
by  affiliates  of KMC (each,  an "MGS Server") and (ii) permit Qwest and/or its
end users to originate  single-stage calls from and terminate calls to the PSTN.


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<PAGE>

KMC shall cause its affiliates to provide local trunks providing two-way traffic
capability for use with the Upgraded MGS Services provided hereunder.

      "UPGRADED MGS SERVICES"  means the enabling of the MGS Servers to provide,
and  the  continued   operation  and  maintenance  of  MGS  Servers  to  provide
voice-over-IP  services  through  such MGS  Servers as more fully  described  in
Section  6  hereof   (including   the   maintenance   of  hardware,   equipment,
environmental  control,  network connections,  and line provisioning) to provide
such  voice  connectivity  between  the Qwest  data  network  access  connection
("DNAC") at the KMC POP and the public switched  telephone  network ("PSTN") for
Qwest's  end  users,   through  the  MGS  Circuits  using  KMC  affiliate's  own
connections to the public switched telephone network.

      "POP" means the point of presence operated by one party at which data (and
other telecommunications) traffic is exchanged.

1.   INCORPORATION OF RECITALS.  The foregoing recitals are hereby  incorporated
     in this  Agreement  and made a part  hereof to the same extent as if herein
     set forth in full.

2.   UPGRADED MGS SERVICES.  KMC will provide the Upgraded MGS Services to Qwest
     and Qwest's end users according to the Service Levels defined and specified
     in  Schedule  2 to this  Agreement.  KMC shall  provide  the  Upgraded  MGS
     Services for the term set forth in Section 7.a.  below.  Qwest , at it sole
     cost, shall continue to establish and manage (i) a designated DNAC to KMC's
     affiliates  network at each  location  that KMC  provides  the Upgraded MGS
     Services  and (ii) an access link  between the DNAC and  Qwest's  POP.  KMC
     shall cause its affiliates to continue to be  responsible  for the physical
     installation  of the  DNAC at  KMC's  affiliates  POP and the  testing  and
     activation  of  two-way  MGS  Circuits.  KMC shall be  responsible  for all
     operation, maintenance,  installation, and network line connections for the
     Upgraded MGS Services,  subject to Qwest's  obligations as set forth below.
     Notwithstanding  the  foregoing,  Qwest  shall have the  ability to conduct
     remote monitoring, software configuration and billing functions for its end
     user  customers  using  Qwest  software  and network  management  equipment
     related  to the  Upgraded  MGS  Services,  including  software  programming
     related  to the MGS  Servers  as  necessary.  Qwest  shall  conduct  remote
     monitoring of the MGS Servers,  provide traffic and utilization information
     to KMC on a  regular  basis  and  notify  KMC of the  need to  make  onsite
     corrections of errors or defects, which KMC shall do promptly in accordance
     with the Service  Levels set forth in Schedule 2. In order to assist  Qwest
     in ordering Upgraded MGS Services and otherwise  fulfilling its obligations
     under this Section, KMC will, upon Qwest's request,  provide Qwest with all
     necessary  information in KMC's  possession and assistance  relating to the
     establishment  and maintenance of the Upgraded MGS Services,  including but
     not limited to providing software  specifications,  documentation,  network
     provisioning information,  network routing maps and traffic and performance
     reports as it relates to the  networks  of KMC and its  affiliates.  To the
     extent  not  available  to  KMC  internally  Qwest  shall  provide  to  KMC
     sufficient  information  concerning  the traffic  actually  sent on the MGS
     Circuits,  in a manner and detail  consistent with industry  standards,  in
     order for KMC to properly calculate any charges which may be due to or from
     ILECs,  IXCs  or  other  connecting  carriers.  All  such  information  and
     materials  provided by KMC or Qwest will be  confidential.  The parties


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<PAGE>

     may  enter  into  additional  mutually-acceptable  agreements  in  separate
     writings or as written  amendments  hereto,  under  which  KMC will provide
     technical testing and activation of  the  network  connections on the Qwest
     side  of  the  network  demarcation   (including   testing  of  the  Qwest-
     operated   remote   software,  network   management  tools   and   software
     configuration).

3.   RATES.

     a.   Qwest shall pay KMC for Upgraded MGS Services  according to the prices
          set forth in Schedule 1 to this Agreement  (the "Rates").  Payment for
          the Upgraded MGS Services  shall  commence on a monthly  basis for all
          Upgraded MGS Services deemed installed (as described below).

     b.   An Upgraded MGS Service will be deemed  installed as of the earlier of
          (a) the date when KMC notifies  Qwest that the Upgraded MGS Service is
          installed  and  Qwest,  in  its  reasonable  judgment,  verifies  such
          installation  or, in all  events  (b) [text  deleted]  days  after the
          Effective Date (or, in the case of an additional  Upgraded MGS Service
          ordered  pursuant to Section 6 hereof,  [text  deleted] days after the
          acceptance of the Service Order (as defined below) by KMC). Qwest will
          be charged the Rates pro rated for any partial first month.

     c.   Payments for the Upgraded MGS Services shall be due and payable within
          [text  deleted]  days after  receipt of KMC's  invoice,  except to the
          extent  Qwest in good  faith  disputes  any  portion  of the  charges;
          provided that Qwest may not withhold  payment of amounts in dispute to
          the extent such amounts exceed [text  deleted] of the invoice  amount;
          provided  further  that such [text  deleted]  limit shall not apply to
          disputes  arising  from  KMC's  failure  to  correctly  apply  credits
          (including  Delay  Credits) or from KMC  invoicing  for  Upgraded  MGS
          Services  prior to the date they are  deemed  installed,  as set forth
          above. In the event of such a dispute,  Qwest shall pay the undisputed
          portion of the  charges on the  invoice (as well as amounts in dispute
          to the extent  they are subject  to, and  exceed,  the [text  deleted]
          limit set forth above) and the parties shall  cooperate to resolve the
          dispute  as  provided  in  this  Agreement.   The  parties  shall  use
          reasonable  efforts to resolve such dispute within [text deleted].  If
          the dispute is resolved in favor of Qwest and Qwest has  withheld  the
          disputed  amount,  no interest credits or penalties will apply. If the
          dispute is resolved in favor of Qwest and Qwest has paid the  disputed
          amount,  Qwest will be credited with interest on such amount by KMC at
          the lesser of the rate of one and one-half  percent (1 1/2%) per month
          or the  maximum  rate  permitted  by law,  from the date KMC  received
          payment  up to and  including  the date of refund.  If the  dispute is
          resolved in favor of KMC and Qwest has paid the disputed  amount on or
          before the payment  due date,  no interest  credit or  penalties  will
          apply.  If the  dispute  is  resolved  in favor of KMC and  Qwest  has
          withheld the disputed amount, any payments withheld pending settlement
          of the disputed  amount shall bear  interest at the lesser of the rate
          of one and  one-half  percent (1 1/2%) per month or the  maximum  rate
          permitted by law,  from the payment due date up to and  including  the
          date of payment.

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<PAGE>

     d.   The Rates are payable by Qwest without regard to any taxes,  including
          sales taxes if applicable,  FCC charges,  or costs imposed pursuant to
          any rule, regulation or law (including "net reciprocal  compensation,"
          which is calculated  after  deducting  all monies  received by KMC for
          reciprocal  compensation)  imposed  with  respect to the  Upgraded MGS
          Services, which taxes, charges (including net reciprocal compensation)
          or other costs,  (other than taxes based on KMC's net income) shall be
          born  solely by  Qwest.  No  adjustment  shall be made to the Rates on
          account of taxes or other items  imposed on Qwest in  connection  with
          the Upgraded MGS Services.

     e.   In the  event of a Delay  (as  defined  below)  and  payment  for such
          Upgraded MGS Service would otherwise be due in accordance with Section
          3 a.,  KMC shall  provide  to Qwest  for each  affected  Upgraded  MGS
          Service a Delay Credit  equal to the product of (A) [text  deleted] of
          the [text deleted] for the affected Upgraded MGS Circuit times (B) the
          [text  deleted]  of such  Delay.  Notwithstanding  the  provisions  of
          Section 10(a), acceptance of the credit by Qwest pursuant hereto shall
          constitute Qwest's sole remedy for a Delay.

     f.   A "Delay"  shall be deemed to occur if,  (x) after the date upon which
          an Upgraded MGS Service is deemed installed as set forth above,  Qwest
          notifies  KMC that it has an actual  customer  to whom it  desires  to
          provide  service  using such  Upgraded  MGS Service  and within  [text
          deleted] days after such notice KMC has not completed existing testing
          and circuit hand-off procedures (and other such procedures as mutually
          agreed by the  parties)  with  respect to such  Upgraded  MGS Service,
          including,   without   limitation  the   verification  of  full  voice
          connectivity  through  the  DNAC  to  Qwest's  IP  network;  provided,
          however,   that   notwithstanding   the   testing   and   connectivity
          requirements  set  forth  in this  sentence,  a Delay  shall  not have
          occurred,  and monthly  charges  for the  Upgraded  MGS Service  shall
          commence or continue as prescribed in Section 3.a, if due to an act or
          omission of Qwest in the provision of services or equipment reasonably
          necessary for KMC to satisfy its testing and connectivity  obligations
          set forth herein, KMC is unable to satisfy such obligations.

     g.   Qwest  agrees  that,  except (i) as  otherwise  expressly  provided in
          Section 3.c with respect to (x) disputed  amounts not exceeding  [text
          deleted] of the amount  invoiced by KMC  pursuant to Section  3.a, (y)
          disputes  arising  from KMC's  failure to correctly  apply  credits as
          described  in  Section  3.c or (z)  KMC  invoicing  for  Upgraded  MGS
          Services prior to the date they are deemed installed;  (ii) during the
          continuance  of an Event of Default  described  in Section  10.a.i and
          (iii) as otherwise  expressly  provided in Section 9.b or 14,  Qwest's
          obligations  to make all payments  payable by it under this  Agreement
          are  absolute  and  unconditional  and that it will make all  payments
          payable by it hereunder regardless of set-off,  recoupment,  abatement
          or other  similar  right,  existing  or future,  which  Qwest may have
          against KMC.

4.   SERVICES COMMITMENT. Qwest will purchase Upgraded MGS Services for at least
     [text deleted] (the "Services  Commitment")  on or before July 1, 2001 (the
     "Commitment



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<PAGE>

     Date")  unless  this Agreement  is terminated  pursuant to Section   7.b or
     pursuant  to  Sections  10,  14,  or  16 before the   Commitment  Date,  in
     which case Qwest  shall have no  obligation  with  respect to the  Services
     Commitment  (except for  Upgraded MGS Services  actually  rendered  and, if
     applicable,  the early  termination  charge set forth in Section 7.b). This
     Agreement  includes  the  terms,  conditions,  Service  Level  commitments,
     technology  and Rates for the  Upgraded  MGS  Services  within the Services
     Commitment, as well as additional Upgraded MGS Services that may be ordered
     pursuant hereto.

5.   IMPLEMENTATION  SCHEDULE  AND  GROWTH  FORECAST.    Upgraded  MGS  Services
     sufficient  to satisfy the Services  Commitment  shall be installed for the
     MGS Circuits  described by Qwest in the  Implementation  Schedule set forth
     hereto as  Schedule 3 which  schedule  may be amended  from time to time by
     Qwest  pursuant to on one or more  Service  Orders.  If a Service  Order is
     received  after the date hereof KMC will have [text  deleted] days from the
     date of  receipt  of any  such  Service  Order  to  install  the  necessary
     equipment  and software to deliver the Upgraded MGS Services to the changed
     location.  In the  event  KMC is  unable  to  (except  to the  extent  such
     inability  results  from any acts or  omissions  of Qwest),  or the parties
     otherwise  agree that KMC shall not  install  such  Upgraded  MGS  Services
     before  the  Commitment  Date,  Qwest  will  nonetheless  be deemed to have
     satisfied the Services Commitment and no shortfall penalty shall be owed by
     Qwest to KMC with  respect  to same.  Qwest  acknowledges  that KMC may not
     agree to defer the  installation  of Upgraded  MGS Services  without  first
     obtaining the consent of a Financing  Source (as defined in Section  16(b))
     and KMC has no obligation hereunder to obtain such consent.

6.   EQUIPMENT  CONFIGURATION.  KMC  shall  provide  Upgraded  MGS  Services  in
     addition to those in the  Implementation  Schedule after receipt from Qwest
     of a Service  Order in a form  mutually  agreed by the  parties (a "Service
     Order") for such Upgraded MGS Services; provided, however, that any Service
     Order for  additional  Upgraded  MGS  Services  shall not be binding  until
     accepted  by KMC and in the event  KMC in its  discretion  determines  that
     filling such order would require  additional third party capital financing,
     such Service  Order shall be subject to  obtaining  such  additional  third
     party  capital  financing,  and the  provision  of  Upgraded  MGS  Services
     pursuant  thereto may be  conditioned on the agreement of both parties to a
     separate agreement governing such Upgraded MGS Services. Such Service Order
     for additional Upgraded MGS Services shall specify a requested installation
     date that is at [text deleted]  after the date of such Service  Order.  KMC
     shall notify Qwest within 2 business  days after receipt of a Service Order
     if such Service Order contains insufficient information for KMC to meet the
     requested  [text  deleted].  In  filling  Service  Orders  pursuant  to the
     Implementation  Schedule and any other Service Orders  received  hereunder,
     KMC shall use  modems  and/or  MGS  Servers  and  other  network  equipment
     (according to a configuration of cabinets, fuse panels, racks, routers, and
     other  equipment  necessary  for a plug  and play  configuration)  that are
     specified by Qwest in each Service Order. The Upgraded MGS Services will be
     initially  provided using [text deleted]  equipment (as agreed to by Qwest)
     or other equipment  mutually  agreed upon by the parties  ("Qwest  Required
     Equipment")  which (i) enables Qwest to exchange either data (e.g. V.90 and
     V.92, if available),  voice (e.g.  commercial  variants of G.711,  G.723 or
     G.729) or fax (e.g. T.37) traffic with end user customers (i.e. the dial-up
     users) of the Upgraded MGS  Services,  (ii) which are


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<PAGE>

     capable of  converting  the TDM voice  path to an RTP stream  encapsulating
     commercial  variants  of G.711,  G.723 or G.729  CODECs and (iii) which are
     interoperable with industry standards with regard to MGCP. In the event due
     to the failure of any Qwest  Required  Equipment  any  Upgraded MGS Service
     cannot meet the foregoing  specifications,  provided that KMC is taking all
     commercially  reasonable  efforts  to have such  Qwest  Required  Equipment
     repaired or replaced as promptly as possible,  Qwest shall  continue to pay
     for the Upgraded  MGS Services in  accordance  with the terms  hereof.  The
     [text deleted] and [text deleted] hardware shall be co-located,  at no cost
     to KMC, at Qwest's cyber center to be  designated by Qwest,  upon notice to
     KMC.  Qwest may specify  other models or vendors of equipment to be used in
     the  Upgraded  MGS  Services  configuration,  provided  that Qwest shall be
     responsible for and shall pay any increased costs to KMC resulting from the
     use by KMC of other  models and vendors of MGS Servers at Qwest's  request.
     Qwest may also request that software upgrades be made;  provided that Qwest
     shall be responsible for and shall pay any increased costs to KMC resulting
     from such software upgrades;  provided further that absent such request and
     payment by Qwest, KMC shall be under no obligation to upgrade any software.
     Each Service  Order for  Upgraded  MGS  Services  shall be governed by this
     Agreement.


7.   TERM, EARLY TERMINATION CHARGE.

     a.   This Agreement  shall have an initial term commencing on the Effective
          Date and ending  forty-eight  (48) months  after July 1, 2001,  unless
          earlier terminated pursuant to Section 9.b.,10, 14, or 16. Each of the
          Upgraded MGS Services in the Implementation Schedule shall have a term
          that is forty-eight (48) months after July 1, 2001, but shall continue
          at the  option  of Qwest for an  additional  term to be  specified  in
          writing by Qwest no later than 30 days prior to the  expiration of the
          initial term. Each additional  Upgraded MGS Service provided  pursuant
          to  Section  6 shall  have a term  beginning  on the date it is deemed
          installed  as described  in Section 3 b. and ending  forty-eight  (48)
          months  thereafter (but in all events no later July 31, 2005),  unless
          earlier terminated pursuant to Section 9.b.i, 9.b.ii, 10, 14, or 16 or
          extended by Qwest in the manner described in the immediately preceding
          sentence.  In the  event  the term of one or more  such  Upgraded  MGS
          Services  extends  beyond the  expiration  of the initial  term as set
          forth above, the terms and conditions of this Agreement shall continue
          to apply to each  such  additional  Upgraded  MGS  Services  until the
          expiration  of the term of each such  Upgraded MGS Service.  Following
          expiration  of the  initial  term of this  Agreement,  the term  shall
          automatically  renew  (provided  that MGS  Circuit  is being  supplied
          pursuant to a MGS Agreement) for successive  twelve month terms at the
          rate  specified  in  Appendix  A to  Schedule  1 unless  either  party
          notifies  the other  party of its intent not to renew at least  thirty
          (30) days prior to the end of the initial term or renewal term, as the
          case may be.

     b.   In the event Qwest  terminates or cancels Upgraded MGS Services for an
          MGS Circuit,  or this Agreement,  [text deleted],  then Qwest shall be
          responsible  for paying KMC an early  termination  charge equal to one
          hundred  percent  (100%) of the Rates for the  canceled  Upgraded  MGS
          Service(s),  multiplied by the number of full months  remaining in the
          term at the time of cancellation. Any termination of


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<PAGE>

          this  Agreement  as described in the  immediately  preceding  sentence
          shall not be effective until the early termination charge due pursuant
          to the immediately preceding sentence has been paid in full.

8.   INSURANCE.

     a.   During the term of this Agreement, KMC shall maintain insurance of the
          kinds and in the amounts  specified  below with insurers of recognized
          responsibility,  licensed  to do business  in the  State(s)  where the
          Upgraded MGS Services are being performed,  and having either:  an A.M
          Best's rating of A8, a Standard & Poor's  ("S&P's") rating of AA, or a
          Moody's rating of AaZ. If any Upgraded MGS Services provided for or to
          be performed under this Agreement are subcontracted, KMC shall require
          the  subcontractor(s)  to  maintain  and  furnish  it  with  insurance
          approved by Qwest.

     b.   In  accordance  with  the  above,  KMC  and any  subcontractors  shall
          maintain the insurance coverage in accordance with that certain Access
          Service  Agreement between KMC and certain of its affiliates and Qwest
          dated as of December  15,  1998,  as such may be amended  from time to
          time pursuant to the terms thereof.

     c.   Should  KMC at any time  neglect or refuse or  provide  the  insurance
          required,  or should such insurance be canceled or non-renewed,  Qwest
          shall have the right to purchase such insurance, and the cost shall be
          billed to KMC. In  addition,  should KMC at any time neglect or refuse
          to pay the necessary  premium,  Qwest shall have the right to pay same
          and deduct the amount therefor from monies due KMC.

     d.   KMC  and  all  subcontractors  shall  comply  with  the  terms  of the
          Occupational   Safety  and  Health   Administration   (OSHA)  and  all
          locations,  jurisdictions'  safety and health  regulations  during the
          full term of this Agreement.

9.   REPRESENTATIONS AND WARRANTIES.

     a.   Each party  represents and warrants to the other that it has the power
          and authority to enter into this  Agreement  including  each Schedule,
          Attachment and Exhibit hereunder.

     b.   KMC represents, warrants and agrees that:

          i.   it will provide,  to Qwest and its end user  customers,  Upgraded
               MGS Services that meet or exceed the Service Levels  described in
               Schedule  2.  Should  KMC,  in  any  [text  deleted]  during  any
               consecutive  [text  deleted]  period,  (x)  fail to  provide  the
               Upgraded MGS Services at the Service  Levels defined in Section 2
               of Schedule 2 for [text deleted] of the MGS Circuits to which the
               Upgraded MGS Services  were applied in a particular  Market Area;
               or (y) fail to meet the Service Level set forth in Section 1.3 of
               Schedule 2 for Qwest calls affecting, in the aggregate, more than
               [text  deleted]  of the MGS  Circuits to which the  Upgraded  MGS
               Services were


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<PAGE>

               applied  in a  particular  Market  Area;  or (z) fail to meet the
               Service  Level  set  forth  in  Section  1.2 of  Schedule  2 in a
               particular  Market  Area  (unless,  in any of such  events,  such
               failure  was  substantially  caused  by a  force  majeure  event,
               Qwest-Required  Equipment or an action or omission of Qwest,  its
               equipment or its agents or employees), Qwest shall be entitled to
               terminate  all  Upgraded MGS Services in such Market Area without
               any liability to KMC except for payment due for services provided
               up to the point of  termination,  by providing  written notice to
               KMC within  sixty (60) days  after the  occurrence  of the events
               giving  rise to Qwest's  right to  terminate  such  Market  Area;
               provided that, within ten (10) business days after the end of any
               calendar  month in which such failure of Upgraded MGS Services to
               meet such  standards has  occurred,  Qwest shall give KMC written
               notice of such failure and provide to KMC all information  within
               Qwest's possession that is reasonably calculated to assist KMC in
               taking  steps to prevent  the  recurrence  of such  failure.  If,
               during the term of this Agreement, Qwest shall become entitled to
               terminate  all  Upgraded MGS Services in any three or more Market
               Areas that contain in the aggregate [text deleted] or more of the
               Upgraded  MGS Services to be provided  hereunder,  Qwest shall be
               entitled to terminate this Agreement in its entirety by providing
               written notice to KMC within sixty (60) days after the occurrence
               of the events  giving  rise to Qwest's  right to  terminate  this
               Agreement, provided Qwest has provided KMC with reasonable notice
               of KMC's  failure to meet Service  Levels  under this  Agreement.
               Notwithstanding  the  provisions of Section 10.a,  termination of
               Market  Areas  and/or this  Agreement  for breach of this Service
               Level  warranty  pursuant to this Section  9.b.i shall be Qwest's
               sole  remedy for breach of this  Agreement  for failure of KMC to
               meet Service Levels in accordance  with this Section  9.b.i,  and
               such termination shall be effective (without penalty) thirty (30)
               days after KMC receives notice of the breach of this warranty and
               intent to  terminate  from Qwest.  For  purposes of this  Section
               9.b.i,  a "Market Area" means the market being served by a single
               aggregation point for MGS Servers;

          ii.  In the event an Upgraded MGS Service is inoperable or interrupted
               continuously for a period of [text deleted] or incurs  cumulative
               outages  of over [text  deleted]  in any [text  deleted]  period,
               Qwest shall be entitled,  at its sole option,  to either (but not
               both) of the following:  (i) a credit to Qwest's  account for the
               [text  deleted]  for [text  deleted] of Upgraded MGS Services for
               every [text deleted] continuous  interruption of the Upgraded MGS
               Services up to total  credits  equal to [text  deleted] for [text
               deleted] of Upgraded MGS Services in each [text deleted] for each
               Upgraded MGS  Service;  or (ii) the  termination  of the affected
               Upgraded MGS  Services,  provided  such  interruption(s)  was not
               substantially  caused by an event of force majeure,  or an action
               or omission of Qwest,  its  equipment or its agents or employees.
               Termination  of any  particular  Upgraded MGS Services under this
               Section  shall not serve to  terminate  any  other  Upgraded  MGS
               Services  and any  exercise of Qwest's  rights under this


                                       8
<PAGE>

               Section shall not (x) reduce or otherwise  affect  Qwest's rights
               to termination of this Agreement for Service Level failures under
               Section 9.b.i;  or (y) affect the number of Upgraded MGS Services
               that have been ordered with respect to Services Commitments (i.e.
               the number of Upgraded MGS  Services  that have been ordered will
               not be reduced in determining  whether Qwest has met the Services
               Commitments if Upgraded MGS Services are  terminated  pursuant to
               this  Section);  provided  that with the exception of (x) and (y)
               above,   notwithstanding   the   provisions  of  Section   10(a),
               acceptance of a credit  pursuant to (i) above or  termination  of
               affected Upgraded MGS Service(s)  pursuant to (ii) above shall be
               Qwest's  sole  remedy  for the  interruptions  described  in this
               Section 9.b.ii;

          iii. to the best of its knowledge,  there are no pending or threatened
               lawsuits,  claims,  disputes  or actions  (a)  alleging  that the
               Equipment  infringes or misappropriates any third party's patent,
               copyright,   trademark,   trade  secret,   proprietary  or  other
               intellectual  property  rights,  or (b)  adversely  affecting the
               Equipment,   the  Upgraded  MGS  Services  or  KMC's  ability  to
               undertake and perform its obligations under this Agreement; and

          iv.  it has and will  maintain  manufacturer's  warranties of the kind
               typically used in the applicable  industry for all Equipment used
               to  provide  the  Upgraded  MGS  Services  and  will  pass on the
               benefits of such  warranties to the full extent possible to Qwest
               for the Upgraded MGS Services.

     c.   THE  EXPRESS  WARRANTIES  IN THIS  AGREEMENT  ARE IN LIEU OF ALL OTHER
          WARRANTIES,  EXPRESS OR IMPLIED,  INCLUDING, BUT NOT LIMITED TO, THOSE
          OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.

10.  DEFAULT/TERMINATION.  This  Agreement  and any Upgraded MGS Services can be
     terminated  only as  provided in Sections  9.b.i,  9b.ii,  14, 16, and this
     Section 10.

     a.   Qwest may terminate this  Agreement if any one of the following  occur
          (each, an "Event of Default"):  (i) if KMC becomes insolvent or admits
          in writing  its  inability  to pay debts as they  mature,  or makes an
          assignment  for the benefit of creditors  and as a result  thereof KMC
          fails to meet the  requirements of Section 9.b.i or 9.b.ii;  (ii) if a
          petition  under any foreign,  state or United States  bankruptcy  act,
          receivership  statute,  or the like, as they now exist, or as they may
          be amended,  is filed by KMC and as a result thereof KMC fails to meet
          the  requirements  of  Section  9.b.i  or  9.b.ii;  or (iii) if such a
          petition is filed against KMC by any third party and such  application
          is not  resolved  favorably to such other party within sixty (60) days
          and as a result thereof KMC fails to meet the  requirements of Section
          9.b.i or 9.b.ii.

     b.   KMC may terminate  this  Agreement if any one of the  following  occur
          (each,  an "Event of  Default"):  (i) if Qwest fails to pay any amount
          due to KMC within

                                       9
<PAGE>

          fifteen (15)  business  days of demand of such  overdue  amount by KMC
          (or, in the case of  disputed  amounts  withheld by Qwest  pursuant to
          Section 3.c, within fifteen (15) business days after the dispute as to
          such  amounts  is  resolved  in KMC's  favor);  (ii) if Qwest  becomes
          insolvent  or admits in  writing  its  inability  to pay debts as they
          mature,  or makes an assignment  for the benefit of creditors and as a
          result  thereof Qwest fails to timely pay KMC in  accordance  with the
          terms of this agreement;  (iii) if a petition under any foreign, state
          or United States bankruptcy act, receivership statute, or the like, as
          they now exist, or as they may be amended,  is filed by Qwest and as a
          result  thereof Qwest fails to timely pay KMC in  accordance  with the
          terms of this  agreement;  or (iv) if such a petition is filed against
          Qwest  by any  third  party  and  such  application  is  not  resolved
          favorably  to such other party  within sixty (60) days and as a result
          thereof Qwest fails to timely pay KMC in accordance  with the terms of
          this agreement.

     c.   The  parties  acknowledge  that this  Agreement  may be subject to the
          approval of public utility  commissions of individual  states or other
          regulatory agencies wherein Upgraded MGS Services are provided. Either
          party shall have the right to  terminate  the  affected  Upgraded  MGS
          Service without  liability  except for Upgraded MGS Services  actually
          rendered if, by a final,  non-appealable order of a court of competent
          jurisdiction,  the Federal Communications  Commission, or other local,
          state or federal  government  authority,  (i) KMC is  prohibited  from
          furnishing  the Upgraded MGS  Services;  or (ii) any material  rate or
          term  contained  herein is  substantially  changed in a manner that is
          materially adverse to the terminating party.

11.   INDEMNIFICATION FOR INFRINGEMENT.

     a.   The  following   indemnification   provisions  set  forth  the  entire
          obligation of KMC with respect to infringement  of proprietary  rights
          arising  directly from the  Qwest-Required  Equipment  used to provide
          Upgraded  MGS  Services;   provided,   however,   notwithstanding  the
          foregoing,  that KMC shall have no indemnification or other obligation
          to Qwest whatever with respect to infringement  of proprietary  rights
          directly  arising  from the  Qwest-Required  Equipment  except  to the
          extent,  if any, that KMC possesses the right to be indemnified by the
          vendor or  manufacturer of the  Qwest-Required  Equipment from time to
          time for infringement of proprietary rights:

          i.   KMC or its  suppliers  will defend any claim,  suit or proceeding
               brought  against Qwest insofar as it is based on a claim that any
               Qwest-Required Equipment used hereunder infringes a United States
               copyright or an existing United States patent (issued as of March
               31,  2001).  Qwest  shall  notify KMC  promptly in writing of the
               claim and give KMC and its suppliers full authority, information,
               and assistance for the defense. If such claim has occurred, or in
               KMC's opinion is likely to occur,  Qwest agrees to permit KMC and
               its suppliers, at KMC's option and expense, either to procure for
               Qwest the right to continue using the Qwest-Required Equipment or
               to replace  or modify the same so that it becomes



                                       10
<PAGE>

               noninfringing,  or, if neither of the foregoing  alternatives  is
               reasonably  available,  remove the Equipment and refund Qwest the
               portion of the price for the  Upgraded  MGS  Services  reasonably
               attributable  to such  Equipment  depreciated  or amortized by an
               equal  annual  amount  over the  lifetime  of the  Qwest-Required
               Equipment.

          ii.  KMC and its suppliers  have no liability for any claim under this
               Section 11 based upon  alteration or  modification  by Qwest or a
               third party of any Qwest-Required  Equipment supplied  hereunder.
               Further,  KMC and its  suppliers  shall have no liability for any
               claim based upon compliance with Qwest's designs, specifications,
               or instructions.

     b.   The  following   provisions   relate  to  all  Equipment   other  than
          Qwest-Required Equipment and all combinations of Equipment:

          i.   KMC agrees to defend  and/or  handle at its own  expense,  and to
               indemnify  and hold Qwest  harmless  from and against any and all
               liabilities,  losses,  costs,  damages  and  expenses  (including
               reasonable attorneys' fees attributable to such claim) associated
               with,  any claim or action against Qwest by any third party based
               upon any actual or alleged  infringement or violation of a United
               States patent, or any trademark,  copyright, or trade secret of a
               third party  enforceable  in the United  States  related to KMC's
               provision of the Upgraded  MGS Services  ("Infringement  Claim"),
               provided that Qwest shall approve the terms of any  settlement or
               compromise  unless KMC  demonstrates  its  financial  capacity to
               satisfy the settlement or compromise.

          ii.  KMC shall have the sole right to conduct  the defense of any such
               claim  or  action  and all  negotiations  for its  settlement  or
               compromise.  Qwest shall promptly notify KMC of the subject claim
               and provide reasonable information in connection with such claim.

          iii. KMC warrants that it has the full power and authority to deliver,
               convey and grant to Qwest the related  license  and other  rights
               granted  under  this  Agreement;  and  that  KMC's  provision  of
               Upgraded MGS Services under this Agreement and Qwest's use of the
               Upgraded  MGS  Services   related  to  the  Equipment   will  not
               constitute a misappropriation  of any trade secrets or constitute
               a patent, copyright or trademark infringement.

          iv.  This  indemnity  shall not  extend  to any claim of  infringement
               resulting from Qwest's unauthorized  modification of equipment of
               KMC or the  combination of the Equipment or Upgraded MGS Services
               with services or equipment not provided by KMC or by or for Qwest
               with KMC's express written approval.



                                       11
<PAGE>

12.   GENERAL INDEMNIFICATION AND LIMITATION OF LIABILITY.

     a.   Each party shall indemnify the other party from any third-party  claim
          or damages due to the injury or death of any  individual,  or the loss
          or damage to real or personal property,  resulting from the willful or
          negligent acts, or omissions of the indemnifying  party, its agents or
          employees.

     b.   NEITHER  PARTY  SHALL BE LIABLE TO THE OTHER OR TO ANY THIRD PARTY FOR
          ANY SPECIAL, INDIRECT,  CONSEQUENTIAL,  PUNITIVE OR EXEMPLARY DAMAGES,
          INCLUDING,  BUT NOT LIMITED TO, LOST PROFITS, EVEN IF THE PARTIES HAVE
          KNOWLEDGE OF THE POSSIBILITY OF SUCH DAMAGES. THE FOREGOING LIMITATION
          SHALL NOT APPLY IN THE EVENT OF: (i) A CLAIM  BROUGHT BY QWEST AGAINST
          KMC ARISING UNDER THE SECTION OF THIS AGREEMENT ENTITLED  INFRINGEMENT
          (SECTION  11);  (ii)  EITHER  PARTY'S  BREACH  OF THE  CONFIDENTIALITY
          OBLIGATIONS  OF SECTION 15  (CONFIDENTIAL  INFORMATION);  OR (iii) THE
          WILLFUL  MISCONDUCT  OF EITHER  PARTY,  ITS AGENTS,  ITS  EMPLOYEES OR
          NOMINEES ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT.

     c.   IN NO EVENT SHALL A PARTY'S  TOTAL  LIABILITY  TO THE OTHER UNDER THIS
          AGREEMENT EXCEED $5,000,000 (OTHER THAN QWEST'S PAYMENT OF THE RATES),
          EXCEPT WITH RESPECT TO THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF A
          PARTY.

     d.   In the event any  applicable  law does not  allow  the  limitation  or
          exclusion of liability as provided for in this Agreement,  the subject
          limitation or exclusion of liability shall be deemed modified so as to
          limit or exclude the parties'  liability for damages  hereunder to the
          greatest extent permitted by such law.

13.   INTERNET DISCLAIMERS AND LIMITATIONS.

     a.   Neither  party will be liable or  responsible  for the Internet or any
          information contained thereon. Neither party will warrant, and neither
          will assume any  responsibility  for any consequences  suffered by any
          person as a result of  obtaining  Internet  access  including  without
          limitation,  damages arising from accessing  Internet  content or from
          computer viruses.

     b.   KMC will have no  responsibility  for  authentication of the end users
          accessing the Upgraded MGS  Services.  Qwest will be  responsible  for
          controlling end user access to the Upgraded MGS Services.

     c.   Qwest shall be  responsible  for billing its end users and all records
          related to such billing or accounting.

14.  FORCE MAJEURE.  In no event shall either party be liable to the other party
     (other  than for  obligations  to pay  money)  for any delay or  failure to
     perform  due to  causes  beyond  the



                                       12
<PAGE>

     control and without the fault or negligence of the party claiming excusable
     delay,  including  but  not  limited  to  acts  of  God,  fire,  explosion,
     vandalism,  cable cut, storm,  governmental  action, wars, strikes or other
     labor difficulties,  supplier failures, breaches or delays. Notwithstanding
     the  foregoing,  in the  event of a force  majeure,  KMC will  restore  the
     Upgraded  MGS  Services  for Qwest using  substantially  the same or better
     efforts  that it uses  with  respect  to its  other  customers.  If a force
     majeure  condition  continues  for a period  greater  than [text  deleted],
     either party may terminate  only those  Upgraded MGS Services which are the
     subject of the force majeure condition without further penalty (except that
     Qwest  shall not have the  right to  terminate  any  Upgraded  MGS  Service
     pursuant to this Section 14 as a result of a force majeur  condition caused
     by Qwest).

15.  CONFIDENTIAL  INFORMATION.  Qwest  and  KMC  agree  that  unless  otherwise
     specifically  provided  in the  applicable  Exhibit  and/or  Schedule,  the
     following confidentiality provisions shall apply.

     a.   All information  (including the terms and conditions hereof) marked as
          confidential  and  disclosed  by either  party to the other,  or which
          comes to the  attention  of either party or its  employees,  officers,
          directors,  agents,  investors  and  potential  investors  or advisors
          ("Representatives") during the course of work pursuant to the terms of
          this Agreement and any other  information  that a party receiving such
          information  should know,  by its nature,  is  confidential,  shall be
          confidential  information.   Confidential  information  constitutes  a
          valuable  asset  of and is  proprietary  to the  party  disclosing  or
          originally  possessing  it.  KMC  acknowledges  that  Qwest  keeps its
          customers' records strictly confidential.  KMC and its Representatives
          shall keep strictly  confidential any Qwest customer records,  whether
          or not they are marked as confidential.  Neither party shall willfully
          disclose   confidential    information   or   knowingly   permit   its
          Representatives  to disclose  confidential  information  to any person
          other than persons among its Representatives having a specific need to
          know in performance of the work or to any Financing  Source as defined
          in Section 16 (b).  Each party  shall take  reasonable  care to ensure
          fulfillment of this  obligation,  [text  deleted] not to sell,  lease,
          assign,  transfer, use outside their scope of employment or reveal any
          confidential  information  or Qwest  customer  records  without  prior
          written  consent of the other  party.  KMC shall  obtain  the  written
          agreement of its  affiliates  and  Representatives  to maintain  Qwest
          customer  records  or  other  confidential  information  hereunder  in
          accordance  with KMC's  obligations  under this Section.  KMC will not
          provide  Qwest  customer  records  or other  confidential  information
          provided  by Qwest to the  Financing  Source(s)  unless the  Financing
          Source(s)   provide  written   agreement  to  keep  such   information
          confidential.

     b.   If  a  subpoena  or  other  legal   process  in  any  way   concerning
          confidential  information is served upon a party to which confidential
          information  has been  disclosed  ("Recipient"),  the Recipient  shall
          notify the disclosing party ("Discloser")  promptly, and the Recipient
          shall cooperate with the Discloser,  at the latter's  expense,  in any
          lawful  effort to contest the validity of such subpoena or other legal
          process.



                                       13
<PAGE>

     c.   This Section will in no way limit  either  party's  ability to satisfy
          any  governmentally  required  disclosure of its relationship with the
          other  party,  or either  party's  ability to satisfy any  requests or
          demands  generated  in the course of audits of either  party or either
          party's parent or either party's attorneys or auditors,  provided such
          audits are conducted pursuant to non-disclosure obligations.

     d.   The obligations of  confidentiality in this Section shall not apply to
          any information  which a party has in its possession when disclosed to
          it by  the  other  party,  information  which  a  party  independently
          develops,  information  which is or becomes  known to the public other
          than by breach of this Agreement or information rightfully received by
          a party from a third party without the obligation of confidentiality.

     e.   Each party  acknowledges  and agrees  that in the event of a breach or
          threatened  breach  of the  foregoing  provisions,  it  will  have  no
          adequate remedy in money or damages and accordingly  shall be entitled
          to injunctive relief; provided,  however, that no specification of any
          legal  or  equitable   remedy  shall  be  construed  as  a  waiver  or
          prohibition  against any other contractual,  legal or equitable remedy
          available to either party hereunder;

     f.   Upon  completion,  expiration or termination of this Agreement,  or at
          any other  time upon  request,  each  party  shall  return any and all
          related  confidential  information  of the other  party and all copies
          thereof (in whatever form and on whatever medium).

     g.   The  terms  of  this  section  of  the  Agreement  shall  survive  the
          expiration or termination of this Agreement.

16.   ASSIGNMENT; RIGHTS OF SUBSIDIARIES.

     a.   Neither  party may assign this  Agreement  without  the prior  written
          consent of the other party,  which consent  shall not be  unreasonably
          withheld.  If consent is not  granted  under this  Section,  the party
          seeking  consent  may  terminate  the  Agreement  upon sixty (60) days
          notice to the other  party or  challenge  the  refusal  to  consent as
          unreasonable  through  appropriate  legal  action.  It  shall  not  be
          unreasonable for KMC to withhold its consent if the assignee has a net
          worth  less  than  that  of  the  applicable  Qwest  entity  as of the
          Effective  Date.  The  assignment or delegation of any of KMC's rights
          under  this  Agreement  to any of the  following  shall be  considered
          reasonable  reasons for which Qwest may  withhold its consent for such
          assignment:  [text deleted].  Any prohibited  assignment or delegation
          shall be null and void.  Notwithstanding  the foregoing,  either party
          may  assign  this  Agreement  to any  company  or entity  controlling,
          controlled  by  or  under  common  control  with  such  party  or  its
          affiliates  without  the  other  party's  consent;  provided  that the
          assignee  has a net worth  equal to or  greater  than that of Qwest or
          KMC, as may be  applicable,  as of the  Effective  Date.  In addition,
          either  party may assign this  Agreement  without the  approval of the
          other  party to any




                                       14
<PAGE>

          successor   in  interest   resulting   from  a  merger,   acquisition,
          reorganization  or  transfer  of  all  or  substantially  all  of  the
          assigning  party's business with or to a successor;  provided that the
          assignee  has a net worth  equal to or  greater  than that of Qwest or
          KMC, as may be applicable, as of the Effective Date.

     b.   Qwest  acknowledges  that in order for KMC to provide the services set
          forth in this  Agreement  KMC will  finance the capital  costs of this
          Agreement with third party financing sources. KMC shall have the right
          to assign or  collaterally  assign this  Agreement to a third party or
          parties  providing  financing for the capital expenses  required to be
          undertaken  by KMC  in  order  to  provide  the  services  under  this
          Agreement ("Financing Source(s)"), and Qwest shall execute and deliver
          consents to the  assignment  by KMC as are  requested by the Financing
          Sources  and  are  customary  and  usual   (including  the  terms  and
          conditions set forth in the consents  previously  executed by Qwest in
          favor  of  affiliates   of  KMC)   provided   such  consents   contain
          non-disturbance   rights  of  Qwest,  and  are  otherwise   reasonably
          acceptable to Qwest under the circumstances.

17.  MODIFICATION;  AMENDMENT;  WAIVER. No modification,  changes,  amendment or
     supplement to this Agreement  shall be binding upon the parties unless made
     in writing and duly signed by both parties.  The parties  acknowledge  that
     KMC shall  finance  the  capital  costs of this  Agreement  with  Financing
     Sources.  Accordingly,  Qwest agrees to  cooperate  with KMC to discuss and
     make  such  amendments  or  modifications  to  this  Agreement  as  may  be
     reasonably necessary or appropriate to finance and syndicate this Agreement
     to Financing Sources. At no time shall any failure or delay by either party
     in  enforcing  any   provisions,   exercising  any  option,   or  requiring
     performance of any provisions,  be construed to be a waiver or cancellation
     of same. No effective  waiver of any right  hereunder shall be construed to
     be a waiver of any other right.

18.  NOTICES. All notices shall be in writing and either delivered personally or
     mailed,  first  class  mail  and  postage  prepaid,  or by  facsimile  with
     electronically-generated  confirmation  of receipt that is followed  with a
     mailed  copy.  Notice  shall be deemed  communicated  on receipt in case of
     personal  delivery  and five (5) days  after  mailing in the case of mailed
     notice  (including the mailed copy of a facsimile  transmission).  All such
     notices or other  communications shall be addressed as set forth below, but
     either party may change its address by notice or other  communication given
     in accordance with the provisions of this paragraph.

            If to Qwest :
            555 Seventeenth Street, Suite 1000
            Denver, Colorado 80202
            Attn:  President -- Internet and Multimedia Markets
            Attn:  General Counsel

                                       15
<PAGE>

            If to KMC:
            1545 Route 206
            Suite 300
            Bedminster, NJ  07921
            Attn: General Counsel
                  Chief Financial Officer


19.  GOVERNING  LAW;  INTERPRETATION.  In all respects this  Agreement  shall be
     governed by the substantive laws of the State of New York without regard to
     conflict of law principles.

20.  DISPUTE RESOLUTION.

     a.   It is the  intent of KMC and Qwest that any  disputes  which may arise
          between  them or between the  employees of each of them be resolved as
          quickly as possible.  Quick resolution may, in certain  circumstances,
          involve immediate decisions made by the parties' representatives. When
          such resolution is not possible,  and depending upon the nature of the
          dispute,  the  parties  hereto  agree  to  resolve  such  disputes  in
          accordance with the provisions of this paragraph; provided however, if
          they are unable to do so within  sixty (60) days  commencing  with the
          date of the  notice set forth in Section  20.b then  either  party may
          seek any and all remedies available at law or equity.

     b.   Qwest   and  KMC   shall   each   designate,   by   separate   letter,
          representatives  as  points of  contact  and  decision-making  for the
          pre-acceptance  phases of the Agreement.  Any disputed  issues arising
          under this  Agreement  shall be  initially  referred  to the  parties'
          designated  representatives.  The parties' designated  representatives
          shall render a mutually agreeable resolution of the disputed issue, in
          writing, within three (3) business days of such referral. Either party
          may modify the  designated  representative  upon written notice to the
          other party.

     c.   Any claims or disputes  arising under the terms and provisions of this
          Agreement,   or  any   claims   or   disputes   which   the   parties'
          representatives  are unable to  resolve  within the three (3) day time
          period   shall   continue   to  be  resolved   between  the   parties'
          representatives if mutually agreeable.

21.  ATTORNEY'S  FEES. If a legal action or arbitration  proceeding is commenced
     in connection with any dispute under this Agreement,  the prevailing  party
     shall  be  entitled  to  reasonable   counsel  fees,  costs  and  necessary
     disbursements  incurred in  connection  with the action or  proceeding,  as
     determined by the court or arbitrators.

22.  INCONSISTENCIES.  In the event of any  inconsistency or conflict among this
     Agreement,  or any  Schedule  or  Exhibit,  the  governing  provisions  and
     interpretation  necessary to resolve the inconsistency or conflict shall be
     based on the following  order:  the specific  Schedule or Exhibit signed by
     the parties, followed next by the provisions of this Agreement.

23.  PUBLICITY.  Neither party shall use the other party's name or logo or refer
     to such party directly or indirectly in any advertising, sales presentation
     to any other person,  news



                                       16
<PAGE>

          release,  release to any professional or trade  publication or for any
          other purpose  without such party's prior written  approval,  provided
          that either party may use the other  party's name or logo, or both, in
          a list  of  such  party's  customers,  if  such  use  does  not  imply
          endorsement. Either party shall be allowed to issue press releases and
          public  announcements  regarding this Agreement with the other party's
          prior written approval which shall not be unreasonably withheld.  This
          Section 23 shall not limit a party's  rights  pursuant to Section 15 c
          hereof.

24.  MISCELLANEOUS.

     a.   If any of the  provisions  of this  Agreement  are held  invalid,  the
          remaining provisions shall be unimpaired.

     b.   Headings  are for  reference  only and shall not affect the meaning of
          any of the provisions of this Agreement.

     c.   The parties,  who have both been  represented by legal  counsel,  have
          jointly  participated  in  negotiating  and drafting  this  Agreement,
          including its Schedules, Exhibits and any attachments. In the event an
          ambiguity  or  question  of  intent  or  interpretation  arises,  this
          Agreement  shall be construed as if jointly drafted by the parties and
          no  presumption,  inference or burden of proof shall arise favoring or
          disfavoring  a party  by  virtue  of  authorship  of any or all of the
          Agreement's provisions.

     d.   The rights and remedies set forth in this  Agreement are not exclusive
          and are in addition to any other rights and remedies  available in law
          or in equity.

     e.   The terms and  provisions  contained in this  Agreement  that by their
          sense and context are intended to survive shall survive the completion
          of performance and termination of this Agreement,  including,  without
          limitation, the obligation of making all payments due hereunder and to
          preserve the confidentiality of confidential information.

25.  RELATIONSHIP  OF THE  PARTIES.  The  parties are  independent  contractors.
     Nothing in this Agreement or in the activities  contemplated by the parties
     pursuant  to  this   Agreement   shall  be  deemed  to  create  an  agency,
     partnership,  employment or joint venture relationship between the parties.
     Each  party  shall be  deemed to be acting  solely on its own  behalf  and,
     except as  expressly  stated,  has no authority to pledge the credit of, or
     incur  obligations or perform any acts or make any statements on behalf of,
     the other party.  Neither party shall represent to any person or permit any
     person to act upon the belief that it has any such authority from the other
     party.  Neither party's officers or employees,  agents or contractors shall
     be deemed officers, employees, agents or contractors of the other party for
     any purpose.

26.  COMPLIANCE WITH LAWS.

     a.   The parties shall comply with all applicable federal,  state and local
          laws,  regulations and ordinances as they relate to this Agreement and
          the  Upgraded




                                       17
<PAGE>

          MGS Services,  including,  but not limited to, the  regulations of the
          United States  Government,  e.g.,  the  provisions of Executive  Order
          11246 (as  amended)  of the  President  of the United  States on Equal
          Employment  Opportunity and the rules and regulations  issued pursuant
          thereto.

     b.   KMC warrants, represents, covenants and agrees that it will not assign
          to perform any efforts under this  Agreement any  individual who is an
          unauthorized  alien  under the  Immigration  Reform and Control Act of
          1986 or its  implementing  regulations.  KMC shall  indemnify and hold
          harmless Qwest, its parent, subsidiaries and affiliated companies from
          and  against  any and all  liabilities,  damages,  losses,  claims  or
          expenses (including  attorneys' fees) arising out of any breach by KMC
          of this section.  In the event any KMC personnel or contractor working
          under this Agreement,  or other individual(s)  providing work to Qwest
          on  behalf  of  KMC  under  this  Agreement,   are  discovered  to  be
          unauthorized aliens, KMC will immediately remove such individuals from
          performing work and replace such  individuals with individuals who are
          not unauthorized  aliens. KMC shall indemnify and hold harmless Qwest,
          its parent, subsidiaries and affiliated companies from and against any
          and all liabilities,  damages,  losses,  claims or expenses (including
          attorneys' fees) arising out of any breach by KMC of this section.

     c.   Neither party shall cause the other party to violate any ruling, order
          or determination by the Federal  Communications  Commission ("FCC") or
          any other  governmental body relating to the provision of the Upgraded
          MGS  Services  under  the  terms  and  conditions  set  forth  in  the
          Agreement.  Should  such  a  ruling,  order  or  determination  become
          effective, the other party shall indemnify,  defend and hold the other
          party harmless against any such event.

27.  SUCCESSORS.  This Agreement shall inure to the benefit of and be binding on
     the   parties,   and   their   heirs,   successors,   assigns   and   legal
     representatives,  but nothing  contained in this section shall be construed
     to permit an assignment or other transfer except as  specifically  provided
     herein.

28.  ENTIRE  AGREEMENT.  This  Agreement is comprised of this  Agreement and any
     Schedule or Exhibits  specified  hereunder  or which are added to hereto by
     the parties;  such Schedule or Exhibits are  incorporated by this reference
     and shall constitute a part of this Agreement as if fully set forth herein.
     This Agreement  constitutes  the entire  agreement  between the parties and
     supersedes all previous agreements,  promises, proposals,  representations,
     understandings  and  negotiations,  whether  written or oral,  between  the
     parties respecting the subject matter hereof.

29.  COUNTERPARTS.  This Agreement may be executed in one or more  counterparts,
     each of which  shall  constitute  an  original,  but all such  counterparts
     together shall constitute but one and the same instrument.

                                       18
<PAGE>



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

  KMC Telecom VIII LLC


  By: /S/ CONSTANCE LOOSEMORE
     ------------------------
  Name: CONSTANCE LOOSEMORE
       --------------------
  Title: VICE PRESIDENT, ASSISTANT TREASURER
        ------------------------------------


  Qwest Communications Corporation


  By: /S/ RICK WESTON
     ----------------
  Name: RICK WESTON
        -----------
  Title: SVP - QIS
        -----------


  Qwest Communications International Inc.


  By: /S/ DRAKE S. TEMPEST
     ---------------------
  Name: DRAKE S. TEMPEST
        ----------------
  Title: EVP, GENERAL COUNSEL
         --------------------

  PERFORMANCE GUARANTEE

  KMC Telecom  Holdings,  Inc. ("KMC Holdings")  acknowledges that KMC VIII must
  obtain  the  agreement  of  certain  wholly  owned  subsidiaries,   which  are
  affiliates  of KMC  VIII,  in  order  for KMC  VIII  to  provide  the  service
  hereunder.  KMC Holdings agrees to cause those subsidiaries to enter into such
  agreements and provide such services to KMC VIII.

  KMC Telecom Holdings, Inc.



  By: /S/ CONSTANCE LOOSEMORE
     ------------------------
  Name: CONSTANCE LOOSEMORE
       --------------------
  Title: VICE PRESIDENT, ASSISTANT TREASURER
        ------------------------------------



                                       19
<PAGE>


                                   SCHEDULE 1
                     PRICES/RATES FOR UPGRADED MGS SERVICES

      Set forth on  Appendix A to this  Schedule  is a table  stating  the Rates
which will apply to the Upgraded MGS Services, subject to the following rules :

1.   RATES.  The rates for Upgraded MGS Services for the term of this  Agreement
     are set forth in Appendix A to this  Schedule.  The number of Upgraded  MGS
     Services  for  purposes of these  prices  shall  include all  Upgraded  MGS
     Services deemed installed pursuant to Section 3.b of the Agreement.

2.   If new or upgraded  equipment is requested by Qwest prior to the expiration
     of the Agreement's term, Qwest will pay for such equipment.

3.   The parties agree and  acknowledge  that expenses and market prices related
     to the  provision  of the Upgraded MGS Services may decrease in the future.
     Should the  market  conditions  change  (including  but not  limited to the
     market prices for similar  services),  the parties agree to discuss in good
     faith reductions to the Rates. Qwest acknowledges that KMC may not agree to
     reduce the Rates without first  obtaining the consent of a Financing  Party
     and KMC has no obligation hereunder to obtain such consent.

4.   As set forth in  Section 7 of the  Agreement,  the  Upgraded  MGS  Services
     provided pursuant to the Implementation Schedule shall have an initial term
     which is  co-terminous  with the initial term of the  Agreement  (and shall
     terminate when this Agreement is terminated),  and each additional Upgraded
     MGS  Service  shall  have an  initial  term  commencing  on the  date it is
     installed  and ending 48 months  after such date but in all events no later
     than July 31, 2005.  In the event an Upgrade MGS Service is being  supplied
     to an expiring  MGS  Circuit,  Qwest  shall have the right to transfer  the
     remaining  term of the Upgraded MGS Service  provided  hereunder to another
     MGS  Circuit.  The  Rates set forth in this  Schedule  shall  apply to each
     Upgraded MGS Service during the initial term for such Upgraded MGS Service.
     Ninety  (90)  days  prior to the  expiration  of the  initial  term of this
     Agreement  the  parties  agree to enter into good faith  negotiations  with
     regard to the terms and  conditions  for KMC to supply Qwest with  Upgraded
     MGS Services for an additional term with Rates  consistent with Section 1.b
     of Appendix A to this Schedule. If the parties fail to agree upon terms and
     conditions pursuant to the preceding sentence Qwest shall nevertheless have
     the right to renew this Agreement in accordance  with Section 7.a hereof at
     the Rate specified in Section 1.b of Appendix A to this Schedule.

5.   At Qwest's option,  Qwest may purchase any services  offered by KMC in lieu
     of the  Upgraded  MGS  Services so long as the minimum  monthly  commitment
     payment set forth in Section 1 of this  Appendix A is made and KMC does not
     incur any  additional  costs  above  those  incurred  by KMC to supply  the
     Upgraded MGS Services hereunder.



                                       20
<PAGE>

                            APPENDIX A TO SCHEDULE 1


1.a. Commencing  July 1, 2001 and  continuing  until June 30,  2005,  assuming a
     minimum  [text  deleted]  count equal to [text  deleted]  ports the monthly
     charge  shall be [text  deleted] per [text  deleted],  but in all events no
     less than [text deleted] per month.  Notwithstanding  any provision of this
     Agreement  to  the  contrary,  the  minimum  monthly  amount  shall  not be
     increased if Qwest  requests  additional  Upgraded  MGS Services  hereunder
     provided  that there are no  additional  capital  costs  incurred  or to be
     incurred by KMC to provide such service.

1.b. On and after July 1, 2005 the monthly  charge  shall be [text  deleted] per
     [text deleted] as may be agreed by the parties.

2.   Maintenance  Costs.  KMC shall  provide  up to  twenty-four  (24)  hours of
     on-site  maintenance  (not including travel time) per location per calendar
     month.  In the event the hours of such on-site  maintenance at any location
     exceed twenty-four (24) in any calendar month, Qwest will reimburse KMC for
     its  reasonable  costs of  providing  the hours of on-site  maintenance  in
     excess of twenty-four (24). KMC will notify Qwest when it has attained this
     twenty-four  (24) hour threshold at a given  location.  To the extent Qwest
     fails to remotely monitor the equipment or software at any site or fails to
     notify KMC of any deficiency which Qwest remotely  detects,  KMC shall bear
     no responsibility  for a failure of the subject equipment or software under
     this Agreement or otherwise to the extent that such failure could have been
     prevented or resolved with notice from Qwest  regarding such  deficiency as
     required hereunder.

4.   Qwest shall be paid in cash [text deleted] of any payments or credits which
     KMC  receives  from any  provider  of ingress or egress  trunks for the MGS
     Circuits used in connection with the provision of Upgraded MGS Services. To
     the extent  received from such  provider,  KMC shall pay Qwest within [text
     deleted] days of the end of each calendar  quarter  during the Term. In the
     event any amount  received  by KMC from a provider  of ingress or egress is
     required to be returned by KMC pursuant to a requirement of law or order of
     any court or regulatory authority ("Forfeited Amount"),  KMC shall have the
     right to bill Qwest for [text  deleted] of such Forfeited  Amount,  up to a
     maximum  of the  total  amount  previously  credited  to Qwest  under  this
     paragraph,  and Qwest shall, within [text deleted] days, repay such amounts
     to KMC.


                                       21
<PAGE>


                                   Schedule 2

                                 SERVICE LEVELS


1.   SERVICE LEVELS. For purposes of this agreement, "Service Level" or "Service
     Levels"  means the level of service at which or above KMC (and for purposes
     of this Schedule 2 only, KMC's affiliates, collectively referred to in this
     Schedule 2 as "KMC") shall support,  maintain and manage the [text deleted]
     hardware  or two-way  traffic  capability  specifically  provided by KMC to
     provide the  Upgraded  MGS  Services to Qwest and  includes  the  following
     elements  (all of which shall be based on industry  standard  measurements)
     provided KMC.

     1.1. 24x7 (at the KMC Equipment Site) "remote hands" services;

     1.2. P.01 grade of service  measured  on a calendar  month  basis,  for the
          portion of the KMC network,  from and  including the KMC switches (but
          not including Qwest  maintained  software),  to the DNAC,  during peak
          busy hours.

     1.3. A time to repair of [text  deleted]  from the time Qwest's call to the
          KMC help desk are  answered,  for each  Upgraded  MGS  Service  or any
          hardware utilized to provide the Upgraded MGS Service.

     1.4. Meeting  or  exceeding   industry   standards  for  onsite  power  and
          environmental   control  and  quality   provided  to  devices,   local
          interconnection  trunks, local loop access, and for out of band access
          circuits to the devices under this agreement and

2.   KMC will support and maintain  the  upgraded  MGS service,  [text  deleted]
     servers,  associated  PSTN  connectivity  and all  associated  hardware and
     software  interfaces.  To allow a monthly  average  uptime that shall be no
     less than [text  deleted].  However,  such  uptime does not include the KMC
     scheduled downtimes for maintenance. The scheduled downtime for maintenance
     shall not exceed three (3) hours per week and is currently  completed on an
     as-needed basis

Monitoring/Reporting

Upon the  Company's  request,  KMC will  prepare a report  that  will  track the
performance metrics stated in Section 1. This information will be emailed by the
fifth  working day of the month  following  the reported  month,  to the Company
designated email address.

                                       22
<PAGE>

When a System Outage occurs,  KMC will provide an outage report which  includes,
at a minimum, the following information:

Company site affected  (including  without  limitation each  customized  Company
platforms);
Time of System Outage;
Length of System Outage;
Reason for System
Outage (if known);
Long term remedy; and
Person notified


Escalation Procedures

In the event System  Outage,  KMC shall  contact  Company by email within thirty
(30) minutes of any such System Outage and may also contact Company by telephone
or other method. Company must provide emergency contact information.

The status information, if known by KMC, will include:
reason for the System Outage; and
estimated time for service restoration

If Company experiences a System Outage and has not been notified by KMC, Company
will  contact the Trouble  Management  Center (TMC) staff at KMC by telephone at
800-850-9048 and email at tmc@kmctelecom.com.

KMC will  periodically  notify  Company  with an updated  status of such  System
Outage for the duration of the System Outage,  in no event less  frequently than
every sixty (60) minutes.

KMC will  provide  a  post-incident  summary  of each  System  Outage  that will
include:
cause of the problem;
method used to correct the problem; and
measures KMC will take to prevent similar occurrences in the future

KMC shall  undertake  efforts  to  resolve  System  Outages,  respond to Company
inquiries and requests for modifications as set forth in the tables below:


                                       23
<PAGE>


<TABLE>
<CAPTION>

NON-CONFORMITY IDENTIFICATION AND RESOLUTION PARAMETERS

---------------------------------------------------------------
Level   Definition           Client Obligations  Acceptable
                                                 Resolution
---------------------------------------------------------------
<S>     <C>                  <C>                 <C>

1       Critical - KMC       Verbal and          Written/email
        Service unavailable  written/email       acknowledgment,
        or non-conformity    notification of     and
        in KMC Service       unavailability or   modifications
        causes consistent    non-conformity as   to the KMC
        User system          soon as possible    Service as
        response delays.     after               soon as
                             determination of    possible,
                             the unavailability
                             or non-conformity
---------------------------------------------------------------
1       Serious - KMC        Verbal and          Written/email
        Service              written/email       acknowledgment,
        intermittently       notification of     and
        unavailable or       unavailability or   modifications
        non-conformity in    non-conformity as   to the KMC
        KMC Service causes   soon as possible    Service as
        intermittent         after               soon as
        crashes that         determination of    possible
        require User system  the unavailability
        to be rebooted.      or non-conformity
---------------------------------------------------------------
2       Intermittent -       Written/email       Written/email
        Non-conformity in    notification of     acknowledgment
        KMC Service causes   non-conformity      and
        intermittent bugs    within 5 business   modifications
        which cause a        days of             to the KMC
        material module or   determination of    Service to
        features to not      the non-conformity  be released
        work.                                    within  10
                                                 business days
---------------------------------------------------------------
3       Annoying -           Written/email       Written/email
        Non-conformity in    notification of     acknowledgment
        KMC Service causes   non-conformity      and
        bugs or annoyances   within 10 business  modifications
        that do not cause    days of             to the KMC
        operation            determination of    Service to
        termination, but     the non-conformity  be released
        reduce the                               within next
        efficiency of the                        scheduled
        KMC Service and/or                       release
        may annoy the User.
---------------------------------------------------------------
</TABLE>



                                       24
<PAGE>

<TABLE>
<CAPTION>

NON-CONFORMITY IDENTIFICATION AND RESOLUTION PARAMETERS

---------------------------------------------------------------
Level   Definition           Client Obligations  Acceptable
                                                 Resolution
---------------------------------------------------------------
<S>     <C>                  <C>                 <C>

4       Cosmetic or Next     Written/email       Written/email
        Revision             notification of     acknowledgment
        Non-conformity in    non-conformity      and
        the KMC Service      within next         modifications
        which can be         standard report     to the KMC
        addressed with       cycle               Service to
        changes or updates                       be released
        in next update or                        within next
        release of the KMC                       scheduled
        Service.                                 release
---------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>

SUPPORT RESPONSE TIMETABLE

----------------------------------------------------------------
Severity Definition          Client Obligations Acceptable
                                                Resolution
----------------------------------------------------------------
<S>     <C>                  <C>                 <C>


1, 2     Quick Response -    Verbal and         Written/email
         Users cannot        written/email      resolutions as
         operate the KMC     confirmation of    soon as
         Service without     issue presented    possible,
         help                within 24 hours
----------------------------------------------------------------
3        Medium Response -   Written/email      Written/email
         Users can operate   confirmation of    explanation
         KMC Service but     issue presented    within 5
         are greatly         within 5 business  business days.
         inconvenienced.     days
         Client may need
         additional help to
         answer a common
         problem or issue.
----------------------------------------------------------------
4        Non-Critical        Written/email      Written/email
         Response - Users    confirmation of    explanation
         or Client would     issue presented    within 10
         like to understand  within 20          business days.
         operation or gain   business days
         additional
         information.

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

o  Credits are addressed in previous MGS agreements.



                                       25
<PAGE>

Business Resumption

Company  agrees to notify KMC no less than two (2)  business  days in advance of
any modifications and/or network  configuration changes (especially with regards
to any  changes  in their  Server IP  addresses  that host the KMC  control)  to
Company's  system, as well as any upgrades or removal of devices that may impact
the production and network  connectivity from Company's system through which the
Services are provided (if they are outside of the scheduled downtime maintenance
windows). If any such change will or could, in either party's opinion, result in
incompatibility  between the parties'  respective  systems or  interruptions  in
delivery of the  Services,  then the parties  shall work together to resolve any
such issue before Company makes such a change.