CREDIT AGREEMENT

         This Credit Agreement is entered into this 24th day of January, 2000 by
and between  TELESOURCE  CNMI, INC.  ("Borrower")  and THE HONGKONG AND SHANGHAI
BANKING CORPORATION,  LIMITED, ("Bank") with reference to that commitment letter
entered into between  Bank and Borrower  dated 21 JANUARY 2000 (the  "commitment
letter").

          Borrower  desires  Bank  to  extend  credit   facilities  to  Borrower
referenced in the Commitment Letter, subject to the conditions set forth in this
Credit Agreement.

          In consideration  of the premises and the mutual promises  hereinafter
contained,  and in consideration  of Bank granting the financial  accommodations
described  hereunder.  Borrower  hereby  warrants,  represents,  and  agrees  as
follows: -

                                    ARTICLE I

                                   DEFINITIONS

          Section 1.01.  Certain  Definitions.  As used in this  Agreement,  the
following  terms have the following  respective  meanings  (such  meanings to be
equally  applicable to both the singular and plural of the terms defined  unless
otherwise indicated):

          "Affiliate"  means any  Person,  directly or  indirectly  controlling,
controlled by, or under common control with, any other Person.

          "Applicable  Interest  Rate" means the rate of  interest  set forth in
Section 2.01 (c) hereof.

          "Banking  Day" means days on which  dealings  in Dollar  deposits  arc
carried on in the London and New York Intrabank  Markets and on which commercial
banks are open for  business in Saipan.  Commonwealth  of the  Northern  Mariana
Islands.

          "Base Lending Rate" means the base index rate of interest  established
by the New  York  office  of the  Bank  from  time to time in good  faith in its
discretion  for general  pricing of its short term loans to ordinary  commercial
borrowers, which rate may be established and changed from time to time.

          "Documentary Credit Instruments" means the letters of credit,  drafts,
short term notes and any other standard  instruments  issued in connection  with
the Line of Credit as provided for in Section 2.01 below.

          `Encumbrance"  means any mortgage,  lien,  security interest,  pledge,
charge, encumbrance or other type of preferential arrangement.

          "Event of Default" has the meaning  attributed  thereto in Section ~JM
hereof.

          "Governmental   Agency"  means  any  agency,   department,   ministry,
authority,  statutory corporation or other statutory body, political subdivision
or judicial  entity of the  Commonwealth  of the  Northern  Mariana  Islands now
existing or hereafter  created,  acid any  corporation or other legal entity the
majority  of  whose  capital  or  voting  stock  is now or  hereafter  owned  or
controlled  directly or indirectly by the  Commonwealth of the Northern  Mariana
Islands or any corporation or other legal entity otherwise  controlled  directly
or indirectly by the Commonwealth of the Northern Mariana Islands.

          "Governmental   Approval"  means  any  consent,   license,   approval,
authorization,  exemption,  registration, filing, opinion or declaration from or
with, as the case may be, the  Commonwealth  of the Northern  Mariana Islands or
any Governmental Agency.

         "Guarantor"  means  any and all  persons  executing  guaranties  of the
          obligations of Borrower required under Section 3.04 hereof. "Guaranty"
          means the  guaranty  or  guaranties  of the  obligations  of  Borrower
          required under Section 3.04 hereof.

          "Interest  Period"  means the period of months as specified in Section
2.01(c) hereof.

          "Libor" means,  in respect of any Interest Period an interest rate per
annum equal to the  average  rate of  interest  per annum  offered in the London
interbank  Market to Lender by reference banks in the London Interbank Market at
approximately I 1:00 am. (London time) on the date which is two (2) Banking Days
prior  to  the  first  day  of  such  interest  Period  for  a  period  of  time
comparable.1o,thc.nammber  of days in such  Interest..  Period  and in an amount
substantially equal the principal amount of the note scheduled to be outstanding
for such Interest Period.

          "Loan  Documents"  means any and all  instruments  and documents,  the
execution of which is contemplated herein including,  without limitation, any an
all Security Agreements, Guaranty, the Note, any Documentary Credit Instruments,
and this Credit  Agreement.  All Loan  Documents  shall be in form and substance
satisfactory to the Bank.

          "Loan" means collectively, the credit facilities extended hereunder.
<PAGE>

         "New York" means New York, New York, United States.
          --------

         "Note"  means the  promissory  notes and any  renewals,  extensions  or
replacement notes evidencing the advances provided for in this Agreement.

          "Person" means an individual, corporation. partnership, joint venture,
trust, unincorporated organization or any judicial entity or a national state or
any agency or political subdivision thereof.

         "Security  Agreements"  mean  all  of  the  documents  and  instruments
provided for herein as support and security for the Loan.

          Section 1.02.    Section Headlines. The section headings used herein
are for reference and for convenience only and shall not enter into the
interpretations hereof.


                                   ARTICLE II

                                      LOANS

          Section 2.01.  Line of Credit.  Subject to the conditions and upon the
terms  herein  provided,  Bank will make  available to Borrower an amount not to
exceed a total amount of USD TWO MILLION AND NO/l00 DOLLARS ($USD2,000,000.  00)
on a line of credit basis (the "Line of Credit" or "Credit Line") to be extended
for the  purposes  as set forth in the  Bank's  commitment  letter.  The Line of
Credit facilities expire 31 JANUARY 2001.

                   (a) Type and Amount of Facilities.  The Line of Credit may be
allocated  among any of the following  types of facilities as marked,  up to the
aggregate maximum amount set forth above:

                            [ ]  Documentary  credits/bills  receivable  due  at
sight up to an aggregate amount of Not Applicable.

                            [  ] Trust receipts/clean import loans of a duration
up to but not exceeding _______ (___) days up to an aggregate amount of $  Not
Applicable.

                            [  ] Promissory note advances of a duration up to.
but not exceeding _______ (____) days up to an aggregate amount of $   Not
Applicable.

                             [ ] Standby  letters  of credit up to an  aggregate
amount of $ Not Applicable.

                            [X] Revolving  line evidenced by an OPTIONAL TIME OR
DEMAND GRID NOTE DATED up to an aggregate amount of $

USD TWO MILLION DOLLARS ($USD 2,000,000.00)
------------------------ -----------------

                               Foreign exchange contracts up to an aggregate
amount of $     Not Applicable

and

                            [X] Overdraft line not to exceed an aggregate amount
as specified in the overdraft agreement entitled "Credit Agreement (Overdraft
Facility)."

         Provided  however,  that the total amount  outstanding  at any one time
under the above Line of Credit shall in all events not exceed a total  aggregate
principal amount for all credit facilities of USD TWO MILLION AND NO/100 DOLLARS
($ USD2,000,000. 00).

         As to any overdraft agreement,  letter of credit agreement,  or similar
credit  agreement  executed by Borrower in  connection  with the Line of Credit.
such  agreements  are hereby  made  subject to all  conditions,  agreements  and
covenants contained herein to the same extent as if they were fully set forth in
and made a part of this Agreement.  In the event of a conflict between the terms
hereof and the terms of such agreements, the terms hereof shall control.

                   (b)  Documentary  Credit  Instruments.  All credit  documents
under the Line of Credit (including,  without limitation,  all letters of credit
and the short term  promissory  notes) shall be on standard  instruments in form
and  content  satisfactory  to the  Bank.  For each and  every  letter of credit
requested  by  Borrower  an  application  and  agreement  in  form  and  content
satisfactory to Bank, containing such standard commercial provisions as Bank may
require (including,  without  limitation,  the commitment by Borrower to pay all
drafts, commissions, charges and expenses and the recognition of Bank's security
interest and right to possession of the shipping  documents and property shipped
in connection with the letter of credit) will be executed by Borrower.  All such
standard  documentary credit  instruments,  plus any short term promissory notes
issued  pursuant  to Section  2.01(a)  are herein  sometimes  referred to as the
"Documentary  Credit  Instruments."  Borrower  will provide Bank with  signature
cards and corporate  resolutions  designating  what persons shall,  from time to
time, be authorized to execute Documentary Credit Instruments.

                                        2
<PAGE>

                  (c)  Applicable Interest Rate. Interest on the various
Documentary Credit Instruments and facilities under the Line of Credit shall be
payable:

                  (i) at rate per annum equal to the following as marked:

                           [X] Bank's Base Lending Rate plus ONE AND ONE HALF OF
ONE (1.50%) percent per annum, adjusted from time to time as to all note
drawings;

                          [   ] Libor Plus  Not Applicable (    %)  adjusted at
the commencement of each Interest Period as to all drawings for Interest
Periods of________ months;

                            [  ]  Libor Plus Not Applicable (    %), adjusted
 _____________ as to all note drawings;

                            [3] The rate of interest paid by Bank on time
certificate(s) of deposit with a maturity of Not Applicable (   ),
months ___________, adjusted ____________as to all note drawings.


                   (ii)    as provided in Bank's commitment letter as to all
other extensions of credit.

                   (d) Review  Date.  The Line of Credit  shall mature as of the
close of business on 31 JANUARY 2002, and no Documentary Credit Instrument shall
be issued or accepted  which expires or matures  beyond the maturity date of the
Line of  Credit,  Bank  shall  have no  obligation  to extend  any  advances  or
facilities under the Line of Credit from and after the maturity date.  Provided,
however,  the Bank may from time to time,  upon  request of Borrower  and at the
sole option of Bank,  renew and extend the credit  facilities  under the Line of
Credit for additional periods of such duration as the Bank may from time to time
fix. In all events,  and not  withstanding the above, the Bank retains the right
to  terminate  the Credit Line at any time upon notice to Borrower  and cease to
permit any further drawings thereunder.

                   (e)  Availability.  The Line of Credit  shall be available to
Borrower only so long as Borrower shall not he in default hereunder or under any
of its other obligations to Bank, the Bank has not exercised its right to demand
repayment,  and only prior to the maturity date provided in Section  2,02(d) and
any extensions or renewals thereof.

                   (f) Renewal. The terms and conditions of this Agreement shall
continue  to apply as to any renewal or  extension  hereof  notwithstanding  the
issuance of a new commitment letter by Bank. Upon any renewal and issuance of a,
new commitment  letter accepted by Borrower,  the terms of the commitment letter
as to she review  date,  applicable  interest  rate,  types and amount of credit
facilities and security shall be  incorporated  herein as fully as if originally
contained  herein and shall supersede any conflicting  terms hereof Upon request
of Bank.  Borrower shall execute an amendment so this  Agreement  confirming the
amendment of this Agreement by the new commitment letter.

          Section 2.02.  Repayment.  The principal  amount of the Line of Credit
and interest  thereon shall be paid as specified in the  promissory  notes as to
note  drawings  and at sight for  Documentary  Credits  other than TR/CIL  which
mature on a Not Applicable ( ) day basis.

                                   ARTICLE III

                                SECURITY/SUPPORT

          Section 3.01.     Security. Borrower shall deliver to the Bank the
following as marked as security for the credit facilities extended to Batik
hereunder.

                       [  ] Security Interest. Borrower shall execute and
deliver to Bank security agreements granting to Bank a first security  interest
in  Borrower's  receivables,   inventory,  stock  in  trade, furniture and
fixtures and equipment. Borrower shall also execute and deliver to Bank  for
filing  one  or  more  financing   statements  in  form  and  content
satisfactory  to Bank  relative  to the  security  interest  granted  under  the
security agreement.

                       [  ] Real Estate Mortgages. Borrower will duly execute
and deliver or cause to he executed and delivered in form satisfactory to Bank
a mortgage or mortgages granting and conveying to Bank as  mortgagee a lien on
all the right,  title and  interest  of Borrower  and or Guarantor  in various
fee  simple/leasehold  properties  as  described in Bank's commitment  letter to
Borrower,  including  also all buildings now and hereafter constructed on said
properties and any fixtures and equipment therein.

                       [  ] Assignment of Rental income, Borrower will duly
execute and deliver or cause to be executed and delivered in form satisfactory
to Bank an assignment of rental income from the mortgaged property.


                      [X] Other. ASSIGNMENT OF RECEIVABLES/PROMISSORY NOTES.
Borrower will duly execute and deliver or cause to be executed  and  delivered
in form and content  satisfactory  to Bank a pledge and assignment of
Borrower's  accounts  receivables  and/or  promissory  notes from Common wealth
Utilities Corporation.

                                        3
<PAGE>

The value of the security to be a minimum of 125% of the total facility  amount.
Original promissory notes under pledge to be held under lien at the Bank.

          Section 3.02. Additional Documents.  Borrower and any mortgagor at any
time or times that it is requested to do so by Bank, will execute and deliver or
provide to Bank in recordable form, if appropriate, such other documents as Bank
may  reasonable  request to  effectuate  and protect its  security  for the Loan
provided  for  herein  including  without  limitation   estoppel   certificates,
non-disturbance agreements and financing statements.

          Section 3.03. Security Agreements.  All -the Security Agreements shall
be in form and content  satisfactory  to Bank and shall  constitute  valid first
liens upon the respective  real  property,  buildings,  receivables,  equipment,
furniture  and  fixtures  to which the  respective  Security  Agreements  relate
(provided,  however,  that Bank may,  in writing,  consent to specific  liens or
exceptions as to specific properties). All Security Agreements shall be duly and
properly  recorded or filed as necessary to protect and preserve the priority of
the Bank's liens thereunder

          Section 3.04.     Guaranty. Borrower will-cause to be provided the
guarantee of TELESOURCE INTERNATIONAL, INC. guarantying to Bank repayment by
Borrower of the Loan, which Guaranty shall be in form and content satisfactory
to Bank.

                                   ARTICLE IV

                          CONDITIONS OF LOAN/WARRANTIES

          Section 4.01. Conditions of Loan. The obligation of the Bank to extend
the Loan,  including  all  future  advances,  is subject  to: (i) the  condition
precedent  that  Borrower  shall be in full  compliance  with all the  terms and
conditions of this  Agreement to be performed or observed by Borrower,  and (ii)
the condition precedent that the Bank shall have received the following (each of
which shall be in form and substance satisfactory to the Bank):

                   (a)      Insurance. Evidence of the insurance required by
the terms of this Agreement.

                   (b)      Collateral. The Security Agreement required under
Article ill.

                   (c)      Guaranty. The Guaranty required tinder Section 3.04.

                   (d) Borrowing Resolutions. Certified copies of resolutions of
the board of directors of Borrower and any corporate  Guarantor  approving  each
Loan Document to which the Borrower or Guarantor is a party and of all documents
evidencing other necessary corporate action and governmental  approvals, if any,
with respect to each such Loan Document.

                   (e) Opinion or Counsel. The opinion of the Borrower's counsel
required  under  Section  4.03 and  certificates  of good  standing for Borrower
required under Section 4.04.

                   (I)      Additional Documents. Such additional documents as.
may. be specifically required hereunder or as the Bank may from time to time
otherwise reasonably require.

                   (g)      Evidence of Compliance. Such evidence as Bank may
require that Borrower is in compliance with all the terms and conditions of this
Agreement.

                   (h) Appraisals.  Prior to disbursement of any funds, and from
time to time  thereafter  (but in no event  less  than  every two  years),  such
appraisals  as Bank may  request in the  Bank's  reasonable  discretion,  and at
Borrower's  cost,  which  appraisals shall be done by an appraiser who shall who
shall be satisfactory to Bank.

          Section  4.02.  Warranties.  The  Loan  and the  accommodations  given
hereunder  to  Borrower  by  Bank  are  specifically  made  upon  the  following
representations  and  warranties by Borrower and each  Guarantor  executing this
Agreement, each of which shall constitute a continuing covenant hereunder:

                   (a)  Compliance  wish  Loan   Documents.   The  Borrower  and
Guarantor have fully complied with all of the provisions of this Agreement,  the
Notes,  and any  Documentary  Credit  Instruments  and Security  Agreements  and
Borrower is entitled to  disbursement,  it being  understood  that the making of
such  disbursement when Borrower is not so entitled will not constitute a waiver
of such compliance.

                   (b)  Documents   Authorized   and  Valid.   The  Notes,   any
Documentary Credit  Instruments,  the Security  Agreements,  the Guaranty,  this
Agreement,  and all other  documents  contemplated  to be executed and delivered
hereby have been fully authori2ed and executed and constitute valid  obligations
of the obligors or persons  executing  such  documents  and are  enforceable  in
accordance with their respective terms.

                   (c)      Security Agreements. The Security Agreements
provided herein create valid liens upon the secured property, free and clear of
all encumbrances except as may be expressly waived by Bank and except as
provided for herein; and has full, valid and complete


                                        4
<PAGE>

title to all secured property,  except as to those properties held in leasehold,
as to which properties has full and valid leasehold title.

                   (d)  Corporate  Resolutions.  Bank  has been  furnished  with
proper corporate resolutions of Borrower and any corporate Guarantor authorizing
all the  transactions  contemplated  in this Agreement and With such  documents,
reports,  certificates,  affidavits and other  information  (including,  without
limitation, an opinion of Borrower's counsel) in form and substance satisfactory
to Bank, as the Bank may reasonably  require to evidence  compliance by Borrower
with all of the  provisions  of this  Agreement,  and such  documents,  reports,
certifications, and other information are true and correct.

                   (e) No Pending  Litigation.  There are no  actions,  suits or
proceedings  pending or, to  Borrower's  or  Guarantor's  knowledge,  threatened
against or affecting the Borrower or Guarantor or any secured  property,  at law
or in equity,  or before or by any  Governmental  Agency,  which,  if  adversely
determined,  would impair the ability of Borrower  and/or  Guarantor to continue
its  business in the  ordinary  course or to pay when due any amounts  which may
become  payable on the Notes.  Borrower  shall furnish to the Bank  satisfactory
evidence of compliance with this subparagraph upon request by Bank.

                    (I) Licenses.  Borrower possess all trade names, franchises,
licenses and  certificates and other rights,  free from burdensome  restrictions
that are necessary in tiny material  respect for the ownership,  maintenance and
operation  of its.  properties  and assets,  and  Borrower  is not in  violation
thereof.

          Section  4.03.  Opinion  of  Counsel.  As  a  condition  precedent  to
obtaining  the Loan,  Borrower  shall  deliver  to Bank an opinion of counsel of
Borrower and any corporate  Guarantor  (which counsel shall be  satisfactory  to
Bank) addressed to Bank stating that:

                   (i) The Borrower and said  Guarantor  are  corporations  duly
incorporated  according  the laws of the  Commonwealth  of the Northern  Mariana
Islands and are in good standing therein, and are duly authorized, respectively,
to transact business in the Commonwealth of the Northern Mariana Islands;

                   (ii) The documents  required  hereunder to be executed by the
Borrower  and/or  Guarantor,   including  the  Notes,  and  Documentary   Credit
Instruments,   the  Security  Agreements  and  this  Agreement  have  been  duly
authorized,  executed and delivered by Borrower and/or  Guarantor and constitute
valid,  enforceable  and  binding  obligations  of the  respective  obligors  in
accordance with their respective terms;

                   (iii) The  execution  and delivery of this  Agreement and the
Notes, the Documentary  Credit  Instruments and the security  Agreements and the
doing and  performance of all acts herein and in said  documents  provided to be
done by the respective obligors do not and will not violate any provision of the
Articles of  Incorporation  or By-Laws of the Borrower or Guarantor and will not
result in the breach of, or constitute a default  under,  or require any consent
under, any indenture, bank loan or credit agreement, mortgage or other agreement
or instrument  to which  Borrower,  or any  corporation  of which  Borrower is a
subsidiary,  or Guarantor is a party or by which Borrower,  any such corporation
or their  respective  properties  may be bound or  affected,  to the extent that
counsel is aware of the existence of any such agreement or instrument;

                   (iv) No  license,  authorization.  consent or approval of any
governmental  authority is required for the Borrower and/or Guarantor to perform
its  agreements   contained  in  said   documents,   Or  if  any  such  license,
authorization, consent or approval is required, the same has been obtained;

                   (v)That  to she best  knowledge,  information  and  belief of
counsel all  representations  contained in this Agreement or made to Bank on the
part of Borrower or Guarantor are true and correct.

          Section 4.04.     Certificates of Good Standing. Upon request of Bank
from time to time, Borrower shall provide to Bank certificates of good standing
for itself and the corporate Guarantor.

                                    ARTICLE V

                        FINANCIAL STATEMENTS AND RECORDS

          Section 5.01.  Maintenance  of Records.  Borrower and Guarantor  shall
maintain  complete  and accurate  books of account and  business and  accounting
records  in  accordance  with  generally  accepted   accounting   principles  as
recogniled by the American Institute of Certified Public  Accountants.  Borrower
shall  provide  to Bank  from time to time upon  requesL  by Bank such  records,
financial information and business information as Bank may reasonably require.

          Section 5.02. Annual  Statements.  (If checked here [X ]) Borrower and
the corporate  Guarantor  shall furnish to Bank within ONE HUNDRED  TWENTY (120)
days after the end of each annual fiscal  period of Borrower or said  Guarantor,
audited financial statements of the Borrower for such fiscal period, including a
balance  sheet and a statement  of net worth,  all prepared in  accordance  with
generally  accepted  principles of accounting  practices  currently  employed by
Borrower or Guarantor  and all  certified  by an  independent  certified  public
accountant acceptable to Bank.

         Section 5.03. Quarterly Statements.  (If checked here [ ]) Borrower and
Guarantor shall furnish to Bank within_Not  Applicable  (___) days after the end
of each quarterly  fiscal period of Borrower and Guarantor  unaudited  financial
statements  for such  quarter,  including a balance sheet and a statement of net
worth,  all  prepared  in  accordance  with  generally  accepted  principles  of
accounting practices currently employed by Borrower and certified by a financial
officer of Borrower or Guarantor.

                                        5
<PAGE>

          Section  5.04.  Individual  Guarantors.  (If  checked  here [ ])  each
individual  Guarantor  shall  provide  to Bank  prior to  closing  of the  Loan,
personal net worth  statements in form and content  satisfactory to Bank,  which
statements  shall be updated  annually  and  submitted  prior to any  designated
review date of the credit facilities.

          Section 5.05.     OTHER.   Not Applicable.
                            -----    ---------------

                                   ARTICLE VI

                                    INSURANCE

          Section  6.01.  Insurance.  Borrower  will  maintain  or  cause  to be
maintained the insurance set forth below in a company or companies  satisfactory
to Bank.  The  property  damage  policy or policies  shall name the Bank as loss
payee and shall  provide  that there shall be no  termination  or  reduction  in
coverage without prior notice to the Bank.

          Section  6.02.  Insurance  on  improvements.  (If  checked  here  [ ])
Borrower will maintain or cause to be maintained fire,  typhoon,  earthquake and
extended coverage on all improvements  constructed upon the properties which are
mortgaged to secure the Loan to Borrower  hereunder.  Such  insurance  policy or
policies  shall be in an amount equal to  replacement  cost or  appraised  value
(whichever is less) or in such other amount as the parties may agree.

          Section 6.03.  General Insurance  Requirements.  Without limitation of
the foregoing, and without reducing the insurance required above, Borrower shall
in all events  maintain  commercially  adequate  insurance  in such  amounts and
covering  such risks as is  usually  carried  by  prudent  companies  engaged in
similar  businesses  and  owning  similar  properties  as  does  Borrower.  Such
insurance shall include, without limitation, the following as marked:

                            [__] workmen's compensation;

                            [__] public third-party liability;

                            [__] property damage insurance;

                            [__] Keyman life insurance on __________________
                                 _________ assigned to Bank;

                            [__] business interruption; and

                            [--] -----------------------------------------------

          Borrower shall annually  review all insurance  coverage to insure that
the dollar  amount of its  insurance  coverage is  maintained at a proper level,
taking into account, but without limitation,  inflation,  any increases in risks
and any changes in circumstances.

          Section  6.04.  Title  Insurance.  To the extent  that a  mortgage  or
mortgages  are to be  given as  security  fur the  Loan  and as a  condition  of
disbursement  of the  Loan,  Borrower  will  deliver  to Bank  ALTA  mortgagee's
policies of title  insurance  (mortgagee's  coverage) which shall be in form and
content  satisfactory  to Bank  insuring  that title to all of the real property
mortgaged to secure the Loan is valid and marketable and that the mortgage(s) is
a valid first lien on the mortgaged  property,  subject to no encumbrances other
than  those  specifically  acceptable  t~ the  Bank in  writing  and the lien of
current  real  estate  taxes,  if  applicable,  not  delinquent  and any  normal
easements shown of record.

                                   ARTICLE VII

                                    COVENANTS

          Section 7.01. Affirmative  Covenants.  As a condition of the Loans and
so long as the Notes and all other obligations  remain unpaid,  the Borrower and
the  Guarantor  shall  (unless Bank shall  otherwise  waive `n writing any other
requirements contained herein as marked):

                   [X  ]Litigation.  Promptly  advise  Bank  in  writing  of all
litigation  (including threatened litigation and any matter which may become the
subject of litigation)  involving the Borrower or Guarantor or their business or
any  of  their  property,  and  of  all  complaints  and  charges  made  by  any
Governmental  Agency  which  may have any  substantial  effect  on  Borrower  or
Guarantor or their business or their property.

                   [X ] Compliance  with Law.  Comply promptly with all laws and
regulations of the federal  government and the Government of the Commonwealth of
the Northern Mariana Islands and any Governmental  Agency affecting  Borrower or
Guarantor, their business and properties.

                   [X ] Payment of Taxes.  Pay when due all  taxes,  assessments
and governmental  charges levied or assessed upon it and levied or assessed upon
their  operations  and  against any of their  properties  as they become due and
payable.

                   [X }] Corporate Existence. At all times do or cause to be
done all things necessary to maintain, preserve and renew their

                                        6
<PAGE>

            corporate existence and their rights, patents and franchises.

                             [X ] Propertv.  Insofar as it is not  prevented  by
           causes beyond its control, at all times maintain,  preserve,  protect
           and keep, or cause to be  maintained,  preserved  protected and kept,
           its property in good repair,  working  order and  condition  and from
           time to  time  make  or  cause  to be  made  all  repairs,  renewals,
           replacements,   additions,  betterments  and  improvements  to  their
           property as are needful and proper so that the business carried on in
           connection therewith may be conducted properly and efficiently at all
           times.

                             [ ] Maintenance  of Working  Capital and Net Worth.
           Maintain at all times during the term of the Loans a positive working
           capital (an excess of current assets over current  liabilities) and a
           positive net worth Not  Applicable  ,all as  determined in accordance
           with generally acceptable accounting standards  consistently applied,
           on all consolidated financial statements.

                             [ ] Subordination  of Inter-Company  Debts.  Obtain
            subordination as to any and all inter-company  debts and payments of
            any kind whereby such debts and payments  shall be  subordinated  to
            the loans provided for in this  Agreement.  The term  "inter-company
            debts or payments" shall mean any debts or payments owed by Borrower
            to any corporation  which Borrower or Guarantors own stock or to any
            corporation which owns any interest in Borrower.

                             [  ] Other. Not Applicable

                     Section 7.02.     Negative Covenants. During the term of
           the Loan, the Borrower and Guarantor will not, without the written
           consent of the Bank, do or attempt to do any of the following as
           marked:

                             [X ] Liens.  Create,  incur or  suffer to exist any
            Encumbrance  of any kind upon any of the  property  or assets of the
            Borrower and Guarantor which are subject to the Security  Agreements
            provided  for  herein,   except  liens  or  encumbrances   expressly
            authorized  by Bank in writing  and liens for  current  real  estate
            taxes, if applicable.

                             [  ] Corporate Change. Merge or consolidate with
            any other corporation or dissolve or enter into any dissolution
            proceedings.

                             [ ]  Dispose  of  Assets.  Sell,  encumber,  lease,
           transfer or  otherwise  dispose of any  substantial  portion of their
           property or assets other than in the ordinary course of business. -

                             [ ]  Loans.  Make  any  advances  or  loans  to any
           person,  firm or  corporation  other than in the  ordinary  course of
           business,  except  loans to  stockholders  or  affiliates  or related
           companies  which (i) shall not in any event  exceed in the  aggregate
           the  amount  of Not  Applicable  AND___  /100  DOLLARS  ($__________)
           annually,  and  (ii)  shall  not  exceed  in the  aggregate  a  total
           outstanding  amount at any one time in excess  of  _____________  AND
           /100 DOLLARS ($------------------).

                              I X] Adverse  Action.  Take any action  that would
            adversely  affect their financial  condition or impair their ability
            to repay their  obligations  to the Bank under this Agreement or the
            Notes or the Guarantee.

                             [  ]Other. Not Applicable

                                   ARTICLE VII

                                     DEFAULT

                     Section 8.01. Default. The Bank may. at its option, declare
           immediately due and payable without  presentation,  protest or notice
           of any kind,  all of which are hereby waived,  the balance  remaining
           unpaid on any Loan  and/or  Note or any other sums  payable  pursuant
           hereto or  pursuant to any other Loan  Document  and to cease to make
           any further  advances,  upon the  happening  of any of the  following
           events of default:

                             (a)       Monetary Default. Any default (by failure
           to make payment on or before the due date) in the payment of
           principal or interest on the Notes or any Documentary Credit
           Instrument or in the payment of any other sums now or hereafter owned
           to Bank by Borrower pursuant hereto or to any other Loan Agreement or
           transaction: or

                              (b) Performance of Agreements. Any event specified
           in any  Note  or  Documentary  Credit  Instrument  or in an  Security
           Agreement  which  would  permit  the Bank to cause  the  indebtedness
           evidenced  or  secured  thereby  to become  due  prior to its  stated
           maturity or to foreclose the Security Agreement(s); or

                               (c)    Loan Agreement Default. Any default in any
           representations made or in the observance of any obligation
           undertaken by Borrower or Guarantor pursuant to this Agreement or any
           other loan agreement with Bank; or



                                        7
<PAGE>

                             (d)      Third Party Default. Any default by
           Borrower or Guarantor in the payment of any sums due to any third
           parties; or

                             (e) Representations/Warranties.  Any representation
           or warranty  made or deemed to have been made by the  Borrower or the
           Guarantor  under or in  connection  with this  Agreement or any other
           Loan  Document   (including   without   limitation  any  certificate,
           notification or report  furnished  tinder this Agreement) shall prove
           to have been  incorrect,  incomplete  or  misleading  in any material
           respect when made or when deemed to have been made; or

                              (I)  Enforceability  of Loan  Documents.  Any Loan
           Document  to which the  Borrower  or the  Guarantor  shall be a party
           shall for any reason cease to be binding upon and enforceable against
           the Borrower or the Guarantor, as the case may be, in accordance with
           its terms or the binding  effect or  enforceability  hereof  shall be
           contested  by the Borrower or the  Guarantor,  as the case may be, or
           the  Borrower  or the  Guarantor  shall deny that it has any  further
           liability or obligation under any such Loan Document; or

                              (g) Adverse Chance in Financial  Condition.  There
            shall occur any substantial  adverse change in the overall financial
            condition  of the  Borrower or the  Guarantor,  or any  Governmental
            Agency or court shall take any action  which  adversely  affects the
            financial  condition of the Borrower or the Guarantor or the ability
            of  either  thereof  to  fulfill  its  obligations  under  any  Loan
            Document; or

                             (h)      Validity of Loan Documents. Any of the
            loan Documents shall be terminated or any provision of any of the
            Loan Documents shall become illegal, invalid, void or unenforceable;
            or

                             (i)      Other Demand by the Bank. If for any
            reason not otherwise specified in this Section 8.01 the Bank shall
            demand repayment of the Loan.

                    Section  8.02.  Indemnification  Costs.  The parties  hereto
           shall  indemnify an hold Bank  harmless from any  liability,  cost or
           damage  arising out of the parties  breach  hereof Bank may appear in
           and defend any action or  proceeding  purporting to affect the rights
           or duties of the  parties  hereunder  or any  security  given for the
           Loans, and Borrower shall pay all of Bank's costs and expenses.

                                   ARTICLE IX

                             TAXES, INCREASED COSTS

                    Section 9.01. Taxes. The Borrower warrants that all payments
            or  reimbursements  required  to be made under this  Agreement,  the
            Notes or any other document  required  hereunder are exempt from the
            payment of any and all taxes, duties, fees, withholdings, deductions
            or other charges of any nature  whatsoever  (collectively,  `Taxes")
            levied or imposed by any taxing  authority,  other than Taxes on the
            overall net income of the Bank imposed by the jurisdictions.  or any
            political  subdivision  thereof in which the Bank's principal office
            or actual lending office is located.

                    Section 9.02. Taxes for the Account of the Borrower.  If any
           Taxes  (other  than  taxes  on net  income)  are at any  time  on any
           payments  made  on or in  respect  of the  Loan  (including,  but not
           limited to, payments made pursuant to this  paragraph),  the Borrower
           shall  pay such  taxes and  shall  also pay to the Bank.  at she time
           interest is paid, all additional  amounts which the Bank specifies as
           necessary  to  preserve  the  after-tax  yield  the Bank  would  have
           received if such taxes had not been imposed.

                    Section 9.03. Necessary Increases in Payments.  tf any Taxes
           are  imposed  on any  payments  made  on or in  respect  of the  Loan
           (including,  without  limitation,  payments  made  pursuant  to  this
           Paragraph),  and if the  Borrower is  prohibited  by operation of law
           from (i) making  payments  without  deduction  us provided in Section
           9.02. or (ii) paying, causing to be paid, or reimbursing the Bank for
           the cost of, any and all Taxes as provided in Section 9.02,  then the
           amounts  payable so the Bank under  this  Agreement  and the Note and
           Documentary  Credit  Instruments  shall be  increased to such amounts
           which,  after  provision for such Taxes,  shall be necessary to yield
           and remit to the Bank  payments of the  amounts  that would have been
           required to be paid hereunder if no such Taxes had been imposed.

                    Section 9.04.     Evidence of Tax Payment. The Borrower will
           provide the Bank with original tax receipts. notarized copies of tax
           receipts. or other documentation as will prove payment of tax, for
           all taxes paid by the Borrower pursuant to this Agreement. The
           Borrower will deliver receipts to the Bank within 30 days after the
           doe date for the related tax.

                    Section  9.05.  Survival.  The  obligations  of the Borrower
           under this Article IX are  independent of and additional to the other
           obligations  of the Borrower  under this  Agreement  and the Note and
           Documentary Credit Instruments, and shall survive the payment of such
           obligations.

                    Section  9.06.   Increased   Costs.   Without  limiting  she
           foregoing  provisions  of this  Article IX, if after the date of this
           Agreement any law, rule or regulation,  or any interpretation thereof
           by any  governmental  authority  charged with the  interpretation  or
           administration   thereof,   or  any  request  of   directive  by  any
           governmental  authority  (whether  or not  having  the  force of law)
           either (i) subjects the Bank to any tax,  duty or other charge of any
           jurisdiction   with  respect  to  this   Agreement  or  the  Note  or
           Documentary Credit  Instruments.  or changes the basis of taxation of
           payments to the Bank,  of the principal of or interest on the Note or
           in respect of any other  amount  due  hereunder  or under the Note or
           Documentary Credit Instruments  (except any change in the rate of tax
           on the  overall  income of the Bank),  or (ii)  imposes,  modifies or
           deems applicable any reserve,  special deposit or similar requirement
           against  assets of,  deposits  with or for the  account of, or credit
           extended by, the Bank.  and the result of any of the  foregoing is so
           increase the cost to the Bank of making or  maintaining  the Loan, or
           to reduce the amount of any  payment  received or  receivable  by the
           Bank,  or to impose on the Bank an  obligation to make any payment to
           any fiscal, monetary, regulatory or

                                        8
<PAGE>

other  authority  calculated  on or by  reference  so  any  amount  received  or
receivable  by it under this  Agreement or the Note,  by an amount deemed by the
Bank so be material,  then the  Borrower  shall pay so the Bank,  promptly  upon
demand,  such additional  amount or amounts as will compensate the Bank for such
increased cost or reduction in the amount received or receivable. The Bank shall
notify she Borrower of any event which will entitle the Bank to such  additional
amount or amounts  pursuant to this  Section as promptly  as  practicable  after
becoming  aware of such event. A certificate of the Bank setting forth the basis
for  the  determination  of such  additional  amount  or  amounts  necessary  to
compensate the Bank as provided  herein shall be conclusive and binding,  absent
manifest error.

                                    ARTICLE X

                                  MISCELLANEOUS

          Section 10.01. Continuance of Agreement,  Waiver. This Agreement shall
continue as long as any obligations of the Borrower  contemplated  herein or any
part thereof or renewal or extension thereof remain unpaid. No consent or waiver
under this  Agreement  shall be  effective  unless in writing.  No waiver of any
breach or default  shall be deemed a waiver of any breach or default  thereafter
occurring.

          Section 10.02. Fees and Costs. Borrower shall pay all fees and charges
in connection with this transaction,  including any charges for title insurance,
appraisal  fees,  recording  fees,  preparation  of  documents,   service  fees,
attorneys'  fees and any other fees which maybe  incurred by Bank in  connection
with the preparation of this Agreement and of any Loan Documents and which maybe
incurred by Bank in exercising any right, power or remedy provided for herein or
in any Loan Document.

          Section  10.03.   Survival  of  Covenants.   All  representations  and
covenants  of  Borrower  or  Guarantor  herein  shall  survive the making of all
disbursements.   The  Note,   the  Security   Agreements,   Documentary   Credit
Instruments,  and the  Guaranty  are  hereby  made  subject  so all  conditions,
agreements  and  covenants  contained  herein to the same extent as if they were
fully  set  forth  in  and  made a  part  of  said  Note,  Security  Agreements,
Documentary Credit Instruments, and Guaranty.

          Section 10.04.  Remedies Cumulative.  All rights,  powers and remedies
given to Bank herein or in any other Loan  Document are  cumulative  and are not
alternative,  and are in addition to all  statutes or rules of law;  and partial
exercise  or  forbearance  or delay by Bank in  exercising  the same  shall  not
operate as any  waiver  thereof or of any other  power or rights  hereunder  are
granted by law,  and the same  shall  continue  in full  force and effect  until
specifically waived by an instrument in writing executed by Bank.

          Section 10.05. Third Parties. Nothing herein contained shall be deemed
to  establish  any trust fund for the benefit of any person or  persons,  nor to
impose any liability upon Bank to pay or be chargeable  with any claims of third
persons against the Borrower.

          Section 10.06. Counterparts. This Agreement may he executed in as many
counterparts as may be deemed necessary or convenient, and each counterpart
shall be deemed an original.

          Section 10.07.  Partial  Invalidity,.  In the event any one or more of
the  provisions  contained in this Agreement or in any other Loan Document shall
for any reason be held to be invalid, illegal or unenforceable in any respect in
any  jurisdiction,  such  invalidity,  unenforceability  or illegality shall not
affect any other provision of this Agreement and/or of such other Loan Document,
and this  Agreement  and  such  Loan  Document  shall  be  construed  as if such
provision  had never been  contained  herein or therein and shall not affect the
validity or enforceability of such provision in any other jurisdiction.

          Section  10.08.  Extensions.  Bank may at any time  extend the time of
payment of the  principal  and/or  interest  under the Nose and any extension so
granted  shall  be  deemed  made  in  pursuance  of  this  Agreement  and not in
modification hereof.

          Section 10.09. Governing Law. This Agreement and the Note shall be
governed by and construed and interpreted in accordance with the law of the
commonwealth of the Northern Mariana Islands.

          Section 10.10. Notices, Etc. Any notices and other communications
hereunder shall be in writing and mailed or delivered, if to the Borrower:

                           TELESOURCE CNMI, INC.
                           BOX 100001 PPP 402 PMB
                           SAIPAN, MP 96950

                           Attn.:        K. J. SEMIKIAN
                                 ----------------------

if to any corporate Guarantors:

                           TELESOURCE INTERNATIONAL, INC.
                           860 PARKVIEW BOULEVARD
                           LOMBARD, IL 60148


                           Attn.:        JEFF KARANDJEFF

                                        9
<PAGE>

if to any of the individual Guarantors:

                               **Not Applicable**

and if to Bank::           THE HONGKONG AND SHANGHAI BANKING CORPORATION LIMITED
                            HSBC BOX 10001 PMB
                            SAIPAN, NIP 96950
                            Attn.: Branch Manager

or as to each  party,  at such other  address be  designated  by such party in a
written notice to the other party.  All such notices and  communications  to the
Borrower  shall  be  effective,  when  deposited  in the mail  addressed  to the
aforesaid,  or upon personal delivery of such notices to the respective  offices
as above-described.

          Section 10.11. Successors and Assi~n5. This Agreement shall be binding
upon and inure to the benefit of each parry hereto and its respective successors
and assigns,  except the Borrower  shall not have the right to assign its rights
hereunder or any interest herein.

          Section 10.12. Effectiveness. This Agreement shall be effective upon
execution and delivery thereof by the Borrower and the Bank.


          IN WITNESS  WHEREOF,  the parties have executed this Agreement the day
and date first above written.

BORROWER:                         BANK:

TELESOURCE CNMII INC.             THE HONGKONG SHANGHAI BANKING
                                  CORPORATION LIMITED




/s/ Khajadour Semikian            /s/  Vickie N. Izuka
By:  Khajadour Semikian           By:  Vickie N. Izuka
Its:   President                  Its:   Duly Authorized Representative


GUARANTOR ACKNOWLEDGEMENT:

TELESOURCE INTERNATIONAL, INC.



/s/ Jeffrey Karandjeff
By:    Jeffrey Karandjeff
Its:   Secretary

                                       10


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