AMENDMENT, CONSENT AND WAIVER

                  AMENDMENT, CONSENT AND WAIVER (this "Amendment"),  dated as of
September 8, 2000,  among USOL  HOLDINGS,  INC.  ("Holdings"),  USOL,  INC. (the
"Borrower"),  the various financial  institutions  party to the Credit Agreement
referred to below (the "Banks"),  BNP PARIBAS  (formerly  known as Paribas),  as
Administrative  Agent and  Syndication  Agent  and  DEUTSCHE  BANK AG,  NEW YORK
BRANCH,  as  Documentation  Agent.  All  capitalized  terms used  herein and not
otherwise defined shall have the respective  meanings provided such terms in the
Credit Agreement.

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


                  WHEREAS,  Holdings, the Borrower, the Banks and the Agents are
parties  to a Credit  Agreement,  dated as of  December  30,  1999 (as  amended,
modified or supplemented through the date hereof, the "Credit Agreement"); and

                  WHEREAS,   the  parties  hereto  wish-  to  amend  the  Credit
Agreement and consent to certain provisions as herein provided;

                  NOW, THEREFORE, it is agreed:

1.  Section 3 .OZ(A)(f) of the Credit  Agreement is hereby  amended by inserting
the  text  "and,  in the case of  U.S.-Austin,  50% of cash  proceeds  received"
immediately  after the text "on which  Holdings  or any  Subsidiary  of Holdings
(other than Residentclub" appearing in such Section.

2. Section 3.02(A)(g) of the Credit Agreement is hereby amended by inserting the
text  "(50% in the  case of  U.S.-Austin)"  immediately  after  the text  "100%"
appearing in such Section.

3. Section  4.04(a) of the Credit  Agreement  is hereby  amended by (I) deleting
such Section in its entirety  and (II)  inserting in lieu thereof the  following
new Section 4.04(a):

                  "4.04  Corporate  Documents;  Proceedings.  (a) On the Initial
                  Borrowing  Date, the Agents shall have received a certificate,
                  dated  the  Initial   Borrowing  Date,  signed  by  the  Chief
                  Executive   Officer,   President,   Chief  Financial  Officer,
                  President,  any Vice  President  or  General  Partner  of each
                  Credit Party and U.S.-Austin, and attested to by the Secretary
                  or  any   Assistant   Secretary   of  such  Credit  Party  and
                  U.S.-Austin,  in  the  form  of  Exhibit  E  with  appropriate
                  insertions,   together  with  copies  of  the  Certificate  of
                  Incorporation,  By-Laws,  Certificate of Limited  Partnership,
                  Agreement  of  Limited  Partnership  or  other  organizational
                  documents  of  such  Credit  Party  and  U.S.-Austin  and  the
                  resolutions or,  consents or similar  evidence of authority of
                  such  Credit  Party  and  U.S.-Austin   referred  to  in  such
                  certificate,  and the  foregoing  shall be  acceptable  to the
                  Agents and the Required Banks in their sole discretion."

4. Section  4.04(b) of the Credit  Agreement is hereby  amended by (I) inserting
the text ", partnership" immediately after the text "All corporate" appearing in
such Section and (II) inserting the text "partnership  proceedings," immediately
after the text "corporate proceedings," appearing in such Section.


<PAGE>

5. Section 4.05 of the Credit  Agreement is hereby  amended by (I) inserting the
text  "Partnership   Agreements;"  immediately  after  the  text  "Shareholders'
Agreements;"  appearing in the title to such  Section,  (II)  inserting the text
"Partnership Agreements," immediately after the text "Shareholders' Agreements,"
appearing in the last  sentence of such  Section,  (III)  redesignating  clauses
(iii),  (iv),  (v),  (vi),  (vii),  (viii) and (ix) appearing in such Section as
clauses (iv),  (v),  (vi),  (vii),  (viii),  (ix) and (x) and (IV) inserting the
following new clause (iii):

                  "(iii) all  agreements  entered  into by the  Borrower  or any
                  Subsidiary  of the Borrower  governing  the terms and relative
                  rights of its partnership interests and any agreements entered
                  into by the partners  relating to any such entity with respect
                  to their partnership interests (collectively, the "Partnership
                  Agreements");"

6. Section 4.06 of the Credit  Agreement is hereby  amended by (I) deleting such
Section in its entirety and (II)  inserting  in lieu thereof the  following  new
Section 4.06:

                  "4.06 Pledge  Agreements.  (a) On the Initial  Borrowing Date,
                  each Credit  Party shall have duly  authorized,  executed  and
                  delivered  a Pledge  Agreement  in the form of Exhibit F-1 (as
                  modified,  supplemented  or  amended  from  time to time,  the
                  "Corporate Pledge  Agreement") and shall have delivered to the
                  Collateral  Agent, as Pledgee  thereunder,  all of the Pledged
                  Securities  referred to therein then owned by each such Credit
                  Party (x)  endorsed in blank in the case of  promissory  notes
                  constituting Pledged Securities and (y) together with executed
                  and undated  irrevocable  stock powers, in the case of capital
                  stock constituting Pledged Securities.

                           (b) On the Initial Borrowing Date, the Borrower shall
                  have duly  authorized,  executed and  delivered a  Partnership
                  Pledge Agreement  substantially in the form of Exhibit F-2 (as
                  modified,  supplemented  or  amended  from  time to time,  the
                  "Partnership  Pledge  Agreement")  and shall have delivered to
                  the Collateral Agent, as Pledgee  thereunder,  if certificated
                  all of the Pledged  Partnership  Interests referred to therein
                  then owned by the Borrower  together with executed and undated
                  irrevocable  stock powers or other  acceptable  instruments of
                  transfer and:

                         (i) evidence  that all other  actions  necessary or, in
                    the reasonable opinion of counsel to the Agent,  appropriate
                    to perfect and protect the first priority  security interest
                    created by the Partnership Pledge Agreement have been taken;

                         (ii)  acknowledgment  copies  of  all  UCC-1  financing
                    statements filed,  registered or recorded (or other evidence
                    satisfactory  to  the  Agent  that  there  has  been  filed,
                    registered  or recorded all financing  statements  necessary
                    and  advisable  to  perfect  the  security  interest  of the
                    Secured Creditors);

                         (iii)   consents   and/or   acknowledgments   from  the
                    requisite  number of limited partners to permit the granting
                    of the security  interests  purported to be granted pursuant
                    to the Partnership  Pledge Agreement as the Agent shall have
                    reasonably requested; and

                                       2

<PAGE>
                         (iv) copies of lien and judgment  searches as the Agent
                    shall reasonably request (and such termination statements or
                    other  documents  as may be necessary to release any Lien in
                    favor of any third party not otherwise  permitted by Section
                    8.01)."

7. Section 4.08 of the Credit  Agreement is hereby  amended by (I) deleting such
Section in its entirety and (II)  inserting  in lieu thereof the  following  new
Section 4.08:

                  "4.08  Subsidiaries  Guaranty.  On the Initial Borrowing Date,
                  each   Subsidiary  of  Holdings   (other  than  the  Borrower,
                  Residentclub  and  U.S.-Austin)  shall  have duly  authorized,
                  executed and delivered a Guaranty in the form of Exhibit H (as
                  modified,  supplemented  or  amended  from  time to time,  the
                  "Subsidiaries Guaranty")."

8.  Section 4.09 of the Credit  Agreement is hereby  amended by (I) deleting the
word "and" appearing  immediately  after the word "Holdings",  (II) inserting in
lieu  thereof  the  text "" and  (III)  inserting  the  text  "and  U.S.-Austin"
immediately after the text "Credit Party" appearing in such Section.

9.  Section 4.10 of the Credit  Agreement is hereby  amended by (I) deleting the
text "1998" and (II) inserting in lieu thereof the text "1999".

10.  Section  4.15(a)(i) of the Credit  Agreement is hereby amended by inserting
the text "and  Holdings as at December  31,  1999 and for the  six-month  period
ended  June 30,  2000"  immediately  after  the text  "1999"  appearing  in such
Section.

11. Section  4.15(a)(ii),of  the Credit Agreement is hereby amended by inserting
the text "and Holdings at December 31, 1999 and June 30, 2000" immediately after
each appearance of the text "September 30, 1999" in such Section.

12.  Section 4 of the  Credit  Agreement  is hereby  amended  by  inserting  the
following new Section 4.17 at the end of such Section:

               "4.17  Concentration  Account Consent Letters. On or prior to the
               Initial  Borrowing  Date,  the  Agents  shall have  received  the
               Concentration  Account Consent Letters in compliance with Section
               7.18."

13. Section  6.01(i) of the Credit  Agreement is hereby amended by inserting the
text "or  limited  partnership"  immediately  after the text  "validly  existing
corporation" appearing in such Section.

14. Section  6.01(ii) of the Credit Agreement is hereby amended by inserting the
text "or partnership"  immediately after the text "has the corporate"  appearing
in such Section.


                                       3

<PAGE>


15. Section 6.02 of the Credit  Agreement is hereby amended by (I) inserting the
text "or  Partnership"  immediately  after the word  "Corporate" in the title to
such Section and (II) inserting the text "or partnership" immediately after each
appearance of the word "corporate" in such Section.

16. Section 6.03 of the Credit Agreement is hereby amended by inserting the text
"Agreement  of  Limited   Partnership,   Certificate  of  Limited   Partnership"
immediately after the text "By-Laws" appearing in such Section.

17.  Section  6.05(a) of the Credit  Agreement is hereby amended by (1) deleting
such Section in its entirety  and (II)  inserting in lieu thereof the  following
new Section 6.05(a):

                  "6.05 Financial Statements:  Financial Condition:  Undisclosed
                  Liabilities;   Projections,  etc,  (a)  (i)  The  consolidated
                  balance  sheet of U.S.  Online  Communications,  Inc.  (or its
                  successors)  and  Firstlink as at December 31, 1997,  December
                  1998, and for the nine-month  period ended  September 30, 1999
                  and  Holdings  as at December  31, 1999 and for the  six-month
                  period  ended  June 30,  2000 and the  related  statements  of
                  earnings  and  stockholders'  equity  and  cash  flows of such
                  Person,  as applicable for the fiscal periods ended as of said
                  dates, which, in the case of the annual statements,  have been
                  examined  by  Arthur  Andersen  LLP an  independent  certified
                  public  accountant,  who  delivered  unqualified  opinions  in
                  respect thereto,  (ii) the consolidated  balance sheet of U.S.
                  Online  Communications,  Inc. (or its successor) and Firstlink
                  at March 31, 1999,  June 30, 1999 and  September  30, 1999 and
                  Holdings  at  December  31,  1999 and  June  30,  2000 and the
                  related statements of operations,  changes in partners' equity
                  and cash flows of U. S. Online  Communications,  Inc.  (or its
                  successor) and Firstlink for each of the  three-month  periods
                  ended as of March 31, 1999,  June 30, 1999 and  September  30,
                  1999 and  Holdings at December  31, 1999 and June 30, 2000 and
                  (iii) the pro forma (after  giving  effect to the  Transaction
                  and the related financing thereof)  consolidated balance sheet
                  of  Holdings  as  at  the  Effective  Date,  copies  of  which
                  financial  statements  have  heretofore been furnished to each
                  Bank, present a good faith estimate of the pro forma financial
                  condition  of  Holdings  and its  Subsidiaries  (after  giving
                  effect to the Transaction) on a consolidated basis at the date
                  thereof).  Such  financial  statements  have been  prepared in
                  accordance with generally accepted  accounting  principles and
                  practices  consistently  applied except to the extent provided
                  in the notes to said financial statements.  Since December 31,
                  1999,  there  has  been  no  material  adverse  change  in the
                  performance,  business, assets, nature of assets, liabilities,
                  operations,  properties, condition (financial or otherwise) or
                  prospects  of the  Holdings  and its  Subsidiaries  taken as a
                  whole."

18.  Section 6.11 (b) of the Credit  Agreement is hereby amended by (I) deleting
each  appearance of the word  "Agreement"  in such Section and (II) inserting in
lieu thereof the word "Agreements".

19.  Section 6.14 of the Credit  Agreement is hereby amended by (I) deleting the
word  "partnership"  and (II)  inserting  in lieu  thereof the text "its capital
stock, its partnership interests".


                                       4

<PAGE>


20. Section 6.15 of the Credit Agreement is hereby amended by inserting the text
 ."or partnership interests" immediately after the text "capital stock" appearing
in such Section.

21. Section 6.23 of the Credit Agreement is hereby amended by inserting the text
"partnership interests" immediately after the text "capital stock," appearing in
such Section.

22.  Section 6 of the  Credit  Agreement  is hereby  amended  by  inserting  the
following new Section 6.27:

                  "U.S.-Austin  Value. The Borrowers' 50% ownership  interest in
                  U.S.-Austin  has a book value and a fair market  value of less
                  than $750,000."

23.  Section 6 of the  Credit  Agreement  is hereby  amended  by  inserting  the
following new Section 6.28:

                  "Fair  Market  Value of ROE  Agreements.  (a) The fair  market
                  value  of  all  equipment  and  other  assets  located  at the
                  locations  identified in all of the ROE Agreements of Holdings
                  and the  Borrower  listed on  Schedule  IV and  Schedule  VIII
                  (without  duplication)  is not in excess of  $3,500,000 in the
                  aggregate.

                           (b) The fair market value of all  equipment and other
                  assets  located at the locations  identified in all of the ROE
                  Agreements  of  Holdings  and  its  Subsidiaries   (including,
                  without limitation,  Residentclub and 50% of the equipment and
                  other  assets  of  U.S.-Austin  at such  locations)  listed on
                  Schedule IV and Schedule VIII (without  duplication) is not in
                  excess of $4,000,000 in the aggregate."

24.  Section 6 of the  Credit  Agreement  is hereby  amended  by  inserting  the
following new Section 6.29:

                  "Tower and Antenna Sites. There are no sites containing either
                  a stand-alone  transmitting tower or stand-alone  transmitting
                  antenna  other  than  those  sites  which are  subject  to the
                  agreements  listed under the "Tower Site Agreements"  sections
                  of Schedule IV and Schedule VIII."

25.  Section 6 of the  Credit  Agreement  is hereby  amended  by  inserting  the
following new Section 6.30:

                  "Certain Office Leases.  The leases with numbers 2 and 7 under
                  the heading "Real Property  Leases of Borrower" on Schedule IV
                  are not  material to the  operation  of Holdings or any of its
                  Subsidiaries."

26.  Section  7.01(f) of the Credit  Agreement is hereby amended by (I) deleting
each  appearance  of the text "8.01" in such  Section and (B)  inserting in lieu
thereof the text "7.01".

27. Section 7.18 of the Credit Agreement is hereby amended by inserting the text
"and U.S. -Austin"  immediately after the word "Residentclub"  appearing in such
Section.


                                       5


<PAGE>

28.  Section 8.03 of the Credit  Agreement is hereby amended by (I) deleting the
word "and" appearing immediately after the text "Wholly-Owned  Subsidiary of the
Borrower" appearing in such Section, (II) inserting in lieu thereof the text ","
and (III)  inserting  the text "and (iii)  U.S.-Austin  may pay Dividends to the
Borrower and its other partners  proportionate to their respective  interests in
U.S.-Austin"  immediately after the text "corporate existence" appearing in such
Section.

29. Section  8.06(ii) of the Credit Agreement is hereby amended by inserting the
text "(except that  U.S.-Austin  does not have to hold cash and Cash Equivalents
in a Concentration  Account)" immediately after the text "Concentration Account"
appearing in such Section.

30. (a) Section 8.08 of the Credit  Agreement is hereby amended by (i) inserting
the text "(I)"  immediately  after the text "except that" appearing  therein and
(ii) inserting the following text immediately after the text "ending thereafter"
appearing therein:

                  "and (II) in addition to any amounts  permitted  under 8.08(1)
                  above,  the  Borrower  and its  Subsidiaries  may make Capital
                  Expenditures  of up to  (i)  $1,500,000  in  the  year  ending
                  December 31, 2000, (ii) $1,000,000 in the year ending December
                  31, 2001 and (iii)  $700,000 in the year ending  December  31,
                  2002  and in  each  calendar  year  thereafter.  In  case  the
                  additional  Capital  Expenditures  specified  in this  Section
                  8.08(11)  are not  made or are made at less  than the  maximum
                  amount specified therein for each year, the difference between
                  the maximum  amount for the relevant  year and the  additional
                  Capital Expenditures made in such year in accordance with such
                  Section 8.08(11) may be carried over to the following year and
                  the maximum amount  specified for such following year shall be
                  increased by the amount carried over"

31. Section 8.14 of the Credit  Agreement is hereby amended by (I) inserting the
text ", Certificate of Limited  Partnership,  Agreement of Limited  Partnership"
immediately after the text "By-Law" appearing in the title to such Section, (II)
redesignating  clauses  (iv) (v) and (vi)  appearing  in such Section as clauses
(v), (vi) and (vii) and (III) inserting the following new clause (iv):

                           "(iv)  amend,  modify or change  its  Certificate  of
                  Limited Partnership or Agreement of Limited Partnership or any
                  agreement  entered into by it, with respect to its partnership
                  interests, or enter into any new agreement with respect to its
                  partnership interests;"

32. Section 8.15 of the Credit Agreement is hereby amended by inserting the text
"or partnership  interests" immediately after the text "capital stock" appearing
in such Section.

33. Section 8.16 of the Credit  Agreement is hereby amended by (I) inserting the
text "and Partnership Interests" after the text "Capital Stock" appearing in the
title to such  Section,  (II)  inserting  the text  "or  partnership  interests"
immediately  after the text  "(including by way of sales of treasury stock)" and
again  after  the  text  "into,  capital  stock"  and  (III)  deleting  the word
"Agreement"   appearing   therein  and   inserting  in  lieu  thereof  the  word
"Agreements".

34. Section 8.19 of the Credit Agreement is hereby amended by inserting the text
"(other  than  Residentclub  and  U.  S.-Austin)"  immediately  after  the  word
"Subsidiaries" appearing in such Section.


                                       6

<PAGE>


35. Section 10.01 of the Credit' Agreement is hereby amended by (I) deleting the
definitions for "Cable  Passings," "Cable  Television  Subscribers",  "Change in
Control",  "Concentration Account",  "Concentration Account Bank", "Consolidated
Current Assets",  "Consolidated Current  Liabilities'",  "Consolidated  Interest
Expense", "Consolidated Net Income", "Corporate Overhead Expenditures",  "Credit
Party",  "Dividend",  "Excess Cash Flow", "Firstlink Merger",  "Firstlink Merger
Agreement",   "Guaranty",   "Internet  Passings",   "Net  Consolidated  Interest
Expense", "Partnership Pledge Agreement", "Pledge Agreement", '.Pledge Agreement
Collateral",  "Pledged Partnership Interests",  "Pledged Securities",  "Recovery
Event", "Residentclub",  "Security Documents'",  "Subscriber",  "Subsidiary" and
"Telephony  Subscribers"  in their entirety and (II) inserting the following new
definitions in such Section in appropriate alphabetical order:

                           " "Cable  Passings" shall mean the number of dwelling
                  units  which the  Borrower  and its  Subsidiaries  (other than
                  Residentclub  and,  in the  case of  U.S.-Austin,  50% of such
                  dwelling   units)  has  the   opportunity   to  provide  cable
                  television  services pursuant to the ROE Agreements whether or
                  not all such dwelling units subscribe to such cable television
                  services.

                           "Cable Television  Subscribers" shall mean the number
                  of dwelling  units  which the  Borrower  and its  Subsidiaries
                  (other than Residentclub and, in the case of U.S.-Austin,  50%
                  of such dwelling units) provide cable  television  service (as
                  evidenced  by a written  agreement),  who are not more than 60
                  days past due on the payment of their cable television bill.

                           "Capital Expenditure" shall have the meaning provided
                  in Section 8.08.

                           "Change in Control"  means the  occurrence  of one or
                  more of the  following:  (i) Holdings  shall cease to directly
                  own 100% on a fully diluted basis of the  outstanding  capital
                  stock of the  Borrower,  (ii) the Borrower  shall cease to own
                  100% of all of the  equity  of its  Subsidiaries  (other  than
                  Residentclub and U.S.-Austin),  (iii) the Borrower shall cease
                  to own 50% of the equity of  U.S.-Austin  or shall cease to be
                  the sole  general  partner of U.S.  -Austin,  (iv) any Person,
                  entity or "group"  (within  the  meaning  of Section  13(d) or
                  14(d) of the  Securities  Exchange  Act) shall  have  acquired
                  beneficial  ownership of 51% or more of any outstanding  class
                  of capital stock of Holdings,  having ordinary voting power in
                  the  election of  directors  or (v) the Board of  Directors of
                  Holdings shall cease to consist of Continuing Directors.

                           "Concentration Account" shall mean a separate account
                  which   shall  be   established   and   maintained   with  the
                  Concentration  Account  Bank for the  benefit  of the  Secured
                  Creditors by Holdings and each of its Subsidiaries (other than
                  Residentclub  and  U.S.-Austin)  and in which  the  Collateral
                  Agent has a security  interest  pursuant to the  Concentration
                  Account Consent Letter.

                           "Concentration  Account  Bank" shall mean Wells Fargo
                  Bank or such  other  bank  that  may  become  a  Concentration
                  Account Bank in accordance with the provisions of the Security
                  Agreement.


                                       7

<PAGE>


                           "Consolidated   Current   Assets"   shall   mean  the
                  consolidated  current assets of Holdings and its  Subsidiaries
                  (other than Residentciub and, in the case of U. S.-Austin, 50%
                  of such current assets).

                           "Consolidated  Current  Liabilities"  shall  mean the
                  consolidated   current   liabilities   of  Holdings   and  its
                  Subsidiaries  (other  than  Residentclub  and,  in the case of
                  U.S.-Austin,  50% of such current liabilities),  but excluding
                  the current portion of any long-term  Indebtedness which would
                  otherwise be included therein.

                           "Consolidated  Interest  Expense" shall mean, for any
                  period,  the  total  consolidated  cash  interest  expense  of
                  Holdings and its Subsidiaries (other than Residentclub and, in
                  the case of U.S.-Austin, 50% of its cash interest expense) for
                  such period  (calculated  without regard to any limitations on
                  the payment  thereof) payable during such period in respect of
                  all Indebtedness of Holdings and its Subsidiaries  (other than
                  Residentclub),  on  a  consolidated  basis,  for  such  period
                  (including,  without duplication,  that portion of Capitalized
                  Lease Obligations of Holdings and its Subsidiaries (other than
                  Residentclub) representing the interest factor for such period
                  and all  commitment  and similar  fees payable with respect to
                  any Indebtedness).

                           "Consolidated Net Income" shall mean, for any period,
                  net  income  of  Holdings  and its  Subsidiaries  (other  than
                  Residentclub  and, in the case of U.S.-Austin,  50% of its net
                  income) for such period  determined  on a  consolidated  basis
                  (after provision for taxes); provided, however, the net income
                  of any  Subsidiary  of Holdings,  which is not a  Wholly-Owned
                  Subsidiary and for which the investment of Holdings therein is
                  accounted for by the equity method of  accounting,  shall have
                  its net  income  included  in the  Consolidated  Net Income of
                  Holdings and its Subsidiaries only to the extent of the amount
                  of cash dividends or distributions  paid by such Subsidiary to
                  Holdings.

                           "Corporate Overhead  Expenditures" shall mean for any
                  period of  determination  all  expenses  of  Holdings  and its
                  Subsidiaries  (other than  Residentclub)  related to corporate
                  and headquarters operations; provided, however, that Corporate
                  Overhead  Expenditures  do not  include  any  direct  expenses
                  related  to the  provision  of cable,  telephony  or  internet
                  services,  field  operations  expenses at  individual  markets
                  (including  technical,  sales and  marketing  and  maintenance
                  expenses   incurred  at  the  market  level),   royalties  and
                  commissions, bad debt expenses and customer service expenses.

                           "Corporate  Pledge  Agreement" shall have the meaning
                  provided in Section 4.06(a).

                           "Credit Party" shall mean  Holdings  and  each of its
                  Subsidiaries (other than Residentclub and U.S.-Austin),

                                       8

<PAGE>


                           "Dividend" with respect to any Person shall mean that
                  such Person has declared or paid a dividend,  distribution  or
                  returned any equity capital to its stockholders or partners or
                  authorized or made any other distribution, payment or delivery
                  of property  (other than common stock or preferred stock (with
                  the  same  terms as the  preferred  stock  outstanding  on the
                  Effective Date) of such Person) or cash to its stockholders or
                  partners,  in their capacity as stockholders  or partners,  or
                  redeemed,  retired, purchased or otherwise acquired,  directly
                  or indirectly,  for a consideration any shares of any class of
                  its capital stock  outstanding or partnership  interests on or
                  after the Effective Date (or any options or warrants issued by
                  such Person with respect to its capital  stock or  partnership
                  interests),  or set aside  any funds for any of the  foregoing
                  purposes,  or shall have permitted any of its  Subsidiaries to
                  purchase or otherwise  acquire for a consideration  any shares
                  of any class of the capital stock or partnership  interests of
                  such Person outstanding on or after the Effective Date (or any
                  options or warrants issued by such Person with respect to ,its
                  capital stock or partnership interests).  Without limiting the
                  foregoing,  "Dividends"  with respect to any Person shall also
                  include all cash  payments made or required to be made by such
                  Person with respect to any stock appreciation  rights,  Plans,
                  equity incentive plans, achievement plans or any similar plans
                  or setting aside of any funds for the foregoing purposes.

                           "Excess  Cash Flow" shall mean,  for any period,  the
                  remainder  of (i) the  sum of (a)  Adjusted  Consolidated  Net
                  Income  for such  period,  and (b) the  decrease,  if any,  in
                  Adjusted Working Capital from the first day to the last day of
                  such  period,  minus  (ii) the sum of (a) the  amount  of cash
                  Capital   Expenditures   (to  the  extent  not  financed  with
                  Indebtedness), made by Holdings on a consolidated basis (other
                  than  Residentclub)  during  such  period,  (b) the  amount of
                  permanent  principal  payments of  Indebtedness  for  borrowed
                  money  of   Holdings   and  its   Subsidiaries   (other   than
                  Residentclub  and,  in the  case of  U.S.-Austin,  50% of such
                  Indebtedness) (other than repayments of Loans);  provided that
                  repayments  of Loans shall be deducted in  determining  Excess
                  Cash  Flow  if  such  repayments  were  applied  to  Scheduled
                  Repayments  required to be made during such period,  were made
                  as a voluntary prepayment with internally generated funds (but
                  in the case of a  voluntary  prepayment  of Loans prior to the
                  Conversion Date, only to the extent accompanied by a voluntary
                  reduction to the Total Commitment) during such period, and (c)
                  the  increase,  if any, in Adjusted  Working  Capital from the
                  first day to the last day of such period.

                           "Firstlink  Merger"  shall  mean the  merger  of USOL
                  Holdings,   Inc.,  a  Delaware  corporation,   with  and  into
                  Firstlink with Firstlink as the surviving corporation.

                           "Firstlink  Merger  Agreement"  shall mean the Merger
                  Agreement,  dated as of July 21, 1999,  between USOL Holdings,
                  Inc., a Delaware corporation, and Firstlink.


                                       9

<PAGE>

                           "Guaranty"   shall  mean  and  include  each  of  the
                  Subsidiary Guaranties executed by the Subsidiaries of Holdings
                  (other than the Borrower,  Residentclub  and  U.S.-Austin) and
                  the Holdings Guaranty.

                           "Internet Passings" shall mean the number of dwelling
                  units  which the  Borrower  and its  Subsidiaries  (other than
                  Residentclub and, in the case of U.S.-Austin,  50(degree)/a of
                  such dwelling units) has the  opportunity to provide  internet
                  service  pursuant  to ROE  Agreements  whether or not all such
                  dwelling units subscribe to such internet services.

                           "Net   Consolidated   Interest  Expense"  shall  mean
                  Consolidated   Interest  Expense  paid  by  Holdings  and  its
                  Subsidiaries  (other than  Residentclub and, in the case of U.
                  S.-Austin,  50%  of  its  cash  interest  expense)  less  cash
                  interest income earned by Holdings and its Subsidiaries (other
                  than   Residentclub   and,   in  the   case  of   U.S.-Austin,
                  50(degree)/a of its cash interest income).

                           "Partnership  Agreement"   shall  have   the  meaning
                  provided in Section 4.05(iii).

                           "Partnership Pledge Agreement" shall have the meaning
                  provided in Section 4.06(b).

                           "Pledge   Agreements"  shall  mean  and  include  the
                  Corporate   Pledge   Agreement  and  the  Partnership   Pledge
                  Agreement.

                           "Pledge   Agreement   Collateral"   shall   mean  all
                  "Collateral" as defined in the Pledge Agreements.

                           "Pledged   Partnership   Interests"  shall  have  the
                  meaning  assigned  to  that  term  in the  Partnership  Pledge
                  Agreement.

                           "Pledged  Securities" shall have the meaning assigned
                  that term in the Pledge Agreements.

                           "Recovery  Event"  shall mean the receipt by Holdings
                  or any  Subsidiary  of the Holdings  (other than  Residentclub
                  and, in the case of  U.S.-Austin,  50% of its receipts) of any
                  cash insurance proceeds or condemnation awards payable: (i) by
                  reason of theft, loss, physical destruction,  damage or taking
                  or any other event with respect to any properties or assets of
                  Holdings  or any  Subsidiary  of Holdings  (including  without
                  limitation,  business interruption insurance); and, (ii) under
                  any  policy  of  insurance  required  to be  maintained  under
                  Section 7.03.

                           "Residentclub"  shall  mean  TheResidentClub, Inc., a
                  Delaware corporation.

                           "Security    Documents"   shall   mean   the   Pledge
                  Agreements,  the  Security  Agreement,  and the  Concentration
                  Account Consent Letter.

                                       10

<PAGE>


                           "Subscribers"   shall   mean  the  total   number  of
                  subscribers  to the services of Holdings and its  Subsidiaries
                  (other than Residentclub and, in the case of U.S.-Austin,  50%
                  of its subscribers),  including cable television, internet and
                  telephony subscribers.

                           "Subsidiary"  shall mean,  as to any Person,  (i) any
                  corporation  more  than  50% of whose  stock  of any  class or
                  classes having by the terms thereof  ordinary  voting power to
                  elect  a  majority  of  the  directors  of  such   corporation
                  (irrespective of whether or not at the time stock of any class
                  or classes of such corporation shall have or might have voting
                  power by reason of the happening of any contingency) is at the
                  time owned by such Person and/or one or more  Subsidiaries  of
                  such Person, (ii) any partnership,  association, joint venture
                  or  other  entity  in which  such  Person  and/or  one or more
                  Subsidiaries  of  such  Person  has  more  than  a 50%  equity
                  interest at the time and (iii) any  partnership  in which such
                  Person or its  Subsidiary is the general  partner  (including,
                  without limitation, U.S.-Austin in the case of the Borrower or
                  Holdings).

                           "Telephony   Passings"   shall  mean  the  number  of
                  dwelling units which the Borrower and its Subsidiaries  (other
                  than  Residentclub  and, in the case of U. S.  Austin,  50% of
                  such dwelling units) has the opportunity to provide  telephony
                  services to pursuant to an ROE Agreement regardless of whether
                  all such dwelling units subscribe to such telephone services.

                           "Telephony  Subscribers"  shall  mean the  number  of
                  dwelling units which the Borrower and its Subsidiaries  (other
                  than Residentclub and, in the case of U.S.-Austin, 50% of such
                  dwelling units) provide  telephone  service (as evidenced by a
                  written  agreement)  who are not more than 60 days past due on
                  payment of their telephone bill.

                           "U.S.-Austin" shall  mean U.S.-Austin Cable Assoc. I,
                  Ltd., a Texas limited partnership."

36.  Section  11.03 of the Credit  Agreement  is hereby  amended by deleting the
text," the participation in the Letters of Credit" appearing in such Section.

37. The Table of  Contents  to the  Credit  Agreement  is hereby  amended by (i)
deleting  the text  "EXHIBIT  F Pledge  Agreement"  appearing  therein  and (ii)
inserting in lieu thereof the following:

                  "EXHIBIT F-1      Corporate Pledge Agreement

                  EXHIBIT F-2       Partnership Pledge Agreement"

38. Notwithstanding  anything to the contrary contained in the Credit Agreement,
the  undersigned  hereby  agree that any  proceeds  from the issuance or sale of
equity by  Holdings,  raised  specifically  for the use by  Residentciub  in the
operations of Residentclub  shall be freely  transferred to Residentclub.  to be
used in the operations of Residentclub and shall not be subject to the mandatory
repayment requirements under the Credit Agreement, including without limitation,
Section 3.02 of the Credit  Agreement;  provided,  that the Borrower provide the


                                       11

<PAGE>

Administrative Agent with documentation satisfactory to the Administrative Agent
that such  issuance  of sale of equity will not have.  an adverse  effect on the
Loan.

39. Notwithstanding  anything to the contrary contained in the Credit Agreement,
the  undersigned  hereby  consent  to the  subordination  of the  loan  from the
Borrower to Residentclub in an amount not to exceed  $2,000,000 to the loan from
Newman Financial Services, Inc. to Residentclub in the amount of $5,000,000.

40. In order to induce  the Banks to enter  into this  Amendment,  the  Borrower
hereby represents and warrants that on the Amendment Effective Date, both before
and after giving  effect to this  Amendment  and the  transactions  contemplated
hereby,  (i) no  Default or Event of  Default  shall  exist .and (ii) all of the
representations  and warranties  contained in the Credit Documents shall be true
and  correct  in all  material  respects,  with the same  effect as though  such
representations  and  warranties  had  been  made  on and  as of  the  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
specified date).

41. This Amendment shall become effective on the date (the "Amendment  Effective
Date") when (i) Holdings,  the Borrower 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) the same to the Administrative  Agent
and (ii) all fees,  costs and expenses  owing to the Banks,  including,  without
limitation, the fees of White & Case LLP, shall have been paid.

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

43. 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 Agent.

44. 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.

45. From and after the  Amendment  Effective  Date all  references in the Credit
Agreement and the other Credit Documents to the Credit Agreement shall be deemed
to be references to the Credit Agreement as modified hereby.

                                       12
<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.

10300 Metric Boulevard                       USOL HOLDINGS, INC.
Austin, Texas 78758
Attention: Jeffrey Sperber
Telephone: (512) 651-3806                    By: //S// Jeffrey Sperber
                                                 -------------------------------
Facsimile:(512) 651-6177                           Title        CFO


10300 Metric Boulevard                       USOL, INC.
Austin, Texas 78758
Attention: Jeffrey Sperber
Telephone: (512) 651-3806                    By: //S// Jeffrey Sperber
                                                 -------------------------------
Facsimile:(512) 651-6177                           Title        CFO


787 Seventh Avenue                           BNP PARIBAS
New York, New York 10019                      Individually and as Administrative
Attention: Salo Aizenberg                     agent and Syndication Agent
Telephone: (212) 841-2000
Facsimile: (212) 841-2369
                                             By: _______________________________
                                                   Title


                                             By: _______________________________
                                                   Title


31 West 52nd Street                          DEUTSCHE BANK AG, NEW YORK
New York, New York 10019                      BRANCH,
Attention: Jon Storck                         as Documentation Agent
Telephone: (212) 469-5000
Facsimile:(212) 469-3713
                                             By: _______________________________
                                                   Title


                                             By: _______________________________
                                                   Title

                                       13

<PAGE>



31 West 52nd Street                          DEUTSCHE BANK AG, NEW YORK
New York, New York 10019                      AND/OR CAYMAN ISLANDS BRANCHES
Attention: Jon Storck
Telephone: (212) 469-5000
Facsimile: (212) 469-3713
                                             By: _______________________________
                                                   Title


                                             By: _______________________________
                                                   Title


12121 Wilshire Boulevard                     COAST BUSINESS CREDIT
Suite 1400
Los Angeles, California 90025
Attention: Jonathan Segal
Telephone: (310) 979-7212
Facsimile: (310) 826-2884                    By: _______________________________
                                                   Title





                                       14