$680,000,000

           COMPETITIVE ADVANCE AND REVOLVING CREDIT FACILITY AGREEMENT

                          Dated as of October 24, 2001

                                      among

                         CITIZENS COMMUNICATIONS COMPANY
                                   as Borrower

                                       and

                            THE LENDERS NAMED HEREIN
                                   as Lenders

                                 CITIBANK, N.A.
                              as Syndication Agent

                                       and

                            TD SECURITIES (USA) INC.
                         BEAR STEARNS CORPORATE LENDING
                           as Co-Documentation Agents

                                       and

                            THE CHASE MANHATTAN BANK
                             as Administrative Agent

                           ___________________________


                           J.P. MORGAN SECURITIES INC.
                            SALOMON SMITH BARNEY INC.
                   Joint Lead Arrangers and Joint Bookrunners





<PAGE>

<TABLE>
<CAPTION>
                                Table of Contents

                                                                                                                Page
                                   ARTICLE I

                                  DEFINITIONS

<S>                                                                                                              <C>
SECTION 1.01.         Defined Terms...............................................................................1
SECTION 1.02.         Terms Generally............................................................................13

                                   ARTICLE II

                                   THE CREDITS

SECTION 2.01.         Commitments................................................................................13
SECTION 2.02.         Loans......................................................................................14
SECTION 2.03.         Competitive Bid Procedure..................................................................15
SECTION 2.04.         Standby Borrowing Procedure................................................................17
SECTION 2.05.         Conversions................................................................................18
SECTION 2.06.         Fees.......................................................................................18
SECTION 2.07.         Repayment of Loans.........................................................................19
SECTION 2.08.         Interest on Loans..........................................................................19
SECTION 2.09.         Default Interest...........................................................................20
SECTION 2.10.         Alternate Rate of Interest.................................................................20
SECTION 2.11.         Changes in Commitments.....................................................................21
SECTION 2.12.         Prepayment.................................................................................22
SECTION 2.13.         Reserve Requirements; Change in Circumstances..............................................23
SECTION 2.14.         Change in Legality.........................................................................25
SECTION 2.15.         Indemnity..................................................................................25
SECTION 2.16.         Pro Rata Treatment.........................................................................26
SECTION 2.17.         Sharing of Setoffs.........................................................................26
SECTION 2.18.         Payments...................................................................................27
SECTION 2.19.         Taxes......................................................................................27

                                   ARTICLE III

                         REPRESENTATIONS AND WARRANTIES

SECTION 3.01.         Organization; Powers; Governmental Approvals...............................................30
SECTION 3.02.         Financial Statements.......................................................................30
SECTION 3.03.         No Material Adverse Change.................................................................31
SECTION 3.04.         Title to Properties; Possession Under Leases...............................................31
SECTION 3.05.         Ownership of Subsidiaries..................................................................31
<PAGE>

SECTION 3.06.         Litigation; Compliance with Laws...........................................................31
SECTION 3.07.         Agreements.................................................................................32
SECTION 3.08.         Federal Reserve Regulations................................................................32
SECTION 3.09.         Investment Company Act; Public Utility Holding Company Act.................................33
SECTION 3.10.         Use of Proceeds............................................................................33
SECTION 3.11.         Tax Returns................................................................................33
SECTION 3.12.         No Material Misstatements..................................................................33
SECTION 3.13.         Employee Benefit Plans.....................................................................33
SECTION 3.14.         Insurance..................................................................................34

                                   ARTICLE IV

                              CONDITIONS OF LENDING

SECTION 4.01.         Each Borrowing.............................................................................34
SECTION 4.02.         Effective Date.............................................................................34

                                    ARTICLE V

                              AFFIRMATIVE COVENANTS

SECTION 5.01.         Existence; Businesses and Properties.......................................................36
SECTION 5.02.         Financial Statements, Reports, etc.........................................................37
SECTION 5.03.         Litigation and Other Notices...............................................................38
SECTION 5.04.         Maintaining Records........................................................................38
SECTION 5.05.         Use of Proceeds............................................................................38

                                   ARTICLE VI

                               NEGATIVE COVENANTS

SECTION 6.01.         Liens; Restrictions on Sales of Receivables................................................39
SECTION 6.02.         Ownership of the Principal Subsidiaries....................................................39
SECTION 6.03.         Asset Sales................................................................................40
SECTION 6.04.         Mergers....................................................................................40
SECTION 6.05.         Restrictions on Dividends..................................................................40
SECTION 6.06.         Transactions with Affiliates...............................................................41
SECTION 6.07.         Minimum Consolidated Net Worth.............................................................41
SECTION 6.08.         Minimum Access Lines.......................................................................41
<PAGE>

                                   ARTICLE VII

                                EVENTS OF DEFAULT

                                  ARTICLE VIII

                            THE ADMINISTRATIVE AGENT

                                   ARTICLE IX

                                  MISCELLANEOUS

SECTION 9.01.         Notices....................................................................................46
SECTION 9.02.         Survival of Agreement......................................................................46
SECTION 9.03.         Binding Effect.............................................................................46
SECTION 9.04.         Successors and Assigns.....................................................................47
SECTION 9.05.         Expenses; Indemnity........................................................................49
SECTION 9.06.         Right of Setoff............................................................................50
SECTION 9.07.         Applicable Law.............................................................................51
SECTION 9.08.         Waivers; Amendment.........................................................................51
SECTION 9.09.         Interest Rate Limitation...................................................................51
SECTION 9.10.         Entire Agreement...........................................................................52
SECTION 9.11.         Waiver of Jury Trial.......................................................................52
SECTION 9.12.         Severability...............................................................................52
SECTION 9.13.         Counterparts...............................................................................52
SECTION 9.14.         Headings...................................................................................52
SECTION 9.15.         Jurisdiction; Consent to Service of Process................................................53

Exhibit A-1           Form of Competitive Bid Request
Exhibit A-2           Form of Notice of Competitive Bid Request
Exhibit A-3           Form of Competitive Bid
Exhibit A-4           Form of Competitive Bid Accept/Reject Letter
Exhibit A-5           Form of Standby Borrowing Request
Exhibit A-6           Form of Conversion Request
Exhibit B             Form of Assignment and Acceptance
Exhibit C             Form of Opinion of Counsel to Borrower
Exhibit D-1           Form of Standby Note
Exhibit D-2           Form of Competitive Note

Schedule 2.01         Lenders' Commitments
</TABLE>

<PAGE>


                    COMPETITIVE ADVANCE AND REVOLVING CREDIT FACILITY AGREEMENT,
                    dated as of October 24, 2001, among CITIZENS  COMMUNICATIONS
                    COMPANY,  a  Delaware  corporation  (the  "Borrower"),   the
                    Lenders listed in Schedule 2.01 (together with any assignees
                    pursuant to Section  9.04(b),  the  "Lenders") and THE CHASE
                    MANHATTAN   BANK,  a  New  York  banking   corporation,   as
                    administrative agent for the Lenders (in such capacity,  the
                    "Administrative Agent").

     The Borrower has  requested the Lenders to extend credit to the Borrower in
order to enable it to borrow on a standby  revolving  credit  basis on and after
the date hereof and at any time and from time to time prior to the Maturity Date
(as hereinafter  defined) a principal  amount not in excess of $680,000,000  (as
such  amount  may be  modified  pursuant  to  Section  2.11  hereof) at any time
outstanding.  The Borrower has also requested the Lenders to provide a procedure
pursuant to which the Borrower  may invite the Lenders to bid on an  uncommitted
basis on short-term borrowings by the Borrower.  The proceeds of such borrowings
are to be used for general  corporate  purposes,  including  working capital and
support of  commercial  paper  issuances  and  Securitization  Transactions  (as
hereinafter defined) permitted hereunder. The Lenders are willing to extend such
credit to the  Borrower  on the terms and subject to the  conditions  herein set
forth.

     Accordingly,  the Borrower,  the Lenders and the Administrative Agent agree
as follows:

                                    ARTICLE I

                                   DEFINITIONS

     SECTION 1.01. Defined Terms.

     As used in this  Agreement,  the  following  terms shall have the  meanings
specified below:

     "ABR Borrowing" shall mean a Borrowing comprised of ABR Loans.

     "ABR  Loan"  shall  mean  any  Standby  Loan  bearing  interest  at a  rate
determined  by  reference  to the  Alternate  Base Rate in  accordance  with the
provisions of Article II.

     "Access  Lines"  shall mean,  on any date,  the total  number of  telephony
access  lines  provided  by  the  Borrower  and  its  Subsidiaries  (other  than
Non-Recourse  Joint  Ventures)  through  their owned  telecommunications  system
network  facilities  (excluding  lines provided  through  resale  agreements) to
customers of the Borrower and its Subsidiaries  (other than  Non-Recourse  Joint
Ventures)  whose  service  payments are not overdue to a point where  service is
generally disconnected.
<PAGE>

     "Administrative  Fees"  shall  have the  meaning  assigned  to such term in
Section 2.06(b).

     "Administrative  Questionnaire" shall mean an Administrative  Questionnaire
in a form supplied by the Administrative Agent.

     "Affiliate"  shall  mean,  when used with  respect to a  specified  Person,
another Person that directly,  or indirectly through one or more intermediaries,
Controls  or is  Controlled  by or is  under  common  Control  with  the  Person
specified.

     "Alternate  Base Rate" shall mean,  for any day, a rate per annum  (rounded
upwards,  if necessary,  to the next 1/16 of 1%) equal to the greater of (i) the
Prime Rate in effect on such day and (ii) the Federal  Funds  Effective  Rate in
effect  on such day plus  1/2 of 1%.  If the  Administrative  Agent  shall  have
determined (which  determination shall be conclusive absent manifest error) that
it is unable to  ascertain  the  Federal  Funds  Effective  Rate for any reason,
including  the  inability  of the  Administrative  Agent  to  obtain  sufficient
quotations, the Alternate Base Rate shall be determined without regard to clause
(ii) of the first sentence of this  definition  until the  circumstances  giving
rise to such  inability no longer exist.  Any change in the Alternate  Base Rate
due to a change in the Prime Rate or the Federal Funds  Effective  Rate shall be
effective on the effective  date of such change in the Prime Rate or the Federal
Funds Effective Rate, respectively.

     "Applicable  Rate" shall  mean,  with  respect to any ABR Loan,  Eurodollar
Standby Loan or Facility  Fee, as the case may be, at all times during which any
"Applicable  Rating Level" set forth below is in effect,  the rate per annum set
forth below under the appropriate caption next to such Applicable Rating Level:

<TABLE>
<CAPTION>

<S>                  <C>                 <C>               <C>                 <C>                   <C>
   Applicable              S&P                             Applicable Rate      Applicable Rate
     Rating          Rating/Moody's     Applicable Rate     for Eurodollar            for            Utilization
      Level              Rating          for ABR Loans      Standby Loans        Facility Fee          Margin
--------------------------------------------------------------------------------------------------------------------
        I         A-or higher/A3             0.000%             0.425%              0.200%             0.125%
                  or higher
--------------------------------------------------------------------------------------------------------------------
       II         BBB+/Baa1                  0.000%             0.525%              0.225%             0.125%
--------------------------------------------------------------------------------------------------------------------
       III        BBB/Baa2                   0.000%             0.625%              0.250%             0.125%
--------------------------------------------------------------------------------------------------------------------
       IV         BBB-/Baa3                  0.000%             0.825%              0.300%             0.125%
--------------------------------------------------------------------------------------------------------------------
        V         BB+/Bal                    0.000%             0.975%              0.400%             0.125%
--------------------------------------------------------------------------------------------------------------------
       VI         lower than BB+/lower       0.125%             1.125%              0.500%             0.125%
                        than Ba1
</TABLE>

provided,  that the Applicable  Rate for Eurodollar  Standby Loans and ABR Loans
shall be  increased  by the rate per  annum set forth  above  under the  caption
"Utilization  Margin" that  corresponds to the  Applicable  Rating Level used to
determine such Applicable Rates at any time during a Utilization Period.
<PAGE>

     For  purposes  of the  foregoing,  the  Applicable  Rating  Level  shall be
determined  in  accordance  with the then  applicable  S&P  Rating  and the then
applicable  Moody's  Rating.  In the event that the S&P  Rating and the  Moody's
Rating do not correspond to the same Applicable Rating Level, then the higher of
the two ratings shall determine the Applicable Rating Level; provided,  however,
that if there is a  difference  of two or more  levels  between  the  Applicable
Rating Level  corresponding  to the S&P Rating and the  Applicable  Rating Level
corresponding  to the Moody's Rating,  then the Applicable  Rating Level that is
one level above the Applicable  Rating Level  corresponding  to the lower of the
S&P Rating and the Moody's  Rating shall apply.  In the event that no S&P Rating
or no  Moody's  Rating  shall  be  in  effect  (other  than  by  reason  of  the
circumstances  referred to in the last  sentence of this  definition),  then the
Applicable  Rating Level shall be  Applicable  Rating  Level VI. The  Applicable
Rating Level shall be  redetermined  on the date of  announcement of a change in
the S&P Rating or the Moody's Rating.  A change in the Applicable Rate resulting
from a change in the  Applicable  Rating  Level shall  become  effective on such
date. If the rating  system of S&P or Moody's  shall  change,  or if either such
Person shall cease to be in the business of rating  corporate debt  obligations,
the  Borrower  and the  Lenders  shall  negotiate  in good  faith to amend  this
definition  to reflect  such  changed  rating  system or the  unavailability  of
ratings from such Person and,  pending the  effectiveness of any such amendment,
the Applicable Rate shall be determined by reference to the rating most recently
in effect prior to such change or cessation.

     "Asset   Exchange"   shall  mean  the   exchange   or  other   transfer  of
telecommunications  assets  between or among the Borrower and another  Person or
other   Persons  in   connection   with  which  the  Borrower   would   transfer
telecommunications  assets and/or other property in consideration of the receipt
of  telecommunications  assets and/or other property  having a fair market value
substantially  equivalent to those transferred by the Borrower (as determined in
good faith by the Borrower's  Board of  Directors);  provided that the principal
value of the assets being  transferred  to the Borrower  shall be represented by
telecommunications assets.

     "Assignment and Acceptance" shall mean an assignment and acceptance entered
into by a Lender and an assignee,  and accepted by the Administrative  Agent, in
substantially  the  form  of  Exhibit  B or  any  other  form  approved  by  the
Administrative Agent.

     "Board" shall mean the Board of Governors of the Federal  Reserve System of
the United States.

     "Borrowing"  shall  mean a group  of Loans  of a  single  Type  made by the
Lenders (or, in the case of a  Competitive  Borrowing,  by the Lender or Lenders
whose Competitive Bids have been accepted pursuant to Section 2.03) or Converted
on a single  date and as to which a single  Interest  Period is in  effect.  All
Loans of the same Type, having the same Interest Period and made or Converted on
the same day shall be deemed a single  Borrowing  hereunder until repaid or next
Converted.

     "Business  Day" shall mean any day (other  than a day which is a  Saturday,
Sunday or legal  holiday  in the State of New York) on which  banks are open for
business in New York City; provided, however, that, when used in connection with
a Eurodollar  Loan,  the term "Business Day" shall also exclude any day on which
banks are not open for  dealings  in dollar  deposits  in the  London  interbank
market.
<PAGE>

     "Capital  Lease  Obligations"  of any Person shall mean the  obligations of
such  Person  to pay  rent  or  other  amounts  under  any  lease  of (or  other
arrangement  conveying  the  right  to use)  real  or  personal  property,  or a
combination  thereof,  which  obligations  are  required  to be  classified  and
accounted  for as capital  leases on a balance  sheet of such Person  under GAAP
and, for the purposes of this Agreement,  the amount of such  obligations at any
time  shall  be the  capitalized  amount  thereof  at such  time  determined  in
accordance with GAAP.

     A "Change in Control" shall be deemed to have occurred if (a) any Person or
group  (within  the  meaning  of  Rule  13d-5  of the  Securities  and  Exchange
Commission  as in effect on the date hereof)  shall own directly or  indirectly,
beneficially  or of record,  shares  representing  50% or more of the  aggregate
ordinary voting power represented by the issued and outstanding capital stock of
the  Borrower;  or (b) a majority of the seats (other than vacant  seats) on the
board of  directors  of the  Borrower  shall at any time have been  occupied  by
Persons who were neither (i) nominated by the  management  of the Borrower,  nor
(ii)  appointed  by  directors  so  nominated;  or (c) any Person or group shall
otherwise directly or indirectly Control the Borrower.

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

     "Commitment"  shall mean,  with respect to each Lender,  the  commitment of
such Lender  hereunder as set forth in Schedule  2.01 hereto,  as such  Lender's
Commitment may be modified from time to time pursuant to Section 2.11 or Section
2.13(f). Unless earlier terminated pursuant to the terms of this Agreement,  the
Commitments shall automatically and permanently terminate on the Maturity Date.

     "Competitive  Bid"  shall  mean an offer by a Lender to make a  Competitive
Loan pursuant to Section 2.03.

     "Competitive Bid  Accept/Reject  Letter" shall mean a notification  made by
the Borrower pursuant to Section 2.03(d) in the form of Exhibit A-4.

     "Competitive  Bid Rate" shall  mean,  as to any  Competitive  Bid made by a
Lender pursuant to Section  2.03(b),  (i) in the case of a Eurodollar  Loan, the
Margin,  and (ii) in the case of a Fixed Rate Loan,  the fixed rate of  interest
offered by the Lender making such Competitive Bid.

     "Competitive  Bid Request"  shall mean a request  made  pursuant to Section
2.03 in the form of Exhibit A-1.

     "Competitive  Borrowing" shall mean a Borrowing consisting of a Competitive
Loan  or  concurrent   Competitive  Loans  from  the  Lender  or  Lenders  whose
Competitive Bids for such Borrowing have been accepted by the Borrower under the
bidding procedure described in Section 2.03.
<PAGE>

     "Competitive Loan" shall mean a Loan from a Lender to the Borrower pursuant
to the bidding procedure  described in Section 2.03. Each Competitive Loan shall
be a Eurodollar Competitive Loan or a Fixed Rate Loan.

     "Consolidated Net Worth" shall mean, as at any date of  determination,  the
consolidated   stockholders'   equity  of  the  Borrower  and  its  consolidated
Subsidiaries,  including  redeemable  preferred  securities where the redemption
date  occurs  after  the  Maturity  Date,   mandatorily  redeemable  convertible
preferred  securities,  mandatorily  convertible  Indebtedness  (or Indebtedness
subject  to  mandatory   forward  purchase   contracts  for  equity  or  similar
securities) and minority equity  interests in other persons,  as determined on a
consolidated basis in conformity with GAAP consistently applied. For the purpose
of calculating  "Consolidated Net Worth", the consolidated  stockholders' equity
of any Non-Recourse  Joint Venture and its  subsidiaries  shall be excluded from
the  consolidated  stockholders'  equity of the  Borrower  and its  consolidated
Subsidiaries.

     "Consolidated  Tangible  Assets" of any Person  shall mean total  assets of
such Person and its  consolidated  Subsidiaries,  determined  on a  consolidated
basis,  less  goodwill,  patents,  trademarks  and other  assets  classified  as
intangible assets in accordance with GAAP.

     "Control" shall mean the possession,  directly or indirectly,  of the power
to direct or cause the  direction  of the  management  or  policies of a Person,
whether  through the ownership of voting  securities,  by contract or otherwise,
and "Controlling" and "Controlled" shall have meanings correlative thereto.

     "Conversion",  "Convert" or  "Converted"  shall mean the  conversion of any
Standby Loan of one Type into a Standby Loan of another  Type,  or the selection
of a new, or the renewal of the same, Interest Period for any such Standby Loan,
as the case may be, pursuant to Section 2.05.

     "Conversion  Request" shall mean a request made pursuant to Section 2.05 in
the form of Exhibit A-6.

     "Default"  shall mean any event or condition  which upon  notice,  lapse of
time, or both would constitute an Event of Default.

     "Dollars" or "$" shall mean lawful money of the United States of America.

     "Effective  Date" shall mean the date on which the conditions  specified in
Section 4.02 are satisfied (or waived in accordance with Section 9.08).

     "Environmental Laws" shall mean all national,  federal, state,  provincial,
municipal  or local laws,  statutes,  ordinances,  orders,  judgments,  decrees,
injunctions,   writs,  policies  and  guidelines  (having  the  force  of  law),
directives,  approvals, notices, rules and regulations and other applicable laws
relating to environmental or occupational  health and safety matters,  including
those relating to the Release or threatened Release of Specified  Substances and
to the generation,  use, storage or transportation of Specified Substances, each
as in effect as of the date of determination.
<PAGE>

     "ERISA" shall mean the Employee  Retirement Income Security Act of 1974, as
the same may be amended from time to time, and the  regulations  promulgated and
the rulings issued thereunder.

     "ERISA  Affiliate"  shall  mean  each  trade or  business  (whether  or not
incorporated)  which  together with the Borrower or a Subsidiary of the Borrower
would be  deemed  to be a  "single  employer"  within  the  meaning  of  Section
4001(b)(1) of ERISA.

     "ERISA  Termination Event" shall mean (i) a "Reportable Event" described in
Section  4043 of ERISA  (other  than a  "Reportable  Event"  not  subject to the
provision  for 30-day  notice to the PBGC under such  regulations),  or (ii) the
withdrawal of the Borrower or any of its ERISA  Affiliates  from a Plan during a
plan  year in  which it was a  "substantial  employer"  as  defined  in  Section
4001(a)(2)  of ERISA,  or (iii) the filing of a notice of intent to  terminate a
Plan or the treatment of a Plan amendment as a termination under Section 4041 of
ERISA,  or (iv) the institution of proceeding to terminate a Plan by the PBGC or
(v) any other event or condition  which might  constitute  grounds under Section
4042 of ERISA  for the  termination  of,  or the  appointment  of a  trustee  to
administer, any Plan.

     "Eurodollar  Borrowing"  shall mean a  Borrowing  comprised  of  Eurodollar
Loans.

     "Eurodollar  Competitive  Borrowing"  shall mean a Borrowing  comprised  of
Eurodollar Competitive Loans.

     "Eurodollar  Competitive  Loan"  shall mean any  Competitive  Loan  bearing
interest at a rate  determined by reference to the LIBO Rate in accordance  with
the provisions of Article II.

     "Eurodollar Loan" shall mean any Eurodollar  Competitive Loan or Eurodollar
Standby Loan.

     "Eurodollar   Standby  Borrowing"  shall  mean  a  Borrowing  comprised  of
Eurodollar Standby Loans.

     "Eurodollar Standby Loan" shall mean any Standby Loan bearing interest at a
rate  determined by reference to the LIBO Rate in accordance with the provisions
of Article II.

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

     "Existing  Facilities" shall mean (i) the Competitive Advance and Revolving
Credit Facility  Agreement dated as of December 16, 1993, as amended,  among the
Borrower, the lenders party thereto, PNC Bank, National Association, as co-agent
for the lenders, and The Chase Manhattan Bank, as agent for the lenders and (ii)
the Competitive  Advance and Revolving  Credit Facility  Agreement,  dated as of
October 27, 2000, among the Borrower,  the lenders parties thereto and The Chase
Manhattan Bank, as agent for the lenders.
<PAGE>

     "Facility  Fee" shall  have the  meaning  assigned  to such term in Section
2.06(a).

     "Federal  Funds  Effective  Rate" shall  mean,  for any day,  the  weighted
average of the rates on overnight Federal funds transactions with members of the
Federal  Reserve System  arranged by Federal funds brokers,  as published on the
next  succeeding  Business Day by the Federal  Reserve Bank of New York,  or, if
such rate is not so published  for any day which is a Business  Day, the average
of  the   quotations  for  the  day  of  such   transactions   received  by  the
Administrative  Agent from three Federal  funds  brokers of recognized  standing
selected by it.

     "Fees" shall mean the Facility Fee and the Administrative Fees.

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

     "First  Mortgage  Bond  Indentures"  shall mean (i) the First  Mortgage and
Collateral Trust Indenture,  dated as of March 1, 1947, from the Borrower to The
Marine Midland Trust Company of New York, as Trustee,  and (ii) the Mortgage and
Deed of  Trust  Indenture,  dated  as of June 1,  1962,  from  the  Borrower  to
Manufacturers  Hanover Trust Company,  as Trustee, as the same have been and may
from time to time be amended or supplemented and in effect.

     "Fixed  Rate  Borrowing"  shall mean a  Borrowing  comprised  of Fixed Rate
Loans.

     "Fixed Rate Loan" shall mean any  Competitive  Loan  bearing  interest at a
fixed  percentage rate per annum  (expressed in the form of a decimal to no more
than four  decimal  places)  specified  by the  Lender  making  such Loan in its
Competitive Bid.

     "GAAP" shall mean generally accepted  accounting  principles,  applied on a
consistent basis.

     "Governmental  Approval"  shall  mean any  authorization,  consent,  order,
approval,  license, franchise, lease, ruling, tariff, rate, permit, certificate,
exemption of, or filing or registration with, any Governmental Authority.

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

     "Hostile  Acquisition" shall mean any Target Acquisition (as defined below)
involving  a tender  offer or proxy  contest  that has not been  recommended  or
approved by the board of  directors  (or similar  governing  body) of the Person
that is the  subject  of such  Target  Acquisition  prior  to the  first  public
announcement or disclosure relating to such Target Acquisition.  As used in this
definition,  the term "Target  Acquisition"  shall mean any transaction,  or any
series  of  related  transactions,  by  which  the  Borrower  and/or  any of its
Subsidiaries  directly or indirectly (i) acquires any ongoing business or all or
substantially  all of the  assets of any  Person or  division  thereof,  whether
through  purchase  of  assets,  merger  or  otherwise,  (ii)  acquires  (in  one
transaction  or as the most  recent  transaction  in a series  of  transactions)
control of at least a majority in ordinary  voting power of the  securities of a
Person which have  ordinary  voting power for the election of directors or (iii)
otherwise  acquires  control of a more than 50%  ownership  interest in any such
Person.
<PAGE>

     "Indebtedness"  of any Person  shall  mean,  without  duplication,  (a) all
obligations  of such Person for  borrowed  money or with  respect to deposits or
advances of any kind (other than customer  deposits made in the ordinary  course
of business), (b) all obligations of such Person evidenced by bonds, debentures,
notes or similar  instruments,  (c) all  obligations  of such  Person upon which
interest charges are customarily  paid, (d) all obligations of such Person under
conditional  sale or other title  retention  agreements  relating to property or
assets  purchased by such Person,  (e) all  obligations of such Person issued or
assumed  as the  deferred  purchase  price  of  property  or  services,  (f) all
Indebtedness of others secured by (or for which the holder of such  Indebtedness
has an existing  right,  contingent or otherwise,  to be secured by) any Lien on
property  owned or  acquired  by such  Person,  whether  or not the  obligations
secured  thereby have been assumed,  (g) all Capital Lease  Obligations  of such
Person,  (h)  all  obligations  of such  Person  in  respect  of  interest  rate
protection agreements, foreign currency exchange agreements or other interest or
exchange rate hedging  arrangements  (except to the extent such  obligations are
used as a bona  fide  hedge  of  other  Indebtedness  of such  Person),  (i) all
obligations  of such Person as an account  party in respect of letters of credit
and bankers' acceptances (except to the extent any such obligations are incurred
in support of other  obligations  constituting  Indebtedness  of such Person and
other than, to the extent  reimbursed if drawn,  letters of credit in support of
ordinary course performance  obligations) and (j) any obligation,  contingent or
otherwise,  of such  Person  guaranteeing  or  having  the  economic  effect  of
guaranteeing any Indebtedness of any other Person (the "primary obligor") in any
manner,  whether  directly or  indirectly,  and including any obligation of such
Person,  directly  or  indirectly  (i) to  purchase or pay (or advance or supply
funds for the  purchase or payment of) such  Indebtedness  or to purchase (or to
advance or supply  funds for the  purchase  of) any  security for the payment of
such  Indebtedness,  (ii) to purchase  property,  securities or services for the
purpose  of  assuring  the owner of such  Indebtedness  of the  payment  of such
Indebtedness  or (iii) to  maintain  working  capital,  equity  capital or other
financial  statement  condition  or  liquidity  of the primary  obligor so as to
enable the primary obligor to pay such Indebtedness; provided, however, that the
term Indebtedness shall not include  endorsements for collection or deposit,  in
either case in the ordinary course of business.

     "Interest  Payment Date" shall mean, with respect to any Loan, the last day
of the Interest Period applicable  thereto and, in the case of a Eurodollar Loan
with an  Interest  Period of more than three  months'  duration  or a Fixed Rate
Loan,  each day that would have been an Interest  Payment Date for such Loan had
successive  Interest Periods of three months'  duration or 90 days duration,  as
the case may be, been applicable to such Loan and, in addition,  the date of any
Conversion of such Loan to a Loan of a different Type.
<PAGE>

     "Interest Period" shall mean (a) as to any Eurodollar Borrowing, the period
commencing on the date of such Borrowing or, with respect to any Conversion,  on
the last day of the immediately  preceding  Interest  Period  applicable to such
Borrowing,  as the case may be, and ending on the numerically  corresponding day
(or,  if there is no  numerically  corresponding  day,  on the last  day) in the
calendar month that is 1, 2, 3 or 6 months  thereafter (or such longer period as
may be agreed to by all of the  Lenders),  as the Borrower may elect,  (b) as to
any ABR  Borrowing,  the period  commencing  on the date of such  Borrowing  and
ending on the date 90 days  thereafter  or, if earlier,  on the Maturity Date or
the date of prepayment of such Borrowing and (c) as to any Fixed Rate Borrowing,
the  period  commencing  on the date of such  Borrowing  and  ending on the date
specified  in the  Competitive  Bids in which the  offer to make the Fixed  Rate
Loans  comprising such Borrowing were extended,  which shall not be earlier than
the day after the date of such Borrowing or later than 364 days (or,  subject to
the Borrower obtaining all necessary Governmental Approvals,  such longer period
as may be agreed  to by all of the  Lenders)  after the date of such  Borrowing;
provided,  however,  that if any Interest Period would end on a day other than a
Business  Day,  such  Interest  Period shall be extended to the next  succeeding
Business Day unless,  in the case of Eurodollar Loans only, such next succeeding
Business Day would fall in the next calendar  month, in which case such Interest
Period shall end on the next preceding  Business Day. Interest shall accrue from
and including the first day of an Interest  Period to but excluding the last day
of such Interest Period.

     "Joint  Venture"  shall  mean a general  or  limited  partnership,  limited
liability  company or other  entity  formed or  organized  under the laws of the
United  States  of  America  or any state  thereof  that  would  own or  operate
telecommunications assets and which, in turn, the Borrower would manage.

     "Joint Venture Transaction" shall mean the formation of a Joint Venture, by
the formation of a new entity and the contribution of telecommunications  assets
(or cash or similar  assets)  thereto by the  Borrower,  the  investment  by the
Borrower in a previously existing entity that owns telecommunications  assets or
other similar transaction.

     "LIBO Rate" shall mean,  with respect to any  Eurodollar  Borrowing for any
Interest  Period,  an interest  rate per annum equal to the rate at which dollar
deposits approximately equal in principal amount to (i) in the case of a Standby
Borrowing,  The Chase Manhattan Bank's (if then acting as  Administrative  Agent
or, in case another Person is then acting as  Administrative  Agent,  such other
Person's)  portion  of such  Eurodollar  Borrowing  and  (ii)  in the  case of a
Competitive  Borrowing,  a  principal  amount  that  would  have  been The Chase
Manhattan  Bank's (if then acting as  Administrative  Agent or, in case  another
Person is then acting as  Administrative  Agent, such other Person's) portion of
such  Competitive  Borrowing  had  such  Competitive  Borrowing  been a  Standby
Borrowing,  and, in the case of each of clause (i) and clause (ii) above,  for a
maturity comparable to such Interest Period, are offered to the principal London
office  of The  Chase  Manhattan  Bank (or such  other  Person  then  acting  as
Administrative  Agent) in immediately  available  funds in the London  interbank
market at approximately  11:00 A.M., London time, two Business Days prior to the
commencement of such Interest Period.

     "Lien" shall mean,  with respect to any asset,  (a) any  mortgage,  deed of
trust,  lien,  pledge,  encumbrance,  charge, or security interest in or on such
asset,  (b) the  interest  of a vendor or a lessor  under any  conditional  sale
agreement,  capital lease, or title retention  agreement  relating to such asset
and (c) in the case of securities,  any purchase option,  call, or similar right
of a third party with respect to such securities.
<PAGE>

     "Loan" shall mean a Competitive  Loan or a Standby Loan,  whether made as a
Eurodollar Loan, an ABR Loan, or a Fixed Rate Loan, as permitted hereby.

     "Margin"  shall mean, as to any  Eurodollar  Competitive  Loan,  the margin
(expressed  as a  percentage  rate per annum in the form of a decimal to no more
than four  decimal  places) to be added to or  subtracted  from the LIBO Rate in
order to determine  the interest  rate  applicable to such Loan, as specified in
the Competitive Bid relating to such Loan.

     "Margin Regulations" shall mean Regulations T, U and X of the Board.

     "Material  Adverse  Effect" shall mean a materially  adverse  effect on the
business,  assets,  operations,  financial condition or results of operations of
the Borrower and the Subsidiaries taken as a whole.

     "Maturity Date" shall mean October 24, 2006.

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

     "Moody's  Rating"  shall mean, on any date of  determination,  (i) the debt
rating most recently announced by Moody's with respect to the long-term, senior,
unsecured,  non-credit enhanced  Indebtedness of the Borrower or (ii) if (A) the
Indebtedness  of the Borrower under this Agreement  shall be credit  enhanced by
any  Person  other than the  Borrower  and (B) both  Moody's  and S&P shall have
assigned a debt rating to such  Indebtedness,  then such debt rating assigned by
Moody's.

     "Non-Recourse Joint Venture" shall mean a Joint Venture the Indebtedness of
which is Non-Recourse Joint Venture Indebtedness.

     "Non-Recourse  Joint Venture  Indebtedness" shall mean secured or unsecured
Indebtedness  of a Joint  Venture  that is  non-recourse  to the Borrower or any
Principal  Subsidiary  or  any  of  their  respective  assets  or  property.  In
furtherance of the foregoing, an obligation of the Borrower that is non-recourse
to the  Borrower  except  to the  extent  of a pledge  of the  equity of a Joint
Venture (the  Indebtedness  of which is otherwise  non-recourse to the Borrower)
will be deemed Non-Recourse Joint Venture Indebtedness.

     "PBGC" shall mean the Pension Benefit Guaranty  Corporation referred to and
defined in ERISA.
<PAGE>

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

     "Plan" shall mean any pension plan (including a multiemployer plan) subject
to the  provisions  of Title IV of ERISA  or  Section  412 of the Code  which is
maintained for or to which  contributions are made for employees of the Borrower
or any ERISA Affiliate.

     "Prime Rate" shall mean the rate of interest per annum  publicly  announced
from time to time by the Administrative Agent as its prime rate in effect at its
principal  office in New York  City;  each  change in the  Prime  Rate  shall be
effective on the date such change is publicly announced as effective.

     "Principal  Subsidiaries" shall mean any Subsidiary of the Borrower,  other
than Electric  Lightwave,  Inc., whose Consolidated  Tangible Assets comprise in
excess  of 20% of the  Consolidated  Tangible  Assets  of the  Borrower  and its
consolidated  Subsidiaries as of the date hereof or at any time  hereafter.  The
term "Principal Subsidiaries" shall not include any Non-Recourse Joint Venture.

     "Register" shall have the meaning given such term in Section 9.04(d).

     "Regulation D" shall mean Regulation D of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.

     "Regulation T" shall mean Regulation T of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.

     "Regulation U" shall mean Regulation U of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.

     "Regulation X" shall mean Regulation X of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.

     "Release"  shall  mean any  spilling,  emitting,  discharging,  depositing,
escaping,  leaching,  dumping or other releasing,  including the movement of any
Specified  Substance  through  the air,  soil,  surface  water,  groundwater  or
property, and when used as a verb has a like meaning.

     "Required  Lenders"  shall mean, at any time,  Lenders  having  Commitments
representing  more  than  50%  of the  Total  Commitment  or,  for  purposes  of
acceleration  pursuant to clause (ii) of Article VII or if the Total  Commitment
has  terminated,  Lenders  holding  Loans  representing  more  than  50%  of the
aggregate principal amount of the Loans outstanding.

     "S&P"  shall mean  Standard & Poor's  Ratings  Services,  a division of The
McGraw-Hill Companies, Inc., or any successor thereto.
<PAGE>

     "S&P Rating" shall mean, on any date of determination,  (i) the debt rating
most recently announced by S&P with respect to the long-term, senior, unsecured,
non-credit enhanced Indebtedness of the Borrower or (ii) if (A) the Indebtedness
of the  Borrower  under this  Agreement  shall be credit  enhanced by any Person
other than the Borrower and (B) both S&P and Moody's  shall have assigned a debt
rating to such Indebtedness, then such debt rating assigned by S&P.

     "Securitization  Transaction" means (a) any transfer of accounts receivable
or interests  therein (i) to a trust,  partnership,  corporation or other entity
(other than a Subsidiary),  which transfer or pledge is funded by such entity in
whole  or in part  by the  issuance  to one or  more  lenders  or  investors  of
indebtedness or other securities that are to receive  payments  principally from
the cash flow derived  from such  accounts  receivable  or interests in accounts
receivable, or (ii) directly to one or more investors or other purchasers (other
than  any  Subsidiary),  or (b) any  transaction  in  which  the  Borrower  or a
Subsidiary  incurs  Indebtedness  secured by Liens on accounts  receivable.  The
"amount" of any Securitization Transaction shall be deemed at any time to be (A)
in the case of a transaction  described in clause (a) of the preceding sentence,
the aggregate uncollected amount of the accounts receivable transferred pursuant
to such  Securitization  Transaction,  net of any such accounts  receivable that
have been  written off as  uncollectible,  and (B) in the case of a  transaction
described in clause (b) of the preceding  sentence,  the  aggregate  outstanding
principal  amount of the  Indebtedness  secured by Liens on accounts  receivable
Incurred pursuant to such Securitization Transaction.

     "Specified  Substance"  shall mean (i) any chemical,  material or substance
defined as or included in the definition of "hazardous  substances",  "hazardous
wastes",   "hazardous  materials",   "extremely  hazardous  waste",  "restricted
hazardous  waste" or "toxic  substances"  or words of similar  import  under any
applicable  Environmental  Laws;  (ii) any (A) oil,  natural  gas,  petroleum or
petroleum  derived  substance,  any drilling  fluids,  produced waters and other
wastes associated with the exploration,  development or production of crude oil,
natural gas or geothermal  fluid,  any flammable  substances or explosives,  any
radioactive materials,  any hazardous wastes or substances,  any toxic wastes or
substances or (B) other  materials or  pollutants  that, in the case of both (A)
and  (B),  (1) pose a  hazard  to the  property  of the  Borrower  or any of its
Subsidiaries  or any part thereof or to persons on or about such  property or to
any other  property  that may be affected by the  Release of such  materials  or
pollutants from such property or any part thereof or to persons on or about such
other  property  or (2) cause  such  property  or such other  property  to be in
violation of any  Environmental  Law; (iii)  asbestos,  urea  formaldehyde  foam
insulation,  toluene,  polychlorinated  biphenyls and any  electrical  equipment
which contains any oil or dielectric fluid containing levels of  polychlorinated
biphenyls in excess of fifty parts per million;  and (iv) any sound,  vibration,
heat,  radiation  or other form of energy and any other  chemical,  material  or
substance,  exposure  to  which  is  prohibited,  limited  or  regulated  by any
Governmental Authority.

     "Standby  Borrowing"  shall mean a  Borrowing  consisting  of  simultaneous
Standby Loans from each of the Lenders.

     "Standby  Borrowing  Request" shall mean a request made pursuant to Section
2.04 in the form of Exhibit A-5.
<PAGE>

     "Standby  Loans" shall mean the revolving  loans made by the Lenders to the
Borrower  pursuant to Section  2.04.  Each  Standby  Loan shall be a  Eurodollar
Standby  Loan or an ABR Loan.  All  Standby  Loans by a Lender of the same Type,
having the same  Interest  Period and made or Converted on the same day shall be
deemed  to be a  single  Standby  Loan  by  such  Lender  until  repaid  or next
Converted.

     "Subsidiary"  shall mean, with respect to any Person (herein referred to as
the "parent"),  any  corporation,  partnership,  association,  or other business
entity (a) of which securities or other ownership  interests  representing  more
than 50% of the  equity or more than 50% of the  ordinary  voting  power or more
than 50% of the general partnership interests are, at the time any determination
is being made, owned, controlled, or held by the parent, or (b) which is, at the
time any  determination  is made,  otherwise  Controlled by the parent or one or
more subsidiaries of the parent or by the parent and one or more subsidiaries of
the parent.  Unless  otherwise  indicated,  all  references in this Agreement to
"Subsidiaries" shall be construed as references to Subsidiaries of the Borrower.

     "Total  Commitment"  shall  mean at any time the  aggregate  amount  of the
Lenders' Commitments, as in effect at such time.

     "Transferee" shall mean any transferee or assignee of all or any portion of
a  Lender's  interests,   rights  and  obligations   hereunder,   including  any
participation holder.

     "Type",  when used in respect of any Loan or Borrowing,  shall refer to the
Rate by reference to which interest on such Loan or on the Loans comprising such
Borrowing is  determined.  For purposes  hereof,  "Rate" shall  include the LIBO
Rate, the Alternate  Base Rate and the rate of interest  applicable to any Fixed
Rate Loan.

     "Utilities  Assets" shall mean any assets of the Borrower or any Subsidiary
thereof (including,  without limitation,  stock in any such Subsidiary) that are
employed in the  generation or  production,  transmission  or  distribution  (as
applicable) of  electricity,  natural gas,  synthetic gas or water,  or that are
used to provide wastewater services.

     "Utilization  Period" shall mean any day or days during which the aggregate
amount of Loans outstanding  hereunder is equal to or greater than 331/3% of the
Total Commitment for such day or days.

     SECTION 1.02. Terms Generally.

     The  definitions  in Section 1.01 shall apply  equally to both the singular
and plural forms of the terms  defined.  Whenever  the context may require,  any
pronoun shall include the  corresponding  masculine,  feminine and neuter forms.
The words "include",  "includes" and "including"  shall be deemed to be followed
by the phrase "without limitation". All references herein to Articles, Sections,
Exhibits and Schedules  shall be deemed  references to Articles and Sections of,
and  Exhibits  and  Schedules  to,  this  Agreement,  unless the  context  shall
otherwise require.  Except as otherwise  expressly provided herein, all terms of
an accounting or financial nature shall be construed in accordance with GAAP, as
in  effect  from  time  to  time;  provided,  however,  that,  for  purposes  of
determining  compliance  with any  covenant  set forth in Article VI, such terms
shall be  construed  in  accordance  with  GAAP as in effect on the date of this
Agreement  applied on a basis  consistent with the application used in preparing
the Borrower's audited financial statements referred to in Section 3.02.
<PAGE>

                                   ARTICLE II

                                   THE CREDITS

     SECTION 2.01. Commitments.

     Subject to the terms and  conditions  and relying upon the  representations
and warranties herein set forth, each Lender agrees,  severally and not jointly,
to make Standby Loans to the Borrower,  at any time and from time to time on and
after the Effective Date and until the earlier to occur of the Maturity Date and
the  termination  of the  Commitment of such Lender,  in an aggregate  principal
amount at any time outstanding not to exceed such Lender's  Commitment minus the
amount by which the Competitive  Loans  outstanding at such time shall be deemed
to have used such Commitment  pursuant to Section 2.16, subject however,  to the
conditions  that  (a) at no  time  shall  (i)  the  sum of (x)  the  outstanding
aggregate principal amount of all Standby Loans made by all Lenders plus (y) the
outstanding  aggregate  principal  amount of all  Competitive  Loans made by all
Lenders exceed (ii) the Total  Commitment,  and (b) at all times the outstanding
aggregate  principal amount of all Standby Loans made by each Lender shall equal
the product of (i) the percentage  which its Commitment  represents of the Total
Commitment times (ii) the outstanding  aggregate principal amount of all Standby
Loans made  pursuant to Section  2.04.  Each  Lender's  Commitment  is set forth
opposite its respective name in Schedule 2.01. Such  Commitments may be modified
or reduced from time to time pursuant to Section 2.11 and Section 2.13(f).

     Within the foregoing  limits,  the Borrower may borrow,  pay, or prepay and
reborrow  hereunder,  on and after the Effective  Date and prior to the Maturity
Date, subject to the terms, conditions and limitations set forth herein.

     SECTION 2.02. Loans.

     (a) Each  Standby Loan shall be made as part of a Borrowing  consisting  of
Loans  made  by the  Lenders  ratably  in  accordance  with  their  Commitments;
provided, however, that the failure of any Lender to make any Standby Loan shall
not in itself  relieve any other Lender of its  obligation to lend hereunder (it
being understood,  however,  that no Lender shall be responsible for the failure
of any other Lender to make any Loan required to be made by such other  Lender).
Each  Competitive Loan shall be made in accordance with the procedures set forth
in Section 2.03. The Standby Loans or Competitive Loans comprising any Borrowing
shall be in an  aggregate  principal  amount  which is an  integral  multiple of
$1,000,000 and not less than  $10,000,000  (or, in the case of Standby Loans, an
aggregate  principal  amount  equal to the  remaining  balance of the  available
Commitments).
<PAGE>

     (b) Each  Competitive  Borrowing shall be comprised  entirely of Eurodollar
Competitive  Loans or Fixed Rate  Loans,  and each  Standby  Borrowing  shall be
comprised entirely of Eurodollar Standby Loans or ABR Loans, as the Borrower may
request pursuant to Section 2.03 or 2.04, as applicable.  Each Lender may at its
option make any  Eurodollar  Loan by causing any  domestic or foreign  branch or
Affiliate of such Lender to make such Loan;  provided  that any exercise of such
option  shall not affect the  obligation  of the  Borrower to repay such Loan in
accordance  with the terms of this  Agreement.  Borrowings of more than one Type
may be outstanding at the same time; provided,  however, that the Borrower shall
not be entitled to request any  Borrowing  which,  if made,  would  result in an
aggregate  of  more  than  ten  separate  Standby  Loans  of  any  Lender  being
outstanding  hereunder  at any one time.  For purposes of the  foregoing,  Loans
having different  Interest  Periods,  regardless of whether they commence on the
same date, shall be considered separate Loans.

     (c) Each  Lender  shall  make each Loan to be made by it  hereunder  on the
proposed date thereof by wire  transfer of  immediately  available  funds to the
Administrative  Agent in New York,  New York, not later than 1:00 P.M., New York
City time, and the Administrative  Agent shall by 3:00 P.M., New York City time,
credit the amounts so received to the general  deposit  account of the  Borrower
with the  Administrative  Agent or, if a Borrowing  shall not occur on such date
because any condition precedent herein specified shall not have been met, return
the amounts so received to the respective  Lenders.  Competitive  Loans shall be
made by the Lender or Lenders  whose  Competitive  Bids  therefor  are  accepted
pursuant to Section 2.03 in the amounts so accepted  and Standby  Loans shall be
made by the  Lenders  pro rata in  accordance  with  Section  2.16.  Unless  the
Administrative  Agent shall have received notice from a Lender prior to the date
of any Borrowing (or, in the case of an ABR Borrowing, prior to the time of such
ABR Borrowing)  that such Lender will not make  available to the  Administrative
Agent such Lender's  portion of such  Borrowing,  the  Administrative  Agent may
assume that such Lender has made such portion  available  to the  Administrative
Agent on the date of such  Borrowing in accordance  with this  paragraph (c) and
the Administrative  Agent may, in reliance upon such assumption,  make available
to the Borrower on such date a corresponding  amount.  If and to the extent that
such Lender  shall not have made such portion  available  to the  Administrative
Agent and the  Administrative  Agent has made  available  to the  Borrower  such
portion,  such  Lender  and  the  Borrower  severally  agree  to  repay  to  the
Administrative  Agent forthwith on demand such  corresponding  amount,  together
with interest  thereon for each day from the date such amount is made  available
to the Borrower until the date such amount is repaid to the Administrative Agent
at (i) in the case of the Borrower,  the interest rate applicable at the time to
the Loans  comprising  such  Borrowing and (ii) in the case of such Lender,  the
Federal Funds Effective  Rate. If such Lender shall repay to the  Administrative
Agent such corresponding amount, such amount shall constitute such Lender's Loan
as part of such Borrowing for purposes of this Agreement.

     (d)  Notwithstanding  any other provision of this  Agreement,  the Interest
Period  requested by the Borrower  with respect to any  Borrowing  shall not end
after the Maturity Date.
<PAGE>

     SECTION 2.03. Competitive Bid Procedure.

     (a) Subject to the terms and conditions set forth herein, from time to time
during the period from and  including  the  Effective  Date to but excluding the
earlier to occur of the Maturity Date and the  termination of the Commitments of
all Lenders,  the Borrower may request  Competitive  Bids and may, but shall not
have any obligation to, accept  Competitive Bids and borrow  Competitive  Loans;
provided,  that  at no time  shall  the  sum of (x)  the  outstanding  aggregate
principal  amount  of all  Standby  Loans  made  by all  Lenders  plus  (y)  the
outstanding  aggregate  principal  amount of all  Competitive  Loans made by all
Lenders exceed the Total Commitment.  In order to request  Competitive Bids, the
Borrower  shall hand  deliver or  telecopy  to the  Administrative  Agent a duly
completed  Competitive  Bid  Request in the form of Exhibit  A-1  hereto,  to be
received by the Administrative Agent (i) in the case of a Eurodollar Competitive
Borrowing,  not later than 10:00 A.M.,  New York City time,  four  Business Days
before a  proposed  Competitive  Borrowing  and (ii) in the case of a Fixed Rate
Borrowing,  not later than 10:00  A.M.,  New York City time,  one  Business  Day
before a proposed Competitive  Borrowing.  No ABR Loan shall be requested in, or
made pursuant to, a Competitive Bid Request. A Competitive Bid Request that does
not  conform  substantially  to the format of Exhibit A-1 may be rejected in the
Administrative  Agent's  sole  discretion,  and the  Administrative  Agent shall
promptly notify the Borrower of such rejection by telecopier. Such request shall
in each case refer to this  Agreement and specify (x) whether the Borrowing then
being requested is to be a Eurodollar  Borrowing or a Fixed Rate Borrowing,  (y)
the date of such  Borrowing  (which shall be a Business  Day) and the  aggregate
principal  amount  thereof  which  shall be in a  minimum  principal  amount  of
$10,000,000  and in an integral  multiple of  $1,000,000,  and (z) the  Interest
Period(s)  with respect  thereto  (which may not end after the  Maturity  Date).
Promptly after its receipt of a Competitive  Bid Request that is not rejected as
aforesaid,  the Administrative Agent shall invite by telecopier (in the form set
forth in Exhibit A-2 hereto) the Lenders to bid, on the terms and  conditions of
this  Agreement,  to make  Competitive  Loans  pursuant to the  Competitive  Bid
Request.

     (b) Each Lender may, in its sole  discretion,  make one or more Competitive
Bids to the Borrower  responsive to a Competitive Bid Request.  Each Competitive
Bid by a Lender must be received by the Administrative Agent via telecopier,  in
the form of Exhibit  A-3  hereto,  (i) in the case of a  Eurodollar  Competitive
Borrowing,  not later than 9:30 A.M.,  New York City time,  three  Business Days
before a  proposed  Competitive  Borrowing  and (ii) in the case of a Fixed Rate
Borrowing,  not  later  than 9:30  A.M.,  New York  City  time,  on the day of a
proposed  Competitive   Borrowing.   Multiple  bids  will  be  accepted  by  the
Administrative Agent.  Competitive Bids that do not conform substantially to the
format  of  Exhibit  A-3  may be  rejected  by the  Administrative  Agent  after
conferring   with,  and  upon  the  instruction   of,  the  Borrower,   and  the
Administrative  Agent shall notify the Lender making such  nonconforming  bid of
such rejection as soon as practicable.  Each Competitive Bid shall refer to this
Agreement and specify (x) the range of principal amounts (each of which shall be
in a minimum  principal  amount of  $5,000,000  and in an  integral  multiple of
$1,000,000  and,  in the case of the larger  such  amount,  may equal the entire
principal amount of the Competitive  Borrowing requested by the Borrower) of the
Competitive  Loan or Loans that the  Lender is willing to make to the  Borrower,
(y) the  Competitive  Bid Rate or Rates at which the Lender is  prepared to make
the  Competitive  Loan or Loans  and (z) the  Interest  Period  and the last day
thereof.  If any Lender shall elect not to make a  Competitive  Bid, such Lender
shall so  notify  the  Administrative  Agent via  telecopier  (A) in the case of
Eurodollar  Competitive  Loans,  not later than 9:30  A.M.,  New York City time,
three Business Days before a proposed Competitive Borrowing, and (B) in the case
of Fixed Rate Loans, not later than 9:30 A.M., New York City time, on the day of
a proposed Competitive  Borrowing;  provided,  however,  that the failure by any
Lender to give such notice  shall not cause such Lender to be  obligated to make
any Competitive  Loan as part of such Competitive  Borrowing.  A Competitive Bid
submitted by a Lender  pursuant to this paragraph (b) shall be  irrevocable.  If
the Administrative Agent shall not have received from any Lender notification of
its election to make a  Competitive  Bid on or before the times set forth in the
second sentence of this  paragraph,  such Lender shall be deemed to have elected
not to make a Competitive Bid.
<PAGE>

     (c) The  Administrative  Agent shall  promptly  notify (but in any event no
later than 10:00 A.M.,  New York City time,  on the day any  Competitive  Bid is
received by the  Administrative  Agent) the  Borrower by  telecopier  of all the
Competitive  Bids made, the  Competitive  Bid Rate and the principal  amount (or
range thereof) of each  Competitive  Loan in respect of which a Competitive  Bid
was made and the identity of the Lender that made each bid.  The  Administrative
Agent shall send a copy of all Competitive  Bids to the Borrower for its records
as soon as practicable after completion of the bidding process set forth in this
Section 2.03.

     (d) The Borrower may in its sole and absolute  discretion,  subject only to
the  provisions  of this  paragraph  (d),  accept or reject  all or any  portion
(within the range of principal amounts specified therein) of any Competitive Bid
referred to in paragraph (c) above. The Borrower shall notify the Administrative
Agent by telephone,  confirmed by  telecopier  in the form of a Competitive  Bid
Accept/Reject  Letter,  whether  and to what  extent it has decided to accept or
reject any of or all the bids  referred to in  paragraph  (c) above,  (x) in the
case of a Eurodollar Competitive Borrowing,  not later than 11:00 A.M., New York
City time, three Business Days before a proposed  Competitive  Borrowing and (y)
in the case of a Fixed Rate Borrowing,  not later than 11:00 A.M., New York City
time, on the day of a proposed Competitive  Borrowing;  provided,  however, that
(i) the  failure by the  Borrower  to give such  notice  shall be deemed to be a
rejection of all the bids referred to in paragraph (c) above,  (ii) the Borrower
shall not accept a bid made at a particular Competitive Bid Rate if the Borrower
has  decided  to reject a bid made at a lower  Competitive  Bid Rate,  (iii) the
aggregate  amount of the  Competitive  Bids  accepted by the Borrower  shall not
exceed the principal  amount  specified in the Competitive Bid Request,  (iv) if
the Borrower  shall accept a bid or bids made at the same  Competitive  Bid Rate
but the  amount of such bid or bids shall  cause the total  amount of bids to be
accepted by the Borrower to exceed the amount  specified in the  Competitive Bid
Request,  then the  Borrower  shall  accept a portion  of such bid or bids in an
amount no greater than the amount  specified in the Competitive Bid Request less
the  amount  of all  other  Competitive  Bids at a lower  Competitive  Bid  Rate
accepted with respect to such Competitive Bid Request, which acceptance,  in the
case of multiple bids at such  Competitive  Bid Rate,  shall be made pro rata in
accordance with the lowest amount of each such bid at such Competitive Bid Rate,
and (v) except  pursuant to clause (iv)  above,  no bid shall be accepted  for a
Competitive Loan unless such  Competitive Loan is in a minimum  principal amount
of $5,000,000 and an integral multiple of $1,000,000; provided further, however,
that if a Competitive Loan must be in an amount less than $5,000,000  because of
the provisions of clause (iv) above,  such Competitive Loan may be for a minimum
of $1,000,000 or any integral multiple thereof,  and in calculating the pro rata
allocation  of  acceptances  of  portions  of  multiple  bids  at  a  particular
Competitive  Bid Rate  pursuant to clause  (iv) the amounts  shall be rounded to
integral multiples of $1,000,000 in a manner which shall be in the discretion of
the  Borrower.  A notice given by the Borrower  pursuant to this  paragraph  (d)
shall be irrevocable.
<PAGE>

     (e) The  Administrative  Agent shall  promptly  notify each bidding  Lender
whether or not its  Competitive Bid has been accepted (and if so, in what amount
and at what  Competitive  Bid  Rate) by  telecopier  sent by the  Administrative
Agent, and each successful  bidder will thereupon  become bound,  subject to the
other applicable  conditions  hereof, to make the Competitive Loan in respect of
which its bid has been accepted.

     (f) If the Administrative  Agent shall elect to submit a Competitive Bid in
its capacity as a Lender,  it shall submit such bid directly to the Borrower not
later than 9:15 A.M.,  New York City time, on the day on which the other Lenders
are  required  to submit  their bids to the  Administrative  Agent  pursuant  to
paragraph (b) above.

     (g) All notices  required by this Section 2.03 shall be given in accordance
with Section 9.01.

     SECTION 2.04. Standby Borrowing Procedure.

     In order to request a Standby  Borrowing  (other  than a  Conversion),  the
Borrower shall hand deliver or telecopy to the Administrative  Agent a notice in
the form of Exhibit A-5 (a) in the case of a Eurodollar Standby  Borrowing,  not
later than 11:00 A.M., New York City time, three Business Days before a proposed
Borrowing,  and (b) in the case of an ABR Borrowing,  not later than 11:00 A.M.,
New York City time, on the day of a proposed Borrowing. No Fixed Rate Loan shall
be requested or made pursuant to a Standby Borrowing Request.  Such notice shall
be irrevocable  (unless otherwise  expressly  provided herein) and shall in each
case  specify  (i)  whether  the  Borrowing  then  being  requested  is  to be a
Eurodollar Standby Borrowing or an ABR Borrowing;  (ii) the date of such Standby
Borrowing  (which shall be a Business Day) and the amount thereof;  and (iii) if
such Borrowing is to be a Eurodollar Standby Borrowing, the Interest Period with
respect thereto. If no election as to the Type of Standby Borrowing is specified
in any  such  notice,  then  the  requested  Standby  Borrowing  shall be an ABR
Borrowing.  If no  Interest  Period  with  respect  to  any  Eurodollar  Standby
Borrowing is specified in any such notice,  then the Borrower shall be deemed to
have selected an Interest  Period of one month's  duration.  The  Administrative
Agent shall  promptly  advise (but in any event no later than 12:00 noon on such
date) the Lenders of any notice given  pursuant to this Section 2.04 and of each
Lender's portion of the requested Borrowing.
<PAGE>

     SECTION 2.05. Conversions.

     The  Borrower  may from time to time  Convert any Standby  Loan (or portion
thereof) of any Type and with any Interest Period (if applicable) to one or more
Standby  Loans of the same or any other  Type and with any  Interest  Period (if
applicable)  by delivering  (by hand delivery or  telecopier) a request for such
Conversion in the form of Exhibit A-6 to the Administrative  Agent no later than
(i) 11:00 A.M.,  New York City time, on the third Business Day prior to the date
of any proposed  Conversion into a Eurodollar  Standby Loan and (ii) 11:00 A.M.,
New York City time, on the day of any proposed  Conversion into an ABR Loan. The
Administrative  Agent shall give each Lender  prompt  notice of each  Conversion
Request.   Each  Conversion  Request  shall  be  irrevocable  (unless  otherwise
expressly  provided  herein) and binding on the Borrower  and shall  specify the
requested (A) date of such Conversion, (B) Type of, and Interest Period, if any,
applicable to, the Standby Loans (or portions thereof) proposed to be Converted,
(C) Type of Standby Loans to which such Standby Loans (or portions  thereof) are
proposed to be Converted,  (D) initial Interest Period, if any, to be applicable
to the Standby Loans resulting from such Conversion and (E) aggregate  amount of
Standby  Loans (or portions  thereof)  proposed to be  Converted.  No Eurodollar
Standby Loans may be Converted on a date other than the last day of the Interest
Period applicable  thereto,  unless the Borrower reimburses each Lender pursuant
to Section 2.15 for all losses or expenses incurred by such Lender in connection
with such  Conversion.  If the Borrower  shall fail to give a timely  Conversion
Request  pursuant  to this  subsection  in respect of any  Standby  Loans,  such
Standby  Loans  shall,  on the  last day of the then  existing  Interest  Period
therefor,  automatically  Convert  into,  or remain  as, as the case may be, ABR
Loans,  unless such Standby Loans are repaid at the end of such Interest Period.
If the  Borrower  shall fail,  in any  Conversion  Request  that has been timely
given,  to select the  duration of any Interest  Period for Standby  Loans to be
Converted into Eurodollar  Standby Loans,  such Standby Loans shall, on the last
day of the then existing  Interest Period therefor,  automatically  Convert into
Eurodollar Standby Loans with an Interest Period of one month's duration. If, on
the date of any proposed  Conversion,  the Borrower shall have failed to fulfill
any  condition set forth in Section  4.01,  all Standby  Loans then  outstanding
shall, on such date,  automatically  Convert into, or remain as, as the case may
be, ABR Loans.

     SECTION 2.06. Fees.

     (a) The Borrower agrees to pay to each Lender,  through the  Administrative
Agent,  on each March 31, June 30,  September 30 and December 31, on the date on
which the  Commitment of such Lender shall be terminated as provided  herein and
on the Maturity  Date,  a facility  fee (a  "Facility  Fee") at a rate per annum
equal to the  Applicable  Rate from time to time in effect on (i) the  amount of
the  Commitment  of such Lender,  whether used or unused,  during the  preceding
quarter  (or  shorter  period  commencing  on the date  hereof and ending on the
Maturity Date or any other date on which the  Commitment of such Lender shall be
terminated)  and (ii) in the event that the  Commitments  have  terminated,  the
aggregate amount of the Standby Loans owed by the Borrower to such Lender during
the  preceding  quarter  (or  shorter  period  ending on the date on which  such
Standby  Loans are paid in full).  All  Facility  Fees shall be  computed on the
basis of the actual  number of days elapsed in a year of 365 or 366 days, as the
case may be. The Facility Fee due to each Lender shall commence to accrue on the
date hereof and shall cease to accrue on the later of the Maturity  Date and the
date of payment in full of the Loans,  accrued  interest  thereon  and all other
amounts payable hereunder.
<PAGE>

     (b) The  Borrower  agrees  to pay  the  Administrative  Agent,  for its own
account,  the fees (the  "Administrative  Fees") at the times and in the amounts
agreed  upon  between  them.

     (c) All Fees  shall be paid on the  dates  due,  in  immediately  available
funds,  to the  Administrative  Agent for  distribution,  if and as appropriate,
among the Lenders.  Once paid,  none of the Fees shall be  refundable  under any
circumstances.

     SECTION 2.07. Repayment of Loans.

     (a) The outstanding principal balance of each Loan shall be payable, in the
case of each  Competitive  Loan,  on the earlier to occur of the last day of the
Interest Period  applicable to such Loan and the Maturity Date, and, in the case
of each Standby  Loan,  on the Maturity  Date.  Each  Competitive  Loan and each
Standby  Loan  shall bear  interest  from the date  thereof  on the  outstanding
principal  balance thereof as set forth in Section 2.08. Each Lender shall,  and
is hereby authorized by the Borrower to record in such Lender's internal records
an appropriate  notation evidencing the date and amount of each Competitive Loan
or Standby Loan, as  applicable,  of such Lender,  each payment or prepayment of
principal of any Competitive Loan or Standby Loan, as applicable, and such other
relevant information as such Lender records in its internal records with respect
to loans of a type similar to such Loans; provided, however, that the failure of
any Lender to make such a notation or any error  therein shall not in any manner
affect the obligation of the Borrower to repay the Competitive  Loans or Standby
Loans, as applicable, made by such Lender in accordance with the terms hereof.

     (b) Any Lender may request that any Loans made by it be evidenced by one or
more promissory notes. Promptly upon receipt of such request, the Borrower shall
prepare, execute and deliver to such Lender one or more promissory notes payable
to the order of such Lender (or, if requested by such Lender, to such Lender and
its assignees)  substantially in the form of Exhibit D-1 or D-2, as appropriate.
Thereafter,  the Loans evidenced by such promissory  notes and interest  thereon
shall at all times  (including  after  assignment  pursuant to Section  9.04) be
represented by one or more promissory notes in such form payable to the order of
the payee named therein.

     SECTION 2.08. Interest on Loans.

     (a) Subject to the  provisions of Section 2.09, the Loans  comprising  each
Eurodollar  Borrowing  shall bear interest  (computed on the basis of the actual
number of days elapsed over a year of 360 days) at a rate per annum equal to (i)
in the case of each  Eurodollar  Standby  Loan,  the LIBO Rate for the  Interest
Period in effect for such Borrowing  plus the  Applicable  Rate, and (ii) in the
case of each Eurodollar  Competitive Loan, the LIBO Rate for the Interest Period
in effect for such  Borrowing  plus the Margin offered by the Lender making such
Loan and accepted by the  Borrower  pursuant to Section  2.03.  Interest on each
Eurodollar  Borrowing shall be payable on each applicable Interest Payment Date.
The LIBO Rate for each Interest Period shall be determined by the Administrative
Agent,  and such  determination  shall be conclusive  absent manifest error. The
Administrative  Agent shall promptly (but in any event no later than 10:30 A.M.,
New York City time, two Business Days prior to the commencement of such Interest
Period)  (A)  advise the  Borrower  and each  Lender,  as  appropriate,  of such
determination  and (B) upon the request of the  Borrower,  provide the  Borrower
with the calculations and relevant factors supporting such determination.
<PAGE>

     (b) Subject to the  provisions of Section 2.09, the Loans  comprising  each
ABR Borrowing shall bear interest (computed on the basis of the actual number of
days elapsed over a year of 365 or 366 days, as the case may be, when determined
with reference to the Prime Rate and over a year of 360 days in all other cases)
at a rate per annum equal to the Alternate Base Rate plus the  Applicable  Rate.
Interest  on each ABR  Borrowing  shall be payable on each  applicable  Interest
Payment Date. The Alternate Base Rate shall be determined by the  Administrative
Agent,  and such  determination  shall be conclusive  absent manifest error. The
Administrative  Agent shall promptly (but in any event no later than 11:30 A.M.,
New York City time,  on the day of each ABR  Borrowing)  (A) advise the Borrower
and each Lender of such  determination and (B) upon the request of the Borrower,
provide the Borrower with the calculations and relevant factors  supporting such
determination.

     (c) Subject to the  provisions of Section 2.09,  each Fixed Rate Loan shall
bear interest at a rate per annum (computed on the basis of the actual number of
days  elapsed  over a year of 360  days)  equal to the  fixed  rate of  interest
offered by the Lender making such Loan and accepted by the Borrower  pursuant to
Section 2.03.  Interest on each Fixed Rate Loan shall be payable on the Interest
Payment  Dates  applicable  to such Loan  except as  otherwise  provided in this
Agreement.

     SECTION 2.09. Default Interest.

     If the  Borrower  shall  default  in the  payment  of the  principal  of or
interest on any Loan or any other  amount  becoming  due  hereunder,  whether by
scheduled  maturity,  notice of  prepayment,  acceleration,  or  otherwise,  the
Borrower  shall on demand  from time to time from the  Administrative  Agent pay
interest,  to the extent  permitted by law, on such defaulted  amount up to (but
not including) the date of actual payment (after as well as before  judgment) at
a rate per annum  (computed  on the basis of the actual  number of days  elapsed
over a year of 360 days) equal to the Alternate Base Rate plus 2%.

     SECTION 2.10. Alternate Rate of Interest.

     In the event, and on each occasion, that on the day two Business Days prior
to the  commencement  of any  Interest  Period for a  Eurodollar  Borrowing  the
Administrative Agent shall have determined that dollar deposits in the principal
amounts of the  Eurodollar  Loans  comprising  such  Borrowing are not generally
available in the London interbank market, or that the rates at which such dollar
deposits are being offered will not  adequately  and fairly  reflect the cost to
any Lender of making or  maintaining  its  Eurodollar  Loan during such Interest
Period,  or that reasonable  means do not exist for  ascertaining the LIBO Rate,
the Administrative Agent shall, as soon as practicable thereafter,  give written
notice of such  determination  to the Borrower and the Lenders.  In the event of
any such  determination,  until the Administrative  Agent shall have advised the
Borrower  and the Lenders that the  circumstances  giving rise to such notice no
longer exist, (i) any such request by the Borrower for a Eurodollar  Competitive
Borrowing  pursuant to Section 2.03 shall be of no force and effect and shall be
denied by the Administrative  Agent, (ii) any such request by the Borrower for a
Eurodollar  Standby  Borrowing  pursuant to Section 2.04 shall be deemed to be a
request for an ABR  Borrowing  (unless the  Borrower  shall have  withdrawn  its
request for such  Eurodollar  Standby  Borrowing not later than 10:00 A.M.,  New
York City time, on the day of the proposed  Borrowing)  and (iii) any request by
the Borrower for a Conversion  to Eurodollar  Standby Loans  pursuant to Section
2.05 shall be deemed to be a request for a Conversion  to ABR Loans  (unless the
Borrower  shall have  withdrawn its request for such  Conversion  not later than
10:00 A.M.,  New York City time,  on the day of the proposed  Conversion).  Each
determination by the  Administrative  Agent hereunder shall be conclusive absent
manifest error.
<PAGE>

     SECTION 2.11. Changes in Commitments.

     (a) Upon at least three Business Days' prior irrevocable  written notice to
the  Administrative  Agent,  the Borrower  may at any time in whole  permanently
terminate,  or  from  time  to  time  in  part  permanently  reduce,  the  Total
Commitment;  provided,  however,  that (i) each  partial  reduction of the Total
Commitment  shall be in an  integral  multiple  of  $1,000,000  and in a minimum
principal  amount of $10,000,000 and (ii) no such termination or reduction shall
be made which would,  after giving  effect to any  concurrent  prepayment of the
Loans in accordance with Section 2.12,  reduce the Total Commitment to an amount
less  than  the sum of the  aggregate  principal  amount  of all  Standby  Loans
outstanding  plus  the  aggregate  principal  amount  of all  Competitive  Loans
outstanding.

     (b) Each reduction in the Total Commitment  hereunder shall be made ratably
among the Lenders in accordance with their respective Commitments.  The Borrower
shall pay to the  Administrative  Agent for the account of the  Lenders,  on the
date of each  termination  or reduction,  the Facility Fees on the amount of the
Commitments  so  terminated  or  reduced   accrued  through  the  date  of  such
termination or reduction. Subject to Section 2.06(a)(ii), no additional Facility
Fees on the amount of the Commitments so terminated or reduced will accrue.

     (c) Unless earlier terminated pursuant to the terms of this Agreement,  the
Commitment of each Lender shall  automatically and permanently  terminate on the
Maturity Date.
<PAGE>

     (d) Provided that no Default or Event of Default shall have occurred and be
continuing,  the  Borrower  shall have the  right,  without  the  consent of the
Lenders  but subject to the terms of an  amendment  hereto  entered  into by the
Borrower  and the  Administrative  Agent,  to  effectuate  from  time to time an
increase in the Total  Commitment by (x) the accession to this  Agreement of one
or more financial  institutions as a Lender or as Lenders or (y) allowing one or
more Lenders to increase its Commitment  hereunder (any such event  described in
clause (x) or (y) being a "Commitment Increase"; provided that (i) the aggregate
amount of Commitment Increases  effectuated pursuant to this paragraph shall not
exceed  $75,000,000,  (ii) no Lender's Commitment shall be increased without the
consent  of such  Lender,  (iii) on the  effective  date of any such  Commitment
Increase,  there  are no  outstanding  Eurodollar  Standby  Loans,  and  (iv) no
Commitment  Increase  may occur  pursuant  to this  paragraph  on any date after
January 31, 2002.  Each party hereto  hereby  consents to the  amendment of this
Agreement to reflect any such Commitment  Increase.  The Borrower shall give the
Administrative  Agent three  Business  Days' (or such shorter  period of time as
shall be  acceptable  to the  Administrative  Agent)  notice  of the  Borrower's
intention  to increase the Total  Commitment  pursuant to this  paragraph.  Such
notice shall specify each new financial  institution to accede to this Agreement
as a Lender or the name of the Lender that has agreed to increase its Commitment
hereunder,  as the  case  may be,  and the  amount  of the  proposed  additional
Commitment or the amount of the proposed increase in an existing Commitment,  as
the case may be. The  Borrower  shall also provide to the  Administrative  Agent
satisfactory  evidence that all necessary  Governmental  Approvals and corporate
authorizations  have been obtained by the Borrower in  connection  with proposed
Commitment  Increase,  together  with such other  information  as is  reasonably
requested by the Administrative  Agent. Each financial  institution  agreeing to
accede to this Agreement as a Lender,  and each Lender  agreeing to increase its
Commitment  (each  such  financial  institution  or  Lender  being an  "Acceding
Lender"), shall execute and deliver to the Administrative Agent and the Borrower
documentation in form and substance satisfactory to the Administrative Agent and
the  Borrower  pursuant  to which it  becomes a party  hereto or  increases  its
Commitment,  as the case may be, shall  deliver to the  Administrative  Agent an
Administrative  Questionnaire,  and shall purchase from the existing Lenders its
proportionate share (based on the amount of its Commitment and the amount of the
Total Commitment after giving effect to the Commitment  Increase) of any Standby
Loans outstanding on the date such Commitment  Increase becomes effective.  Upon
(x) the  execution and delivery of such  documentation  and an amendment to this
Agreement  that  reflects  any such  increase in the Total  Commitment  and such
additional or changed  Commitments  and (y) the provision to the  Administrative
Agent by the Acceding  Lender of funds in an amount  necessary to purchase  from
the  existing  Lenders  its  proportionate  share  (based  on the  amount of its
Commitment  and the amount of the Total  Commitment  after giving  effect to the
Commitment  Increase)  of  any  Standby  Loans  outstanding  on  the  date  such
Commitment Increase becomes effective,  (i) the Commitment Increase shall become
effective,  (ii) the financial  institution agreeing to accede to this Agreement
as a Lender shall  constitute a Lender under this Agreement with a Commitment as
specified  therein,  or, in the case of an existing  Lender agreeing to increase
its Commitment,  such Lender's  Commitment shall increase as specified  therein,
and (iii) the Acceding Lender shall acquire its proportionate  share (determined
as aforesaid) of any outstanding  Standby Loans and the rights relating  thereto
as provided by the Agreement.

     (e) Any changes in the  Commitments  pursuant to this Section 2.11 shall be
appropriately recorded by the Administrative Agent in the Register in accordance
with Section 9.04(d).  In addition,  all notices with respect to any such change
shall be maintained by the Administrative Agent with the Register.

     SECTION 2.12. Prepayment.

     (a) The Borrower  shall have the right at any time and from time to time to
prepay any Standby Borrowing or Eurodollar Competitive Borrowing, in whole or in
part,  upon giving written  notice (or telephone  notice  promptly  confirmed by
written  notice) to the  Administrative  Agent:  (i) before 11:00 A.M., New York
City time,  three Business Days prior to  prepayment,  in the case of Eurodollar
Loans, and (ii) before 11:00 A.M., New York City time, on the day of prepayment,
in the case of ABR Loans; provided,  however, that each partial prepayment shall
be in an amount which is an integral  multiple of  $1,000,000  and not less than
$5,000,000.  The  Borrower  shall not have the right to  prepay  any Fixed  Rate
Competitive Borrowing without the consent of the applicable Lender.
<PAGE>

     (b) Each notice of  prepayment  shall specify the  prepayment  date and the
principal amount of each Borrowing (or portion thereof) to be prepaid,  shall be
irrevocable  and shall commit the Borrower to prepay such  Borrowing (or portion
thereof)  by  the  amount  stated  therein  on  the  date  stated  therein.  All
prepayments  under this  Section  2.12  shall be  subject  to  Section  2.15 but
otherwise  without premium or penalty.  All prepayments  under this Section 2.12
shall be accompanied by accrued  interest on the principal  amount being prepaid
to the date of payment.

     SECTION 2.13. Reserve Requirements; Change in Circumstances.

     (a) It is understood  that the cost to each Lender of making or maintaining
any of the Eurodollar  Loans may fluctuate as a result of the  applicability  of
reserve  requirements  imposed  by the  Board  at  the  ratios  provided  for in
Regulation  D on the date  hereof.  The  Borrower  agrees  to pay to each of the
Lenders from time to time such amounts as shall be necessary to compensate  such
Lender for the  portion of the cost of making or  maintaining  Eurodollar  Loans
(other  than  Eurodollar  Competitive  Loans)  resulting  from any such  reserve
requirements  provided for in  Regulation D as in effect on the date hereof,  it
being understood that the rates of interest  applicable to Eurodollar Loans have
been  determined on the assumption  that no such reserve  requirements  exist or
will exist and that such rates do not  reflect  costs  imposed on the Lenders in
connection with such reserve requirements.

     (b)  Notwithstanding  any other provision herein, if after the date of this
Agreement  any  change  in  applicable  law or  regulation  (including,  without
limitation,  Regulation D) or in the interpretation or administration thereof by
any Governmental  Authority  charged with the  interpretation  or administration
thereof  (whether  or not  having  the force of law)  shall  change the basis of
taxation  of  payments  to any Lender of the  principal  of or  interest  on any
Eurodollar  Loan or Fixed  Rate  Loan  made by such  Lender or any Fees or other
amounts payable hereunder (other than changes in respect of taxes imposed on the
overall  net income of such  Lender  and  franchise  taxes  imposed on it by the
jurisdiction  in which such Lender has its principal  office or by any political
subdivision  or taxing  authority  therein),  or shall impose,  modify,  or deem
applicable any reserve,  special deposit,  or similar requirement against assets
of,  deposits with or for the account of or credit  extended by such Lender,  or
shall impose on such Lender or the London  interbank  market any other condition
affecting this Agreement or any Eurodollar  Loan or Fixed Rate Loan made by such
Lender,  and the result of any of the foregoing shall be to increase the cost to
such Lender of making or maintaining  any Eurodollar  Loan or Fixed Rate Loan or
to reduce the amount of any sum received or receivable by such Lender  hereunder
(whether of  principal,  interest,  or  otherwise)  by an amount  deemed by such
Lender to be material,  then, to the extent not otherwise being reimbursed under
Section  2.19  hereof,  the  Borrower  will pay to such  Lender upon demand such
additional  amount or amounts as will compensate such Lender for such additional
costs incurred or reduction suffered.  Notwithstanding the foregoing,  no Lender
shall be entitled to request  compensation  under this paragraph with respect to
any Competitive  Loan if it shall have had actual knowledge of the change giving
rise to such request at the time of submission of the  Competitive  Bid pursuant
to which such Competitive Loan shall have been made.
<PAGE>

     (c) If any Lender shall have  determined  that the adoption  after the date
hereof of any law, rule, regulation, or guideline regarding capital adequacy, or
any change in any existing law, rule, regulation, or guideline regarding capital
adequacy or in the  interpretation  or administration of any of the foregoing by
any governmental authority,  central bank, or comparable agency charged with the
interpretation  or administration  thereof,  or compliance by any Lender (or any
lending office of such Lender) or any Lender's  holding company with any request
or directive regarding capital adequacy (whether or not having the force of law)
of any such authority, central bank, or comparable agency, has or would have the
effect of reducing the rate of return on such Lender's capital or on the capital
of such Lender's holding company,  if any, as a consequence of this Agreement or
the Loans made by such Lender  pursuant  hereto to a level below that which such
Lender  or such  Lender's  holding  company  could  have  achieved  but for such
adoption,  change,  or  compliance  (taking  into  consideration  such  Lender's
policies  and the  policies of such  Lender's  holding  company  with respect to
capital  adequacy) by an amount deemed by such Lender to be material,  then from
time to time the  Borrower  shall pay to such Lender such  additional  amount or
amounts as will compensate such Lender or such Lender's  holding company for any
such reduction suffered.

     (d) A certificate of a Lender setting forth such amount or amounts as shall
be necessary to  compensate  such Lender as specified in paragraph  (a), (b), or
(c)  above,  as the  case  may  be,  and  all of the  relevant  factors  and the
calculations  supporting  such  amount or  amounts,  shall be  delivered  to the
Borrower and shall be conclusive  absent manifest error.  The Borrower shall pay
each  Lender the amount  shown as due on any such  certificate  delivered  by it
within 10 days after the receipt of the same.

     (e) Notwithstanding the provisions of subsections (a), (b) or (c) above, to
the  contrary,  no  Lender  shall be  entitled  to demand  compensation  for any
increased  costs or reduction in amounts  received or receivable or reduction in
return on capital to the extent that such compensation  relates to any period of
time prior to the date upon which such Lender first notified the Borrower of the
occurrence of the event entitling such Lender to such compensation  (unless, and
to the  extent,  that any such  compensation  so  demanded  shall  relate to the
retroactive application of any event so notified to the Borrower required by any
governmental authority, central bank or comparable agency).

     (f) If any Lender shall have delivered a notice or certificate  pursuant to
paragraph (d) above, the Borrower shall have the right, at its own expense, upon
notice to such Lender and the  Administrative  Agent,  to require such Lender to
(i) terminate its  Commitment or (ii) transfer and assign  without  recourse (in
accordance with and subject to the  restrictions  contained in Section 9.04) all
or a portion of its interest,  rights and  obligations  under this  Agreement to
another financial institution which shall assume such obligations; provided that
(A) no such  termination  or assignment  shall  conflict with any law,  rule, or
regulation  or order of any  Governmental  Authority and (B) the Borrower or the
assignee,  as the case may be, shall pay to the affected  Lender in  immediately
available  funds on the date of such  termination or assignment the principal of
and  interest  accrued to the date of payment on the Loans made by it  hereunder
and all other  amounts  accrued for its account or owed to it  hereunder  (other
than any amounts owed to such Lender  pursuant to Section  2.15(c) in connection
with such principal payment).
<PAGE>

     SECTION 2.14. Change in Legality.

     (a) Notwithstanding any other provision herein, if any change in any law or
regulation  or in  the  interpretation  thereof  by any  governmental  authority
charged with the administration or interpretation thereof shall make it unlawful
for any Lender to make or maintain any Eurodollar  Loan or to give effect to its
obligations as contemplated hereby with respect to any Eurodollar Loan, then, by
written notice to the Borrower and to the Administrative Agent, such Lender may:

          (i) declare that Eurodollar  Loans will not thereafter be made by such
     Lender hereunder,  whereupon such Lender shall not submit a Competitive Bid
     in response to a request for Eurodollar  Competitive  Loans and any request
     by the Borrower for a Eurodollar Standby Borrowing shall, as to such Lender
     only,  be deemed a  request  for an ABR Loan (or for a  Conversion  thereto
     pursuant to Section  2.05) unless such  declaration  shall be  subsequently
     withdrawn; and

          (ii)  require  that all  outstanding  Eurodollar  Loans  made by it be
     Converted to ABR Loans, in which event all such  Eurodollar  Loans shall be
     automatically  Converted  to ABR  Loans  as of the  effective  date of such
     notice as provided in paragraph (b) below.

     In the event any Lender shall  exercise its rights under (i) or (ii) above,
all  payments  and  prepayments  of principal  which would  otherwise  have been
applied to repay the  Eurodollar  Loans that would have been made by such Lender
or the  Converted  Eurodollar  Loans of such Lender shall  instead be applied to
repay  the ABR Loans  made by such  Lender  in lieu of,  or  resulting  from the
Conversion of, such Eurodollar Loans.

     (b) For  purposes of this  Section  2.14,  a notice to the  Borrower by any
Lender shall be effective as to each Eurodollar Loan, if lawful, on the last day
of the Interest  Period  currently  applicable to such  Eurodollar  Loan; in all
other  cases  such  notice  shall be  effective  on the date of  receipt  by the
Borrower.

     SECTION 2.15. Indemnity.

     The Borrower shall  indemnify each Lender against any loss or expense which
such  Lender may  sustain or incur as a  consequence  of (a) any  failure by the
Borrower  to  fulfill  on the date of any  Borrowing  hereunder  the  applicable
conditions set forth in Article IV, (b) any failure by the Borrower to borrow or
to Convert any Loan  hereunder  after  irrevocable  notice of such  Borrowing or
Conversion  has been given  pursuant  to  Section  2.03,  2.04 or 2.05,  (c) any
payment,  prepayment or  Conversion  of a Eurodollar  Loan required by any other
provision of this  Agreement  or  otherwise  made or deemed made on a date other
than the last day of the Interest Period applicable thereto,  (d) any default in
payment or prepayment of the principal amount of any Loan or any part thereof or
interest accrued thereon,  as and when due and payable (at the due date thereof,
whether by scheduled maturity, acceleration, irrevocable notice of prepayment or
otherwise),  or (e) the occurrence of any Event of Default,  including,  in each
such  case,  any loss or  reasonable  expense  sustained  or  incurred  or to be
sustained or incurred in  liquidating  or employing  deposits from third parties
acquired to effect or  maintain  such Loan or any part  thereof as a  Eurodollar
Loan.  Such loss or  reasonable  expense  shall  include an amount  equal to the
excess,  if any, as reasonably  demonstrated by such Lender,  of (i) its cost of
obtaining the funds for the Loan being paid, prepaid, Converted, or not borrowed
(assumed  to be the LIBO Rate or, in the case of a Fixed  Rate  Loan,  the fixed
rate of  interest  applicable  thereto)  for the  period  from  the date of such
payment, prepayment, or failure to borrow to the last day of the Interest Period
for such Loan (or, in the case of a failure to borrow,  the Interest  Period for
such Loan which would have  commenced on the date of such failure) over (ii) the
amount of interest  (as  reasonably  demonstrated  by such Lender) that would be
realized  by such  Lender  in  redeploying  the funds so paid,  prepaid,  or not
borrowed for such period or Interest  Period,  as the case may be. A certificate
of any Lender setting forth the factors and  calculations  supporting any amount
or amounts  which such Lender is entitled  to receive  pursuant to this  Section
shall  be  delivered  to the  Borrower  no  later  than  30 days  following  the
incurrence   of  any  loss  or  expense   for  which  such   Lender  is  seeking
indemnification  under this Section 2.15 and shall be conclusive absent manifest
error.
<PAGE>

     SECTION 2.16. Pro Rata Treatment.

     Except as required or otherwise  permitted under Sections 2.13(f) and 2.14,
each Standby  Borrowing,  each payment or prepayment of principal of any Standby
Borrowing,  each payment of interest on the Standby  Loans,  each payment of the
Facility Fees,  each  reduction of the  Commitments  and each  Conversion of any
Borrowing  with a Standby  Borrowing of any Type,  shall be  allocated  pro rata
among the Lenders in accordance with their  respective  Commitments (or, if such
Commitments  shall  have  expired or been  terminated,  in  accordance  with the
respective  principal amounts of their outstanding  Standby Loans). Each payment
of principal of any Competitive  Borrowing shall be allocated pro rata among the
Lenders  participating  in such  Borrowing  in  accordance  with the  respective
principal  amounts  of  their  outstanding  Competitive  Loans  comprising  such
Borrowing.  Each  payment of  interest  on any  Competitive  Borrowing  shall be
allocated  pro  rata  among  the  Lenders  participating  in such  Borrowing  in
accordance  with the respective  amounts of accrued and unpaid interest on their
outstanding  Competitive  Loans  comprising  such  Borrowing.  For  purposes  of
determining  the  available  Commitments  of  the  Lenders  at  any  time,  each
outstanding   Competitive  Borrowing  shall  be  deemed  to  have  utilized  the
Commitments  of the Lenders  (including  those Lenders which shall not have made
Loans as part of such  Competitive  Borrowing) pro rata in accordance  with such
respective  Commitments.  Each Lender  agrees that,  in computing  such Lender's
portion of any Borrowing to be made hereunder,  the Administrative Agent may, in
its  discretion,  round each Lender's  percentage of such  Borrowing to the next
higher or lower whole dollar amount.

     SECTION 2.17. Sharing of Setoffs.

     Each  Lender  agrees that if it shall,  through the  exercise of a right of
banker's lien,  setoff, or counterclaim  against the Borrower,  or pursuant to a
secured  claim under  Section 506 of Title 11 of the United States Code or other
security or interest  arising from, or in lieu of, such secured claim,  received
by such Lender under any applicable bankruptcy, insolvency, or other similar law
or otherwise,  or by any other means,  obtain payment (voluntary or involuntary)
in respect of any Standby Loan or Standby  Loans as a result of which the unpaid
principal  portion of the Standby Loans of such Lender shall be  proportionately
less than the unpaid principal portion of the Standby Loans of any other Lender,
it shall be deemed  simultaneously  to have  purchased from such other Lender at
face value,  and shall promptly pay to such other Lender the purchase price for,
a participation in the Standby Loans of such other Lender, so that the aggregate
unpaid principal amount of the Standby Loans and  participations  in the Standby
Loans  held by each  Lender  shall be in the same  proportion  to the  aggregate
unpaid  principal  amount of all Standby Loans then outstanding as the principal
amount of its Standby Loans prior to such exercise of banker's lien,  setoff, or
counterclaim  or other event was to the  principal  amount of all Standby  Loans
outstanding prior to such exercise of banker's lien,  setoff, or counterclaim or
other  event;  provided,  however,  that if any such  purchase or  purchases  or
adjustments  shall be made pursuant to this Section 2.17 and the payment  giving
rise  thereto  shall  thereafter  be  recovered,  such  purchase or purchases or
adjustments  shall be rescinded to the extent of such  recovery and the purchase
price or prices or adjustment restored without interest.  The Borrower expressly
consents to the foregoing  arrangements  and agrees that, to the maximum  extent
permitted by law, any Lender holding a participation in a Standby Loan deemed to
have been so purchased may exercise any and all rights of banker's lien, setoff,
or counterclaim with respect to any and all moneys owing by the Borrower to such
Lender by reason  thereof  as fully as if such  Lender  had made a Standby  Loan
directly to the Borrower in the amount of such participation.
<PAGE>

     SECTION 2.18. Payments.

     (a) The  Borrower  shall  make  each  payment  (including  principal  of or
interest on any Borrowing or any Fees or other amounts) hereunder not later than
12:00  noon,  New York  City  time,  on the  date  when  due in  Dollars  to the
Administrative  Agent at its  offices  at 270 Park  Avenue,  New York,  New York
10017,  in immediately  available  funds.  All payments by the Borrower shall be
made without deduction for any counterclaim, defense, recoupment or setoff.

     (b)  Whenever  any  payment  (including  principal  of or  interest  on any
Borrowing or any Fees or other amounts) hereunder shall become due, or otherwise
would occur,  on a day that is not a Business  Day,  such payment may be made on
the next succeeding  Business Day, and such extension of time shall in such case
be included in the computation of interest or Fees, if applicable.

     SECTION 2.19. Taxes.

     (a) Any and all  payments  by the  Borrower  hereunder  shall be  made,  in
accordance  with Section 2.18,  free and clear of and without  deduction for any
and all  present or future  taxes,  levies,  imposts,  deductions,  charges,  or
withholdings,  and all liabilities with respect thereto, excluding taxes imposed
on the  Administrative  Agent's or any Lender's (or any Transferee's) net income
and  franchise  taxes  imposed  on the  Administrative  Agent or any  Lender (or
Transferee) by the United States or any jurisdiction  under the laws of which it
is organized or any political  subdivision  thereof (all such nonexcluded taxes,
levies,  imposts,  deductions,   charges,  withholdings  and  liabilities  being
hereinafter referred to as "Taxes"). If the Borrower shall be required by law to
deduct any Taxes from or in respect of any sum payable  hereunder to the Lenders
(or any Transferee) or the  Administrative  Agent,  (i) the sum payable shall be
increased by the amount  necessary so that after making all required  deductions
(including  deductions  applicable to additional sums payable under this Section
2.19) such Lender (or Transferee) or the  Administrative  Agent (as the case may
be) shall  receive an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such deductions and (iii) the
Borrower shall pay the full amount deducted to the relevant taxing  authority or
other  Governmental  Authority in accordance  with  applicable  law. Each Lender
party hereto on the date hereof  represents  and warrants  that no Taxes will be
incurred on the date hereof in  connection  with the  execution  and delivery of
this Agreement.
<PAGE>

     (b) In addition,  the Borrower agrees to pay any present or future stamp or
documentary  taxes or any other excise or property  taxes,  charges,  or similar
levies  which  arise from any  payment  made  hereunder  or from the  execution,
delivery,  or  registration  of, or otherwise  with  respect to, this  Agreement
(hereinafter referred to as "Other Taxes"). Each Lender party hereto on the date
hereof  represents and warrants that no Other Taxes will be incurred on the date
hereof in connection with the execution and delivery of this Agreement.

     (c) The  Borrower  will  indemnify  each  Lender  (or  Transferee)  and the
Administrative Agent for the full amount of Taxes and Other Taxes (including any
Taxes or Other Taxes imposed by any  jurisdiction  on amounts payable under this
Section 2.19) paid by such Lender (or Transferee) or the  Administrative  Agent,
as the  case  may be,  and any  liability  (including  penalties,  interest  and
expenses) arising  therefrom or with respect thereto,  whether or not such Taxes
or Other  Taxes  were  correctly  or legally  asserted  by the  relevant  taxing
authority or other Governmental Authority. Payment of such indemnification shall
be made  within  30 days  after  the  date any  Lender  (or  Transferee)  or the
Administrative  Agent, as the case may be, makes written demand  therefor.  If a
Lender (or Transferee) or the Administrative Agent shall become aware that it is
entitled  to  receive  a refund in  respect  of Taxes or Other  Taxes,  it shall
promptly  notify the  Borrower  of the  availability  of such  refund and shall,
within 30 days after receipt of a request by the Borrower, apply for such refund
at the Borrower's  expense.  If any Lender (or Transferee) or the Administrative
Agent  receives a refund in  respect of any Taxes or Other  Taxes for which such
Lender (or Transferee) or the Administrative Agent has received payment from the
Borrower  hereunder,  it shall  promptly  notify the Borrower of such refund and
shall,  within 15 days after  receipt of such  refund,  repay such refund to the
Borrower,  net of all  out-of-pocket  expenses of such Lender (or Transferee) or
the  Administrative  Agent and only with  interest  received,  if any,  from the
relevant taxing authority or Governmental Authority; provided that the Borrower,
upon the request of such Lender (or  Transferee)  or the  Administrative  Agent,
agrees to return such refund (plus  penalties,  interest,  or other  charges) to
such Lender (or Transferee) or the Administrative Agent in the event such Lender
(or Transferee) or the Administrative Agent is required to repay such refund.

     (d)  Within 30 days after the date of any  payment of Taxes or Other  Taxes
withheld by the Borrower in respect of any payment to any Lender (or Transferee)
or the  Administrative  Agent,  the Borrower will furnish to the  Administrative
Agent,  at its address  referred to in Section 9.01, the original or a certified
copy of a receipt evidencing payment thereof.

     (e) Without  prejudice  to the  survival of any other  agreement  contained
herein,  the  agreements  and  obligations  contained in this Section 2.19 shall
survive the payment in full of the  principal  of and interest on all Loans made
hereunder.
<PAGE>

     (f) Each Lender  represents  and  warrants  that either (i) it is organized
under  the  laws of a  jurisdiction  within  the  United  States  or (ii) it has
delivered to the Borrower and the Administrative  Agent duly completed copies of
such form or forms  prescribed by the Internal  Revenue Service  indicating that
such Lender is entitled to receive payments without  deduction or withholding of
any  United  States  federal  income  taxes,  as  permitted  by the  Code.  Each
Transferee  agrees  that,  on or prior to the date upon which it shall  become a
party hereto or obtain a participation  herein,  and upon the reasonable request
from time to time of the Borrower or the  Administrative  Agent, it will deliver
to the Borrower and the  Administrative  Agent either (A) a statement that it is
organized under the laws of a jurisdiction  within the United States or (B) duly
completed copies of such form or forms as may from time to time be prescribed by
the United States Internal Revenue  Service,  indicating that such Transferee is
entitled to receive  payments  without  deduction or  withholding  of any United
States  federal  income  taxes,  as permitted by the Code.  Each Lender that has
delivered,  and each Transferee that hereafter delivers, to the Borrower and the
Administrative  Agent  the  form  or  forms  referred  to in the  two  preceding
sentences further  undertakes to deliver to the Borrower and the  Administrative
Agent,  so far as it may legally do so, further copies of such form or forms, or
successor applicable form or forms, as the case may be, as and when any previous
form filed by it hereunder shall expire or shall become incomplete or inaccurate
in any respect.  Each Lender and  Transferee  represents  and warrants that each
such form supplied by it to the  Administrative  Agent and the Borrower pursuant
to this subsection (f), and not superseded by another form supplied by it, is or
will be, as the case may be, complete and accurate.

     (g) The Borrower shall not be required to pay any additional amounts to any
Lender (or  Transferee) in respect of United States  withholding tax pursuant to
paragraph (a) above if the obligation to pay such  additional  amounts would not
have arisen but for a failure by such Lender (or  Transferee) to comply with the
provisions of paragraph (f) above, unless such failure results from (i) a change
in applicable law, regulation,  or official  interpretation  thereof, or (ii) an
amendment,  modification, or revocation of any applicable tax treaty or a change
in official  position  regarding the application or interpretation  thereof,  in
each case after the date hereof  (and,  in the case of a  Transferee,  after the
date of assignment or transfer);  provided,  however, that the Borrower shall be
required  to pay  those  amounts  to any  Lender  (or  Transferee)  which it was
required to pay hereunder prior to the failure of such Lender (or Transferee) to
comply with the provisions of paragraph (f).

     (h) Any Lender (or  Transferee)  claiming any  additional  amounts  payable
pursuant to this  Section 2.19 shall use  reasonable  efforts  (consistent  with
legal and regulatory restrictions) to file any certificate or document requested
by the Borrower or to change the  jurisdiction of its applicable  lending office
if the making of such a filing or change  would avoid the need for or reduce the
amount of any such additional amounts which may thereafter accrue and would not,
in the sole  determination of such Lender, be otherwise  disadvantageous to such
Lender (or Transferee).

     (i) If any Lender shall request  compensation  under this Section 2.19, the
Borrower  shall have the right,  at its own expense,  upon notice to such Lender
and the  Administrative  Agent,  to require  such  Lender to (i)  terminate  its
Commitment or (ii) transfer and assign without  recourse (in accordance with and
subject to the  restrictions  contained in Section 9.04) all or a portion of its
interest,  rights and  obligations  under this  Agreement  to another  financial
institution  which shall  assume  such  obligations;  provided  that (A) no such
termination  or assignment  shall  conflict with any law, rule, or regulation or
order of any Governmental Authority and (B) the Borrower or the assignee, as the
case may be, shall pay to the affected Lender in immediately  available funds on
the date of such termination or assignment the principal of and interest accrued
to the date of payment on the Loans made by it hereunder  and all other  amounts
accrued for its account or owed to it hereunder.
<PAGE>

                                  ARTICLE III

                         REPRESENTATIONS AND WARRANTIES

     The Borrower represents and warrants to each of the Lenders that:

     SECTION 3.01. Organization; Powers; Governmental Approvals.

     (a) The Borrower and each Principal  Subsidiary  (i) is a corporation  duly
organized,  validly  existing  and  in  good  standing  under  the  laws  of the
jurisdiction of its organization,  (ii) has all requisite power and authority to
own its property and assets and to carry on its  business as now  conducted  and
(iii) is qualified to do business in every jurisdiction where such qualification
is required,  except  where the failure so to qualify  would not have a Material
Adverse  Effect.  The  Borrower's  execution,  delivery and  performance of this
Agreement  are within its  corporate  powers,  have been duly  authorized by all
necessary  action and do not violate or create a default  under (A) law, (B) its
constituent documents,  or (C) any contractual provision binding upon it, except
to the extent (in the case of violations or defaults described under clauses (A)
or (C)) where such  violation  or default  would not  reasonably  be expected to
result in a Material Adverse Effect. This Agreement constitutes the legal, valid
and binding obligation of the Borrower enforceable against it in accordance with
its  terms  (except  as  such   enforceability  may  be  limited  by  applicable
bankruptcy, reorganization,  insolvency, moratorium and other laws affecting the
rights of creditors  generally and general  principles  of equity,  including an
implied covenant of good faith and fair dealing).

     (b) Except for (i) any Governmental  Approvals  required in connection with
any  Borrowings  (such  approvals  being  "Borrowing  Approvals")  and  (ii) any
Governmental  Approvals  the  failure to obtain  which could not  reasonably  be
expected  to result in a  Material  Adverse  Effect or affect  the  validity  or
enforceability  of  this  Agreement,  all  Governmental  Approvals  required  in
connection with the execution and delivery by the Borrower of this Agreement and
the  performance by the Borrower of its  obligations  hereunder have been,  and,
prior  to the time of any  Borrowing,  all  Borrowing  Approvals  will be,  duly
obtained,  are (or, in the case of Borrowing  Approvals,  will be) in full force
and effect without having been amended or modified in any manner that may impair
the ability of the Borrower to perform its obligations under this Agreement, and
are not (or, in the case of Borrowing Approvals, will not be) the subject of any
pending appeal, stay or other challenge.
<PAGE>

     SECTION 3.02. Financial Statements.

     The Borrower has furnished to the Lenders, for itself and its Subsidiaries,
its most recent  filings with the  Securities  and Exchange  Commission on Forms
10-K and 10-Q. Such Forms 10-K and 10-Q do not contain any untrue statement of a
material fact or omit to state a material  fact  necessary to make any statement
therein,  in light of the circumstances under which it was made, not misleading.
Each of the financial  statements in such Forms 10-K and 10-Q has been, and each
of the financial  statements  to be furnished  pursuant to Section 5.02 will be,
prepared in accordance with GAAP applied consistently with prior periods, except
as therein  noted,  and fairly  presents or will fairly  present in all material
respects  the   consolidated   financial   position  of  the  Borrower  and  its
Subsidiaries  as of the date  thereof and the results of the  operations  of the
Borrower and its Subsidiaries for the period then ended.

     SECTION 3.03. No Material Adverse Change.

     Since the date of the Borrower's most recent financial statements contained
in its Annual  Report on Form 10-K for the fiscal year ended  December 31, 2000,
furnished to the Lenders  pursuant to Section  3.02,  there has been no material
adverse change in, and there has occurred no event or condition  which is likely
to result in a material adverse change in, the financial  condition,  results of
operations,  business, assets or operations of the Borrower and the Subsidiaries
taken as a whole (it being  understood that none of the divestiture of Utilities
Assets,  the  consummation  or dissolution of a Joint Venture  Transaction,  the
incurrence of Non-Recourse Joint Venture  Indebtedness or the consummation of an
Asset Exchange shall constitute such a material adverse change).

     SECTION 3.04. Title to Properties; Possession Under Leases.

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

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

     SECTION 3.05. Ownership of Subsidiaries.

     The Borrower owns,  free and clear of any Lien (other than Liens  expressly
permitted by Section 6.01),  all of the issued and outstanding  shares of common
stock of each of the Principal Subsidiaries.

     SECTION 3.06. Litigation; Compliance with Laws.

     (a)  There  is  no  action,  suit,  or  proceeding,   or  any  governmental
investigation or any  arbitration,  in each case pending or, to the knowledge of
the Borrower,  threatened against the Borrower or any of the Subsidiaries or any
material  property  of  any  thereof  before  any  court  or  arbitrator  or any
governmental or  administrative  body,  agency, or official which (i) challenges
the  validity  of this  Agreement,  (ii) may  reasonably  be  expected to have a
material  adverse  effect on the  ability of the  Borrower to perform any of its
obligations  under this  Agreement or on the rights of or benefits  available to
the Lenders under this  Agreement or (iii) except as disclosed in the Borrower's
Annual  Report on Form 10-K for the fiscal year ended  December  31, 2000 or the
Borrower's  Quarterly Reports on Form 10-Q for the periods ending March 31, 2001
and June 30, 2001, may reasonably be expected to have a Material Adverse Effect.

     (b) Neither the Borrower nor any of the Subsidiaries is in violation of any
law,  rule, or  regulation,  or in default with respect to any  judgment,  writ,
injunction  or decree of any  Governmental  Authority,  where such  violation or
default could reasonably be anticipated to result in a Material Adverse Effect.

     (c) Except as set forth in or contemplated  by the financial  statements or
other reports  referred to in Section 3.02 hereof and which have been  delivered
to the Lenders on or prior to the date hereof,  (i) the Borrower and each of its
Subsidiaries  have complied with all  Environmental  Laws,  except to the extent
that failure to so comply is not  reasonably  likely to have a Material  Adverse
Effect,  (ii)  neither the Borrower  nor any of its  Subsidiaries  has failed to
obtain,  maintain or comply with any permit, license or other approval under any
Environmental  Law, except where such failure is not reasonably likely to have a
Material Adverse Effect,  (iii) neither the Borrower nor any of its Subsidiaries
has  received  notice of any  failure to comply  with any  Environmental  Law or
become subject to any liability under any  Environmental  Law, except where such
failure or liability is not reasonably likely to have a Material Adverse Effect,
(iv) no facilities of the Borrower or any of its Subsidiaries are used to manage
any Specified  Substance in violation of any law, except to the extent that such
violations,  individually or in the aggregate, are not reasonably likely to have
a  Material  Adverse  Effect,  and (v)  the  Borrower  is  aware  of no  events,
conditions or circumstances  involving any Release of a Specified Substance that
is reasonably likely to have a Material Adverse Effect.

     SECTION 3.07. Agreements.

     (a)  Neither the  Borrower  nor any of the  Subsidiaries  is a party to any
agreement  or  instrument  or  subject  to any  corporate  restriction  that has
resulted,  or could  reasonably be anticipated to result,  in a Material Adverse
Effect.
<PAGE>

     (b) Neither the Borrower nor any of the  Subsidiaries  is in default in any
manner under any  provision of any  indenture or other  agreement or  instrument
evidencing Indebtedness,  or any other material agreement or instrument to which
it is a party or by which it or any of its  properties  or assets  are or may be
bound,  where  such  default  could  reasonably  be  anticipated  to result in a
Material Adverse Effect.

     SECTION 3.08. Federal Reserve Regulations.

     No part of the  proceeds  of the Loans will be used,  whether  directly  or
indirectly,  and  whether  immediately,  incidentally,  or  ultimately,  for any
purpose  which  entails a  violation  of,  or which is  inconsistent  with,  the
provisions of the Margin Regulations.

     SECTION 3.09. Investment Company Act; Public Utility Holding Company Act.

     Neither the  Borrower  nor any of the  Subsidiaries  is (a) an  "investment
company" as defined in, or subject to regulation  under, the Investment  Company
Act of 1940 or (b) a "holding  company" as defined in, or subject to  regulation
under, the Public Utility Holding Company Act of 1935.

     SECTION 3.10. Use of Proceeds.

     The Borrower  will use the proceeds of the Loan only for general  corporate
purposes,  including  working capital and support of commercial  paper issuances
and Securitization Transactions permitted hereunder as well as one or more Joint
Venture Transactions,  acquisitions or Asset Exchanges;  provided, however, that
no such proceeds  shall be used  directly or  indirectly in connection  with any
Hostile Acquisition.

     SECTION 3.11. Tax Returns.

     Each of the Borrower and the  Subsidiaries  has filed or caused to be filed
all Federal,  state and local tax returns  required to have been filed by it and
has paid or  caused  to be paid all taxes  shown to be due and  payable  on such
returns or on any  assessments  received by it,  except (i) taxes that are being
contested in good faith by  appropriate  proceedings  and for which the Borrower
shall have set aside on its books adequate  reserves and (ii) where such failure
to file or pay would not reasonably be expected to result in a Material  Adverse
Effect.

     SECTION 3.12. No Material Misstatements.

     No statement, information, report, financial statement, exhibit or schedule
furnished  by or on behalf of the  Borrower to the  Administrative  Agent or any
Lender in connection  with the  syndication  or negotiation of this Agreement or
included  herein or  delivered  pursuant  hereto  contained,  contains,  or will
contain any material  misstatement of fact or intentionally  omitted,  omits, or
will omit to state any material fact necessary to make the  statements  therein,
in the light of the  circumstances  under which they were, are, or will be made,
not misleading.
<PAGE>

     SECTION 3.13. Employee Benefit Plans.

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

     (b) No Plan has an  accumulated  or waived  funding  deficiency  within the
meaning  of  Section  412 or  Section  418B of the  Code,  except  for any  such
deficiency  that has not resulted,  and could not  reasonably be  anticipated to
result, in a Material Adverse Effect.

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

     (d) Neither the Borrower nor any Subsidiary or ERISA Affiliate has incurred
any liability to or on account of a Plan under ERISA (other than  obligations to
make  contributions in accordance with such Plan), and no condition exists which
presents a material risk to the Borrower or any  Subsidiary of incurring  such a
liability,  except for such  liabilities  that have not resulted,  and could not
reasonably be anticipated to result, in a Material Adverse Effect.

     SECTION 3.14. Insurance.

     Each of the Borrower and the  Principal  Subsidiaries  maintains  insurance
with financially sound and reputable insurers,  or self-insurance,  with respect
to its  properties and business  against loss or damage of the kind  customarily
insured  against by reputable  companies in the same or similar  business and of
such types and in such amounts  (with such  deductible  amounts) as is customary
for such companies under similar circumstances.

                                   ARTICLE IV

                              CONDITIONS OF LENDING

     SECTION 4.01. Each Borrowing.

     The  obligation  of  each  Lender  to make a Loan  on the  occasion  of any
Borrowing,  including any Conversion pursuant to Section 2.05, is subject to the
satisfaction of the following conditions:

     (a) The Administrative Agent shall have received a notice of such Borrowing
as required by Section 2.03, 2.04 or 2.05, as applicable;

     (b) The  representations  and  warranties  set forth in Article  III hereof
(except, in the case of a Conversion,  the representations set forth in Sections
3.03 and 3.06(a))  shall be true and correct in all material  respects on and as
of the date of such  Borrowing  with the same effect as though made on and as of
such date, except to the extent such  representations  and warranties  expressly
relate to an earlier date;
<PAGE>

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

each Borrowing shall be deemed to constitute a representation and warranty by
the Borrower on the date of such Borrowing as to the matters specified in
paragraphs (b) and (c) of this Section 4.01.

     SECTION 4.02. Effective Date.

     The  obligations  of the Lenders to make Loans  hereunder  shall not become
effective until the date on which each of the following  conditions is satisfied
(or waived in accordance with Section 9.08):

     (a) The  Administrative  Agent  shall  have  received a  favorable  written
opinion of the general  counsel of the Borrower,  dated the  Effective  Date and
addressed to the Lenders,  to the effect set forth in Exhibit C hereto,  and the
Borrower  hereby   instructs  such  counsel  to  deliver  such  opinion  to  the
Administrative Agent;

     (b) All  legal  matters  incident  to  this  Agreement  and the  borrowings
hereunder shall be satisfactory to the Administrative Agent and the Lenders;

     (c)  The  Administrative  Agent  shall  have  received  (i) a  copy  of the
certificate or articles of incorporation,  including all amendments  thereto, of
the  Borrower,  certified  as of a recent date by the  Secretary of State of the
state of its  organization,  and a  certificate  as to the good  standing of the
Borrower as of a recent date,  from such Secretary of State;  (ii) a certificate
of the Secretary or Assistant Secretary of the Borrower dated the Effective Date
and  certifying  (A) that  attached  thereto is a true and complete  copy of the
by-laws  of the  Borrower  as in effect on the  Effective  Date and at all times
since a date prior to the date of the resolutions described in clause (B) below,
(B) that  attached  thereto  is a true and  complete  copy of  resolutions  duly
adopted by the Board of  Directors of the Borrower  authorizing  the  execution,
delivery and  performance of this Agreement and the  borrowings  hereunder,  and
that such resolutions have not been modified,  rescinded,  or amended and are in
full force and effect,  (C) that the certificate or articles of incorporation of
the Borrower have not been amended since the date of the last amendment  thereto
shown on the  certificate  of good  standing  furnished  pursuant  to clause (i)
above,  and (D) as to the  incumbency  and  specimen  signature  of each officer
executing this Agreement or any other document delivered in connection  herewith
on behalf of the  Borrower;  (iii) a  certificate  of another  officer as to the
incumbency  and  specimen  signature of the  Secretary  or  Assistant  Secretary
executing  the  certificate  pursuant  to clause (ii)  above;  (iv)  irrevocable
notices from the Borrower requesting termination of the "Total Commitment" under
each of the Existing  Facilities  effective  automatically on the Effective Date
and (v) such other  documents  as the  Administrative  Agent or the  Lenders may
reasonably request;
<PAGE>

     (d) The Administrative  Agent shall have received a certificate,  dated the
Effective  Date and signed by a Financial  Officer of the  Borrower,  confirming
compliance with the conditions  precedent set forth in paragraphs (b) and (c) of
Section 4.01;

     (e) The Administrative Agent shall have received all Fees and other amounts
due and payable on or prior to the Effective Date; and

     (f) All "Commitments" (as defined in each of the Existing Facilities) under
the Existing  Facilities shall have been terminated in accordance with the terms
thereof  and  all  "Loans"  (as  defined  in each  of the  Existing  Facilities)
outstanding  thereunder  shall have been repaid or prepaid together with accrued
interest  thereon and all other amounts  payable to the "Lenders" (as defined in
each of the Existing Facilities) under the Existing Facilities.

                                   ARTICLE V

                              AFFIRMATIVE COVENANTS

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

     SECTION 5.01. Existence; Businesses and Properties.

     (a) Preserve and  maintain,  cause each of the  Principal  Subsidiaries  to
preserve and maintain,  and cause each other Subsidiary to preserve and maintain
(where the  failure by any such other  Subsidiary  to so preserve  and  maintain
would likely result in a Material  Adverse  Effect),  its  corporate  existence,
rights and franchises,  except in connection with a Joint Venture Transaction or
an Asset  Exchange,  provided,  however,  that the  corporate  existence  of any
Principal   Subsidiary   may  be   terminated   if  such   termination   is  not
disadvantageous to the Administrative Agent or any Lender;

     (b) continue to own all of the  outstanding  shares of common stock of each
Principal  Subsidiary,  except in connection with a Joint Venture Transaction or
an Asset Exchange;

     (c) comply,  and cause each of the Subsidiaries to comply,  in all material
respects,  with all applicable laws, rules,  regulations and orders,  including,
without limitation, all Environmental Laws;

     (d) pay, and cause each of the Subsidiaries to pay, before any such amounts
become delinquent,  (i) all taxes,  assessments and governmental charges imposed
upon it or upon its property, and (ii) all claims (including without limitation,
claims for labor,  materials,  supplies,  or services)  which might,  if unpaid,
become a Lien upon its property,  unless,  in each case,  the validity or amount
thereof  is being  disputed  in good  faith,  and the  Borrower  has  maintained
adequate reserves with respect thereto, in each case where the failure to so pay
would be reasonably expected to cause a Material Adverse Effect;
<PAGE>

     (e) keep,  and cause  each of the  Subsidiaries  to keep,  proper  books of
record and account,  containing  complete and accurate  entries of all financial
and business  transactions  of the Borrower and such  Subsidiary in all material
respects;

     (f) continue to carry on, and cause each  Principal  Subsidiary to continue
to carry on,  substantially  the same type of business  as the  Borrower or such
Principal  Subsidiary  conducted as of the date hereof and  business  reasonably
related  thereto,  except for changes in such business that result from the sale
of Utilities Assets, a Joint Venture Transaction or an Asset Exchange; and

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

provided,  however, that the foregoing shall not limit the right of the Borrower
or any of its Subsidiaries to engage in any transaction not otherwise prohibited
by Section 6.02, 6.03 or 6.04.

     SECTION 5.02. Financial Statements, Reports, etc.

     In the case of the Borrower,  furnish to the Administrative  Agent and each
Lender:

     (a) as soon as available  and in any event within 110 days after the end of
each fiscal year,  consolidated  balance  sheets and the related  statements  of
income and cash flows of the Borrower and its Subsidiaries (the Borrower and its
Subsidiaries being collectively  referred to as the "Companies") as of the close
of such fiscal year (which requirement shall be deemed satisfied by the delivery
of the  Borrower's  Annual Report on Form 10-K (or any successor  form) for such
year), all audited by KPMG Peat Marwick or other independent  public accountants
of  recognized   national  standing  and  accompanied  by  an  opinion  of  such
accountants to the effect that such  consolidated  financial  statements  fairly
present  in all  material  respects  the  financial  condition  and  results  of
operations of the  Companies on a  consolidated  basis in  accordance  with GAAP
consistently applied;

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

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

     (d)  prompt  notice of any  reduction  in the  credit  rating  given to the
Borrower by S&P or Moody's;

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

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

     SECTION 5.03. Litigation and Other Notices.

     Furnish to the  Administrative  Agent and each Lender prompt written notice
of the following:

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

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

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

     SECTION 5.04. Maintaining Records.

     Maintain all financial records in accordance with GAAP and, upon reasonable
notice,  permit any Lender to visit and  inspect  the  financial  records of the
Borrower at reasonable times and as often as requested and to make extracts from
and copies of such financial records, and permit any representatives  designated
by any Lender to discuss the  affairs,  finances  and  condition of the Borrower
with the appropriate  officers  thereof and, with the Borrower's  consent (which
shall not be  unreasonably  withheld),  the  independent  accountants  therefor;
provided,   however,   that  if  the  Borrower   shall  so  require,   a  single
representative  shall be  appointed  by  Lenders  holding  at  least  50% of the
aggregate  outstanding  principal  balance of the Loans to  exercise  the rights
granted under this Section 5.04.
<PAGE>

     SECTION 5.05. Use of Proceeds.

     Use  the  proceeds  of the  Loans  only  for  general  corporate  purposes,
including  working  capital  and  support  of  commercial  paper  issuances  and
Securitization  Transactions  permitted  hereunder  as well as one or more Joint
Venture Transactions,  acquisitions or Asset Exchanges;  provided, however, that
no such proceeds  shall be used  directly or  indirectly in connection  with any
Hostile Acquisition.

                                   ARTICLE VI

                               NEGATIVE COVENANTS

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

     SECTION 6.01. Liens; Restrictions on Sales of Receivables.

     Create,  incur,  assume, or suffer to exist, or permit any of the Principal
Subsidiaries to create,  incur,  assume,  or suffer to exist, any Lien on any of
its property now owned or hereafter  acquired to secure any  Indebtedness of the
Borrower  or any such  Principal  Subsidiary,  or sell or  assign  any  accounts
receivable  (other  than in the  ordinary  course of business  substantially  in
accordance with the Borrower's past practice), other than: (a) Liens incurred or
deposits  made in the  ordinary  course of business to secure  surety and appeal
bonds, leases, return-of-money bonds and other similar obligations (exclusive of
obligations  of the payment of borrowed  money);  (b) Liens  created under or in
connection  with the First  Mortgage  Bond  Indentures  or any other  indentures
governing  the  issuance  of  mortgage  bonds by the  Borrower;  (c)  pledges or
deposits  to secure the  utility  obligations  of the  Borrower  incurred in the
ordinary  course  of  business;  (d)  Liens  upon or in  property  now  owned or
hereafter  acquired to secure  Indebtedness  incurred  solely for the purpose of
financing the acquisition, construction or improvement of any property, provided
that such  Indebtedness  shall not exceed the fair market  value of the property
being  acquired,  constructed  or  improved;  (e)  Liens  on the  assets  of any
Principal  Subsidiary  to secure the  repayment  of project  financing  for such
Principal  Subsidiary;  (f)  Liens  on  the  assets  of  any  Person  merged  or
consolidated  with or into (in accordance with Section 6.04) the Borrower or any
Principal  Subsidiary  that  were  in  effect  at the  time of  such  merger  or
consolidation;  (g)  Liens  securing  Indebtedness  of  the  Borrower  or of any
Principal  Subsidiary  to the Rural  Electrification  Administration,  the Rural
Utilities  Service,  the Rural  Telephone  Bank or the Rural  Telephone  Finance
Cooperative  (or any  successor  to any  such  agency);  (h)  Liens  for  taxes,
assessments  and  governmental  charges or levies,  which are not yet due or are
which  are  being  contested  in good  faith  by  appropriate  proceedings;  (i)
carriers', warehousemen's,  mechanics', materialmen's, repairmen's, suppliers or
other  like  Liens  arising  in the  ordinary  course of  business  relating  to
obligations not overdue for a period of more than 60 days or which are bonded or
being  contested  in good  faith by  appropriate  proceedings;  (j)  pledges  or
deposits in connection with workers' compensation laws or similar legislation or
to secure  public or statutory  obligations;  (k) Liens  incurred on deposits to
secure the performance of bids, trade contracts,  leases, statutory obligations,
surety and  appeal  bonds,  performance  bonds and other  obligations  of a like
nature  incurred in the ordinary  course of business;  (l) easements,  rights of
way,  restrictions and other encumbrances  incurred which, in the aggregate,  do
not materially interfere with the ordinary conduct of business; (m) restrictions
by  Governmental  Authorities  on the  operations,  business  or  assets  of the
Borrower  or its  Subsidiaries  that are  customary  in the  Borrower's  and its
Subsidiaries' businesses;  and (n) sales of accounts receivable pursuant to, and
Liens  existing  or  deemed  to exist in  connection  with,  any  Securitization
Transactions,   provided  the  aggregate  amount  of  all  such   Securitization
Transactions shall not at any time exceed $150,000,000;  provided, however, that
the Borrower or any Principal Subsidiary may create,  incur, assume or suffer to
exist other Liens (in addition to Liens  excepted by the  foregoing  clauses (a)
through  (m)) on its  assets so long as the sum of the  assets  subject  to such
Liens plus the amount of any outstanding  Securitization  Transactions permitted
by the foregoing clause (n) does not represent in the aggregate more than 20% of
the Borrower's Consolidated Tangible Assets.
<PAGE>

     SECTION 6.02. Ownership of the Principal Subsidiaries.

     Sell,  assign,  pledge,  or otherwise  transfer or dispose of any shares of
common stock,  voting stock, or stock convertible into voting or common stock of
any Principal  Subsidiary,  except (a) to another Subsidiary,  (b) to the extent
the assets of such Principal  Subsidiary consist entirely of Utilities Assets at
the time such transaction is consummated, (c) in connection with a Joint Venture
Transaction or (d) in connection with an Asset Exchange.

     SECTION 6.03. Asset Sales.

     Except in connection with a Joint Venture Transaction or an Asset Exchange,
permit  any  Principal  Subsidiary  to sell,  assign,  or  otherwise  dispose of
telecommunications   assets   (whether  in  one   transaction  or  a  series  of
transactions, if the net, after-tax proceeds thereof are used by the Borrower or
any Subsidiary to prepay (other than a mandatory  prepayment in accordance  with
the terms of the applicable governing  documents,  including pursuant to any put
provision)  Indebtedness incurred after the date hereof which Indebtedness has a
maturity  later than the  Maturity  Date (other than bridge or other  financings
incurred in connection  with an asset  purchase or sale,  including  acquisition
indebtedness or indebtedness of an acquired entity).
<PAGE>

     SECTION 6.04. Mergers.

     Merge or consolidate with, or sell, assign,  lease, or otherwise dispose of
(whether in one transaction or a series of  transactions)  all or  substantially
all of its  assets  (whether  now  owned  or  hereafter  acquired),  except  for
Utilities  Assets or in connection  with an Asset  Exchange,  to any Person,  or
permit any Principal  Subsidiary to do so, except that any  Subsidiary may merge
into or, subject to Section 6.03,  transfer  assets to the Borrower or any other
Subsidiary  and  the  Borrower  may  merge  with  any  Person;   provided  that,
immediately  thereafter and after giving effect thereto, no event shall occur or
be  continuing  which  constitutes  an Event of Default or a Default and, in the
case of any such merger to which the Borrower is a party, either the Borrower is
the surviving  corporation  or the surviving  entity (if not the Borrower) has a
consolidated  net worth (as  determined  in  accordance  with GAAP)  immediately
subsequent  to such merger at least equal to the  Consolidated  Net Worth of the
Borrower  immediately prior to such merger and expressly assumes the obligations
of  the  Borrower  hereunder;   provided,  however,  that,  notwithstanding  the
foregoing, the Borrower and any of the Principal Subsidiaries may sell assets in
the ordinary  course of its  business and may sell or otherwise  dispose of worn
out or obsolete equipment on a basis consistent with good business practices.

     SECTION 6.05. Restrictions on Dividends.

     Enter into or permit any Principal  Subsidiary to enter into,  any contract
or  agreement  (other  than  with a  governmental  regulatory  authority  having
jurisdiction  over the Borrower or such Principal  Subsidiary)  restricting  the
ability of such Principal  Subsidiary to pay dividends or make  distributions to
the Borrower in any manner that would impair the ability of the Borrower to meet
its present and future obligations  hereunder.  The Secretary of the Borrower or
another officer of the Borrower  satisfactory to the Administrative Agent shall,
prior to entry into any contract or agreement that could restrict the ability of
any Principal Subsidiary to pay dividends or make distributions to the Borrower,
deliver to the Lenders a certificate  certifying (a) to the absence of any Event
of  Default  or  Default  after  giving  effect to the  entry by such  Principal
Subsidiary  into such  contract  or  agreement,  and (b) that such  contract  or
agreement  will not impair the  ability of the  Borrower to meet its present and
future obligations hereunder.

     SECTION 6.06. Transactions with Affiliates.

     Except in connection with a Joint Venture Transaction or an Asset Exchange,
sell or transfer  any property or assets to, or purchase or acquire any property
or assets from, or otherwise engage in any other  transactions  with, any of its
Affiliates,  except  that as long as no Default  or Event of Default  shall have
occurred and be continuing,  the Borrower or any Subsidiary may engage in any of
the foregoing  transactions (i) in the ordinary course of business at prices and
on terms and conditions  not less  favorable to the Borrower or such  Subsidiary
than could be obtained on an  arm's-length  basis from unrelated  third parties,
(ii)  as  otherwise  may  be  required  by any  Federal  or  state  Governmental
Authority,   or  (iii)  so  long  as  such   transactions   are  not  materially
disadvantageous to the Borrower.

     SECTION 6.07. Minimum Consolidated Net Worth.

     Permit   its   Consolidated   Net  Worth  at  any  time  to  be  less  than
$1,500,000,000.
<PAGE>

     SECTION 6.08. Minimum Access Lines.

     Permit,  as a  direct  result  of any  sale,  exchange,  transfer  or other
disposition  of Access  Lines,  the total Access Lines owned by the Borrower and
its Subsidiaries  (other than any Joint Venture) as of the end of the applicable
fiscal quarter of the Borrower to be less than 2,500,000.

                                  ARTICLE VII

                                EVENTS OF DEFAULT

     In  case  of the  happening  of any of the  following  events  ("Events  of
Default"):

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

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

     (c) default  shall be made in the  payment of any  interest on any Loan (or
any  portion  thereof)  or any Fee or any  other  amount  (other  than an amount
referred to in (b) above) due  hereunder,  when and as the same shall become due
and payable,  and such default shall  continue  unremedied  for a period of five
Business Days;

     (d)  default  shall be made in the due  observance  or  performance  of any
covenant,  condition,  or agreement contained in Section 5.01(f) or Section 5.05
or in Article VI;

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

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

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

     (h) the Borrower or any Principal Subsidiary,  as the case may be, fails to
pay when  due,  or within  any  grace  period  applicable  thereto  by the terms
thereof,  any other  Indebtedness  of the Borrower or any  Principal  Subsidiary
aggregating $50,000,000 or more;

     (i) the  Borrower  or any  Principal  Subsidiary  shall  fail to observe or
perform  any  covenant  or  agreement  contained  in  any  single  agreement  or
instrument  relating to any  Indebtedness  in excess of (i)  $75,000,000  in the
aggregate,  with respect to any Indebtedness  issued on a tax-exempt  basis, and
(ii) $50,000,000 in the aggregate,  with respect to all other  Indebtedness,  in
each case within any applicable grace period,  or any other event shall occur if
the effect of such  failure or other  event is to  accelerate,  or to permit the
holder of such  Indebtedness or any other Person to accelerate,  the maturity of
such  Indebtedness;  or any such  Indebtedness  shall be  required to be prepaid
(other than by a regularly  scheduled required  prepayment,  pursuant to any put
right (or  similar  right) of the  holder  thereof,  or by the  exercise  by the
Borrower  or  such  Principal  Subsidiary  of its  right  to  make  a  voluntary
prepayment) in whole or in part prior to its stated maturity;

     (j) a judgment or order for the  payment of money in excess of  $50,000,000
and having a Material  Adverse Effect shall be rendered  against the Borrower or
any of the  Subsidiaries  and such judgment or order shall continue  unsatisfied
(in the case of a money  judgment)  and in effect for a period of 30 days during
which execution shall not be effectively  stayed or deferred  (whether by action
of a court, by agreement, or otherwise);

     (k) a Plan shall fail to maintain the minimum funding standard  required by
Section  412(a) of the Code for any plan year or a waiver  of such  standard  is
sought  or  granted  under  Section  412(d),  or a Plan is or  shall  have  been
terminated  or the  subject  of  termination  proceedings  under  ERISA,  or the
Borrower or an ERISA  Affiliate  has  incurred a liability to or on account of a
Plan under  Section 4062,  4063,  4064,  4201 or 4204 of ERISA,  and there shall
result from any such event or events a Material Adverse Effect; and
<PAGE>

     (l) there shall have occurred a Change in Control;

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

                                  ARTICLE VIII

                            THE ADMINISTRATIVE AGENT

     In order to expedite the transactions  contemplated by this Agreement,  The
Chase  Manhattan  Bank is hereby  appointed  to act as  Administrative  Agent on
behalf of the Lenders. Each of the Lenders, and each Transferee by its agreement
to be bound hereby, irrevocably authorizes the Administrative Agent to take such
actions on behalf of such Lender or  Transferee  and to exercise  such powers as
are  specifically  delegated  to  the  Administrative  Agent  by the  terms  and
provisions  hereof,  together  with such  actions  and powers as are  reasonably
incidental thereto.  The Administrative  Agent is hereby expressly authorized by
the Lenders,  without hereby limiting any implied  authority,  (a) to receive on
behalf of the Lenders all payments of principal of and interest on the Loans and
all other  amounts due to the Lenders  hereunder,  and promptly to distribute to
each Lender its proper share of each payment so received;  (b) to promptly  give
notice on behalf of each of the Lenders to the  Borrower of any Event of Default
specified  in this  Agreement  of which  the  Administrative  Agent  has  actual
knowledge  acquired  in  connection  with  its  agency  hereunder;  and  (c)  to
distribute to each Lender copies of all notices,  financial statements and other
materials  delivered by the Borrower  pursuant to this  Agreement as received by
the Administrative Agent.
<PAGE>

     Neither  the  Administrative  Agent  nor  any of its  directors,  officers,
employees,  or agents shall be liable as such for any action taken or omitted by
any of them,  except for its or his own gross negligence or willful  misconduct,
or be responsible for any statement,  warranty,  or representation herein or the
contents of any document  delivered in  connection  herewith,  or be required to
ascertain or to make any inquiry concerning the performance or observance by the
Borrower of any of the terms,  conditions,  covenants,  or agreements  contained
herein. The Administrative  Agent shall not be responsible to the Lenders or any
Transferee  for the due execution,  genuineness,  validity,  enforceability,  or
effectiveness  of this Agreement or any other  instruments  or  agreements.  The
Administrative  Agent may deem and treat each Lender  party hereto as a "Lender"
hereunder and for all purposes hereof until it shall have received notice, given
as  provided  herein,  of the  assignment  of all of such  Lender's  rights  and
obligations  hereunder.  The  Administrative  Agent  shall in all cases be fully
protected in acting,  or  refraining  from acting,  in  accordance  with written
instructions  signed by the Required Lenders (or such other number of Lenders as
is  expressly  required  hereby with  respect to such action or  inaction)  and,
except as otherwise  specifically  provided  herein,  such  instructions and any
action or inaction pursuant thereto shall be binding on all the Lenders and each
Transferee.  The Administrative  Agent shall, in the absence of knowledge to the
contrary,  be entitled to rely on any  instrument or document  believed by it in
good  faith to be genuine  and  correct  and to have been  signed or sent by the
proper  Person  or  Persons.  Neither  the  Administrative  Agent nor any of its
directors,  officers,  employees, or agents shall have any responsibility to the
Borrower on account of the failure of or delay in  performance  or breach by any
Lender of any of its  obligations  hereunder  or to any Lender on account of the
failure of or delay in performance or breach by any other Lender or the Borrower
of any of their respective  obligations hereunder or in connection herewith. The
Administrative  Agent may  execute  any and all duties  hereunder  by or through
agents or  employees  and  shall be  entitled  to rely upon the  advice of legal
counsel  selected by it with respect to all matters arising  hereunder and shall
not be liable for any action taken or suffered in good faith by it in accordance
with the advice of such counsel.

     The Lenders hereby acknowledge that the Administrative Agent shall be under
no duty to take any discretionary action permitted to be taken by it pursuant to
the provisions of this  Agreement  unless it shall be requested in writing to do
so by the Required Lenders.

     Subject to the  appointment  and  acceptance of a successor  administrative
agent as  provided  below,  the  Administrative  Agent may resign at any time by
notifying the Lenders and the Borrower. Upon any such resignation,  the Borrower
shall  have the  right to  appoint  a  successor,  provided  that any  successor
selected  by the  Borrower  must be  approved  by the  Required  Lenders.  If no
successor  shall have been so appointed by the Borrower and shall have  accepted
such appointment within 20 Business Days after the retiring Administrative Agent
gives notice of its resignation,  then the Required Lenders shall have the right
to appoint a  successor.  If no  successor  shall have been so  appointed by the
Required  Lenders and shall have  accepted such  appointment  within 30 Business
Days after the retiring  Administrative  Agent gives notice of its  resignation,
then the retiring Administrative Agent may, on behalf of the Lenders,  appoint a
successor administrative agent which shall be a bank with an office in New York,
New York and having a combined capital and surplus of at least $1,000,000,000 or
an  Affiliate  of any such  bank.  Upon the  acceptance  of any  appointment  as
Administrative Agent hereunder by a successor bank, such successor shall succeed
to and become vested with all the rights,  powers,  privileges and duties of the
retiring  Administrative  Agent and the retiring  Administrative  Agent shall be
discharged from its duties and obligations  hereunder.  After the Administrative
Agent's resignation  hereunder,  the provisions of this Article and Section 9.05
shall  continue  in effect for its  benefit in respect of any  actions  taken or
omitted to be taken by it while it was acting as Administrative Agent.
<PAGE>

     With respect to the Loans made by it hereunder, the Administrative Agent in
its  individual  capacity  and not as  Administrative  Agent shall have the same
rights and powers as any other  Lender  and may  exercise  the same as though it
were  not  the  Administrative  Agent,  and  the  Administrative  Agent  and its
Affiliates may accept deposits from,  lend money to and generally  engage in any
kind of business with the Borrower or any Subsidiary or other Affiliate  thereof
as if it were not the Administrative Agent.

     Each Lender agrees (i) to reimburse the Administrative Agent, on demand, in
the amount of its pro rata share (based on its  Commitment  hereunder or, if the
Commitments shall have terminated,  based on its outstanding Loans hereunder) of
any  expenses  incurred  for the  benefit of the  Lenders by the  Administrative
Agent,  including  reasonable  counsel  fees  and  compensation  of  agents  and
employees paid for services  rendered on behalf of the Lenders,  which shall not
have been  reimbursed by the  Borrower,  and (ii) to indemnify and hold harmless
the  Administrative  Agent and any of its  directors,  officers,  employees,  or
agents,  on demand,  in the amount of such pro rata share,  from and against any
and all liabilities,  taxes, obligations,  losses, damages, penalties,  actions,
judgments,  suits,  cost,  expenses,  or  disbursements  of any  kind or  nature
whatsoever  which may be imposed on, incurred by, or asserted  against it in its
capacity as the  Administrative  Agent or any of them in any way  relating to or
arising  out of this  Agreement  or any action  taken or omitted by it or any of
them  under  this  Agreement,  to the  extent  the  same  shall  not  have  been
indemnified  by the  Borrower;  provided  that no Lender  shall be liable to the
Administrative  Agent  or any of them  for  any  portion  of  such  liabilities,
obligations,  losses,  damages,  penalties,  actions,  judgments,  suits, costs,
expenses,  or  disbursements  resulting  from the gross  negligence  or  willful
misconduct  of the  Administrative  Agent  or any  of its  directors,  officers,
employees, or agents.

     Each Lender  acknowledges  that it has,  independently and without reliance
upon the  Administrative  Agent or any other Lender and based on such  documents
and information as it has deemed  appropriate,  made its own credit analysis and
decision to enter into this  Agreement.  Each Lender also  acknowledges  that it
will,  independently and without reliance upon the  Administrative  Agent or any
other Lender and based on such  documents and  information as it shall from time
to time deem  appropriate,  continue to make its own  decisions in taking or not
taking action under or based upon this Agreement,  any related  agreement or any
document furnished hereunder or thereunder.

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

                                   ARTICLE IX

                                  MISCELLANEOUS

     SECTION 9.01. Notices.

     Notices and other  communications  provided  for herein shall be in writing
and  shall  be  delivered  by the  method,  if any,  specified  in the  relevant
provisions of this Agreement and otherwise by hand or overnight courier service,
mailed or sent by telecopy, as follows:

     (a) if to the Borrower,  to it at 3 High Ridge Park, Stamford,  Connecticut
06905, Attention of Treasurer (Telecopy No. 203-614-5711);

     (b) if to the Administrative Agent, to it at One Chase Manhattan Plaza, 8th
Floor,  New York,  New York  10081,  Attention  of Janet  Belden  (Telecopy  No.
212-552-5658),  with a copy to Joan M. Fitzgibbon, The Chase Manhattan Bank, 270
Park Avenue, New York, New York 10017 (Telecopy No. 212-270-4164); and

     (c) if to a Lender,  to it at its address (or telecopy number) set forth in
its Administrative Questionnaire.

All notices and other  communications  given to any party  hereto in  accordance
with the provisions of this Agreement  shall be deemed to have been given on the
date of receipt if  delivered by hand or  overnight  courier  service or sent by
telecopy,  or on the date five  Business  Days after  dispatch by  certified  or
registered  mail, if mailed,  in each case delivered,  sent, or mailed (properly
addressed) to such party as provided in this Section 9.01 or in accordance  with
the latest  unrevoked  direction  from such party given in accordance  with this
Section  9.01;  provided,  that notices from the Borrower to the  Administrative
Agent  relating to Borrowings or  Conversions  shall be effective only on actual
receipt.

     SECTION 9.02. Survival of Agreement.

     All  covenants,  agreements,  representations  and  warranties  made by the
Borrower  herein  and in the  certificates  or  other  instruments  prepared  or
delivered in connection  with or pursuant to this Agreement  shall be considered
to have been  relied  upon by the  Lenders  and shall  survive the making by the
Lenders of the Loans,  regardless of any investigation made by the Lenders or on
their  behalf,  and  shall  continue  in full  force  and  effect as long as the
principal of or any accrued  interest on any Loan or any Fee or any other amount
payable  under  this  Agreement  is  outstanding  and  unpaid  or so long as the
Commitments have not been terminated.
<PAGE>

     SECTION 9.03. Binding Effect.

     This Agreement  shall become  effective when it shall have been executed by
the  Borrower and the  Administrative  Agent and when the  Administrative  Agent
shall  have  received  copies  hereof  which,  when  taken  together,  bear  the
signatures of each Lender, and thereafter shall be binding upon and inure to the
benefit of the  Borrower,  the  Administrative  Agent and each  Lender and their
respective  successors and assigns,  except that the Borrower shall not have the
right to assign its rights  hereunder or any interest  herein  without the prior
consent of all the Lenders.

     SECTION 9.04. Successors and Assigns.

     (a) Whenever in this  Agreement  any of the parties  hereto is referred to,
such  reference  shall be deemed to include the  successors  and assigns of such
party;  and all  covenants,  promises  and  agreements  by or on  behalf  of the
Borrower,  the  Administrative  Agent or the Lenders that are  contained in this
Agreement shall bind and inure to the benefit of their respective successors and
assigns.

     (b) Each Lender may assign to one or more assignees all or a portion of its
interests,  rights and  obligations  under this  Agreement,  including  all or a
portion  of its  Commitment  and the  Loans at the time  owing to it;  provided,
however,  that  (i)  except  in the  case of an  assignment  to a  Lender  or an
Affiliate of such Lender, or an assignment  pursuant to Section 9.04(h) (in such
circumstances  described in Section 9.04(h) where consent is not required),  the
Borrower and the  Administrative  Agent must give their prior written consent to
such  assignment,  which consent shall not be unreasonably  withheld,  provided,
further,  however, that the consent of the Borrower to any such assignment shall
not be  required  at any time an Event of  Default  shall have  occurred  and be
continuing, (ii) each such assignment shall be of a constant, and not a varying,
percentage  of all the  assigning  Lender's  rights or  obligations  under  this
Agreement,  (iii) the amount of the Commitment or Loans of the assigning  Lender
subject to any such  assignment  (determined  as of the date the  Assignment and
Acceptance  with respect to such  assignment is delivered to the  Administrative
Agent) shall not be less than  $5,000,000  and the amount of the  Commitment  or
Loans of such  Lender  remaining  after such  assignment  shall not be less than
$5,000,000  or shall be zero,  (iv) the  parties to each such  assignment  shall
execute and deliver to the  Administrative  Agent an Assignment and  Acceptance,
together with a processing and  recordation  fee of $3,500 and (v) the assignee,
if it shall  not be a  Lender,  shall  deliver  to the  Administrative  Agent an
Administrative Questionnaire.  Subject to payment in full by the assignee to the
assignor and upon  acceptance  and  recording  pursuant to paragraph (e) of this
Section 9.04, from and after the effective date specified in each Assignment and
Acceptance,  which effective date shall be at least five Business Days after the
execution thereof,  (A) the assignee  thereunder shall be a party hereto and, to
the extent of the interest assigned by such Assignment and Acceptance,  have (in
addition to any such rights and obligations  theretofore  held by it) the rights
and obligations of a Lender under this Agreement,  and (B) the assigning  Lender
thereunder  shall, to the extent of the interest assigned by such Assignment and
Acceptance,  be released from its obligations  under this Agreement (and, in the
case of an Assignment and Acceptance covering all or the remaining portion of an
assigning  Lender's  rights and obligations  under this  Agreement,  such Lender
shall  cease to be a party  hereto  (but shall  continue  to be  entitled to the
benefits of Sections 2.13,  2.15,  2.19 and 9.05, as well as to any Fees accrued
for its account hereunder and not yet paid)). Notwithstanding the foregoing, any
Lender assigning its rights and obligations  under this Agreement may retain any
Competitive  Loans made by it  outstanding  at such time, and in such case shall
retain its rights hereunder in respect of any Loans so retained until such Loans
have been repaid in full in accordance with this Agreement.
<PAGE>

     (c) By executing and delivering an Assignment and Acceptance, the assigning
Lender thereunder and the assignee  thereunder shall be deemed to confirm to and
agree  with each  other  and the  other  parties  hereto  as  follows:  (i) such
assigning  Lender  warrants  that it is the  legal and  beneficial  owner of the
interest being assigned thereby free and clear of any adverse claim and that its
Commitment,  and the  outstanding  balances of its Standby Loans and Competitive
Loans  (to  the  extent  assigned),  in  each  case  without  giving  effect  to
assignments  thereof which have not become  effective,  are as set forth in such
Assignment and Acceptance, (ii) except as set forth in (i) above, such assigning
Lender makes no representation  or warranty and assumes no  responsibility  with
respect  to  any  statements,  warranties,  or  representations  made  in  or in
connection  with  this  Agreement,   or  the  execution,   legality,   validity,
enforceability,  genuineness,  sufficiency,  or value of this  Agreement  or any
other  instrument  or  document  furnished  pursuant  hereto  or  the  financial
condition of the Borrower or any Subsidiary or the  performance or observance by
the Borrower or any Subsidiary of any of its obligations under this Agreement or
any other instrument or document furnished pursuant hereto;  (iii) such assignee
represents  and  warrants  that it is  legally  authorized  to enter  into  such
Assignment and  Acceptance;  (iv) such assignee  confirms that it has received a
copy of this  Agreement,  together  with  copies  of the most  recent  financial
statements  delivered  pursuant  to Section  5.02 and such other  documents  and
information  as it has deemed  appropriate  to make its own credit  analysis and
decision to enter into such  Assignment and  Acceptance;  (v) such assignee will
independently and without reliance upon the Administrative Agent, such assigning
Lender,  or any other Lender,  and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this  Agreement;  (vi) such assignee  appoints
and authorizes the  Administrative  Agent to take such action as  administrative
agent on its behalf and to exercise  such  powers  under this  Agreement  as are
delegated to the  Administrative  Agent by the terms hereof,  together with such
powers as are reasonably incidental thereto; and (vii) such assignee agrees that
it will perform in accordance with their terms all the obligations  which by the
terms of this Agreement are required to be performed by it as a Lender.

     (d) The  Administrative  Agent shall  maintain at one of its offices in The
City of New York a copy of each Assignment and Acceptance  delivered to it and a
register for the recordation of the names and addresses of the Lenders,  and the
Commitment of, and principal  amount of the Loans owing to, each Lender pursuant
to the terms hereof from time to time (the "Register"). The Administrative Agent
shall also record in the Register  the then  scheduled  Maturity  Date and shall
update the Register  from time to time upon any change in a Lender's  Commitment
and Loans pursuant to the terms of this  Agreement.  The entries in the Register
shall be conclusive  in the absence of manifest  error,  and the  Borrower,  the
Administrative  Agent  and the  Lenders  may treat  each  Person  whose  name is
recorded in the Register  pursuant to the terms hereof as a Lender hereunder for
all purposes of this  Agreement.  The Register shall be available for inspection
by the Borrower  and any Lender,  at any  reasonable  time and from time to time
upon reasonable prior notice.
<PAGE>

     (e) Upon its receipt of a duly completed Assignment and Acceptance executed
by an  assigning  Lender  and  an  assignee,  together  with  an  Administrative
Questionnaire  completed in respect of the assignee  (unless the assignee  shall
already be a Lender  hereunder),  the processing and recordation fee referred to
in paragraph (b) above and, if required, the written consent of the Borrower and
the Administrative Agent to such assignment,  the Administrative Agent shall (i)
accept such  Assignment and Acceptance,  (ii) record the  information  contained
therein in the  Register,  (iii) give prompt  notice  thereof to the Lenders and
(iv) send a copy of such Assignment and Acceptance to the Borrower.

     (f)  Each  Lender  may,   without  the  consent  of  the  Borrower  or  the
Administrative Agent, sell participations to one or more banks or other entities
in  all  or a  portion  of its  rights  and  obligations  under  this  Agreement
(including  all or a  portion  of its  Commitment  and the  Loans  owing to it);
provided, however, that (i) such Lender's obligations under this Agreement shall
remain unchanged,  (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations,  (iii) the participating
banks or other entities shall be entitled to the benefit of the cost  protection
provisions  contained in Sections  2.13,  2.15 and 2.19 to the same extent as if
they were Lenders and (iv) the Borrower,  the Administrative Agent and the other
Lenders  shall  continue  to deal  solely  and  directly  with  such  Lender  in
connection with such Lender's rights and obligations  under this Agreement,  and
such  Lender  shall  retain  the sole right to enforce  the  obligations  of the
Borrower  relating to the Loans and to approve any  amendment,  modification  or
waiver of any provision of this Agreement (other than amendments, modifications,
or waivers  decreasing any fees payable  hereunder or the amount of principal of
or the rate at which  interest is payable on the Loans,  extending any scheduled
principal payment date or date fixed for the payment of interest on the Loans or
Fees, or changing or extending the Commitments).

     (g)  Any  Lender  may,  in  connection  with  any  assignment  or  proposed
assignment  pursuant to this Section 9.04,  disclose to the assignee or proposed
assignee any information relating to the Borrower furnished to such Lender by or
on  behalf of the  Borrower;  provided  that,  prior to any such  disclosure  of
information  designated by the Borrower as  confidential,  each such assignee or
proposed  assignee shall execute an agreement  whereby such assignee shall agree
(subject to  customary  exceptions)  to  preserve  the  confidentiality  of such
confidential  information.   It  is  understood  that  confidential  information
relating to the Borrower  would not  ordinarily be provided in  connection  with
assignments  of  Competitive  Loans.  No  Lender  may,  in  connection  with any
participation or proposed  participation pursuant to this Section 9.04, disclose
to any participant or proposed participant any confidential information relating
to the Borrower without the prior written consent of the Borrower.

     (h) Any Lender may at any time pledge or assign a security  interest in all
or any portion of its rights under this Agreement and its  promissory  notes (if
any) to secure obligations of such Lender to a Federal Reserve Bank or, with the
prior written  consent of the Borrower  (which consent shall not be unreasonably
withheld,  provided,  that the  consent of the  Borrower  to any such  pledge or
assignment  shall not be  required  at any time an Event of  Default  shall have
occurred  and be  continuing),  to  secure  other  obligations  of such  Lender;
provided that no such pledge or assignment shall release such Lender from any of
its  obligations  hereunder or substitute  any such pledgee or assignee for such
Lender as a party hereto.
<PAGE>

     (i) The  Borrower  shall not assign or delegate any of its rights or duties
hereunder.

     SECTION 9.05. Expenses; Indemnity.

     (a)  The  Borrower  agrees  to  pay  (i)  all  reasonable  legal  fees  and
disbursements  incurred  by the  Administrative  Agent  in  connection  with the
preparation of this  Agreement and (ii) all  out-of-pocket  expenses  (including
reasonable fees and  disbursements  of counsel)  incurred by the  Administrative
Agent and any Lender in connection with any amendments, modifications or waivers
of the provisions hereof or thereof or incurred by the  Administrative  Agent or
any Lender in connection  with the  enforcement or protection of their rights in
connection with this Agreement.

     (b) The Borrower agrees to indemnify the Administrative  Agent, each Lender
and each of their  respective  directors,  officers,  employees,  Affiliates and
agents (each such Person being called an "Indemnitee") against, and to hold each
Indemnitee harmless from, any and all losses, claims,  damages,  liabilities and
related expenses, including reasonable counsel fees and expenses, incurred by or
asserted  against any Indemnitee  arising out of, (i) the use of the proceeds of
the Loans or (ii) any claim, litigation,  investigation,  or proceeding relating
to this  Agreement,  the use of such proceeds or the  transactions  contemplated
hereby,  whether or not any  Indemnitee is a party  thereto;  provided that such
indemnity shall not, as to any Indemnitee,  be available to the extent that such
losses, claims,  damages,  liabilities,  or related expenses are determined by a
court of  competent  jurisdiction  by final and  nonappealable  judgment to have
resulted  from the gross  negligence or willful  misconduct of such  Indemnitee.
Each Lender shall notify the Borrower  promptly after it determines that it will
make a claim for indemnification  under this Section 9.05(b). The Borrower shall
be entitled to participate in the defense of the litigation,  investigation,  or
proceeding giving rise to such claim with counsel satisfactory to the Lender, in
the  exercise  of its  reasonable  judgment;  provided,  however,  that any such
participation  in such  defense  shall be  conducted  by the Borrower and at the
Borrower's  expense and in a manner considered by such Lender to be satisfactory
and  effective  to protect  against  such claim  without  causing  damage to the
conduct of, or affecting such Lender's  control of, such Lender's  defense.  The
Borrower shall inform such Lender of its intention to participate in the defense
of such claim within 15 days after receipt of notice thereof from such Lender.

     (c) The provisions of this Section 9.05 shall remain  operative and in full
force and effect regardless of the expiration of the term of this Agreement, the
consummation of the transactions  contemplated  hereby,  the repayment of any of
the Loans, the invalidity or  unenforceability  of any term or provision of this
Agreement, or any investigation made by or on behalf of the Administrative Agent
or any  Lender.  All  amounts  due under this  Section  9.05 shall be payable on
written demand therefor.
<PAGE>

     SECTION 9.06. Right of Setoff.

     If an Event of Default shall have occurred and be  continuing,  each Lender
is hereby  authorized at any time and from time to time,  to the fullest  extent
permitted by law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held and other indebtedness at
any  time  owing by such  Lender  to or for the  credit  or the  account  of the
Borrower against any of and all the obligations of the Borrower now or hereafter
existing under this Agreement  held by such Lender,  irrespective  of whether or
not such Lender  shall have made any demand  under this  Agreement  and although
such obligations may be unmatured.  The rights of each Lender under this Section
are in addition to other rights and remedies  (including other rights of setoff)
which such Lender may have.

     SECTION 9.07. Applicable Law.

     THIS  AGREEMENT  SHALL BE CONSTRUED IN ACCORDANCE  WITH AND GOVERNED BY THE
LAWS OF THE STATE OF NEW YORK.

     SECTION 9.08. Waivers; Amendment.

     (a) No  failure  or delay of the  Administrative  Agent  or any  Lender  in
exercising any power or right hereunder  shall operate as a waiver thereof,  nor
shall  any  single  or  partial  exercise  of any such  right or  power,  or any
abandonment  or  discontinuance  of steps  to  enforce  such a right  or  power,
preclude  any other or further  exercise  thereof or the  exercise  of any other
right or power.  The rights and  remedies  of the  Administrative  Agent and the
Lenders hereunder are cumulative and are not exclusive of any rights or remedies
which they would otherwise have. No waiver of any provision of this Agreement or
consent  to any  departure  by the  Borrower  therefrom  shall  in any  event be
effective  unless the same shall be permitted by paragraph  (b) below,  and then
such waiver or consent shall be effective only in the specific  instance and for
the purpose  for which  given.  No notice or demand on the  Borrower in any case
shall  entitle the Borrower to any other or further  notice or demand in similar
or other circumstances.

     (b) Except as provided in Section  2.11(d),  neither this Agreement nor any
provision  hereof may be waived,  amended,  or  modified  except  pursuant to an
agreement or agreements in writing entered into by the Borrower and the Required
Lenders;  provided,  however,  that no such  agreement  shall (i)  decrease  the
principal  amount  of, or extend  the  maturity  of or any  scheduled  principal
payment date or date for the payment of any  interest on, any Loan,  or waive or
excuse any such payment or any part thereof, or decrease the rate of interest on
any Loan,  without  the prior  written  consent of each  Lender,  (ii) except as
provided in Section  2.11(d),  change or extend the  Commitment of any Lender or
decrease  or extend any  scheduled  payment  date for the  Facility  Fees of any
Lender  without  the prior  written  consent of such  Lender,  or (iii) amend or
modify the  provisions  of Section 2.16,  the  provisions of this Section or the
definition  of "Required  Lenders",  without the prior  written  consent of each
Lender;  provided  further  that no  such  agreement  shall  amend,  modify,  or
otherwise  affect the  rights or duties of the  Administrative  Agent  hereunder
without the prior written consent of the Administrative Agent. Each Lender shall
be bound by any waiver, amendment, or modification authorized by this Section or
by Section 2.11(d), and any consent by any Lender pursuant to this Section or by
Section  2.11(d)  shall  bind  any  Transferee  of its  rights  and  obligations
hereunder.
<PAGE>

     SECTION 9.09. Interest Rate Limitation.

     Notwithstanding  anything  herein  to  the  contrary,  if at any  time  the
applicable  interest rate,  together with all fees and charges which are treated
as interest under applicable law (collectively,  the "Charges"), as provided for
herein or in any other document  executed in connection  herewith,  or otherwise
contracted  for,  charged,  received,  taken,  or reserved by any Lender,  shall
exceed the maximum lawful rate (the "Maximum Rate") which may be contracted for,
charged,  taken,  received,  or  reserved  by such  Lender  in  accordance  with
applicable law, the rate of interest  payable to such Lender,  together with all
Charges payable to such Lender, shall be limited to the Maximum Rate.

     SECTION 9.10. Entire Agreement.

     This Agreement constitutes the entire contract between the parties relative
to the subject  matter  hereof.  Any previous  agreement  among the parties with
respect to the subject matter hereof is superseded by this Agreement. Nothing in
this Agreement, expressed or implied, is intended to confer upon any party other
than the  parties  hereto and  thereto any  rights,  remedies,  obligations,  or
liabilities under or by reason of this Agreement.

     SECTION 9.11. Waiver of Jury Trial.

     EACH PARTY  HERETO  HEREBY  WAIVES,  TO THE  FULLEST  EXTENT  PERMITTED  BY
APPLICABLE  LAW,  ANY  RIGHT IT MAY HAVE TO A TRIAL  BY JURY IN  RESPECT  OF ANY
LITIGATION  DIRECTLY OR INDIRECTLY  ARISING OUT OF, UNDER, OR IN CONNECTION WITH
THIS  AGREEMENT OR ANY OTHER  AGREEMENT OR INSTRUMENT  EXECUTED AND DELIVERED IN
CONNECTION  HEREWITH.  EACH PARTY HERETO (a) CERTIFIES  THAT NO  REPRESENTATIVE,
AGENT, OR ATTORNEY OF ANY OTHER PARTY HAS  REPRESENTED,  EXPRESSLY OR OTHERWISE,
THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER, AND (b) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE
BEEN  INDUCED  TO ENTER  INTO  THIS  AGREEMENT  AND,  IF  APPLICABLE,  ANY OTHER
AGREEMENT OR INSTRUMENT EXECUTED AND DELIVERED IN CONNECTION HEREWITH, BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.11.

     SECTION 9.12. Severability.

     In the event any one or more of the provisions  contained in this Agreement
should be held invalid,  illegal, or unenforceable in any respect, the validity,
legality and enforceability of the remaining  provisions  contained herein shall
not in any way be affected or impaired  thereby.  The parties shall  endeavor in
good-faith  negotiations  to replace  the  invalid,  illegal,  or  unenforceable
provisions with valid  provisions the economic effect of which comes as close as
possible to that of the invalid, illegal, or unenforceable provisions.
<PAGE>

     SECTION 9.13. Counterparts.

     This Agreement may be executed in two or more  counterparts,  each of which
shall  constitute  an  original  but all of  which  when  taken  together  shall
constitute but one contract,  and shall become  effective as provided in Section
9.03.

     SECTION 9.14. Headings.

     Article and Section  headings and the Table of Contents used herein are for
convenience  of reference  only,  are not part of this  Agreement and are not to
affect the construction  of, or to be taken into  consideration in interpreting,
this Agreement.

     SECTION 9.15. Jurisdiction; Consent to Service of Process.

     (a) The Borrower  hereby  irrevocably  and  unconditionally  submits to the
nonexclusive  jurisdiction  of any New York State court or Federal  court of the
United States of America  sitting in New York City, and any appellate court from
any  thereof,  in any action or  proceeding  arising  out of or relating to this
Agreement  or any other  agreement  or  instrument  executed  and  delivered  in
connection herewith, or for recognition or enforcement of any judgment, and each
of the parties hereto hereby  irrevocably  and  unconditionally  agrees that all
claims in respect of any such action or proceeding  may be heard and  determined
in such New York  State or, to the  extent  permitted  by law,  in such  Federal
court.  Each of the  parties  hereto  agrees  that a final  judgment in any such
action  or  proceeding  shall  be  conclusive  and  may  be  enforced  in  other
jurisdictions  by suit on the judgment or in any other  manner  provided by law.
Nothing in this  Agreement  shall affect any right that any Lender may otherwise
have to bring any action or proceeding  relating to this  Agreement  against the
Borrower or its properties in the courts of any jurisdiction.

     (b) The Borrower hereby  irrevocably  and  unconditionally  waives,  to the
fullest extent it may legally and  effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit,  action, or proceeding
arising  out of or  relating  to  this  Agreement  or  any  other  agreement  or
instrument  executed and delivered in connection  herewith in any New York State
court or Federal court of the United States of America sitting in New York City.
Each of the parties  hereto hereby  irrevocably  waives,  to the fullest  extent
permitted by law, the defense of an  inconvenient  forum to the  maintenance  of
such action or proceeding in any such court.

     (c) Each party to this Agreement irrevocably consents to service of process
in the manner  provided for notices in Section 9.01.  Nothing in this  Agreement
will  affect the right of any party to this  Agreement  to serve  process in any
other manner permitted by law.

                            [Signature pages follow]


<PAGE>

     IN WITNESS WHEREOF, the Borrower,  the Administrative Agent and the Lenders
have caused this  Agreement to be duly executed by their  respective  authorized
officers as of the day and year first above written.

                         CITIZENS COMMUNICATIONS COMPANY



                        By:  /s/ Donald B. Armour
                             -------------------------------------------
                             Name: Donald B. Armour
                             Title: Vice-President Finance and Treasurer


                        THE CHASE MANHATTAN BANK,
                        as Administrative Agent



                        By:  /s/ Joan M. Fitzgibbon
                            ---------------------------------------------
                            Name: Joan M. Fitzgibbon
                            Title: Managing Director



<PAGE>


                        Lenders:
                        -------


                        THE CHASE MANHATTAN BANK



                        By: Joan M. Fitzgibbon
                            ---------------------------------------------
                            Name: Joan M. Fitzgibbon
                            Title: Managing Director





<PAGE>

                                                           SIGNATURE PAGE TO
                                             CITIZENS COMMUNICATIONS COMPANY
                                           COMPETITIVE ADVANCE AND REVOLVING
                                                   CREDIT FACILITY AGREEMENT




                                 Name of Institution: Citibank N.A.
                                                      -------------


                                 By:   /s/ Thomas Labergere
                                       ------------------------------
                                       Name: Thomas Labergere
                                       Title: Vice-President



<PAGE>




                                                        SIGNATURE PAGE TO
                                          CITIZENS COMMUNICATIONS COMPANY
                                        COMPETITIVE ADVANCE AND REVOLVING
                                                CREDIT FACILITY AGREEMENT




                         Name of Institution: Toronto Dominion (Texas), Inc.
                                              --------------------------------


                         By:    /s/ Caroline Faeth
                                -----------------------
                                Name:  Caroline Faeth
                                Title:Vice-President




<PAGE>



                                                        SIGNATURE PAGE TO
                                          CITIZENS COMMUNICATIONS COMPANY
                                        COMPETITIVE ADVANCE AND REVOLVING
                                                CREDIT FACILITY AGREEMENT




               Name of Institution:    Bear Stearns Corporate Lending
                                       ------------------------------


                               By:    /s/ Lawrence B. Alletto
                                      --------------------------------
                                      Name:  Lawrence B. Alletto
                                      Title: Senior Managing Director
                                      Bear Stearns Corporate Lending


<PAGE>




                                                    SIGNATURE PAGE TO
                                      CITIZENS COMMUNICATIONS COMPANY
                                    COMPETITIVE ADVANCE AND REVOLVING
                                            CREDIT FACILITY AGREEMENT




                           Name of Institution:   Bank of America , N. A.
                                                  -----------------------


                                     By: /s/ Michael Pavell
                                         -----------------------
                                         Name: Michael Pavell
                                         Title: Vice-President




<PAGE>


                                                       SIGNATURE PAGE TO
                                         CITIZENS COMMUNICATIONS COMPANY
                                       COMPETITIVE ADVANCE AND REVOLVING
                                               CREDIT FACILITY AGREEMENT




                             Name of Institution:   Bank One, NA
                                                    ------------


                                     By: /s/ Jennifer L. Jones
                                         ------------------------
                                         Name: Jennifer L. Jones
                                         Title: Assistant Vice-President




<PAGE>


                                                       SIGNATURE PAGE TO
                                         CITIZENS COMMUNICATIONS COMPANY
                                       COMPETITIVE ADVANCE AND REVOLVING
                                               CREDIT FACILITY AGREEMENT




                                  Name of Institution:   Mellon Bank, N.A.
                                                         -----------------


                                          By: /s/ Thomas J. Tarasovich, Jr.
                                              -----------------------------
                                              Name: Thomas J. Tarasovich, Jr.
                                              Title: Lending Officer