Document:

EXHIBIT 10.4

                          PLEDGE AND SECURITY AGREEMENT
                          (Global Network Assets, LLC)

             THIS INSTRUMENT GRANTS A SECURITY INTEREST BY A UTILITY
          THIS INSTRUMENT CONTAINS AN AFTER-ACQUIRED PROPERTY PROVISION

         THIS PLEDGE AND SECURITY AGREEMENT  ("Agreement") dated as of September
5, 2000,  is by and  between  Global  Network  Assets,  LLC, a Delaware  limited
liability company ("Debtor"),  whose address is 12851 Worldgate Drive,  Herndon,
Virginia 20170 and whose Tax I.D. No. is 54-2002891 and Nortel  Networks Inc., a
Delaware  corporation   ("Secured  Party"),  as  Administrative  Agent  for  the
"Lenders",  as that term is defined below, whose address is 2221 Lakeside Blvd.,
Richardson, Texas 75082-4399.

                                R E C I T A L S:
                                 ---------------

         A. Subject to the terms of that certain  Credit  Agreement  dated as of
June 30, 2000, among Savvis Communications  Corporation,  a Delaware corporation
("Holdings"),   Savvis  Communications   Corporation,   a  Missouri  corporation
("Borrower"),  certain of the Lenders and Secured  Party (the  "Original  Credit
Agreement"),  certain of the  Lenders  extended  certain  credit  facilities  to
Borrower.

         B. Pursuant to that certain Amended and Restated Credit Agreement dated
as of September 5, 2000,  among  Borrower,  Holdings,  the lenders named therein
(together with their  successors  and assigns,  the "Lenders") and Secured Party
(as such  agreement  may be  amended,  renewed,  extended,  restated,  replaced,
substituted,  supplemented or otherwise  modified from time to time, the "Credit
Agreement"),  the Original Credit  Agreement is,  concurrently  herewith,  being
amended and restated.

         C. Debtor has directly and indirectly  benefitted and will directly and
indirectly benefit from the Loans evidenced and governed by the Credit Agreement
and the other transactions evidenced by and contemplated in the Loan Documents.

         D. The  execution  and  delivery of this  Agreement  is required by the
terms of the Credit  Agreement  and is a condition  to the  availability  of the
Loans to Borrower pursuant to the Credit Agreement.

         NOW, THEREFORE, in consideration of the premises and for other good and
valuable  consideration,  the  adequacy,  receipt and  sufficiency  of which are
hereby acknowledged,  and in order to induce the Lenders to make the Loans under
the Credit Agreement, the parties hereto hereby agree as follows:

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                                    ARTICLE 1

                                   Definitions

         Section 1.1 Definitions. As used in this Agreement, the following terms
have the following meanings:

                  "Account"  means any  "account",  as such term is  defined  in
         Article or Chapter 9 of the UCC,  now owned or  hereafter  acquired  by
         Debtor and, in any event, shall include,  without  limitation,  each of
         the following,  whether now owned or hereafter  acquired by Debtor: (a)
         all  rights of Debtor to payment  for goods  sold or  leased,  services
         rendered or the license of Intellectual Property, whether or not earned
         by performance;  (b) all accounts  receivable of Debtor; (c) all rights
         of  Debtor  to  receive   any   payment  of  money  or  other  form  of
         consideration,  including, without limitation, all Payment Intangibles;
         (d) all security  pledged,  assigned or granted to or held by Debtor to
         secure any of the foregoing; (e) all guaranties of, or indemnifications
         with respect to, any of the  foregoing;  (f) all rights of Debtor as an
         unpaid seller of goods or services,  including, but not limited to, all
         rights of stoppage in transit,  replevin,  reclamation and resale;  (g)
         all  rights to  brokerage  commissions;  and (h) all  other  Supporting
         Obligations, including any applicable Letter of Credit Rights.

                  "Amendment" has the meaning specified in Section 4.17(b).

                  "Broker"  means  any  "broker,"  as such  term is  defined  in
         Article or Chapter 8 of the UCC,  and in any event shall  include,  but
         not be limited to, any Person  defined as a broker or dealer  under the
         federal  securities  laws, but without  excluding a bank acting in that
         capacity.

                  "Capital   Stock"  means  corporate  stock  and  any  and  all
         securities,  shares,  partnership interests (whether general,  limited,
         special or other  partnership  interests),  limited  liability  company
         interests,  membership  interests,  equity  interests,  participations,
         rights or other equivalents  (however designated) of corporate stock or
         any of the foregoing  issued by any entity  (whether a  corporation,  a
         partnership,  a  limited  liability  company  or  another  entity)  and
         includes, without limitation, securities convertible into Capital Stock
         and rights, warrants or options to acquire Capital Stock.

                  "Chattel  Paper"  means any  "chattel  paper," as such term is
         defined  in Article  or  Chapter 9 of the UCC,  now owned or  hereafter
         acquired by Debtor.

                  "Clearing  Corporation"  means any "clearing  corporation," as
         such term is defined  in  Article  or Chapter 8 of the UCC,  and in any
         event  shall  include,  but not be limited  to, any (a) Person  that is
         registered as a "clearing  agency" under the federal  securities  laws,
         (b) federal  reserve bank, or (c) other Person that provides  clearance
         or settlement services

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         with respect to Financial Assets that would require it to register as a
         clearing agency under the federal  securities laws but for an exclusion
         or exemption from the registration requirement,  if its activities as a
         clearing corporation,  including,  without limitation,  promulgation of
         rules, are subject to regulation by a Governmental Authority.

                  "Collateral" has the meaning specified in Section 2.1.

                  "Commodity  Account"  means any  "commodity  account," as such
         term is  defined  in  Article  or  Chapter  9 of the UCC,  now owned or
         hereafter  acquired  by  Debtor,  including,  without  limitation,  all
         accounts  maintained by a Commodity  Intermediary  in which a Commodity
         Contract is carried for Debtor.

                  "Commodity  Contract" means any "commodity  contract," as such
         term is  defined in  Article  or  Chapter 9 of the UCC,  and  includes,
         without limitation,  a commodity futures contract,  a commodity option,
         or other  contract  that,  in each case, is (a) traded on or subject to
         the rules of a board of trade  that has been  designated  as a contract
         market for such a contract pursuant to the federal commodities laws, or
         (b) traded on a foreign  commodity board of trade,  exchange or market,
         and is carried on the books of a Commodity Intermediary for a Commodity
         Customer.

                  "Commodity  Customer"  means any "commodity  customer" as such
         term is  defined in  Article  or  Chapter 9 of the UCC,  and  includes,
         without  limitation,  any  Person  for  whom a  Commodity  Intermediary
         carries a Commodity Contract on its books.

                  "Commodity  Intermediary" means any "commodity  intermediary,"
         as such term is defined in Article or Chapter 9 of the UCC,  including,
         without  limitation,  (a) a  Person  who  is  registered  as a  futures
         commission merchant under the federal commodities laws, or (b) a Person
         who in the  ordinary  course  of its  business  provides  clearance  or
         settlement  services for a board of trade that has been designated as a
         contract market pursuant to the federal commodities laws.

                  "Copyright   License"  means  any  written  agreement  now  or
         hereafter  in  existence  granting  to  Debtor  any  right  to use  any
         Copyright including,  without limitation,  the agreements identified on
         Schedule  1, in each  case to the  extent  the  grant  by  Debtor  of a
         security  interest  pursuant to this Agreement in its right,  title and
         interest in such agreement is not prohibited by such agreement  without
         the consent of any other party thereto,  would not give any other party
         to such agreement the right to terminate its obligations thereunder, or
         is permitted with consent if all necessary  consents to such grant of a
         security interest have been obtained from the other parties thereto (it
         being  understood  that the  foregoing  shall not be deemed to obligate
         Debtor  to  obtain  such  consents);   provided,   that  the  foregoing
         limitation  shall not  affect,  limit,  restrict or impair the grant by
         Debtor of a security interest pursuant to

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         this Agreement in any accounts receivable or any money or other amounts
         due or to become due under such agreement.

                  "Copyright  Security  Agreement"  means a  copyright  security
         agreement,   executed  and  delivered  by  Debtor  to  Secured   Party,
         substantially  in the  form of  Exhibit  A, as  such  agreement  may be
         amended, supplemented or otherwise modified from time to time.

                  "Copyrights"  means all of the following:  (a) all copyrights,
         works protectable by copyright,  copyright  registrations and copyright
         applications of Debtor, including,  without limitation, those set forth
         on Schedule 1; (b) all renewals,  extensions and modifications thereof;
         (c) all income, royalties, damages, profits and payments relating to or
         payable  under  any of the  foregoing;  (d) the  right to sue for past,
         present or future infringements of any of the foregoing;  (e) all other
         rights and benefits  relating to any of the  foregoing  throughout  the
         world;  and (f) all goodwill  associated  with and symbolized by any of
         the foregoing; in each case, whether now owned or hereafter acquired by
         Debtor.

                  "Data   Centers"   means  the  data  centers   planned  to  be
         constructed and operated by Borrower at 587 McDonnell Blvd., Hazelwood,
         MO 63042 and 760 Office Parkway, Creve Coeur, MO 63141.

                  "Debt  Issuance" means any issuance by Holdings or Borrower of
         any Debt securities of Holdings or Borrower, respectively.

                  "Deposit   Accounts"  means  any  and  all  deposit   accounts
         (including  cash  collateral  accounts),  bank  accounts or  investment
         accounts  now  owned  or  hereafter   acquired  or  opened  by  Debtor,
         including,  without limitation,  those set forth on Schedule 2, and any
         account which is a replacement  or substitute for any of such accounts,
         together with all monies,  Instruments,  certificates,  checks, drafts,
         wire transfer  receipts and other  Property  deposited  therein and all
         balances therein and all investments made with funds deposited  therein
         or  otherwise  held  in  connection   therewith,   including,   without
         limitation, indebtedness (howsoever evidenced) and/or securities issued
         or guaranteed by the  government of the U.S.,  certificates  of deposit
         and all contract rights, General Intangibles,  contracts,  Instruments,
         Investment Property, Security Entitlements, Financial Assets, Commodity
         Contracts and other  Documents  now or hereafter  existing with respect
         thereto,   including,  but  not  limited  to,  any  and  all  renewals,
         extensions,  reissuances and  replacements and  substitutions  therefor
         with all earnings,  profits or other Proceeds  therefrom in the form of
         interest  or  otherwise,  from time to time  representing,  evidencing,
         deposited  into or held in such  deposit  accounts,  bank  accounts  or
         investment accounts.

                  "Document"  means any  "document,"  as such term is defined in
         Article or Chapter 9 of the UCC,  now owned or  hereafter  acquired  by
         Debtor, including, without limitation, all

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         documents  of  title  and  all   receipts   covering,   evidencing   or
         representing goods now owned or hereafter acquired by Debtor.

                  "Entitlement  Holder" means any "entitlement  holder", as such
         term is defined  in  Article or Chapter 8 of the UCC,  and in any event
         shall  include,  but not be limited  to, any Person  identified  in the
         records of a Securities  Intermediary  as the Person  having a Security
         Entitlement  against the Securities  Intermediary,  including,  without
         limitation,  any Person  who  acquires  a  security  entitlement  under
         Article or Chapter 8 of the UCC.

                  "Equipment"  means any "equipment," as such term is defined in
         Article or Chapter 9 of the UCC,  now owned or  hereafter  acquired  by
         Debtor  and,  in any event,  shall  include,  without  limitation,  all
         machinery,  equipment,  furniture,  fixtures, trade fixtures, trailers,
         rolling  stock,  vessels,  aircraft and vehicles now owned or hereafter
         acquired  by  Debtor  and  any  and all  additions,  substitutions  and
         replacements of any of the foregoing,  wherever located,  together with
         all attachments, components, parts, equipment and accessories installed
         thereon or affixed thereto.

                  "FCC"  means the  Federal  Communications  Commission  and any
         successor agency.

                  "Financial Asset" means any "financial asset," as such term is
         defined  in Article  or  Chapter 8 of the UCC,  and in any event  shall
         include,  but not be limited to, any (a) Security,  (b) obligation of a
         Person or a share,  participation  or other  interest in a Person or in
         Property or an enterprise of a Person, which is, or is of a type, dealt
         in or traded on financial  markets,  or which is recognized in any area
         in which it is issued or dealt in as a medium for  investment,  and (c)
         any  Property  that is held by a  Securities  Intermediary  for another
         Person in a  Securities  Account  if the  Securities  Intermediary  has
         expressly  agreed  with the other  Person  that the  Property  is to be
         treated as a Financial Asset under Article or Chapter 8 of the UCC.

                  "Foreign  Subsidiary" means, with respect to any Person,  each
         direct  or  indirect  Subsidiary  of  such  Person  that  is not a U.S.
         Subsidiary.

                  "General Intangibles" means any "general intangibles," as such
         term is  defined  in  Article  or  Chapter  9 of the UCC,  now owned or
         hereafter acquired by Debtor and, in any event, shall include,  without
         limitation,  each of the  following,  whether  now  owned or  hereafter
         acquired by Debtor:  (a) all of Debtor's  service  marks,  trade names,
         trade secrets, registrations,  goodwill, franchises, licenses, permits,
         proprietary  information,  customer lists, designs and inventions;  (b)
         all of Debtor's books and records,  including,  without limitation, all
         computer  runs,  invoices,   tapes,  processing  software,   processing
         contracts  (such as contracts  for computer  time and services) and any
         computer  prepared  information,  tapes  or  data  of  every  kind  and
         description, whether in the possession

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<PAGE>

         of Debtor or in the  possession of third  parties,  and all of Debtor's
         other data, plans, manuals, computer software, computer tapes, computer
         disks,  computer  programs,  source  codes,  object  codes,  management
         information systems and all rights of Debtor to retrieve data and other
         information  from  third  parties  and  other  data of  every  kind and
         description,  to the extent that they indicate,  summarize or evidence,
         or  otherwise  relate to, the  Accounts  or  Inventory,  whether in the
         possession of Debtor or in the  possession of any third party;  (c) all
         of Debtor's  contract  rights,  partnership  interests,  joint  venture
         interests,   securities,  Deposit  Accounts,  investment  accounts  and
         certificates of deposit (including,  without limitation,  all contracts
         relating to the  construction  or operation  of the Network,  including
         rights of way, easements,  leases and all related  contracts);  (d) all
         rights  of Debtor to  payment  under  letters  of  credit  and  similar
         agreements, including, without limitation, all Letter of Credit Rights;
         (e) all tax refunds and tax refund claims of Debtor;  (f) all choses in
         action and  causes of action of Debtor  (whether  arising in  contract,
         tort or otherwise and whether or not currently in  litigation)  and all
         judgments  in favor  of  Debtor,  including,  without  limitation,  all
         commercial  tort  claims;  (g) all rights  and  claims of Debtor  under
         warranties,  indemnities,  guaranties or other  Supporting  Obligations
         with respect to such agreements; (h) all Intellectual Property; and (i)
         all rights of Debtor under any insurance, surety or similar contract or
         arrangement,  in each  case to the  extent  the  grant by  Debtor  of a
         security  interest  pursuant to this Agreement in its right,  title and
         interest in such  contract,  agreement,  instrument or indenture is not
         prohibited by such contract, agreement, instrument or indenture without
         the consent of any other party thereto,  would not give any other party
         to such  contract,  agreement,  instrument  or  indenture  the right to
         terminate its obligations  thereunder,  or is permitted with consent if
         all necessary  consents to such grant of a security  interest have been
         obtained from the other parties  thereto (it being  understood that the
         foregoing  shall  not be  deemed to  obligate  Debtor  to  obtain  such
         consents);  provided,  that the foregoing  limitation shall not affect,
         limit,  restrict  or impair the grant by Debtor of a security  interest
         pursuant to this  Agreement in any accounts  receivable or any money or
         other  amounts  due or to become  due under such  contract,  agreement,
         instrument or indenture.

                  "Governmental  Authority" means any nation or government,  any
         state,  provincial  or  political  subdivision  thereof  and any entity
         exercising   executive,    legislative,    judicial,    regulatory   or
         administrative functions of or pertaining to government.

                  "Guarantee" by any Person means any indebtedness, liability or
         obligation,  contingent  or  otherwise,  of  such  Person  directly  or
         indirectly  guaranteeing  any Debt or  other  obligation  of any  other
         Person and,  without  limiting the  generality  of the  foregoing,  any
         indebtedness,  liability or obligation,  direct or indirect, contingent
         or  otherwise,  of such  Person (a) to  purchase  or pay (or advance or
         supply  funds  for the  purchase  or  payment  of)  such  Debt or other
         obligation (whether arising by virtue of partnership  arrangements,  by
         agreement  to  keep-well,  to purchase  assets,  goods,  securities  or
         services, to take-or-pay, or to maintain financial statement conditions
         or otherwise) or (b) entered into for the purpose of assuring in

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         any  other  manner  the  obligee  of such  Debt or other  indebtedness,
         liability  or  obligation  as to the payment  thereof or to protect the
         obligee against loss in respect thereof (in whole or in part), provided
         that the term Guarantee shall not include  endorsements  for collection
         or deposit in the  ordinary  course of business.  The term  "Guarantee"
         used as a verb has a corresponding meaning. The amount of any Guarantee
         shall be  deemed to be an amount  equal to the  stated or  determinable
         amount of the primary  obligation in respect of which such Guarantee is
         made  or,  if not  stated  or  determinable,  the  maximum  anticipated
         liability  in respect  thereof  (assuming  such  Person is  required to
         perform thereunder).

                  "Instrument"  means any  "instrument," as such term is defined
         in Article or Chapter 9 of the UCC, now owned or hereafter  acquired by
         Debtor, and, in any event, shall include all promissory notes,  drafts,
         bills of exchange and trade acceptances of Debtor, whether now owned or
         hereafter acquired.

                  "Intellectual   Property"  means  the  Copyrights,   Copyright
         Licenses, Patents, Patent Licenses, Trademarks and Trademark Licenses.

                  "Inventory"  means any "inventory," as such term is defined in
         Article or Chapter 9 of the UCC,  now owned or  hereafter  acquired  by
         Debtor, and, in any event, shall include,  without limitation,  each of
         the following,  whether now owned or hereafter  acquired by Debtor: (a)
         all goods and other personal  property of Debtor that are held for sale
         or lease or to be furnished under any contract of service;  (b) all raw
         materials,  work-in-process,  finished goods,  inventory,  supplies and
         materials  of Debtor;  (c) all  wrapping,  packaging,  advertising  and
         shipping materials of Debtor; (d) all goods that have been returned to,
         repossessed  by or stopped in transit by Debtor;  and (e) all Documents
         evidencing any of the foregoing.

                  "Investment Property" means any "investment property," as such
         term is  defined  in  Article  or  Chapter  9 of the UCC,  now owned or
         hereafter acquired by Debtor, and, in any event, shall include, without
         limitation,  each of the  following,  whether  now  owned or  hereafter
         acquired by Debtor:  (a) the Securities  Accounts and other  Investment
         Property  described on Schedule 2; (b) any  Security or Capital  Stock,
         whether certificated or uncertificated;  (c) any Security  Entitlement;
         (d) any Securities  Account;  (e) any Commodity  Contract;  and (f) any
         Commodity Account.

                  "Issuer"  means  any  "issuer,"  as such  term is  defined  in
         Article or Chapter 8 of the UCC,  and in any event shall  include,  but
         not be limited to, any Person that, with respect to an obligation on or
         a defense to a Security,  (a) places or  authorizes  the placing of its
         name on a Security Certificate,  other than as authenticating  trustee,
         registrar,   transfer   agent  or  the  like,   to  evidence  a  share,
         participation or other interest in its Property or in an enterprise, or
         to  evidence  its duty to  perform  an  obligation  represented  by the
         certificate;  (b) creates a share,  participation  or other interest in
         its Property or in an enterprise, or undertakes an obligation,

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         that is an Uncertificated  Security; (c) directly or indirectly creates
         a  fractional  interest in its rights or  Property,  if the  fractional
         interest  is  represented  by a Security  Certificate;  or (d)  becomes
         responsible for, or in the place of, another Issuer.

                  "Letter of Credit  Rights" means "letter of credit  rights" as
         such term is defined in Revised Article 9.

                  "License" means any consent, permit,  franchise,  certificate,
         approval, order, license,  right-of-way (whether an easement,  contract
         or agreement in any form) or other  authorization,  including,  without
         limitation, any FCC License.

                  "Lien" means,  with respect to any  Property,  any mortgage or
         deed of trust, pledge, hypothecation,  assignment, deposit arrangement,
         security  interest,  tax lien,  financing  statement,  pledge,  charge,
         hypothecation or other lien, charge,  easement (other than any easement
         not materially impairing usefulness), encumbrance, preference, priority
         or other security agreement or preferential  arrangement of any kind or
         nature  whatsoever  on or with  respect  to such  Property  (including,
         without  limitation,  any  conditional  sale or other  title  retention
         agreement having  substantially  the same economic effect as any of the
         foregoing).

                  "Master Purchase Agreement" means that certain Nortel Networks
         Global  Purchase  Agreement,  dated as of June 30, 2000, by and between
         Borrower and Nortel Networks, as amended, supplemented or restated from
         time to time.

                  "Network"  means  as  such  term  is  defined  in  the  Credit
         Agreement.

                  "Nortel  Networks"  means  Nortel  Networks  Inc.,  a Delaware
         corporation.

                  "Nortel Networks  Equipment" means all hardware,  software and
         equipment (including fixtures) manufactured, sold or otherwise provided
         to Debtor or any  Subsidiary  of  Holdings  by Nortel  Networks  and/or
         Nortel Networks Corporation including, without limitation,  pursuant to
         the Master Purchase Agreement.

                  "Nortel Networks  Software" means any and all software sold or
         licensed by Nortel  Networks  and/or  Nortel  Networks  Corporation  to
         Debtor or any Subsidiary of Holdings and including, without limitation,
         all source code and object code and all manuals and other documentation
         relating thereto and each copy thereof regardless of the media in which
         they are stored.

                  "Obligations" means the "Obligations", as such term is defined
         in  the  Credit  Agreement,  and  the  obligations,   indebtedness  and
         liabilities  of Debtor under this Agreement and any other Loan Document
         to which Debtor is a party.

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                  "Patent License" means any written  agreement now or hereafter
         in existence granting to Debtor any right to use any invention on which
         a Patent is in existence including,  without limitation, the agreements
         described on Schedule 1, in each case to the extent the grant by Debtor
         of a security interest  pursuant to this Agreement in its right,  title
         and interest in such  agreement  is not  prohibited  by such  agreement
         without  the  consent of any other  party  thereto,  would not give any
         other party to such  agreement the right to terminate  its  obligations
         thereunder,  or is permitted with consent if all necessary  consents to
         such grant of a security  interest  have been  obtained  from the other
         parties  thereto (it being  understood  that the foregoing shall not be
         deemed to obligate Debtor to obtain such consents);  provided, that the
         foregoing  limitation shall not affect,  limit,  restrict or impair the
         grant by Debtor of a security  interest  pursuant to this  Agreement in
         any accounts  receivable or any money or other amounts due or to become
         due under such agreement.

                  "Patent Security  Agreement" means a patent security agreement
         executed and delivered by Debtor to Secured Party, substantially in the
         form of Exhibit B, as such  agreement may be amended,  supplemented  or
         otherwise modified from time to time.

                  "Patents" means all of the following:  (a) all patents, patent
         applications and patentable  inventions of Debtor,  including,  without
         limitation,  those set forth on Schedule  1, and all of the  inventions
         and improvements  described and claimed therein; (b) all continuations,
         divisions,   renewals,   extensions,   modifications,    substitutions,
         continuations-in-part  or  reissues  of any of the  foregoing;  (c) all
         income, royalties, profits, damages, awards and payments relating to or
         payable  under  any of the  foregoing;  (d) the  right to sue for past,
         present and future infringements of any of the foregoing; (e) all other
         rights and benefits  relating to any of the  foregoing  throughout  the
         world;  and (f) all goodwill  associated with any of the foregoing;  in
         each case, whether now owned or hereafter acquired by Debtor.

                  "Payment Intangibles" means "payment intangibles" as such term
         is defined in Revised Article 9.

                  "Person"   means   any   individual,    corporation,    trust,
         association,  company,  partnership,  joint venture,  limited liability
         company, joint stock company, Governmental Authority or other entity.

                  "Pledged  Collateral"  has the  meaning  specified  in Section
         4.16(b)(i).

                  "Pledged  Shares" means 100% of the Capital Stock from time to
         time owned or acquired by Debtor in any manner of each of the direct or
         indirect U.S. Subsidiaries of Debtor, including without limitation, the
         Capital Stock identified on Schedule 3 attached hereto,  or on Schedule
         1 to an Amendment.

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                  "Proceeds"  means any  "proceeds,"  as such term is defined in
         Article or Chapter 9 of the UCC and, in any event,  shall include,  but
         not be  limited  to,  (a)  any  and  all  proceeds  of  any  insurance,
         indemnity,  warranty  or  guaranty  payable to Debtor from time to time
         with respect to any of the Collateral, (b) any and all payments (in any
         form whatsoever) made or due and payable to Debtor from time to time in
         connection with any requisition, confiscation, condemnation, seizure or
         forfeiture  of all or any part of the  Collateral  by any  Governmental
         Authority (or any Person acting, or purporting to act, for or on behalf
         of any Governmental Authority),  and (c) any and all other amounts from
         time to time paid or  payable  under or in  connection  with any of the
         Collateral and all other Payment Intangibles relating thereto.

                  "Property" means property and/or assets of all kinds,  whether
         real,  personal or mixed,  tangible or intangible  (including,  without
         limitation,  all rights relating thereto), whether owned or acquired on
         or after the date hereof.

                  "Revised Article 9" means the Revised Article 9 of the Uniform
         Commercial  Code  included  in the 1998  official  text of the  Uniform
         Commercial  Code as approved by the American Law  Institute in 1998 and
         the National Conference of Commissioners on Uniform State Laws in 1999.

                  "Securities  Account" means any "securities  account," as such
         term is defined  in  Article or Chapter 8 of the UCC,  and in any event
         shall include,  but not be limited to, any account to which a Financial
         Asset is or may be credited in accordance with an agreement under which
         the Person  maintaining the account  undertakes to treat the Person for
         whom the account is  maintained as entitled to exercise the rights that
         comprise the Financial Asset.

                  "Securities Intermediary" means any "securities intermediary,"
         as such term is defined in Article or Chapter 8 of the UCC,  and in any
         event  shall  include,   but  not  be  limited  to,  any  (a)  Clearing
         Corporation,  or (b) Person,  including  a bank or Broker,  that in the
         ordinary  course of its  business  maintains  Securities  Accounts  for
         others and is acting in that capacity.

                  "Security"  means any  "security,"  as such term is defined in
         Article or Chapter 8 of the UCC and, in any event,  shall include,  but
         not  be  limited  to,  any   obligation   of  an  Issuer  or  a  share,
         participation  or other  interest  in an  Issuer or in  Property  or an
         enterprise  of  an  Issuer  (a)  which  is  represented  by a  Security
         Certificate in bearer or registered  form, or the transfer of which may
         be registered upon books maintained for that purpose by or on behalf of
         the  Issuer,  (b)  which is one of a class or series or by its terms is
         divisible into a class or series of shares,  participations,  interests
         or  obligations,  and (c) which  (i) is,  or is of a type,  dealt in or
         traded on  securities  exchanges or  securities  markets,  or (ii) is a
         medium for investment and by its terms expressly  provides that it is a
         security governed by Article or Chapter 8 of the UCC.

                                       10
<PAGE>

                  "Security  Certificate"  means any "security  certificate," as
         such term is defined  in  Article  or Chapter 8 of the UCC,  and in any
         event  shall   include,   but  not  be  limited  to,  any   certificate
         representing a Security.

                  "Security  Entitlement"  means any "security  entitlement," as
         such term is defined  in  Article  or Chapter 8 of the UCC,  and in any
         event  shall  include,  but not be  limited  to,  any of the rights and
         property interests of an Entitlement Holder with respect to a Financial
         Asset.

                  "Subsidiary"   means,   with   respect  to  any  Person,   any
         corporation  or  other  entity  of which  at  least a  majority  of the
         outstanding shares of stock or other ownership  interests having by the
         terms thereof ordinary voting power to elect a majority of the board of
         directors (or Persons performing similar functions) of such corporation
         or entity (irrespective of whether or not at the time, in the case of a
         corporation,  stock of any other  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 directly or indirectly  owned or controlled
         by such Person or one or more of its Subsidiaries or by such Person and
         one or more of its Subsidiaries.

                  "Supporting  Obligations"  means  "supporting  obligations" as
         such term is defined in Revised Article 9.

                  "Trademark   License"  means  any  written  agreement  now  or
         hereafter  in  existence  granting  to  Debtor  any  right  to use  any
         Trademark,  including, without limitation, the agreements identified on
         Schedule  1, in each  case to the  extent  the  grant  by  Debtor  of a
         security  interest  pursuant to this Agreement in its right,  title and
         interest in such agreement is not prohibited by such agreement  without
         the consent of any other party thereto,  would not give any other party
         to such agreement the right to terminate its obligations thereunder, or
         is permitted with consent if all necessary  consents to such grant of a
         security interest have been obtained from the other parties thereto (it
         being  understood  that the  foregoing  shall not be deemed to obligate
         Debtor  to  obtain  such  consents);   provided,   that  the  foregoing
         limitation  shall not  affect,  limit,  restrict or impair the grant by
         Debtor  of a  security  interest  pursuant  to  this  Agreement  in any
         accounts  receivable or any money or other amounts due or to become due
         under such agreement.

                  "Trademark  Security  Agreement"  means a  trademark  security
         agreement   executed  and   delivered  by  Debtor  to  Secured   Party,
         substantially  in the  form of  Exhibit  C, as  such  agreement  may be
         amended, supplemented or otherwise modified from time to time.

                  "Trademarks"  means all of the following:  (a) all trademarks,
         trade names, corporate names, company names, business names, fictitious
         business  names,  trade styles,  service marks,  logos,  other business
         identifiers,  prints  and  labels  on which any of the  foregoing  have

                                       11
<PAGE>

         appeared or appear,  all registrations  and recordings  thereof and all
         applications in connection  therewith,  including,  without limitation,
         registrations,  recordings and applications in the United States Patent
         and  Trademark  Office or in any similar  office or agency of the U.S.,
         any state  thereof or any other  country or any  political  subdivision
         thereof, including,  without limitation, those described in Schedule 1;
         (b) all  reissues,  extensions  and renewals  thereof;  (c) all income,
         royalties, damages and payments now or hereafter relating to or payable
         under any of the foregoing,  including, without limitation,  damages or
         payments for past or future infringements of any of the foregoing;  (e)
         the right to sue for past,  present and future  infringements of any of
         the  foregoing;  (f) all rights  corresponding  to any of the foregoing
         throughout  the  world;  and  (g)  all  goodwill  associated  with  and
         symbolized by any of the foregoing;  in each case, whether now owned or
         hereafter acquired by Debtor.

                  "UCC"  means the  Uniform  Commercial  Code as in effect on or
         after  the  date  hereof  in the  State of New York  and/or  any  other
         jurisdiction  the laws of which may be  applicable  to or in connection
         with the creation,  perfection or priority, or the effect of perfection
         or non-perfection,  of any Lien on any Property created or purported to
         be  created   pursuant  to  this  Agreement,   and  includes,   without
         limitation,  Revised  Article 9 if and when enacted in the State of New
         York and/or any other such jurisdiction.

                  "Uncertificated Security" means any "uncertificated security,"
         as such term is defined in Article or Chapter 8 of the UCC,  and in any
         event shall  include,  but not be limited to, any Security  that is not
         represented by a certificate.

                  "U.S." means the United States of America.

                  "U.S.  Subsidiary"  means,  with  respect to any Person,  each
         direct or indirect  Subsidiary  of such Person formed under the laws of
         the U.S. or any state thereof.

         Section 1.2 Other Definitional  Provisions.  Terms used herein that are
defined in the Credit Agreement and are not otherwise  defined herein shall have
the  meanings  therefor  specified  in  the  Credit  Agreement.   References  to
"Sections,"  "Subsections,"  "Exhibits"  and  "Schedules"  shall be to Sections,
Subsections,  Exhibits and Schedules,  respectively,  of this  Agreement  unless
otherwise specifically provided. All definitions contained in this Agreement are
equally  applicable to the singular and plural forms of the terms  defined.  All
references to statutes and regulations  shall include any amendments of the same
and any successor statutes and regulations. References to particular sections of
the UCC  should  be read to  refer  also to  parallel  sections  of the  Uniform
Commercial Code as enacted in each state or other jurisdiction where any portion
of the  Collateral is or may be located.  Terms used herein which are defined in
the UCC, unless otherwise defined herein or in the Credit Agreement,  shall have
the meanings  determined  in  accordance  with the UCC.  The term  "continuing",
"continuation"  or "continuance"  means, in reference to any Default or Event of
Default  that has  occurred,  that such Default or Event of Default has not been
either cured to the

                                       12
<PAGE>

reasonable  satisfaction of the Secured Party within the applicable grace period
(if any) specified in this Agreement or the other Loan Documents (as applicable)
or waived in writing by the requisite  Lenders in accordance  with Section 13.11
of the Credit Agreement.

                                    ARTICLE 2

                                Security Interest

         Section  2.1  Security  Interest.  Subject  to Section  2.2  below,  as
collateral  security for the prompt payment and  performance in full when due of
the  Obligations  (whether at stated  maturity,  by  acceleration or otherwise),
Debtor hereby pledges and assigns (as  collateral) to Secured Party,  and grants
to Secured Party, as Administrative  Agent for the Lenders, a continuing Lien on
and security  interest in, all of Debtor's  right,  title and interest in and to
the following,  whether now owned or hereafter  arising or acquired and wherever
located (collectively, the "Collateral"):

                  (a)      all Accounts;

                  (b)      all Chattel Paper;

                  (c)      all Instruments;

                  (d)      all General Intangibles;

                  (e)      all Documents;

                  (f)      all   Equipment   (including,   without   limitation,
                           Equipment at the locations set forth on Schedule 4);

                  (g)      all   Inventory   (including,   without   limitation,
                           Inventory at the locations set forth on Schedule 4);

                  (h)      all Intellectual Property;

                  (i)      all  Financial   Assets  and   Investment   Property,
                           including,  without limitation,  or in addition,  the
                           following:

                           (1)      all   of  the   Pledged   Shares   and   the
                                    certificates   (if  any)   representing  the
                                    Pledged  Shares,  and all  dividends,  cash,
                                    Instruments, and other property from time to
                                    time  received,   receivable,  or  otherwise
                                    distributed or  distributable  in respect of
                                    or in exchange for any or all of the Pledged
                                    Shares; and

                                       13
<PAGE>

                           (2)      all  additional  Capital  Stock from time to
                                    time  owned or  acquired  by  Debtor  in any
                                    manner,    and    all    dividends,    cash,
                                    Instruments, and other property from time to
                                    time  received,   receivable,  or  otherwise
                                    distributed or  distributable  in respect of
                                    or in  exchange  for  any  or  all  of  such
                                    Capital Stock; provided, no Capital Stock of
                                    a Foreign  Subsidiary is or shall be pledged
                                    pursuant to this Section 2.1(i);

                  (j)      all Deposit Accounts;

                  (k)      all indebtedness  from time to time owed to Debtor by
                           Holdings or any of  Borrower's  Subsidiaries  and the
                           instruments  evidencing  such  indebtedness,  and all
                           interest,  cash,  instruments and other property from
                           time  to  time  received,   receivable  or  otherwise
                           distributed  or  distributable  in  respect  of or in
                           exchange for any or all of such indebtedness;

                  (l)      all  proceeds,  in cash or  otherwise,  of any of the
                           property  described  in  the  foregoing  clauses  (a)
                           through (k) and all liens, security, rights, remedies
                           and claims of Debtor with respect thereto;

                  (m)      all other  goods and  personal  Property of Debtor of
                           any   kind  or   character,   whether   tangible   or
                           intangible,  including,  without limitation,  any and
                           all rights in and claims  under  insurance  policies,
                           judgments and rights thereunder, and tort claims; and

                  (n)      all  Proceeds  and  products  of  any  or  all of the
                           foregoing.

         Section 2.2 Exclusions from Security Interest. Notwithstanding anything
in this  Agreement to the  contrary,  "Collateral"  shall not include any of the
following  Property as long as such Property is  encumbered  by Permitted  Liens
(or, in the case of the Lucent Equipment,  expected to be encumbered by November
30, 2000) and as long as such Property is not Nortel Networks Equipment,  Nortel
Networks  Software  nor any other  Property  acquired  with the  proceeds of the
Loans:

                  (x)      any  Property  encumbered  (or,  in the  case  of the
                           Lucent  Equipment,   expected  to  be  encumbered  by
                           November 30, 2000) by purchase money Liens  permitted
                           by clause (g) of the definition of "Permitted Liens,"
                           as such term is defined in the Credit Agreement;

                  (y)      the  real  property  and  related  fixtures  and  any
                           equipment   located  at  the  Data  Centers  and  the
                           proceeds thereof; and

                                       14
<PAGE>

                  (z)      funds held back by a lender  from the  proceeds  of a
                           Debt Issuance in an escrow or collateral  account for
                           the  purpose  of paying  interest  on such Debt as it
                           accrues.

         Upon the  request  of Debtor,  without  the  requirement  of consent or
agreement  of any Lender,  the Secured  Party  shall  promptly  execute (A) such
releases or other  terminations  of Liens as may be necessary  to terminate  the
Liens  granted to the Secured  Party under the Security  Documents in any of the
Property  described  in the  foregoing  clauses  (x),  (y) and  (z) or (B)  such
agreements as may be necessary to provide assurance that the Property  described
in the foregoing  clauses (x), (y) and (z) is not Collateral  pledged to Secured
Party or any Lender.  If the Debt secured by a Permitted  Lien  encumbering  any
Property of the type  described in the foregoing  clauses (x), (y) and (z) shall
be paid in full and the Permitted Lien on such Property is released  (other than
in  connection  with a  refinancing  of such Debt where the grant of a Permitted
Lien to secure such  refinancing  Debt is  contemplated)  or if a Permitted Lien
does not  encumber the Lucent  Equipment by November 30, 2000,  the Debtor shall
and shall cause its  Subsidiaries  to take such action as the Secured  Party may
reasonably  require to cause the Liens of the Security Documents to encumber the
Property in question and for such Liens to be perfected and protected.

         Notwithstanding  anything herein or in the other Security  Documents to
the  contrary,  to the extent  this  Agreement  or any other  Security  Document
purports  to grant to the  Secured  Party a lien and  security  interest  in any
License held directly or indirectly by Debtor, now owned or hereafter  acquired,
the Secured  Party shall only have a lien and security  interest in such License
at such times and to the extent  that  Debtor is  permitted  to grant a security
interest therein under the applicable  provisions of the  Communications  Act of
1934,  as  amended,  and  the  rules  and  regulations  of the  FCC  promulgated
thereunder and other applicable law;  provided,  that any such lien and security
interest shall to the extent  permitted by applicable law be deemed effective as
of the later of (i) the date of this  Agreement or (ii) the date on which Debtor
was assigned, or acquired control over, the applicable License.

         Section  2.3 Debtor  Remains  Liable.  Notwithstanding  anything to the
contrary  contained herein,  (a) Debtor shall remain liable under the contracts,
agreements,  documents and instruments  included in the Collateral to the extent
set forth therein to perform all of its duties and obligations thereunder to the
same extent as if this  Agreement  had not been  executed,  (b) the  exercise by
Secured  Party of any of its  rights or  remedies  hereunder  shall not  release
Debtor from any of its duties or obligations  under the  contracts,  agreements,
documents  and  instruments  included in the  Collateral,  and (c) Secured Party
shall  not have any  indebtedness,  liability  or  obligation  under  any of the
contracts,  agreements,  documents and instruments included in the Collateral by
reason of this  Agreement,  and Secured  Party shall not be obligated to perform
any of the  obligations or duties of Debtor  thereunder or to take any action to
collect or enforce any claim for payment assigned hereunder.

                                       15
<PAGE>

         Section 2.4  Delivery of  Collateral.  Debtor has  delivered to Secured
Party, endorsed in blank as appropriate,  all Collateral the possession of which
is necessary to perfect the security interest of Secured Party therein as of the
date  hereof.  Furthermore,  within 10 days of Debtor  gaining any rights in any
additional  Collateral  having a value in excess of $100,000 the  possession  of
which is necessary to perfect the security  interest of Secured  Party  therein,
all  certificates or instruments  representing or evidencing the Pledged Shares,
any  Instruments  or Chattel Paper or any other  Collateral  including,  without
limitation,  any  Investment  Property,  shall be delivered to and held by or on
behalf of  Secured  Party  pursuant  hereto in  suitable  form for  transfer  by
delivery,  or accompanied by duly executed instruments of transfer or assignment
in blank, or held by a Securities  Intermediary in a Securities Account pursuant
to an agreement  among Secured Party,  Debtor and such  Securities  Intermediary
which agreement establishes "control" (as defined in Article or Chapter 8 of the
UCC) of such  Securities  Account with Secured  Party in one (or more if Secured
Party  requests) of the manners  prescribed  in Section 8-106 of the UCC, all in
form  and  substance  reasonably   satisfactory  to  Secured  Party.  After  the
occurrence  and during  the  continuation  of a Default or an Event of  Default,
Secured  Party  shall  have the right at any time to  exchange  certificates  or
instruments  representing or evidencing any Pledged Collateral in its possession
for certificates or instruments of smaller or larger denominations.

                                    ARTICLE 3

                         Representations and Warranties

         To induce  Secured  Party and the Lenders to enter into this  Agreement
and the other Loan Documents, Debtor represents and warrants that:

         Section 3.1 Title.  Debtor is, and with respect to Collateral  acquired
after the date  hereof  Debtor  will be, the legal and  beneficial  owner of the
Collateral  free and clear of any Lien or other  encumbrance,  except  for those
Permitted  Liens  (if any)  which  are  expressly  permitted  to  attach  to the
Collateral in accordance with the Credit Agreement and Liens in favor of Secured
Party  and  provided,  that  this  Section  3.1 does not  apply to  Intellectual
Property (which is addressed in Section 3.8 below).

         Section 3.2  Accounts.  Unless  Debtor has given  Secured Party written
notice  to the  contrary,  whenever  the  security  interest  granted  hereunder
attaches  to an  Account  with a value in excess of  $250,000,  Debtor  shall be
deemed to have  represented  and  warranted to Secured  Party as to each of such
Accounts at the time of its creation that, to the best knowledge of Debtor,  (a)
each such  Account is genuine  and in all  respects  what it purports to be, (b)
each such Account  represents  the legal,  valid and binding  obligation  of the
account debtor evidencing  indebtedness  unpaid and owed by such account debtor,
(c) except for defenses and business  disputes arising in the ordinary course of
business  which in the  aggregate  are not  material,  the  amount  of each such
Account  represented as owing is the correct amount actually and unconditionally
owing except for normal trade discounts

                                       16
<PAGE>

granted in the  ordinary  course of  business,  and (d) except for  defenses and
business  disputes  arising  in the  ordinary  course of  business  which in the
aggregate  are  not  material,  no  such  Account  is  subject  to  any  offset,
counterclaim or other defense.

         Section 3.3 Financing  Statements.  Debtor has not signed any financing
statement,  security agreement or other Lien instrument covering all or any part
of the  Collateral,  except as may have  been  filed in favor of  Secured  Party
pursuant  to this  Agreement  and except  for  financing  statements  evidencing
Permitted Liens. Except as otherwise disclosed on Schedule 5, Debtor does not do
business and has not done business within the past five years under a trade name
or any  name  other  than its  legal  name set  forth at the  beginning  of this
Agreement.

         Section  3.4  Principal  Place  of  Business.  The  principal  place of
business and chief executive office of Debtor, and the office where Debtor keeps
its books  and  records,  is  located  at the  address  of  Debtor  shown at the
beginning of this Agreement.

         Section 3.5 Location of Collateral.  All Inventory (except Inventory in
transit) and Equipment (other than vehicles) of Debtor  constituting  Collateral
having a value in excess of  $100,000  is  located at the  places  specified  on
Schedule 4. Debtor shall give written  notice to Secured  Party at least 30 days
prior to the date any such Inventory and/or Equipment is located at any location
other than as set forth on Schedule 4. Except for  warehousing  and  co-location
arrangements,  Debtor has exclusive  possession and control of its Inventory and
Equipment.  None of  such  Inventory  (other  than  Inventory  as to  which  all
Documents  evidencing  such  Inventory  have been delivered to Secured Party) or
Equipment (other than vehicles) of Debtor  constituting  Collateral is evidenced
by a Document (including, without limitation, a negotiable document of title).

         Section  3.6  Perfection.  Upon the filing of Uniform  Commercial  Code
financing  statements in the jurisdictions listed on Schedule 6, the filing of a
Patent Security  Agreement (if any) and a Trademark  Security Agreement (if any)
with the United States Patent and  Trademark  Office,  the filing of a Copyright
Security  Agreement (if any) with the United States Copyright  Office,  and upon
Secured  Party's  obtaining  possession  of the  Pledged  Shares  (or  obtaining
"control"  (as such term is  defined  in Article or Chapter 8 of the UCC) of the
Pledged  Shares in one (or more if Secured  Party so  requests)  of the  manners
prescribed in Section 8-106 of the UCC) and all other Instruments, Chattel Paper
and  Security  Certificates  of Debtor  constituting  Collateral,  the  security
interest in favor of Secured  Party created  herein will  constitute a valid and
perfected  Lien upon and  security  interest in the  Collateral  (except for (a)
vehicles covered by certificates of title, and (b) other Property  excluded from
the  application of Article or Chapter 9 of the UCC by Section 9-104 of the UCC,
including,  without  limitation,  fixtures and deposit accounts),  subject to no
equal or prior Liens except for Permitted Liens.

         Section 3.7       [intentionally omitted]

                                       17
<PAGE>

         Section 3.8       Intellectual Property.

                  (a) The  information  contained  on  Schedule  1 in respect of
         Federally  registered  Trademarks,  registered  Copyrights  and  issued
         Patents, is true, correct and complete.

                  (b) Debtor is the sole and  exclusive  owner of the entire and
         unencumbered  right,  title  and  interest  in and to the  Intellectual
         Property set forth on Schedule 1  (consisting  of Federally  registered
         Trademarks, registered Copyrights and issued Patents) free and clear of
         any Liens,  including,  without limitation,  any pledges,  assignments,
         licenses,  user  agreements  and  covenants  by Debtor not to sue third
         Persons, other than Permitted Liens.

                  (c) To Debtor's  best  knowledge,  no claim has been made that
         the use of any of the  Intellectual  Property  set forth on  Schedule 1
         violates or may violate the rights of any third Person.

                  (d) Each of the Patents and Trademarks  identified on Schedule
         1 as being  registered  has been  properly  registered  with the United
         States  Patent  and  Trademark   Office  and  each  of  the  Copyrights
         identified  on  Schedule  1  as  being  registered  has  been  properly
         registered with the United States Copyright Office.

         Section 3.9       Pledged Shares and Instruments.

                  (a) The Pledged  Shares have been duly  authorized and validly
         issued  and are  fully  paid and  nonassessable  under  the laws of the
         jurisdiction of  incorporation  or organization of the issuers thereof.
         To the best  knowledge  of  Debtor,  the  Instruments  have  been  duly
         authorized and validly issued by the obligor  thereunder and constitute
         legally enforceable indebtedness of the obligor thereunder.

                  (b) Debtor is the legal and  beneficial  owner of the  Pledged
         Shares and the Instruments,  free and clear of any Lien (other than the
         Lien created by this Agreement),  and Debtor has not sold,  granted any
         option with respect to, assigned,  transferred or otherwise disposed of
         any of its  rights  or  interest  in or to the  Pledged  Shares  or the
         Instruments.

                  (c) On the date  hereof,  the Pledged  Shares  constitute  the
         percentage of the issued and  outstanding  Capital Stock of the issuers
         thereof  indicated  on Schedule 3, as such  Schedule 3 may from time to
         time be supplemented, amended or modified.

         Section 3.10  Investment  Property.  As of the date of this  Agreement,
Schedule 2  contains  a complete  and  accurate  description  of all  Investment
Property owned by Debtor.

         Section 3.11  Benefit . Debtor  expects to derive  substantial  benefit
(and Debtor may

                                       18
<PAGE>

reasonably be expected to derive substantial benefit),  directly and indirectly,
from the Loans and the other transactions  contemplated by the Credit Agreement.
Debtor will receive  reasonably  equivalent value in exchange for the Collateral
being  provided by it pursuant to the Loan  Documents  to which it is a party as
security for the payment and performance of the Obligations.

                                    ARTICLE 4

                                    Covenants

         Debtor   covenants  and  agrees  with  Secured  Party  that  until  the
Obligations  are paid and performed in full,  the  obligations  of Secured Party
under the Loan Documents and all Commitments of the Lenders have expired or have
been terminated:

         Section 4.1 Encumbrances. Except as otherwise permitted by the terms of
the Credit Agreement relating to disposition of assets, Debtor shall not create,
permit or suffer to exist, and shall defend the Collateral against,  any Lien or
other encumbrance on the Collateral except for Permitted Liens, and shall defend
Debtor's  rights in the  Collateral  and Secured  Party's  pledge and collateral
assignment  of and security  interest in the  Collateral  against the claims and
demands of all Persons.  Subject to the creation or existence of Permitted Liens
under the  Credit  Agreement,  Debtor  shall do  nothing to impair the rights of
Secured Party in the Collateral.

         Section 4.2       [intentionally omitted]

         Section 4.3 Disposition of Collateral. Except as expressly permitted by
the terms of the Credit  Agreement,  Debtor  shall not sell,  lease,  assign (by
operation of law or otherwise) or otherwise dispose of, or grant any option with
respect to, the Collateral or any part thereof without the prior written consent
of Secured Party.

         Section 4.4 Further Assurances. At any time and from time to time, upon
the request of Secured  Party,  and at the sole expense of Debtor,  Debtor shall
promptly  execute  and  deliver  all  such  further  agreements,  documents  and
instruments  and take such further action as Secured Party may  reasonably  deem
necessary or  appropriate  to preserve and perfect its security  interest in and
pledge and collateral  assignment of the Collateral and carry out the provisions
and  purposes of this  Agreement  or to enable  Secured  Party to  exercise  and
enforce its rights and remedies hereunder with respect to any of the Collateral,
and,  to the extent any of the  Collateral  at any time  constitutes  Investment
Property,  then Debtor shall cause Secured Party to obtain "control," as defined
in Article  or  Chapter 8 of the UCC,  of such  Collateral  in one (or more,  if
Secured  Party so requests) of the manners  prescribed  in Section  8-106 of the
UCC.  Debtor and Secured Party agree that the grant of the security  interest in
the Investment  Property  pursuant to this Agreement  shall have the effect of a
delivery of such  securities to Secured  Party  pursuant to Section 8-301 of the
UCC, and the effect of a taking of delivery by Secured Party of such  Collateral
in accordance with Section 8-302 of the UCC.

                                       19
<PAGE>

Except as otherwise  expressly  permitted  by the terms of the Credit  Agreement
relating to disposition of assets and except for Permitted Liens,  Debtor agrees
to defend the title to the  Collateral  and the Lien  thereon  of Secured  Party
against the claim of any other Person and to maintain  and  preserve  such Lien.
Without  limiting the generality of the foregoing,  Debtor shall (a) execute and
deliver to Secured  Party such  financing  statements  as Secured Party may from
time to time  require;  (b)  deliver and pledge to Secured  Party all  Documents
(including,  without limitation, all documents of title) evidencing Inventory or
Equipment having a value in excess of $100,000 (except for certificates of title
covering vehicles unless otherwise  required by Secured Party) and cause Secured
Party to be named as lienholder on all such Documents; (c) deliver and pledge to
Secured  Party all  Instruments  and Chattel  Paper of Debtor  having a value in
excess of $100,000 with any necessary endorsements;  and (d) execute and deliver
to Secured Party such other  agreements,  documents and  instruments  as Secured
Party may reasonably require to perfect and maintain the validity, effectiveness
and priority of the Liens intended to be created by the Loan  Documents.  In the
event Debtor fails, upon request of Secured Party, to promptly (and in any event
within  two days of such  request)  execute  and file one or more  financing  or
continuation statements,  and/or amendments thereto, relating to all or any part
of the  Collateral,  Debtor  authorizes  Secured Party to file such financing or
continuation  statements,  and/or  amendments  thereto  without the signature of
Debtor where permitted by law. A carbon,  photographic or other  reproduction of
this Agreement or of any financing statement covering the Collateral or any part
thereof  shall be  sufficient  as a  financing  statement  and may be filed as a
financing statement.

         Section 4.5 Insurance. Debtor shall maintain insurance in the types and
amounts,  and under the terms and  conditions,  specified  in Section 8.5 of the
Credit Agreement.  If applicable,  recoveries under any such policy of insurance
shall be paid as provided in the Credit Agreement.

         Section 4.6  Bailees.  If any of the  Collateral  is at any time in the
possession or control of any  warehouseman,  bailee or any of Debtor's agents or
processors,  Debtor  shall,  at  the  request  of  Secured  Party,  notify  such
warehouseman,  bailee,  agent or  processor  of the  security  interest  created
hereunder  and shall  instruct such Person to hold such  Collateral  for Secured
Party's account subject to Secured Party's instructions.

         Section 4.7  Inspection  Rights.  Debtor shall permit Secured Party and
its representatives and agents, during normal business hours and upon reasonable
notice to Debtor, to examine, copy and make extracts from its books and records,
to visit and inspect its Properties and to discuss its business,  operations and
financial   condition  with  its  officers  and  independent   certified  public
accountants.  The Debtor will authorize its  accountants in writing (with a copy
to the Secured Party) to comply with this Section.  The Secured Party and/or its
representatives  may,  at any time and from  time to time at  Debtor's  expense,
conduct  field  exams for such  purposes  as the  Secured  Party may  reasonably
request during normal business hours and upon reasonable notice to Debtor.

         Section 4.8       [intentionally omitted]

                                       20
<PAGE>

         Section  4.9  Corporate  Changes.  Debtor  shall not  change  its name,
identity or  corporate  structure  in any manner  that might make any  financing
statement filed in connection with this Agreement  seriously  misleading  unless
Debtor  shall have given  Secured  Party thirty (30) days prior  written  notice
thereof  and shall have taken all action  deemed  necessary  or  appropriate  by
Secured  Party to protect its Liens and the  perfection  and  priority  thereof.
Debtor shall not change its principal place of business,  chief executive office
or the place  where it keeps its books and  records  unless it shall  have given
Secured Party thirty (30) days prior written notice thereof and shall have taken
all  action  deemed  necessary  or  appropriate  by  Secured  Party to cause its
security  interest in the Collateral to be perfected with the priority  required
by this Agreement.

         Section 4.10 Books and  Records;  Information.  Debtor  shall  maintain
appropriate  books of records and accounts in accordance with GAAP  consistently
applied in which true, full and correct entries will be made of its dealings and
business affairs. Debtor shall from time to time at the request of Secured Party
deliver to Secured Party such information regarding the Collateral and Debtor as
Secured Party may reasonably request, including,  without limitation,  lists and
descriptions of the Collateral and evidence of the identity and existence of the
Collateral.  To the extent  required by Section 4.4, Debtor shall mark its books
and  records to reflect  the  security  interest  of  Secured  Party  under this
Agreement.

         Section 4.11      Equipment and Inventory.

                  (a) Debtor shall keep the Equipment  (other than vehicles) and
         Inventory (other than Inventory in transit) constituting Collateral and
         having a value in excess of  $100,000  at the  locations  specified  on
         Schedule 4 or at such  other  places  within the U.S.  where all action
         required to perfect Secured Party's security interest in such Equipment
         and Inventory with the priority  required by this Agreement  shall have
         been taken;  provided that if any such Equipment  (other than vehicles)
         or Inventory  (other than  Inventory in transit) is being  relocated to
         any  jurisdiction  where the security  interest of Secured  Party under
         this  Agreement has not been  previously  perfected,  then in such case
         Debtor shall  deliver  prompt (and in any event within not less than 30
         days) notice thereof to Secured Party.

                  (b) Debtor shall maintain the material Equipment and Inventory
         constituting Collateral in good condition and repair (ordinary wear and
         tear  excepted)  and  in  accordance  with  the  terms  of  the  Credit
         Agreement.  Debtor  shall not permit any waste or  destruction  of such
         Equipment  or Inventory  or any part  thereof.  Debtor shall not permit
         such Equipment or Inventory to be used in violation of any law, rule or
         regulation  or the terms of any policy of  insurance.  Debtor shall not
         use or permit  any of such  Equipment  or  Inventory  to be used in any
         manner or for any purpose  that would  impair its value or expose it to
         unusual risk.

                                       21
<PAGE>

                  (c)  Within  45 days of the  end of  each of  Debtor's  fiscal
         quarters,  Debtor shall  provide  Secured  Party with a report  setting
         forth in  reasonable  detail any change  during such  preceding  fiscal
         quarter of the  location of any  Equipment  or  Inventory  (unless such
         location  is one of the  locations  already  specified  on  Schedule 4)
         constituting Collateral.

         Section 4.12 Warehouse Receipts  Non-Negotiable.  Debtor agrees that if
any warehouse  receipt or receipt in the nature of a warehouse receipt is issued
in respect of any of the Collateral  having a value in excess of $100,000,  such
warehouse receipt or receipt in the nature thereof shall not be "negotiable" (as
such term is used in Section 7-104 of the UCC) unless such warehouse  receipt or
receipt in the nature thereof is delivered to Secured Party.

         Section 4.13  Notification.  Debtor shall promptly notify Secured Party
of (a) any Lien,  encumbrance  or claim  (other than  Permitted  Liens) that has
attached to or been made or  asserted  against  any of the  Collateral,  (b) any
material change in any of the Collateral,  including,  without  limitation,  any
material  damage to or loss of  Collateral,  and (c) the occurrence of any other
event or condition (including,  without limitation, matters as to Lien priority)
that could  reasonably  be  expected  to have a material  adverse  effect on the
Collateral or the security interest created hereunder.

         Section 4.14      [intentionally omitted]

         Section 4.15 Intellectual Property.  Except with the written consent of
Secured Party:

                  (a) If Debtor shall obtain rights to or become entitled to the
         benefit of any Intellectual  Property not identified on Schedule 1, the
         provisions of this Agreement shall automatically apply thereto.  Debtor
         shall  undertake to modify or update Schedule 1 to include any such new
         Intellectual  Property and hereby authorizes Secured Party to modify or
         update Schedule 1 to include any such new Intellectual  Property in the
         event Debtor fails to timely  modify or update  Schedule 1 upon written
         notice from Secured Party;

                  (b) Upon the  occurrence  of any event that would  require any
         addition  to or  modification  of  Schedule  1 or upon the  request  of
         Secured  Party,  Debtor shall furnish to Secured Party  statements  and
         schedules further identifying the Intellectual  Property and such other
         items in connection with the Intellectual Property as Secured Party may
         request.  Promptly  upon the  request of Secured  Party,  Debtor  shall
         modify  this   Agreement   by  amending   Schedule  1  to  include  any
         Intellectual Property that becomes part of the Collateral;

                  (c)  If an  Event  of  Default  shall  have  occurred  and  be
         continuing,  Debtor shall use its best efforts to obtain any  consents,
         waivers or agreements necessary to enable Secured Party to exercise its
         rights and remedies with respect to the Intellectual Property; and

                                       22
<PAGE>

                  (d) Debtor shall, at the request of Secured Party, execute and
         deliver to  Secured  Party a  Copyright  Security  Agreement,  a Patent
         Security  Agreement,  a  Trademark  Security  Agreement  and all  other
         agreements,  documents, instruments and other items as may be necessary
         for  Secured  Party to file  such  agreements  with the  United  States
         Copyright Office, the United States Patent and Trademark Office and any
         similar domestic or foreign office,  department or agency. Debtor will,
         at any time and from time to time upon the  request of  Secured  Party,
         execute  and  deliver  to  Secured  Party  all such  other  agreements,
         documents,   instruments  and  other  items  as  may  be  necessary  or
         appropriate  for  Secured  Party to create  and  perfect  its  security
         interest  in the  Intellectual  Property  and to make  all  appropriate
         filings with respect thereto.

         Section 4.16      Voting Rights, Distributions, Etc.

                  (a) So long as no Event of Default  shall have occurred and be
         continuing:

                           (i) Debtor  shall be entitled to exercise any and all
                  voting  and  other  consensual  rights   (including,   without
                  limitation,   the  right  to  give   consents,   waivers   and
                  notifications  in  respect of any of the  Pledged  Collateral)
                  pertaining  to any  of  the  Pledged  Collateral  or any  part
                  thereof; and

                           (ii) Unless an Event of Default  shall have  occurred
                  and be  continuing,  Debtor  shall be  entitled to receive and
                  retain any and all  dividends  and interest paid in respect of
                  any of the  Collateral  to the extent  permitted by the Credit
                  Agreement; provided, however, that any and all

                                    (A)  Restricted  Payments paid or payable in
                           violation of the terms of the Credit Agreement,

                                    (B)  Restricted  Payments  paid  or  payable
                           other than in cash in respect of, and instruments and
                           other  Property  received,  receivable  or  otherwise
                           distributed  in respect of, or in exchange  for,  any
                           Collateral,

                                    (C)  Restricted  Payments  hereafter paid or
                           payable  in  cash in  respect  of any  Collateral  in
                           connection  with a partial  or total  liquidation  or
                           dissolution  or in  connection  with a  reduction  of
                           capital, capital surplus or paid-in-surplus, and

                                    (D)  cash   paid,   payable   or   otherwise
                           distributed in redemption of, or in exchange for, any
                           Collateral,

shall  be,  and  shall  be  forthwith  delivered  to  Secured  Party to hold as,
Collateral  and shall,  if  received  by Debtor,  be  received  in trust for the
benefit of Secured Party, be segregated from

                                       23
<PAGE>

the other  Property  or funds of Debtor and be  forthwith  delivered  to Secured
Party  as  Collateral  in the  same  form as so  received  (with  any  necessary
endorsement).  All amounts  (other than  amounts  described  in clauses  (ii)(A)
through  (D)  above)  received  by  Secured  Party  in  respect  of any  Pledged
Collateral  shall be either  (1)  promptly  released  to  Debtor,  so long as no
Default or Event of Default  shall have occurred and be continuing or (2) if any
Default  or Event of Default  shall have  occurred  and be  continuing,  held by
Secured Party and (if an Event of Default shall have occurred and be continuing)
applied as  provided  by the Credit  Agreement.  During the  continuance  of any
Default,  any  dividends,  interest  or other  distributions  (whether  in cash,
securities,  Property  or  otherwise)  received  by Debtor  with  respect to any
Collateral  shall be held by Debtor in trust for the  benefit of  Secured  Party
and, during the continuance of any Event of Default, upon the request of Secured
Party,  shall be delivered  promptly to Secured Party to hold as Collateral,  as
Secured  Party may in its  discretion  determine.  If such  Event of  Default is
waived or cured to the  satisfaction  of Secured Party,  any such  distributions
received  by  Secured  Party  (except  those of the types  described  in clauses
(ii)(A)  through  (D) above  which  shall not be  released  to Debtor)  shall be
returned  promptly to Debtor (provided that no other Default or Event of Default
exists).

                  (b) Upon the occurrence and during the continuance of an Event
         of Default:

                           (i)  Secured  Party  may,  without  notice to Debtor,
                  transfer or  register  in the name of Secured  Party or any of
                  its nominees any or all of the Collateral described in Section
                  2.1(i) or Section  2.1(k),  the  proceeds  thereof (in cash or
                  otherwise)  and all  liens,  security,  rights,  remedies  and
                  claims of  Debtor  with  respect  thereto  (collectively,  the
                  "Pledged  Collateral")  held by Secured Party  hereunder,  and
                  Secured Party or its nominee may thereafter, after delivery of
                  notice to Debtor,  exercise all voting and corporate rights at
                  any meeting of any corporation,  partnership or other business
                  entity  issuing any of the Pledged  Collateral and any and all
                  rights  of  conversion,  exchange,  subscription  or any other
                  rights, privileges or options pertaining to any of the Pledged
                  Collateral  as  if  it  were  the  absolute   owner   thereof,
                  including,  without  limitation,  the right to exchange at its
                  discretion  any and all of the  Pledged  Collateral  upon  the
                  merger,  consolidation,  reorganization,  recapitalization  or
                  other  readjustment of any  corporation,  partnership or other
                  business entity issuing any of such Pledged Collateral or upon
                  the exercise by any such issuer or Secured Party of any right,
                  privilege  or  option   pertaining   to  any  of  the  Pledged
                  Collateral,  and  in  connection  therewith,  to  deposit  and
                  deliver  any  and  all  of the  Pledged  Collateral  with  any
                  committee,  depositary,  transfer  agent,  registrar  or other
                  designated  agency  upon such terms and  conditions  as it may
                  determine,   all  without  liability  except  to  account  for
                  Property actually received by it, but Secured Party shall have
                  no duty to exercise any of the aforesaid rights, privileges or
                  options,  and neither  Secured  Party nor any Lender  shall be
                  responsible for any failure to do so or delay in so doing.

                                       24
<PAGE>

                           (ii) All rights of Debtor to exercise  the voting and
                  other  consensual  rights which it would otherwise be entitled
                  to exercise pursuant to Section  4.16(a)(i) and to receive the
                  dividends,  interest  and other  distributions  which it would
                  otherwise  be  authorized  to receive  and retain  pursuant to
                  Section  4.16(a)(ii)  shall be  suspended  until such Event of
                  Default  shall no longer  exist,  and all such  rights  shall,
                  until such Event of Default shall no longer  exist,  thereupon
                  become vested in Secured Party which shall  thereupon have the
                  sole right to exercise such voting and other consensual rights
                  and to receive and hold as Pledged  Collateral such dividends,
                  interest and other distributions.

                           (iii) All dividends, interest and other distributions
                  which are  received by Debtor  contrary to the  provisions  of
                  this  Section  4.16(b)  shall be  received  in  trust  for the
                  benefit of Secured Party, shall be segregated from other funds
                  of Debtor and shall be forthwith paid over to Secured Party as
                  Collateral in the same form as so received (with any necessary
                  endorsement).

                           (iv) Debtor shall execute and deliver (or cause to be
                  executed and  delivered) to Secured Party all such proxies and
                  other instruments as Secured Party may request for the purpose
                  of enabling  Secured  Party to  exercise  the voting and other
                  rights  which it is  entitled  to  exercise  pursuant  to this
                  Section  4.16(b) and to receive the  dividends,  interest  and
                  other distributions which it is entitled to receive and retain
                  pursuant to this Section  4.16(b).  The foregoing shall not in
                  any way limit  Secured  Party's  power and  authority  granted
                  pursuant to Section 5.1.

         Section 4.17      Transfers and Other Liens; Additional Investments.

         (a)  Except as may be  expressly  permitted  by the terms of the Credit
Agreement,  Debtor shall not grant any option with respect to, exchange, sell or
otherwise dispose of any of the Collateral or create or permit to exist any Lien
upon or with  respect  to any of the  Collateral  except  for the Liens  created
hereby and Permitted Liens.

         (b) Debtor agrees that it will (i) cause its U.S.  Subsidiaries  not to
issue any Capital Stock, notes or other securities or instruments in addition to
or in substitution for any of the Pledged Shares,  except (A) with prior written
notice to Secured  Party,  to Debtor or (B) with the written  consent of Secured
Party, to any Person other than Debtor, (ii) pledge hereunder,  immediately upon
its  acquisition  (directly  or  indirectly)  thereof,  any and all such Capital
Stock,  notes or other securities or instruments issued to Debtor or received in
addition to or substituted for any of the Pledged Collateral, and (iii) promptly
(and in any event  within  three  Business  Days)  deliver to  Secured  Party an
Amendment,  duly executed by Debtor,  in substantially the form of Exhibit D (an
"Amendment"), in respect of such Capital Stock, notes or other

                                       25
<PAGE>

securities  or  instruments,  together  with  all  certificates,  notes or other
securities or instruments representing or evidencing the same. Debtor hereby (1)
authorizes  Secured Party to attach each  Amendment to this  Agreement,  and (2)
agrees that all such Capital  Stock,  notes or other  securities or  instruments
listed on any  Amendment  delivered  to  Secured  Party  shall for all  purposes
hereunder constitute Pledged Collateral.

         Section  4.18  Possession;  Reasonable  Care.  Regardless  of whether a
Default or an Event of Default has  occurred  or is  continuing,  Secured  Party
shall have the right to hold in its  possession all  Instruments,  Chattel Paper
and Pledged Collateral pledged,  assigned or transferred hereunder and from time
to time  constituting a portion of the Collateral.  Secured Party may, from time
to time,  in its sole  discretion,  appoint one or more agents (which in no case
shall be Debtor or an Affiliate  of Debtor) to hold  physical  custody,  for the
account of Secured Party, of any or all of the  Collateral.  Secured Party shall
be deemed to have exercised  reasonable care in the custody and  preservation of
the  Collateral  in its  possession  if the  Collateral  is  accorded  treatment
substantially  equal to that which Secured  Party  accords its own Property,  it
being  understood that Secured Party shall not have any  responsibility  for (a)
ascertaining  or taking  action with respect to calls,  conversions,  exchanges,
maturities,  tenders or other matters relative to any Collateral, whether or not
Secured Party has or is deemed to have knowledge of such matters,  or (b) taking
any necessary  steps to preserve  rights against any parties with respect to any
Collateral.  Following the occurrence and during the continuation of an Event of
Default, Secured Party shall be entitled to take possession of the Collateral.

         Section  4.19  Acknowledgment  of  Collateral   Assignment  of  Deposit
Accounts. Debtor shall deliver to Secured Party, within 45 days of the execution
hereof and at any time as Secured Party may request  thereafter,  acknowledgment
by each financial institution in which any Deposit Account is held or maintained
that the collateral  assignment of such Deposit Account has been recorded in the
books and records of such  financial  institution,  and that Secured Party shall
have dominion and control over such Deposit Account,  such  acknowledgment to be
in form and substance satisfactory to Secured Party.

         Section 4.20  Statement of Account on Deposit  Accounts.  Debtor shall,
from time to time upon  written  request  of Secured  Party,  provide to Secured
Party a copy of any  requested  statement  of  account  on any  Deposit  Account
received by Debtor from the financial  institution in which a Deposit Account is
held or maintained.  At Secured Party's request,  Debtor will use its reasonable
efforts to make such  arrangements  as are necessary or  appropriate in order to
enable  Secured  Party to access  such  information  by inquiry of an officer or
other  representative  of any such  financial  institution  or via any automated
information system which may be maintained by such financial institution.

                                       26
<PAGE>

                                    ARTICLE 5

                             Rights of Secured Party

         Section 5.1 Power of Attorney.  Debtor hereby  irrevocably  constitutes
and appoints Secured Party and any officer or agent thereof,  with full power of
substitution,  as its true and  lawful  attorney-in-fact  with full  irrevocable
power and authority in the name of Debtor or in its own name, to take, after the
occurrence and during the continuance of an Event of Default, any and all action
and to execute any and all documents and instruments  which Secured Party at any
time and from time to time  deems  necessary  or  desirable  to  accomplish  the
purposes  of  this  Agreement  and,  without  limiting  the  generality  of  the
foregoing,  Debtor  hereby gives  Secured Party the power and right on behalf of
Debtor and in its own name to do any of the following  after the  occurrence and
during the continuance of an Event of Default,  without notice to or the consent
of Debtor:

                  (a) to demand,  sue for,  collect or  receive,  in the name of
         Debtor or in its own name, any money or Property at any time payable or
         receivable on account of or in exchange for any of the Collateral  and,
         in connection therewith,  endorse checks,  notes, drafts,  acceptances,
         money  orders,  documents  of title or any  other  instruments  for the
         payment of money under the  Collateral  or any policy of insurance  set
         forth, specified or required by the Credit Agreement;

                  (b) to pay or  discharge  taxes,  Liens or other  encumbrances
         levied or placed on or threatened against the Collateral;

                  (c) to notify  post office  authorities  to change the address
         for  delivery  of mail of Debtor to an  address  designated  by Secured
         Party and to receive, open and dispose of mail addressed to Debtor;

                  (d) (i) to direct account debtors and any other parties liable
         for any payment under any of the  Collateral to make payment of any and
         all monies due and to become due  thereunder  directly to Secured Party
         or as Secured  Party shall direct,  provided,  that Secured Party shall
         use  reasonable  efforts to give Debtor prior notice of the form of any
         such  communication  and Debtor  shall have one (1)  business  day from
         receipt  of  such  notice  to  provide  input  as to the  form  of such
         communication,   which  input  may  be  accepted  or  rejected  in  the
         reasonable  discretion of Secured Party; (ii) to receive payment of and
         receipt  for any and all  monies,  claims and other  amounts due and to
         become due at any time in respect of or arising out of any  Collateral;
         (iii) to sign and endorse any invoices, freight or express bills, bills
         of lading,  storage or  warehouse  receipts,  drafts  against  debtors,
         assignments,  proxies,  stock  powers,  verifications  and  notices  in
         connection   with  accounts  and  other   documents   relating  to  the
         Collateral;  (iv)  to  commence  and  prosecute  any  suit,  action  or
         proceeding  at law or in equity in any court of competent  jurisdiction
         to collect the Collateral or any part

                                       27
<PAGE>

         thereof and to enforce  any other  right in respect of any  Collateral;
         (v) to defend any suit,  action or proceeding  brought  against  Debtor
         with respect to any  Collateral;  (vi) to settle,  compromise or adjust
         any suit,  action or  proceeding  described  above and,  in  connection
         therewith,  to give such  discharges  or releases as Secured  Party may
         deem  appropriate;  (vii) to exchange any of the  Collateral  for other
         Property    upon    any    merger,    consolidation,    reorganization,
         recapitalization  or other  readjustment  of the issuer thereof and, in
         connection therewith, deposit any of the Collateral with any committee,
         depositary,  transfer agent,  registrar or other designated agency upon
         such terms as Secured Party may determine; (viii) to add or release any
         guarantor,  indorser,  surety or other party to any of the  Collateral;
         (ix) to renew,  extend or otherwise  change the terms and conditions of
         any  of  the  Collateral;  (x) to  grant  or  issue  any  exclusive  or
         nonexclusive  license under or with respect to any of the  Intellectual
         Property; (xi) to endorse Debtor's name on all applications, documents,
         papers and  instruments  necessary  or  desirable  in order for Secured
         Party to use any of the Intellectual  Property;  (xii) to make, settle,
         compromise  or adjust  any  claims  under or  pertaining  to any of the
         Collateral (including,  without limitation,  claims under any policy of
         insurance);  and (xiii) to sell,  transfer,  pledge,  convey,  make any
         agreement  with respect to or otherwise deal with any of the Collateral
         as fully and completely as though Secured Party were the absolute owner
         thereof  for all  purposes,  and to do, at Secured  Party's  option and
         Debtor's  expense,  at any  time,  or from  time to time,  all acts and
         things  which  Secured  Party deems  necessary  to  protect,  preserve,
         maintain or realize upon the  Collateral and Secured  Party's  security
         interest therein.

         This power of attorney is a power coupled with an interest and shall be
irrevocable  until this  Agreement is terminated  in accordance  with its terms.
Secured Party shall be under no duty to exercise or withhold the exercise of any
of the rights, powers, privileges and options expressly or implicitly granted to
Secured Party in this  Agreement,  and shall not be liable for any failure to do
so or any delay in doing so. Neither Secured Party nor any Person  designated by
Secured  Party  shall be  liable  for any act or  omission  or for any  error of
judgment  or any mistake of fact or law except for gross  negligence  or willful
misconduct or as set forth in Section 4.18.  This power of attorney is conferred
on Secured  Party  solely to protect,  preserve,  maintain  and realize upon its
security interest in the Collateral.  Secured Party shall not be responsible for
any decline in the value of the Collateral and shall not be required to take any
steps to  preserve  rights  against  prior  parties or to  protect,  preserve or
maintain any Lien given to secure the Collateral.

         Section 5.2 Set-off. Each of Secured Party and the Lenders shall, after
the  occurrence  and during the  continuation  of an Event of Default,  have the
right to set-off  and apply  against  the  Obligations,  at any time and without
notice to Debtor,  any and all  deposits  (general or  special,  time or demand,
provisional or final) or other sums at any time credited by or owing from any of
Secured  Party or the Lenders to Debtor and  although  such  Obligations  may be
unmatured.  The rights and remedies of Secured  Party and the Lenders  hereunder
are in addition to other rights and  remedies  (including,  without  limitation,
other rights of set-off) that Secured Party and the Lenders may have.

                                       28
<PAGE>

         Section  5.3  [intentionally omitted]

         Section  5.4  Performance  by Secured  Party.  If Debtor  shall fail to
perform any covenant or agreement contained in this Agreement, Secured Party may
perform or attempt to perform such covenant or agreement on behalf of Debtor. In
such event,  Debtor  shall,  at the request of Secured  Party,  promptly pay any
amount  expended  by  Secured  Party in  connection  with  such  performance  or
attempted  performance to Secured Party,  together with interest  thereon at the
Default Rate from and  including the date of such  expenditure  to but excluding
the date such expenditure is paid in full.  Notwithstanding the foregoing, it is
expressly   agreed  that  Secured   Party  shall  not  have  any   liability  or
responsibility for the performance of any indebtedness,  liability or obligation
of Debtor under this Agreement.

         Section 5.5 License.  If no Event of Default shall have occurred and be
continuing, Debtor shall have the exclusive,  non-transferable right and license
to use the  Intellectual  Property in the  ordinary  course of business  and the
exclusive right to grant to other Persons  licenses and sublicenses with respect
to the Intellectual Property for full and fair consideration.  Debtor agrees not
to sell or assign its interest in, or grant any  sublicense  under,  the license
granted  under this  Section 5.5 without  the prior  written  consent of Secured
Party.

         Section 5.6 Change of  Depository.  In the event of the  termination by
any  financial  institution  in which any Deposit  Account is  maintained of any
agreement  with or for the benefit of Secured  Party,  or if any such  financial
institution  shall  fail to  comply  with any  material  provisions  of any such
agreement  or any  instructions  of Secured  Party in  accordance  with any such
agreement or this  Agreement,  or if Secured Party  determines in its reasonable
discretion  that the financial  condition of any such financial  institution has
materially  deteriorated,   Debtor  agrees  to  transfer  the  affected  Deposit
Account(s) to another  financial  institution  reasonably  acceptable to Secured
Party and cause such substitute financial institution to execute such agreements
as Secured Party may require, in form and substance acceptable to Secured Party,
to  ensure  that  Secured  Party  has a  perfected,  first  priority  collateral
assignment  of or security  interest in the  Deposit  Account(s)  held with such
substitute financial  institution.  If any affected Deposit Account is a lockbox
account,  Debtor  agrees to notify its  account  debtors  promptly  to remit all
payments which were being sent to the terminated Deposit Account directly to the
substitute Deposit Account.

         Section 5.7  Collection of Deposit  Accounts.  After the occurrence and
during the continuation of an Event of Default, upon written demand from Secured
Party to any  financial  institution  in which any of the Deposit  Accounts  are
maintained, each such financial institution is hereby authorized and directed by
Debtor to make payment  directly to Secured Party of the funds in or credited to
the Deposit  Accounts,  or such part thereof as Secured  Party may request,  and
each such  financial  institution  shall be fully  protected in relying upon the
written  statement of Secured Party that an Event of Default has occurred and is
continuing and that the Deposit Accounts are at the time

                                       29
<PAGE>

of such demand assigned  hereunder and that Secured Party is entitled to payment
of the  Obligations  therefrom.  Secured  Party's  receipt  for sums  paid to it
pursuant to such demand  shall be a full and  complete  release,  discharge  and
acquittance to the depository or other financial institution making such payment
to the extent of the amount so paid.  Debtor hereby  authorizes  Secured  Party,
upon (a) the  occurrence  and  during  the  continuation  of an Event of Default
consisting of Debtor's failure to make payment of any of the Obligations, or any
part thereof,  or (b) any  acceleration of the maturity of the Obligations  upon
the  occurrence  of any  Event  of  Default,  each  as  provided  in the  Credit
Agreement,  including, without limitation pursuant to Section 11.1(a) or Section
11.2(a) of the Credit  Agreement,  (i) to withdraw,  collect and receipt for any
and all funds,  securities or other  investments on deposit in or payable on the
Deposit  Accounts,  (ii) on behalf of Debtor to endorse  the name of Debtor upon
any checks,  drafts or other instruments payable to Debtor evidencing payment on
the  Deposit  Accounts,  and (iii) to  surrender  or  present  for  notation  of
withdrawal  the passbook,  certificate  or other  documents  issued to Debtor in
connection with the Deposit  Accounts.  No power granted herein to Secured Party
by Debtor shall terminate upon any disability of Debtor.

                                    ARTICLE 6

                                     Default

         Section  6.1 Rights  and  Remedies.  If an Event of Default  shall have
occurred and be  continuing,  Secured Party shall have the following  rights and
remedies (subject to Section 6.3):

                  (a) In addition to all other  rights and  remedies  granted to
         Secured  Party in this  Agreement  or in any other Loan  Document or by
         applicable law, Secured Party shall have all of the rights and remedies
         of a secured party under the UCC (whether or not the UCC applies to the
         affected  Collateral) and Secured Party may also, without notice except
         as specified  below,  sell the Collateral or any part thereof in one or
         more parcels at public or private sale, at any exchange, broker's board
         or at any of Secured Party's offices or elsewhere,  for cash, on credit
         or for future delivery,  and upon such other terms as Secured Party may
         deem  commercially  reasonable or otherwise as may be permitted by law.
         Without limiting the generality of the foregoing, Secured Party may (i)
         without demand or notice to Debtor, collect, receive or take possession
         of the  Collateral  or any part  thereof and for that  purpose  Secured
         Party may enter upon any  premises on which the  Collateral  is located
         and remove the  Collateral  therefrom or render it  inoperable,  and/or
         (ii) sell,  lease or otherwise  dispose of the Collateral,  or any part
         thereof,  in one or more parcels at public or private sale or sales, at
         Secured Party's offices or elsewhere, for cash, on credit or for future
         delivery,  and  upon  such  other  terms  as  Secured  Party  may  deem
         commercially  reasonable  or  otherwise  as may be  permitted  by  law.
         Secured Party shall have the right at any public sale or sales, and, to
         the extent  permitted by applicable  law, at any private sale or sales,
         to bid  (which  bid  may  be,  in  whole  or in  part,  in the  form of
         cancellation of indebtedness)  and become a purchaser of the Collateral
         or any part  thereof free of any right or equity of  redemption  on the
         part of Debtor,

                                       30
<PAGE>

         which  right or equity of  redemption  is hereby  expressly  waived and
         released by Debtor.  Upon the request of Secured  Party,  Debtor  shall
         assemble the  Collateral  and make it available to Secured Party at any
         place  designated  by Secured  Party that is  reasonably  convenient to
         Debtor and Secured Party. Debtor agrees that Secured Party shall not be
         obligated to give more than five days prior written  notice of the time
         and place of any  public  sale or of the time after  which any  private
         sale may take place and that such notice  shall  constitute  reasonable
         notice of such  matters.  Secured  Party shall not be obligated to make
         any sale of Collateral if it shall  determine not to do so,  regardless
         of the fact that  notice  of sale of  Collateral  may have been  given.
         Secured Party may, without notice or publication, adjourn any public or
         private  sale or cause  the same to be  adjourned  from time to time by
         announcement  at the time and place fixed for sale,  and such sale may,
         without further notice, be made at the time and place to which the same
         was so adjourned.  Debtor shall be liable for all expenses of retaking,
         holding, preparing for sale or the like, and all attorneys' fees, legal
         expenses  and other costs and  expenses  incurred  by Secured  Party in
         connection  with the collection of the  Obligations and the enforcement
         of Secured  Party's  rights under this  Agreement.  Debtor shall remain
         liable  for  any  deficiency  if the  Proceeds  of any  sale  or  other
         disposition  of  the  Collateral   applied  to  the   Obligations   are
         insufficient  to pay the  Obligations in full.  Secured Party may apply
         the  Collateral  against  the  Obligations  in such order and manner as
         Secured  Party  may elect in its sole  discretion.  Debtor  waives  all
         rights  of  marshaling,  valuation  and  appraisal  in  respect  of the
         Collateral.  Any cash held by Secured Party as Collateral  and all cash
         proceeds  received  by  Secured  Party  in  respect  of  any  sale  of,
         collection  from  or  other  realization  upon  all or any  part of the
         Collateral  may, in the discretion of Secured Party, be held by Secured
         Party as collateral for, and then or at any time thereafter  applied in
         whole or in part by Secured  Party  against,  the  Obligations  in such
         order as Secured Party shall  select.  Any surplus of such cash or cash
         proceeds and interest  accrued  thereon,  if any, held by Secured Party
         and  remaining  after payment in full of all the  Obligations  shall be
         paid  over to Debtor  or to  whomsoever  may be  lawfully  entitled  to
         receive  such  surplus;  provided  that  Secured  Party  shall  have no
         obligation  to invest or otherwise  pay interest on any amounts held by
         it in connection with or pursuant to this Agreement.

                  (b) Secured Party may cause any or all of the Collateral  held
         by it to be  transferred  into the name of Secured Party or the name or
         names of Secured Party's nominee or nominees.

                  (c) Secured Party may exercise any and all rights and remedies
         of Debtor  under or in respect of the  Collateral,  including,  without
         limitation, any and all rights of Debtor to demand or otherwise require
         payment of any amount under, or performance of any provision of, any of
         the  Collateral  and any and all voting rights and corporate  powers in
         respect of the Collateral.

                                       31
<PAGE>

                  (d) Secured Party may collect or receive all money or Property
         at any time payable or  receivable on account of or in exchange for any
         of the Collateral, but shall be under no obligation to do so.

                  (e) On any sale of the  Collateral,  Secured  Party is  hereby
         authorized  to comply with any  limitation  or  restriction  with which
         compliance is necessary,  in the view of Secured  Party's  counsel,  in
         order to avoid any  violation of  applicable  law or in order to obtain
         any required  approval of the purchaser or purchasers by any applicable
         Governmental Authority.

                  (f) For  purposes of enabling  Secured  Party to exercise  its
         rights and remedies  under this Section 6.1 and enabling  Secured Party
         and its  successors  and  assigns  to enjoy  the full  benefits  of the
         Collateral,  Debtor  hereby  grants to  Secured  Party an  irrevocable,
         nonexclusive  license  (exercisable without payment of royalty or other
         compensation  to Debtor) to use,  assign,  license or sublicense any of
         the  Intellectual  Property that  constitutes a part of the Collateral,
         including in such license  reasonable  access to all media in which any
         of the  licensed  items  may be  recorded  or stored  and all  computer
         programs  used for the  completion  or printout  thereof.  This license
         shall  also  inure  to the  benefit  of  all  successors,  assigns  and
         transferees of Secured Party.

                  (g) Secured  Party may require  that Debtor  assign all of its
         right,  title and interest in and to the  Intellectual  Property or any
         part thereof to Secured Party or such other Person as Secured Party may
         designate pursuant to documents satisfactory to Secured Party.

         Section 6.2       Registration Rights, Private Sales, Etc.

                  (a) If Secured Party shall  determine to exercise its right to
         sell all or any of the Pledged Shares  pursuant to Section 6.1,  Debtor
         agrees that,  upon the request of Secured  Party (which  request may be
         made by Secured Party in its sole discretion),  Debtor will, at its own
         expense:

                           (i) execute and deliver,  and use its best efforts to
                  cause each issuer of any of the Pledged Shares contemplated to
                  be sold and the directors and officers  thereof to execute and
                  deliver, all such agreements,  documents and instruments,  and
                  do or cause to be done all such other acts and things,  as may
                  be  reasonably  necessary  or, in the  reasonable  opinion  of
                  Secured Party, advisable to register such Pledged Shares under
                  the provisions of the Securities Act (as hereinafter  defined)
                  and to cause the  registration  statement  relating thereto to
                  become  effective  and to remain  effective for such period as
                  prospectuses  are required by law to be furnished  and to make
                  all  amendments  and  supplements  thereto  and to the related
                  prospectus  which,  in  the  opinion  of  Secured  Party,  are
                  necessary   or   advisable,   all  in   conformity   with  the

                                       32
<PAGE>

                  requirements   of  the   Securities  Act  and  the  rules  and
                  regulations  of  the   Securities   and  Exchange   Commission
                  applicable thereto;

                           (ii) if reasonably  necessary  or, in the  reasonable
                  opinion of Secured Party,  advisable,  use its best efforts to
                  qualify  such  Pledged  Shares  under  all  applicable   state
                  securities  or "Blue  Sky"  laws and to obtain  all  necessary
                  governmental approvals for the sale of such Pledged Shares, as
                  requested by Secured Party;

                           (iii) if reasonably  necessary or, in the  reasonable
                  opinion of Secured Party, advisable, cause each such issuer to
                  make   available   to  its  security   holders,   as  soon  as
                  practicable,  an  earnings  statement  which will  satisfy the
                  provisions of Section 11(a) of the Securities Act;

                           (iv) do or cause to be done all such  other  acts and
                  things as may be reasonably  necessary or  appropriate to make
                  such sale of the Pledged  Shares or any part thereof valid and
                  binding and in compliance with applicable law; and

                           (v) bear all reasonable costs and expenses, including
                  reasonable  attorneys'  fees, of carrying out its  obligations
                  under this Section 6.2.

                  (b)  Debtor  recognizes  that  Secured  Party may be unable to
         effect a public sale of any or all of the  Pledged  Shares by reason of
         certain  prohibitions  contained  in the  Securities  Act of  1933,  as
         amended from time to time (the  "Securities  Act") and applicable state
         securities  laws but may be  compelled to resort to one or more private
         sales thereof to a restricted  group of purchasers  who will be obliged
         to agree,  among other things, to acquire such Pledged Shares for their
         own account for investment and not with a view to the  distribution  or
         resale thereof.  Debtor  acknowledges  and agrees that any such private
         sale may result in prices and other terms less  favorable to the seller
         than  if  such  sale  were a  public  sale  and,  notwithstanding  such
         circumstances,  agrees that any such private sale shall,  to the extent
         permitted  by law,  be  deemed  to  have  been  made in a  commercially
         reasonable manner. Neither Secured Party nor the Lenders shall be under
         any  obligation  to delay a sale of any of the  Pledged  Shares for the
         period of time  necessary  to permit the issuer of such  securities  to
         register  such  securities  under  the  Securities  Act  or  under  any
         applicable state securities laws, even if such issuer would agree to do
         so.

                  (c) Debtor  further  agrees to do or cause to be done,  to the
         extent that Debtor may do so under  applicable law, all such other acts
         and  things as may be  necessary  to make such  sales or resales of any
         portion  or  all  of  the  Pledged  Shares  valid  and  binding  and in
         compliance  with  any and all  applicable  laws,  regulations,  orders,
         writs,   injunctions,   decrees  or  awards  of  any  and  all  courts,
         arbitrators  or  governmental  instrumentalities,  domestic or foreign,
         having  jurisdiction  over  any such  sale or  sales,  all at  Debtor's
         expense. Debtor

                                       33
<PAGE>

         further agrees that a breach of any of the covenants  contained in this
         Section  6.2 will cause  irreparable  injury to  Secured  Party and the
         Lenders and that Secured Party and the Lenders have no adequate  remedy
         at law in respect of such  breach and,  as a  consequence,  agrees that
         each  and  every  covenant  contained  in this  Section  6.2  shall  be
         specifically  enforceable  against Debtor, and Debtor hereby waives and
         agrees,  to the fullest  extent  permitted  by law,  not to assert as a
         defense  against an action for specific  performance  of such covenants
         that (i)  Debtor's  failure to perform  such  covenants  will not cause
         irreparable  injury to Secured  Party and the  Lenders or (ii)  Secured
         Party and the Lenders have an adequate remedy at law in respect of such
         breach.  Debtor further  acknowledges the impossibility of ascertaining
         the amount of damages  which would be suffered by Secured Party and the
         Lenders by reason of a breach of any of the covenants contained in this
         Section 6.2 and, consequently,  agrees that, if Debtor shall breach any
         of such covenants and Secured Party or any Lender shall sue for damages
         for such breach,  Debtor shall pay to Secured Party or such Lender,  as
         liquidated  damages and not as a penalty,  an aggregate amount equal to
         the  value of the  Pledged  Shares  on the date  Secured  Party or such
         Lender shall demand compliance with this Section 6.2.

                  (d)  DEBTOR  HEREBY  AGREES  TO  INDEMNIFY,  PROTECT  AND SAVE
         HARMLESS  SECURED  PARTY AND THE  LENDERS AND ANY  CONTROLLING  PERSONS
         THEREOF  WITHIN THE MEANING OF THE  SECURITIES ACT FROM AND AGAINST ANY
         AND ALL  LIABILITIES,  SUITS,  CLAIMS,  COSTS AND  EXPENSES  (INCLUDING
         REASONABLE COUNSEL FEES AND DISBURSEMENTS) ARISING UNDER THE SECURITIES
         ACT,  THE  SECURITIES  AND  EXCHANGE  ACT  OF  1934,  AS  AMENDED,  ANY
         APPLICABLE STATE SECURITIES  STATUTE,  OR AT COMMON LAW, OR PURSUANT TO
         ANY OTHER  APPLICABLE LAW IN CONNECTION WITH THE SALE OF ANY SECURITIES
         OR THE EXERCISE OF ANY OTHER RIGHT OR REMEDY OF SECURED PARTY,  INSOFAR
         AS SUCH LIABILITIES, SUITS, CLAIMS, COSTS AND EXPENSES ARISE OUT OF, OR
         ARE BASED UPON, ANY UNTRUE  STATEMENT OR ALLEGED UNTRUE  STATEMENT OF A
         MATERIAL  FACT MADE BY ANY LOAN  PARTY IN  CONNECTION  WITH THE SALE OR
         PROPOSED  SALE OF ANY PART OF THE  COLLATERAL,  OR ARISES OUT OF, OR IS
         BASED UPON, THE OMISSION OR ALLEGED OMISSION BY ANY LOAN PARTY TO STATE
         A  MATERIAL  FACT  REQUIRED  TO BE STATED IN  CONNECTION  THEREWITH  OR
         NECESSARY  TO  MAKE  THE  STATEMENTS  MADE  NOT  MISLEADING;  PROVIDED,
         HOWEVER, THAT DEBTOR SHALL NOT BE LIABLE IN ANY SUCH CASE TO THE EXTENT
         THAT ANY SUCH LIABILITIES,  SUITS, CLAIMS, COSTS AND EXPENSES ARISE OUT
         OF, OR ARE BASED UPON, ANY UNTRUE STATEMENT OR ALLEGED UNTRUE STATEMENT
         OR OMISSION OR ALLEGED OMISSION MADE IN RELIANCE UPON AND IN CONFORMITY
         WITH WRITTEN  INFORMATION  FURNISHED TO DEBTOR BY SECURED  PARTY OR ANY
         LENDER  SPECIFICALLY  FOR

                                       34
<PAGE>

         INCLUSION IN CONNECTION THEREWITH. THE FOREGOING INDEMNITY AGREEMENT IS
         IN ADDITION TO ANY  INDEBTEDNESS,  LIABILITY OR OBLIGATION  THAT DEBTOR
         MAY  OTHERWISE  HAVE TO SECURED  PARTY,  ANY LENDER OR ANY  CONTROLLING
         PERSON THEREOF.

         Section  6.3  Compliance  with Laws.  Notwithstanding  anything  to the
contrary contained in any Loan Document or in any other agreement, instrument or
document  executed by Debtor and delivered to Secured Party,  Secured Party will
not take any action  pursuant  to this  Agreement  or any  document  referred to
herein which would  constitute or result in any assignment of any FCC license or
any change of control (whether de jure or de facto) of Debtor if such assignment
of any FCC license or change of control would require,  under then existing law,
the prior approval of the FCC or any other Governmental  Authority without first
obtaining such prior approval of the FCC or other Governmental  Authority.  Upon
the  occurrence  of an Event of  Default  or at any time  thereafter  during the
continuance  thereof,  subject to the terms and  conditions  of this  Agreement,
Debtor  agrees to take any action  which  Secured  Party may request in order to
obtain from the FCC or such other Governmental Authority such approval as may be
necessary  to enable  Secured  Party to  exercise  and enjoy the full rights and
benefits  granted to Secured  Party by this  Agreement  and the other  documents
referred to above,  including  specifically,  at the cost and expense of Debtor,
the use of Debtor's  best efforts to assist in obtaining  approval of the FCC or
such other Governmental Authority for any action or transaction  contemplated by
this  Agreement  for which such  approval is or shall be  required  by law,  and
specifically,  without limitation,  upon request, to prepare, sign and file with
the FCC or such other  Governmental  Authority the  assignor's  or  transferor's
portion of any  application  or  applications  for consent to the  assignment of
license or transfer of control  necessary or appropriate under the FCC's or such
other  Governmental  Authority's  rules and  regulations for approval of (a) any
sale or other disposition of the Collateral by or on behalf of Secured Party, or
(b) any assumption by Secured Party of voting rights in the Collateral  effected
in accordance with the terms of this Agreement.

                                    ARTICLE 7

                                  Miscellaneous

         Section 7.1 No Waiver;  Cumulative Remedies.  No failure on the part of
Secured Party to exercise and no delay in  exercising,  and no course of dealing
with  respect  to, any right,  power or  privilege  under this  Agreement  shall
operate as a waiver  thereof,  nor shall any single or partial  exercise  of any
right,  power or privilege  under this  Agreement  preclude any other or further
exercise  thereof or the exercise of any other right,  power or  privilege.  The
rights and  remedies  provided  for in this  Agreement  are  cumulative  and not
exclusive of any rights and remedies provided by law.

         Section 7.2  Successors and Assigns.  This  Agreement  shall be binding
upon and inure to the benefit of Debtor and Secured  Party and their  respective
heirs, successors and permitted assigns,

                                       35
<PAGE>

except that Debtor may not assign any of its rights,  indebtedness,  liabilities
or obligations under this Agreement without the prior written consent of Secured
Party.

         Section 7.3 Entire Agreement;  Amendment . THIS AGREEMENT  EMBODIES THE
FINAL,  ENTIRE  AGREEMENT  AMONG THE PARTIES  HERETO AND  SUPERSEDES ANY AND ALL
PRIOR  COMMITMENTS,  AGREEMENTS,  REPRESENTATIONS  AND  UNDERSTANDINGS,  WHETHER
WRITTEN  OR  ORAL,  RELATING  TO  THE  SUBJECT  MATTER  HEREOF  AND  MAY  NOT BE
CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR,  CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OR  DISCUSSIONS  OF THE PARTIES  HERETO.  THERE ARE NO UNWRITTEN ORAL
AGREEMENTS  AMONG THE PARTIES  HERETO.  The  provisions of this Agreement may be
amended or waived only by an instrument in writing signed by the parties hereto,
except as provided in Section 4.15(a).

         Section 7.4 Notices. All notices and other communications  provided for
in this  Agreement  shall be given or made,  and shall be deemed  effective,  as
provided in the Credit Agreement.

         Section 7.5  Governing  Law;  Submission  to  Jurisdiction;  Service of
Process.  EXCEPT  AS MAY BE  EXPRESSLY  STATED  TO THE  CONTRARY  IN THE  CREDIT
AGREEMENT,  THIS  AGREEMENT  SHALL BE GOVERNED BY, AND  CONSTRUED IN  ACCORDANCE
WITH,  THE LAWS OF THE STATE OF NEW YORK  (WITHOUT  REGARD TO  CONFLICTS OF LAWS
PRINCIPLES)  AND EACH OF THE PARTIES  HERETO CHOOSE THE LAWS OF THE STATE OF NEW
YORK TO GOVERN THIS AGREEMENT  PURSUANT TO N.Y. GEN.  OBLIG.  LAW SECTION 5-1401
(CONSOL.  1995) AND  APPLICABLE  LAWS OF THE U.S.  DEBTOR HEREBY  SUBMITS TO THE
NON-EXCLUSIVE  JURISDICTION  OF EACH  OF (A) THE  U.S.  DISTRICT  COURT  FOR THE
SOUTHERN DISTRICT OF NEW YORK, (B) ANY NEW YORK STATE COURT SITTING IN NEW YORK,
NEW YORK, (C) THE U.S.  DISTRICT COURT FOR THE NORTHERN  DISTRICT OF TEXAS,  AND
(D) ANY TEXAS STATE COURT SITTING IN DALLAS COUNTY,  TEXAS,  FOR THE PURPOSES OF
ALL LEGAL  PROCEEDINGS  ARISING OUT OF OR RELATING TO THIS AGREEMENT,  ANY OTHER
LOAN  DOCUMENT  OR THE  TRANSACTIONS  CONTEMPLATED  HEREBY  OR  THEREBY.  DEBTOR
IRREVOCABLY CONSENTS TO THE SERVICE OF ANY AND ALL PROCESS IN ANY SUCH ACTION OR
PROCEEDING BY THE MAILING OF COPIES OF SUCH PROCESS TO DEBTOR AT ITS ADDRESS FOR
NOTICES SET FORTH  UNDERNEATH ITS SIGNATURE  HERETO.  DEBTOR HEREBY  IRREVOCABLY
WAIVES,  TO THE FULLEST EXTENT  PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW
OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH  PROCEEDING  BROUGHT IN
SUCH A COURT AND ANY CLAIM THAT ANY SUCH

                                       36
<PAGE>

PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

         Section 7.6 Headings.  The headings,  captions and arrangements used in
this Agreement are for convenience only and shall not affect the  interpretation
of this Agreement.

         Section  7.7   Survival  of   Representations   and   Warranties.   All
representations  and  warranties  made in this  Agreement or in any  certificate
delivered  pursuant  hereto  shall  survive the  execution  and delivery of this
Agreement,   and  no   investigation   by  Secured   Party   shall   affect  the
representations and warranties or the right of Secured Party to rely upon them.

         Section 7.8 Counterparts.  This Agreement may be executed in any number
of  counterparts,  each of which shall be deemed an  original,  but all of which
together shall constitute one and the same instrument.

         Section 7.9 Waiver of Bond.  In the event  Secured  Party seeks to take
possession of any or all of the  Collateral by judicial  process,  Debtor hereby
irrevocably  waives any bonds and any surety or security  relating  thereto that
may be required by applicable law as an incident to such possession,  and waives
any demand for possession prior to the commencement of any such suit or action.

         Section 7.10  Severability.  Any provision of this  Agreement  which is
determined   by  a  court  of  competent   jurisdiction   to  be  prohibited  or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability  without  invalidating the
remaining   provisions  of  this   Agreement,   and  any  such   prohibition  or
unenforceability   in  any   jurisdiction   shall  not   invalidate   or  render
unenforceable such provision in any other jurisdiction.

         Section 7.11  Construction.  Debtor and Secured Party  acknowledge that
each of them has had the benefit of legal counsel of its own choice and has been
afforded an opportunity to review this Agreement with its legal counsel and that
this  Agreement  shall be construed as if jointly  drafted by Debtor and Secured
Party.

         Section 7.12  Termination.  If all of the  Obligations  shall have been
paid and performed in full and all Commitments of the Lenders shall have expired
or terminated, Secured Party shall, upon the written request of Debtor, promptly
execute and deliver to Debtor a proper  instrument or instruments  acknowledging
the release and termination of the security interests created by this Agreement,
and shall duly assign and deliver to Debtor  (without  recourse  and without any
representation  or  warranty  except  as may be set  forth in  Section  4.18 and
Section 5.1) such of the Collateral as may be in the possession of Secured Party
and  has  not  previously  been  sold  or  otherwise  applied  pursuant  to this
Agreement.

                                       37
<PAGE>

         Section 7.13 Waiver of Jury Trial.  TO THE FULLEST EXTENT  PERMITTED BY
APPLICABLE  LAW,  EACH OF THE PARTIES  HERETO HEREBY  IRREVOCABLY  AND EXPRESSLY
WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION,  PROCEEDING  OR  COUNTERCLAIM
(WHETHER BASED UPON CONTRACT,  TORT OR OTHERWISE)  ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THE ACTIONS OF SECURED
PARTY IN THE NEGOTIATION, ADMINISTRATION OR ENFORCEMENT THEREOF.

                                       38
<PAGE>

         IN  WITNESS  WHEREOF,  the  parties  hereto  have  duly  executed  this
Agreement as of the day and year first written above.

                             DEBTOR:

                             GLOBAL NETWORK ASSETS, LLC,
                             a Delaware limited liability company

                             By:  /s/ Steven M. Gallant
                                ---------------------------
                             Name:   Steven M. Gallant
                             Title:  President

                             Address for Notices:
                             -------------------
                             12851 Worldgate Drive
                             Herndon, Virginia 20170
                       Attention:  Chief Financial Officer
                             Telephone:  (703) 234-8000
                             Telecopy:   (703) 234-8309

                             with a copy (which shall not constitute notice) to:

                             717 Office Parkway
                             St. Louis, Missouri 63141
                       Attention:  General Counsel
                             Telephone:        (314) 468-7500
                             Telecopy:         (314) 468-7550

                             SECURED PARTY:
                             -------------

                             NORTEL NETWORKS INC.,
                             as Administrative Agent

                             By:  /s/ Mitchell L. Stone
                                --------------------------
                             Name:    Mitchell L. Stone
                             Title:   Director, Customer Finance

                                       39
<PAGE>

                             Address for Notices:
                             -------------------
                             Nortel Networks Inc.
                             Mail Stop 991 15 A40
                             2221 Lakeside Boulevard
                             Richardson, Texas 75082-4399
                             Attention:     Mitchell L. Stone
                                            Director, Customer Finance
                             Telephone:     972-684-0395
                             Telecopy:      972-684-3679

                             and

                             Nortel Networks Inc.
                             Mail Stop 468/05/B40
                             2100 Lakeside Blvd.
                             Richardson, Texas  75082-4399
                             Attention:     Kimberly Poe
                                            Director, Loan Administration
                             Telephone:     972-684-7687
                             Telecopy:      972-685-3613

                                       40
<PAGE>

STATE OF MISSOURI    ss.
                     ss.
COUNTY OF JEFFERSON  ss.

         This instrument was acknowledged  before me this 13th day of September,
2000,  by Steven M.  Gallant,  the President of GLOBAL  NETWORK  ASSETS,  LLC, a
Delaware limited liability company, on behalf of such corporation.

         [SEAL]                  /s/ Cheryl L. Butcher
                                 ---------------------
                                 Notary Public in and for the State of Missouri
                                 Print Name: Cheryl L. Butcher

My commission expires: 10/11/01

STATE OF TEXAS      ss.
                    ss.
COUNTY OF DALLAS    ss.

         This instrument was acknowledged  before me this ____ day of September,
2000, by Mitchell L. Stone,  the Director,  Customer  Finance of NORTEL NETWORKS
INC., a Delaware corporation, on behalf of such corporation.

         [SEAL]                   /s/ Dianna L. Irish
                                  -------------------
                                  Notary Public in and for the State of Texas
                                  Print Name: Dianna L. Irish

My commission expires:  07/05/02

                                       41
<PAGE>

                                   SCHEDULE 1
                                   ----------
                              INTELLECTUAL PROPERTY

<TABLE>
<CAPTION>
===================================================================================================================================
                                                         PATENTS
-----------------------------------------------------------------------------------------------------------------------------------
    Owner of Record    Country of Origin       Patent         Application or     Registration or      Issue Date     Expiration
                                          Identification     Registration No.      Filing Date        (if known)        Dat
-----------------------------------------------------------------------------------------------------------------------------------
<S>                   <C>                 <C>               <C>                  <C>                 <C>             <C>
None.
-----------------------------------------------------------------------------------------------------------------------------------

===================================================================================================================================
</TABLE>

<TABLE>
<CAPTION>
===================================================================================================================================
                                                         PATENT LICENSES
-----------------------------------------------------------------------------------------------------------------------------------
              Name of Agreement                                Patent                            Date of Agreement
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                                  <C>                                    <C>
None
-----------------------------------------------------------------------------------------------------------------------------------

===================================================================================================================================
</TABLE>

<TABLE>
<CAPTION>
===================================================================================================================================
                                                           TRADEMARKS
-----------------------------------------------------------------------------------------------------------------------------------
Owner of record             Country of         Trademark       Application or         Filing           Expiration       Goods
                           Registration                        Registration No.        Date               Date
-----------------------------------------------------------------------------------------------------------------------------------
<S>                       <C>                 <C>             <C>                   <C>               <C>              <C>
None.
-----------------------------------------------------------------------------------------------------------------------------------

===================================================================================================================================
</TABLE>

<TABLE>
<CAPTION>
===================================================================================================================================
                                                         TRADEMARK LICENSES
-----------------------------------------------------------------------------------------------------------------------------------
               Name of Agreement                               Parties                                   Date of Agreement
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                                    <C>                                         <C>
None.
===================================================================================================================================
</TABLE>

                                       42
<PAGE>

<TABLE>
<CAPTION>
===================================================================================================================================
                                                          COPYRIGHTS
===================================================================================================================================
   Owner of Record        Country of         Copyright       Applications or     Registration or      Expiration Date     Title
                         Registration                        Registration No.      Filing Date
===================================================================================================================================
<S>                    <C>                  <C>             <C>                 <C>                  <C>                <C>
None.
-----------------------------------------------------------------------------------------------------------------------------------

===================================================================================================================================
</TABLE>

<TABLE>
<CAPTION>
===================================================================================================================================
                                                        COPYRIGHT LICENSES
===================================================================================================================================
           Name of Agreement                                Copyright                              Date of Approval
===================================================================================================================================
<S>                                                 <C>                                          <C>
None.
-----------------------------------------------------------------------------------------------------------------------------------

===================================================================================================================================
</TABLE>

============================================================================
                          SERVICE MARKS
============================================================================
                           Service Mark
============================================================================
None.
----------------------------------------------------------------------------

============================================================================

                                       43
<PAGE>

                                   SCHEDULE 2

                DEPOSIT ACCOUNTS AND CERTAIN INVESTMENT PROPERTY

None.

                                       44
<PAGE>

                                   SCHEDULE 3

                                 PLEDGED SHARES

<TABLE>
<CAPTION>
=====================================================================================================
                                                                                     Percentage of
                                                                      Number of       Outstanding
                     Class of                                         Shares or        Shares or
        Issuer     Capital Stock    Certificate No(s).   Par Value    Interests        Interests
=====================================================================================================
<S>               <C>              <C>                  <C>          <C>            <C>
None.
-----------------------------------------------------------------------------------------------------

=====================================================================================================
</TABLE>

                                       45
<PAGE>

                                   SCHEDULE 4

                      LOCATIONS OF INVENTORY AND EQUIPMENT

11 N. Pearl St
Albany, NY  12207

3340 Peachtree Rd NE
Suite 200
Atlanta, GA 30326

1190 Allene Ave SW Atlanta, GA
30310

621 Pleasant Valley North
Austin, TX  78702

900 Fleet Street
Baltimore, MD 21202

109 Brookline Ave
Boston, MA 02215

99 Summer St., 12 Fl
Boston, MA  02110

Main Place Tower
350 Main St., 19th Fl.
Buffalo, NY 14202

Avnet in Arizona
7300 W Detroit St
Chandler, AZ 85226

113 North Myers, 3rd Floor
Charlotte, NC 28202

10 S. Lasalle St., Suite 2416
24th Floor Comm Rm
Chicago, IL 60603

                                       46
<PAGE>

600 S. Federal, Suite 400
Chicago, IL  60607

4200 West 40th Street Chicago, IL
60632

105 E. 4th Street, Suite 150C
Cincinnati, OH  45202

1350 Euclid Ave, Suite 150
Cleveland, OH 44115

266 North 5th St.
Columbus, OH 43215

760 Office Parkway
Creve Coeur, MO 63141

13601 Preston Rd
Dallas, TX 75240

600 N. Pearl St., Suite 800
Dallas, TX 75201

4518 So. Miami Blvd.
Durham, NC 27703

6050 Race Rd
Elkridge, MD 21227

8765 East Orchard Rd, Suite 708
Englewood, CO 80111

1400 East Presido
Ft. Worth, TX 76102

301 S. Elm St, Suite 650
Greensboro, NC 27401

587 McDonnell Blvd.
Hazelwood, MO 63042

                                       47
<PAGE>

12851 Worldgate Dr.
Herndon, VA 20170

1301 Fannin St, Suite 1075
Houston, TX 77002

1301 Fannin, 12 Fl.
Houston, TX 77002

6535-43 Hillsdale Ct.
Indianapolis, IN 46250

17770 Cartwright Rd.
Irvine, CA 92614

6620 S Southpoint, Dr Suite 100
Jacksonville, FL 32216

324 E. 11th  Colo Room
Kansas City,  MO  64106

7185 Pollock Dr. Bldg 19
Las Vegas, NV 89119

3080 Ogden Ave.
Lisle, IL  60532

515 S. Flower, Suite 1000
Los Angeles, CA  90071

700 S Flower St., 3rd Floor
Los Angeles, CA 90017

332 West Broadway, Suite 225
Louisville, KY 40202

1 NE 1st Street, 5th Floor
Miami, FL  33132

200 S Biscayne Blvd, 9th Fl.
Miami, FL 33131

                                       48
<PAGE>

511 Eleventh Avenue
Suite 420 4th Floor
Minneapolis, MN 55415

1 American Center, Ste 1300
3100 West End Ave.
Nashville, TN 37203

Sprint Kansas City
500 Sumner Way
New Century, KS 66031

1 State Street Plaza
22nd Fl Data Comm. Rm.
New York, NY 10004

67 Broad St.
New York, NY 10004

60 Hudson 13th Fl.
New York, NY 10013

111-8th Ave 5th Fl.
New York, NY 10013

165 Halsey St. 5th Floor
Newark, NJ 07102

1724 Lovitt Ave
Norfolk, VA  23504

125 St. Paul Street
Norfolk, VA 23510

Bank One Building
100 N. Broadway, Suite 2200
Oklahoma City, OK 73102

100 S. Lucerne Circle West
Suite 202
Orlando, FL 32801

                                       49
<PAGE>

2405 Bird St
Oroville, CA 95965

2130 Arch St.
3rd Floor
Philadelphia, PA  19103

120 E. Van Buren St.
2nd floor West
Phoenix, AZ  85004

2500 Allegheny Center
Office Concourse, 2nd Floor
Pittsburgh, PA 15212

10340 SW Nimbus
Portland OR 97208

3 Regency Plaza
Network Op Center
Providence, RI 02903

282 South Sycamore
Rialto, CA 92376

701 E Cary St
Richmond, VA 23219

1411 I St.
Sacramento, CA 95814

2055 Westport Center Drive
St. Louis, MO 63141

900 Walnut
St. Louis, MO 63102

717 Office Parkway
St. Louis, MO  63141

                                       50
<PAGE>

847 Earl St.
St. Paul, MN 55106

118 S 1000 West
Salt Lake City, UT 84104

323 Broadway St., #200
San Antonio, TX 78205

San Diego Tech Center
9645 Scranton
San Diego, CA 92121

444 Market St., 13th Floor
1 Front St.
San Francisco, CA  94111

55 S. Market
San Jose, CA 95113

3450 Garrett Dr.
Santa Clara, CA 95054

Westin Bldg.
2001 6TH Ave. Suite 2700
Seattle, WA 98121

4000 Town Center 1st Floor
Southfield, MI  48075

26 Fahey St.,
Stamford, CT 06907

655 N Franklin, 10th Fl.
Tampa, FL 33602

705 South Elgin St., 1st Floor
Tulsa, OK  74120

                                       51
<PAGE>

1411 K Street NW
Suite 1402, 14th Fl.
Washington, DC 20036

1331 F St. NW, 2nd Floor
Washington, DC 20004

                                       52
<PAGE>

                                   SCHEDULE 5

                              TRADE AND OTHER NAMES

None.

<PAGE>

                                   SCHEDULE 6

                            JURISDICTIONS FOR FILING
                           UCC-1 FINANCING STATEMENTS

                                     GLOBAL

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------
               Jurisdiction                CC-1 Financing Statement       UCC-1 Financing Statement
                                                                            Transmitting Utility
-------------------------------------------------------------------------------------------------------
<S>                                            <C>                             <C>
1.      Arizona Secretary of State                 X                               X
-------------------------------------------------------------------------------------------------------
2.      California Secretary of State              X                               X
-------------------------------------------------------------------------------------------------------
3.      Colorado Secretary of State                X                               X
-------------------------------------------------------------------------------------------------------
4.      Connecticut Secretary of State             X                               X
-------------------------------------------------------------------------------------------------------
5.      Delaware Secretary of State                X                               X
-------------------------------------------------------------------------------------------------------
6.      District of Columbia Recorder of           X                               X
        Deeds
-------------------------------------------------------------------------------------------------------
7.      Florida Department of State                X                               X
-------------------------------------------------------------------------------------------------------
8.      Fulton County, Georgia                     X                               X
-------------------------------------------------------------------------------------------------------
9.      Illinois Secretary of State                X                               X
-------------------------------------------------------------------------------------------------------
10.     Indiana Secretary of State                 X                               X
-------------------------------------------------------------------------------------------------------
11.     Marion County, Indiana                     X                              N/A
-------------------------------------------------------------------------------------------------------
12.     Kansas Secretary of State                  X                               X
-------------------------------------------------------------------------------------------------------
13.     Kentucky Secretary of State                X                               X
-------------------------------------------------------------------------------------------------------
14.     Jefferson County, Kentucky                 X                              N/a
-------------------------------------------------------------------------------------------------------
15.     Maryland Department of                     X                               X
        Assessments and Taxation
-------------------------------------------------------------------------------------------------------
16.     Massachusetts Secretary of State           X                               X
-------------------------------------------------------------------------------------------------------
17.     Boston Town Clerk, Massachusetts           X                              N/a
-------------------------------------------------------------------------------------------------------
18.     Michigan Secretary of State                X                               X
-------------------------------------------------------------------------------------------------------
19.     Minnesota Secretary of State               X                               X
-------------------------------------------------------------------------------------------------------
20.     Missouri Secretary of State                X                               X
-------------------------------------------------------------------------------------------------------
21.     St. Louis County, Missouri                 X                              N/a
-------------------------------------------------------------------------------------------------------
22.     St. Louis City, Missouri                   X                              N/a
-------------------------------------------------------------------------------------------------------
23.     Jackson County, Missouri                   X                              N/a
-------------------------------------------------------------------------------------------------------
24.     Nevada Secretary of State                  X                               X
-------------------------------------------------------------------------------------------------------
25.     New Jersey Secretary of State              X                               X
-------------------------------------------------------------------------------------------------------
26.     New York Secretary of State                X                               X
-------------------------------------------------------------------------------------------------------
27.     Albany County, New York                    X                              N/a
-------------------------------------------------------------------------------------------------------
28.     Erie County, New York                      X                              N/a
-------------------------------------------------------------------------------------------------------
29.     New York County, New York                  X                              N/a
-------------------------------------------------------------------------------------------------------
30.     North Carolina Secretary of State          X                               X
-------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------
               Jurisdiction                CC-1 Financing Statement       UCC-1 Financing Statement
                                                                            Transmitting Utility
-------------------------------------------------------------------------------------------------------
<S>                                         <C>                           <C>
31.     Durham County, North Carolina              X                               X
-------------------------------------------------------------------------------------------------------
32.     Guilford County, North Carolina            X                               X
-------------------------------------------------------------------------------------------------------
33.     Mecklenburg County, North Carolina         X                               X
-------------------------------------------------------------------------------------------------------
34.     Ohio Secretary of State                    X                               X
-------------------------------------------------------------------------------------------------------
35.     Cuyahoga County, Ohio                      X                               X
-------------------------------------------------------------------------------------------------------
36.     Franklin County, Ohio                      X                               X
-------------------------------------------------------------------------------------------------------
37.     Hamilton County, Ohio                      X                               X
-------------------------------------------------------------------------------------------------------
38.     Oklahoma Secretary of State               n/a                              X
-------------------------------------------------------------------------------------------------------
39.     Oklahoma County, Oklahoma                  X                              N/a
-------------------------------------------------------------------------------------------------------
40.     Oregon Secretary of State                  X                               X
-------------------------------------------------------------------------------------------------------
41.     Pennsylvania Secretary of                  X                               X
        Commonwealth
-------------------------------------------------------------------------------------------------------
42.     Allegheny County Prothonotary,             X                              N/a
        Pennsylvania
-------------------------------------------------------------------------------------------------------
43.     Philadelphia County Prothonotary           X                              N/a
        Pennsylvania
-------------------------------------------------------------------------------------------------------
44.     Rhode Island Secretary of State            X                               X
-------------------------------------------------------------------------------------------------------
45.     Tennessee Secretary of State               X                               X
-------------------------------------------------------------------------------------------------------
46.     Texas Secretary of State                   X                               X
-------------------------------------------------------------------------------------------------------
47.     Utah Division of Corporations and          X                               X
        Commercial Code
-------------------------------------------------------------------------------------------------------
48.     Virginia State Corporation                 X                               X
        Commission
-------------------------------------------------------------------------------------------------------
49.     Fairfax County, Virginia                   X                               X
-------------------------------------------------------------------------------------------------------
50.     Norfolk City, Virginia                     X                               X
-------------------------------------------------------------------------------------------------------
51.     Richmond City, Virginia                    X                               X
-------------------------------------------------------------------------------------------------------
52.     Washington Department of                   X                               X
        Licensing, UCC Division
-------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

                                    EXHIBIT A

                          COPYRIGHT SECURITY AGREEMENT

<PAGE>

                          COPYRIGHT SECURITY AGREEMENT
                          ----------------------------
                          (Global Network Assets, LLC)

         THIS  COPYRIGHT  SECURITY  AGREEMENT  ("Agreement")  is between  Global
Network Assets, LLC, a Delaware limited liability company ("Debtor"), and Nortel
Networks Inc., a Delaware corporation ("Secured Party"),  acting in its capacity
as  Administrative  Agent pursuant to that certain  Amended and Restated  Credit
Agreement  dated as of September 5, 2000 (as the same may be amended,  modified,
supplemented,  renewed,  extended  or  restated  from time to time,  the "Credit
Agreement")  among  Borrower,  Holdings,  Secured  Party and each of the Lenders
party thereto.

                                R E C I T A L S:
                                 ---------------

         A. Debtor and Secured Party have entered into that certain  Amended and
Restated  Pledge and Security  Agreement,  dated as of September 5, 2000 (as the
same may be amended, modified, supplemented,  renewed, extended or restated from
time to time,  the  "Security  Agreement";  all terms  defined  in the  Security
Agreement,  wherever  used herein,  shall have the same  meanings  herein as are
prescribed by the Security Agreement).

         B. Pursuant to the terms of the Security Agreement,  Debtor has granted
to Secured  Party a lien and  security  interest in all General  Intangibles  of
Debtor including, without limitation, all of Debtor's right, title, and interest
in, to and under all now owned and hereafter  acquired  Copyrights and Copyright
Licenses,  and all products and Proceeds  thereof,  to secure the payment of the
Obligations (as defined in the Credit Agreement).

         NOW, THEREFORE,  for good and valuable  consideration,  the receipt and
sufficiency  of which are hereby  acknowledged,  Debtor hereby grants to Secured
Party a lien and continuing  security interest in all of Debtor's right,  title,
and  interest in, to, and under the  following  (all of the  following  items or
types of  Property  being  herein  collectively  referred  to as the  "Copyright
Collateral"), whether presently existing or hereafter created or acquired:

                  (1)  each   Copyright,   each   registration  of  a  Copyright
         ("Copyright Registration"),  and each application for registration of a
         Copyright  ("Copyright  Application"),  including,  without limitation,
         each  Copyright,  Copyright  Registration,  and  Copyright  Application
         referred to in Schedule 1 annexed hereto;

                  (2) each Copyright  License,  including,  without  limitation,
         each Copyright License referred to in Schedule 1 annexed hereto; and

<PAGE>

                  (3) all  products and  Proceeds of the  foregoing,  including,
         without limitation, any claim by Debtor against third parties for past,
         present, or future  infringement or breach of any Copyright,  Copyright
         Registration,  Copyright Application,  or Copyright License, including,
         without limitation, any Copyright, Copyright Registration, or Copyright
         License  listed  in  Schedule  1  annexed  hereto,  and  any  Copyright
         Registration issued pursuant to a Copyright  Application referred to in
         Schedule 1 annexed hereto.

The lien and  security  interest  contained  in this  Agreement  is  granted  in
conjunction  with the liens and  security  interests  granted to  Secured  Party
pursuant to the Security Agreement.

         Debtor hereby  acknowledges and affirms that the rights and remedies of
Secured Party with respect to the liens and security  interests in the Copyright
Collateral  made and  granted  hereby are more  fully set forth in the  Security
Agreement,  the terms and  provisions  of which are  incorporated  by  reference
herein as if fully set forth herein.

<PAGE>

         IN  WITNESS  WHEREOF,  Debtor  has  caused  this  Agreement  to be duly
executed by its duly authorized officer as of the ____ day of _________, ____.

                                         DEBTOR:
                                         ------

                                         GLOBAL NETWORK ASSETS, LLC,
                                         a Delaware limited liability company

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

                                         SECURED PARTY:
                                         -------------

                                         NORTEL NETWORKS INC.,
                                         as Administrative Agent

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

<PAGE>

                                 ACKNOWLEDGMENT

STATE OF ______________)
                            )
COUNTY OF _____________     )

         This instrument was acknowledged before me this _____ day of _________,
_____,  by  _________________,  as _________ of Global  Network  Assets,  LLC, a
Delaware limited liability company, on behalf of such company.

                                    _____________________________________
         {Seal}                     Notary Public in and for the State of

My commission expires:_____________

STATE OF ______________)
                            )
COUNTY OF _____________     )

         This instrument was acknowledged before me this _____ day of _________,
____, by  _________________,  as  __________________________  of Nortel Networks
Inc., a Delaware corporation, on behalf of such corporation.

                                    _____________________________________
         {Seal}                     Notary Public in and for the State of

My commission expires:_____________

<PAGE>

                                   Schedule 1
                                       to
                          Copyright Security Agreement

                                   COPYRIGHTS
                                   ----------
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------------
OWNER OF RECORD     COUNTRY OF        COPYRIGHT      APPLICATION OR        REGISTRATION OR     EXPIRATION DATE    TITLE
                    REGISTRATION                     REGISTRATION NO.      FILING DATE
--------------------------------------------------------------------------------------------------------------------------
<S>                <C>               <C>            <C>                   <C>                 <C>

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

                               COPYRIGHT LICENSES
                               ------------------
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
NAME OF AGREEMENT                COPYRIGHT              DATE OF AGREEMENT
--------------------------------------------------------------------------------
<S>                             <C>                    <C>

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

<PAGE>

                                    EXHIBIT B

                            PATENT SECURITY AGREEMENT

<PAGE>

                            PATENT SECURITY AGREEMENT
                            -------------------------
                          (Global Network Assets, LLC)

         THIS PATENT SECURITY AGREEMENT  ("Agreement") is between Global Network
Assets,  LLC,  a  Delaware  limited  liability  company  ("Debtor"),  and Nortel
Networks Inc., a Delaware corporation ("Secured Party"),  acting in its capacity
as  Administrative  Agent pursuant to that certain  Amended and Restated  Credit
Agreement  dated as of September 5, 2000 (as the same may be amended,  modified,
supplemented,  renewed,  extended  or  restated  from time to time,  the "Credit
Agreement")  among  Borrower,  Holdings,  Secured  Party and each of the Lenders
party thereto.

                                R E C I T A L S:
                                 ---------------

         A. Debtor and Secured Party have entered into that certain  Amended and
Restated  Pledge and Security  Agreement,  dated as of September 5, 2000 (as the
same may be amended, modified, supplemented,  renewed, extended or restated from
time to time,  the  "Security  Agreement";  all terms  defined  in the  Security
Agreement,  wherever  used herein,  shall have the same  meanings  herein as are
prescribed by the Security Agreement).

         B. Pursuant to the terms of the Security Agreement,  Debtor has granted
to Secured  Party a lien and  security  interest in all General  Intangibles  of
Debtor including, without limitation, all of Debtor's right, title, and interest
in,  to and  under  all now owned and  hereafter  acquired  Patents  and  Patent
Licenses,  and all products and Proceeds  thereof,  to secure the payment of the
Obligations (as defined in the Credit Agreement).

         NOW, THEREFORE,  for good and valuable  consideration,  the receipt and
sufficiency  of which are hereby  acknowledged,  Debtor hereby grants to Secured
Party a lien and continuing  security interest in all of Debtor's right,  title,
and  interest in, to, and under the  following  (all of the  following  items or
types  of  Property  being  herein  collectively  referred  to  as  the  "Patent
Collateral"), whether presently existing or hereafter created or acquired:

                  (1) each  Patent and each  application  for a Patent  ("Patent
         Application"),  including,  without limitation,  each Patent and Patent
         Application referred to in Schedule 1 annexed hereto, together with any
         reissues,  continuations,  divisions,  modifications,  substitutions or
         extensions thereof;

                  (2) each Patent License,  including,  without limitation, each
         Patent License referred to in Schedule 1 annexed hereto; and

                  (3) all  products and  Proceeds of the  foregoing,  including,
         without limitation, any claim by Debtor against third parties for past,
         present,  or future  infringement  or  breach  of any  Patent or Patent
         License,  including,  without limitation,  any Patent or Patent License
         referred  to in  Schedule  1  annexed  hereto,  and any  Patent  issued
         pursuant  to a Patent  Application  referred  to in  Schedule 1 annexed
         hereto.

<PAGE>

The lien and  security  interest  contained  in this  Agreement  is  granted  in
conjunction  with the liens and  security  interests  granted to  Secured  Party
pursuant to the Security Agreement.

         Debtor hereby  acknowledges and affirms that the rights and remedies of
Secured  Party with  respect to the liens and  security  interests in the Patent
Collateral  made and  granted  hereby are more  fully set forth in the  Security
Agreement,  the terms and  provisions  of which are  incorporated  by  reference
herein as if fully set forth herein.

         IN  WITNESS  WHEREOF,  Debtor  has  caused  this  Agreement  to be duly
executed by its duly authorized officer as of the ___ day of ___________, _____.

                                      DEBTOR:
                                      ------

                                      GLOBAL NETWORK ASSETS, LLC,
                                      a Delaware limited liability company

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

                                      SECURED PARTY:
                                      -------------

                                      NORTEL NETWORKS INC.,
                                      as Administrative Agent

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

<PAGE>

                                 ACKNOWLEDGMENT

STATE OF ______________)
                           )
COUNTY OF _____________    )

         This  instrument  was  acknowledged  before  me  this  _______  day  of
_________,  ____, by  _____________________,  as  ___________  of Global Network
Assets, LLC, a Delaware limited liability company, on behalf of such company.

                                       _________________________________________
         {Seal}                        Notary Public in and for the State of

My commission expires:_______________

STATE OF ______________)
                           )
COUNTY OF _____________    )

         This  instrument  was  acknowledged   before  me  this  ______  day  of
_________, ____, by _______________, as _____________ of Nortel Networks Inc., a
Delaware corporation, on behalf of such corporation.

                                       _________________________________________
         {Seal}                        Notary Public in and for the State of

My commission expires:_______________

<PAGE>

                                   Schedule 1
                                       to
                            Patent Security Agreement
                            -------------------------

                                     PATENTS
                                     -------
<TABLE>
<CAPTION>
=====================================================================================================================
OWNER OF RECORD   COUNTRY OF        PATENT         APPLICATION OR    REGISTRATION OR   ISSUE DATE    EXPIRATION DATE
                    ORIGIN      IDENTIFICATION    REGISTRATION NO.     FILING DATE     (IF KNOWN)
=====================================================================================================================
<S>               <C>          <C>               <C>                <C>                <C>           <C>

---------------------------------------------------------------------------------------------------------------------

=====================================================================================================================
</TABLE>

                                 PATENT LICENSES
                                 ---------------
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------
NAME OF AGREEMENT                      PATENT                       DATE OF AGREEMENT
--------------------------------------------------------------------------------------------
<S>                             <C>                               <C>

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

<PAGE>

                                    EXHIBIT C

                          TRADEMARK SECURITY AGREEMENT

<PAGE>

                          TRADEMARK SECURITY AGREEMENT
                          ----------------------------
                          (Global Network Assets, LLC)

         THIS  TRADEMARK  SECURITY  AGREEMENT  ("Agreement")  is between  Global
Network Assets, LLC, a Delaware limited liability company ("Debtor"), and Nortel
Networks Inc., a Delaware corporation ("Secured Party"),  acting in its capacity
as  Administrative  Agent pursuant to that certain  Amended and Restated  Credit
Agreement  dated as of September 5, 2000 (as the same may be amended,  modified,
supplemented,  renewed,  extended  or  restated  from time to time,  the "Credit
Agreement")  among  Borrower,  Holdings,  Secured  Party and each of the Lenders
party thereto.

                                R E C I T A L S:
                                 ---------------

         A. Debtor and Secured Party have entered into that certain  Amended and
Restated  Pledge and Security  Agreement,  dated as of September 5, 2000 (as the
same may be amended, modified, supplemented,  renewed, extended or restated from
time to time,  the  "Security  Agreement";  all terms  defined  in the  Security
Agreement,  wherever  used herein,  shall have the same  meanings  herein as are
prescribed by the Security Agreement).

         B. Pursuant to the terms of the Security Agreement,  Debtor has granted
to Secured  Party a lien and  security  interest in all General  Intangibles  of
Debtor,  including,  without  limitation,  all of  Debtor's  right,  title,  and
interest  in, to and under all now  owned  and  hereafter  acquired  Trademarks,
together with the goodwill of the business  symbolized  by Debtor's  Trademarks,
and Trademark  Licenses,  and all products and Proceeds  thereof,  to secure the
payment of the Obligations (as defined in the Credit Agreement).

         NOW, THEREFORE,  for good and valuable  consideration,  the receipt and
sufficiency  of which are hereby  acknowledged,  Debtor hereby grants to Secured
Party a lien and continuing  security interest in all of Debtor's right,  title,
and  interest in, to, and under the  following  (all of the  following  items or
types of  Property  being  herein  collectively  referred  to as the  "Trademark
Collateral"), whether presently existing or hereafter created or acquired:

                  (1)  each  Trademark,   trademark   registration   ("Trademark
         Registration")  and trademark  application  ("Trademark  Application"),
         including,  without limitation, each Trademark,  Trademark Registration
         and  Trademark  Application  referred to in Schedule 1 annexed  hereto,
         together with the goodwill of the business symbolized thereby; and

                  (2) each Trademark  License,  including,  without  limitation,
         each Trademark License listed in Schedule 1 annexed hereto; and

                  (3) all  products and  proceeds of the  foregoing,  including,
         without limitation, any claim by Debtor against third parties for past,
         present  or  future  (a)  infringement,   dilution  or  breach  of  any
         Trademark, Trademark Registration,  Trademark Application and Trademark
         License,  including,  without  limitation,  any  Trademark,   Trademark
         Registration and

<PAGE>

         Trademark  License  referred to in Schedule 1 annexed  hereto,  and any
         Trademark  Registration  issued  pursuant  to a  Trademark  Application
         referred to in Schedule 1 annexed hereto; or (b) injury to the goodwill
         associated  with any Trademark,  Trademark  Registration  and Trademark
         Application.

The lien and  security  interest  contained  in this  Agreement  is  granted  in
conjunction  with the liens and  security  interests  granted to  Secured  Party
pursuant to the Security Agreement.

         Debtor hereby  acknowledges and affirms that the rights and remedies of
Secured Party with respect to the liens and security  interests in the Trademark
Collateral  made and  granted  hereby are more  fully set forth in the  Security
Agreement,  the terms and  provisions  of which are  incorporated  by  reference
herein as if fully set forth herein.

<PAGE>

         IN  WITNESS  WHEREOF,  Debtor  has  caused  this  Agreement  to be duly
executed by its duly authorized officer as of the ___ day of __________, _____.

                                       DEBTOR:
                                       ------

                                       GLOBAL NETWORK ASSETS, LLC,
                                       a Delaware limited liability company

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

                                       SECURED PARTY:
                                       -------------

                                       NORTEL NETWORKS INC.,
                                       as Administrative Agent

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

<PAGE>

                                 ACKNOWLEDGMENT
                                 --------------

STATE OF ______________)
                            )
COUNTY OF _____________     )

         This instrument was acknowledged before me this _____ day of _________,
____,  by  _________________,  as _________  of Global  Network  Assets,  LLC, a
Delaware limited liability company, on behalf of such company.

                                       _________________________________________
         {Seal}                        Notary Public in and for the State of

My commission expires:_____________________

STATE OF ______________)
                           )
COUNTY OF _____________    )

         This instrument was acknowledged  before me this ____ day of _________,
____, by _________________, as ______________________ of Nortel Networks Inc., a
Delaware corporation, on behalf of such corporation.

                                       _________________________________________
         {Seal}                        Notary Public in and for the State of

My commission expires:_____________________

<PAGE>

                                   Schedule 1
                                       to
                          Trademark Security Agreement
                          ----------------------------

                                   TRADEMARKS
                                   ----------
<TABLE>
<CAPTION>
=============================================================================================================
 OWNER OF RECORD      COUNTRY OF      TRADEMARK       APPLICATION OR      FILING     EXPIRATION     GOODS
                     REGISTRATION                     REGISTRATION NO.     DATE         DATE
=============================================================================================================
<S>                 <C>              <C>              <C>                <C>         <C>           <C>

-------------------------------------------------------------------------------------------------------------

=============================================================================================================
</TABLE>

<PAGE>

                                    EXHIBIT D
                                    ---------

                                FORM OF AMENDMENT

<PAGE>

                   AMENDMENT TO PLEDGE AND SECURITY AGREEMENT

         This Amendment, dated _______________,  _____, is delivered pursuant to
Section  4.17(b) of the Pledge and  Security  Agreement  referred to below.  The
undersigned  hereby  agrees that this  Amendment may be attached to that certain
Pledge and Security  Agreement,  dated as of  September  5, 2000 (the  "Security
Agreement"), between the undersigned and Nortel Networks Inc., as Administrative
Agent  ("Administrative  Agent") under that certain  Amended and Restated Credit
Agreement dated as of September 5, 2000 among Borrower, Holdings, Administrative
Agent and the Lenders party thereto,  and that the Capital Stock, notes or other
securities  or  instruments  listed on  Schedule 1 annexed  hereto  shall be and
become part of the  Collateral  referred to in the Security  Agreement and shall
secure payment and  performance  of all  Obligations as provided in the Security
Agreement.

         Capitalized  terms used  herein but not defined  herein  shall have the
meanings therefor provided in the Security Agreement.

                                        GLOBAL NETWORK ASSETS, LLC,
                                        a Delaware limited liability company

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

<PAGE>

                                   Schedule 1
                                       to
                         Amendment to Security Agreement
                         -------------------------------

<TABLE>
<CAPTION>
                                                                          Number of         Percentage of
                          Class of          Certificate                   Shares or       Outstanding Shares
      Issuer            Capital Stock         No(s).         Par Value    Interests          or Interests
      ------            -------------         ------         ---------    ---------          ------------
<S>                    <C>                 <C>              <C>          <C>               <C>

</TABLE>EXHIBIT 10.5

                              AMENDED AND RESTATED
                               GUARANTY AGREEMENT

         This AMENDED AND RESTATED GUARANTY AGREEMENT (this  "Guaranty"),  dated
effective  as of  September  5,  2000,  is  executed  and  delivered  by  SAVVIS
COMMUNICATIONS  CORPORATION,  a Delaware  corporation  ("Guarantor"),  to and in
favor of NORTEL NETWORKS INC., as administrative  agent for itself and the other
Lenders (as such term is hereinafter  defined) (in such capacity,  together with
its successors and assigns in such capacity, "Administrative Agent").

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

         A. Subject to the terms of that certain  Credit  Agreement  dated as of
June 30, 2000 among Savvis  Communications  Corporation,  a Missouri corporation
("Borrower"),   Guarantor,  the  lenders  named  therein  (together  with  their
successors  and assigns,  "Lenders")  and  Administrative  Agent (the  "Original
Credit Agreement"),  the Lenders extended certain credit facilities to Borrower.
As a condition to the effectiveness of the Original Credit Agreement,  Guarantor
executed and delivered that certain Guaranty Agreement dated as of June 30, 2000
(the "Original  Guaranty")  pursuant to which Guarantor  guaranteed  payment and
performance of the "Obligations," as such term is defined in the Original Credit
Agreement.

         B.  Borrower,  Guarantor,  the  Lenders and  Administrative  Agent are,
concurrently  herewith,  entering into that certain  Amended and Restated Credit
Agreement  dated as of September  5, 2000 (as the same may be amended,  renewed,
extended,  restated, replaced,  substituted,  supplemented or otherwise modified
from time to time, the "Credit Agreement") and, in connection  therewith,  inter
alia, Borrower is, concurrently herewith,  executing and delivering that certain
Amended and Restated  Note dated  September 5, 2000,  in the original  principal
amount  of  $235,000,000  payable  to the order of Nortel  Networks  Inc.  (such
promissory note, as it may be amended, renewed,  extended,  restated,  replaced,
substituted,  supplemented  or otherwise  modified from time to time, the "Note"
and,  to the  extent  there is more than one  promissory  note  subsequent  to a
partial assignment of the Loans, the "Notes").

         C. Guarantor has directly and  indirectly  benefitted and will directly
and  indirectly  benefit  from the loans  evidenced  and  governed by the Credit
Agreement,  the Notes and the other Loan  Documents  and the other  transactions
evidenced by and contemplated in the Loan Documents.

         D.   Execution  and  delivery  of  this  Guaranty  is  a  condition  to
Administrative  Agent and Lenders  entering  into the Credit  Agreement  and the
making of Loans pursuant thereto.

         NOW, THEREFORE,  for good and valuable  consideration,  the receipt and
adequacy of which are hereby acknowledged, Guarantor hereby agrees as follows:

         1.  Definitions.   Unless  otherwise  defined  in  this  Guaranty,  all
capitalized terms used in this Guaranty shall have the meanings ascribed to such
terms in the Credit Agreement.

<PAGE>

         2. Guaranty of  Indebtedness,  Liabilities and  Obligations.  Guarantor
hereby absolutely,  unconditionally  and irrevocably  guarantees (a) payment and
performance to Administrative Agent and Lenders, as and when the same become due
or performable  strictly in accordance with the terms and provisions of the Loan
Documents,  whether at stated maturity, by acceleration or otherwise, of any and
all  Obligations  (as such  term is  defined  in the  Credit  Agreement),  which
Obligations include,  without limitation,  (i) any and all interest,  penalties,
fees and  expenses  (specifically  including,  but not  limited  to,  reasonable
attorneys'  fees and expenses)  which  Borrower may now or at any time hereafter
owe to  Administrative  Agent  or any  Lender  (whether  or not  such  interest,
penalties,  fees and expenses were  originally  contracted  with  Administrative
Agent or any Lender or with another or others and whether or not such  interest,
penalties,  fees and expenses are enforceable  against Borrower) pursuant to the
Credit  Agreement,  any Note or any other Loan  Document plus (ii) the principal
amount of any and all indebtedness,  liabilities and other obligations,  whether
primary, absolute,  secondary, direct, indirect, fixed, contingent,  liquidated,
unliquidated,  secured or  unsecured,  matured or unmatured,  joint,  several or
joint and several, due or to become due and whether arising by agreement,  note,
discount,  acceptance,  overdraft or otherwise, which Borrower may now or at any
time hereafter owe to  Administrative  Agent or any Lender  (whether or not such
indebtedness,  liabilities  and  obligations  were  originally  contracted  with
Administrative  Agent or any Lender or with another or others and whether or not
such indebtedness,  liabilities or obligations are enforceable against Borrower)
pursuant to the Credit  Agreement,  any Note or any other Loan  Document and (b)
the  faithful,  prompt  and  complete  compliance  by  Borrower  with all terms,
conditions,  covenants, agreements and undertakings of Borrower under the Credit
Agreement,  any  Note  or any  other  Loan  Document  (the  Obligations  and the
interest, penalties, fees, expenses, indebtedness,  liabilities and obligations,
etc.  referred  to in  clauses  (a)  and  (b)  preceding  as to  which  payment,
performance  and  compliance  are  guaranteed  pursuant  to  this  Guaranty  are
hereinafter individually and collectively called the "Guaranteed Obligations").

         Notwithstanding  that  Borrower  may  not be  liable  or  obligated  to
Administrative  Agent or any Lender for interest  and/or  reasonable  attorneys'
fees and expenses on, or in connection with, the Guaranteed Obligations from and
after the Petition Date (as  hereinafter  defined) as a result of the provisions
of the federal  bankruptcy  laws or otherwise,  the Guaranteed  Obligations  for
which  Guarantor shall be liable and obligated under this Guaranty shall include
(to the extent permitted by law or a court of competent  jurisdiction)  interest
accruing on the  Guaranteed  Obligations at the highest rate provided for in the
Credit  Agreement from and after the date on which Borrower files for protection
under  the  federal  bankruptcy  laws or from  and  after  the  date on which an
involuntary  proceeding is filed against  Borrower under the federal  bankruptcy
laws (herein collectively referred to as the "Petition Date") and all attorneys'
fees and expenses incurred by Administrative  Agent or any Lender from and after
the Petition Date in connection with the Guaranteed Obligations.

         3.  Continuing  Guaranty of Payment.  This  Guaranty is and shall be an
absolute, unconditional, irrevocable and continuing guaranty of payment, and not
merely  of  collection,  and from  time to time or at any  time  the  Guaranteed
Obligations  may be  increased,  reduced or paid in full without  affecting  the
liability or obligation of Guarantor with respect to  indebtedness,  liabilities
and  obligations of Borrower to  Administrative  Agent or any Lender  thereafter
incurred.  Guarantor  further  agrees that this  Guaranty  shall  continue to be
effective or be reinstated (if a release or

                                       2
<PAGE>

discharge has occurred),  as the case may be, if at any time any payment (or any
part thereof) to Administrative Agent or any Lender in respect of the Guaranteed
Obligations is rescinded or must otherwise be restored by  Administrative  Agent
or  any  Lender   pursuant  to  any  bankruptcy,   insolvency,   reorganization,
receivership  or other debtor  relief  granted to Borrower or its  successors or
assigns.  In the event that  Administrative  Agent or any Lender must rescind or
restore  any  payment   received   by   Administrative   Agent  or  any  Lender,
respectively,  in  satisfaction  of the  Guaranteed  Obligations,  as set  forth
herein,  any prior release or discharge from the terms of this Guaranty given to
Guarantor by Administrative Agent or such Lender, respectively, shall be without
effect,  and this  Guaranty  shall  remain in full force and  effect.  It is the
intention  of  Administrative  Agent,  Lenders and  Guarantor  that  Guarantor's
liabilities and obligations hereunder shall not be discharged except by the full
and complete payment and performance of the Guaranteed Obligations and then only
to the extent of such payment and performance.  This Guaranty is independent of,
and in addition  and without  modification  to and does not impair or in any way
affect any other guaranty,  endorsement or other agreement  executed in favor of
Administrative   Agent  or  any  Lender,   and  this  Guaranty  and  Guarantor's
liabilities  and  obligations  under  this  Guaranty  shall not be  impaired  or
otherwise affected by the execution, delivery or performance by Guarantor or any
other Person of any other guaranty, endorsement or other agreement.

         4. Absolute  Guaranty.  Guarantor's  liabilities and obligations  under
this Guaranty shall be absolute and unconditional  irrespective of, shall not be
released,  impaired, limited, reduced, conditioned upon or otherwise affected by
and shall  continue in full force and effect  notwithstanding  the occurrence of
any event (other than an event  consisting  of payment and  performance  of such
liabilities  and  obligations  as provided in Paragraph 3 hereof) at any time or
from  time  to  time,  including,  without  limitation,  any  one or more of the
following events specified in clauses (a) through (n) of this Paragraph 4 below,
and neither  Administrative  Agent nor any Lender shall be obligated or required
to take or to refrain  from taking any of such  actions or  inactions  specified
below and shall  not have any  liability,  obligation  or duty  whatsoever  with
respect  to such  actions  or  inactions,  it being  acknowledged  and agreed by
Guarantor  that all of such  liabilities,  obligations  and  duties  (if any) of
Administrative  Agent  or any  Lender  otherwise  existing  and all  rights  and
remedies (if any) of Guarantor with respect thereto  (whether such  liabilities,
obligations,  duties,  rights or remedies  exist by virtue of agreement,  common
law,  equity,  statute or otherwise),  and each and every defense  which,  under
principles of guaranty or suretyship law, would otherwise  operate to eliminate,
impair,  condition or restrict the  liabilities and obligations of Guarantor for
the Guaranteed Obligations, are hereby expressly waived by Guarantor:

                  (a) the taking or accepting of any security or other  guaranty
         for  any  or all of the  Guaranteed  Obligations,  whether  heretofore,
         concurrently herewith or hereafter;

                  (b) any  failure to create or perfect  or  properly  create or
         perfect any lien, security interest or assignment intended as security,
         or any release,  surrender,  exchange,  substitution,  subordination or
         loss of any  security or guaranty  at any time  existing in  connection
         with any or all of the Guaranteed  Obligations  for any reason;  or any
         suretyship defenses,  including,  without limitation, any impairment of
         collateral;

                                       3
<PAGE>

                  (c) any partial or full release of the liability or obligation
         of Guarantor  under any other  guaranty  whether or not similar to this
         Guaranty;

                  (d) the entering into, delivery of, modification of, amendment
         to or waiver of  compliance  with any Note or any other  Loan  Document
         (other than the Credit Agreement to which the Guarantor is a party), or
         any agreement, document or instrument evidencing, securing or otherwise
         affecting  all or  part  of the  Guaranteed  Obligations,  without  the
         notification of Guarantor,  the right of such notification being hereby
         specifically waived by Guarantor;

                  (e)  the  bankruptcy,  insolvency,  arrangement,   adjustment,
         composition,  liquidation, disability, dissolution or lack of authority
         (whether  corporate,  partnership  or trust or  relating  to any  other
         entity or Person) of  Borrower,  Guarantor  or any other  Person at any
         time  liable  or  obligated  for  the  payment  of  any  or  all of the
         Guaranteed Obligations, whether now existing or hereafter arising;

                  (f) any increase,  reduction,  renewal, extension,  amendment,
         modification,  repayment, refunding and/or rearrangement of the payment
         or any  other  terms  or  provisions  of  any or all of the  Guaranteed
         Obligations  at any time and from time to time,  whether on one or more
         occasions, either with or without notice to or consent of Guarantor, or
         any  adjustment,  indulgence,  forbearance or compromise  that might be
         granted or given by  Administrative  Agent or any Lender to Borrower or
         Guarantor;

                  (g) any  neglect,  delay,  omission,  failure  or  refusal  of
         Administrative  Agent or any  Lender (i) to  exercise  or  properly  or
         diligently  exercise  any right or remedy with respect to any or all of
         the Guaranteed Obligations or the collection thereof or any collateral,
         security or guaranty therefor,  whether under the Credit Agreement, any
         Note or any  other  Loan  Document  or  otherwise,  including,  without
         limitation,  to ensure  compliance  with any term or  provision  of the
         Credit Agreement or any other Loan Document,  (ii) to take or prosecute
         or  properly  or  diligently  take  or  prosecute  any  action  for the
         collection  of  any  or  all  of  the  Guaranteed  Obligations  against
         Borrower,  Guarantor  or  any  other  guarantor  of  any  or all of the
         Guaranteed  Obligations and/or any other Person,  (iii) to foreclose or
         prosecute or properly or  diligently  foreclose or prosecute any action
         in connection with any agreement, document or instrument or arrangement
         evidencing,  securing  or  otherwise  affecting  all or any part of the
         Guaranteed Obligations,  including,  without limitation, any failure to
         conduct a commercially reasonable foreclosure sale, or (iv) to mitigate
         damages  or take any other  action to reduce,  collect  or enforce  the
         Guaranteed Obligations;

                  (h) any failure of Administrative  Agent or any Lender to give
         notice to  Borrower  and/or  Guarantor  of, or obtain  the  consent  of
         Borrower and/or Guarantor with respect to, (i) the incurrence of any of
         the  Guaranteed  Obligations,  (ii) the  occurrence of any "Default" or
         "Event of Default" as such terms are defined in the Credit Agreement or
         any of the other Loan  Document,  (iii) demand,  presentment,  protest,
         nonpayment, intention to accelerate, acceleration, lack of diligence or
         delay in collection of all or any part of the Guaranteed Obligations or
         any other matter, or the absence thereof,  (iv) any renewal,  extension
         or

                                       4
<PAGE>

         assignment of the Guaranteed  Obligations or any part thereof, (vi) the
         disposition  or  release  of all or any  part of any  security  for the
         Guaranteed Obligations (whether or not such disposition is commercially
         reasonable)  or (vi) any other  action  taken or  refrained  from being
         taken by Administrative Agent or any Lender against Borrower,  it being
         agreed  that  (except as may be  expressly  provided  in the other Loan
         Documents)  neither  Administrative  Agent  nor  any  Lender  shall  be
         required  to give  Borrower or  Guarantor  any notice of any kind or to
         obtain  Borrower's  or  Guarantor's  consent  under  any  circumstances
         whatsoever  with  respect  to  or in  connection  with  the  Guaranteed
         Obligations;

                  (i) the  unenforceability,  illegality or  uncollectibility of
         all or any  part of the  Guaranteed  Obligations  against  Borrower  by
         reason of (i) failure of consideration,  (ii) breach of warranty, (iii)
         fraud,  (iv)  the fact  that  the  interest  contracted  for,  charged,
         collected or received in respect of the Guaranteed  Obligations exceeds
         the amount  permitted by law,  (v) the act of creating  the  Guaranteed
         Obligations  or any part  thereof is ultra  vires,  (vi) the  officers,
         directors,   partners,   trustees  or   representatives   creating  the
         Guaranteed  Obligations  acted in excess of their  authority  or lacked
         legal capacity,  (vii) the Credit Agreement, any Note or any other Loan
         Document  evidencing  the  Guaranteed  Obligations  has been  forged or
         otherwise  is  irregular  or  is  not  genuine  or  authentic,   (viii)
         expiration of the  applicable  statute of limitations of the Guaranteed
         Obligations,  (ix)  failure to comply with the  statute of frauds,  (x)
         lender liability, or (xi) accord and satisfaction;

                  (j) any  payment by Borrower  to  Administrative  Agent or any
         Lender is held to  constitute a  preferential  transfer or a fraudulent
         conveyance  or  transfer  under any  applicable  law, or for any reason
         Administrative  Agent or any Lender is required to refund such  payment
         or pay such amount to Borrower or any other Person;

                  (k) any merger,  reorganization,  consolidation or dissolution
         of Borrower, any sale, lease or transfer of any or all of the assets of
         Borrower,  or any  change  in name,  business,  location,  composition,
         structure  or any  change  in the  shareholders,  partners  or  members
         (whether  by  accession,  secession,  death,  dissolution,  transfer of
         assets or otherwise) of Borrower;

                  (l) any  failure  of  Administrative  Agent or any  Lender  to
         notify  Guarantor  of (i) the  acceptance  of this  Guaranty,  (ii) the
         making of Loans by any Lender in reliance on this  Guaranty,  (iii) the
         failure  of   Borrower   to  make  any   payment  due  by  Borrower  to
         Administrative  Agent or any Lender, or (iv) any information  regarding
         the financial condition or prospects of Borrower;

                  (m) any full or partial  release of the liability of Borrower,
         any guarantor of all or any part of the  Guaranteed  Obligations or any
         other  Person  for all or any part of the  Guaranteed  Obligations,  it
         being  acknowledged  and agreed by Guarantor that it may be required to
         pay the Guaranteed  Obligations in full without  assistance or support,
         whether from Borrower, any other guarantor or any other Person; or

                                       5
<PAGE>

                  (n) any other action taken or omitted to be taken with respect
         to any of the Credit  Agreement,  any Note or any other Loan  Document,
         the Guaranteed  Obligations  or the security and  collateral  therefor,
         whether  or  not  such  action  or  omission  prejudices  Guarantor  or
         increases the likelihood  that Guarantor will be required to pay all or
         any part of the Guaranteed Obligations pursuant to the terms hereof.

Without limiting the foregoing or Guarantor's  liability under this Guaranty, to
the extent that Administrative  Agent and Lenders (or any of them) have advanced
funds or  extended  credit to Borrower  and do not receive  payments or benefits
thereon in the amounts and at the times required or provided by or in connection
with the Credit  Agreement,  any Notes or any other Loan Document,  Guarantor is
absolutely  liable to make such  payments and to confer such benefits on Lenders
on a timely basis.

         5.  Representations  and Warranties.  In connection with this Guaranty,
Guarantor  hereby  represents and warrants to  Administrative  Agent and Lenders
that:

                  (a) Borrower is a  wholly-owned  Subsidiary  of Guarantor  and
         Guarantor has received and will receive a direct and indirect  material
         benefit  from the  transactions  evidenced by and  contemplated  in the
         Credit Agreement, the Notes and the other Loan Documents; this Guaranty
         is given  by  Guarantor  in  furtherance  of the  direct  and  indirect
         business  interests  and  corporate  purposes  of  Guarantor,   and  is
         necessary to the conduct, promotion and attainment of the businesses of
         Borrower and Guarantor; and the value of the consideration received and
         to be received by Guarantor  is believed by Guarantor to be  reasonably
         worth at least as much as the  liability  and  obligation  of Guarantor
         hereunder;

                  (b)  The  execution  and  delivery  of this  Guaranty  and the
         performance of and compliance with the terms hereof will not constitute
         a default (or an event which with notice or lapse of time or both would
         constitute a default)  under,  or result in the breach of, any material
         contract,  agreement  or  instrument  to which  Guarantor is a party or
         which may be applicable to Guarantor or any of its assets;

                  (c) This  Guaranty,  when executed and delivered by Guarantor,
         will  constitute the legal,  valid and binding  obligation of Guarantor
         enforceable  in  accordance  with  its  terms,  except  as  limited  by
         bankruptcy, insolvency or other laws of general application relating to
         the enforcement of creditors' rights and general principles of equity;

                  (d) As of the date of this  Guaranty,  and after giving effect
         to  this  Guaranty  and the  contingent  obligation  evidenced  by this
         Guaranty,  Guarantor  is not,  on either an  unconsolidated  basis or a
         consolidated   basis   with   Guarantor's   Consolidated   Subsidiaries
         (including, without limitation,  Borrower),  insolvent, as such term is
         used or defined in any applicable  bankruptcy,  fraudulent  conveyance,
         fraudulent  transfer or similar  law, and  Guarantor  has and will have
         assets which, fairly valued,  exceed its indebtedness,  liabilities and
         obligations;   Guarantor  is  not  executing  this  Guaranty  with  any
         intention to hinder, delay or defraud any present or future creditor or
         creditors  of  Guarantor;  Guarantor  is not engaged

                                       6
<PAGE>

         in any business or  transaction  (including,  without  limitation,  the
         execution  of  this   Guaranty)   which  will  leave   Guarantor   with
         unreasonably  small capital or assets which are  unreasonably  small in
         relation to the business or transactions  engaged in by Guarantor,  and
         Guarantor   does  not  intend  to  engage  in  any  such   business  or
         transaction;  Guarantor  does not intend to incur,  nor does  Guarantor
         believe that it will incur, debts beyond  Guarantor's  ability to repay
         such debts as they mature;

                  (e) All acts  and  conditions  required  to be  performed  and
         satisfied  prior to the creation and issuance of this Guaranty,  and to
         constitute this Guaranty as the legal,  valid and binding obligation of
         Guarantor  in  accordance  with its  terms,  have  been  performed  and
         satisfied in due and strict compliance with all applicable laws;

                  (f) Guarantor is familiar with, and has independently received
         books and records regarding, the financial condition of Borrower and is
         familiar with the value of any and all  collateral (if any) intended to
         secure the Guaranteed Obligations; however, Guarantor is not relying on
         such  financial  condition  or  any  such  collateral  (if  any)  as an
         inducement to enter into this Guaranty; Guarantor has adequate means to
         obtain from Borrower,  on a continuing basis, the information  referred
         to in this clause (f) and is not relying on Administrative Agent or any
         Lender to provide any such information at any time;

                  (g) Guarantor has not been induced to enter into this Guaranty
         on the basis of a  contemplation,  belief,  understanding  or agreement
         that  any  Person  other  than  Guarantor  will  be  liable  to pay the
         Guaranteed Obligations;

                  (h) Except for the execution of the Credit Agreement,  neither
         Administrative  Agent,  any  Lender  nor any other  Person has made any
         representation,  warranty  or  statement  to, or  promise,  covenant or
         agreement with,  Guarantor in order to induce Guarantor to execute this
         Guaranty; and

                  (i) All representations and warranties in the Credit Agreement
         relating to the  Guarantor  are true and correct in all  respects as of
         the date hereof,  except to the extent made only as of a specific prior
         date, and on each date the  representations  and warranties  thereunder
         are restated  pursuant to any of the Loan Documents with the same force
         and effect as if such  representations  and warranties had been made on
         and as of such date, all of which are incorporated herein by reference.

         6.  Default.  Upon the  occurrence  of an Event of  Default,  Guarantor
shall, on demand by Administrative  Agent and without further notice of dishonor
and  without  notice  of any kind  (including,  without  limitation,  notice  of
acceptance by  Administrative  Agent or any Lender of this Guaranty) having been
given to  Borrower,  Guarantor  or any other  Person  previous  to such  demand,
promptly  (i.e.,  not later than 1:00 p.m., New York, New York time, on the date
of such  demand  or,  if such  demand  is made  after  12:00  noon,  on the next
succeeding  Business Day) pay, in immediately  available  funds, the full unpaid
amount of the Guaranteed  Obligations,  or such lesser amount, if any, as may be
specifically   demanded  by   Administrative   Agent  from  time  to  time,   to
Administrative

                                       7
<PAGE>

Agent at  Administrative  Agent's Principal Office located in New York, New York
or at such other  place as  Administrative  Agent may  specify to  Guarantor  in
writing.  If  acceleration  of the time for  payment  of any  amount  payable by
Borrower under or with respect to any of the Guaranteed Obligations is stayed or
otherwise delayed upon the insolvency, bankruptcy or reorganization of Borrower,
all such  amounts  otherwise  subject  to  acceleration  under  the terms of the
Guaranteed  Obligations  shall  nonetheless  be payable by  Guarantor  hereunder
promptly on demand by Administrative Agent.

         7. Cumulative Remedies;  No Election. If Guarantor is or becomes liable
or obligated for the Guaranteed Obligations,  by endorsement or otherwise, other
than under this  Guaranty,  such  liability  or  obligation  shall not be in any
manner   impaired  or  affected   hereby,   and  the  rights  and   remedies  of
Administrative  Agent or any Lender hereunder shall be cumulative of any and all
other rights and remedies that Administrative Agent or such Lender may ever have
against  Guarantor.  The exercise by  Administrative  Agent or any Lender of any
right or remedy hereunder or under any other agreement,  document or instrument,
or at law or in equity, shall not preclude the concurrent or subsequent exercise
of any other right or remedy.  Without in any way limiting the generality of the
foregoing,  it is specifically understood and agreed that this Guaranty is given
by  Guarantor  as an  additional  guaranty  or  security  to any and  all  other
guaranties or security heretofore,  concurrently  herewith or hereafter executed
and/or  delivered  by Guarantor  to or in favor of  Administrative  Agent or any
Lender relating to the Guaranteed Obligations,  and nothing herein shall ever be
deemed to in any way negate or replace any such other  guaranties  or  security;
provided, however, that Administrative Agent and Lenders shall have all of their
rights and remedies under this Guaranty irrespective of anything to the contrary
contained  in any such  other  guaranties  or  security.  This  Guaranty  may be
enforced  from time to time as often as occasion  therefor may arise,  and it is
agreed and understood that it shall not be necessary for Administrative Agent or
any  Lender,  in order to enforce  this  Guaranty  against  Guarantor,  first to
exercise  any  rights  or  remedies  against  Borrower  or any  other  Person or
institute suit or exhaust any available  rights or remedies  against security in
Administrative  Agent's  or any  Lender's  possession  or  under  Administrative
Agent's or any Lender's  control,  or to resort to any other sources or means of
obtaining payment of the Guaranteed Obligations.

         8. Joint and Several  Obligation.  Guarantor agrees that Administrative
Agent and  Lenders,  in their sole  discretion,  may (a) bring suit  against all
guarantors or other Persons liable or obligated to  Administrative  Agent or any
Lender or against any one or more of them,  for interest,  penalties,  expenses,
fees, indebtedness,  liabilities and obligations owed to Administrative Agent or
any Lender and apply any amounts obtained by Administrative  Agent or any Lender
in such a manner as Administrative Agent or any Lender may elect, (b) bring suit
against all  guarantors of the Guaranteed  Obligations  jointly and severally or
against  any one or more of them,  (c)  settle  fully or in part with any one or
more of such guarantors for such  consideration as  Administrative  Agent or any
Lender may deem proper,  and (d)  partially or fully release one or more of such
guarantors from liability under any guaranty agreement,  and that no such action
shall  impair the rights of  Administrative  Agent or any Lender to collect  the
Guaranteed  Obligations  (or the unpaid balance  thereof) from other  guarantors
(including, without limitation, Guarantor), or any of them, not so sued, settled
with or released.

                                       8
<PAGE>

         9.  Release of  Collateral,  etc. If all or any part of the  Guaranteed
Obligations is at any time secured,  Guarantor agrees that Administrative  Agent
or any Lender may, at any time and from time to time in its  discretion and with
or  without  valuable   consideration,   allow  substitution  or  withdrawal  of
collateral or other security and release  collateral or other  security  without
impairing or diminishing the liabilities or obligations of Guarantor  hereunder.
Guarantor further agrees that, if Borrower or any other Person executes in favor
of Administrative Agent or any Lender any collateral agreement,  mortgage,  deed
of  trust,   collateral   assignment,   security  agreement  or  other  security
instrument,  the exercise by Administrative  Agent or any Lender of any right or
remedy thereby conferred on  Administrative  Agent or any Lender shall be wholly
discretionary with Administrative Agent and such Lender, respectively,  and that
the  exercise  or failure to exercise  any such right or remedy  shall in no way
impair or diminish the  obligation  of Guarantor  hereunder.  Guarantor  further
agrees that (except to the extent  prohibited by applicable law  notwithstanding
an agreement of the parties to the contrary)  neither  Administrative  Agent nor
any Lender  shall be liable  for its  failure  to use  diligence  or care in the
collection of the Guaranteed  Obligations,  in the creation or perfection of any
lien,  security interest or assignment intended as security or in preserving the
liability of any Person liable or obligated on the Guaranteed  Obligations,  and
Guarantor hereby waives presentment for payment,  notice of nonpayment,  protest
and notice thereof,  and diligence in bringing suit against any Person liable on
the Guaranteed Obligations or any part thereof.

         10. Binding Effect.  This Guaranty is for the benefit of Administrative
Agent and Lenders and their successors and permitted  assigns,  and in the event
of an  assignment  by  Administrative  Agent or any Lender or its  successors or
assigns  of the  Guaranteed  Obligations,  or any part  thereof,  the rights and
benefits  hereunder,  to the extent applicable to the indebtedness,  liabilities
and  obligations  so  assigned,  may  be  transferred  with  such  indebtedness,
liabilities and obligations.  This Guaranty is binding, not only upon Guarantor,
but upon its successors and assigns.

         11. WAIVER OF SUBROGATION,  CONTRIBUTION AND OTHER RIGHTS. UPON PAYMENT
BY  GUARANTOR  OF ANY SUMS IN RESPECT OF THE  GUARANTEED  OBLIGATIONS  HEREUNDER
(INCLUDING,  WITHOUT LIMITATION, ANY AMOUNTS ADVANCED TO BORROWER BY GUARANTOR),
ALL  RIGHTS  OF  GUARANTOR  AGAINST  BORROWER  OR  ANY  OTHER  GUARANTOR  OF THE
GUARANTEED  OBLIGATIONS  ARISING  AS A  RESULT  THEREFROM  BY  WAY OF  RIGHT  OF
SUBROGATION,  REIMBURSEMENT,  EXONERATION, CONTRIBUTION,  INDEMNIFICATION AND/OR
OTHERWISE  SHALL IN ALL RESPECTS BE  SUBORDINATE  AND JUNIOR IN RIGHT OF PAYMENT
AND ENFORCEMENT TO THE PRIOR INDEFEASIBLE PAYMENT AND ENFORCEMENT IN FULL OF THE
GUARANTEED OBLIGATIONS. GUARANTOR SHALL NOT HAVE, AND HEREBY IRREVOCABLY WAIVES,
ANY AND ALL RIGHTS AND  REMEDIES  OF  SUBROGATION,  REIMBURSEMENT,  EXONERATION,
CONTRIBUTION,  INDEMNIFICATION  AND/OR OTHERWISE AGAINST OR FROM BORROWER UNLESS
AND UNTIL ALL OF THE  GUARANTEED  OBLIGATIONS  HAVE BEEN PAID AND  PERFORMED  IN
FULL. IN ADDITION TO THE FOREGOING,  GUARANTOR HEREBY IRREVOCABLY WAIVES ANY AND
ALL CLAIMS OR OTHER RIGHTS AND

                                       9
<PAGE>

REMEDIES IT MAY NOW HAVE OR HEREAFTER ACQUIRE AGAINST  ADMINISTRATIVE AGENT, ANY
LENDER,  BORROWER OR ANY OTHER PERSON UNDER CHAPTER 34 OF THE TEXAS BUSINESS AND
COMMERCE  CODE,  UNDER RULES 31 AND 163 OF THE TEXAS  RULES OF CIVIL  PROCEDURE,
UNDER SECTION 17.001 OF THE TEXAS CIVIL PRACTICE AND REMEDIES CODE AND UNDER ANY
OTHER STATUTE OF ANY STATE OR OTHER JURISDICTION  REQUIRING RECOURSE AGAINST THE
PRIMARY  OBLIGOR OR  IMPOSING  OTHER  REQUIREMENTS  AS A  CONDITION  TO RECOURSE
AGAINST A GUARANTOR IF AND TO THE EXTENT THAT THE SAME MAY BE APPLICABLE TO THIS
GUARANTY. Except as expressly otherwise provided in this Paragraph 11, Guarantor
shall have all rights of subrogation,  reimbursement,  exoneration, contribution
and indemnification that may exist under currently applicable law.

         12.  Subordination  of Indebtedness  and Liens. In connection with this
Guaranty, Guarantor hereby agrees that:

                  (a) The payment of any and all  principal  of and  interest on
         the Subordinated  Indebtedness (as defined below) shall in all respects
         be  subordinate  and junior in right of payment and  enforcement to the
         prior payment and enforcement in full of all Guaranteed  Obligations as
         provided in this Paragraph 12. The Subordinated  Indebtedness shall not
         be payable,  and no payment of principal,  interest or other amounts on
         account  thereof,  and no property or guaranty of any nature to secure,
         guarantee or pay the Subordinated  Indebtedness shall be made or given,
         directly  or  indirectly  by or on  behalf  of  Borrower  or  received,
         accepted,  retained  or  applied  by  Guarantor  unless  and  until the
         Guaranteed  Obligations  shall have been paid and performed in full. If
         any sums shall be paid to  Guarantor  or any  Affiliate of Guarantor by
         Borrower   or  any  other   Person  on  account  of  the   Subordinated
         Indebtedness  when such payment is not permitted  hereunder,  such sums
         shall be held in trust by Guarantor  for the benefit of  Administrative
         Agent and Lenders and shall  forthwith be  delivered to  Administrative
         Agent without  affecting the liability of Guarantor under this Guaranty
         and may be applied  by  Administrative  Agent  against  the  Guaranteed
         Obligations in accordance with the Credit  Agreement.  Upon the request
         of Administrative Agent, Guarantor shall execute,  deliver, and endorse
         to Administrative  Agent such documentation as Administrative Agent may
         request to perfect,  preserve  and enforce  its rights  hereunder.  For
         purposes  of this  Guaranty  and with  respect to  Guarantor,  the term
         "Subordinated  Indebtedness"  means all  indebtedness,  liabilities and
         obligations  of  Borrower  to  Guarantor,  whether  such  indebtedness,
         liabilities  and  obligations  now exist or are  hereafter  incurred or
         arise, or are primary,  absolute,  secondary,  direct, indirect, fixed,
         contingent, liquidated,  unliquidated, secured or unsecured, matured or
         unmatured,  joint,  several,  joint  and  several,  or  otherwise,  and
         irrespective of whether such  indebtedness,  liabilities or obligations
         are  evidenced  by a note,  contract,  open account or  otherwise,  and
         irrespective of the Person or Persons in whose favor such indebtedness,
         obligations or liabilities may, at their  inception,  have been, or may
         hereafter  be  created,  or the  manner in which  they have been or may
         hereafter be acquired by Guarantor;

                                       10
<PAGE>

                  (b) Any and all Liens  (including  any  judgment  Liens)  upon
         Borrower's  property  or assets  securing  payment of any  Subordinated
         Indebtedness  (the  "Subordinated  Liens") shall be and remain inferior
         and  subordinate to any and all Liens upon  Borrower's  assets securing
         payment of the Guaranteed  Obligations or any part thereof,  regardless
         of whether such  Subordinated  Liens  presently  exist or are hereafter
         created or when such Subordinated Liens were created,  perfected, filed
         or recorded.  Guarantor  shall not  exercise or enforce any  creditors'
         rights or remedies  that it may have  against  Borrower  or  foreclose,
         repossess,  sequester or otherwise  institute  any action or proceeding
         (whether  judicial or otherwise,  including,  without  limitation,  the
         commencement   of,  or   joinder   in,  any   bankruptcy,   insolvency,
         reorganization,  liquidation,  receivership or other debtor relief law)
         to enforce any Subordinated  Lien on any property or assets of Borrower
         unless and until the Guaranteed Obligations shall have been irrevocably
         paid and performed in full.

                  (c)   In  the   event   of   any   receivership,   bankruptcy,
         reorganization,  rearrangement,  debtor's  relief  or other  insolvency
         proceeding  involving  Borrower as debtor,  Administrative  Agent shall
         have the  right to prove  and vote any  claim  under  the  Subordinated
         Indebtedness  and to receive  directly  from the  receiver,  trustee or
         other court custodian all dividends, distributions and payments made in
         respect  of  the   Subordinated   Indebtedness   until  the  Guaranteed
         Obligations have been paid in full.  Administrative Agent may apply any
         such  dividends,  distributions  and  payments  against the  Guaranteed
         Obligations in accordance with the Credit Agreement;

                  (d)  All  promissory  notes,  accounts  receivable,   ledgers,
         records or any other  evidence of  Subordinated  Indebtedness,  and all
         mortgages,  deeds of trust, security agreements,  assignments and other
         security documents  evidencing the Subordinated  Liens, shall contain a
         specific  written  notice  thereon  that  the  indebtedness  and  Liens
         evidenced  thereby are  subordinated  under the terms of this Guaranty;
         and

                  (e) The terms and provisions of this Paragraph 12 are given by
         Guarantor as  additional  rights,  remedies and benefits to any and all
         other subordination  agreements  heretofore,  concurrently  herewith or
         hereafter executed by Guarantor to or in favor of Administrative  Agent
         or any Lender,  and nothing in this Guaranty shall ever be deemed to in
         any way  negate or  replace  any other  such  previous,  concurrent  or
         subsequent subordination agreements.

         13. Right of Setoff.  Guarantor hereby grants to  Administrative  Agent
and each Lender a right of setoff upon any and all monies,  securities  or other
property of  Guarantor,  and the proceeds  therefrom,  now or hereafter  held or
received by or in transit to Administrative  Agent or any Lender from or for the
account of Guarantor,  whether for safekeeping,  custody, pledge,  transmission,
collection or otherwise, and also upon any and all deposits (general or special)
and  credits  of  Guarantor,  and  any  and  all  claims  of  Guarantor  against
Administrative  Agent or any  Lender at any time  existing.  The right of setoff
granted  pursuant to this Paragraph 13 shall be cumulative of and in addition to
Administrative Agent's and each Lender's common law right of setoff.

                                       11
<PAGE>

         14. Further Assurances. Upon the request of Administrative Agent or any
Lender,  Guarantor  will,  at any time and from time to time,  duly  execute and
deliver to Administrative  Agent any and all such further agreements,  documents
and instruments,  and supply such additional information, as may be necessary or
advisable,  in the reasonable opinion of Administrative  Agent or any Lender, to
obtain the full benefits of this Guaranty.

         15. Invalid Provisions. If any provision of this Guaranty is held to be
illegal,  invalid or unenforceable under present or future laws effective during
the term hereof, such provision shall be fully severable, this Guaranty shall be
construed and enforced as if such illegal,  invalid or  unenforceable  provision
had never  comprised a part hereof,  and the remaining  provisions  hereof shall
remain in full  force and  effect  and shall  not be  affected  by the  illegal,
invalid or unenforceable provision or by its severance herefrom. Furthermore, in
lieu of such illegal,  invalid or  unenforceable  provision there shall be added
automatically as a part of this Guaranty a provision as similar in terms to such
illegal,  invalid or  unenforceable  provision  as may be possible and be legal,
valid  and  enforceable.  No  provision  herein or in any  other  Loan  Document
evidencing  the Guaranteed  Obligations  shall require the payment or permit the
collection of interest in excess of the maximum permitted by applicable law.

         16.  Modification in Writing.  No modification,  consent,  amendment or
waiver of any  provision of this  Guaranty,  and no consent to any  departure by
Guarantor  herefrom,  shall be effective unless the same shall be in writing and
signed by a duly authorized  officer of  Administrative  Agent and Guarantor and
then shall be  effective  only in the  specific  instance  and for the  specific
purpose for which given.

         17.  No  Waiver,   Etc.  No  notice  to  or  demand  on   Guarantor  or
Administrative  Agent in any case  shall  entitle  Guarantor  or  Administrative
Agent,  respectively,  to any other or  further  notice or demand in  similar or
other circumstances. No delay or omission by Administrative Agent, any Lender or
Guarantor  in  exercising  any right or remedy  hereunder  shall impair any such
right or remedy or be construed as a waiver thereof or any acquiescence therein,
and no single or partial  exercise  of any such right or remedy  shall  preclude
other or further  exercise  thereof or the exercise of any other right or remedy
hereunder.

         18. Cumulative Rights. All rights and remedies of Administrative  Agent
and Lenders  hereunder are  cumulative of each other and of every other right or
remedy which  Administrative Agent or any Lender may otherwise have at law or in
equity or under any other contract or document,  and the exercise of one or more
rights or remedies  shall not  prejudice or impair the  concurrent or subsequent
exercise of other rights or remedies.

         19. Expenses. Guarantor agrees to pay on demand by Administrative Agent
all reasonable costs and expenses incurred by Administrative Agent or any Lender
in connection  with the enforcement of the terms and provisions of this Guaranty
and, if and to the extent that Borrower is obligated therefor in accordance with
the  Credit  Agreement,  any  and  all  amendments,   modifications,   renewals,
restatements  and/or  supplements hereto from time to time,  including,  without
limitation,  the reasonable fees and expenses of legal counsel to Administrative
Agent. If

                                       12
<PAGE>

Guarantor  should  breach or fail to perform  any  provision  of this  Guaranty,
Guarantor agrees to pay to Administrative  Agent all costs and expenses incurred
by  Administrative  Agent or any Lender in the enforcement of this Guaranty from
time to time, including, without limitation, the reasonable fees and expenses of
all legal counsel to Administrative Agent and Lenders.

         20.  APPLICABLE  LAW. THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED
IN  ACCORDANCE  WITH,  THE  LAWS OF THE  STATE OF NEW YORK  (WITHOUT  REGARD  TO
CONFLICTS OF LAWS PRINCIPLES).

         21. NO ORAL  AGREEMENTS.  THIS GUARANTY  REPRESENTS THE FINAL AGREEMENT
BETWEEN GUARANTOR AND  ADMINISTRATIVE  AGENT AND LENDERS RELATING TO THE SUBJECT
MATTER  OF THIS  GUARANTY  AND MAY NOT BE  CONTRADICTED  BY  EVIDENCE  OF PRIOR,
CONTEMPORANEOUS  OR SUBSEQUENT  ORAL  AGREEMENTS  OF SUCH PARTIES.  THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN OR AMONG GUARANTOR AND ADMINISTRATIVE AGENT OR
ANY LENDER.  THIS GUARANTY  SUPERSEDES ALL PRIOR (IF ANY) ORAL AGREEMENTS,  ORAL
ARRANGEMENTS  OR ORAL  UNDERSTANDINGS  RELATING  TO THE  SUBJECT  MATTER OF THIS
GUARANTY,  AND THIS GUARANTY  SUPERSEDES  ALL PRIOR (IF ANY) WRITTEN  AGREEMENTS
RELATING TO THE SUBJECT  MATTER OF THIS  GUARANTY IF AND TO THE EXTENT THAT SUCH
PRIOR AGREEMENTS ARE INCONSISTENT WITH THIS GUARANTY.

         22. Notices. All notices and other communications required or permitted
to be given under this  Guaranty  shall be given or made in writing and shall be
delivered in the manner and to the  addresses,  and shall be deemed to have been
duly given when, specified in the Credit Agreement.

         23. Survival. All representations, warranties, covenants and agreements
of Guarantor in this Guaranty shall survive the execution of this Guaranty.

         24.  Counterparts.  This  Guaranty  may be  executed  in any  number of
counterparts,  each of which shall constitute an original, but all of which when
taken together shall constitute one and the same Guaranty.

         25.  Limitation on Interest.  Notwithstanding  anything to the contrary
contained or referred to in this  Guaranty,  none of the terms and provisions of
this Guaranty, the Credit Agreement,  the Notes or any other Loan Document shall
ever be construed to create a contract or  obligation  to pay interest at a rate
in excess of the Maximum Rate, and neither  Administrative  Agent nor any Lender
shall ever charge, receive, take, collect,  reserve or apply, as interest on the
Obligations or the Guaranteed  Obligations,  any amount in excess of the Maximum
Rate. The parties hereto agree that any interest,  charge, fee, expense or other
indebtedness,  liability or obligation provided for in this Guaranty, the Credit
Agreement, the Notes or any other Loan Document which constitutes interest under
applicable law shall be, ipso facto and under any and all circumstances, limited
or reduced to an amount equal to the lesser of (a) the amount of such  interest,
charge, fee, expense or other

                                       13
<PAGE>

indebtedness,  liability or  obligation  that would be payable in the absence of
this  Paragraph  25 or (b) an amount,  which  when  added to all other  interest
payable under this Guaranty, the Credit Agreement,  the Notes and any other Loan
Document,   equals  the  Maximum  Rate.  If,   notwithstanding   the  foregoing,
Administrative Agent or any Lender ever contracts for, charges, receives, takes,
collects,  reserves or applies as  interest  any amount in excess of the Maximum
Rate,  such amount which would be deemed  excessive  interest  shall be deemed a
partial payment or prepayment of principal of the Obligations and the Guaranteed
Obligations  and  treated  hereunder  as such,  and if the  Obligations  and the
Guaranteed  Obligations,  or applicable portions thereof,  are paid in full, any
remaining  excess shall  promptly be paid to  Borrower,  Guarantor or such other
Person (as  appropriate).  In determining  whether the interest paid or payable,
under any specific contingency,  exceeds the Maximum Rate, Guarantor,  Borrower,
Administrative  Agent and Lenders  shall,  to the maximum  extent  permitted  by
applicable law, (i) characterize any nonprincipal  payment as an expense, fee or
premium  rather than as interest,  (ii) exclude  voluntary  prepayments  and the
effects thereof,  and (iii) amortize,  prorate,  allocate and spread in equal or
unequal parts the total amount of interest  throughout  the entire  contemplated
term of the Obligations and the Guaranteed  Obligations,  or applicable portions
thereof,  so that the interest rate does not exceed the Maximum Rate at any time
during the term of the  Obligations  and the  Guaranteed  Obligations;  provided
that, if the unpaid principal balance is paid and performed in full prior to the
end of the full contemplated term thereof,  and if the interest received for the
actual  period of existence  thereof  exceeds the Maximum  Rate,  Administrative
Agent and Lenders  shall refund to Borrower,  Guarantor or such other Person (as
appropriate)   the  amount  of  such  excess   and,   in  such  event,   neither
Administrative  Agent nor any Lender shall be subject to any penalties  provided
by any  laws for  contracting  for,  charging,  receiving,  taking,  collecting,
receiving or applying interest in excess of the Maximum Rate.

         26 Irrevocable Nature of Guaranty.  This Guaranty may not be revoked by
Guarantor; provided, however, in the event it shall be determined that Guarantor
shall have the right, in accordance with applicable law and  notwithstanding its
express agreement herein to the contrary, to revoke this Guaranty, Guarantor may
deliver to  Administrative  Agent,  at its  address for notices set forth in the
Credit  Agreement,  written  notice of  Guarantor's  intention  not to be liable
hereunder for any  Guaranteed  Obligations  arising,  created or incurred  after
Administrative  Agent's  receipt of such notice,  whereupon such notice shall be
effective  to the extent (but only to the  extent)  provided  hereinbelow  as to
Guarantor  from and after (but not before) the time when such notice is actually
delivered  to and  received by and  receipted  for in writing by  Administrative
Agent (the "Effective Revocation Time"); provided,  further,  however, that such
notice shall not be effective as to, and shall not in any way  restrict,  limit,
impair,   release  or  otherwise  affect,   the  indebtedness,   liabilities  or
obligations of Guarantor  under this Guaranty with respect to (a) any Guaranteed
Obligations  consisting of  indebtedness,  liabilities or obligations  under the
Credit Agreement, the Notes or any other Loan Document,  whether incurred before
or after the Effective  Revocation  Time  (including,  without  limitation,  any
loans,  advances or  extensions  of credit at any time made or created under the
Credit Agreement, whether or not agreed, committed or contemplated to be made by
Administrative  Agent  or any  Lender  and  whether  or not  discretionary  with
Administrative  Agent or any Lender),  (b) any Guaranteed  Obligations  arising,
created or incurred prior to the Effective  Revocation Time, (c) any amendments,
modifications,  renewals,  extensions,  restatements and/or supplements to or of
the indebtedness,  liabilities or obligations referred to in clauses (a) and (b)
preceding,  whether occurring

                                       14
<PAGE>

before or after the Effective  Revocation  Time, or (d) any interest or costs of
collection with respect to any of the  indebtedness,  liabilities or obligations
referred to in clauses (a), (b) or (c)  preceding.  Any  revocation or attempted
revocation of this Guaranty, whether in whole or in part, shall not be effective
except  under  limited  circumstances  (if  any),  and  to the  limited  extent,
expressly provided in this Paragraph 26.

         27 Reinstatement of Guaranteed Obligations. Notwithstanding anything to
the  contrary  contained  in this  Guaranty or any other Loan  Document,  if the
payment of any amount of principal of or interest with respect to the Guaranteed
Obligations,  or any portion thereof, is rescinded,  voided or must otherwise be
refunded by the  Administrative  Agent or any Lender or otherwise for any reason
whatsoever, then the Guaranteed Obligations will be automatically reinstated and
become  automatically  effective and in full force and effect, all to the extent
that and as though such payment so rescinded,  voided or otherwise  refunded had
never been made.

         28 Covenants and  Agreements.  Guarantor  covenants and agrees that, as
long as the Guaranteed  Obligations  or any part thereof are  outstanding or any
Lender has any Commitment under the Credit Agreement,  it will comply,  strictly
in  accordance  with the  terms  thereof,  with  all  covenants  and  agreements
specifically  applicable  to it as set  forth  in any one or more of the  Credit
Agreement and the other Loan Documents,  all of which are incorporated herein by
reference.

         29  Amendment  and  Restatement.  This  Guaranty  shall  constitute  an
amendment  and  restatement  of  all,  but  not  an  extinguishment,  discharge,
satisfaction or novation of any,  indebtedness,  liabilities  and/or obligations
(including,  without  limitation,  the "Guaranteed  Obligations" as such term is
defined in the Original Guaranty) of Guarantor under the Original Guaranty.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       15
<PAGE>

         IN WITNESS  WHEREOF,  the  undersigned has executed this Guaranty as of
the date first written above.

                                    GUARANTOR:
                                    ---------

                                    SAVVIS COMMUNICATIONS
                                    CORPORATION

                                    By:  /s/ David J. Frear
                                       ----------------------------
                                    Name:  David J. Frear

                                    Title: Executive Vice President,
                                           Chief Financial Officer

         The  undersigned  has executed this Guaranty  solely for the purpose of
confirming   receipt  of  this   Guaranty  and  reliance  on  this  Guaranty  by
Administrative Agent and Lenders as of the date first written above.

                                    NORTEL NETWORKS INC.,
                                    as Administrative Agent

                                    By: /s/ Mitchell L. Stone
                                       -------------------------------
                                       Name:   Mitchell L. Stone
                                       Title:  Director, Customer Finance

                                       16

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