THIRD AMENDMENT TO CREDIT AGREEMENT

         THIRD  AMENDMENT TO CREDIT  AGREEMENT (this  "Amendment"),  dated as of
March 6, 2001, among USOL HOLDINGS,  INC., a corporation  organized and existing
under the laws of the State of Oregon  ("Holdings"),  USOL,  INC., a corporation
organized and existing under the laws of the State of Delaware (the "Borrower"),
the  financial  institutions  from time to time  party to the  Credit  Agreement
referred to below (each, a "Bank" and  collectively,  the "Banks"),  BNP PARIBAS
(f/k/a PARIBAS), as Administrative Agent (in such capacity,  the "Administrative
Agent"),  BNP PARIBAS (f/k/a PARIBAS),  as Syndication  Agent (in such capacity,
the "Syndication Agent") and DEUTSCHE BANK AG, NEW YORK BRANCH, as Documentation
Agent (in such capacity, the "Documentation  Agent"). All capitalized terms used
herein and not  otherwise  defined  herein  shall have the  respective  meanings
provided such terms in the Credit Agreement referred to below.

                              W I T N E S S E T H:
                               - - - - - - - - - -


         WHEREAS, the Borrower,  Holdings,  the Banks, the Administrative Agent,
the  Syndication  Agent  and the  Documentation  Agent are  parties  to a Credit
Agreement,   dated  as  of  December  30,  1999  (as  amended,  modified  and/or
supplemented to, but not including,  the date hereof,  the "Credit  Agreement");
and

         WHEREAS,  subject to the terms and  conditions of this  Amendment,  the
parties hereto wish to amend the Credit Agreement as herein provided;

         NOW, THEREFORE, it is agreed:

I.       Amendments to Credit Agreement.

1. Section  3.02(A)(c) of the Credit Agreement is hereby amended by deleting the
table  appearing in said Section and  inserting  the following new table in lieu
thereof:

"Scheduled Repayment Dates Percentage

                  The Quarterly Payment Date ended March 31, 2003    1.00%
                  Each Quarterly Payment Date occurring during the   2.00%
                  9 month period  commencing on April 1, 2003
                  Each Quarterly Payment Date occurring              3.25%
                  during the 12 month period commencing
                  on January 1, 2004
                  Each Quarterly Payment Date occurring              5.50%
                  during the 12 month period commencing
                  on January 1, 2005
                  Each Quarterly Payment Date occurring              6.75%
                  during the 12 month period commencing
                  on January 1, 2006
                  Each Quarterly Payment Date occurring              7.75%"
                  during the 12 month period commencing
                  on January 1, 2007

2. Section 8.08 of the Credit  Agreement is hereby  amended by (i) inserting the
text "(a)"  immediately  prior to the text  "Holdings will not" appearing at the
beginning  of said  Section,  (ii)  deleting  the text "$450"  appearing in said
Section and inserting the text "$550" in lieu thereof,  (iii)  deleting the text
"8.08(I)"  appearing in said Section and inserting the text "8.08(a)(I)" in lieu
thereof,  (iv) deleting each reference to the text "8.08(II)"  appearing in said
Section and inserting the text  "8.08(a)(II)"  in lieu thereof and (v) inserting
the following new clause (b) at the end of said Section:

                  "(b)  Notwithstanding  anything to the  contrary  set forth in
                  clause (a) above, the aggregate amount of Capital Expenditures
                  related to  Telephony  Passings  shall not exceed,  during any
                  period or fiscal  year set forth  below,  the amount set forth
                  below opposite such date:
<TABLE>
<CAPTION>

                                  Fiscal Year Ended                           Amount
                                  -----------------                           ------
                     <S>                                                    <C>

                     January 1, 2000 -
                     December 31, 2001                                      $  4,000,000
                     December 31, 2002                                      $  1,750,000
                     January 1, 2003 and thereafter                         $    500,000"
</TABLE>

3.  Section  8.10 of the Credit  Agreement  is hereby  amended by deleting  said
Section in its entirety and  inserting  the  following  new Section 8.10 in lieu
thereof:

                  "8.10 Interest Coverage. Holdings will not permit the ratio of
                  its  Consolidated  EBITDA  to its  Net  Consolidated  Interest
                  Expense  for any period of four  consecutive  fiscal  quarters
                  ending on the last day of a fiscal  quarter  of  Holdings,  in
                  each case taken as one accounting  period, to be less than the
                  ratio set forth opposite such date below:

                                 Fiscal Quarter Ended                     Ratio
                                 --------------------                     -----
                    December 31, 2002                                0.90:1.00
                    March 31, 2003                                   1.75:1.00
                    June 30, 2003                                    2.00:1.00
                    September 30, 2003                               2.25:1.00
                    December 31, 2003                                2.25:1.00
                    March 31, 2004                                   2.75.1.00
                    June 30, 2004                                    2.75:1.00
                    September 30, 2004                               3.00:1.00
                    December 31, 2004                                3.00:1.00
                    March 31, 2005 and thereafter                    3.50:1.00"

4.  Section  8.11 of the Credit  Agreement  is hereby  amended by deleting  said
Section in its entirety and  inserting  the  following  new Section 8.11 in lieu
thereof:

                  "8.11 Leverage  Ratios.  Holdings will not permit the ratio of
                  Consolidated  Indebtedness as at the end of any fiscal quarter
                  ended on the date set forth below to  Annualized  Consolidated
                  EBITDA  for such  fiscal  quarter,  in each case  taken as one
                  accounting  period,  ending on the date set forth  below to be
                  greater than the ratio set forth opposite such date below:

                                Fiscal Quarter Ended                      Ratio
                                --------------------                      -----
                  December 31, 2002                                  12.00:1.00
                  March 31, 2003                                      6.00:1.00
                  June 30, 2003                                       5.50:1.00
                  September 30, 2003                                  5.50:1.00
                  December 31, 2003                                   5.00:1.00
                  March 31, 2004                                      4.00:1.00
                  June 30, 2004                                       4.00:1.00
                  September 30, 2004                                  4.00:1.00
                  December 31, 2004                                   4.00:1.00
                  March 31, 2005 and thereafter                       3.00:1.00"

5.  Section  8 of the  Credit  Agreement  is hereby  amended  by  inserting  the
following new Sections 8.20, 8.21 and 8.22 at the end of said Section:

                  "8.20 Minimum Cable  Passings.  Holdings will not permit,  and
                  will cause each of its Subsidiaries  (other than Residentclub)
                  not to permit,  the number of Cable Passings at the end of any
                  period  ended on or after a date  set  forth  below to be less
                  than the number of Cable Passings set forth opposite such date
                  set forth below:

                                  Fiscal Quarter Ended                  Amount
                                  --------------------                  ------

                        March 31, 2001                                    27,500
                        June 30, 2001                                     31,500
                        September 30, 2001                                36,500
                        December 31, 2001                                 41,000
                        March 31, 2002                                    46,000
                        June 30, 2002                                     50,000
                        September 30, 2002                                54,000
                        December 31, 2002                                 55,000

                  8.21  Minimum  Revenues.  Holdings  will not permit,  and will
                  cause each of its Subsidiaries  (other than  Residentclub) not
                  to permit,  its  Consolidated  Revenues for any fiscal quarter
                  ended on a date set forth below to be less than the number set
                  forth below opposite such date set forth below:

                                 Fiscal Quarter Ended                   Amount
                                 --------------------                   ------
                        March 31, 2001                                $2,800,000
                        June 30, 2001                                 $3,100,000
                        September 30, 2001                            $3,600,000
                        December 31, 2001                             $4,100,000
                        March 31, 2002                                $4,800,000
                        June 30, 2002                                 $5,300,000
                        September 30, 2002                            $5,900,000
                        December  31, 2002                            $6,400,000
                        March 31, 2003                                $7,000,000
                        June 30, 2003                                 $7,100,000
                        September 30, 2003                            $7,200,000
                        December 31, 2003                             $7,400,000

                  8.22 Minimum  Consolidated  EBITDA.  Holdings will not permit,
                  and  will  cause  each  of  its   Subsidiaries   (other   than
                  Residentclub) not to permit,  its Consolidated  EBITDA for any
                  fiscal quarter ended on a date set forth below to be less than
                  the number set forth below opposite such date set forth below:

                                 Fiscal Quarter Ended                 Amount
                                 --------------------                 ------
                        March 31, 2001                             $(1,300,000)
                        June 30, 2001                              $(1,200,000)
                        September 30, 2001                           $(900,000)
                        December 31, 2001                            $(600,000)
                        March 31, 2002                               $(300,000)
                        June 30, 2002                                       $0
                        September 30, 2002                            $200,000
                        December  31, 2002                            $400,000"

6. The definition of Applicable  Commitment  Commission  Percentage appearing in
Section 10 of the Credit Agreement is hereby amended by deleting said definition
in its entirety and inserting the following new definition in lieu thereof:

                  "Applicable  Commitment Commission Percentage" shall mean, for
                  any day, a percentage per annum equal to (i) if the Unutilized
                  Commitment  on such day is greater than or equal to 66-2/3% of
                  the Total Commitment (as of the Effective Date),  1.375%, (ii)
                  if the Unutilized  Commitment on such day is less than 66-2/3%
                  of the Total Commitment (as of the Effective Date) and greater
                  than or equal to  33-1/3% of the Total  Commitment  (as of the
                  Effective   Date),   1.125%,   and  (iii)  if  the  Unutilized
                  Commitment  on such  day is less  than  33-1/3%  of the  Total
                  Commitment  (as  of  the  Effective   Date),   0.625%  of  the
                  Unutilized Commitment."

7. The  definition  of Applicable  Margin  appearing in Section 10 of the Credit
Agreement is hereby amended by (i) deleting the text "2.75%" appearing in clause
(i) of said  definition  and inserting the text "3.00%" in lieu thereof and (ii)
deleting  the text  "3.75%"  appearing  in clause  (ii) of said  definition  and
inserting the text "4.00%" in lieu thereof.

8. The  definition  of  Borrowing  Base  appearing  in  Section 10 of the Credit
Agreement is hereby amended by deleting the text "$675"  appearing in clause (x)
of said definition and inserting the text "$750" in lieu thereof.

9. The definition of Cable Television Debt appearing in Section 10 of the Credit
Agreement  is hereby  amended by deleting  said  definition  in its entirety and
inserting the following new definition in lieu thereof:

                  "Cable Television Debt" shall mean the following:

                           Period                                     Amount

                  Third Amendment Effective Date -
                  December 31, 2002                                    $750
                  January 1, 2003 - December 31, 2003                  $675
                  January 1, 2004 - December 31, 2004                  $600
                  January 1, 2005 - December 31, 2005                  $500
                  January 1, 2006 and thereafter                       $400

10. The definition of Debt Base appearing in Section 10 of the Credit  Agreement
is hereby amended by deleting the text ", less (z) any Indebtedness outstanding"
appearing immediately prior to the period in said definition.

11. The  definition  of  Telephone  Debt  appearing  in Section 10 of the Credit
Agreement  is hereby  amended by deleting  said  definition  in its entirety and
inserting the following new definition in lieu thereof:

                  "Telephone Debt" shall mean the following:

                           Period                                      Amount

                  Third Amendment Effective Date -
                  December 31, 2002                                    $450
                  January 1, 2003 - December 31, 2003                  $400
                  January 1, 2004 - December 31, 2004                  $300
                  January 1, 2005 and thereafter                       $200

12.  Section 10 of the Credit  Agreement  is hereby  amended by the deleting the
definitions  of  "Adjusted   Consolidated   EBITDA"  and  "Annualized   Adjusted
Consolidated  EBITDA"  appearing in said Section and inserting the following new
definitions in alphabetical order:

                  "Consolidated  Revenues" shall mean, for any period, the total
                  consolidated  gross revenues of Holdings and its  Subsidiaries
                  for such period determined on a consolidated basis, including,
                  without limitation, revenues related to the provision of cable
                  television services,  telephony services and all other related
                  services, in any event calculated in accordance with GAAP.

                  "GAAP" shall mean generally accepted accounting  principles in
                  the United States of America,  consistently  applied  during a
                  relevant period.

                  "Third  Amendment"  shall mean that certain Third Amendment to
                  Credit  Agreement,  dated as of February __,  2001,  among the
                  Borrower,  Holdings, the Administrative Agent, the Syndication
                  Agent, the Documentation Agent and the Banks party thereto.

                  "Third  Amendment  Effective  Date"  shall  have  the  meaning
provided in the Third Amendment.

II.      Miscellaneous Provisions.

         1. In order to induce  the  Banks to enter  into  this  Amendment,  the
Borrower hereby represents and warrants that:

         (a) no  Default or Event of  Default  exists as of the Third  Amendment
Effective Date, both immediately  before and immediately  after giving effect to
this Amendment; and

         (b) all of the representations  and warranties  contained in the Credit
Agreement  and the other Credit  Documents  are true and correct in all material
respects  on the Third  Amendment  Effective  Date both  immediately  before and
immediately  after  giving  effect to this  Amendment,  with the same  effect as
though such  representations and warranties had been made on and as of the Third
Amendment  Effective  Date  (it  being  understood  that any  representation  or
warranty  made as of a specific  date shall be true and correct in all  material
respects as of such specific date).

         2. This  Amendment is limited as specified  and shall not  constitute a
modification, acceptance or waiver of, or consent to, any other provision of the
Credit Agreement or any other Credit Document.

         3. This Amendment may be executed in any number of counterparts  and by
the  different   parties  hereto  on  separate   counterparts,   each  of  which
counterparts when executed and delivered shall be an original,  but all of which
shall  together  constitute  one and the  same  instrument.  A  complete  set of
counterparts shall be lodged with the Borrower and the Administrative Agent.

         4.  THIS  AMENDMENT  AND THE  RIGHTS  AND  OBLIGATIONS  OF THE  PARTIES
HEREUNDER  SHALL BE CONSTRUED IN ACCORDANCE  WITH AND GOVERNED BY THE LAW OF THE
STATE OF NEW YORK.

         5. This  Amendment  shall  become  effective  on the date  (the  "Third
Amendment Effective Date") when each of the following conditions shall have been
satisfied:

                  (i) the Administrative  Agent shall have received from Jenkens
         & Gilchrist P.C.,  special New York counsel to the Credit  Parties,  an
         opinion addressed to the Administrative Agent, the Collateral Agent and
         each of the Banks and dated the Third Amendment  Effective Date in form
         and substance  satisfactory to the  Administrative  Agent, and covering
         such matters incident to this Amendment as the Administrative Agent may
         reasonably request;

                  (ii) the Borrower shall have paid to the Administrative  Agent
         the Amendment Fee and such other fees as may have been otherwise agreed
         to in writing among such parties; and

                  (iii) the Borrower,  Holdings, each Guarantor and the Required
         Banks  shall have  signed a  counterpart  hereof  (whether  the same or
         different  counterparts) and shall have delivered  (including by way of
         facsimile  transmission)  the same to the  Administrative  Agent as its
         Notice Office.

         6. By executing and delivering a copy hereof,  each Credit Party hereby
agrees that all Loans shall be fully  guaranteed  pursuant to the  Guaranties in
accordance  with the terms and  provisions  thereof  and shall be fully  secured
pursuant to the Pledge Agreement and the Security Agreement.

         7. From and after the Third Amendment Effective Date, all references in
the  Credit  Agreement  and each of the other  Credit  Documents  to the  Credit
Agreement  shall be deemed to be references to the Credit  Agreement as modified
hereby.

         8. The Borrower hereby  covenants and agrees that, so long as the Third
Amendment  Effective  Date occurs,  it shall pay to each Bank which executes and
delivers to the  Administrative  Agent (or its designee) a counterpart hereof by
the later to occur of (x) the close of business on the Third Amendment Effective
Date or (y) 5:00 p.m.  (New York City time) on  February  __,  2001 (such  later
date, the "Outside  Date"),  or which is an immediate or successive  assignee of
any Bank  described  above  (with  respect  to  amounts  obtained,  directly  or
indirectly,  by  assignment  of such  Bank),  a  non-refundable  cash  fee  (the
"Amendment Fee") in an amount (in U.S. dollars) equal to 50 basis points (0.50%)
of the Total  Commitment (as of the Effective  Date),  which Amendment Fee shall
not be subject to counterclaim or set-off for, or be otherwise  affected by, any
claim or dispute relating to any other matters and shall be paid by the Borrower
to the  Administrative  Agent for  distribution  to the Banks no later  than the
[second] Business Day following the Outside Date.

         9. In addition to the  representations  and warranties made pursuant to
preceding  Section  1, and in order  to  induce  the  Banks to enter  into  this
Amendment,  the Borrower hereby represents and warrants that (i) attached hereto
are updated Schedules to the Credit Agreement,  which Schedules  attached hereto
are in each case true and correct (based upon the representations and warranties
made  in  the  Credit  Agreement)  as  if  such  Schedules  were  prepared,  and
representation and warranty were made, as of the Third Amendment  Effective Date
and (ii)  attached  hereto are revised  Annexes to the  Security  Agreement  and
Pledge  Agreement  which  correspond  to the Annexes  attached  to the  Security
Agreement and Pledge  Agreement,  which Annexes attached hereto are in each case
true and correct (based upon the representations and warranties contained in the
Security Agreement or Pledge Agreement, as the case may be) as if the respective
Annexes were  prepared,  and  representation  and warranty  were made, as of the
Third Amendment Effective Date.

                                      * * *



<PAGE>


         IN  WITNESS  WHEREOF,   the  parties  hereto  have  caused  their  duly
authorized  officers to execute and deliver this  Amendment as of the date first
above written.

                                       USOL, INC.,
                                       as Borrower

                                       By:         /s/ Robert G. Solomon
                                          ----------------------------------
                                          Name: Robert G. Solomon
                                          Title:  CEO



                                       BNP PARIBAS,
                                       as Administrative Agent,
                                       Syndication Agent and
                                       individually, as Bank

                                       By:         /s/ Soloe Aizenberg
                                          -----------------------------------
                                          Name:   Soloe Aizenberg
                                          Title:  Director

                                       DEUTSCHE BANK AG, NEW YORK BRANCH,
                                       as Documentation Agent and
                                       individually, as Bank



                                       By:         /s/
                                          -----------------------------------
                                          Name:   Colleen Roux
                                          Title:  Director

                                       By:         /s/
                                          -----------------------------------
                                          Name:   Sangita Gupte
                                          Title:  Associate

                                       COAST BUSINESS CREDIT, as Bank



                                        By:         /s/
                                           ----------------------------------
                                           Name:   Jonathan Sigal
                                           Title:  Vice President

         Each of the  undersigned,  each being a Guarantor under, and as defined
in, the Credit Agreement referenced in the foregoing Amendment,  hereby consents
to the  entering  into of the  Amendment  and agrees to the  provisions  thereof
(including, without limitation, Section 6 and 7 of Part II thereof).

                                        USOL HOLDINGS, INC.,
                                        as Guarantor

                                        By:         /s/ Robert Solomon
                                           -----------------------------------
                                           Name:   Robert Solomon
                                           Title:  CEO



                                        [NAME OF SUBSIDIARY GUARANTOR],
                                        as Guarantor

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