Document:

EXECUTION VERSION

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                                CREDIT AGREEMENT

                            dated as of June 30, 2000

                                  by and among

            SAVVIS COMMUNICATIONS CORPORATION, a Delaware Corporation
                                 as a Guarantor,

            SAVVIS COMMUNICATIONS CORPORATION, a Missouri Corporation
                                as the Borrower,

                              NORTEL NETWORKS INC.
                           as the Administrative Agent

                                       and

                            THE LENDERS NAMED HEREIN

                    $38,000,000 ADVANCING TERM LOANS FACILITY

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                                TABLE OF CONTENTS

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ARTICLE 1

         Definitions..............................................................................................1
         Section 1.1       Definitions, etc.......................................................................1
         Section 1.2       Other Definitional Provisions.........................................................20
         Section 1.3       Accounting Terms and Determinations...................................................20
         Section 1.4       Financial Covenants and Reporting.....................................................21

ARTICLE 2

         Loans...................................................................................................21
         Section 2.1       Commitments...........................................................................21
         Section 2.2       Notes.................................................................................22
         Section 2.3       Repayment of Loans....................................................................22
         Section 2.4       Interest..............................................................................22
         Section 2.5       Borrowing Procedure...................................................................23
         Section 2.6       Optional Prepayments, Conversions and Continuations of Loans..........................24
         Section 2.7       Mandatory Prepayments.................................................................25
         Section 2.8       Minimum Amounts.......................................................................25
         Section 2.9       Certain Notices.......................................................................26
         Section 2.10      Use of Proceeds.......................................................................26
         Section 2.11      Fees..................................................................................27
         Section 2.12      Computations..........................................................................27
         Section 2.13      Termination or Reduction of Commitments...............................................27

ARTICLE 3

         Payments................................................................................................28
         Section 3.1       Method of Payment and Application of Payments.........................................28
         Section 3.2       Pro Rata Treatment....................................................................29
         Section 3.3       Sharing of Payments, Etc..............................................................29
         Section 3.4       Non-Receipt of Funds by the Administrative Agent......................................29
         Section 3.5       Taxes.................................................................................30
         Section 3.6       Withholding Tax Exemption.............................................................31
         Section 3.7       Reinstatement of Obligations..........................................................31
         Section 3.8       No Force Majeure, Disputes............................................................31
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ARTICLE 4

         Yield Protection and Illegality.........................................................................32
         Section 4.1       Additional Costs......................................................................32
         Section 4.2       Limitation on Types of Loans..........................................................33
         Section 4.3       Illegality............................................................................34
         Section 4.4       Treatment of Affected Loans...........................................................34
         Section 4.5       Compensation..........................................................................35
         Section 4.6       Capital Adequacy......................................................................35
         Section 4.7       Additional Interest on Eurodollar Loans...............................................36

ARTICLE 5

         Security................................................................................................36
         Section 5.1       Collateral............................................................................36
         Section 5.2       Guaranties............................................................................37
         Section 5.3       New Subsidiaries......................................................................36
         Section 5.4       Landlord Waivers......................................................................37
         Section 5.5       Further Assurances....................................................................37
         Section 5.6       Setoff................................................................................38

ARTICLE 6

         Conditions Precedent....................................................................................38
         Section 6.1       Initial Extension of Credit...........................................................38
         Section 6.2       All Extensions of Credit..............................................................42
         Section 6.3       Closing Certificates..................................................................43

ARTICLE 7

         Representations and Warranties..........................................................................43
         Section 7.1       Existence.............................................................................43
         Section 7.2       Financial Statements..................................................................43
         Section 7.3       Corporate Action; No Breach...........................................................44
         Section 7.4       Operation of Business; Licenses.......................................................44
         Section 7.5       Intellectual Property.................................................................45
         Section 7.6       Litigation and Judgments..............................................................45
         Section 7.7       Rights in Properties; Liens...........................................................45
         Section 7.8       Enforceability........................................................................46
         Section 7.9       Approvals.............................................................................46
         Section 7.10      Debt..................................................................................46
         Section 7.11      Taxes.................................................................................46
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         Section 7.12      Margin Securities.....................................................................46
         Section 7.13      ERISA.................................................................................46
         Section 7.14      Disclosure............................................................................47
         Section 7.15      Loan Parties; Capitalization..........................................................47
         Section 7.16      Compliance with Laws..................................................................48
         Section 7.17      Investment Company Act................................................................48
         Section 7.18      Public Utility Holding Company Act....................................................48
         Section 7.19      Environmental Matters.................................................................48
         Section 7.20      Year 2000 Compliance..................................................................49
         Section 7.21      Labor Disputes and Acts of God........................................................49
         Section 7.22      Material Contracts....................................................................49
         Section 7.23      Outstanding Securities................................................................50
         Section 7.24      Solvency..............................................................................50
         Section 7.25      Employee Matters......................................................................50
         Section 7.26      Insurance.............................................................................50
         Section 7.27      Common Enterprise.....................................................................50
         Section 7.28      Burdensome Agreements.................................................................50
         Section 7.29      Most Favored Lender...................................................................51

ARTICLE 8

         Affirmative Covenants...................................................................................51
         Section 8.1       Reporting Requirements................................................................51
         Section 8.2       Maintenance of Existence; Conduct of Business.........................................54
         Section 8.3       Maintenance of Properties and Licenses................................................54
         Section 8.4       Taxes and Claims......................................................................54
         Section 8.5       Insurance.............................................................................54
         Section 8.6       Inspection Rights.....................................................................56
         Section 8.7       Keeping Books and Records.............................................................56
         Section 8.8       Compliance with Laws..................................................................56
         Section 8.9       Compliance with Agreements............................................................56
         Section 8.10      Further Assurances....................................................................56
         Section 8.11      ERISA.................................................................................57
         Section 8.12      Non-Consolidation.....................................................................57
         Section 8.13      Year 2000 Compliance..................................................................57
         Section 8.14      Trade Accounts Payable................................................................57
         Section 8.15      Ownership of Telecommunications Assets and Telecommunications
                           Business; Holdings to Remain a Holding Company........................................57
         Section 8.16      Most Favored Lender...................................................................58
         Section 8.17      Foreign Subsidiaries..................................................................58
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ARTICLE 9

         Negative Covenants......................................................................................58
         Section 9.1       Limitation on Liens...................................................................58
         Section 9.2       Mergers, Etc..........................................................................58
         Section 9.3       Investments...........................................................................59
         Section 9.4       Transactions with Affiliates..........................................................60
         Section 9.5       Disposition of Collateral.............................................................60
         Section 9.6       Lines of Business.....................................................................60
         Section 9.7       Environmental Protection..............................................................60
         Section 9.8       Master Purchase Agreement.............................................................60
         Section 9.9       Modification of Certain Agreements....................................................61
         Section 9.10      ERISA.................................................................................61

ARTICLE 10

         Financial Covenants.....................................................................................61
         Section 10.1      EBITDA................................................................................61

ARTICLE 11

         Default.................................................................................................61
         Section 11.1      Events of Default.....................................................................61
         Section 11.2      Remedies..............................................................................64
         Section 11.3      Performance by the Administrative Agent, etc..........................................65

ARTICLE 12

         The Administrative Agent................................................................................66
         Section 12.1      Appointment, Powers and Immunities....................................................66
         Section 12.2      Rights of Administrative Agent as a Lender............................................67
         Section 12.3      Defaults..............................................................................67
         Section 12.4      INDEMNIFICATION.......................................................................67
         Section 12.5      Independent Credit Decisions..........................................................68
         Section 12.6      Several Commitments...................................................................68
         Section 12.7      Successor Administrative Agent........................................................69

ARTICLE 13

         Miscellaneous...........................................................................................69
         Section 13.1      Expenses..............................................................................69
         Section 13.2      INDEMNIFICATION.......................................................................70
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         Section 13.3      Limitation of Liability...............................................................71
         Section 13.4      No Duty...............................................................................71
         Section 13.5      No Fiduciary Relationship.............................................................71
         Section 13.6      Equitable Relief......................................................................71
         Section 13.7      No Waiver; Cumulative Remedies........................................................72
         Section 13.8      Successors and Assigns................................................................72
         Section 13.9      Survival..............................................................................75
         Section 13.10     ENTIRE AGREEMENT......................................................................76
         Section 13.11     Amendments............................................................................76
         Section 13.12     Maximum Interest Rate.................................................................77
         Section 13.13     Notices...............................................................................78
         Section 13.14     GOVERNING LAW; SUBMISSION TO JURISDICTION;
                           SERVICE OF PROCESS....................................................................78
         Section 13.15     Counterparts..........................................................................79
         Section 13.16     Severability..........................................................................79
         Section 13.17     Headings..............................................................................79
         Section 13.18     Construction..........................................................................79
         Section 13.19     Independence of Covenants.............................................................79
         Section 13.20     Confidentiality.......................................................................79
         Section 13.21     WAIVER OF JURY TRIAL..................................................................80
         Section 13.22     Approvals and Consent.................................................................80
         Section 13.23     Service of Process....................................................................81

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                                INDEX TO EXHIBITS

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Exhibit A           -    Form of Assignment and Acceptance
Exhibit B           -    Form of Note
Exhibit C           -    Form of Notice of Borrowings, Conversions, Continuations and Prepayments
Exhibit D           -    Form of Compliance Certificate
Exhibit E           -    Form of Certificate of No Encumbrances
Exhibit F           -    Form of Pledge Agreement

                                                INDEX TO SCHEDULES

Schedule 1.1(a)     -    Certain Permitted Holders
Schedule 1.1(b)     -    Certain Permitted Liens

Schedule 5.5        -    Locations of Nortel Networks Equipment to Be Maintained Outside the United
                         States
Schedule 7.4        -    Licenses
Schedule 7.5        -    Intellectual Property
Schedule 7.6        -    Litigation, Etc.
Schedule 7.7        -    Real Property
Schedule 7.10       -    Existing Debt
Schedule 7.13       -    Plans
Schedule 7.15       -    Loan Parties; Capitalization
Schedule 7.22       -    Material Contracts
Schedule 7.25       -    Employee Matters
Schedule 7.26       -    Insurance
Schedule 8.13       -    Year 2000 Compliance
Schedule 8.15       -    Telecommunications Assets Not Owned by the Borrower and its Subsidiaries
Schedule 9.3        -    Certain Investments
Schedule 10.1       -    EBITDA

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CREDIT AGREEMENT - Page vi

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                                CREDIT AGREEMENT

         THIS  CREDIT  AGREEMENT,  dated as of June 30,  2000,  is by and  among
SAVVIS COMMUNICATIONS  CORPORATION, a Delaware corporation ("Holdings"),  SAVVIS
COMMUNICATIONS CORPORATION, a Missouri corporation (the "Borrower"), each of the
lending entities which is a party hereto (as evidenced by the signature pages of
this Agreement) or which may from time to time become a party hereto as a lender
or  any   successor  or  assignee   thereof   (individually,   a  "Lender"  and,
collectively,  the "Lenders"), and NORTEL NETWORKS INC., a Delaware corporation,
as  administrative  agent for itself and the other  Lenders  (in such  capacity,
together with its successors in such capacity, the "Administrative Agent").

                                    RECITALS:

         A. The Borrower  desires to obtain a  $38,000,000  advancing  term loan
facility  to  finance a  portion  of the  Borrower's  costs to  purchase  Nortel
Networks Goods and Installation Services.

         B. The Lender(s)  identified on the signature  pages of this  Agreement
desire  to  provide  such  credit   facilities   with  the   assistance  of  the
Administrative  Agent upon and subject to the terms and provisions  contained in
this Agreement.

         NOW,  THEREFORE,  in  consideration  of the  premises  and  the  mutual
covenants herein contained, the parties hereto hereby agree as follows:

                                    ARTICLE 1

                                   Definitions

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

         "Additional Costs" means as specified in Section 4.1(a).

         "Adjusted  Eurodollar  Rate"  means,  for any  Eurodollar  Loan for any
Interest Period therefor, the rate per annum (rounded upwards, if necessary,  to
the nearest 1/16 of one percent)  determined by the  Administrative  Agent to be
equal to (a) the  Eurodollar  Rate for such  Eurodollar  Loan for such  Interest
Period divided by (b) one minus the Reserve Requirement for such Eurodollar Loan
for such Interest Period.

         "Adjusted Net Income"  means,  as to any Person (the "subject  Person")
and its Consolidated  Subsidiaries  and for any period,  Consolidated Net Income
less the following (without duplication) to the extent that any of the following
shall have been included in Consolidated Net Income for such period: (a) any net
gain or loss arising from the sale of any property,  plant or equipment; (b) any
net gain or loss

CREDIT AGREEMENT - Page 1

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arising from any write-up or write-down of assets; (c) earnings or losses of any
other Person, substantially all of the assets of which have been acquired by the
subject Person or a Consolidated Subsidiary of the subject Person in any manner,
to the extent that such  earnings or losses were  realized by such other  Person
prior to the date of such  acquisition;  (d)  earnings  or losses of any  Person
(other  than a  Consolidated  Subsidiary  of the  subject  Person)  in which the
subject  Person  or a  Consolidated  Subsidiary  of the  subject  Person  has an
ownership  interest,  unless such  earnings  have  actually been received by the
subject   Person  or  such   Consolidated   Subsidiary   in  the  form  of  cash
distributions;  and (e) any net gain or loss arising from the acquisition of any
securities  of the subject  Person or a  Consolidated  Subsidiary of the subject
Person.

         "Administrative Agent" means as specified in the introductory paragraph
of this Agreement.

         "Administrative  Agent's Letter" means the letter agreement dated as of
June 30, 2000 between the Administrative Agent and the Borrower.

         "Affiliate" means, as to any Person (the "subject  Person"),  any other
Person  (a) that  directly  or  indirectly  through  one or more  intermediaries
controls or is  controlled  by, or is under  direct or indirect  common  control
with, the subject Person,  (b) that directly or indirectly  beneficially owns or
holds ten  percent or more of any class of voting  Capital  Stock of the subject
Person,  or (c) ten  percent  or more of the  voting  Capital  Stock of which is
directly or indirectly beneficially owned or held by the subject Person. For the
purposes  of this  definition,  "control"  when used with  respect to any Person
means the power to direct the management  and policies of such Person,  directly
or indirectly,  whether through the ownership of voting securities,  by contract
or  otherwise;  and the  terms  "controlling"  and  "controlled"  have  meanings
correlative to the foregoing.  For purposes of the Loan  Documents,  neither the
Administrative  Agent nor any Lender  shall be deemed to be an  Affiliate of the
Borrower or any other Loan Party.

         "Agreement"   means  this   Agreement  and  any  and  all   amendments,
modifications, supplements, renewals, extensions or restatements hereof.

         "Amortization  Commencement Date" means the earlier to occur of (a) the
last day of the calendar quarter in which the Commitment Termination Date occurs
or (b) the date six (6) months after the Closing Date, if less than  $15,000,000
in aggregate principal amount of the Loans has been advanced as of such date.

         "Applicable  Lending  Office"  means,  for each Lender and each Type of
Loan,  the  lending  office of such  Lender  (or an  Affiliate  of such  Lender)
designated  for such Type of Loan below its name on the  signature  pages hereof
(or, with respect to a Lender that becomes a party to this Agreement pursuant to
an assignment  made in  accordance  with Section  13.8,  in the  Assignment  and
Acceptance  executed by it) or such other office of such Lender (or an Affiliate
of such Lender) as such Lender may from time to time specify to the Borrower and
the Administrative Agent as the office by which such Lender's Loans of such Type
are to be made and maintained.

CREDIT AGREEMENT - Page 2

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         "Applicable  Margin" means (a) with respect to each Base Rate Loan, two
percent  (2.00%) and (b) with respect to each  Eurodollar  Loan,  three  percent
(3.00%).

         "Approved  Fund" means (a) with  respect to any Lender  which is a fund
primarily  engaged in making,  purchasing  or otherwise  investing in commercial
loans,  any other fund which is  primarily  engaged  in  making,  purchasing  or
otherwise investing in commercial loans or extending, or investing in extensions
of, credit for its own account in the ordinary  course of its business and which
is managed or advised  by the same  investment  advisor as such  Lender or by an
Affiliate  of such  investment  advisor or (b) any other  entity  which has been
approved  by the  Administrative  Agent and which is (or which is  managed  by a
manager which manages funds which are) primarily  engaged in making,  purchasing
or  otherwise  investing  in  commercial  loans or  extending,  or  investing in
extensions  of,  credit  for its  own  account  in the  ordinary  course  of its
business;  provided, however, that Approved Fund shall not include any Affiliate
of the Borrower.

         "Asset Disposition" means the disposition of any or all of the Property
of the Borrower or any of its Subsidiaries,  whether by sale,  lease,  transfer,
assignment,  condemnation or otherwise,  but excluding (a) sales of inventory in
the ordinary  course of business,  (b) the grant of a Lien as security,  (c) any
involuntary  disposition  resulting  from casualty  damage to Property,  and (d)
dispositions  of equipment if and to the extent that the  equipment  disposed of
is,  concurrently  therewith,  exchanged  or replaced by  equipment  of equal or
greater value.

         "Assignee" means as specified in Section 13.8(b).

         "Assigning Lender" means as specified in Section 13.8(b).

         "Assignment and Acceptance" means an assignment and acceptance  entered
into by a Lender and its  Assignee  and  accepted  by the  Administrative  Agent
pursuant to Section 13.8(e), in substantially the form of Exhibit A hereto.

         "Bankruptcy Code" means as specified in Section 11.1(e).

         "Base Rate" means, at any time, the greater of (a) the rate of interest
per annum then most recently  announced or  established by the Reference Bank at
its principal  office in New York City as its highest  commercial  prime or base
rate then in effect,  or (b) the Federal Funds Rate then in effect plus one-half
of one percent (0.50%).  The Base Rate may not necessarily be the lowest rate of
interest charged by the Reference Bank to its commercial borrowers.  Each change
in any  interest  rate  provided for herein based upon the prime or base rate or
the Federal Funds Rate  resulting from a change in the prime or base rate or the
Federal  Funds  Rate,  respectively,  shall take  effect  without  notice to the
Borrower  at the time of such  change in the  prime or base rate or the  Federal
Funds Rate, respectively.

         "Base Rate Loans"  means  Loans that bear  interest at rates based upon
the Base Rate.

CREDIT AGREEMENT - Page 3

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         "Basle  Accord" means the proposals for  risk-based  capital  framework
described  by  the  Basle  Committee  on  Banking  Regulations  and  Supervisory
Practices  in  its  paper   entitled   "International   Convergence  of  Capital
Measurement and Capital Standards" dated July 1988, as amended, supplemented and
otherwise modified and in effect from time to time, or any replacement thereof.

         "Board of Directors"  means (a) with respect to any Loan Party which is
a corporation, the board of directors of such Loan Party and (b) with respect to
any Loan  Party  which is not a  corporation,  an  analogous  body,  officer  or
representative  of such Loan Party  which is the  functional  equivalent  of the
board of directors  of a  corporation  and which has the power and  authority to
authorize and  effectuate the  execution,  delivery and  performance of the Loan
Documents  to be  executed  by such Loan Party and other  actions to be taken by
such Loan Party.

         "Board  Resolution"  means  a copy  of a  resolution  certified  by the
Secretary or an Assistant  Secretary or analogous  officer of any Loan Party, as
applicable based upon the context in which such term appears,  to have been duly
adopted by its Board of Directors and to be in full force and effect on the date
of such certification.

         "Borrower"  means  as  specified  in  the  initial  paragraph  of  this
Agreement.

         "Business Day" means (a) any day other than a Saturday, Sunday or other
day on which  commercial banks are authorized or required by law to close in New
York,  New York or  Dallas,  Texas,  and (b)  with  respect  to all  borrowings,
payments, Conversions, Continuations, Interest Periods and notices in connection
with Eurodollar  Loans,  any day which is a Business Day described in clause (a)
above and which is also a day on which  dealings in Dollar  deposits are carried
out in the London interbank market.

         "Business  Plan" means the Borrower's  marketing and Network  build-out
plans, budget and schedule as submitted to the Administrative  Agent,  including
financial projections of Holdings and its Consolidated  Subsidiaries (including,
without  limitation,  the  Borrower)  for the ten year period  beginning  on the
Closing  Date,  certified  by the chief  financial  officer of Holdings as being
prepared generally in accordance with the policies and procedures of GAAP to the
extent of the information  presented therein,  such projections giving effect to
the Debt to be  incurred  under this  Agreement  as well as the other Debt to be
incurred by  Holdings  and its  Consolidated  Subsidiaries  (including,  without
limitation, the Borrower) during such period, as modified,  amended, replaced or
superceded by any Business  Plan  subsequently  submitted to the  Administrative
Agent in accordance with Section 8.1(j).

         "Capital  Lease   Obligations"   means,   as  to  any  Person  and  its
Consolidated Subsidiaries,  the obligations of such Persons to pay rent or other
amounts  under a lease of (or other  agreement  conveying the right to use) real
and/or personal Property, which obligations are classified as a capital lease on
a balance sheet of such Persons under GAAP. For purposes of this Agreement,  the
amount  of such  Capital  Lease  Obligations  shall  be the  capitalized  amount
thereof, determined in accordance with GAAP.

CREDIT AGREEMENT - Page 4

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         "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.

         "Change in Control"  means the  existence or  occurrence  of any of the
following:  (a) any of the Capital  Stock of the Borrower is owned by any Person
other than Holdings;  (b) any Capital Stock of any Subsidiary of the Borrower is
owned by any Person other than the Borrower or a Wholly- Owned Subsidiary of the
Borrower;  (c) any  Person  or two or more  Persons  (other  than the  Permitted
Holders)  acting as a group (as defined in Section  13d-3 of the  Exchange  Act)
shall have acquired  beneficial  ownership  (within the meaning of Rule 13d-3 of
the  Securities  and Exchange  Commission  under the Exchange Act) of (i) 35% or
more of the outstanding  shares of Voting Stock of Holdings and (ii) more Voting
Stock of Holdings than is beneficially owned, in the aggregate, by the Permitted
Holders; or (d) individuals who, as of the Closing Date, constitute the Board of
Directors of Holdings (the "Holdings  Incumbent  Board") cease for any reason to
constitute at least a majority of the Board of Directors of Holdings;  provided,
however,  that any individual  becoming a director of Holdings subsequent to the
Closing Date whose election or nomination for election by Holdings' shareholders
was approved by a vote of at least a majority of the directors  then  comprising
the Holdings  Incumbent Board shall be considered as though such individual were
a member of the Holdings Incumbent Board, but excluding,  for this purpose,  any
such individual whose initial  assumption of office occurs as a result of either
an actual or threatened  election contest (as such terms are used in Rule 14a-11
of  Regulation  14A  promulgated  under  the  Exchange  Act) or other  actual or
threatened  solicitation of proxies or contest by or on behalf of a Person other
than the Board of Directors of Holdings.

         "Closing Date" means June 30, 2000, the date of this Agreement.

         "Code" means the Internal  Revenue  Code of 1986,  as amended,  and the
regulations promulgated and rulings issued thereunder.

         "Collateral"  means all assets of the Borrower described in Section 5.1
and assets of the Borrower upon which a Lien is created or purported or required
(in  accordance  with the Loan  Documents) to be created by any Loan Document as
security for the Obligations or any portion thereof.

         "Commitment"  means, as to any Lender,  such Lender's  Commitment,  and
"Commitments"  means,  as to any one or more of the  Lenders,  such  Lender's or
Lenders' Commitments, collectively.

         "Commitment Percentage" means, as to any Lender and its Commitment, the
percentage equivalent of a fraction, the numerator of which is the amount of the
outstanding Commitments of such Lender (or, if such Commitment has terminated or
expired,  the  outstanding  principal  amount of Loans of such  Lender)  and the
denominator of which is the aggregate  amount of the outstanding  Commitments of
all Lenders (or,

CREDIT AGREEMENT - Page 5

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if such  Commitments  have  terminated  or expired,  the  aggregate  outstanding
principal  amount of Loans of all  Lenders),  as  adjusted  from time to time in
accordance with Section 13.8.

         "Commitment Termination Date" means June 30, 2001.

         "Communications  Act"  means the  Communications  Act of 1934,  and any
similar or successor  federal statute,  and the rules and regulations of the FCC
thereunder, all as amended and as the same may be in effect from time to time.

         "Consolidated  Interest  Expense"  means,  as to  any  Person  and  its
Consolidated  Subsidiaries  and for any  period,  and without  duplication,  all
interest on Debt of such  Persons  paid or payable in cash  during such  period,
including the interest portion of payments under Capital Lease Obligations.

         "Consolidated  Net Income" means, as to any Person and its Consolidated
Subsidiaries  and for any period,  the net income (or loss) of such  Persons for
such period, determined on a consolidated basis in accordance with GAAP.

         "Consolidated  Subsidiary"  means,  with  respect  to any  Person,  any
Subsidiary the financial  attributes of which are or would be consolidated  with
those of such Person in the consolidated  financial statements of such Person in
accordance with GAAP.

         "Continue",   "Continuation"   and  "Continued"   shall  refer  to  the
continuation  pursuant to Section 2.6 of a Eurodollar  Loan as a Eurodollar Loan
of the same Type from one Interest Period to the next Interest Period.

         "Contract Rate" means as specified in Section 13.12(a).

         "Convert",  "Conversion"  and  "Converted"  shall refer to a conversion
pursuant  to Section 2.6 or Article 4 of one Type of Loan into the other Type of
Loan.

         "Current Date" means (a) a date occurring no more than 90 days prior to
the  Closing  Date  or  other  relevant  date  as may be  specified  herein  (as
applicable)  or (b) such earlier date which is acceptable to the  Administrative
Agent.

         "Debt" means as to any Person at any time  (without  duplication):  (a)
all indebtedness, liabilities and obligations of such Person for borrowed money;
(b) all  indebtedness,  liabilities and obligations of such Person  evidenced by
bonds,  notes,  debentures or other similar  instruments;  (c) all indebtedness,
liabilities and obligations of such Person to pay the deferred purchase price of
Property or services,  except trade  accounts  payable of such Person arising in
the  ordinary  course of business;  (d) all Capital  Lease  Obligations  of such
Person;  (e) all Debt of others Guaranteed by such Person; (f) all indebtedness,
liabilities and obligations secured by a Lien existing on Property owned by such
Person,  whether or not the  indebtedness,  liabilities or  obligations  secured
thereby have been assumed by such Person or are non-recourse to such

CREDIT AGREEMENT - Page 6

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Person; (g) all reimbursement  obligations of such Person (whether contingent or
otherwise)  in respect of letters  of credit,  bankers'  acceptances,  surety or
other bonds and  similar  instruments;  (h) all  indebtedness,  liabilities  and
obligations  of such Person to redeem or retire  shares of Capital Stock of such
Person;  (i) all indebtedness,  liabilities and obligations of such Person under
Interest Rate Protection Agreements;  and (j) all indebtedness,  liabilities and
obligations  of such Person in respect of  unfunded  vested  benefits  under any
pension plans.

         "Default"  means an Event of Default or the  occurrence  of an event or
condition  which with  notice or lapse of time or both would  become an Event of
Default.

         "Default  Rate" means,  in respect of any  principal of any Loan at all
times during which any Default has occurred and is  continuing  or in respect of
any other amount  payable by the Borrower under this Agreement or any other Loan
Document which is not paid when due (whether at stated maturity, by acceleration
or otherwise),  a rate per annum during the period of such Default or during the
period  commencing  on the due date of such other amount until such other amount
is paid in full equal to the lesser of (a) the sum of three percent (3.00%) plus
the Base Rate as in effect from time to time plus the Applicable Margin for Base
Rate Loans or (b) the Maximum Rate;  provided,  however,  that if such amount in
default is principal  of a Eurodollar  Loan and the due date is a day other than
the last  day of an  Interest  Period  therefor,  the  "Default  Rate"  for such
principal  shall be, for the period from and  including  the due date and to but
excluding the last day of the Interest Period  therefor,  the lesser of the rate
per annum equal to (i) the sum of three  percent  (3.00%) plus the interest rate
for such  Eurodollar Loan for such Interest Period as provided in clause (ii) of
Section  2.4(a)  hereof  or (ii) the  Maximum  Rate  and,  thereafter,  the rate
provided for above in this definition.

         "Dollars" and "$" mean lawful money of the U.S.

         "EBITDA" means, as to any Person and its Consolidated  Subsidiaries and
for any period,  without duplication,  the sum of the following for such Persons
for such period determined on a consolidated  basis in accordance with GAAP: (a)
Adjusted Net Income, plus (b) Consolidated Interest Expense, plus (c) income and
franchise taxes to the extent deducted in determining  Adjusted Net Income, plus
(d) depreciation and amortization  expense and other non-cash,  non-tax items to
the extent  deducted in  determining  Adjusted  Net Income,  minus (e)  non-cash
income (or losses) to the extent included in determining Adjusted Net Income.

         "Eligible  Assignee" means (a) any Lender or Affiliate of a Lender, (b)
any  commercial  bank,  savings  and loan  association,  savings  bank,  finance
company,  insurance  company,  pension  fund,  mutual  fund or  other  financial
institution  (whether a corporation,  partnership,  limited liability company or
other entity) which has been  approved by the  Administrative  Agent as a Lender
under this  Agreement  or (c) any Approved  Fund;  provided,  however,  that (i)
Eligible  Assignee  shall not include any  Affiliate  of the  Borrower  and (ii)
Eligible  Assignee  shall not include any  business  competitor  of the Borrower
engaged in the same line of business as the Borrower except after the occurrence
and during the continuance of an Event of Default.

CREDIT AGREEMENT - Page 7

<PAGE>

         "Environmental  Law" means any  federal,  state,  provincial,  local or
foreign  law,  statute,  code or  ordinance,  principle  of common law,  rule or
regulation,  as well as any  License,  order,  decree,  judgment  or  injunction
issued,  promulgated,  approved or entered thereunder,  relating to pollution or
the protection,  cleanup or restoration of the environment or natural resources,
or to the public health or safety, or otherwise  governing the generation,  use,
handling, collection,  treatment, storage, transportation,  recovery, recycling,
discharge or disposal of Hazardous Materials,  including,  without limitation as
to  U.S.  laws,  the  Comprehensive  Environmental  Response,  Compensation  and
Liability Act of 1980, 42  U.S.C.ss.9601  et seq.,  the Superfund  Amendment and
Reauthorization  Act of 1986, 99-499, 100 Stat. 1613, the Resource  Conservation
and Recovery Act of 1976, 42 U. S.  C.ss.6901 et seq., the  Occupational  Safety
and Health Act, 29 U S.C.ss.651 et seq., the Clean Air Act, 42  U.S.C.ss.7401 et
seq., the Clean Water Act, 33 U. S.  C.ss.1251 et seq.,  the Emergency  Planning
and  Community  Right to Know Act,  42 U. S.  C.ss.11001  et seq.,  the  Federal
Insecticide,  Fungicide and  Rodenticide  Act, 7  U.S.C.ss.136  et seq., and the
Toxic  Substances  Control Act, 15 U.S.C.ss.2601 et seq., and any state or local
counterparts.

         "Environmental  Liabilities"  means, as to any Person, all liabilities,
obligations,  responsibilities,  Remedial  Actions,  losses,  damages,  punitive
damages,  consequential damages,  treble damages, costs and expenses (including,
without limitation,  all reasonable fees, disbursements and expenses of counsel,
expert and consulting fees and costs of investigation and feasibility  studies),
fines,  penalties,  sanctions and interest  incurred as a result of any claim or
demand,  by any Person,  whether  based in  contract,  tort,  implied or express
warranty,  strict  liability or  criminal,  penal or civil  statute,  including,
without limitation,  any Environmental Law, License, order or agreement with any
Governmental  Authority or other Person,  arising from environmental,  health or
safety conditions or the Release or threatened  Release of a Hazardous  Material
into the environment.

         "ERISA" means the Employee  Retirement  Income Security Act of 1974, as
amended from time to time,  and the  regulations  and published  interpretations
thereunder.

         "ERISA Affiliate" means any corporation or trade or business which is a
member of a group of entities,  organizations or employers of which a Loan Party
is also a member and which is treated as a single employer within the meaning of
Sections 414(b), (c), (m) or (o) of the Code.

         "Eurodollar  Loans" means Loans that bear  interest at rates based upon
the Eurodollar Rate or the Adjusted Eurodollar Rate.

         "Eurodollar  Rate"  means,  for any  Eurodollar  Loan for any  Interest
Period  therefor,  the rate per annum  (rounded  upwards,  if necessary,  to the
nearest 1/16 of 1%) appearing on Telerate  Page 3750 (or any successor  page) as
the London  interbank  offered rate for  deposits in Dollars in the  approximate
amount of the proposed Eurodollar Loan at approximately 11:00 a.m. (London time)
two  Business  Days  prior to the first day of such  Interest  Period for a term
comparable to such  Interest  Period.  If such rate ceases to be available  from
Telerate  News  Service,   the  Eurodollar  Rate  shall  be  determined  by  the
Administrative  Agent in good faith from another  financial  reporting  service,
which service shall be reasonably acceptable to the Borrower.

CREDIT AGREEMENT - Page 8

<PAGE>

         "Event of Default" has the meaning specified in Section 11.1.

         "Exchange  Act" means the  Securities  Exchange Act of 1934, as amended
(or any successor act), and the rules and regulations  thereunder (or respective
successors thereto).

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

         "FCC Licenses" means all Licenses issued by the FCC.

         "Federal  Funds Rate" means,  for any day, the rate per annum  (rounded
upwards, if necessary, to the nearest one-sixteenth of one percent (1/16 of 1%))
equal  to  the  weighted  average  of  the  rates  on  overnight  Federal  funds
transactions  with  members of the Federal  Reserve  System  arranged by Federal
funds brokers on such day, as published by the Federal  Reserve Bank of New York
on the Business Day next succeeding  such day,  provided that (a) if the day for
which such rate is to be  determined  is not a Business  Day, the Federal  Funds
Rate for such day shall be such rate on such  transactions on the next preceding
Business Day as so published on the next succeeding Business Day and (b) if such
rate is not so published on such next succeeding Business Day, the Federal Funds
Rate for any day  shall be the  average  rate  which  would  be  charged  to the
Reference  Bank  on  such  day  on  such   transactions  as  determined  by  the
Administrative Agent.

         "GAAP" means generally  accepted  accounting  principles,  applied on a
consistent basis, as set forth in Opinions of the Accounting Principles Board of
the American  Institute of Certified Public  Accountants and/or in statements of
the Financial Accounting Standards Board and/or their respective  successors and
which are applicable in the circumstances as of the date in question. Accounting
principles are applied on a "consistent  basis" when the  accounting  principles
applied in a current  period are  comparable  in all material  respects to those
accounting principles applied in a preceding period.

         "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.

         "Governmental  Requirement"  means any law, statute,  code,  ordinance,
order, rule, regulation,  judgment,  decree, injunction,  franchise,  License or
other directive or requirement of any federal, state, county, municipal, parish,
provincial or other Governmental Authority or any department, commission, board,
court, agency or any other instrumentality of any of them.

         "Guarantee"  by  any  Person  means  any   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

CREDIT AGREEMENT - Page 9

<PAGE>

statement  conditions  or  otherwise)  or (b)  entered  into for the  purpose of
assuring  in 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).

         "Guarantors"  means  Holdings,  each  Subsidiary of Holdings  which has
executed a Guaranty and each other  Person  which has  executed a Guaranty,  and
"Guarantor" means any of such Persons.

         "Guaranty"  means  a  guaranty  agreement   guaranteeing   payment  and
performance  of the  Obligations  in  form  and  substance  satisfactory  to the
Administrative  Agent  executed  by a Guarantor  in favor of the  Administrative
Agent and the Lenders, and any and all amendments,  modifications,  supplements,
renewals, extensions or restatements thereof.

         "Hazardous  Material"  means any  substance,  product,  liquid,  waste,
pollutant,  chemical,  contaminant,  insecticide,  pesticide,  gaseous  or solid
matter,  organic  or  inorganic  matter,  fuel,  micro-  organisms,  ray,  odor,
radiation,  energy,  vector,  plasma,  constituent  or material  which (a) is or
becomes listed, regulated or addressed under any Environmental Law or (b) is, or
is deemed to be, alone or in any combination, hazardous, hazardous waste, toxic,
a pollutant,  a deleterious substance, a contaminant or a source of pollution or
contamination  under  any  Environmental  Law,  including,  without  limitation,
asbestos, petroleum,  underground storage tanks (whether empty or containing any
substance) and polychlorinated biphenyls.

         "Holdings"  means  SAVVIS   Communications   Corporation,   a  Delaware
corporation.

         "Insurance  Recovery"  means,  with  respect  to  any  Property  of the
Borrower  or any of its  Subsidiaries  and  any  single  occurrence  or  related
occurrences  with respect thereto,  the receipt or constructive  receipt by such
Loan Party, or the payment by an insurance company to the Administrative  Agent,
of proceeds of any such Property or casualty insurance.

         "Intellectual  Property"  means any U.S.  or  foreign  patents,  patent
applications,  trademarks,  trade names,  service marks,  brand names, logos and
other trade designations (including unregistered names and marks), trademark and
service  mark   registrations   and   applications,   copyrights  and  copyright
registrations and applications,  inventions,  invention  disclosures,  protected
formulae,  formulations,  processes,  methods, trade secrets, computer software,
computer programs and source codes, manufacturing research and similar technical
information,  engineering know-how, customer and supplier information,  assembly
and test data drawings or royalty rights.

CREDIT AGREEMENT - Page 10

<PAGE>

         "Interest  Period"  means,  with respect to any Eurodollar  Loan,  each
period  commencing  on the date such Loan is made or Converted  from a Base Rate
Loan or (if Continued) the last day of the next preceding  Interest  Period with
respect to such Loan,  and ending on the  numerically  corresponding  day in the
first,  second,  third or sixth calendar month  thereafter,  as the Borrower may
select as provided in Section 2.9 hereof,  except that each such Interest Period
which  commences on the last Business Day of a calendar month (or on any day for
which there is no numerically  corresponding  day in the appropriate  subsequent
calendar month) shall end on the last Business Day of the appropriate subsequent
calendar month.  Notwithstanding  the foregoing:  (a) each Interest Period which
would  otherwise  end on a day which is not a Business Day shall end on the next
succeeding  Business Day (or, if such succeeding  Business Day falls in the next
succeeding calendar month, on the next preceding Business Day); (b) any Interest
Period which would otherwise extend beyond the Maturity Date with respect to any
Loans shall end on such Maturity  Date;  (c) no more than five Interest  Periods
for Eurodollar Loans shall be in effect at the same time; (d) no Interest Period
shall have a duration of less than one month and, if the Interest Period for any
Eurodollar  Loans would otherwise be a shorter  period,  such Loans shall not be
available hereunder;  and (e) no Interest Period for a Loan may commence before,
and end after, any principal  payment date unless,  after giving effect thereto,
the aggregate  principal  amount of the Eurodollar Loans having Interest Periods
that end after such  principal  payment  date shall be equal to or less than the
amount of the applicable Loans scheduled to be outstanding  hereunder after such
principal payment date.

         "Interest  Rate  Protection  Agreement"  means,  with  respect  to  the
Borrower,  an interest rate swap, cap or collar agreement or similar arrangement
between the Borrower and one or more Lenders or other  counterparties  providing
for the transfer or mitigation of interest rate risks either  generally or under
specified contingencies.

         "Investments" means as specified in Section 9.3.

         "Lender" and "Lenders"  means as specified in the initial  paragraph of
this Agreement.

         "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).

         "Loan  Documents"  means  this  Agreement,   the  Notes,  the  Security
Documents,   the  Administrative   Agent's  Letter  and  all  other  agreements,
documents, instruments and certificates now or hereafter executed

CREDIT AGREEMENT - Page 11

<PAGE>

and/or delivered pursuant to or in connection with any of the foregoing, and any
and  all  amendments,   modifications,   supplements,  renewals,  extensions  or
restatements thereof.

         "Loan  Party"  means the  Borrower,  Holdings,  any  Subsidiary  of the
Borrower,  any Subsidiary of Holdings,  any Guarantor or any Person who grants a
Lien on any Property to secure the payment or performance of the  Obligations or
any portion thereof, and "Loan Parties" means all of such Persons.

         "Loans" means as specified in Section 2.1(a).

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

         "Material Adverse Effect" means any event,  development or circumstance
that has had or could  reasonably be expected to have a material  adverse effect
on (a) the  business,  assets,  financial  condition,  results of  operations or
prospects of Holdings and its  Subsidiaries  taken as a whole, (b) the business,
assets, financial condition,  results of operations or prospects of the Borrower
individually or of the Borrower and its  Subsidiaries  taken as a whole, (c) the
validity or  enforceability  of any of the Loan  Documents or the Liens,  rights
and/or remedies of the Administrative  Agent and/or the Lenders thereunder,  (d)
the ability of any Loan Party to pay and perform its  indebtedness,  liabilities
and/or  obligations  under  any of the  Loan  Documents,  or (e)  the  value  of
Collateral  available to the  Administrative  Agent and the Lenders after giving
effect to Liens in favor of other Persons.

         "Material Contracts" means, as to any Loan Party, any supply, purchase,
service, employment, tax, indemnity,  shareholder or other agreement or contract
for which the aggregate amount or value of services performed or to be performed
for or by, or funds or other Property transferred or to be transferred to or by,
any Loan Party to such agreement or contract,  or by which any Loan Party or any
of its Properties is otherwise bound,  during any fiscal year of such Loan Party
exceeds  $5,000,000 (or the  equivalent  amount in any currency) and any and all
amendments, modifications, supplements, renewals or restatements thereof.

         "Maturity Date" means the earlier to occur of (a) March 31, 2003 or (b)
the second anniversary of the Commitment Termination Date.

         "Maximum  Rate"  means,  with  respect  to  any  Lender,   the  maximum
non-usurious  interest rate or an amount  computed in reference to such rate (as
applicable),  if any, that any time or from time to time may be contracted  for,
taken, reserved,  charged or received with respect to the particular Obligations
as to which such rate is to be  determined,  payable to such Lender  pursuant to
this Agreement or any other Loan Document,  under laws applicable to such Lender
which are  presently  in effect  or, to the extent  allowed  by law,  under such
applicable  laws  which  may  hereafter  be in effect  and which  allow a higher
maximum  non-usurious  interest rate than applicable laws now allow. The Maximum
Rate shall be  calculated  in a manner that takes into account any and all fees,
payments  and other  charges in respect of the Loan  Documents  that  constitute
interest  under  applicable  law.  Each change in any interest rate provided for
herein based upon

CREDIT AGREEMENT - Page 12

<PAGE>

the Maximum Rate  resulting  from a change in the Maximum Rate shall take effect
without notice to the Borrower at the time of such change in the Maximum Rate.

         "Monthly Date" means the last day of each month of each year, the first
of which shall be September 30, 2000.

         "Multiemployer  Plan"  means a  multiemployer  plan  defined as such in
Section 3(37) of ERISA to which  contributions have been made by or are required
from the  Borrower  or any ERISA  Affiliate  since  1974 and which is covered by
Title IV of ERISA.

         "Net Proceeds" means,  with respect to any Asset  Disposition,  (a) the
gross amount of cash  received by the Borrower or any of its  Subsidiaries  from
such  Asset  Disposition,  minus (b) the  amount,  if any,  of all taxes paid or
payable by the Borrower or any of its Subsidiaries  directly resulting from such
Asset Disposition  (including the amount,  if any,  estimated by the Borrower in
good  faith at the time of such  Asset  Disposition  for  taxes  payable  by the
Borrower  or any of its  Subsidiaries  on or  measured  by net  income  or  gain
resulting from such Asset Disposition),  minus (c) the reasonable  out-of-pocket
costs and expenses  incurred by the Borrower or such  Subsidiary  in  connection
with such  Asset  Disposition  (including  reasonable  brokerage  fees paid to a
Person other than an Affiliate of the  Borrower)  excluding any fees or expenses
paid to an Affiliate of the Borrower, minus (d) amounts applied to the repayment
of Debt (other than the  Obligations)  secured by any Permitted Lien (if any) on
the Property  subject to the Asset  Disposition.  "Net Proceeds" with respect to
any Asset  Disposition  shall also include proceeds (after deducting any amounts
specified in clauses (b),  (c) and (d) of the  preceding  sentence) of insurance
with  respect  to any  actual or  constructive  loss of  Property,  an agreed or
compromised  loss of Property or the taking of any  Property  under the power of
eminent domain and  condemnation  awards and awards in lieu of condemnation  for
the taking of Property under the power of eminent domain.

         "Network" means the Borrower's  integrated  communications  network for
the provision of high speed data and voice  services in the U.S. as described in
the Business Plan.

         "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 the Borrower or
any Subsidiary of Holdings by Nortel Networks and/or Nortel Networks Corporation
pursuant to the Master Purchase Agreement.

CREDIT AGREEMENT - Page 13

<PAGE>

         "Nortel Networks Goods and Installation Services" means Nortel Networks
Equipment  and  related  software   (including  Nortel  Networks  Software)  and
installation  services  performed by personnel of Nortel  Networks and/or Nortel
Networks Corporation.

         "Nortel Networks  Software" means any and all software sold or licensed
by Nortel  Networks  and/or Nortel  Networks  Corporation to the Borrower or any
Subsidiary of Holdings pursuant to the Master Purchase Agreement.

         "Notes"  means  the Notes in the form of  Exhibit B hereto  made by the
Borrower  evidencing  the  Loans  and  any and  all  amendments,  modifications,
supplements,  renewals, extensions or restatements thereof and all substitutions
therefor (including  promissory notes issued by the Borrower pursuant to Section
13.8), and "Note" means any such promissory note.

         "Notice of Borrowing" means as specified in Section 2.9.

         "Obligations"  means  any  and all (a)  indebtedness,  liabilities  and
obligations of the Borrower or any other Loan Party to the Administrative  Agent
and the Lenders, or any of them,  evidenced by and/or arising pursuant to any of
the Loan  Documents  (including,  without  limitation,  this  Agreement  and the
Notes), now existing or hereafter arising,  whether direct,  indirect,  related,
unrelated, fixed, contingent, liquidated,  unliquidated, joint, several or joint
and several, including,  without limitation, (i) the obligations of the Borrower
or any  other  Loan  Party to repay  the  Loans,  to pay  interest  on the Loans
(including, without limitation, interest accruing after any, if any, bankruptcy,
insolvency,  reorganization  or  other  similar  filing)  and to pay  all  fees,
indemnities,  costs and expenses (including attorneys' fees) provided for in the
Loan  Documents  and (ii)  the  indebtedness  constituting  the  Loans  and such
interest,   fees,  indemnities,   costs  and  expenses,  and  (b)  indebtedness,
liabilities  and  obligations  of the Borrower or any other Loan Party under any
and all  Interest  Rate  Protection  Agreements  that it may enter into with any
Lender with the written  consent of the  Administrative  Agent and the  Required
Lenders.

         "Payor" means as specified in Section 3.4.

         "PBGC" means the Pension  Benefit  Guaranty  Corporation  or any entity
succeeding to all or any of its functions under ERISA.

         "Pension  Plan" means an employee  pension  benefit  plan as defined in
Section 3(2) of ERISA  (including a Multiemployer  Plan) which is subject to the
funding  requirements  under Section 302 of ERISA or Section 412 of the Code, in
whole or in part,  and which is maintained or contributed to currently or at any
time within the six years immediately preceding the Closing Date or, in the case
of a Multiemployer Plan, at any time since September 2, 1974, by any Borrower or
any ERISA Affiliate for employees of any Borrower or any ERISA Affiliate.

         "Permitted Holders" means (a) the Persons identified on Schedule 1.1(a)
hereto who are  shareholders  of  Holdings  as of the  Closing  Date and (b) any
spouse, parent, sibling, child or grandchild of any of the aforesaid individuals
(in each case,  whether  such  relationship  arises  from birth or  adoption  or
through  marriage)  or any  trust  established  for  the  benefit  of  any  such
individuals  or any spouse,  parent,  sibling,  child or  grandchild of any such
individuals  (in each  case  whether  such  relationship  arises  from  birth or
adoption or through marriage).

         "Permitted Liens" mean:

              (a) Liens disclosed on Schedule 1.1(b) hereto;

              (b) Liens securing the Obligations in favor of the  Administrative
         Agent (for the  benefit of the  Administrative  Agent and the  Lenders)
         pursuant to the Loan Documents;

              (c) encumbrances  consisting of easements,  rights-of-way,  zoning
         restrictions  or  other  restrictions  on the use of real  Property  or
         imperfections  to title that do not  (individually or in the aggregate)
         materially  affect  the value of the  Property  encumbered  thereby  or
         materially   impair  the  ability  of  the   Borrower  or  any  of  its
         Subsidiaries to use such Property in its businesses,  and none of which
         is violated in any material respect by existing or proposed  structures
         or land use;

CREDIT AGREEMENT - Page 14

<PAGE>

              (d) Liens for taxes,  assessments  or other  governmental  charges
         that are not  delinquent or which are being  contested in good faith by
         appropriate   proceedings,   which   proceedings  have  the  effect  of
         preventing  the  forfeiture  or sale of the  Property  subject  to such
         Liens,  and for which  adequate  reserves (as  determined in accordance
         with GAAP) have been established;

                  (e) Liens of mechanics, materialmen,  warehousemen,  carriers,
         landlords or other similar  statutory Liens securing  obligations  that
         are not yet due and are incurred in the ordinary  course of business or
         which are being  contested  in good faith by  appropriate  proceedings,
         which  proceedings have the effect of preventing the forfeiture or sale
         of the Property subject to such Liens, and for which adequate  reserves
         (as determined in accordance with GAAP) have been established;

                  (f) Liens resulting from good faith deposits to secure payment
         of worker's compensation or other social security programs or to secure
         the performance of tenders,  statutory  obligations,  surety and appeal
         bonds, bids,  contracts (other than for payment of Debt) or leases, all
         in the ordinary course of business;

              (g) Liens on Property other than the Collateral; and

              (h) Any extension,  renewal or replacement of any of the foregoing
         Permitted  Liens,  provided that Liens  permitted under this clause (h)
         shall not be extended or spread to cover any additional indebtedness or
         Property;

provided,  however, that except for the Liens disclosed on Schedule 1.1(b) which
are  expressly  identified as  constituting  purchase  money Liens,  none of the
Permitted Liens referred to in clause (a) preceding may have a priority equal or
prior to the  Liens in favor of the  Administrative  Agent as  security  for the
Obligations.

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

         "Plan"  means any  employee  benefit plan as defined in Section 3(3) of
ERISA established or maintained or contributed to by any Loan Party or any ERISA
Affiliate, including any Pension Plan.

         "Principal  Office"  means the principal  office of the  Administrative
Agent  in  Richardson,   Texas,   presently  located  at  2221  Lakeside  Blvd.,
Richardson, Texas 75082.

         "Prohibited Transaction" means any transaction set forth in Section 406
of ERISA or Section 4975 of the Code.

CREDIT AGREEMENT - Page 15

<PAGE>

         "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 Closing
Date.

         "Quarterly Date" means the last day of each March, June,  September and
December of each year, the first of which shall be September 30, 2000.

         "Receivables" means, as at any date of determination  thereof, each and
every  "account"  as such  term is  defined  in the  UCC and  includes,  without
limitation,  the unpaid portion of the  obligation,  as stated on the respective
invoice,  or,  if there is no  invoice,  other  writing,  of a  customer  of the
Borrower  or any of its  Subsidiaries  in respect of  services  rendered  by the
Borrower or any of its Subsidiaries.

         "Reference Bank" means Citibank, N.A.

         "Register" means as specified in Section 13.8(d).

         "Registered Note" means as specified in Section 2.2(b).

         "Registered Note Register" means as specified in Section 13.8(h).

         "Regulation  D" means  Regulation  D of the Board of  Governors  of the
Federal Reserve System as the same may be amended or  supplemented  from time to
time.

         "Regulatory Change" means, with respect to any Lender, any change after
the Closing  Date in any U.S.  federal or state or foreign  laws or  regulations
(including  Regulation  D) or the  adoption  or  making  after  such date of any
interpretations,  directives,  guidelines  or  requests  applying  to a class of
lenders  including such Lender of or under any U.S.  federal or state or foreign
laws or regulations (whether or not having the force of law) by any Governmental
Authority charged with the interpretation or administration thereof.

         "Release"  means,  as to any  Person,  any  release,  spill,  emission,
leaking,  pumping,  injection,  deposit,  discharge,   disposal,   dispersement,
leaching  or  migration  of  Hazardous  Materials  into the  indoor  or  outdoor
environment or into or out of Property owned by such Person, including,  without
limitation,  the movement of Hazardous  Materials  through or in the air,  soil,
surface water or ground water.

         "Remedial  Action" means all actions  required to (a) cleanup,  remove,
respond to,  treat or  otherwise  address  Hazardous  Materials in the indoor or
outdoor  environment,  (b)  prevent the Release or threat of Release or minimize
the  further  Release  of  Hazardous  Materials  so that they do not  migrate or
endanger  or  threaten  to  endanger  public  health or welfare or the indoor or
outdoor  environment,  (c) perform studies and  investigations on the extent and
nature of any actual or  suspected  contamination,  the remedy or remedies to be
used  or  health  effects  or  risks  of  such  contamination,  or  (d)  perform
post-remedial monitoring, care or remedy of a contaminated site.

CREDIT AGREEMENT - Page 16

<PAGE>

         "Reportable Event" means any of the events set forth in Section 4043(b)
of ERISA other than any such event for which the 30-day notice  requirement  has
been waived in regulations issued by the PBGC.

         "Required Lenders" means, at any date of determination, Lenders holding
at  least  two-thirds  (in  Dollar  amount)  of the  sum of  (a)  the  aggregate
outstanding  principal amount of the Loans, plus (b) the aggregate amount of the
outstanding Commitments.

         "Required Payment" means as specified in Section 3.4.

         "Reserve  Requirement" means, for any Eurodollar Loan of any Lender for
any Interest Period therefor,  the maximum rate at which reserves (including any
marginal,  supplemental  or emergency  reserves)  are required to be  maintained
during such Interest  Period under any  regulations of the Board of Governors of
the  Federal  Reserve  System (or any  successor)  by such  Lender for  deposits
exceeding $1,000,000 against "Eurocurrency  Liabilities" as such term is used in
Regulation  D.  Without  limiting  the  effect  of the  foregoing,  the  Reserve
Requirement  shall reflect any other reserves  required to be maintained by such
Lenders  by  reason  of any  Regulatory  Change  against  (a)  any  category  of
liabilities which includes deposits by reference to which the Eurodollar Rate or
the  Adjusted  Eurodollar  Rate  is to be  determined  or (b)  any  category  of
extensions of credit or other assets which include Eurodollar Loans.

         "Responsible  Officer" means, as to any Loan Party, the chief executive
officer,  the president,  any vice president,  the chief financial officer,  the
chief operating officer or the treasurer of such Person.

         "Security  Agreements" means security  agreements,  pledge  agreements,
securities  pledge  agreements  and other  agreements,  documents or instruments
evidencing  or creating a Lien as security  for the  Obligations  or any portion
thereof in form and substance  satisfactory to the Administrative Agent executed
by any Loan Party, in favor of the  Administrative  Agent for the benefit of the
Administrative  Agent  and the  Lenders,  and any such  agreement,  document  or
instrument subsequently executed in accordance or connection with this Agreement
or  any  other  Loan  Document,  and  any  and  all  amendments,  modifications,
supplements, renewals, extensions or restatements thereof.

         "Security  Documents"  means the  Security  Agreements,  as they may be
amended,  modified,  supplemented,  renewed,  extended or restated  from time to
time, and any and all other agreements,  chattel mortgages, security agreements,
pledges,  guaranties,  assignments of proceeds, or other collateral assignments,
subordination   agreements,   undertakings  and  other  agreements,   documents,
instruments and financing  statements now or hereafter executed and/or delivered
by any Person in connection  with or as security or assurance for the payment or
performance of the Obligations or any part thereof.

         "Solvent"  means,  with  respect  to any  Person  as of the date of any
determination,  that on such  date (a) the fair  value of the  Property  of such
Person (both at fair  valuation and at present fair  saleable  value) is greater
than  the  total  liabilities,   including,   without   limitation,   contingent
liabilities,  of such Person,  (b) the present fair saleable value of the assets
of such  Person is not less than the  amount  that will be  required  to pay the
probable  liability  of such  Person on its debts as they  become  absolute  and
matured, (c) such Person

CREDIT AGREEMENT - Page 17

<PAGE>

is able to  realize  upon its  assets  and pay its debts and other  liabilities,
contingent obligations and other commitments as they mature in the normal course
of  business,  (d) such Person does not intend to, and does not believe  that it
will,  incur debts or  liabilities  beyond such Person's  ability to pay as such
debts and liabilities  mature, and (e) such Person is not engaged in business or
a  transaction,  and is not about to engage in  business or a  transaction,  for
which such Person's Property would constitute  unreasonably  small capital after
giving due consideration to current and anticipated future capital  requirements
and current and anticipated future business conduct and the prevailing  practice
in the  industry  in which such Person is engaged.  In  computing  the amount of
contingent  liabilities at any time, such  liabilities  shall be computed at the
amount  which,  in light of the facts and  circumstances  existing at such time,
represents  the amount  that can  reasonably  be expected to become an actual or
matured liability.

         "Subordinated  Debt" means Debt of Holdings or the Borrower which meets
all of the following requirements:  (a) such Debt is wholly unsecured;  (b) such
Debt is contractually  subordinated,  as to payment, to payment of the Loans and
other  Obligations  (or,  in the case of  Holdings,  to its  Guaranty of payment
thereof) on terms, and pursuant to agreements in form and substance,  reasonably
satisfactory to the Administrative  Agent and the Required Lenders; and (c) such
Debt is evidenced and governed by agreements,  documents and instruments in form
and  substance,  and  containing  payment,  subordination  and  other  terms and
provisions,  which  have been  wholly  approved  by the  Agent and the  Required
Lenders in writing prior to the incurrence of such Debt.

         "Subordinated  Debt Documents" means any and all agreements,  documents
and instruments now or hereafter evidencing or governing any Subordinated Debt.

         "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.

         "Telecommunications  Assets" means all assets,  rights  (contractual or
otherwise) and Properties,  whether tangible or intangible, used or intended for
use in connection with a Telecommunications Business.

         "Telecommunications  Business" means the business of (a)  transmitting,
or providing  services  relating to the  transmission  of, voice,  data or video
through   owned  or  leased   transmission   facilities,   including   providing
applications and content services  through such  facilities,  (b)  constructing,
creating, developing or marketing communications related network equipment, data
centers, software and other devices for use in a telecommunications  business or
(c) evaluating, participating or pursuing any other activity or opportunity that
is primarily  related to, or ancillary or complementary to, those referred to in
clause (a) or (b) preceding.

         "Type"  means any type of Loan  (i.e.,  a Base Rate Loan or  Eurodollar
Loan).

CREDIT AGREEMENT - Page 18

<PAGE>

         "UCC"  means the Uniform  Commercial  Code as in effect 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 of any Lien on any
Property created pursuant to any Security Document.

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

         "U.S.  Person" means a citizen or resident of the U.S., a  corporation,
partnership,  limited  liability company or other entity created or organized in
or under any laws of the U.S.  or any  estate or trust  that is  subject to U.S.
Federal income taxation regardless of the source of its income.

         "U.S.  Taxes"  means any  present or future  tax,  assessment  or other
charge  or levy  imposed  by or on behalf of the U.S.  or any  taxing  authority
thereof.

         "Vendor"  means  Nortel  Networks in its  capacity as vendor  under the
Master Purchase Agreement.

         "Voting  Stock" of any Person means  Capital Stock of such Person which
ordinarily  has voting power for the election of directors,  managers or general
partners (or persons performing  similar  functions) of such Person,  whether at
all times or only for so long as no senior class of  securities  has such voting
power by reason of any contingency.

         "Wholly-Owned   Subsidiary"  means,  with  respect  to  any  Person,  a
Subsidiary  of such Person all of whose  outstanding  Capital  Stock (other than
directors'  qualifying shares, if any) shall at the time be owned by such Person
and/or one or more of its Wholly-Owned Subsidiaries.

         "Year 2000  Compliant"  means that (a) the services,  products or other
item(s) at issue accurately  process,  provide and/or receive all date/time data
(including  calculating,   comparing,  sequencing,  processing  and  outputting)
within,   from,  into  and  between  centuries   (including  the  twentieth  and
twenty-first  centuries  and the  years  1999 and  2000),  including  leap  year
calculations,  and (b) neither the  performance  nor the  functionality  nor the
business' provision of the services, products and other item(s) at issue will be
affected by any dates/times prior to, on, after or spanning January 1, 2000. The
design of the services, products and other item(s) at issue to ensure compliance
with the "year 2000"  representations  and warranties and covenants contained in
this  Agreement   includes  proper   date/time  data  century   recognition  and
recognition of 1999 and 2000,  calculations that accommodate  single century and
multi-century  formulae  and  date/time  values  before,  on, after and spanning
January 1, 2000, and date/time  data interface  values that reflect the century,
1999 and 2000. In particular, but without limitation, such design means that (i)
no value for current  date/time will cause any error,  interruption or decreased
performance  in or for such  services,  products  and  other  item(s),  (ii) all
manipulations of date and time related data (including  calculating,  comparing,
sequencing processing and outputting) will produce correct results for all valid
dates and times when used  independently  or in combination with other services,
products and/or items,  (iii) date/time  elements in interfaces and data storage
will specify the century to eliminate date ambiguity without human intervention,
including  leap  year   calculations,   (iv)  where  any  date/time  element  is
represented  without a century,  the correct century will be unambiguous for all
manipulations involving that element, (v) authorization codes,

CREDIT AGREEMENT - Page 19

<PAGE>

passwords  and zaps (purge  functions)  will  function  normally and in the same
manner during,  prior to, on and after January 1, 2000,  including the manner in
which they function with respect to expiration dates and CPU serial numbers, and
(vi) the business'  supply of the services,  products and other item(s) will not
be interrupted,  delayed,  decreased or otherwise  affected by the advent of the
year 2000.

         Section 1.2 Other Definitional Provisions. All definitions contained in
this  Agreement  are equally  applicable to the singular and plural forms of the
terms defined. The words "hereof", "herein" and "hereunder" and words of similar
import referring to this Agreement refer to this Agreement as a whole and not to
any   particular   provision   of  this   Agreement.   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 reasonable  satisfaction of the Administrative  Agent 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.  Unless  otherwise  specified,  all Article and
Section references pertain to this Agreement. Terms used herein that are defined
in the UCC, unless otherwise defined herein,  shall have the meanings  specified
in the UCC. All references in this Agreement to any agreement shall be deemed to
mean and refer to such agreement as it may be amended,  modified or supplemented
from time to time if (but only if) such  amendment,  modification  or supplement
has been  approved by the  Administrative  Agent and the requisite  Lenders,  is
expressly referred to in such reference or is otherwise  expressly  permitted by
the terms of this Agreement.

         Section 1.3       Accounting Terms and Determinations.

         (a) Except as may be expressly provided herein to the contrary, (i) all
accounting terms (whether or not specifically defined herein) shall be construed
in  accordance  with  GAAP  (subject  to year end  adjustments,  if  applicable)
consistent  with such  accounting  principles  applied in the preparation of the
audited financial  statements  referred to in Section 7.2(a), (ii) all financial
information  delivered to the Administrative Agent pursuant to Section 8.1 shall
be  prepared  in  accordance  with GAAP  (subject  to year end  adjustments,  if
applicable)  applied  on a basis  consistent  with  such  accounting  principles
applied in the preparation of the audited financial statements of the applicable
Person  referred to in Section 7.2 or in accordance  with Section 8.7, and (iii)
with respect to accounting terms or financial  information  defined or described
in reference to a Person and its Consolidated  Subsidiaries,  all such terms and
information  shall be construed as applying to such Person and its  Consolidated
Subsidiaries  on a consolidated  basis in accordance with GAAP. In the event any
changes in accounting principles required by GAAP and implemented by Holdings or
the  Borrower  occur and such  changes  result in a change in the  method of the
calculation  of financial  covenants,  standards or terms under this  Agreement,
then the Borrower,  Holdings, the Administrative Agent, and the Lenders agree to
enter into  negotiations  in order to amend such provisions of this Agreement so
as to equitably  reflect such changes with the desired  result that the criteria
for evaluating such covenants,  standards, or terms shall be the same after such
changes  as if such  changes  had not  been  made.  Until  such  time as such an
amendment  shall have been executed and delivered by the  Administrative  Agent,
the Borrower, Holdings, and the Lenders, all financial covenants, standards, and
terms in this Agreement  shall continue to be calculated or construed as if such
changes had not occurred.

         (b) The  Borrower  shall  deliver to the  Administrative  Agent and the
Lenders,  at the same time as the delivery of any annual or quarterly  financial
statement under Section 8.1, (i) a description, in

CREDIT AGREEMENT - Page 20

<PAGE>

reasonable  detail,  of any material  variation  between the application of GAAP
employed in the preparation of the next preceding annual or quarterly  financial
statements  prepared in accordance with Section 1.3(a)  preceding as to which no
objection  has  been  made  by the  Administrative  Agent  and  (ii)  reasonable
estimates of the  difference  between such  statements  arising as a consequence
thereof.

         (c) To enable the ready and consistent determination of compliance with
the covenants set forth in this Agreement, the Borrower will not change the last
day of its  fiscal  year from  December  31 or the last days of the first  three
fiscal  quarters of the Borrower in each of its fiscal years from March 31, June
30 and September 30, respectively.

         (d) Unless  otherwise  expressly  provided herein to the contrary,  all
references  herein to the Closing  Date shall be deemed to mean and refer to the
Closing Date after giving  effect to all  transactions  which occur on or before
such date.

         Section 1.4 Financial Covenants and Reporting. All financial statements
and reports  required to be delivered  pursuant to this  Agreement and the other
Loan  Documents,  and  all  financial  covenants  (if  any)  contained  in  this
Agreement,  shall be prepared or determined (as  applicable) in accordance  with
GAAP (except as may be expressly provided to the contrary herein) and, if and to
the extent  that such  statements,  reports or  covenants  are to be prepared or
determined  on a  consolidated  basis,  shall be  prepared  or  determined  on a
consolidated  basis for Holdings and its Consolidated  Subsidiaries  (including,
without  limitation,  the Borrower)  except as may be expressly  provided to the
contrary herein.

                                    ARTICLE 2

                                      Loans

         Section 2.1       Commitments.

         (a)  Loans.  Subject  to the terms  and  conditions  of this  Agreement
(including,  without limitation,  Section 2.13(a)), each Lender severally agrees
to make one or more loans to the Borrower  from time to time from and  including
the Closing Date to but excluding the Commitment  Termination Date up to but not
exceeding  the amount  (if any) of such  Lender's  Commitment  as then in effect
(such loans  referred to in this  Section  2.1(a) now or  hereafter  made by the
Lenders to the Borrower,  including, without limitation, such loans which remain
outstanding after the Commitment Termination Date, are hereinafter  collectively
called the  "Loans").  The  Borrower  may not reborrow the Loans which have been
repaid.

         (b)  Continuation  and  Conversion  of Loans.  Subject to the terms and
conditions  of this  Agreement,  the  Borrower may borrow the Loans as Base Rate
Loans or  Eurodollar  Loans and,  until the  Maturity  Date with  respect to the
applicable Loans, the Borrower may Continue Eurodollar Loans or Convert Loans of
one Type into Loans of the other Type.

CREDIT AGREEMENT - Page 21

<PAGE>

         (c) Lending  Offices.  Loans of each Type made by each Lender  shall be
made and maintained at such Lender's Applicable Lending Office for Loans of such
Type.

         Section 2.2       Notes.

         (a) Notes.  Each of the Loans made by each Lender shall be evidenced by
a single  promissory note of the Borrower in substantially the form of Exhibit B
hereto dated the Closing Date (or such appropriate  later date if such Lender is
a party to an Assignment and Acceptance), payable to the order of such Lender in
a principal amount equal to the sum of (A) the aggregate principal amount of the
Loans of such Lender plus (B) the  aggregate  principal  amount of the  unfunded
Commitment of such Lender, as originally in effect and otherwise duly completed.
Each Lender is hereby  authorized by the Borrower to endorse on the schedule (or
a  continuation  thereof)  attached  to the Note of such  Lender,  to the extent
applicable,  the  date,  amount  and Type of and the  Interest  Period  for each
applicable  Loan made by such  Lender  to the  Borrower  and the  amount of each
payment  or  prepayment  of  principal  of such Loan  received  by such  Lender,
provided that any failure by such Lender to make any such endorsement  shall not
affect the  obligations of the Borrower under any such Note or this Agreement in
respect of any such Loan.

         (b)  Registered  Notes.  Any Lender that is not a U.S.  Person and that
could become  completely  exempt from  withholding  of U.S.  Taxes in respect of
payment of any Obligations due to such Lender  hereunder  relating to any of its
Loans if such Loans were in registered form for U.S. Federal income tax purposes
may request the Borrower (through the  Administrative  Agent),  and the Borrower
agrees  thereupon,  to exchange such Lender's  Note  evidencing  its Loans for a
promissory  note registered as provided in Section 13.8(h) hereof (a "Registered
Note").  Registered  Notes  may  not be  exchanged  for  Notes  that  are not in
registered form.

         Section  2.3  Repayment  of  Loans.  The  Borrower  shall  pay  to  the
Administrative  Agent for the account of each Lender the principal amount of the
Loans  outstanding  as of the  Commitment  Termination  Date (and the  principal
amount of such Loans  outstanding as of such date shall be due and payable) in 8
quarterly  installments,  commencing on the Amortization  Commencement  Date and
continuing on each Quarterly Date thereafter,  each of which  installments shall
be in an amount  equal to twelve  and  one-half  of one  percent  (12.5%) of the
aggregate  principal  amount  of the  Loans  outstanding  as of  the  Commitment
Termination  Date.  In addition,  the Borrower  shall pay to the  Administrative
Agent for the account of each Lender all outstanding principal of the Loans (and
all outstanding  principal of the Loans shall be due and payable in full) on the
Maturity Date.

         Section 2.4   Interest.

         (a) Interest Rate. The Borrower shall pay to the  Administrative  Agent
for the account of each Lender interest on the unpaid  principal  amount of each
Loan made by such Lender (or deemed  made by such Lender with  respect to a Loan
assigned to such Lender  after the making of such Loan) to the  Borrower for the
period commencing on the date of such Loan to, but excluding, the date such Loan
shall be paid in full, at the following rates per annum:

CREDIT AGREEMENT - Page 22

<PAGE>

                  (i) during  the  periods  such Loan is a Base Rate  Loan,  the
         lesser  of (A) the Base  Rate  plus the  Applicable  Margin  or (B) the
         Maximum Rate; and

                  (ii) during the periods  such Loan is a Eurodollar  Loan,  the
         lesser of (A) the Adjusted  Eurodollar Rate plus the Applicable  Margin
         or (B) the Maximum Rate.

         (b)  Payment  Dates.  Accrued  interest  on the Loans  shall be due and
payable as follows:

                  (i)   in the case of Base Rate Loans on each Monthly Date;

                  (ii) in the case of each  Eurodollar  Loan, on the last day of
         the  Interest  Period  with  respect  thereto  and,  in the  case of an
         Interest  Period greater than three months,  at three- month  intervals
         after the first day of such Interest Period;

                  (iii) upon the payment or  prepayment  (whether  mandatory  or
         optional)  of any Loan or the  Conversion  of any Loan to a Loan of the
         other  Type  (but only on the  principal  amount  so paid,  prepaid  or
         Converted); and

                  (iv)  with respect to all Loans, on the Maturity Date.

         (c) Default Interest. Notwithstanding the foregoing, the Borrower shall
pay to the  Administrative  Agent for the account of each Lender interest at the
applicable  Default  Rate (i) at all times during which any Default has occurred
and is  continuing,  on any principal of any Loan  outstanding,  and (ii) to the
fullest extent  permitted by law, any other amount payable by the Borrower under
this  Agreement or any other Loan  Document to or for the account of such Lender
which is not paid in full when due (whether at stated maturity,  by acceleration
or  otherwise)  for the period from and  including  the due date  thereof to but
excluding the date the same is paid in full. Interest accrued and payable at the
Default Rate shall be payable from time to time on demand by the  Administrative
Agent.

         Section 2.5  Borrowing Procedure.

         (a)  Procedure  While  Nortel  Networks  is Sole  Lender  --  Automatic
Advancement of Loans. Notwithstanding anything to the contrary contained in this
Agreement,  the  Administrative  Agent  shall  cause Loans to be advanced by the
Lenders  for and on  behalf of the  Borrower  whether  or not (i) any  Notice of
Borrowing is given in accordance  with Section 2.9,  (ii) any of the  conditions
precedent set forth in Article 6 hereof are satisfied, (iii) any Default exists,
or (iv) any other fact or circumstance exists, if (A) Nortel Networks shall have
given five Business Day's prior written notice to the  Administrative  Agent and
the Borrower of Nortel  Networks' desire to cause the Lenders to make such Loans
and (B) Nortel  Networks is then the sole Lender and all  proceeds of such Loans
are  used  to  pay  the  purchase  price  due  for  Nortel  Networks  Goods  and
Installation  Services  and/or to pay  accrued  late  charges  relating  to such
purchase  price in  accordance  with the Master  Purchase  Agreement.  All Loans
advanced  pursuant  to this  Section  2.5(a)  shall  be  initially  advanced  as
Eurodollar Loans with a one month Interest Period or, if the maximum

CREDIT AGREEMENT - Page 23

<PAGE>

number of Interest  Periods for Eurodollar  Loans is already then in effect,  as
Base Rate Loans (but after such  advancement,  may be  Converted or Continued in
accordance with this Agreement).

         (b) Procedure if Nortel  Networks is Not the Sole Lender.  The Borrower
shall  give the  Administrative  Agent  notice of each  borrowing  hereunder  in
accordance  with Section 2.9. Not later than 1:00 p.m. (New York, New York time)
on the date  specified  for each  borrowing  hereunder,  each  Lender  will make
available  the  amount  of  the  Loan  to be  made  by it on  such  date  to the
Administrative  Agent, at the Principal Office, in immediately  available funds,
for the  account of the  Borrower.  The amount of each  borrowing  hereunder  so
received by the Administrative  Agent shall, subject to the terms and conditions
of this  Agreement,  be made  available,  for and on behalf of the Borrower,  in
immediately  available  funds by no later  than 1:00 p.m.  (New  York,  New York
time);  provided,  however,  that  (i)  the  Administrative  Agent  may,  in its
discretion,  cause  such  amount  to be made  available  directly  to or for the
benefit of the Person who is to receive the proceeds of such Loan in  accordance
with Section 2.10 (e.g.,  the Vendor if and to the extent that  proceeds of such
borrowing are used to pay for Nortel Networks Goods and Installation Services).

         (c)  Credits  Under  the  Master  Purchase  Agreement.  Notwithstanding
anything to the contrary contained in this Agreement,  if and to the extent that
Nortel  Networks is a Lender under this Agreement,  the Borrower  further hereby
irrevocably  agrees  that each Loan to be  advanced  by Nortel  Networks  to the
Borrower in accordance  with this  Agreement  (and only in accordance  with this
Agreement and after the Administrative  Agent's receipt of a Notice of Borrowing
executed by the Borrower) may (in the  discretion of Nortel  Networks and if and
to the extent that the proceeds of such Loan are to be paid to Nortel  Networks)
be  effectively  disbursed on the date set forth in the Notice of Borrowing  for
such  disbursement  to the  Borrower by virtue of a credit in the amount of such
Loan given to the Borrower under the Master Purchase Agreement.

         Section 2.6 Optional  Prepayments,  Conversions  and  Continuations  of
Loans.  Subject to Section 2.8 and Section 2.11(c),  the Borrower shall have the
right from time to time to prepay the Loans in whole or in part,  to Convert all
or  part of a Loan  of one  Type  into a Loan  of  another  Type or to  Continue
Eurodollar  Loans;  provided,  however,  that (a) the  Borrower  shall  give the
Administrative Agent notice of each such prepayment,  Conversion or Continuation
as provided in Section  2.9, (b)  Eurodollar  Loans may only be Converted on the
last day of the Interest  Period and any  prepayment of Eurodollar  Loans on any
day other than the last day of the  Interest  Period shall be subject to payment
of the  additional  compensation  specified  in  Section  4.5,  (c)  except  for
Conversions  of  Eurodollar  Loans  into  Base Rate  Loans,  no  Conversions  or
Continuations shall be made while a Default has occurred and is continuing,  and
(d) optional  prepayments  of the Loans shall be applied to the principal of the
Loans  prepaid in the  inverse  order of the  maturities  of the then  remaining
installments of such Loans. No amounts prepaid  pursuant to this Section 2.6 may
be reborrowed.

CREDIT AGREEMENT - Page 24

<PAGE>

         Section 2.7       Mandatory Prepayments.

         (a) Asset  Dispositions,  etc. The Borrower shall,  within two Business
Days after it receives any Net Proceeds of any Asset  Disposition of Collateral,
proceeds of any  Insurance  Recovery  with respect to  Collateral or proceeds of
condemnation awards with respect to Collateral, pay to the Administrative Agent,
as a prepayment of the Loans,  the amount  received by the  Borrower;  provided,
that no such prepayment will be required with respect to any Insurance  Recovery
with  respect  to  Collateral  if and to  the  extent  that  such  proceeds  are
contractually  committed  to be  re-invested  in assets  purchased  from  Nortel
Networks  within 180 days of the receipt of such  proceeds;  provided,  further,
however, that all such proceeds not so re-invested within 90 days of the receipt
thereof  shall  be  deposited  into  a  cash  collateral  account  held  by  the
Administrative  Agent pursuant to an agreement in form and substance  reasonably
satisfactory  to the  Administrative  Agent until such time as such proceeds are
either  re-invested  within such 180 day period or applied to the Loans or other
Obligations as provided in this Section 2.7.

         (b)  Subsequent  Credit  Facility  from Nortel  Networks.  In the event
Holdings  and/or the Borrower and Nortel  Networks enter into a credit  facility
relating to the purchase of optical  equipment from Nortel  Networks by Holdings
and/or the Borrower,  the Borrower and  Administrative  Agent may agree that the
Borrower  shall,  from the  proceeds  of such  facility,  prepay in full (i) the
outstanding  principal amount of all Loans, (ii) all interest accrued and unpaid
with respect to all Loans and (iii) all other outstanding Obligations.

         (c) Sale of the Network.  The  Borrower  shall,  concurrently  with any
sale,  transfer  or other  disposition  of the Network or any  material  portion
thereof,  prepay in full (i) the outstanding principal amount of all Loans, (ii)
all  interest  accrued and unpaid with  respect to all Loans and (iii) all other
outstanding Obligations.

         (d) Application of Mandatory  Prepayments.  All prepayments pursuant to
Section 2.7(a) and Section 2.7(b) shall be applied first to the principal of the
Loans in the inverse order of the maturities of the then remaining  installments
of the Loans and then to the remaining outstanding  Obligations in such order as
the Administrative Agent may determine.

         (e) No Reborrowing. No amounts prepaid pursuant to this Section 2.7 may
be reborrowed.

         Section 2.8 Minimum  Amounts.  Except for  Conversions  and prepayments
pursuant to Section 2.7 and Article 4, each borrowing,  each Conversion and each
optional  prepayment  of  principal  of the Loans shall be in an amount at least
equal to  $1,000,000  or an integral  multiple  of  $100,000  in excess  thereof
(borrowings,  prepayments or Conversions of or into Loans of different Types or,
in the case of Eurodollar Loans,  having different  Interest Periods at the same
time hereunder shall be deemed separate borrowings,  prepayments and Conversions
for purposes of the foregoing, one for each Type or Interest Period).

CREDIT AGREEMENT - Page 25

<PAGE>

         Section  2.9  Certain   Notices.   Notices  by  the   Borrower  to  the
Administrative   Agent  of  terminations   or  reductions  of  Commitments,   of
borrowings,  Conversions,  Continuations  and  prepayments  of Loans  and of the
duration of Interest Periods shall be irrevocable and shall be effective only if
received by the  Administrative  Agent not later than 11:00 a.m. (New York,  New
York,  time) on the  applicable  Business  Day prior to the date of the relevant
termination, reduction, borrowing, Conversion, Continuation or prepayment or the
first day of such Interest Period specified below:

--------------------------------------------------------------------------------
                                                                       Number of

                  Notice                                  Business Days Prior
--------------------------------------------------------------------------------
Terminations or Reductions of Commitments                          1
--------------------------------------------------------------------------------
Borrowings of Loans which are Base Rate Loans                      2
--------------------------------------------------------------------------------
Borrowings of Loans which are Eurodollar Loans                     3
--------------------------------------------------------------------------------
Prepayments of Loans                                               3
--------------------------------------------------------------------------------

Each such notice of  termination  or reduction  shall  specify the amount of the
Commitments  to be  terminated  or  reduced.  Each  such  notice  of  borrowing,
Conversion,  Continuation or prepayment  shall specify the Loans to be borrowed,
Converted,  Continued or prepaid and the amount  (subject to Section 2.8 hereof)
and Type of the Loans to be borrowed,  Converted,  Continued or prepaid (and, in
the case of a Conversion,  the Type of Loans to result from such Conversion) and
the date of borrowing, Conversion,  Continuation or prepayment (which shall be a
Business  Day).   Each  such  notice  of  termination,   reduction,   borrowing,
Conversion, Continuation or prepayment shall be in the form of Exhibit C hereto,
appropriately  completed as  applicable.  Each notice of borrowing (a "Notice of
Borrowing")  (a) shall  certify  that all proceeds of the  requested  Loans are,
concurrently  with the making of such Loans,  being used by the Borrower for the
purpose  specified  in Section 2.10 and (b) shall be  accompanied  by such other
evidence as to use of the  proceeds  of such  borrowing,  as the  Administrative
Agent may  reasonably  request  from time to time.  Each notice  which  includes
reference to the duration of an Interest Period shall specify the Loans to which
such  Interest  Period is to relate.  The  Administrative  Agent shall  promptly
notify  the  Lenders  of the  contents  of each  such  notice.  In the event the
Borrower  fails to select  the Type of Loan,  or the  duration  of any  Interest
Period for any Eurodollar Loan, within the time period and otherwise as provided
in this Section  2.9,  such Loan (if  outstanding  as  Eurodollar  Loan) will be
automatically  Converted  into a Base  Rate  Loan on the last  day of  preceding
Interest  Period  for such Loan or (if  outstanding  as a Base Rate  Loan)  will
remain as, or (if not then  outstanding)  will be made as, a Base Rate Loan. The
Borrower may not borrow any Eurodollar Loans,  Convert any Loans into Eurodollar
Loans or Continue any Loans as  Eurodollar  Loans if the interest  rate for such
Eurodollar Loans would exceed the Maximum Rate.

         Section 2.10      Use of Proceeds.

         (a) Loans.  The Borrower agrees that all proceeds of the Loans shall be
used to finance the purchase price for Nortel  Networks  Goods and  Installation
Services provided by the Vendor under the

CREDIT AGREEMENT - Page 26

<PAGE>

Master Purchase  Agreement,  excluding sales and use taxes and freight  charges,
which  Nortel  Networks  Goods and  Installation  Services  shall be used in the
construction and operation of the Network.

         (b)  Margin  Stock.  None of the  proceeds  of any  Loan may be used to
acquire any security in any  transaction  that is subject to Section 13 or 14 of
the Exchange Act or to purchase or carry any margin stock (within the meaning of
Regulations T, U or X of the Board of Governors of the Federal Reserve System).

         Section 2.11      Fees.

         (a)  Subject  to  Section   13.12,   the  Borrower  shall  pay  to  the
Administrative  Agent for the account of each applicable Lender a commitment fee
on the  daily  average  unused  or  unfunded  amount  of each  of such  Lender's
Commitments (as the same may be reduced or terminated pursuant to Section 2.13),
for the  period  from  and  including  the  date on which  such  Lender  (or its
predecessor in interest with respect to  Commitments  assigned to such Lender as
to which a commitment  fee has not  previously  been paid during the  applicable
period) became a party hereto but excluding the Commitment  Termination Date, at
one-half of one percent (0.50%) per annum based on a 360 day year and the actual
number of days  elapsed,  which  accrued  commitment  fees  shall be  payable in
arrears on each Quarterly Date and on the Commitment Termination Date.

         (b)  Subject  to  Section  13.12,  the  Borrower  agrees  to pay to the
Administrative  Agent and Nortel  Networks such additional fees as are specified
in the  Administrative  Agent's  Letter,  which  fees  shall be  payable in such
amounts and on such dates as are specified therein.

         Section  2.12  Computations.  Interest and fees payable by the Borrower
hereunder  and under the other Loan  Documents on all Loans shall be computed on
the basis of a year of 360 days and the actual number of days elapsed (including
the first day but  excluding  the last day)  occurring  in the  period for which
payable unless,  in the case of interest or fees which  constitute  interest (if
applicable),  such  calculation  would result in a usurious  rate, in which case
interest or fees which constitute  interest (if applicable)  shall be calculated
on the basis of a year of 365 or 366 days, as the case may be.

         Section 2.13      Termination or Reduction of Commitments.

         (a)  Notwithstanding   anything  to  the  contrary  contained  in  this
Agreement,  each of the  Commitments  shall  automatically  terminate  upon  the
earlier to occur of (i) the  occurrence  of any Change in  Control,  or (ii) any
sale,  transfer  or other  disposition  of the Network or any  material  portion
thereof.

         (b) The  Borrower  shall have the right to  terminate or reduce in part
the unused portion of the Commitments at any time and from time to time prior to
the Commitment Termination Date; provided, however, that (i) no such termination
or reduction  shall be effective  unless the Borrower shall have given notice of
each such  termination  or  reduction  as  provided in Section 2.9 and (ii) each
partial reduction of

CREDIT AGREEMENT - Page 27

<PAGE>

any such Commitment shall be in an aggregate amount at least equal to $1,000,000
or an integral multiple of $100,000 in excess thereof.

         (c)  The  Commitments  may  not be  reinstated  after  they  have  been
terminated or increased after they have been reduced.

                                    ARTICLE 3

                                    Payments

         Section 3.1 Method of Payment and Application of Payments. All payments
of principal,  interest, fees and other amounts to be made by the Borrower under
this Agreement and the other Loan Documents shall be made to the  Administrative
Agent at the  Principal  Office  for the  account  of each  Lender's  Applicable
Lending Office in Dollars and in immediately  available  funds,  without setoff,
deduction or counterclaim, not later than 1:00 p.m. (New York, New York time) on
the date on which such  payment  shall  become due (each such payment made after
such time on such due date to be deemed to have been made on the next succeeding
Business  Day).  The Borrower  shall,  at the time of making each such  payment,
specify to the Administrative  Agent the sums payable by the Borrower under this
Agreement  and the other Loan  Documents  to which such payment is to be applied
(and in the  event  that the  Borrower  fails to so  specify,  or if an Event of
Default has occurred and is continuing,  the Administrative Agent may apply such
payment to the Obligations in such order and manner as the Administrative  Agent
may elect, subject to this Section 3.1 and Section 3.2). Upon the occurrence and
during the  continuation of an Event of Default,  all proceeds of any Collateral
and all other funds of the  Borrower  in the  possession  of the  Administrative
Agent  or  any  Lender  may  be  applied  by  the  Administrative  Agent  to the
Obligations  in such  order and  manner as the  Administrative  Agent may elect,
subject to  Section  3.2;  provided,  however,  that,  in the event of any sale,
disposition or liquidation of the Collateral or any portion  thereof as a result
of or in  connection  with the  occurrence of an Event of Default and receipt by
the  Administrative  Agent  of any  proceeds  thereof,  or in the  event  of any
bankruptcy or similar  proceedings  involving  Holdings,  the Borrower or any of
their Subsidiaries and receipt by the Administrative  Agent of any payments with
respect to the Obligations in connection  therewith,  all proceeds thereof shall
be applied by the Administrative Agent as follows unless otherwise agreed by the
Administrative  Agent and the Required  Lenders:  (i) first,  to  reimburse  the
Administrative  Agent for all fees,  costs and  expenses  relating to such sale,
disposition or liquidation or bankruptcy or similar proceedings, (ii) second, to
the accrued and unpaid  interest with respect to the Loans,  (iii) third, to the
principal of the Loans (until such Loans are paid in full), and (iv) fourth,  to
the then remaining  outstanding  Obligations in such order as the Administrative
Agent may determine.  Each payment  received by the  Administrative  Agent under
this  Agreement or any other Loan  Document for the account of a Lender shall be
paid promptly to such Lender, in immediately available funds, for the account of
such  Lender's  Applicable  Lending  Office.  Whenever  any  payment  under this
Agreement or any other Loan Document  shall be stated to be due on a day that is
not a Business  Day,  such payment may be made on the next  succeeding  Business
Day,  and  such  extension  of time  shall  in  such  case  be  included  in the
computation of the payment of interest and commitment fee, as the case may be.

CREDIT AGREEMENT - Page 28

<PAGE>

         Section 3.2 Pro Rata Treatment. Except to the extent otherwise provided
in this Agreement: (a) each Loan shall be made by the Lenders under Section 2.1,
each payment of  commitment  fees or prepayment  fees under  Section  2.11(a) or
Section 2.11(c), respectively,  shall be made for the account of the Lenders, as
applicable,  and each termination or reduction of the Commitments  under Section
2.13 shall be applied to the  Commitments of the Lenders,  pro rata according to
the respective unused Commitments;  (b) the making,  Conversion and Continuation
of Loans of a particular  Type (other than  Conversions  provided for by Section
4.4)  shall  be made pro rata  among  the  Lenders  holding  Loans of such  Type
according to the amounts of their respective  Commitments;  (c) each payment and
prepayment  by the Borrower of principal of or interest on Loans of a particular
Type shall be made to the  Administrative  Agent for the  account of the Lenders
holding Loans of such Type pro rata in  accordance  with the  respective  unpaid
principal  amounts of such Loans held by such Lenders;  and (d) Interest Periods
for Loans of a  particular  Type shall be  allocated  among the Lenders  holding
Loans of such Type pro rata according to the respective  principal  amounts held
by such Lenders.

         Section 3.3 Sharing of Payments,  Etc. If a Lender shall obtain payment
of any  principal  of or interest on any of the  Obligations  due to such Lender
hereunder  through  the  exercise  of  any  right  of  setoff,   banker's  lien,
counterclaim or similar right, or otherwise, it shall promptly purchase from the
other Lenders  participations  in the  Obligations  held by the other Lenders in
such amounts, and make such adjustments from time to time, as shall be equitable
to the end that all the  Lenders  shall  share pro rata in  accordance  with the
unpaid  principal and interest on the  Obligations  then due to each of them. To
such end, all of the Lenders shall make appropriate adjustments among themselves
(by the resale of  participations  sold or  otherwise)  if all or any portion of
such excess payment is thereafter  rescinded or must otherwise be restored.  The
Borrower agrees, to the fullest extent it may effectively do so under applicable
law, that any Lender so purchasing a  participation  in the  Obligations  by the
other Lenders may exercise all rights of setoff,  banker's lien, counterclaim or
similar  rights with  respect to such  participation  as fully as if such Lender
were a direct holder of Obligations in the amount of such participation. Nothing
contained  herein  shall  require any Lender to exercise any such right or shall
affect  the  right of any  Lender  to  exercise,  and  retain  the  benefits  of
exercising, any such right with respect to any other indebtedness,  liability or
obligation of the Borrower.

         Section 3.4 Non-Receipt of Funds by the  Administrative  Agent.  Unless
the  Administrative  Agent shall have been  notified by a Lender or the Borrower
(the  "Payor")  prior to the date on which such Lender is to make payment to the
Administrative Agent of the proceeds of a Loan to be made by it hereunder or the
Borrower is to make a payment to the Administrative Agent for the account of one
or more of the Lenders, as the case may be (such payment being herein called the
"Required  Payment"),  which notice shall be effective  upon  receipt,  that the
Payor does not intend to make the Required Payment to the Administrative  Agent,
the Administrative  Agent may assume that the Required Payment has been made and
may, in reliance upon such  assumption  (but shall not be required to), make the
amount  thereof  available  to the  intended  recipient on such date and, if the
Payor has not in fact made the Required Payment to the Administrative Agent, the
recipient of such payment shall, on demand, pay to the Administrative  Agent the
amount made  available to it together  with  interest  thereon in respect of the
period commencing on the date

CREDIT AGREEMENT - Page 29

<PAGE>

such amount was so made available by the Administrative Agent until the date the
Administrative  Agent  recovers  such  amount at a rate per  annum  equal to the
Federal Funds Rate for such period.

         Section 3.5       Taxes.

         (a) All  payments by the  Borrower of  principal of and interest on the
Loans and of all fees and other amounts  payable under the Loan Documents  shall
be made free and clear of, and without  withholding  or  deduction by reason of,
any present or future  taxes,  levies,  duties,  imposts,  assessments  or other
charges levied or imposed by any  Governmental  Authority  (other than franchise
taxes and taxes on the  overall  net income of any  Lender).  If any such taxes,
levies, duties, imposts,  assessments or other charges are so levied or imposed,
the Borrower will (i) make additional payments in such amounts so that every net
payment  of  principal  of and  interest  on the Loans and of all other  amounts
payable by it under the Loan Documents, after withholding or deduction for or on
account  of  any  such  present  or  future  taxes,  levies,  duties,   imposts,
assessments  or other charges  (including  any tax imposed on or measured by net
income of a Lender  attributable  to  payments  made to or on behalf of a Lender
pursuant to this Section 3.5 and any penalties or interest  attributable to such
payments),  will not be less than the  amount  provided  for  herein or  therein
absent such withholding or deduction  (provided that the Borrower shall not have
any obligation to pay such  additional  amounts to any Lender to the extent that
such taxes, levies, duties, imposts,  assessments or other charges are levied or
imposed by reason of the failure of such Lender to comply with the provisions of
Section 3.6),  (ii) make such  withholding or deduction and (iii) remit the full
amount deducted or withheld to the relevant Governmental Authority in accordance
with  applicable  law.  Without  limiting the generality of the  foregoing,  the
Borrower will,  upon written  request of any Lender,  reimburse each such Lender
for the amount of (A) such taxes, levies, duties, imports,  assessments or other
charges  so levied or  imposed by any  Governmental  Authority  and paid by such
Lender as a result of payments made by the Borrower under or with respect to the
Loans other than such taxes,  levies,  duties,  imports,  assessments  and other
charges  previously  withheld or deducted by the Borrower which have  previously
resulted in the payment of the required  additional  amount to such Lender,  and
(B) such  taxes,  levies,  duties,  assessments  and other  charges so levied or
imposed with respect to any Lender reimbursement under the foregoing clause (A),
so that the net amount  received by such  Lender (net of payments  made under or
with  respect to the Loans) after such  reimbursement  will not be less than the
net amount  such Lender  would have  received  if such  taxes,  levies,  duties,
assessments  and other  charges  on such  reimbursement  had not been  levied or
imposed.  The Borrower shall furnish  promptly to the  Administrative  Agent for
distribution to each affected  Lender,  as the case may be, upon request of such
Lender, official receipts evidencing any such payment, withholding or reduction.

         (b) The  Borrower  will  indemnify  the  Administrative  Agent and each
Lender (without duplication) against, and reimburse the Administrative Agent and
each  Lender  for,  all  present  and future  taxes,  levies,  duties,  imposts,
assessments  or other  charges  (including  interest  and  penalties)  levied or
collected  (whether or not legally or  correctly  imposed,  assessed,  levied or
collected),  excluding,  however, any taxes imposed on the overall net income of
the  Administrative   Agent  or  such  Lender  or  any  lending  office  of  the
Administrative   Agent  or  such  Lender  by  any   jurisdiction  in  which  the
Administrative Agent or such Lender or any such lending office is located, on or
in respect of this Agreement, any of the Loan

CREDIT AGREEMENT - Page 30

<PAGE>

Documents or the Obligations or any portion thereof (the "reimbursable  taxes").
Any such indemnification shall be on an after-tax basis, taking into account any
such reimbursable taxes imposed on the amounts paid as indemnity.

         (c) Without prejudice to the survival of any other term or provision of
this  Agreement,  the  obligations  of the Borrower under this Section 3.5 shall
survive the payment of the Loans and the other  Obligations  and  termination of
the Commitments.

         Section  3.6  Withholding  Tax  Exemption.  Each  Lender  that  is  not
incorporated  or otherwise  formed under the laws of the U.S. or a state thereof
agrees that it will,  prior to or on or about the Closing  Date or the date upon
which it initially  becomes a party to this  Agreement and if it is legally able
to do so,  deliver  to the  Borrower  and the  Administrative  Agent,  two  duly
completed copies of U.S. Internal Revenue Service Form W-8ECI or W-8BEN or other
equivalent  successor  form,  as  appropriate,  certifying in any case that such
Lender is entitled to receive payments from the Borrower under any Loan Document
without  deduction or withholding of any U.S. federal income taxes.  Each Lender
which so delivers a Form W-8ECI or W-8BEN or other equivalent successor form, as
appropriate,   further   undertakes   to  deliver  to  the   Borrower   and  the
Administrative  Agent, two additional  copies of such form (or a successor form)
on or  before  the date such  form  expires  or  becomes  obsolete  or after the
occurrence of any event  requiring a change in the most recent form so delivered
by it, and such amendments  thereto or extensions or renewals  thereof as may be
reasonably  requested by the Borrower or the Administrative  Agent, in each case
certifying  that such Lender is entitled to receive  payments  from the Borrower
under any Loan Document  without  deduction or withholding  of any U.S.  federal
income  taxes,  unless an event  (including  without  limitation  any  change in
treaty,  law or  regulation)  has  occurred  prior to the date on which any such
delivery would  otherwise be required which renders all such forms  inapplicable
or which would prevent such Lender from duly  completing and delivering any such
form  with  respect  to  it  and  such  Lender  advises  the  Borrower  and  the
Administrative  Agent that it is not capable of receiving such payments  without
any deduction or withholding of U.S. federal income tax.

         Section 3.7 Reinstatement of Obligations.  Notwithstanding  anything to
the contrary  contained in this  Agreement  or any other Loan  Document,  if the
payment of any amount of principal  of or interest  with respect to the Loans or
any other  amount of the  Obligations,  or any portion  thereof,  is  rescinded,
voided or must otherwise be refunded by the  Administrative  Agent or any Lender
upon the insolvency,  bankruptcy or  reorganization of the Borrower or otherwise
for any  reason  whatsoever,  then  each of (a) the  Obligations,  (b) the  Loan
Documents  (including,  without  limitation,  this Agreement,  the Notes and the
Security  Documents),  (c) the indebtedness,  liabilities and obligations of the
Borrower  and any other Loan  Parties  and (d) all Liens for the  benefit of the
Administrative  Agent and the Lenders  created  under or  evidenced  by the Loan
Documents,  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.

         Section 3.8 No Force Majeure,  Disputes.  The Borrower's  obligation to
pay all  amounts  due under the  Loans  and the other  Obligations  shall not be
affected  by (a) any setoff,  counterclaim,  recoupment,

CREDIT AGREEMENT - Page 31

<PAGE>

deduction, abatement, suspension,  diminution, reduction, defense or other right
which the Borrower may have against the Vendor for any reason whatsoever arising
under or pursuant to the Master Purchase  Agreement or otherwise relating to the
purchase of goods or services from the Vendor,  (b) any defect in the condition,
design, operation or fitness for use of, or any damage to or loss or destruction
of, any  equipment  or  material  or service  provided  by the  Vendor,  (c) any
insolvency, bankruptcy,  reorganization or similar proceedings by or against the
Borrower or affecting any of its Properties,  (d) any action of any Governmental
Authority  or any damage to or  destruction  of or any taking of the  Borrower's
Property or any part thereof, (e) any change, waiver,  extension,  indulgence or
failure to perform or comply with, or other action or omission  herein or in the
other Loan Documents (except for express written modifications to this Agreement
or other Loan Documents as and in the manner  permitted  under this Agreement or
the other Loan Documents), (f) any dissolution of the Borrower or any other Loan
Party,  (g) any inability or illegality  with respect to the use or ownership of
the Borrower's Property, (h) any failure to obtain, or expiration, suspension or
other  termination  of, or  interruption  to, any  required  licenses,  permits,
consents,  authorizations,  approvals  or  other  legal  requirements,  (i)  the
invalidity  or  unenforceability  of any  of the  Loan  Documents  or any  other
infirmity therein or any lack of power or authority of the Administrative  Agent
or  any  Lender  or the  Borrower,  or  (j)  any  other  event  or  circumstance
whatsoever,  whether or not similar to any of the  foregoing  and whether or not
the Borrower  shall have notice or knowledge of any of the  foregoing,  it being
the intention of the Administrative  Agent and the Lenders and the Borrower that
the Obligations of the Borrower shall be absolute and unconditional and shall be
separate and independent  covenants and agreements and shall continue unaffected
unless the  requirements  to pay or perform the same shall have been  terminated
pursuant to an express provision thereof or of any of the other Loan Documents.

                                    ARTICLE 4

                         Yield Protection and Illegality

         Section 4.1       Additional Costs.

         (a) The  Borrower  shall pay directly to each Lender from time to time,
promptly  upon the  request of such  Lender,  the costs  incurred by such Lender
which such Lender  determines are  attributable  to its making or maintaining of
any  Eurodollar  Loans  or its  obligation  to make  any of such  Loans,  or any
reduction in any amount  receivable  by such Lender  hereunder in respect of any
such Loans or  obligations  (such  increases in costs and  reductions in amounts
receivable  being  herein  called  "Additional   Costs"),   resulting  from  any
Regulatory Change which:

                  (i) changes  the basis of  taxation of any amounts  payable to
         such Lender under this Agreement or its Notes in respect of any of such
         Loans  (other  than  taxes  imposed on the  overall  net income of such
         Lender or its  Applicable  Lending  Office for any of such Loans by the
         jurisdiction  in which  such  Lender has its  principal  office or such
         Applicable Lending Office);

                  (ii) imposes or modifies any reserve, special deposit, minimum
         capital,   capital  ratio  or  similar  requirement   relating  to  any
         extensions of credit or other assets of, or any deposits with or

CREDIT AGREEMENT - Page 32

<PAGE>

other liabilities or commitments of, such Lender (including any of such Loans or
any deposits  referred to in the definition of "Eurodollar  Rate" in Section 1.1
hereof,  but excluding the Reserve  Requirement  to the extent it is included in
the calculation of the Adjusted Eurodollar Rate); or

                  (iii) imposes any other condition  affecting this Agreement or
         the Notes or any  extensions of credit or  liabilities  or  commitments
         contemplated hereunder or thereunder.

Each Lender will notify the Borrower (with a copy to the  Administrative  Agent)
of any event  occurring after the Closing Date which will entitle such Lender to
compensation pursuant to this Section 4.1(a) as promptly as practicable after it
obtains knowledge thereof and determines to request such  compensation,  and (if
so requested by the  Borrower)  will  designate a different  Applicable  Lending
Office for the Eurodollar  Loans of such Lender if such  designation  will avoid
the need for,  or reduce the amount of, such  compensation  and will not, in the
sole opinion of such Lender,  violate any law,  rule or  regulation or be in any
way  disadvantageous  to such  Lender,  provided  that such Lender shall have no
obligation to so designate an Applicable Lending Office located in the U.S. Each
Lender will furnish the Borrower with a certificate  setting forth the basis and
the amount of each  request of such Lender for  compensation  under this Section
4.1(a). If any Lender requests compensation from the Borrower under this Section
4.1(a),  the  Borrower  may,  by  notice  to  such  Lender  (with  a copy to the
Administrative Agent), suspend the obligation of such Lender to make or Continue
making,  or Convert Base Rate Loans into,  Eurodollar Loans until the Regulatory
Change  giving  rise to such  request  ceases to be in effect (in which case the
provisions of Section 4.4 hereof shall be applicable).

         (b) Without  limiting the effect of the  foregoing  provisions  of this
Section 4.1, in the event that, by reason of any Regulatory  Change,  any Lender
either (i) incurs  Additional  Costs based on or measured by the excess  above a
specified level of the amount of a category of deposits or other  liabilities of
such Lender which  includes  deposits by reference to which the interest rate on
Eurodollar  Loans is determined  as provided in this  Agreement or a category of
extensions  of credit or other assets of such Lender which  includes  Eurodollar
Loans or (ii) becomes  subject to  restrictions on the amount of such a category
of  liabilities  or assets which it may hold,  then, if such Lender so elects by
notice to the Borrower (with a copy to the Administrative Agent), the obligation
of such  Lender to make or  Continue  making,  or Convert  Base Rate Loans into,
Eurodollar  Loans  hereunder  shall be suspended  until such  Regulatory  Change
ceases to be in effect (in which case the provisions of Section 4.4 hereof shall
be applicable).

         (c)  Determinations  and allocations by any Lender for purposes of this
Section 4.1 of the effect of any  Regulatory  Change on its costs of maintaining
its  obligation  to make Loans or of making or  maintaining  Loans or on amounts
receivable by it in respect of Loans and of the additional  amounts  required to
compensate such Lender in respect of any Additional  Costs,  shall be conclusive
in the  absence  of  manifest  error,  provided  that  such  determinations  and
allocations are made on a reasonable basis.

         Section  4.2  Limitation  on Types of  Loans.  Anything  herein  to the
contrary  notwithstanding,  if with  respect  to any  Eurodollar  Loans  for any
Interest Period therefor:

CREDIT AGREEMENT - Page 33

<PAGE>

         (a) the Administrative  Agent determines (which  determination shall be
conclusive  absent  manifest  error) that  quotations of interest  rates for the
relevant  deposits referred to in the definition of "Eurodollar Rate" in Section
1.1 hereof are not being  provided in the  relative  amounts or for the relative
maturities  for purposes of  determining  the rate of interest for such Loans as
provided in this Agreement; or

         (b) the  Required  Lenders  determine  (which  determination  shall  be
conclusive absent manifest error) and notify the  Administrative  Agent that the
relevant rates of interest referred to in the definition of "Eurodollar Rate" or
"Adjusted  Eurodollar Rate" in Section 1.1 hereof on the basis of which the rate
of interest for such Loans for such  Interest  Period is to be determined do not
accurately  reflect the cost to the Lenders of making or maintaining  such Loans
for such Interest Period;

then the Administrative Agent shall give the Borrower prompt notice thereof and,
so long as such  condition  remains in  effect,  the  Lenders  shall be under no
obligation  to  make  Eurodollar  Loans  or to  Convert  Base  Rate  Loans  into
Eurodollar  Loans and the Borrower shall, on the last day(s) of the then current
Interest  Period(s) for the  outstanding  Eurodollar  Loans,  either prepay such
Loans or Convert such Loans into Base Rate Loans in accordance with the terms of
this Agreement.

         Section 4.3  Illegality.  Notwithstanding  any other  provision of this
Agreement,  in the  event  that  it  becomes  unlawful  for  any  Lender  or its
Applicable  Lending Office to (a) honor its obligation to make Eurodollar  Loans
or (b) maintain  Eurodollar  Loans,  then such Lender shall promptly  notify the
Borrower  (with a copy to the  Administrative  Agent)  thereof and such Lender's
obligation to make or maintain  Eurodollar  Loans and to Convert Base Rate Loans
into  Eurodollar  Loans  hereunder  shall be  suspended  until such time as such
Lender  may  again  make  and  maintain  Eurodollar  Loans  (in  which  case the
provisions of Section 4.4 hereof shall be applicable).

         Section 4.4  Treatment  of Affected  Loans.  If the  obligation  of any
Lender to make or Continue, or to Convert Base Rate Loans into, Eurodollar Loans
is  suspended  pursuant  to Section 4.1 or Section  4.3  hereof,  such  Lender's
Eurodollar  Loans shall be  automatically  Converted into Base Rate Loans on the
last day(s) of the then current Interest Period(s) for the Eurodollar Loans (or,
in the case of a Conversion required by Section 4.1(b) or Section 4.3 hereof, on
such earlier date as such Lender may specify to the Borrower  with a copy to the
Administrative Agent) and, unless and until such Lender gives notice as provided
below that the  circumstances  specified  in Section  4.1 or Section  4.3 hereof
which gave rise to such Conversion no longer exist:

         (a) to the  extent  that such  Lender's  Eurodollar  Loans have been so
Converted,  all payments and  prepayments of principal  which would otherwise be
applied to such Lender's  Eurodollar  Loans shall be applied instead to its Base
Rate Loans; and

         (b) all Loans which would otherwise be made or Continued by such Lender
as Eurodollar  Loans shall be made as or Converted  into Base Rate Loans and all
Loans of such Lender which would

CREDIT AGREEMENT - Page 34

<PAGE>

otherwise be Converted into Eurodollar Loans shall be Converted instead into (or
shall remain as) Base Rate Loans.

If such Lender gives notice to the Borrower that the circumstances  specified in
Section  4.1 or Section  4.3 hereof  which gave rise to the  Conversion  of such
Lender's  Eurodollar  Loans  pursuant to this Section 4.4 no longer exist (which
such Lender agrees to do promptly upon such circumstances ceasing to exist) at a
time when Eurodollar Loans are outstanding,  such Lender's Base Rate Loans shall
be automatically  Converted, on the first day(s) of the next succeeding Interest
Period(s) for such  outstanding  Eurodollar  Loans,  to the extent  necessary so
that,  after  giving  effect  thereto,  all Loans  held by the  Lenders  holding
Eurodollar Loans and by such Lender are held pro rata (as to principal  amounts,
Types and Interest Periods) in accordance with their respective Commitments.

         Section 4.5 Compensation.  The Borrower shall pay to the Administrative
Agent for the account of each Lender,  promptly  upon the request of such Lender
through the Administrative  Agent, such amount or amounts as shall be sufficient
(in the reasonable  opinion of such Lender) to compensate it for any loss,  cost
or expense incurred by it as a result of:

         (a) Any payment,  prepayment or Conversion of a Eurodollar Loan for any
reason (including, without limitation, the acceleration of the outstanding Loans
pursuant  to  Section  11.2) on a date  other  than the last day of an  Interest
Period for such Loan; or

         (b) Any  failure by the  Borrower  for any reason  (including,  without
limitation, the failure of any conditions precedent specified in Article 6 to be
satisfied) to borrow,  Convert or prepay a Eurodollar  Loan on the date for such
borrowing,  Conversion  or  prepayment  specified  in  the  relevant  notice  of
borrowing, prepayment or Conversion under this Agreement.

         Section 4.6 Capital  Adequacy.  If, after the Closing Date,  any Lender
shall have determined that the adoption or implementation of any applicable law,
rule or regulation  regarding capital adequacy  (including,  without limitation,
any law,  rule or  regulation  implementing  the Basle  Accord),  or any  change
therein,  or any change in the  interpretation or administration  thereof by any
central bank or other Governmental  Authority charged with the interpretation or
administration  thereof,  or  compliance by such Lender (or its parent) with any
guideline,  request or  directive  regarding  capital  adequacy  (whether or not
having the force of law) of any  central  bank or other  Governmental  Authority
(including,  without limitation, any guideline or other requirement implementing
the Basle  Accord),  has or would have the effect of reducing the rate of return
on such Lender's (or its parent's)  capital as a consequence of its  obligations
hereunder or the  transactions  contemplated  hereby to a level below that which
such  Lender  (or  its  parent)  could  have  achieved  but for  such  adoption,
implementation,  change or compliance  (taking into  consideration such Lender's
policies  with respect to capital  adequacy) by an amount  reasonably  deemed by
such Lender to be material,  then from time to time,  within ten  Business  Days
after  demand by such  Lender  (with a copy to the  Administrative  Agent),  the
Borrower  shall pay to such  Lender  such  additional  amount or amounts as will
compensate such Lender (or its parent) for such reduction. A certificate of such
Lender  claiming  compensation  under this  Section  4.6 and  setting  forth the
additional amount or amounts

CREDIT AGREEMENT - Page 35

<PAGE>

to be paid to it hereunder shall be conclusive  absent manifest error,  provided
that the  determination  thereof is made on a reasonable  basis.  In determining
such  amount or  amounts,  such  Lender  may use any  reasonable  averaging  and
attribution methods.

         Section  4.7   Additional   Interest  on  Eurodollar   Loans.   Without
duplication of Section 2.4 or amounts directly included in the definition of the
term "Adjusted Eurodollar Rate", the Borrower shall pay, directly to each Lender
from time to time,  additional  interest on the unpaid  principal amount of each
Eurodollar  Loan  held by such  Lender,  from  the  date of the  making  of such
Eurodollar Loan until such principal amount is paid in full, at an interest rate
per  annum  determined  by such  Lender  in good  faith  equal  to the  positive
remainder  (if  any) of (a) the  Adjusted  Eurodollar  Rate  applicable  to such
Eurodollar  Loan minus (b) the  Eurodollar  Rate  applicable to such  Eurodollar
Loan. Each payment of additional  interest pursuant to this Section 4.7 shall be
payable  by the  Borrower  on each date upon which  interest  is payable on such
Eurodollar Loan pursuant to Section 2.4(b); provided, however, that the Borrower
shall not be  obligated  to make any such  payment  of  additional  interest  in
accordance  with this  Section 4.7 until the first  Business  Day after the date
when the Borrower has been informed (i) that such Lender is subject to a Reserve
Requirement and (ii) of the amount of such Reserve Requirement (after which time
the  Borrower  shall  be  obligated  to make  all such  payments  of  additional
interest,  including,  without  limitation,  such payment of additional interest
that otherwise  would have been payable by the Borrower on or prior to such time
had the Borrower been earlier informed).

                                    ARTICLE 5

                                    Security

         Section 5.1  Collateral.  To secure the full and  complete  payment and
performance of the  Obligations,  the Borrower will grant, and will cause Savvis
Communications  Canada,  Inc.  to  grant,  to the  Administrative  Agent for the
benefit of the Administrative Agent and the Lenders a perfected,  first priority
Lien on all of its right,  title and interest in and to the Collateral,  whether
now owned or hereafter acquired, pursuant to the Security Documents,  consisting
of the following:

         (a) all Nortel Networks  Equipment  purchased under the Master Purchase
Agreement  with  proceeds  of the  Loans  and  owned by the  Borrower  or Savvis
Communications  Canada,  Inc., and any and all substitutions and replacements of
any of the foregoing,  wherever located and whether the same constitute personal
property or fixtures,  together with all components and parts installed directly
therein or directly thereon;

         (b) all Nortel Networks Software purchased or licensed under the Master
Purchase Agreement with proceeds of the Loans; and

         (c)  all  cash  and  non-cash  proceeds  and  products  of  any  of the
foregoing.

CREDIT AGREEMENT - Page 36

<PAGE>

         Section 5.2  Guaranties.  Holdings  will, and the Borrower and Holdings
will cause each of the  Subsidiaries  of the  Borrower  domiciled  in the United
States  (the  "U.S.  Subsidiaries")  (whether  owned as of the  Closing  Date or
thereafter  organized or created) to,  Guarantee the payment and  performance of
the Obligations pursuant to the Guaranties.

         Section 5.3 New Subsidiaries. As soon as practicable after the creation
or acquisition of any U.S. Subsidiary of the Borrower after the Closing Date (or
if Administrative Agent shall require because of possible fraudulent conveyance,
preference  or  similar  concerns,   contemporaneously  with  such  creation  or
acquisition), the Borrower shall:

         (a) cause each such U.S.  Subsidiary  of the Borrower to Guarantee  the
payment and  performance  of the  Obligations by executing and delivering to the
Administrative  Agent  a  Guaranty  or  a  joinder  therein  acceptable  to  the
Administrative Agent; and

         (b) cause each such U.S.  Subsidiary  of the  Borrower  to execute  and
deliver to the Administrative Agent a Security Agreement and such other Security
Documents,  in form and substance acceptable to the Administrative Agent, as the
Administrative  Agent may  request to grant the  Administrative  Agent,  for the
benefit of itself and the  Lenders,  a  perfected,  first  priority  Lien on all
Collateral owned by such U.S. Subsidiary of the Borrower.

         Section  5.4  Landlord  Waivers.  With  respect  to each  lease of real
Property at which  Collateral  is located  that is executed by the  Borrower and
Savvis  Communications  Canada,  Inc.,  the Borrower  will, and Holdings and the
Borrower will cause Savvis  Communications  Canada,  Inc. to, obtain  waivers or
subordinations  of landlord's  Liens from each lessor and other  agreements from
such  lessor  and  its  lenders   necessary   or   appropriate   to  ensure  the
Administrative  Agent's  perfected,  first  priority  Lien on the  Collateral or
Property  affected  thereby,  and  the  Administrative  Agent's  access  to such
Collateral  or  Property,   in  each  case  in  form  and  substance  reasonably
satisfactory to the Administrative Agent;  provided,  however, that Borrower and
Holdings  shall be deemed in  compliance  with this Section 5.4 if Borrower uses
its best efforts to obtain such waivers or subordinations and if, on or prior to
September 30, 2000 and at all times  thereafter,  such waivers or subordinations
have been  obtained  and are in effect for leases of Real  Property  at which at
least 50% of the value of the  Collateral  (based upon its purchase  price under
the Master  Purchase  Agreement)  maintained  in the United  States or Canada is
located.

         Section 5.5 Further  Assurances.  In  addition  to the  foregoing,  the
Borrower  will,  and  will  cause  each of the  other  Loan  Parties  and  other
appropriate  Persons (as  applicable)  to,  execute  and/or deliver such further
agreements,  documents and instruments (including, without limitation,  Security
Documents and financing  statements) as the Administrative  Agent may reasonably
request  from  time  to time in  order  for it to  obtain  and  maintain  valid,
perfected, first priority Liens to be granted in accordance with this Article 5.
All   Collateral   shall  remain   located  in  the  United  States  unless  the
Administrative   Agent  shall  have   specifically   consented  in  writing  and
appropriate action has been taken to maintain valid,  perfected,  first priority
Liens on any Collateral  removed from the United States;  provided,  that Nortel
Networks  Equipment  having a value  (based  upon its  purchase  price under the
Master Purchase Agreement) of not greater than

CREDIT AGREEMENT - Page 37

<PAGE>

$8,000,000  may be  located  outside  the  United  States  or Canada as shown on
Schedule 5.5. The Borrower  represents and warrants to the Administrative  Agent
and to the Lenders that the amount secured by financing  statements  executed by
Interconnected Associates,  Inc., as debtor, in favor of Jeffrey Sterling and/or
Jeffrey  and  Lisa  Sterling,   as  secured  parties  (the  "Sterling  Financing
Statements")  does not  exceed  $100,000.  The  Borrower  agrees to use its best
efforts, on or prior to July 30, 2000 or as soon as practical thereafter, to (a)
have the  Sterling  Financing  Statements  and the  related  liens and  security
interests  terminated  and  released  of record or (b) obtain the  agreement  of
Jeffrey and Lisa Sterling that the Collateral is free and clear of the liens and
security interests of Jeffrey and Lisa Sterling.

         Section 5.6 Setoff.  If an Event of Default  shall have occurred and be
continuing,  each Lender is hereby authorized at any time and from time to time,
without  notice to  Holdings  or the  Borrower or any other Loan Party (any such
notice being hereby  expressly waived by Holdings and the Borrower and the other
Loan  Parties),  to set off and apply any and all deposits  (general or special,
time or demand,  provisional or final  excluding any trust accounts) at any time
held and  other  indebtedness  at any time  owing by such  Lender  to or for the
credit or the account of Holdings,  the Borrower or any other Loan Party against
any and all of the Obligations  now or hereafter  existing under this Agreement,
such Lender's Note or any other Loan  Document,  irrespective  of whether or not
the  Administrative  Agent or such Lender  shall have made any demand under this
Agreement,  such Lender's Note or any such other Loan Document and although such
Obligations may be unmatured. Each Lender agrees promptly to notify the Borrower
(with a copy to the Administrative Agent) after any such setoff and application,
provided  that the failure to give such notice  shall not affect the validity of
such setoff and  application.  The rights and remedies of each Lender  hereunder
are in addition to other rights and  remedies  (including,  without  limitation,
other rights of setoff) which such Lender may have.

                                    ARTICLE 6

                              Conditions Precedent

         Section 6.1 Initial Extension of Credit.  The obligation of each Lender
to make its initial  Loan under this  Agreement is subject to the receipt by the
Administrative  Agent, on or before the Closing Date, of all of the following in
form and substance satisfactory to the Administrative Agent and the Lenders and,
in the case of actions to be taken, the taking of the following required actions
and  evidence  that such  actions  have been  taken to the  satisfaction  of the
Administrative Agent:

         (a)  Resolutions.  Resolutions  of the Board of Directors or equivalent
governing  body (as  applicable)  certified  by the  Secretary  or an  Assistant
Secretary  or  equivalent  officer or  representative  of each Loan Party  which
authorize the execution, delivery and performance by such Loan Party of the Loan
Documents to which it is or is to be a party;

         (b) Incumbency  Certificate.  A certificate of incumbency  certified by
the  Secretary or an Assistant  Secretary (or other  analogous  officer) of each
Loan Party certifying as to the name of each officer or other  representative of
such Loan Party (i) who is authorized to sign the Loan Documents to which it

CREDIT AGREEMENT - Page 38

<PAGE>

is or is  to be a  party  (including  any  certificates  contemplated  therein),
together with specimen signatures of each such officer or other  representative,
and (ii) who will,  until  replaced by other  officers or  representatives  duly
authorized  for that  purpose,  act as its  representative  for the  purposes of
signing documents and giving notices and other communications in connection with
the Loan Documents and the transactions contemplated thereby;

         (c) Certificates or Articles of Incorporation,  etc. The certificate or
articles of  incorporation or other analogous  constitutional  documents of each
Loan Party certified by the Secretary of State or other applicable  Governmental
Authority of the state of incorporation or organization of such entity and dated
as of a Current Date;

         (d) Bylaws, etc. The bylaws or other analogous constitutional documents
of each Loan Party  certified by its  Secretary or an  Assistant  Secretary  (or
other analogous officer or representative);

         (e) Governmental Certificates. Certificates of appropriate officials as
to the  existence  and  good  standing  of  each  of  the  Loan  Parties  in its
jurisdiction of incorporation or organization and in all  jurisdictions in which
such Loan Party is  qualified  or is  required  to qualify to do  business  as a
foreign entity, each such certificate to be dated as of a Current Date;

         (f) Notes.  The Notes duly  completed and executed by the Borrower (one
payable to the order of each Lender with respect to each of its Commitment);

         (g)  Security  Agreements  and  Other  Security   Documents.   Security
Agreements  and other  Security  Documents  executed by each of the Loan Parties
pertaining  to the  Collateral  owned by such Loan  Party or in which  such Loan
Party has  rights  sufficient  to create a Lien  (one  such  Security  Agreement
executed by each such Loan Party) together with all related financing statements
and other  filings,  and, with respect to each  existing  lease of real Property
where  Collateral  is located and if and to the extent  required by Section 5.4,
waivers  or  subordinations  of  landlord's  Liens  from each  lessor  and other
agreements  from such lessor and its lenders  necessary or appropriate to ensure
the  Administrative  Agent's  perfected,  first  priority Lien on the Collateral
affected thereby and the  Administrative  Agent's access to such Collateral,  in
each case in form and substance satisfactory to the Administrative Agent;

         (h) Insurance  Certificates and Policies.  Certificates  evidencing all
insurance  policies required by this Agreement and the other Loan Documents and,
if requested by the Administrative Agent, copies of all such insurance policies;

         (i)  Lien  Searches.  Lien  searches  in the  name of each of the  Loan
Parties (and in all names under which any of them has done  business  within the
last five years) in each jurisdiction  where such Loan Party maintains an office
or has Property,  showing no financing  statements or other Lien  instruments of
record  affecting  the  Collateral  except for  Permitted  Liens and Liens being
released prior to or concurrently with the making of the initial Loan;

CREDIT AGREEMENT - Page 39

<PAGE>

         (j) Master Purchase Agreement. The Master Purchase Agreement shall have
been executed and delivered by all parties thereto, and the Administrative Agent
shall have received a photocopy of the Master Purchase  Agreement as so executed
and  delivered,  certified by a  Responsible  Officer of the Borrower as being a
true and correct copy of such document;

         (k) Payment of Fees and Expenses. The Borrower shall have paid all fees
due on or before the  Closing  Date as  specified  in this  Agreement  or in the
Administrative Agent's Letter and all fees, costs and expenses of or incurred by
the  Administrative  Agent and its counsel to the extent billed on or before the
Closing Date and payable pursuant to this Agreement;

         (l)  Compliance  with Laws.  Holdings,  the Borrower and the other Loan
Parties  shall have  complied in all  material  respects  with all  Governmental
Requirements  necessary to execute and deliver this Agreement and the other Loan
Documents and to perform and consummate the  transactions  contemplated  by this
Agreement and the other Loan Documents;

         (m) No  Prohibitions.  No Governmental  Requirement  shall prohibit the
execution  or  delivery  of this  Agreement  or any other Loan  Document  or the
performance or consummation of the  transactions  contemplated by this Agreement
or any other Loan Document, and no order, judgment or decree of any Governmental
Authority or arbitrator  shall,  and no litigation or other  proceeding shall be
pending or to Holdings' or the  Borrower's  knowledge,  threatened  which would,
enjoin, prohibit,  restrain or otherwise adversely affect in any material manner
the  execution or delivery of this  Agreement or any other Loan  Document or the
performance or consummation of the  transactions  contemplated by this Agreement
or any other Loan Document or otherwise have a Material Adverse Effect;

         (n) Financial  Statements.  Copies of each of the financial  statements
referred to in Section 7.2, in each case as certified by a  Responsible  Officer
of  Holdings  as having  been  prepared  in  accordance  with GAAP and as fairly
presenting the financial condition of Holdings and its Consolidated Subsidiaries
as of the respective  dates indicated  therein and results of operations for the
respective periods indicated therein;

         (o) Opinions of Counsel.  Favorable  legal  opinions of counsel for the
Loan Parties,  in form and substance and issued by counsel  satisfactory  to the
Administrative  Agent,  with respect to the Loan Parties and with respect to the
Loan  Documents  and a  favorable  legal  opinion of  regulatory  counsel to the
Borrower  and  its  Subsidiaries  in  form  and  substance  satisfactory  to the
Administrative Agent;

         (p) Legal  Matters and Loan  Documents.  All matters of a legal  nature
relating to Holdings, the Borrower and the other Loan Parties and this Agreement
and  the  other  Loan  Documents   shall  be  reasonably   satisfactory  to  the
Administrative  Agent and its counsel,  and the Administrative  Agent shall have
received all such other agreements,  documents and instruments, each in form and
substance and executed and delivered by all parties, as the Administrative Agent
may have reasonably requested to receive;

         (q) Business  Plan. A copy of the Business  Plan in form and  substance
satisfactory to the Administrative Agent;

CREDIT AGREEMENT - Page 40

<PAGE>

         (r) Material Contracts. A true and correct copy of each of the Material
Contracts  in  existence  as  of  the  Closing   Date,  in  form  and  substance
satisfactory to the Administrative Agent;

         (s)  Licenses.  Copies  of all  Licenses  affecting  any Loan  Party in
connection  with its businesses or any of the  Properties  owned or leased by it
and in connection with its businesses to be conducted and Properties to be owned
or leased as contemplated by the Business Plan, and evidence satisfactory to the
Administrative  Agent that  Holdings,  the Borrower and each other Loan Party is
able to conduct its businesses as currently  conducted and as to be conducted as
contemplated  by the Business  Plan with the use of such  Licenses in full force
and  effect;  and the  Administrative  Agent  shall  be  satisfied  that (i) the
Borrower and each other Loan Party has the exclusive,  unrestricted right to use
each of such  Licenses  pursuant  to  license  agreements  or other  agreements,
documents or instruments in form and substance  reasonably  satisfactory  to the
Administrative  Agent and (ii) Holdings,  the Borrower and each other Loan Party
has complied with all initial and on-going conditions of the issuance and use of
all such Licenses and all other terms and provisions thereof;

         (t) Waivers and  Consents.  To the extent not referred to in clause (g)
preceding,  copies  of all  material  waivers  and  consents  necessary  for the
execution,  delivery  and  performance  by each of the Loan  Parties of the Loan
Documents to which it is a party, including, without limitation, any waivers and
consents in connection with the Master Purchase  Agreement as the Administrative
Agent  may  require,  which  waivers  and  consents  shall  be  certified  by  a
Responsible  Officer of the Borrower as true and correct copies of such consents
as of the Closing Date;

         (u) Regulatory  Approvals.  Evidence satisfactory to the Administrative
Agent  that  all  filings,   consents  or  approvals  with  or  of  Governmental
Authorities  necessary or  appropriate to execute and deliver this Agreement and
the  other  Loan  Documents  and to  perform  and  consummate  the  transactions
contemplated by the Loan Documents have been made and obtained, as applicable;

         (v) No Material Adverse Change. As of the Closing Date, (i) no material
adverse  change  shall have  occurred  with respect to the  businesses,  assets,
financial  condition,   results  of  operations,   operations,   capitalization,
indebtedness, liabilities, obligations, profitability or prospects or Properties
or of the general affairs or management of Holdings and its Subsidiaries,  taken
as a  whole,  or of  the  Borrower  individually  or of  the  Borrower  and  its
Subsidiaries  taken as a whole,  in each  case  since  March 31,  2000,  (ii) no
disruption or adverse change in the capital  markets  generally or in the market
for loan  syndications  in particular  shall have  occurred  since June 1, 2000,
which  disruption  or adverse  change is deemed  material in the judgment of the
Administrative Agent, and (iii) the Administrative Agent shall be satisfied that
the financial performance of Holdings and its Subsidiaries  (including,  without
limitation,  the Borrower) prior to the Closing Date is not materially different
from the financial  projections for such Person(s) through the Closing Date that
were previously submitted to the Administrative Agent;

         (w)  Accountant's  Letter.  A  letter  from  Holdings  authorizing  the
independent  public  accountants  of Holdings and its  Subsidiaries  (including,
without limitation,  the Borrower) to communicate with the Administrative  Agent
and the Lenders; and

CREDIT AGREEMENT - Page 41

<PAGE>

         (x) Solvency. Certificates certifying that (i) each of the Borrower and
Holdings,  as a separate entity, is Solvent, both before and after giving effect
to the Loans and (ii) Holdings, together with its Consolidated Subsidiaries,  is
Solvent, both before and after giving effect to the Loans.

The Borrower  shall  deliver,  or cause to be delivered,  to the  Administrative
Agent  sufficient  counterparts of each agreement,  document or instrument to be
received  by the  Administrative  Agent  under  this  Section 6. 1 to permit the
Administrative  Agent to  distribute  a copy of the same to each of the Lenders.
After the request of the  Borrower,  the  Administrative  Agent shall inform the
Borrower in writing as to the status of satisfaction of the conditions precedent
set forth in this Section 6.1.

         Section 6.2 All Extensions of Credit.  The obligation of each Lender to
make any Loan  (including  the initial Loan) under this  Agreement is subject to
the  continued  satisfaction  of each of the  conditions  precedent set forth in
Section 6.1 and each of the following additional conditions precedent:

         (a) No Default  or  Material  Adverse  Effect.  No Default or  Material
Adverse Effect shall have occurred and be continuing,  or would result from such
Loan;

         (b)  Representations  and Warranties.  All of the  representations  and
warranties  of Holdings,  the  Borrower and the other Loan Parties  contained in
this Agreement and in the other Loan Documents  shall be true and correct on and
as of the  date  of  such  Loan  with  the  same  force  and  effect  as if such
representations  and warranties had been made on and as of such date unless they
relate solely to an earlier date;

         (c)  Use  of  Proceeds.  The  Borrower  shall  have  certified  to  the
Administrative  Agent  that all  proceeds  of the Loans  then  being made by the
Lenders  are,  concurrently  with the  making of such  Loans,  being used by the
Borrower for the purposes specified in Section 2.10;

         (d) Master Purchase Agreement.  The Master Purchase Agreement shall not
have been terminated by the Borrower or any other Loan Party and shall remain in
full force and effect;

         (e) Full Disclosure.  Neither Holdings, the Borrower nor any other Loan
Party has  failed to  disclose  to the  Administrative  Agent or any  Lender any
material  fact with  respect to the  Network or its  business  or its  financial
condition (including any contingent liabilities),  or has failed to disclose any
information,  the absence of which makes any information previously disclosed to
the Administrative Agent or any Lender materially misleading; and

         (f)  Additional  Documentation.  The  Administrative  Agent  shall have
received such additional approvals, agreements, documents and instruments as the
Administrative Agent may reasonably request.

Each  notice  of  borrowing  by  the  Borrower   hereunder  shall  constitute  a
representation  and warranty by the Borrower that the  conditions  precedent set
forth in this Section 6.2 have been satisfied (both as of the date

CREDIT AGREEMENT - Page 42

<PAGE>

of such notice and, unless the Borrower  otherwise  notifies the  Administrative
Agent prior to the date of such borrowing, as of the date of such borrowing).

         Section 6.3 Closing Certificates. The Borrower shall, concurrently with
the Closing Date (with respect to the conditions  precedent set forth in Section
6.1)  and  concurrently  with  the  date of the  making  of each  other  Loan if
requested by the Administrative Agent, execute and deliver to the Administrative
Agent a certificate  in form and substance  satisfactory  to the  Administrative
Agent certifying as to the satisfaction of each of the conditions  precedent set
forth in this  Article 6 which are  required to be  satisfied  on or before such
date (without  regard to whether such matters are, in fact,  satisfactory to the
Administrative   Agent  to  the  extent  that  such   satisfaction  is  required
hereunder).

                                    ARTICLE 7

                         Representations and Warranties

         Each of  Holdings  and the  Borrower  represents  and  warrants  to the
Administrative  Agent and the Lenders that the following  statements  are on the
Closing Date, and after giving effect to the funding of the initial Loans on the
Closing Date and  continuing  thereafter as long as the  Obligations or any part
thereof are  outstanding  or any Lender has any  Commitment  hereunder  will be,
true, correct and complete:

         Section 7.1  Existence.  Each of the Loan Parties (a) is a  corporation
(or other entity) duly  organized,  validly  existing and in good standing under
the laws of the jurisdiction of its incorporation (or organization), (b) has all
requisite  corporate or other entity (as applicable)  power and authority to own
its Properties and carry on its business as now conducted,  and (c) is qualified
to do business in all  jurisdictions  in which the nature of its business  makes
such  qualification  necessary  and where  failure  to so  qualify  would have a
Material  Adverse  Effect.  Each of the Loan Parties has the power and authority
and legal right to execute,  deliver and perform its obligations  under the Loan
Documents to which it is or may become a party.

         Section 7.2       Financial Statements.

         (a) Holdings has delivered to the Administrative  Agent and the Lenders
(i) the audited  consolidated and consolidating  (as to the Borrower)  financial
statements  (including  balance sheet and  statements  of income or  operations,
shareholders'   equity  and  cash  flows)  of  Holdings  and  its   Consolidated
Subsidiaries  (including,  without  limitation,  the Borrower) as of and for the
fiscal  year ended  December  31,  1999,  (ii) the  unaudited  consolidated  and
consolidating (as to the Borrower) financial statements (including balance sheet
and statements of income or operations,  shareholders' equity and cash flows) of
Holdings and its Consolidated Subsidiaries (including,  without limitation,  the
Borrower) as of and for the fiscal  period  ended March 31,  2000,  and (iii) an
unaudited  consolidated and consolidating (as to the Borrower) pro forma balance
sheet  of  Holdings  and  its  Consolidated  Subsidiaries  (including,   without
limitation, the Borrower) dated as of the Closing Date which gives effect to the
initial  Loans made on the Closing Date and the other  transactions  to occur on
such date. All financial statements required to be delivered to the

CREDIT AGREEMENT - Page 43

<PAGE>

Administrative  Agent in  accordance  with this  Agreement  (including,  without
limitation, those referred to in the immediately preceding sentence) are or will
be when  delivered (as  applicable)  true and correct,  have been or will be (as
applicable)  prepared in accordance  with GAAP (except for year-end  adjustments
and the absence of financial  statement  footnotes  required by GAAP) and fairly
and accurately present or will fairly and accurately present (as applicable), on
a consolidated and consolidating  (as to the Borrower where  applicable)  basis,
the  financial   condition  of  Holdings  and  its   Consolidated   Subsidiaries
(including,  without limitation,  the Borrower) as of such dates and the results
of operations for the respective periods indicated therein.  There has not been,
as of the Closing Date, any material adverse change in the financial  condition,
results  of  operations,  businesses,  operations,  Properties,  capitalization,
assets,  liabilities  or prospects of Holdings and its  Subsidiaries  taken as a
whole,  or of the  Borrower on an  individual  basis or of the  Borrower and its
Subsidiaries taken as a whole, since March 31, 2000.

         (b) The Business Plan  (including,  without  limitation,  the financial
projections  contained  therein)  represents,  as of the Closing Date,  the good
faith estimate of each of Holdings and the Borrower and their respective  senior
management  concerning  the probable  financial  condition  and  performance  of
Holdings and its Subsidiaries for the time period covered  thereunder based upon
the assumptions believed by such management to be reasonable at the time made.

         Section 7.3 Corporate  Action; No Breach.  The execution,  delivery and
performance  by each of the Loan Parties of the Loan Documents to which it is or
may  become a party and  compliance  with the terms and  provisions  hereof  and
thereof have been duly authorized by all requisite  entity action and do not and
will not (a) violate or conflict  with, or result in a breach of, or require any
consent  under (i) the  certificate  or articles of  incorporation,  articles of
organization, bylaws, regulations or other constitutional documents of such Loan
Party, (ii) any Governmental  Requirement  (including,  without limitation,  the
Communications  Act, any rule or regulation of the FCC or any rule or regulation
of any  federal  or  state  public  utility  commission  or  other  Governmental
Authority)  or any  order,  writ,  injunction  or  decree  of  any  Governmental
Authority or arbitrator, or (iii) any material agreement, document or instrument
to which  any Loan  Party  is a party or by which  any Loan  Party or any of its
Property  is bound or  subject,  or (b)  constitute  a  default  under  any such
material  agreement,  document  or  instrument,  or  result in the  creation  or
imposition of any Lien (except a Lien in favor of the  Administrative  Agent for
and on behalf of the Lenders under the Security Documents as provided in Article
5) upon any of the revenues or Property of any Loan Party.

         Section 7.4 Operation of Business;  Licenses.  Each of the Loan Parties
(a)  possesses all material  Licenses  necessary or  appropriate  to conduct its
businesses substantially as now conducted and as to be conducted as contemplated
by the  Business  Plan,  and (b) has  complied  with all  initial  and  on-going
conditions to the issuance and use of all such Licenses  except where failure to
comply could not reasonably be expected to have a Material Adverse Effect.  None
of such  Persons is in violation of any such  material  Licenses  which could be
expected to result in any termination or cessation thereof. All of such material
Licenses   required  by  any  Governmental   Requirement   (including,   without
limitation,  the  Communications  Act, any rule or  regulation of the FCC or any
state public utility  commission) or issued by any Governmental  Authority as of
the Closing Date are summarized by category or type, as relevant to the

CREDIT AGREEMENT - Page 44

<PAGE>

operation  of each Loan  Party,  on Schedule  7.4.  Such  Licenses  set forth on
Schedule 7.4 have been duly issued by the appropriate Governmental Authority (as
applicable)  and are in full  force  and  effect,  and  all  provisions  of such
Licenses  have been complied  with in all material  respects.  As of the Closing
Date, no such License set forth on Schedule 7.4 is subject to any pending or, to
the knowledge of the Borrower,  threatened revocation or termination  proceeding
or action.

         Section 7.5 Intellectual  Property.  All Intellectual Property owned or
used by each of the Loan  Parties in the  operation of its business is set forth
on Schedule 7.5. Each of the Loan Parties owns or possesses (or will be licensed
or have the full right to use) all  Intellectual  Property which is necessary or
appropriate  for the operation of its  businesses as presently  conducted and as
currently  proposed to be conducted,  without any known conflict with the rights
of others.  The consummation of the transactions  contemplated by this Agreement
and the other Loan Documents will not materially  alter or impair,  individually
or in the aggregate,  any of such rights of any of the Loan Parties.  No product
or service of any of the Loan Parties  infringes upon any Intellectual  Property
of any other Person,  and no claim or litigation is pending or, to the knowledge
of Holdings or the Borrower,  threatened  against any Loan Party  contesting its
right to sell or  otherwise  use any product or material or service  which could
reasonably be expected to have a Material Adverse Effect.  There is no violation
by any Loan Party of any right of such Loan Party with  respect to any  material
Intellectual Property owned or used by such Loan Party.

         Section 7.6  Litigation  and  Judgments.  Each material  action,  suit,
investigation or proceeding in any court or before any arbitrator or mediator or
before  or by  any  Governmental  Authority  (whether  or not  any  Governmental
Authority is a party  thereto)  pending or, to the  knowledge of Holdings or the
Borrower, threatened against or affecting any Loan Party, or that relates to any
of the Loan Documents as of the Closing Date, is disclosed on Schedule 7.6. None
of such  actions,  suits,  investigations  or  proceedings  could,  if adversely
determined,  reasonably be expected to have a Material Adverse Effect. Except as
may  be  disclosed  on  Schedule  7.6,  as of the  Closing  Date,  there  are no
outstanding  judgments  against any Loan Party.  No Loan Party has  received any
opinion or  memorandum  or legal advice from legal counsel to the effect that it
is exposed to any liability or disadvantage that could reasonably be expected to
have a Material Adverse Effect.

         Section  7.7  Rights  in  Properties;  Liens.  Except as  disclosed  on
Schedule 7.7, none of the Loan Parties owns any right,  title or interest in any
real Property. Each Loan Party has good and marketable title to or, with respect
to  leasehold  interests,  valid  leasehold  interests  in all  of its  material
Properties  and assets,  real and personal,  including the material  Properties,
assets and leasehold interests reflected in the financial  statements  described
in Section  7.2(a),  except where failure to have good and  marketable  title or
valid  leasehold  interests  could not reasonably be expected to have a Material
Adverse  Effect,  and none of the Properties or leasehold  interests of any Loan
Party is subject to any Lien,  except Permitted Liens.  None of the Loan Parties
has granted or voluntarily allowed or permitted to exist any Lien to or in favor
of any  Person  (other  than the  Administrative  Agent for and on behalf of the
Lenders as security for the Obligations) which attaches or relates to any of the
Collateral and the Liens on the Collateral in favor of the Administrative  Agent
are perfected, first priority Liens.

CREDIT AGREEMENT - Page 45

<PAGE>

         Section  7.8  Enforceability.  The Loan  Documents  have  been duly and
validly  executed  and  delivered  by each of the Loan  Parties  that is a party
thereto,  and such Loan  Documents  constitute  the  legal,  valid  and  binding
obligations of each such Loan Party, enforceable against each such Loan Party in
accordance  with  their  respective  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.

         Section 7.9 Approvals. No authorization, approval or consent of, and no
filing or registration with or notice to, any Governmental  Authority (including
the FCC) or third party is or will be necessary for the  execution,  delivery or
performance  by any  Loan  Party  of any of  the  Loan  Documents  or any of the
Material  Contracts  to which it is or will be a party  or for the  validity  or
enforceability thereof, except for such consents,  approvals and filings as have
been validly obtained or made and are in full force and effect. The consummation
of the  transactions  contemplated  by  the  Loan  Documents  and  the  Material
Contracts  does not require the consent or approval of any other Person,  except
such consents and  approvals  (a) as have been validly  obtained and are in full
force and effect or (b) as to which the  failure to obtain is not,  individually
or in the aggregate, material. None of the Loan Parties has failed to obtain any
material License (including,  without limitation,  any FCC License) necessary or
appropriate  for the ownership or use of any of its  Properties,  conduct of its
business and performance of the Business Plan.

         Section 7.10 Debt. As of the Closing Date,  neither Holdings nor any of
its  Subsidiaries  (including,  without  limitation,  the Borrower) has any Debt
other than (a) the  Obligations,  and (b) the Debt  disclosed  on Schedule  7.10
hereto.

         Section  7.11  Taxes.  Each of the Loan  Parties  has filed (a) all tax
returns (federal,  state and local) and reports required to be filed, including,
without limitation,  all income, franchise,  employment,  Property and sales tax
returns, and (b) all other material tax returns and reports required to be filed
except where  failure to file any such return or report could not  reasonably be
expected to have a Material  Adverse Effect,  and has paid all federal and other
material  taxes  (shown  on such  returns  or  reports  to be due and  payable),
assessments,  fees and other  governmental  charges levied or imposed upon it or
its  Properties,  income or assets  otherwise due and payable before they become
delinquent,  except those which are being contested in good faith by appropriate
proceedings  and for which  adequate  reserves  have been provided in accordance
with GAAP and no notice of Lien has been filed or recorded. There is no proposed
tax assessment  against any Loan Party which could, if the assessment were made,
reasonably be expected to have a Material Adverse Effect.

         Section  7.12 Margin  Securities.  None of the Loan  Parties is engaged
principally, or as one of its important activities, in the business of extending
credit for the  purpose of  purchasing  or  carrying  margin  stock  (within the
meaning  of  Regulations  T, U or X of the  Board of  Governors  of the  Federal
Reserve  System),  and no  part  of the  proceeds  of any  Loan  will be used to
purchase or carry any margin stock or to extend credit to others for the purpose
of purchasing or carrying margin stock.

         Section  7.13 ERISA.  None of the Loan  Parties or any ERISA  Affiliate
maintains or contributes to, or has any obligation under, any Pension Plan other
than the Pension Plans identified on Schedule 7.13.

CREDIT AGREEMENT - Page 46

<PAGE>

Each Plan of any Loan Party is in compliance  in all material  respects with all
applicable  provisions of ERISA and the Code.  Neither a Reportable  Event nor a
Prohibited  Transaction  has occurred  within the last 60 months with respect to
any Plan that could  reasonably be expected have a Material  Adverse Effect.  No
notice of intent to terminate a Pension Plan has been filed, nor has any Pension
Plan been terminated.  No circumstances exist which constitute grounds entitling
the PBGC to  institute  proceedings  to  terminate,  or  appoint  a  trustee  to
administer,  a Pension Plan, nor has the PBGC  instituted any such  proceedings.
None of the Loan  Parties or any ERISA  Affiliate  has  completely  or partially
withdrawn from a  Multiemployer  Plan.  Each Loan Party and each ERISA Affiliate
have met their  minimum  funding  requirements  under ERISA and the Code or with
respect to all of their Pension Plans subject to such  requirements,  and, as of
the Closing Date except as specified on Schedule  7.13, the present value of all
vested  benefits under each funded Plan  (exclusive of any  Multiemployer  Plan)
does not and will not  exceed  the fair  market  value of all such  Plan  assets
allocable to such benefits,  as determined on the most recent  valuation date of
such Plan and in  accordance  with ERISA.  None of the Loan Parties or any ERISA
Affiliate has incurred any  liability to the PBGC under ERISA.  No litigation is
pending or, to Holdings' or the Borrower's  knowledge,  threatened concerning or
involving any Plan that could  reasonably be expected to have a Material Adverse
Effect.   There  are  no  unfunded  or  unreserved   liabilities  (on  either  a
going-concern  basis  or a  wind-up  basis)  relating  to any Plan  that  could,
individually or in the aggregate,  have a Material Adverse Effect if Holdings or
the Borrower were required to fund or reserve such  liability in full. As of the
Closing  Date,  no  funding  waivers  have been or will have been  requested  or
granted  under  Section 412 of the Code with respect to any Plan. No unfunded or
unreserved  liability  for benefits  under any Plan or Plans  (exclusive  of any
Multiemployer  Plans)  exceeds  $100,000,  with  respect  to any such  Plan,  or
$200,000  with  respect to all such Plans,  in the  aggregate  as of the Closing
Date, on either a going-concern basis or a wind-up basis.

         Section 7.14 Disclosure.  No written  statement,  information,  report,
representation  or  warranty  made by any Loan  Party in any  Loan  Document  or
furnished to the Administrative  Agent or any Lender by or on behalf of any Loan
Party in  connection  with the Loan  Documents or any  transaction  contemplated
hereby or thereby  contains any untrue  statement of a material fact or omits to
state any material fact necessary to make the statements  herein or therein,  in
light of the circumstances in which made, not misleading. There is no fact known
to Holdings or the Borrower which has had a Material  Adverse Effect,  and there
is no fact known to  Holdings or the  Borrower  which might in the future have a
Material  Adverse  Effect  except as may have been  disclosed  in writing to the
Administrative Agent.

         Section  7.15 Loan  Parties;  Capitalization.  Schedule  7.15  attached
hereto  contains,  as of the Closing  Date,  complete and  accurate  information
regarding (a) the identities of each of the  Subsidiaries  of Holdings,  (b) the
number of issued and outstanding shares of each class of Capital Stock issued by
the Borrower and each of its  Subsidiaries and the identities of, and number and
percentage  of each of such  shares  held by, the  owner(s)  (both of record and
beneficially) of such Capital Stock and (c) the jurisdiction of incorporation or
other  organization  of each Loan  Party.  Holdings  owns,  beneficially  and of
record,  all of the  issued  and  outstanding  shares  of  Capital  Stock of the
Borrower.

CREDIT AGREEMENT - Page 47

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         Section  7.16  Compliance  with  Laws.  None of the Loan  Parties is in
violation of any Governmental  Requirement (including,  without limitation,  the
Communications  Act, any rule or regulation of the FCC or any rule or regulation
of any  federal  or  state  public  utility  commission  or  other  Governmental
Authority),  except for instances of non-compliance that could not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect.

         Section 7.17  Investment  Company  Act.  None of the Loan Parties is an
"investment  company" within the meaning of the Investment  Company Act of 1940,
as amended.

         Section  7.18 Public  Utility  Holding  Company  Act.  None of the Loan
Parties is a "holding company" or a "subsidiary  company" of a "holding company"
or an  "affiliate"  of a  "holding  company"  or a "public  utility"  within the
meaning of the Public Utility Holding Company Act of 1935, as amended.

         Section 7.19      Environmental Matters.

         (a) Except for instances of noncompliance  with or exceptions to any of
the following  representations and warranties that could not have,  individually
or in the aggregate, a Material Adverse Effect:

                  (i)  Each  of the  Loan  Parties  and  all  of its  respective
         Properties and operations are in full compliance with all Environmental
         Laws.  Neither Holdings nor the Borrower is aware of, and no Loan Party
         has received written notice of, any past, present or future conditions,
         events, activities,  practices or incidents which may interfere with or
         prevent the compliance or continued  compliance by such Loan Party with
         all Environmental Laws;

                  (ii) Each of the Loan Parties has  obtained all Licenses  that
         are required under applicable Environmental Laws, and all such Licenses
         are in good standing and all such Persons are in compliance with all of
         the terms and conditions thereof;

                  (iii) No Hazardous Materials exist on, about or within or have
         been (to the  knowledge of Holdings or the Borrower) or are being used,
         generated, stored, transported,  disposed of on or Released from any of
         the Properties of any Loan Party except in compliance  with  applicable
         Environmental  Laws.  The use which each of the Loan Parties  makes and
         intends  to make of its  respective  Properties  will not result in the
         use, generation,  storage,  transportation,  accumulation,  disposal or
         Release of any Hazardous Material on, in or from any of their currently
         owned  Properties  except in compliance with  applicable  Environmental
         Laws;

                  (iv) There are no conditions or circumstances  associated with
         the  currently  owned or leased  Properties  or  operations of any Loan
         Party  that  could   reasonably   be  expected  to  give  rise  to  any
         Environmental  Liabilities  or claims  resulting  in any  Environmental
         Liabilities;

CREDIT AGREEMENT - Page 48

<PAGE>

                  (v) None of the  Loan  Parties  and  none of their  respective
         currently or previously  owned or leased  Properties or operations  are
         subject to any  outstanding  or, to the  knowledge  of  Holdings or the
         Borrower,  threatened  order from or  agreement  with any  Governmental
         Authority or other Person or subject to any judicial or  administrative
         proceeding with respect to (A) any failure to comply with Environmental
         Laws, (B) any Remedial Action, or (C) any Environmental Liabilities;

                  (vi) None of the Loan  Parties is subject to, or has  received
         written notice of any claim from any Person alleging that it is or will
         be subject to, any Environmental Liabilities;

                  (vii) None of the  Properties  of any of the Loan Parties is a
         treatment  facility  (except for the  recycling of Hazardous  Materials
         generated  on-site and the  treatment of liquid  wastes  subject to the
         Clean Water Act or other  applicable  Environmental  Law for  temporary
         storage  of  Hazardous  Materials  generated  on-site  prior  to  their
         disposal  off-site) or disposal  facility  requiring a permit under the
         Resource  Conservation  and Recovery  Act, 42 U.S.C.  ss. 6901 et seq.,
         regulations  thereunder or any  comparable  provision of state law. The
         Loan  Parties  are  in  compliance   with  all   applicable   financial
         responsibility requirements of all Environmental Laws; and

                  (viii) None of the Loan  Parties has failed to file any notice
         required under applicable Environmental Law reporting a Release.

         (b) No Lien  arising  under  any  Environmental  Law that  could  have,
individually or in the aggregate,  a Material Adverse Effect has attached to any
Property or revenues of any of the Loan Parties.

         Section 7.20 Year 2000  Compliance.  Each of the Loan Parties  believes
that it is Year 2000  Compliant  as of the  Closing  Date  except to the  extent
described in Schedule 8.13.

         Section 7.21 Labor  Disputes and Acts of God.  Neither the business nor
the  Properties of any of the Loan Parties are affected by any fire,  explosion,
accident,  strike,  lockout  or  other  labor  dispute,  drought,  storm,  hail,
earthquake,  embargo,  act of  God or of the  public  enemy  or  other  casualty
(whether  or not covered by  insurance)  that is having or could  reasonably  be
expected to have a Material Adverse Effect.

         Section 7.22 Material Contracts.  Attached hereto as Schedule 7.22 is a
complete list, as of the Closing Date, of all Material  Contracts of each of the
Loan Parties,  other than the Loan Documents.  All of the Material Contracts are
in full force and effect  and none of the Loan  Parties is in default  under any
Material  Contract and, to the knowledge of Holdings and the Borrower  after due
inquiry,  no other Person that is a party thereto is in default under any of the
Material  Contracts.  None of the Material Contracts  prohibits the transactions
contemplated  under the Loan  Documents.  Except as may be  provided on Schedule
7.22,  each of the Material  Contracts is currently in the name of a Loan Party.
Holdings and the Borrower have delivered to the Administrative  Agent a complete
and current copy of each Material

CREDIT AGREEMENT - Page 49

<PAGE>

Contract  of  Holdings  and/or  any  of  its  Subsidiaries  (including,  without
limitation,  the  Borrower)  (other than  purchase  orders  entered  into in the
ordinary course of business) existing on the Closing Date.

         Section 7.23  Outstanding  Securities.  All outstanding  securities (as
defined in the Securities Act of 1933, as amended, or any successor thereto, and
the rules and regulations of the Securities and Exchange Commission  thereunder)
of each of the Loan Parties have been  offered,  issued,  sold and  delivered in
compliance with all applicable Governmental Requirements.

         Section 7.24 Solvency. Each of the Borrower and Holdings, as a separate
entity, is Solvent, both before and after giving effect to the Loans.  Holdings,
together with its Consolidated  Subsidiaries,  is Solvent, both before and after
giving effect to the Loans.

         Section 7.25 Employee Matters. Except as set forth on Schedule 7.25, as
of the  Closing  Date (a)  neither  any Loan Party nor any of its  employees  is
subject  to  any  collective  bargaining  agreement,  and  (b) no  petition  for
certification  or union election is pending with respect to the employees of any
Loan  Party,  and no  union  or  collective  bargaining  unit  has  sought  such
certification  or recognition  with respect to the employees of any such Person.
There are no strikes,  slowdowns, work stoppages or controversies pending or, to
the best  knowledge of Holdings and the Borrower  after due inquiry,  threatened
against,  any Loan Party or its respective  employees  which could have,  either
individually or in the aggregate, a Material Adverse Effect. Except as set forth
on Schedule 7.25, as of the Closing Date, none of the Loan Parties is subject to
an employment contract.

         Section  7.26  Insurance.  Schedule  7.26  sets  forth a  complete  and
accurate  description  of all policies of insurance that are in effect as of the
Closing  Date  for  the  Loan  Parties  and  their  Properties.   No  notice  of
cancellation  has been  received  for any of such  policies and each of the Loan
Parties and the owner and holder of each such policy are in compliance  with all
of the terms and conditions of such policies.

         Section  7.27  Common   Enterprise.   Holdings  and  its   Subsidiaries
(including, without limitation, the Borrower) are members of an affiliated group
with each other such Person and are collectively  engaged in a common enterprise
with one another. Each of the Loan Parties expects to derive substantial benefit
(and may  reasonably be expected to derive  substantial  benefit),  directly and
indirectly,  from the Loans contemplated by this Agreement, both in its separate
capacity and as a member of an affiliated and integrated group.

         Section 7.28 Burdensome Agreements. None of the Loan Parties is a party
to any indenture, loan agreement,  credit agreement, stock purchase agreement or
any lease or other agreement,  document or instrument, or subject to any charter
or corporate restriction, that is unduly and materially burdensome or that could
reasonably  be  expected  to have a Material  Adverse  Effect.  None of the Loan
Parties  is in  default  in  any  respect  in  the  performance,  observance  or
fulfillment of any of the obligations,  covenants or conditions contained in any
agreement,  document or instrument  binding on it or its Properties,  except for
instances of  noncompliance  that,  individually or in the aggregate,  could not
have a Material Adverse Effect.

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<PAGE>

         Section 7.29 Most Favored Lender.  None of the Loans Parties is a party
to any equipment  financing with any other lender that provides for  guaranties,
security,  financial  covenants or negative  covenants  which are more favorable
than  those  contained  in this  Agreement  or any other  terms,  provisions  or
conditions  (excluding terms and provisions  relating to interest rates or fees)
which are materially more favorable than those contained in this Agreement.

                                    ARTICLE 8

                              Affirmative Covenants

         Each of Holdings and the Borrower covenants and agrees that, as long as
the  Obligations  or any part  thereof  are  outstanding  or any  Lender has any
Commitment hereunder,  it will perform and observe, or cause to be performed and
observed, the following covenants:

         Section 8.1 Reporting  Requirements.  Holdings and/or the Borrower will
furnish (or will cause to be  furnished)  to the  Administrative  Agent and each
Lender:

         (a) Annual Financial Statements. As soon as available, and in any event
within 90 days after the end of each fiscal year of Holdings, beginning with the
fiscal  year  ending  December  31,  2000,  either  (i) a copy of the Form  10-K
(including all financial  statements  contained therein) filed by Holdings as of
the  end of  and  for  such  fiscal  year  then  ended,  together  with  audited
consolidating   schedules  for  the  Borrower  with  respect  to  the  financial
statements  contained  therein,  or  (ii) a  copy  of the  annual  audit  report
(including  the  consolidated  balance  sheet) of Holdings and its  Subsidiaries
(including, without limitation, the Borrower) as of the end of such year and the
related  consolidated  statements of income or operations,  shareholders' equity
and cash  flows  for such  fiscal  year,  together  with  audited  consolidating
schedules for the Borrower with respect to each of such financial statements, in
each case setting forth in comparative  form the figures for the previous fiscal
year, and accompanied by the opinion of independent certified public accountants
of recognized standing reasonably  acceptable to the Administrative Agent, which
opinion shall state that such consolidated  financial  statements present fairly
the financial  position and results of operations  for the periods  indicated in
conformity  with GAAP applied on a basis  consistent  with prior years and which
opinion  shall not be  qualified or limited  because of a restricted  or limited
examination by such accountant of any material portion of such Person's records;

         (b) Quarterly Financial  Statements.  As soon as available,  and in any
event  within 45 days after the end of each of the  quarters of each fiscal year
of Holdings,  beginning with the fiscal quarter ending June 30, 2000, either (i)
a copy of the Form 10-Q (including all financial  statements  contained therein)
filed by  Holdings  as of the end of and for such  fiscal  quarter  then  ended,
together with  consolidating  schedules for the Borrower with respect to each of
the  financial  statements  contained  therein,  or (ii) a copy of the unaudited
consolidated balance sheet of Holdings and its Subsidiaries (including,  without
limitation,  the  Borrower)  as of the  end of  such  quarter  and  the  related
consolidated  statements of income or operations,  shareholders' equity and cash
flows and quarterly operating budgets for the period commencing on the first day
and  ending  on  the  last  day  of  such  quarter,   together  with   unaudited
consolidating  schedules for the Borrower with respect to each of such financial
statements and quarterly operating budgets, in each case

CREDIT AGREEMENT - Page 51

<PAGE>

setting  forth in  comparative  form the  information  or figures and  quarterly
operating  budget figures,  respectively,  for the  corresponding  period of the
preceding  fiscal year, and certified by an appropriate  Responsible  Officer of
Holdings as fairly  presenting,  in accordance with GAAP, the financial position
and the results of  operations  of  Holdings  and its  Subsidiaries  (including,
without limitation, the Borrower), except for year-end adjustments and financial
statement footnotes required by GAAP;

         (c) Compliance  Certificate.  Concurrently with the delivery of each of
the financial statements referred to in Sections 8.1(a) and 8.1(b), a Compliance
Certificate of a Responsible Officer of Holdings and the Borrower  substantially
in the form of Exhibit D hereto,  appropriately completed,  stating that, to the
best of such officer's knowledge,  no Default has occurred and is continuing or,
if a Default has occurred and is continuing,  stating the nature thereof and the
action that has been taken and is proposed to be taken with respect thereto;

         (d) Notice of Actions, Suits,  Investigations or Proceedings.  Promptly
after the commencement thereof, notice of all actions, suits, investigations and
proceedings  in any court or before any  arbitrator  or mediator or before or by
any Governmental  Authority (including the FCC) (whether or not any Governmental
Authority is a party thereto) affecting any Loan Party or any License, which, if
determined  adversely to any Loan Party,  could reasonably be expected to have a
Material Adverse Effect;

         (e)  Notice of  Default,  etc..  As soon as  possible  and in any event
immediately upon Holdings' or the Borrower's  knowledge of the occurrence of any
Default,  a written  notice  setting  forth the details of such  Default and the
action  that  Holdings  and/or  any  of  its  Subsidiaries  (including,  without
limitation, the Borrower) has taken and, if and to the extent known, proposes to
take with respect thereto;

         (f) ERISA Plan Reports.  Promptly after the filing or receipt  thereof,
copies of all reports, including annual reports, and notices which Holdings, the
Borrower or any of their ERISA  Affiliates  files with or receives from the PBGC
or the U.S.  Department  of Labor under ERISA with  respect to a Pension Plan or
for which Holdings or the Borrower has any potential  liability;  and as soon as
possible and in any event within five days after  Holdings or the Borrower knows
or has reason to know that any Pension Plan is insolvent, or that any Reportable
Event  or  Prohibited  Transaction  has  occurred  with  respect  to any Plan or
Multiemployer  Plan,  or that the  PBGC,  Holdings,  the  Borrower  or any ERISA
Affiliate has instituted or will institute  proceedings under ERISA to terminate
or withdraw from or reorganize  any Pension Plan, a certificate of a Responsible
Officer of Holdings setting forth the details as to such insolvency, withdrawal,
Reportable  Event,  Prohibited  Transaction or  termination  and the action that
Holdings and/or any of its  Subsidiaries  (including,  without  limitation,  the
Borrower) has taken and proposes to take with respect thereto;

         (g) Proxy Statements,  Etc. As soon as available,  one copy of each (if
any) financial statement,  report, notice or proxy statement sent by Holdings or
the Borrower to its  stockholders  or other security  holders  generally and one
copy of each (if any) regular,  periodic or special report  (including,  without
limitation,  reports on forms 10-K,  10-Q and 8-K),  registration  statement  or
prospectus filed by Holdings with any securities  exchange or the Securities and
Exchange Commission or any successor agency;

CREDIT AGREEMENT - Page 52

<PAGE>

         (h)  Insurance.  Within 60 days prior to the end of each fiscal year of
Holdings,  a  report  in  form  and  substance  reasonably  satisfactory  to the
Administrative  Agent summarizing all material insurance coverage  maintained by
Holdings and its Subsidiaries (including,  without limitation,  the Borrower) as
of the date of such report and all  material  insurance  coverage  planned to be
maintained by such Persons in the subsequent fiscal year;

         (i) Plan Information. From time to time, as reasonably requested by the
Administrative  Agent or any  Lender,  such books,  records and other  documents
relating to any Pension  Plan as the  Administrative  Agent or any Lender  shall
specify;  prior to any termination,  partial  termination or merger of a Pension
Plan covering employees of Holdings,  the Borrower or any ERISA Affiliate,  or a
transfer  of  assets of a Pension  Plan  covering  employees  of  Holdings,  the
Borrower or any ERISA Affiliate,  written  notification  thereof;  promptly upon
Holdings' or the Borrower's receipt thereof, a copy of any determination  letter
or advisory  opinion  regarding any Pension Plan received from any  Governmental
Authority  and any  amendment or  modification  thereto as may be necessary as a
condition to obtaining a favorable determination letter or advisory opinion; and
promptly  upon  the  occurrence  thereof,  written  notification  of any  action
requested by any  Governmental  Authority to be taken as a condition to any such
determination letter or advisory opinion;

         (j) Business Plan, etc. Not later than 15 days prior to the end of each
fiscal  year,  an update of the  Business  Plan for the  immediately  succeeding
fiscal year; and, promptly upon any preparation thereof, any proposed amendment,
modification or supplement to the Business Plan;

         (k) Management Letters.  Promptly upon each receipt thereof by any Loan
Party,  a copy  of any  management  letter  submitted  to  such  Loan  Party  by
independent certified public accountants with respect to the business, condition
(financial or otherwise), operations, prospects or Properties of any Loan Party;

         (l) Reports to Other Creditors.  Promptly after the furnishing thereof,
a copy of any financial or other material  statement or report  furnished by any
Loan Party to any other  party  pursuant  to the terms of any  indenture,  loan,
stock purchase or credit or similar  agreement and not otherwise  required to be
furnished  to the  Administrative  Agent and the  Lenders  pursuant to any other
clause of this Section 8.1;

         (m) Notice of Material  Adverse Effect.  Within two Business Days after
any Loan Party becomes aware  thereof,  written  notice of any matter that could
reasonably be expected to have a Material Adverse Effect;

         (n) Environmental  Assessments and Notices.  Promptly after the receipt
thereof,  a copy  of  each  environmental  assessment  (including  any  analysis
relating  thereto)  prepared  with respect to any Property of any Loan Party and
each notice sent by any Governmental Authority to any Loan Party relating to any
failure or alleged failure to comply with any Environmental Law or any liability
with respect thereto; and

CREDIT AGREEMENT - Page 53

<PAGE>

         (o) General  Information.  Promptly,  such other  business,  financial,
corporate  affairs and other  similar  information  concerning  the Loan Parties
and/or the Collateral as the Administrative Agent or any Lender may from time to
time reasonably request.

         Section 8.2  Maintenance  of  Existence;  Conduct of Business.  Each of
Holdings  and the Borrower  will,  and will cause each of the other Loan Parties
to,  preserve  and  maintain  its  entity  existence  and  all  of  its  leases,
privileges, Licenses, qualifications, Intellectual Property, intangible Property
and  contract  and other  rights that are  necessary or material to the ordinary
conduct of its business.  Each of Holdings and the Borrower will, and will cause
each of the other Loan  Parties  to,  conduct  its  business  in an orderly  and
efficient  manner in accordance  with good  business  practices and the Business
Plan.

         Section 8.3  Maintenance of Properties  and Licenses.  Each of Holdings
and the  Borrower  will,  and will  cause  each of the other  Loan  Parties  to,
maintain,  keep and preserve all of its Properties and Licenses necessary in the
proper  conduct of its  businesses  in good repair,  working order and condition
(ordinary wear and tear excepted) and make all necessary  repairs,  renewals and
replacements and improvements thereof.

         Section 8.4 Taxes and Claims.  Each of Holdings and the Borrower  will,
and will cause  each of the other  Loan  Parties  to,  pay or  discharge  before
becoming delinquent (a) all taxes, levies,  assessments and governmental charges
imposed on it or its income or profits or any of its Property and (b) all lawful
claims for labor,  material and supplies,  which, if unpaid, might become a Lien
upon any of its Property; provided, however, that none of the Loan Parties shall
be  required to pay or  discharge  any tax,  levy,  assessment  or  governmental
charge, or claim for labor, material or supplies, whose amount, applicability or
validity  is being  contested  in good faith by  appropriate  proceedings  being
diligently  pursued and for which adequate  reserves have been established under
GAAP.

         Section 8.5 Insurance.

         (a) Each of Holdings and the Borrower  will, and will cause each of the
other Loan Parties to, keep insured by financially sound and reputable  insurers
all Property of a character  usually insured by responsible  entities engaged in
the same or a similar business  similarly situated against loss or damage of the
kinds and in the amounts  customarily  insured  against by such  corporations or
entities  and  carry  such  other  insurance  as  is  usually  carried  by  such
corporations  or  entities,  provided  that in any event the Loan  Parties  will
maintain:

                  (i)  Property  Insurance.  Insurance  against  loss or  damage
         covering  substantially  all of the tangible real and personal Property
         (including, without limitation, the Nortel Networks Equipment and other
         equipment  related to the Network) and  improvements  of such Person by
         reason of any  Peril (as  defined  below) in such  amounts  as shall be
         reasonable  and  customary  and  sufficient  to avoid the insured named
         therein from becoming a co-insurer  of any loss under such policy,  but
         in any event the  Nortel  Networks  Equipment  shall be insured in such
         amounts as are

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<PAGE>

         (A) reasonably  available as determined by the  Borrower's  independent
         insurance  broker and (B) reasonably  acceptable to the  Administrative
         Agent.

                  (ii)  Automobile  Liability  Insurance  for Bodily  Injury and
         Property Damage.  Insurance in respect of all vehicles  (whether owned,
         hired or  rented by such  Person)  at any time  located  at, or used in
         connection with, its Properties or operations  against  liabilities for
         bodily injury and Property damage in such amounts as are then customary
         for vehicles used in connection with similar Properties and businesses,
         but in any event to the extent required by applicable law.

                  (iii)  Comprehensive  General Liability  Insurance.  Insurance
         against claims for bodily injury,  death or Property  damage  occurring
         on, in or about the Property  (and  adjoining  streets,  sidewalks  and
         waterways)  of such Person,  in such amounts as are then  customary for
         Property similar in use in the jurisdictions  where such Properties are
         located.

                  (iv) Worker's  Compensation  Insurance.  Worker's compensation
         insurance  (including  employers'  liability  insurance)  to the extent
         required by applicable law, which may be  self-insurance  to the extent
         permitted by applicable law.

Without  limiting  the  generality  of the  foregoing,  the Loan  Parties  shall
purchase  and  maintain in effect  all-risk,  property  and  casualty  insurance
(including  casualty insurance covering  earthquake and flood damage) reasonably
acceptable  and  in  amounts  (A)  reasonably  available  as  determined  by the
Borrower's  independent  insurance  broker and (B) reasonably  acceptable to the
Administrative  Agent covering all Nortel Networks Equipment and other equipment
related to the  Network and  liability  insurance  covering  the  operations  of
Holdings and its Subsidiaries (including, without limitation, the Borrower). All
insurance shall be written by financially  responsible companies selected by the
applicable Loan Party and having an A.M. Best Rating of "A-" or better and being
in a financial size category of "VI" or larger, or by other companies reasonably
acceptable to the Administrative  Agent. Each policy referred to in this Section
8.5 shall name the Administrative Agent (for the benefit of itself and the other
Lenders)  as loss  payee  (with  respect to  casualty  insurance  policies)  and
additional  insured  (with  respect to liability  insurance  policies) and shall
provide that it will not be canceled,  amended or reduced  except after not less
than 30 days' prior written  notice to the  Administrative  Agent and shall also
provide that the interests of the Administrative Agent and the Lenders shall not
be invalidated or reduced by any act,  omission or negligence of any Loan Party.
Holdings  and/or the Borrower will advise the  Administrative  Agent promptly of
any policy cancellation,  reduction or amendment.  For purposes hereof, the term
"Peril" shall mean,  collectively,  fire,  lightning,  flood,  windstorm,  hail,
explosion,  riot and civil commotion,  vandalism and malicious mischief,  damage
from  aircraft,  vehicles and smoke and other perils  covered by the  "all-risk"
endorsement  then in use in the  jurisdictions  where the Properties of the Loan
Parties are located.

         (b) The  Borrower  will pay all  Insurance  Recoveries  with respect to
Collateral to the Administrative  Agent for application  against the Obligations
if and to the extent required in accordance with Section 2.7(a).

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<PAGE>

         (c) If a Default  shall have occurred and be  continuing,  the Borrower
will cause all proceeds of insurance paid on account of the loss of or damage to
any  Collateral to be promptly paid directly to the  Administrative  Agent to be
applied against or held as security for the Obligations,  at the election of the
Administrative Agent and the Required Lenders.

         Section 8.6 Inspection Rights.  Each of Holdings and the Borrower will,
and will cause each of the other Loan  Parties to,  permit  representatives  and
agents of the Administrative Agent and the Lenders, during normal business hours
and upon  reasonable  notice to Holdings or the Borrower,  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.  Each of Holdings and the
Borrower  will  authorize,  and will  cause  each of the other  Loan  Parties to
authorize,  its accountants in writing (with a copy to the Administrative Agent)
to  comply  with  this  Section  8.6.  The   Administrative   Agent  and/or  its
representatives  may,  at any  time  and  from  time to  time at the  Borrower's
expense,  conduct field exams for such purposes as the Administrative  Agent may
reasonably  request during normal business hours and upon  reasonable  notice to
Holdings or the Borrower.

         Section  8.7  Keeping  Books  and  Records.  Each of  Holdings  and the
Borrower  will,  and will  cause  each of the other Loan  Parties  to,  maintain
appropriate  books of record and account in  accordance  with GAAP  consistently
applied in which true, full and correct entries will be made of their respective
dealings and business affairs.

         Section 8.8  Compliance  with Laws.  Each of Holdings  and the Borrower
will,  and will  cause  each of the  other  Loan  Parties  to,  comply  with all
Governmental   Requirements   applicable   to  the  operation  of  its  business
(including,  without limitation,  the Communications Act, any rule or regulation
of the FCC or any rule or  regulation  of any  federal or state  public  utility
commission   or  other   Governmental   Authority),   except  for  instances  of
noncompliance that could not reasonably be expected to have,  individually or in
the aggregate, a Material Adverse Effect.

         Section  8.9  Compliance  with  Agreements.  Each of  Holdings  and the
Borrower will, and will cause each of the other Loan Parties to, comply with all
agreements,  documents and instruments binding on it or affecting its Properties
or business,  including,  without limitation, all Material Contracts, except for
instances  of  noncompliance  that could not  reasonably  be  expected  to have,
individually or in the aggregate, a Material Adverse Effect.

         Section 8.10 Further Assurances. Each of Holdings and the Borrower will
execute and  deliver,  and will cause each of the other Loan  Parties to execute
and deliver,  such further  agreements,  documents and  instruments  (including,
without limitation,  financing statements and amendments to financing statements
specifying each item of the Collateral and the serial number  therefor) and take
such further actions as may be reasonably  requested by the Administrative Agent
to carry out the terms and  provisions  and purposes of this  Agreement  and the
other Loan  Documents,  to evidence  the  Obligations  and to create,  preserve,
maintain  and perfect the Liens of the  Administrative  Agent for the benefit of
itself and the Lenders in and to the  Collateral  and the  required  priority of
such Liens. Without limiting the generality of the foregoing,

CREDIT AGREEMENT - Page 56

<PAGE>

each of Holdings  and the Borrower  will,  and will cause each of the other Loan
Parties to, (a) take all necessary  actions to and otherwise ensure that, at all
times, the Obligations will rank senior in respect of priority of payment to any
Subordinated  Debt  (to  the  extent  of  the  subordination  provisions  in the
Subordinated Debt Documents  governing such Subordinated  Debt) and will rank at
least pari passu in respect of priority of treatment  with all other present and
future Debt of the Borrower (excluding rights of secured parties with respect to
Permitted  Liens) and (b) take all  necessary  actions to and  otherwise  ensure
that, at all times,  the  indebtedness,  liabilities and obligations of Holdings
under this  Agreement  and the Guaranty  executed by Holdings will rank at least
pari passu in respect of priority of treatment with all other present and future
Debt of Holdings  (excluding rights of secured parties with respect to Permitted
Liens).

         Section 8.11 ERISA.  Each of Holdings and the Borrower  will,  and will
cause  each  of its  ERISA  Affiliates  to,  comply  with  all  minimum  funding
requirements and all other material requirements of ERISA so as not to give rise
to any material liability thereunder.

         Section 8.12 Non-Consolidation. Each of Holdings and the Borrower will,
and will cause each of the other Loan  Parties to: (a) maintain  entity  records
and  books of  account  separate  from  those of any  other  entity  which is an
Affiliate of such Loan Party;  (b) not  commingle its funds or assets with those
of any other entity  which is an  Affiliate of such Loan Party;  and (c) provide
that its Board of  Directors  or other  analogous  governing  body will hold all
appropriate  meetings to authorize  and approve such  Person's  entity  actions,
which meetings will be separate from those of other Loan Parties.

         Section 8.13 Year 2000 Compliance. Except as set forth in Schedule 8.13
and except for such  instances as  individually  or in the  aggregate  could not
reasonably be expected to have a Material  Adverse  Effect,  all of the material
computer software,  computer hardware (whether general or special purpose),  and
other similar or related items of automated,  computerized  or software  systems
that are used or relied  upon by any Loan Party in the  conduct of its  business
are and will  continue  to be Year 2000  Compliant  and,  without  limiting  the
generality of the foregoing,  will not malfunction,  will not cease to function,
will not generate  incorrect  data and will not produce  incorrect  results when
processing,  providing or receiving (a)  date-related  data into and between the
twentieth and twenty- first  centuries and (b)  date-related  data in connection
with any valid date in the twentieth and twenty-  first  centuries.  Holdings or
the Borrower will promptly notify the Administrative Agent in the event any Loan
Party discovers or determines that any computer application  (including those of
its suppliers  and vendors)  that is material to such Loan Party's  business and
operations will not be Year 2000 Compliant on a timely basis.

         Section 8.14 Trade Accounts Payable.  Each of Holdings and the Borrower
will,  and will cause each of the other Loan Parties to, pay all trade  accounts
payable  before  the same  become  more than 90 days past due,  except (a) trade
accounts  payable  contested in good faith or (b) trade  accounts  payable in an
aggregate  amount  not to exceed  $5,000,000  at any time  outstanding  and with
respect to which no proceeding to enforce  collection  has been commenced or, to
the knowledge of any Loan Party, threatened.

         Section    8.15    Ownership   of    Telecommunications    Assets   and
Telecommunications  Business; Holdings to Remain a Holding Company. The Borrower
shall,  at all times and  except as may be set forth

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<PAGE>

on Schedule 8.15, own or lease all  Telecommunications  Assets used or useful in
the   operation  of  the   Telecommunications   Business  of  Holdings  and  its
Subsidiaries in the United States (including, without limitation, the Borrower).
Holdings shall, at all times and except as may be set forth on Schedule 8.15, be
a holding company and shall not own or lease  Telecommunications  Assets used or
useful in the operation of the Telecommunications Business.

         Section 8.16 Most  Favored  Lender.  If  Holdings,  the Borrower or any
other  Subsidiary  of Holdings  enters  into any  equipment  financing  with any
lender,  other than the Lenders  pursuant to this  Agreement,  that provides for
guaranties,  security,  financial covenants or negative covenants which are more
favorable than those contained in this Agreement or any other terms,  provisions
or conditions  (excluding  terms and  provisions  relating to interest  rates or
fees)  which  are  materially  more  favorable  than  those  contained  in  this
Agreement,  then the Borrower shall promptly notify the Administrative  Agent in
writing of such fact and of the details of such more favorable terms, provisions
or conditions and, promptly upon any request of the Administrative  Agent or the
Required  Lenders to effectuate such amendment,  the Borrower and Holdings agree
that they  shall  amend this  Agreement  and/or  the other  Loan  Documents  (as
applicable) in a manner which is reasonably  satisfactory to the  Administrative
Agent and the  Required  Lenders  and which  makes  such more  favorable  terms,
provisions  or  conditions  a part of  this  Agreement  and/or  the  other  Loan
Documents (as applicable).

         Section 8.17 Foreign Subsidiaries.  Holdings and the Borrower shall, on
or prior to  September  30,  2000,  cause each  Subsidiary  of  Holdings  or the
Borrower  that is not  domiciled  in the United  States or Canada and that owns,
operates  or  utilizes  on  premises  owned,  occupied  or leased by it,  Nortel
Networks  Equipment,  to  execute  and  deliver  to the  Administrative  Agent a
Certificate of No  Encumbrances  in  substantially  the form attached  hereto as
Exhibit E. Holdings shall, on or prior to September 30, 2000 execute and deliver
to the  Administrative  Agent,  a Pledge  Agreement  in  substantially  the form
attached  hereto as Exhibit F, pursuant to which Holdings shall pledge up to 66%
of the capital stock of each Subsidiary of Holdings that is not domiciled in the
United States or Canada and that owns, operates or utilizes on premises owned or
leased by it, Nortel Networks Equipment.

                                    ARTICLE 9

                               Negative Covenants

         Each of Holdings and the Borrower covenants and agrees that, as long as
the  Obligations  or any part  thereof  are  outstanding  or any  Lender has any
Commitment hereunder,  it will perform and observe, or cause to be performed and
observed, the following covenants:

         Section 9.1  Limitation  on Liens.  Neither  Holdings  nor the Borrower
will,  nor will it permit any  Subsidiary of Holdings or the Borrower to, incur,
create, assume or permit to exist any Lien upon any of its Property or revenues,
whether now owned or hereafter  acquired,  except  Permitted Liens and will not,
with respect to any of the Collateral, enter into any negative pledge or similar
arrangement in favor of other creditors.

         Section 9.2 Mergers,  Etc.  Neither Holdings nor the Borrower will, nor
will it permit any Subsidiary of Holdings or the Borrower to, (a) become a party
to a merger or  consolidation  in a transaction in which it is not the surviving
Person or (b) wind-up, dissolve or liquidate itself; provided, however, that any
Subsidiary  of  the  Borrower  may  merge  with  and  into  the  Borrower  or  a
Wholly-Owned  Subsidiary  of the  Borrower  if the  Borrower  or a  Wholly-Owned
Subsidiary of the Borrower is the surviving entity in

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<PAGE>

such merger,  provided that no consideration is given by the surviving entity in
such  merger  other than the  issuance  of any  Capital  Stock of the  surviving
entity.  The surviving entity in any such merger shall ratify the Guaranty,  the
Security  Documents and other  indebtedness,  liabilities and obligations of the
non-surviving entity under the Loan Documents.

         Section 9.3  Investments.  Neither  Holdings nor the Borrower will, nor
will it permit any  Subsidiary of Holdings or the Borrower to, make or permit to
remain   outstanding  any  advance,   loan,   extension  of  credit  or  capital
contribution  to or  investment  in any  Person,  or  purchase or own any stock,
bonds,  notes,  debentures or other securities of any Person,  or be or become a
joint venturer with or partner of any Person (all such transactions being herein
called "Investments"), except:

         (a) Investments in obligations or securities  received in settlement of
debts  (created in the  ordinary  course of  business)  owing to the Borrower or
another Loan Party;

         (b)  Investments  identified on Schedule 9.3 hereto and any  Investment
that is consistent with the Business Plan;

         (c)  Investments in securities  issued or guaranteed by the U.S. or any
agency thereof with maturities of one year or less from the date of acquisition;

         (d) Investments in certificates of deposit and Eurodollar time deposits
with  maturities  of six months or less from the date of  acquisition,  bankers'
acceptances  with  maturities  not  exceeding  six  months  and  overnight  bank
deposits,  in each case with any  Lender or with any  domestic  commercial  bank
having capital and surplus in excess of $500,000,000;

         (e) Investments in repurchase  obligations with a term of not more than
seven days for  securities of the types  described in clause (c) preceding  with
any Lender or with any domestic  commercial  bank having  capital and surplus in
excess of $500,000,000;

         (f)  Investments in commercial  paper of a domestic issuer rated A-1 or
better or P-1 or better by Standard & Poor's  Corporation  or Moody's  Investors
Services, Inc.,  respectively,  maturing not more than 270 days from the date of
acquisition;

         (g) (i)  Investments  by Holdings or the Borrower in its directly owned
Subsidiaries  existing  on the Closing  Date or required to occur in  accordance
with this Agreement, and (ii) additional Investments by Holdings or the Borrower
in its directly owned Subsidiaries made after the Closing Date;

         (h) intercompany Debt; and

         (i) temporary loans or advances to employees, officers and directors of
the Loan Parties in the ordinary course of business;

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<PAGE>

provided,  however,  that no Investments may be made by Holdings or the Borrower
pursuant to clauses  (g)(ii) or (h) preceding if a Default exists at the time of
such Investment or would result therefrom.

         Section 9.4  Transactions  with  Affiliates.  Neither  Holdings nor the
Borrower will, nor will it permit any Subsidiary of Holdings or the Borrower to,
enter into any transaction, including, without limitation, the purchase, sale or
exchange of Property or the  rendering  of any  service,  with any  Affiliate of
Holdings or the Borrower  except in the  ordinary  course of and pursuant to the
reasonable  requirements  of  Holdings',  the  Borrower's  or such  Subsidiary's
business and upon fair and reasonable  terms no less favorable to Holdings,  the
Borrower  or  such  Subsidiary,  respectively,  than  would  be  obtained  in  a
comparable arms-length transaction with a Person not an Affiliate of Holdings or
the Borrower; provided, however, that transactions between or among the Borrower
and  Holdings  or any of the  Subsidiaries  or  Affiliates  of  Holdings  or the
Borrower may be on terms more  favorable to the Borrower  than would be obtained
in a comparable  arms-length  transaction  with a Person not an Affiliate of the
Borrower.

         Section  9.5  Disposition  of  Collateral.  Neither  Holdings  nor  the
Borrower will, nor will it permit any Subsidiary of Holdings or the Borrower to,
sell,  lease,  assign,  transfer or otherwise  dispose of any of the  Collateral
other than to a Subsidiary of Holdings that has complied with the  provisions of
Section 8.17.

         Section  9.6 Lines of  Business.  The  Borrower  will not,  and neither
Holdings nor the Borrower will permit any Subsidiary of Holdings or the Borrower
to, (a) engage in any  business  other than the  build-out,  implementation  and
operation of the Network and other Telecommunications Businesses and the conduct
of related  Telecommunications  Businesses and matters incidental thereto or (b)
discontinue any line or lines of business which provide material revenues to the
Borrower or a  Subsidiary  of the Borrower in which it is engaged on the Closing
Date.

         Section 9.7 Environmental Protection. Neither Holdings nor the Borrower
will,  nor will it permit any Subsidiary of Holdings or the Borrower to, (a) use
(or  permit  any  tenant  to  use)  any  of its  Properties  for  the  handling,
processing, storage, transportation or disposal of any Hazardous Material except
in compliance  with  applicable  Environmental  Laws, (b) generate any Hazardous
Material except in compliance with  applicable  Environmental  Laws, (c) conduct
any  activity  that is likely to cause a Release  or  threatened  Release of any
Hazardous  Material in  violation  of any  Environmental  Law, or (d)  otherwise
conduct any activity or use any of its  Properties in any manner,  that violates
or is likely to  violate  any  Environmental  Law or  create  any  Environmental
Liabilities  for  which  any  Loan  Party  would  be  responsible,   except  for
circumstances  or events  described  in clauses (a) through (d)  preceding  that
could not,  individually  or in the aggregate,  reasonably be expected to have a
Material Adverse Effect.

         Section  9.8  Master  Purchase  Agreement.  Neither  Holdings  nor  the
Borrower will, nor will it permit any Subsidiary of Holdings or the Borrower to,
terminate the Master  Purchase  Agreement or any  additional  similar  agreement
between or among any one or more of the Loan Parties and Nortel  Networks  prior
to the later to occur of the Amortization  Commencement Date or the satisfaction
in full of all purchase  commitments  of the Borrower and the other Loan Parties
under the Master Purchase Agreement and any

CREDIT AGREEMENT - Page 60

<PAGE>

such similar  agreement;  provided,  the Borrower and the other Loan Parties may
terminate Addendum No. 1 to the Master Purchase Agreement in accordance with the
terms thereof.

         Section 9.9  Modification of Certain  Agreements.  Neither Holdings nor
the  Borrower  will,  nor will it permit any other Loan Party to,  consent to or
implement any termination, amendment, modification,  supplement or waiver of the
certificate  or articles of  incorporation,  articles of  organization,  bylaws,
regulations or other constitutional  documents of Holdings,  the Borrower or any
other Loan Party;  provided,  however, that the Loan Parties may amend or modify
such documents if and to the extent that such amendment or  modification  is not
adverse to the security interests of the Administrative Agent and the Lenders or
to the ability of any Loan Party to perform  under any Loan Document to which it
is a party.

         Section 9.10 ERISA. Neither Holdings nor the Borrower will, nor will it
permit any Subsidiary of Holdings or the Borrower to:

         (a) allow,  or take (or permit any ERISA  Affiliate to take) any action
which would cause,  any unfunded or unreserved  liability for benefits under any
Plan  (exclusive  of any  Multiemployer  Plan) to exist  or to be  created  that
exceeds  $100,000  with respect to any such Plan or $200,000 with respect to all
such Plans in the aggregate on either a going concern or a wind-up basis; or

         (b) with respect to any  Multiemployer  Plan, allow, or take (or permit
any ERISA  Affiliate  to take) any action  which would  cause,  any  unfunded or
unreserved liability for benefits under any Multiemployer Plan to exist or to be
created,  either  individually as to any such Plan or in the aggregate as to all
such  Plans,  that  could,  upon any  partial  or  complete  withdrawal  from or
termination of any such  Multiemployer  Plan or Plans,  have a Material  Adverse
Effect.

                                   ARTICLE 10

                               Financial Covenants

         Section 10.1 EBITDA.  Neither Holdings nor the Borrower will permit the
EBITDA  of  Holdings  and  its  Consolidated  Subsidiaries  (including,  without
limitation,  the  Borrower)  for any fiscal  year ending on any of the dates set
forth on Schedule  10.1 to be less than the amount set forth  opposite such date
on such Schedule.

                                   ARTICLE 11

                                     Default

         Section 11.1 Events of Default.  Each of the following  shall be deemed
an "Event of Default":

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         (a) (i) The Borrower  shall fail to pay,  repay or prepay when due, any
amount of principal or interest owing to the Administrative  Agent or any Lender
pursuant to this  Agreement  or any other Loan  Document,  or (ii) the  Borrower
shall fail to pay, within two Business Days after the due date thereof, any fee,
expense or other amount or other Obligation owing to the Administrative Agent or
any Lender pursuant to this Agreement or any other Loan Document.

         (b) Any  representation or warranty made or deemed made by or on behalf
of any Loan Party in any Loan Document or in any certificate,  report, notice or
financial  statement  furnished at any time in connection with this Agreement or
any other Loan Document shall be false,  misleading or erroneous in any material
respect when made or deemed to have been made.

         (c) Any Loan Party  shall fail to  perform,  observe or comply with any
covenant, agreement or term contained in Article 5, Section 8.1(e), Section 8.2,
Section 8.6, Section 8.10, Article 9 or Article 10; any Loan Party shall fail to
perform,  observe or comply with any  covenant,  agreement or term  contained in
Sections 8.1 (other than Section  8.1(e)),  8.3, 8.4, 8.5, 8.7, 8.8, 8.9,  8.11,
8.12,  8.13,  8.14,  8.15,  or 8.16,  and such failure is not remedied or waived
within ten days after such  failure  commenced;  or any Loan Party shall fail to
perform, observe or comply with any other covenant,  agreement or term contained
in this  Agreement or any other Loan Document  (other than  covenants to pay the
Obligations)  and such failure is not  remedied or waived  within the earlier to
occur of 30 days after such failure commenced or, if a different grace period is
expressly made  applicable in such other Loan Documents,  such applicable  grace
period.

         (d) Any Loan Party  ceases to be Solvent or shall  admit in writing its
inability to, or be generally unable to, pay its debts as such debts become due.

         (e) Any Loan Party  shall (i) apply for or  consent to the  appointment
of, or the taking of possession by, a receiver,  custodian,  trustee, liquidator
or administrator of itself or of all or a substantial part of its Property, (ii)
admit in writing its inability  to, or be generally  unable to, pay its debts as
such debts become due,  subject to any applicable  grace  periods,  (iii) make a
general  assignment for the benefit of its creditors,  (iv) commence a voluntary
case under the United States Bankruptcy Code (as now or hereafter in effect, the
"Bankruptcy  Code"),  (v) file a petition seeking to take advantage of any other
law providing for the relief of debtors or relating to  bankruptcy,  insolvency,
reorganization,   liquidation,   dissolution,  arrangement  or  winding  up,  or
composition  or  readjustment  of debts,  (vi) fail to controvert in a timely or
appropriate manner, or acquiesce in writing to, any petition filed against it in
an involuntary case under the Bankruptcy Code or other  applicable  Governmental
Requirement, (vii) dissolve, or (viii) take any entity action for the purpose of
effecting any of the foregoing.

         (f) A proceeding or case shall be commenced, without the application or
consent of any Loan Party, in any court of competent  jurisdiction,  seeking (i)
the  liquidation,  reorganization,  dissolution,  arrangement,  winding  up,  or
composition or  readjustment  of its debts,  (ii) the  appointment of a trustee,
receiver, custodian, examiner, liquidator, administrator or the like of it or of
all or any substantial part of its Property,  or (iii) similar relief in respect
of it,  under  any law  providing  for the  relief of  debtors  or  relating  to
bankruptcy, insolvency, reorganization, liquidation, dissolution, arrangement or
winding up, or

CREDIT AGREEMENT - Page 62

<PAGE>

composition or readjustment of debts, and such proceeding or case shall continue
undismissed,  or an order,  judgment or decree  approving or ordering any of the
foregoing shall be entered and continue unstayed and in effect,  for a period of
60 or more days; or an order for relief shall be entered in an involuntary  case
under the Bankruptcy Code against any Loan Party and shall continue unstayed and
in effect for any period of 60 consecutive days.

         (g) Any Loan Party shall fail to  discharge  within a period of 30 days
after the  commencement  thereof any  attachment,  sequestration,  forfeiture or
similar  proceeding or  proceedings  involving an aggregate  amount in excess of
$1,000,000 against any of its Properties.

         (h) A final judgment or judgments for the payment of money in excess of
$1,000,000 in the aggregate  shall be rendered by a court or courts  against any
Loan  Party on  claims  not  covered  by  insurance  and the same  shall  not be
discharged,  bonded or a stay of execution thereof shall not be procured, within
30 days from the date of entry thereof and any Loan Party shall not, within said
period of 30 days,  or such longer  period  during  which  execution of the same
shall have been stayed,  appeal therefrom and cause the execution  thereof to be
stayed during such appeal.

         (i) Any Loan  Party  shall  fail to pay when  due any  principal  of or
interest  on any Debt of such Loan Party  (other  than the  Obligations)  having
(either  individually  or in the  aggregate)  a  principal  amount  of at  least
$10,000,000 or the maturity of any such Debt shall have been accelerated, or any
such Debt shall have been  required to be prepaid  prior to the stated  maturity
thereof,  or any event  shall have  occurred  (and shall not have been waived or
otherwise cured) that permits (or, with the giving of notice or lapse of time or
both,  would  permit) any holder or holders of such Debt or any Person acting on
behalf of such holder or holders to accelerate  the maturity  thereof or require
any such prepayment.

         (j) This Agreement or any other Loan Document shall cease to be in full
force  and  effect  or  shall be  declared  null  and  void or the  validity  or
enforceability thereof shall be contested or challenged by any Loan Party or any
Loan Party shall deny that it has further  liability or obligation  under any of
the Loan  Documents;  or any Lien created or purported to be created by the Loan
Documents shall for any reason cease to be or fail to be a valid, first priority
perfected Lien upon any of the Collateral purported to be covered thereby.

         (k) Any of the  following  events  shall occur or exist with respect to
any Loan Party or any ERISA Affiliate:  (i) any Prohibited Transaction involving
any Plan; (ii) any Reportable  Event with respect to any Pension Plan; (iii) the
filing  under  Section  4041 of ERISA of a notice  of intent  to  terminate  any
Pension  Plan  or the  termination  of any  Pension  Plan;  (iv)  any  event  or
circumstance  that could reasonably be expected to constitute  grounds entitling
the  PBGC  to  institute  proceedings  under  Section  4042  of  ERISA  for  the
termination of, or for the  appointment of a trustee to administer,  any Pension
Plan,  or the  institution  by  the  PBGC  of  any  such  proceedings;  (v)  any
"accumulated  funding deficiency" (as defined in Section 302 of ERISA or Section
412 of the Code), whether or not waived, shall exist with respect to any Pension
Plan; or (vi) complete or partial withdrawal under Section 4201 or 4204 of ERISA
from a Multiemployer  Plan or the  reorganization,  insolvency or termination of
any Pension Plan; and in each case

CREDIT AGREEMENT - Page 63

<PAGE>

above, such event or condition, together with all other events or conditions, if
any,  have  subjected  or could in the  reasonable  opinion of Required  Lenders
subject  any Loan  Party or any ERISA  Affiliate  to any tax,  penalty  or other
liability  to a Plan,  a  Multiemployer  Plan,  the  PBGC or  otherwise  (or any
combination  thereof)  which in the  aggregate  exceed  or could  reasonably  be
expected to exceed $100,000.

         (l) The  occurrence of any breach or default by Holdings,  the Borrower
and/or any other Loan Party  under the Master  Purchase  Agreement  or any other
similar  agreement  between or among any Loan Party and Nortel  Networks  (after
giving  effect to any grace or cure period  specified  therein)  which breach or
default  entitles  Nortel  Networks  to  exercise a right or remedy  under or in
connection with the Master Purchase Agreement or such other similar agreement.

         (m)  Any  termination,  revocation  or  non-renewal  by the  FCC or any
federal or state public utility  commission or other  Governmental  Authority of
any material License of Holdings or any of its Subsidiaries (including,  without
limitation, the Borrower).

         (n) The occurrence of any Material Adverse Effect.

         (o) The occurrence of any Change in Control.

         (p)  If,  at  any  time,  the  subordination  provisions  of any of the
Subordinated  Debt Documents shall be invalidated or shall otherwise cease to be
in full force and effect.

         (q) If, at any time, any event or circumstance  shall occur which gives
any holder of any Subordinated  Debt the right to request or require Holdings or
the  Borrower  or any of other  Loan  Party to  redeem,  purchase  or prepay any
Subordinated Debt.

         (r)  The  occurrence  of  (i)  a  default  under  (including,   without
limitation,  a "Default"  as such term is used or defined  in) any  Subordinated
Debt Document, unless (A) such default has been waived, cured or consented to in
accordance with such documents,  (B) such default is not a payment default,  (C)
the  maturity  of the Debt  affected  thereby  has not been  accelerated,  (D) a
blockage  under such  Subordinated  Debt Document has not been invoked,  and (E)
such  waiver  or  consent  is not  made in  connection  with  any  amendment  or
modification of any such  Subordinated  Debt Documents or in connection with any
payment to the holders of any  Subordinated  Debt,  (ii) a payment default under
(including,  without  limitation,  a payment  "Default"  as such term is used or
defined in) any  Subordinated  Debt  Document,  (iii) an event of default  under
(including,  without  limitation,  an "Event of Default" as such term is used or
defined in) any  Subordinated  Debt Document,  or (iv) any  acceleration  of the
maturity of any Subordinated Debt.

         (s) Any sale,  transfer  or other  disposition  of the  Network  or any
material portion thereof.

         Section  11.2  Remedies.  If any Event of  Default  shall  occur and be
continuing,  the  Administrative  Agent may and,  if  directed  by the  Required
Lenders, the Administrative Agent shall do any one or more of the following:

CREDIT AGREEMENT - Page 64

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         (a) Acceleration.  Declare all outstanding principal of and accrued and
unpaid interest on the Loans and all other amounts payable by the Borrower under
the Loan Documents  immediately  due and payable,  and the same shall  thereupon
become immediately due and payable, without notice, demand, presentment,  notice
of dishonor, notice of acceleration,  notice of intent to accelerate, protest or
other  formalities  of any kind,  all of which are  hereby  expressly  waived by
Holdings and the Borrower;

         (b)  Termination  of  Commitments.  Terminate  each of the  Commitments
without notice to the Borrower or any other Loan Party;

         (c) Judgment. Reduce any claim to judgment;

         (d) Foreclosure. Foreclose or otherwise enforce any Lien granted to the
Administrative Agent for the benefit of the Administrative Agent and the Lenders
to secure  payment and  performance of the  Obligations  in accordance  with the
terms of the Loan Documents; or

         (e) Rights.  Exercise any and all rights and  remedies  afforded by the
laws of the  State of New  York or any  other  jurisdiction,  by any of the Loan
Documents, by equity or otherwise;

provided, however, that upon the occurrence of an Event of Default under Section
11.1(e)  or  Section  11.1(f),  the  Commitments  of all of  the  Lenders  shall
immediately and automatically  terminate,  and the outstanding  principal of and
accrued and unpaid  interest on the Loans and all other  amounts  payable by the
Borrower  under  the Loan  Documents  shall  thereupon  become  immediately  and
automatically due and payable,  without notice, demand,  presentment,  notice of
dishonor,  notice of  acceleration,  notice of intent to accelerate,  protest or
other  formalities  of any kind,  all of which are  hereby  expressly  waived by
Holdings and the Borrower.

         Section 11.3 Performance by the Administrative Agent, etc.. If Holdings
and/or  the  Borrower  shall  fail to  perform  any  covenant  or  agreement  in
accordance with the terms of the Loan Documents,  the  Administrative  Agent may
perform or attempt to perform, or may cause any Lender (with the consent of such
Lender) to perform or attempt to perform,  such  covenant or agreement on behalf
of Holdings  and/or the  Borrower.  In such event,  the Borrower  shall,  at the
request of the  Administrative  Agent,  promptly pay any amount  expended by the
Administrative  Agent or the  Lenders in  connection  with such  performance  or
attempted  performance  to the  Administrative  Agent at its  Principal  Office,
together with interest thereon at the applicable 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 neither the
Administrative  Agent nor any Lender shall have any liability or  responsibility
for the performance of any obligation of Holdings,  the Borrower, any Loan Party
or any other Person under this Agreement or any of the other Loan Documents.

CREDIT AGREEMENT - Page 65

<PAGE>

                                   ARTICLE 12

                            The Administrative Agent

         Section 12.1  Appointment,  Powers and  Immunities.  Each Lender hereby
irrevocably appoints and authorizes the Administrative Agent to act as its agent
hereunder  and  under  the  other  Loan   Documents  with  such  powers  as  are
specifically  delegated  to the  Administrative  Agent  by  the  terms  of  this
Agreement and the other Loan  Documents,  together with such other powers as are
reasonably  incidental thereto.  Neither the Administrative Agent nor any of its
Affiliates,  officers, directors, employees, attorneys or agents shall be liable
for any  action  taken  or  omitted  to be  taken  by any of them  hereunder  or
otherwise in connection  with this  Agreement or any of the other Loan Documents
except  for its or their own gross  negligence  or willful  misconduct.  Without
limiting the generality of the preceding sentence,  the Administrative Agent (a)
may treat the payee of any Note as the holder  thereof until the  Administrative
Agent receives  written  notice of the assignment or transfer  thereof signed by
such payee and in form satisfactory to the Administrative  Agent, (b) shall have
no duties or responsibilities except those expressly set forth in this Agreement
and the other Loan  Documents,  and shall not by reason of this Agreement or any
other Loan Document be a trustee or fiduciary  for any Lender,  (c) shall not be
required to initiate any litigation or collection proceedings hereunder or under
any other Loan Document except to the extent requested by the Required  Lenders,
(d)  shall not be  responsible  to the  Lenders  for any  recitals,  statements,
representations  or  warranties  contained  in this  Agreement or any other Loan
Document,  or any certificate or other document  referred to or provided for in,
or received by any of them under, this Agreement or any other Loan Document,  or
for the value,  validity,  effectiveness,  enforceability or sufficiency of this
Agreement  or any other  Loan  Document  or any other  document  referred  to or
provided  for herein or therein or for any  failure by any Person to perform any
of its obligations  hereunder or thereunder,  (e) may consult with legal counsel
(including  counsel for the Borrower),  independent public accountants and other
experts  selected by it and shall not be liable for any action  taken or omitted
to be taken in good faith by it in  accordance  with the advice of such counsel,
accountants or experts,  and (f) shall incur no liability under or in respect of
any Loan  Document  by acting  upon any notice,  consent,  certificate  or other
instrument or writing reasonably believed by it to be genuine and signed or sent
by the proper party or parties.  As to any matters not expressly provided for by
this Agreement,  the Administrative  Agent shall in all cases be fully protected
in  acting,  or  in  refraining  from  acting,   hereunder  in  accordance  with
instructions  signed  by the  Required  Lenders,  and such  instructions  of the
Required  Lenders and any action taken or failure to act pursuant  thereto shall
be binding on all of the Lenders;  provided,  however,  that the  Administrative
Agent shall not be required to take any action which exposes the  Administrative
Agent to  liability  or which is  contrary to this  Agreement  or any other Loan
Document or applicable law. The Administrative Agent shall not be deemed to have
any  fiduciary  relationship  with any Lender or any Loan Party,  and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or otherwise exist against the Administrative Agent.
Without limiting the generality of the foregoing, the use of the term "agent" in
this  Agreement  with  respect to the  Administrative  Agent is not  intended to
connote any  fiduciary  or other  express or implied  obligation  arising  under
agency  doctrine of any applicable law;  instead,  such term is used merely as a
matter  of  market  custom  and  is  intended  to  create  or  reflect  only  an
administrative relationship among independent contracting parties.

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<PAGE>

         Section 12.2 Rights of Administrative  Agent as a Lender.  With respect
to its  Commitments,  the Loans made by it and the Note(s)  issued to it, Nortel
Networks (and any successor acting as Administrative Agent) in its capacity as a
Lender  hereunder  shall have the same rights and powers  hereunder as any other
Lender  and  may  exercise  the  same  as  though  it  were  not  acting  as the
Administrative  Agent,  and the term  "Lender" or  "Lenders"  shall,  unless the
context otherwise indicates,  include the Administrative Agent in its individual
capacity.  The  Administrative  Agent and its Affiliates may (without  having to
account  therefor to any Lender)  accept  deposits  from,  lend money to, act as
trustee  under   indentures  of,  provide  merchant  banking  services  to,  own
securities  of,  and  generally  engage in any kind of  banking,  trust or other
business  with,  the Borrower or any of its  Affiliates and any other Person who
may do business with or own securities of the Borrower or any of its Affiliates,
all as if it were not acting as the Administrative Agent and without any duty to
account therefor to the Lenders.

         Section 12.3 Defaults.  The Administrative Agent shall not be deemed to
have  knowledge  or  notice  of the  occurrence  of a  Default  (other  than the
non-payment  of  principal  of or interest on the Loans or of  commitment  fees)
unless  the  Administrative  Agent  has  received  notice  from a Lender  or the
Borrower  specifying  such  Default and stating that such notice is a "notice of
default".  In the event that the Administrative  Agent receives such a notice of
the occurrence of a Default,  the Administrative  Agent shall give prompt notice
thereof to the Lenders  (and shall give each Lender  prompt  notice of each such
non-payment). The Administrative Agent shall (subject to Section 12.1) take such
action  with  respect  to such  Default  as shall be  directed  by the  Required
Lenders,  provided  that  unless and until the  Administrative  Agent shall have
received  such  directions,  the  Administrative  Agent  may (but  shall  not be
obligated to) take such action, or refrain from taking such action, with respect
to such  Default  as it shall seem  advisable  and in the best  interest  of the
Lenders.

         Section 12.4  INDEMNIFICATION.  EACH LENDER  HEREBY AGREES TO INDEMNIFY
THE ADMINISTRATIVE AGENT FROM AND HOLD THE ADMINISTRATIVE AGENT HARMLESS AGAINST
(TO THE EXTENT NOT  REIMBURSED  UNDER SECTION 13.1 AND SECTION 13.2, BUT WITHOUT
LIMITING THE  OBLIGATIONS  OF HOLDINGS AND THE BORROWER  UNDER  SECTION 13.1 AND
SECTION 13.2),  RATABLY IN ACCORDANCE WITH ITS PRO RATA SHARE (CALCULATED ON THE
BASIS OF ITS COMMITMENT  PERCENTAGE OF THE AGGREGATE  COMMITMENTS),  ANY AND ALL
LIABILITIES   (INCLUDING,   WITHOUT  LIMITATION,   ENVIRONMENTAL   LIABILITIES),
OBLIGATIONS,  LOSSES,  DAMAGES,  PENALTIES,  ACTIONS,  JUDGMENTS,  DEFICIENCIES,
SUITS, COSTS, EXPENSES (INCLUDING ATTORNEYS' FEES) AND DISBURSEMENTS OF ANY KIND
OR NATURE  WHATSOEVER  WHICH MAY BE IMPOSED ON, INCURRED BY OR ASSERTED  AGAINST
THE  ADMINISTRATIVE  AGENT IN ANY WAY  RELATING  TO OR ARISING OUT OF ANY OF THE
LOAN DOCUMENTS OR ANY ACTION TAKEN OR OMITTED TO BE TAKEN BY THE  ADMINISTRATIVE
AGENT UNDER OR IN RESPECT OF ANY OF THE LOAN DOCUMENTS;  PROVIDED, FURTHER, THAT
NO LENDER SHALL BE LIABLE FOR ANY PORTION OF THE  FOREGOING TO THE EXTENT CAUSED
BY THE ADMINISTRATIVE AGENT'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.

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<PAGE>

WITHOUT LIMITATION OF THE FOREGOING,  IT IS THE EXPRESS INTENTION OF THE LENDERS
THAT THE  ADMINISTRATIVE  AGENT  SHALL BE  INDEMNIFIED  HEREUNDER  FROM AND HELD
HARMLESS  AGAINST  ALL  OF  SUCH  LIABILITIES  (INCLUDING,  WITHOUT  LIMITATION,
ENVIRONMENTAL LIABILITIES),  OBLIGATIONS,  LOSSES, DAMAGES, PENALTIES,  ACTIONS,
JUDGMENTS,  DEFICIENCIES, SUITS, COSTS, EXPENSES (INCLUDING ATTORNEYS' FEES) AND
DISBURSEMENTS  OF ANY KIND OR NATURE  DIRECTLY OR  INDIRECTLY  ARISING OUT OF OR
RESULTING FROM THE SOLE OR CONTRIBUTORY  NEGLIGENCE OF THE ADMINISTRATIVE  AGENT
(EXCEPT TO THE EXTENT THE SAME ARE CAUSED BY THE  ADMINISTRATIVE  AGENT'S  GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT).  WITHOUT LIMITING ANY OTHER PROVISION OF THIS
SECTION 12.4, EACH LENDER AGREES TO REIMBURSE THE ADMINISTRATIVE  AGENT PROMPTLY
UPON DEMAND FOR ITS PRO RATA SHARE  (CALCULATED  ON THE BASIS OF ITS  COMMITMENT
PERCENTAGE OF THE AGGREGATE  COMMITMENTS) OF ANY AND ALL OUT-OF-POCKET  EXPENSES
(INCLUDING  ATTORNEYS' FEES) INCURRED BY THE ADMINISTRATIVE  AGENT IN CONNECTION
WITH  THE  PREPARATION,   EXECUTION,  DELIVERY,  ADMINISTRATION,   MODIFICATION,
AMENDMENT OR ENFORCEMENT  (WHETHER THROUGH  NEGOTIATIONS,  LEGAL  PROCEEDINGS OR
OTHERWISE) OF, OR LEGAL ADVICE IN RESPECT OF RIGHTS OR  RESPONSIBILITIES  UNDER,
THE LOAN DOCUMENTS,  TO THE EXTENT THAT THE ADMINISTRATIVE AGENT IS NOT PROMPTLY
REIMBURSED FOR SUCH EXPENSES BY THE BORROWER.

         Section 12.5 Independent  Credit Decisions.  Each Lender agrees that it
has independently and without reliance on the Administrative  Agent or any other
Lender,   and  based  on  such  documents  and  information  as  it  has  deemed
appropriate,  made its own credit  analysis of  Holdings,  the  Borrower and the
other Loan Parties and its own decision to enter into this Agreement and that it
will,  independently and without reliance upon the  Administrative  Agent or any
other Lender,  and based upon such  documents and  information  as it shall deem
appropriate  at the time,  continue to make its own  analysis  and  decisions in
taking or not  taking  action  under  this  Agreement  or any of the other  Loan
Documents.  The  Administrative  Agent  shall  not be  required  to keep  itself
informed as to the performance or observance by any Loan Party of this Agreement
or any other Loan  Document  or to inspect the  Properties  or books of any Loan
Party (or any other Person). Except for notices, reports and other documents and
information   expressly   required  to  be  furnished  to  the  Lenders  by  the
Administrative   Agent  hereunder  or  under  the  other  Loan  Documents,   the
Administrative  Agent shall not have any duty or  responsibility  to provide any
Lender with any credit or other  financial  information  concerning the affairs,
financial  condition  or  business  of any Loan  Party  which  may come into the
possession of the Administrative Agent or any of its Affiliates.

         Section 12.6 Several Commitments. The Commitments and other obligations
of the Lenders under this  Agreement  are several.  The default by any Lender in
making a Loan in accordance  with any of its  Commitments  shall not relieve the
other Lenders of their  obligations  under this  Agreement.  In the event of any
default by any Lender in making any Loan,  each  nondefaulting  Lender  shall be
obligated to make

CREDIT AGREEMENT - Page 68

<PAGE>

its Loan but shall not be obligated  to advance the amount which the  defaulting
Lender  was  required  to  advance  hereunder.  In no event  shall any Lender be
required to advance an amount or amounts  with respect to any of the Loans which
would in the  aggregate  exceed such  Lender's  Commitment  with respect to such
Loans.  No Lender  shall be  responsible  for any act or  omission  of any other
Lender.

         Section 12.7 Successor Administrative Agent. Subject to the appointment
and  acceptance  of a  successor  Administrative  Agent as provided  below,  the
Administrative  Agent may  resign at any time by giving  notice  thereof  to the
Lenders and the Borrower.  Upon any such resignation,  the Required Lenders will
have the right to appoint another Lender as a successor Administrative Agent. If
no successor  Administrative  Agent shall have been so appointed by the Required
Lenders  and shall  have  accepted  such  appointment  within 30 days  after the
retiring  Administrative  Agent's  giving  of notice  of  resignation,  then the
retiring Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative  Agent, which shall be a commercial bank organized under the laws
of the U.S. or any state thereof or of a foreign  country if acting  through its
U.S.  branch and having combined  capital and surplus of at least  $100,000,000.
Upon the acceptance of its appointment as successor  Administrative  Agent, such
successor Administrative Agent shall thereupon succeed to and become vested with
all  rights,  powers,  privileges,   immunities  and  duties  of  the  resigning
Administrative Agent, and the resigning Administrative Agent shall be discharged
from its  duties  and  obligations  under  this  Agreement  and the  other  Loan
Documents. After any Administrative Agent's resignation as Administrative Agent,
the  provisions  of this Article 12 shall  continue in effect for its benefit in
respect  of any  actions  taken  or  omitted  to be taken by it while it was the
Administrative  Agent.  Each  Administrative  Agent  (including  each  successor
Administrative  Agent)  agrees that,  so long as it is acting as  Administrative
Agent under this Agreement, it shall be a Lender under this Agreement.

                                   ARTICLE 13

                                  Miscellaneous

         Section 13.1 Expenses. Each of Holdings and the Borrower hereby agrees,
on demand, to pay or reimburse the Administrative  Agent and each of the Lenders
for  paying:  (a) all  reasonable  out-  of-pocket  costs  and  expenses  of the
Administrative  Agent  accrued  in  connection  with  the  arranging,  drafting,
preparation, negotiation, execution and/or delivery of the Loan Documents and in
connection  with  any  and all  waivers,  amendments,  modifications,  renewals,
extensions and supplements of or to the Loan  Documents,  and the syndication of
the Commitments and the Loans,  including,  without  limitation,  the reasonable
fees and  expenses  of legal  counsel  (including  all  local  counsel)  for the
Administrative   Agent,  (b)  all  out-of-pocket   costs  and  expenses  of  the
Administrative  Agent  and the  Lenders  in  connection  with any  Default,  the
exercise of any right or remedy and the  enforcement  of this  Agreement  or any
other Loan  Document  or any term or  provision  hereof or  thereof,  including,
without  limitation,  the  fees  and  expenses  of all  legal  counsel  for  the
Administrative Agent and/or any Lender, (c) all transfer,  stamp, documentary or
other similar taxes, assessments or charges levied by any Governmental Authority
in respect of this Agreement or any of the other Loan Documents,  (d) all costs,
expenses,  assessments and other charges incurred in connection with any filing,
registration, recording or perfection of any Lien contemplated by this

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<PAGE>

Agreement or any other Loan Document, and (e) all reasonable out-of-pocket costs
and  expenses  incurred  by the  Administrative  Agent  in  connection  with due
diligence,   computer  services,  copying,  appraisals,   environmental  audits,
collateral audits, field exams, insurance, consultants and search reports.

         Section 13.2 INDEMNIFICATION.  EACH OF HOLDINGS AND THE BORROWER HEREBY
AGREES TO INDEMNIFY THE ADMINISTRATIVE  AGENT AND EACH LENDER AND EACH AFFILIATE
THEREOF AND THEIR  RESPECTIVE  OFFICERS,  DIRECTORS,  EMPLOYEES,  ATTORNEYS  AND
AGENTS  FROM,  AND  HOLD  EACH OF THEM  HARMLESS  AGAINST,  ANY AND ALL  LOSSES,
LIABILITIES (INCLUDING, WITHOUT LIMITATION,  ENVIRONMENTAL LIABILITIES), CLAIMS,
DAMAGES,  PENALTIES,  JUDGMENTS,  DISBURSEMENTS,  COSTS AND EXPENSES  (INCLUDING
REASONABLE  ATTORNEYS'  AND  CONSULTANTS'  FEES) TO WHICH ANY OF THEM MAY BECOME
SUBJECT WHICH  DIRECTLY OR INDIRECTLY  ARISE FROM OR RELATE TO (A) THE DRAFTING,
PREPARATION,  NEGOTIATION,  EXECUTION, DELIVERY, PERFORMANCE,  ADMINISTRATION OR
ENFORCEMENT OF ANY OF THE LOAN DOCUMENTS,  INCLUDING,  WITHOUT  LIMITATION,  THE
EXERCISE OF ANY  FORECLOSURE  RIGHT OR OTHER RIGHT OR REMEDY WHETHER OR NOT SUCH
EXERCISE  IS IN  COMPLIANCE  WITH LAWS  AFFECTING  OTHER  PERSONS  OR RESULTS IN
DAMAGES PAYABLE TO OTHER PERSONS,  (B) ANY OF THE  TRANSACTIONS  CONTEMPLATED BY
THE  LOAN  DOCUMENTS,  (C)  ANY  BREACH  BY  ANY  LOAN  PARTY  OF  ANY  MATERIAL
REPRESENTATION,  WARRANTY,  COVENANT OR OTHER AGREEMENT  CONTAINED IN ANY OF THE
LOAN  DOCUMENTS,  (D) THE USE OR  PROPOSED  USE OF ANY LOAN,  (E) THE  PRESENCE,
RELEASE,  THREATENED  RELEASE,  DISPOSAL,  REMOVAL OR  CLEANUP OF ANY  HAZARDOUS
MATERIAL  LOCATED ON, ABOUT,  WITHIN OR AFFECTING  ANY OF THE  PROPERTIES OF ANY
LOAN PARTY OR ANY OF ITS AFFILIATES,  EXCEPT TO THE EXTENT THAT THE LOSS, DAMAGE
OR CLAIM IS THE DIRECT RESULT OF GROSS  NEGLIGENCE OR WILLFUL  MISCONDUCT OF THE
PERSON  TO BE  INDEMNIFIED,  OR  (F)  ANY  INVESTIGATION,  LITIGATION  OR  OTHER
PROCEEDING,   INCLUDING,   WITHOUT  LIMITATION,  ANY  THREATENED  INVESTIGATION,
LITIGATION OR OTHER PROCEEDING RELATING TO ANY OF THE FOREGOING, WHETHER BROUGHT
BY ANY LOAN PARTY,  ANY CREDITOR OR ANY OTHER  PERSON;  BUT EXCLUDING ANY OF THE
FOREGOING TO THE EXTENT CAUSED BY THE GROSS NEGLIGENCE OR WILLFUL  MISCONDUCT OF
THE PERSON TO BE INDEMNIFIED.  WITHOUT  LIMITING ANY PROVISION OF THIS AGREEMENT
OR OF ANY OTHER LOAN DOCUMENT, IT IS THE EXPRESS INTENTION OF THE PARTIES HERETO
THAT EACH PERSON TO BE INDEMNIFIED  UNDER THIS SECTION 13.2 SHALL BE INDEMNIFIED
FROM AND HELD  HARMLESS  AGAINST  ANY AND ALL  LOSSES,  LIABILITIES  (INCLUDING,
WITHOUT LIMITATION,  ENVIRONMENTAL  LIABILITIES),  CLAIMS,  DAMAGES,  PENALTIES,
JUDGMENTS,  DISBURSEMENTS,  COSTS AND EXPENSES (INCLUDING  REASONABLE ATTORNEYS'
FEES) ARISING OUT OF OR RESULTING  FROM THE SOLE OR  CONTRIBUTORY  NEGLIGENCE OF
SUCH PERSON. WITHOUT PREJUDICE TO THE SURVIVAL OF ANY

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<PAGE>

OTHER TERM OR PROVISION OF THIS  AGREEMENT,  THE OBLIGATIONS OF HOLDINGS AND THE
BORROWER  UNDER THIS SECTION 13.2 SHALL  SURVIVE THE  REPAYMENT OF THE LOANS AND
OTHER OBLIGATIONS AND TERMINATION OF THE COMMITMENTS.

         Section 13.3 Limitation of Liability. None of the Administrative Agent,
any Lender or any  Affiliate,  officer,  director,  employee,  attorney or agent
thereof shall be liable for any error of judgment or act done in good faith,  or
be otherwise liable or responsible under any circumstances whatsoever (including
such Person's negligence),  except for such Person's gross negligence or willful
misconduct.  None of the  Administrative  Agent,  any  Lender or any  Affiliate,
officer, director,  employee, attorney or agent thereof shall have any liability
with respect to, and each of Holdings and the Borrower  hereby waives,  releases
and  agrees not to sue any of them upon,  any claim for any  special,  indirect,
incidental  or  consequential  damages  suffered or incurred  by  Holdings,  the
Borrower,  any Loan  Party or any  Affiliate  of  Holdings  or the  Borrower  in
connection  with,  arising out of or in any way related to this Agreement or any
of the other Loan  Documents,  or any of the  transactions  contemplated by this
Agreement or any of the other Loan Documents.  Each of Holdings and the Borrower
hereby waives,  releases and agrees not to sue the  Administrative  Agent or any
Lender or any of their respective Affiliates,  officers,  directors,  employees,
attorneys or agents for exemplary or punitive damages in respect of any claim in
connection  with,  arising out of or in any way related to this Agreement or any
of the other Loan  Documents,  or any of the  transactions  contemplated by this
Agreement or any of the other Loan Documents.

         Section 13.4 No Duty. All attorneys, accountants,  appraisers and other
professional  Persons and consultants  retained by the Administrative  Agent and
the  Lenders  shall have the right to act  exclusively  in the  interest  of the
Administrative Agent and the Lenders and shall have no duty of disclosure,  duty
of  loyalty,  duty of care or other  duty or  obligation  of any type or  nature
whatsoever to Holdings,  the Borrower, any Loan Party or any of their respective
Affiliates or any other Person.

         Section  13.5  No  Fiduciary  Relationship.  The  relationship  between
Holdings  and each  Lender and the  Borrower  and each  Lender is solely that of
debtor and creditor, and neither the Administrative Agent nor any Lender has any
fiduciary or other special  relationship with Holdings,  the Borrower,  any Loan
Party or any of their respective Affiliates, and no term, provision or condition
of any of the Loan Documents  shall be construed so as to deem the  relationship
between  Holdings and any Lender,  between the Borrower and any Lender,  between
any other Loan Party and any Lender or between any such Affiliate and any Lender
to be other than that of debtor and creditor. No joint venture or partnership is
created by this Agreement among the Lenders or among Holdings, the Borrower, any
Loan Party or any of their respective Affiliates and the Lenders.

         Section  13.6  Equitable  Relief.  Each of  Holdings  and the  Borrower
recognizes that, in the event it fails to pay, perform, observe or discharge any
or all of the Obligations,  any remedy at law may prove to be inadequate  relief
to the Administrative  Agent and the Lenders.  Each of Holdings and the Borrower
therefore  agrees  that  the  Administrative  Agent  and  the  Lenders,  if  the
Administrative Agent or the Lenders

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<PAGE>

so request,  shall be entitled to temporary and permanent  injunctive  relief in
any such case without the necessity of proving actual damages.

         Section 13.7 No Waiver;  Cumulative Remedies. No failure on the part of
the  Administrative  Agent or any Lender to exercise and no delay in exercising,
and no course of dealing  with respect to, any right,  power or privilege  under
this Agreement or any other Loan Document shall operate as a waiver thereof, nor
shall any single or partial exercise of any right, power or privilege under this
Agreement  or any other Loan  Document  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  and the  other  Loan  Documents  are
cumulative and not exclusive of any rights and remedies provided by law.

         Section 13.8      Successors and Assigns.

         (a) This  Agreement  shall be binding  upon and inure to the benefit of
the parties hereto and their respective successors and assigns. Neither Holdings
nor the Borrower may assign or transfer any of its rights or  obligations  under
this Agreement or any other Loan Document  without the prior written  consent of
the Administrative  Agent and the Lenders. Any Lender may sell participations in
all or a portion of its  rights and  obligations  under this  Agreement  and the
other Loan Documents  (including,  without  limitation,  all or a portion of its
Commitments  and the  Loans  owing  to it);  provided,  however,  that  (i) such
Lender's   obligations  under  this  Agreement  and  the  other  Loan  Documents
(including,  without limitation,  its Commitments) shall remain unchanged,  (ii)
such Lender shall remain solely  responsible to the Borrower for the performance
of such obligations,  (iii) such Lender shall remain the holder of its Notes for
all purposes of this Agreement, (iv) Holdings and the Borrower shall continue to
deal solely and  directly  with such  Lender in  connection  with such  Lender's
rights and obligations  under this Agreement and the other Loan  Documents,  and
(v) the Lenders shall not grant any  participation  under which the  participant
shall have the right to approve (or under  which the consent of the  participant
must be obtained  prior to the Lenders'  being able to approve) any amendment or
waiver of this Agreement or the other Loan Documents,  except to the extent that
such amendment or waiver (A) increases any Commitment,  (B) reduces the interest
rate or the amount of principal or fees  applicable to the Loans or  Commitments
in which such participant is  participating,  (C) extends any Maturity Date, (D)
releases  any of the  Collateral  (except as provided for herein or in any other
Loan  Document)  or any  guaranty of the  Obligations,  or (E) releases any Loan
Party from its monetary Obligations under any of the Loan Documents.

         (b)  Holdings,  the  Borrower  and each of the  Lenders  agree that any
Lender (the  "Assigning  Lender") may at any time assign to one or more Eligible
Assignees (each an "Assignee") all or any part of its rights and/or  obligations
under  this  Agreement  and  the  other  Loan  Documents   (including,   without
limitation, its Commitments and/or Loans); provided, however, that (i) each such
assignment  may be of a varying  percentage  of the  Assigning  Lender's  rights
and/or  obligations  under this  Agreement and the other Loan  Documents and may
relate to some but not all of such rights and/or obligations, (ii) except in the
case of (A) an assignment of all of a Lender's rights and obligations under this
Agreement  and the other Loan  Documents or (B) an  assignment by a Lender to an
Affiliate of such Lender,  to another  Lender or to an Approved Fund, the amount
of the Commitment(s) and/or Loans of the Assigning Lender being assigned

CREDIT AGREEMENT - Page 72

<PAGE>

pursuant to each  assignment  (determined  as of the date of the  Assignment and
Acceptance  with  respect  to such  assignment)  shall in no event be less  than
$5,000,000  calculated  based  upon the  aggregate  amount of the  Commitment(s)
and/or Loans assigned,  (iii) the parties to each such assignment  shall execute
and deliver to the Administrative  Agent for its acceptance and recording in the
Register (as defined  below),  an Assignment and  Acceptance,  together with the
Note subject to such assignment, and a processing and recordation fee of $3,500,
and (iv) no Lender other than Nortel  Networks shall assign all or a part of its
rights and obligations  under this Agreement  without the written consent of the
Borrower, which consent shall not be unreasonably withheld. Upon such execution,
delivery,  acceptance and recording, from and after the effective date specified
in each Assignment and  Acceptance,  which effective date shall be at least five
Business Days after the execution  thereof or such other date as may be approved
by the Administrative Agent, (1) the Assignee thereunder shall be a party hereto
as a "Lender" and, to the extent that rights and obligations hereunder have been
assigned to it pursuant to such Assignment and  Acceptance,  have the rights and
obligations of a Lender  hereunder and under the other Loan  Documents,  and (2)
the Assigning Lender thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such  Assignment and  Acceptance,
relinquish its rights and be released from its obligations  under this Agreement
and the other Loan  Documents  (and, in the case of an Assignment and Acceptance
covering all or the remaining portion of a Lender's rights and obligations under
the Loan Documents, such Lender shall cease to be a party thereto, provided that
such  Lender's  rights  under  Article 4,  Section 13.1 and Section 13.2 accrued
through the date of assignment shall  continue).  Holdings and the Borrower will
provide full and prompt  assistance to each Lender as it may reasonably  request
from  time to time in  connection  with such  Lender's  efforts  to  assign  its
Commitments  and/or  Loans  or sell any  participation  interest  therein.  Such
assistance shall include, without limitation, making senior officers of Holdings
and  the  Borrower   available  for  meetings  with   prospective   Lenders  and
participants  and  providing  (in a timely  manner)  such  assistance  as may be
reasonably  requested by such Lender  and/or its  advisors,  including,  without
limitation,  providing  information  to and  responding  to inquiries  from such
prospective Lenders and participants with respect to the businesses, operations,
business plan, financial condition and results of operations of Holdings and its
Subsidiaries (including, without limitation, the Borrower).

         (c) By executing  and  delivering  an Assignment  and  Acceptance,  the
Assigning  Lender  thereunder and the Assignee  thereunder  confirm to and agree
with each  other and the other  parties  hereto as  follows:  (i) other  than as
provided in such  Assignment  and  Acceptance,  such  Assigning  Lender makes no
representation  or warranty  and assumes no  responsibility  with respect to any
statements, warranties or representations made in or in connection with the Loan
Documents or the execution,  legality,  validity,  enforceability,  genuineness,
sufficiency or value of the Loan  Documents or any other  instrument or document
furnished  pursuant thereto;  (ii) such Assigning Lender makes no representation
or  warranty  and  assumes  no  responsibility  with  respect  to the  financial
condition or results of operations of Holdings,  the Borrower, any Loan Party or
any of their respective Affiliates or the performance or observance by Holdings,
the  Borrower,  any Loan Party or any of their  respective  Affiliates of any of
their  respective  obligations  under the Loan  Documents;  (iii) such  Assignee
confirms that it has received a copy of the Loan Documents, together with copies
of the financial  statements referred to in Section 7.2 and such other documents
and information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance;  (iv) such Assignee will,
independently and without reliance

CREDIT AGREEMENT - Page 73

<PAGE>

upon  the  Administrative  Agent  or such  Assigning  Lender  and  based on such
documents and information as it shall deem appropriate at the time,  continue to
make its own  credit  decisions  in  taking  or not  taking  action  under  this
Agreement and the other Loan Documents; (v) such Assignee confirms that it is an
Eligible Assignee; (vi) such Assignee appoints and authorizes the Administrative
Agent to take such action as agent on its behalf and exercise  such powers under
the Loan  Documents as are  delegated to the  Administrative  Agent by the terms
thereof,  together with such powers as are reasonably  incidental  thereto;  and
(vii) such Assignee  agrees that it will perform in accordance  with their terms
all of the obligations  which by the terms of the Loan Documents are required to
be performed by it as a Lender.

         (d) The  Administrative  Agent shall maintain at its Principal Office a
copy of each  Assignment  and  Acceptance  delivered to and accepted by it and a
register for the  recordation  of the names and addresses of the Lenders and the
Commitments  of, and  principal  amount of the Loans  owing to, each Lender from
time to time (the  "Register").  The entries in the Register shall be conclusive
and binding for all purposes, absent manifest error, and Holdings, the Borrower,
the  Administrative  Agent and the Lenders  may treat each Person  whose name is
recorded in the Register as a Lender  hereunder for all purposes  under the Loan
Documents.  The Register  shall be available  for  inspection  by Holdings,  the
Borrower  or any  Lender  at any  reasonable  time  and from  time to time  upon
reasonable prior notice.

         (e) Upon its receipt of an  Assignment  and  Acceptance  executed by an
Assigning  Lender and  Assignee  representing  that it is an Eligible  Assignee,
together with the Note(s) subject to such assignment,  the Administrative  Agent
shall,  if  such  Assignment  and  Acceptance  has  been  completed  and  is  in
substantially  the form of Exhibit A hereto,  (i)  accept  such  Assignment  and
Acceptance,  (ii) record the information contained therein in the Register,  and
(iii) give prompt written  notice thereof to the Borrower.  Within five Business
Days after its receipt of such notice, the Borrower,  at the Borrower's expense,
shall  execute and  deliver to the  Administrative  Agent in  exchange  for each
surrendered Note evidencing the Loans assigned, a new Note evidencing such Loans
payable to the order of such Eligible  Assignee in an amount equal to such Loans
assigned to it and, if the Assigning  Lender has retained any Loans,  a new Note
evidencing  each such Loans payable to the order of the Assigning  Lender in the
amount of such Loans retained by it (each such promissory note shall  constitute
a "Note" for purposes of the Loan Documents).  Such new Notes shall be dated the
effective  date of such  Assignment  and  Acceptance  and shall  otherwise be in
substantially the form of Exhibit B.

         (f) Any Lender may, in connection with any assignment or  participation
or proposed assignment or participation  pursuant to this Section 13.8, disclose
to  the  Assignee  or  participant  or  proposed  Assignee  or  participant  any
information relating to Holdings,  the Borrower,  any Loan Party or any of their
respective Affiliates furnished to such Lender by or on behalf of Holdings,  the
Borrower,  any Loan Party or any of their respective  Affiliates;  provided that
each such actual or proposed  Assignee or participant shall agree to be bound by
the provisions of Section 13.20.

         (g) Any Lender may assign and pledge any Note held by it to any Federal
Reserve Bank or the U.S. Treasury as collateral  security pursuant to Regulation
A of the Board of  Governors  of the Federal  Reserve  System and any  operating
circular issued by such Federal Reserve System and/or Federal Reserve

CREDIT AGREEMENT - Page 74

<PAGE>

Bank; provided,  however,  that any payment made by the Borrower for the benefit
of such assigning  and/or  pledging  Lender in accordance  with the terms of the
Loan Documents shall satisfy the Borrower's obligations under the Loan Documents
in respect  thereof to the extent of such  payment.  No such  assignment  and/or
pledge shall release the assigning  and/or  pledging Lender from its obligations
hereunder.

         (h) The Borrower shall maintain, or cause to be maintained,  a register
(the "Registered Note Register")  (which,  at the request of the Borrower (which
request the Borrower makes by the execution of this Agreement)  shall be kept by
the  Administrative  Agent on behalf of the  Borrower at no extra  charge to the
Borrower at the address to which notices to the  Administrative  Agent are to be
sent hereunder) on which it shall enter the name of the registered owner of each
of the Loans which is evidenced by a Registered Note.  Notwithstanding  anything
to the contrary  contained in this Section 13.8, a Registered Note and the Loans
evidenced  thereby may be assigned or otherwise  transferred in whole or in part
only by  registration of such assignment or transfer of such Registered Note and
the Loans evidenced thereby on the Registered Note Register (and each Registered
Note shall  expressly so provide).  Any assignment or transfer of all or part of
such Loans and the  Registered  Note  evidencing the same shall be registered on
the Registered Note Register only upon surrender for  registration of assignment
or transfer of the Registered Note  evidencing such Loans,  duly endorsed by (or
accompanied by a written  instrument of assignment or transfer duly executed by)
the  registered  noteholder  thereof,  and thereupon one or more new  Registered
Notes in the same aggregate  principal  amount shall be issued to the designated
assignee(s) or  transferee(s).  Prior to the due presentment for registration of
transfer of any Registered Note, the Borrower and the Administrative Agent shall
treat the Person in whose name such Loans and the Registered  Note(s) evidencing
the same are  registered  as the owner  thereof for the purpose of receiving all
payments thereon and for all other purposes,  notwithstanding  any notice to the
contrary.  The  Registered  Note Register  shall be available for  inspection by
Holdings,  the Borrower and any Lender at any  reasonable  time upon  reasonable
prior notice.

         (i) Neither  Holdings  nor the  Borrower  will,  nor will it permit any
other Loan Party to, become a party to any loan agreement,  credit  agreement or
similar  agreement  which  restricts  or  prohibits  the right or ability of any
lender which is a party thereto to become a Lender under this Agreement.

         (j) Holdings and the Borrower  shall provide  prompt  assistance to the
Administrative  Agent and the  Lenders  in  connection  with  their  efforts  in
syndicating  the Loans and  Commitments.  Such  assistance  shall include making
senior officers and other representatives of Holdings and the Borrower and their
respective  Affiliates  available  for  meetings  with  prospective  Lenders and
providing, in a timely manner, such assistance as may be reasonably requested by
the  Administrative  Agent  or  its  advisors,  including,  without  limitation,
providing  information to and responding to inquiries from  prospective  Lenders
with  respect to the  business,  operations,  Business  Plan,  results and other
matters  relating to the business of  Holdings,  the Borrower and the other Loan
Parties.

         Section 13.9  Survival.  All  representations  and  warranties  made or
deemed made in this  Agreement  or any other Loan  Document or in any  document,
statement or  certificate  furnished in  connection  with this  Agreement  shall
survive the execution and delivery of this Agreement and the other

CREDIT AGREEMENT - Page 75

<PAGE>

Loan  Documents  and  the  making  of the  Loans,  and no  investigation  by the
Administrative   Agent  or  any  Lender  or  any   closing   shall   affect  the
representations  and warranties or the right of the Administrative  Agent or any
Lender  to rely  upon  them.  Without  prejudice  to the  survival  of any other
obligation of Holdings or the Borrower  hereunder,  the  obligations of Holdings
and the Borrower  under  Article 4, Section 13.1 and Section 13.2 shall  survive
repayment  of  the  Loans  and  the  Reimbursement  Obligations  and  the  other
Obligations.

         SECTION 13.10 ENTIRE AGREEMENT. THIS AGREEMENT, THE NOTES AND THE OTHER
LOAN DOCUMENTS  REFERRED TO HEREIN EMBODY THE FINAL,  ENTIRE AGREEMENT AMONG THE
PARTIES HERETO AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS  (INCLUDING,  WITHOUT
LIMITATION, ANY COMMITMENT LETTER), TERM SHEETS, 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.

         Section  13.11  Amendments.  No amendment or waiver of any provision of
this  Agreement,  the Notes or any other Loan Document to which  Holdings or the
Borrower  is a party,  nor any  consent  to any  departure  by  Holdings  or the
Borrower  therefrom,  shall in any event be  effective  unless the same shall be
agreed or  consented to by the  Required  Lenders,  Holdings and the Borrower in
writing, and each such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given;  provided,  however, that
no amendment,  waiver or consent  shall,  unless in writing and signed by all of
the Lenders,  Holdings and the Borrower,  do any of the following:  (a) increase
the  Commitments  of the  Lenders  (or any Lender) or subject the Lenders to any
additional  obligations;  (b) reduce the principal of, or interest on, the Loans
or any fees or other amounts payable hereunder;  (c) postpone any date fixed for
any  payment  (including,  without  limitation,  any  mandatory  prepayment)  of
principal  of, or interest  on, the Loans or any fees or other  amounts  payable
hereunder;  (d)  change  the  Commitment  Percentages  or the  aggregate  unpaid
principal  amount of the Loans or the number or interests  of the Lenders  which
shall be required  for the Lenders or any of them to take any action  under this
Agreement;  (e) change any  provision  contained  in Section  3.2,  Section 3.3,
Section 5.1 or this Section 13.11 or modify the definition of "Required Lenders"
contained  in  Section  1.1;  or (f)  except  as  expressly  authorized  by this
Agreement,  release any Collateral from any of the Liens created by the Security
Documents; and provided further,  however, that no amendment,  waiver or consent
relating to Sections 12.1,  12.2, 12.3, 12.4 or 12.5 shall require the agreement
of Holdings or the Borrower.  Notwithstanding anything to the contrary contained
in this  Section  13.11,  no  amendment,  waiver or  consent  shall be made with
respect  to (i)  Article  12 hereof  without  the prior  written  consent of the
Administrative  Agent,  (ii) the  definition  of  "Master  Purchase  Agreement",
"Nortel Networks Equipment",  "Nortel Networks Goods and Installation  Services"
or "Nortel Networks Software" or Section 2.5, Section 2.9 or Section 2.10 hereof
without  the prior  written  consent of Nortel  Networks  (whether or not Nortel
Networks is then a Lender hereunder), (iii) any condition precedent set forth in
Article 6 with  respect to the  making of any Loans  without  the prior  written
consent

CREDIT AGREEMENT - Page 76

<PAGE>

of the Lenders that hold, at the time of such amendment,  waiver or consent,  at
least a majority  (in Dollar  amount)  of the sum of the  outstanding  principal
amount of the Loans plus the outstanding Commitments,  or (iv) the interest rate
applicable to the Loans or the Maturity Date,  without the prior written consent
of the Lenders that hold, at the time of such amendment,  waiver or consent,  at
least a majority  (in Dollar  amount)  of the sum of the  outstanding  principal
amount of the Loans plus the outstanding Commitments.

         Section 13.12     Maximum Interest Rate.

         (a) No interest  rate  specified  in this  Agreement  or any other Loan
Document  shall at any time exceed the Maximum Rate. If at any time the interest
rate (the  "Contract  Rate") for any  Obligation  shall exceed the Maximum Rate,
thereby  causing the interest  accruing on such  Obligation to be limited to the
Maximum  Rate,  then any  subsequent  reduction  in the  Contract  Rate for such
Obligation  shall not reduce the rate of interest on such  Obligation  below the
Maximum Rate until the aggregate  amount of interest  accrued on such Obligation
equals  the  aggregate  amount of  interest  which  would  have  accrued on such
Obligation  if the Contract  Rate for such  Obligation  had at all times been in
effect.

         (b)  Notwithstanding   anything  to  the  contrary  contained  in  this
Agreement or the other Loan Documents,  none of the terms and provisions of this
Agreement  or the other  Loan  Documents  shall  ever be  construed  to create a
contract or  obligation to pay interest at a rate in excess of the Maximum Rate;
and neither the Administrative Agent nor any Lender shall ever charge,  receive,
take, collect,  reserve or apply, as interest on the Obligations,  any amount in
excess of the Maximum Rate. The parties hereto agree that any interest,  charge,
fee, expense or other obligation  provided for in this Agreement or in the other
Loan Documents 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 (i) the amount of such interest,  charge, fee, expense or other
obligation that would be payable in the absence of this Section 13.12(b) or (ii)
an amount,  which when added to all other interest  payable under this Agreement
and the other Loan Documents,  equals the Maximum Rate. If,  notwithstanding the
foregoing,  the 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
treated  hereunder  as such;  and if the  Obligations,  or  applicable  portions
thereof,  are paid in full,  any remaining  excess shall promptly be paid to the
Borrower.  In  determining  whether  the  interest  paid or  payable,  under any
specific contingency, exceeds the Maximum Rate, the Borrower, the Administrative
Agent and the 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,  or applicable portions thereof, so that the interest rate does not
exceed the Maximum Rate at any time during the term of the 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, the  Administrative
Agent  and/or the  Lenders,  as  appropriate,  shall  refund to the Borrower the
amount of such  excess  and, in such  event,  the  Administrative  Agent and the
Lenders shall not be subject to any penalties provided by any laws

CREDIT AGREEMENT - Page 77

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for contracting  for,  charging,  receiving,  taking,  collecting,  reserving or
applying interest in excess of the Maximum Rate.

         (c) Pursuant to Article  15.10(b) of Chapter 15,  Subtitle 79,  Revised
Civil Statutes of Texas 1925, as amended,  the Borrower agrees that such Chapter
15 (which  regulates  certain  revolving  credit  loan  accounts  and  revolving
tri-party accounts) shall not govern or in any manner apply to the Obligations.

         Section 13.13 Notices.  All notices and other  communications  provided
for in this  Agreement  and the other Loan  Documents  to which  Holdings or the
Borrower  is a party  shall be  given  or made by  telecopy  or in  writing  and
telecopied,  mailed by certified mail return  receipt  requested or delivered to
the intended  recipient at the "Address for Notices" specified below its name on
the signature pages hereof (or, with respect to a Lender that becomes a party to
this Agreement  pursuant to an assignment  made in accordance with Section 13.8,
in the Assignment and Acceptance  executed by it); or, as to any party,  at such
other  address  as shall be  designated  by such party in a notice to each other
party given in accordance with this Section 13.13.  Except as otherwise provided
in this  Agreement,  all such  communications  shall be deemed to have been duly
given when transmitted by telecopy or personally  delivered or, in the case of a
mailed  notice,  upon  receipt,  in each case given or addressed  as  aforesaid;
provided,  however,  that  notices to the  Administrative  Agent shall be deemed
given when received by the Administrative Agent.

         SECTION 13.14  GOVERNING LAW;  SUBMISSION TO  JURISDICTION;  SERVICE OF
PROCESS.  EXCEPT AS MAY BE  EXPRESSLY  STATED TO THE  CONTRARY  IN CERTAIN  LOAN
DOCUMENTS,  THIS  AGREEMENT,  THE NOTES AND THE OTHER  LOAN  DOCUMENTS  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.  EACH OF HOLDINGS  AND THE  BORROWER  HEREBY  SUBMITS TO THE  NON-EXCLUSIVE
JURISDICTION OF EACH OF (1) THE U.S. DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
NEW YORK,  (2) ANY NEW YORK STATE COURT SITTING IN NEW YORK,  NEW YORK,  (3) THE
U.S.  DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS, AND (4) 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.  EACH OF HOLDINGS AND THE BORROWER
HEREBY  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 SUCH PERSON AT
ITS ADDRESS SET FORTH UNDERNEATH ITS SIGNATURE HERETO.  EACH OF HOLDINGS AND THE
BORROWER 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

CREDIT AGREEMENT - Page 78

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

         Section 13.15  Counterparts.  This  Agreement may be executed in one or
more counterparts,  each of which shall be deemed an original,  but all of which
together shall constitute one and the same instrument.

         Section 13.16  Severability.  Any provision of this Agreement held by a
court of competent  jurisdiction to be invalid or unenforceable shall not impair
or invalidate  the remainder of this  Agreement and the effect  thereof shall be
confined to the provision held to be invalid or illegal.

         Section 13.17 Headings. The headings, captions and arrangements used in
this Agreement are for convenience only and shall not affect the  interpretation
of this Agreement.

         Section 13.18 Construction.  Holdings, the Borrower, the Administrative
Agent and each Lender  acknowledges that it has had the benefit of legal counsel
of its own choice and has been afforded an  opportunity to review this Agreement
and the other Loan  Documents with its legal counsel and that this Agreement and
the other Loan Documents shall be construed as if jointly drafted by the parties
hereto.

         Section 13.19 Independence of Covenants.  All covenants hereunder shall
be given  independent  effect so that if a particular action or condition is not
permitted  by any of such  covenants,  the fact that it would be permitted by an
exception to, or be otherwise  within the limitations of, another covenant shall
not avoid the  occurrence of a Default if such action is taken or such condition
exists.

         Section 13.20     Confidentiality.

         (a)  Each  Lender  agrees  to  exercise  its best  efforts  to keep any
information  delivered  or made  available  by Holdings or the  Borrower to such
Lender which is clearly indicated to be confidential  information,  confidential
from anyone  other than  Persons  employed or retained by such Lender who are or
are  expected  to  become  engaged  in  evaluating,  approving,  structuring  or
administering  the Loans;  provided that nothing herein shall prevent any Lender
from disclosing such  information (a) to any other Lender,  (b) to any Person if
reasonably  incidental to the administration of the Loans, (c) upon the order of
any  court or  administrative  agency,  (d) upon the  request  or  demand of any
regulatory agency or authority having  jurisdiction over such Lender,  (e) which
has been publicly disclosed,  (f) in connection with any litigation to which the
Administrative  Agent, any Lender or their respective Affiliates may be a party,
(g) to the extent  reasonably  required in  connection  with the exercise of any
right or remedy under the Loan  Documents,  (h) to such Lender's  legal counsel,
independent  auditors  and  Affiliates,  and  (i)  to  any  actual  or  proposed
participant or Assignee of all or part of its rights hereunder,  so long as such
actual or proposed  participant or Assignee agrees to be bound by the provisions
of this Section 13.20.

         (b) Loan Parties' and Affiliates' Obligations. Each of Holdings and the
Borrower  agrees that it will,  and will cause the other Loan  Parties and their
Affiliates  to, keep the terms and  provisions  of this  Agreement and the other
Loan Documents confidential from anyone other than individuals employed or

CREDIT AGREEMENT - Page 79

<PAGE>

retained  by  Holdings,  the  Borrower,  any  other  Loan  Party or any of their
Affiliates  who are or are expected to become  engaged in  financial  matters or
matters  relating to compliance with the Loan  Documents,  provided that nothing
herein shall prevent any such Person from disclosing such information (i) to any
such  other  Loan  Party  or  Affiliate,  (ii)  upon the  order of any  court or
administrative agency, (iii) upon the request or demand of any regulatory agency
or authority having  jurisdiction over such Loan Party or Affiliate,  (iv) which
has been publicly  disclosed,  or (v) to such Loan Party's or Affiliate's  legal
counsel and independent  auditors;  provided,  however, that Holdings and/or the
Borrower  will  deliver  to  the  Administrative  Agent  written  notice  of any
intention or  obligation  of any Loan Party to deliver or provide a copy of this
Agreement or any other Loan Document or any term or provision  hereof or thereof
to any  Governmental  Authority at least ten Business  Days prior to the initial
date upon which any such  delivery  or  provision  occurs and  Holdings  and the
Borrower  shall,  and shall  cause  each of the other Loan  Parties  to, use all
reasonable  efforts to redact or delete from such copy or such term or provision
such terms or  provisions  or  language  relating  to rates of  interest,  fees,
financial  covenants,  availability and other terms or provisions of a sensitive
nature as may be  requested  by the  Administrative  Agent to be so  redacted or
deleted  before the same is so  delivered  or  provided.  Without  limiting  the
generality of the foregoing, Holdings and the Borrower agree that they will not,
and will not permit any other Loan Party or its Affiliates to, without the prior
written consent of the  Administrative  Agent, issue or publish a press release,
tombstone  or  other  similar  announcement  or  publication  relating  to  this
Agreement or any other Loan  Document or the  transactions  contemplated  hereby
unless  they  or it  are  required  to do  so by  the  order  of  any  court  or
administrative agency or in accordance with applicable law.

         SECTION 13.21 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
ANY OF THE  LOAN  DOCUMENTS  OR THE  TRANSACTIONS  CONTEMPLATED  THEREBY  OR THE
ACTIONS OF HOLDINGS, THE BORROWER, THE ADMINISTRATIVE AGENT OR ANY LENDER IN THE
NEGOTIATION, ADMINISTRATION OR ENFORCEMENT THEREOF.

         Section  13.22  Approvals  and  Consent.  Except  as may  be  expressly
provided to the contrary in this  Agreement or in the other Loan  Documents  (as
applicable),  in any instance  under this  Agreement of the other Loan Documents
where the approval,  consent or exercise of judgment of the Administrative Agent
or any Lender is  requested  or  required,  (a) the  granting  or denial of such
approval or consent and the exercise of such  judgment  shall be within the sole
discretion of the  Administrative  Agent or such Lender,  respectively,  and the
Administrative Agent and such Lender shall not, for any reason or to any extent,
be required to grant such  approval or consent or to exercise  such  judgment in
any particular  manner,  regardless of the  reasonableness of the request or the
action  or  judgment  of the  Administrative  Agent or such  Lender,  and (b) no
approval or consent of the Administrative Agent or any Lender shall in any event
be effective unless the same shall be in writing and the same shall be effective
only in the specific instance and for the specific purpose for which given.

CREDIT AGREEMENT - Page 80

<PAGE>

         Section  13.23  Service of Process.  Each of Holdings  and the Borrower
irrevocably  consents to the  service of process by the  mailing  thereof by the
Administrative  Agent or the Required  Lenders by registered or certified  mail,
postage  prepaid,  to Holdings or the Borrower,  as  applicable,  at its address
listed on the signature pages hereof. Nothing in this Section 13.23 shall affect
the right of the  Administrative  Agent or the Lenders to serve legal process in
any other  manner  permitted  by law or affect  the right of the  Administrative
Agent or any  Lender to bring any action or  proceeding  against  Holdings,  the
Borrower or any of their respective Property in the court of any jurisdiction.

                  [Remainder of page intentionally left blank.]

CREDIT AGREEMENT - Page 81

<PAGE>

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

                        HOLDINGS:
                        ---------

                        SAVVIS COMMUNICATIONS CORPORATION,
                        a Delaware corporation

                        By:    /s/ David J. Frear

                               -------------------------------------------------
                        Name:  David J. Frear

                        Title: Executive Vice President, Chief Financial Officer

                        Address for Notices:
                        -------------------
                        12007 Sunrise Valley Drive

                        Reston, Virginia 20191
                       Attention: Chief Financial Officer

                            Telephone: (703) 453-7500

                            Telecopy: (703) 716-1059

                        and

                        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

CREDIT AGREEMENT - Page 82

<PAGE>

                        BORROWER:
                        --------

                        SAVVIS COMMUNICATIONS CORPORATION,
                        a Missouri corporation

                        By:    /s/ David J. Frear

                               -------------------------------------------------
                        Name:  David J. Frear

                        Title: Executive Vice President, Chief Financial Officer

                        Address for Notices:
                        -------------------
                        12007 Sunrise Valley Drive

                        Reston, Virginia 20191
                       Attention: Chief Financial Officer

                            Telephone: (703) 453-7500

                            Telecopy: (703) 716-1059

                        and

                        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

CREDIT AGREEMENT - Page 83

<PAGE>

                                 ADMINISTRATIVE AGENT:
                                 --------------------

                                 NORTEL NETWORKS INC.,
                                 as Administrative Agent

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

                                 Address for Notices:
                                 -------------------
                                 Nortel Networks Inc.
                                 Mail Stop 991 15 A40
                                 2221 Lakeside Blvd.
                                 Richardson, Texas 75082-4399
                                 Attention:  Mitchell L. Stone
                                             Director, Customer Finance Americas
                                 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

CREDIT AGREEMENT - Page 84

<PAGE>

                                    LENDERS:

                                  -------

Commitment:    $38,000,000        NORTEL NETWORKS INC.

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

                                  Address for Notices:
                                  -------------------
                                  Nortel Networks Inc.
                                  Mail Stop 991 15 A40
                                  2221 Lakeside Blvd.
                                  Richardson, Texas 75082-4399
                                  Attention: Mitchell L. Stone
                                             Director, Customer Finance Americas
                                  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

                                  Lending Office for Base Rate Loans:
                                  ----------------------------------
                                  Nortel Networks Inc.
                                  2221 Lakeside Blvd.
                                  Richardson, Texas 75082

                                  Lending Office for Eurodollar Loans:
                                  -----------------------------------
                                  Nortel Networks Inc.
                                  2221 Lakeside Blvd.
                                  Richardson, Texas 75082

CREDIT AGREEMENT - Page 85EXHIBIT 10.3

                               SECURITY AGREEMENT

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

         THIS SECURITY AGREEMENT  ("Agreement") dated as of June 30, 2000, is by
and between SAVVIS COMMUNICATIONS CORPORATION, a Missouri corporation ("Debtor")
whose addresses are 12007 Sunrise Valley Drive, Reston, Virginia 20191 and 12851
Worldgate Drive, Herndon,  Virginia 20170, and whose Tax I.D. No. is 43-1727675,
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.

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

         A. Debtor  entered into that  certain  Credit  Agreement,  concurrently
herewith,  with  Savvis  Communications   Corporation,  a  Delaware  corporation
("Holdings"),  the lenders  party  thereto  (each  individually  a "Lender"  and
collectively,  the  "Lenders")  and Secured  Party (such  Agreement as it may be
amended, renewed, extended, restated, replaced,  substituted,  supplemented,  or
otherwise  modified  from time to time is  referred  to  herein  as the  "Credit
Agreement").

         B. 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 Debtor 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:

                                    ARTICLE 1

                                   Definitions

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

              "Collateral" has the meaning specified in Section 2.1.

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

SECURITY AGREEMENT (Savvis Communications Corporation)

<PAGE>

              "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.

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

              "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 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  pursuant to the Master  Purchase
         Agreement.

              "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 may be a party.

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

              "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.

              "UCC" means the Uniform  Commercial Code as in effect in the State
         of New York;  provided,  that if, by applicable  law, the perfection or
         effect of perfection or non-perfection of the security interest created
         hereunder in any Collateral is governed by the Uniform  Commercial Code
         as in  effect on or after  the date  hereof in any other  jurisdiction,
         "UCC"  means the  Uniform  Commercial  Code as in effect in such  other
         jurisdiction  for purposes of the  provisions  hereof  relating to such
         perfection or the effect of perfection or non-perfection.

SECURITY AGREEMENT (Savvis Communications Corporation)

<PAGE>

         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.

                                    ARTICLE 2

                                Security Interest

         Section 2.1 Security  Interest.  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 a continuing  Lien on
and security  interest in and to, 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 Nortel Networks  Equipment  purchased under the Master
Purchase Agreement with proceeds of the Loans, and any and all substitutions and
replacements  of any of the  foregoing,  wherever  located  and whether the same
constitute personal property or fixtures, together with all components and parts
installed directly therein or directly thereon;

                  (b) all Nortel Networks  Software  purchased or licensed under
the Master Purchase Agreement with proceeds of the Loans;

                  (c) all cash and non-cash  Proceeds and products of any of the
foregoing.

                                    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 Nortel  Networks
Equipment  acquired  after  the date  hereof  Debtor  will  be,  the  legal  and
beneficial owner of the Nortel Networks  Equipment free and clear of any Lien or
other  encumbrance,  except  for  Permitted  Liens and Liens in favor of Secured
Party.

SECURITY AGREEMENT (Savvis Communications Corporation)

<PAGE>

         Section 3.2 Financing  Statements.  Debtor has not signed any financing
statement,  security agreement or other Lien instrument covering all or any part
of the  Collateral,  except  pursuant to this Agreement and except for financing
statements evidencing Permitted Liens. Except as otherwise disclosed on Schedule
1 hereto,  Debtor does not do business and has not done business within the past
five (5) years  under a trade  name or any name  other  than its legal  name set
forth at the beginning of this Agreement.

         Section  3.3  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  addresses  of Debtor  shown at the
beginning of this Agreement.

         Section 3.4 Location of Collateral.  All Collateral owned by the Debtor
is located in the United  States at the  locations  listed on Schedule 2. Debtor
has exclusive possession and control of its Collateral.

         Section  3.5  Perfection.  Upon the filing of Uniform  Commercial  Code
financing  statements  in the  jurisdictions  listed on Schedule 2, the security
interest in favor of Secured  Party created  herein will  constitute a valid and
perfected Lien upon and security interest in the Collateral, subject to no equal
or prior  Liens  except for those (if any)  which  constitute  Permitted  Liens,
except to the extent a filing against fixtures would be required to be made in a
location  other than the filing offices and  jurisdictions  listed on Schedule 2
and to the extent  that a filing  against  fixtures  in the filing  offices  and
jurisdictions listed on Schedule 2 requires a legal description of the property.

                                    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.  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.  Debtor  shall do nothing to impair the rights of Secured  Party in the
Collateral.

         Section 4.2 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,  transfer 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 4.3 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

SECURITY AGREEMENT (Savvis Communications Corporation)

<PAGE>

further  agreements,  documents and  instruments and take such further action as
Secured  Party may 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.  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,  subject to the terms of the Credit  Agreement (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 the Collateral  (except
for certificates of title covering vehicles) and cause Secured Party to be named
as  lienholder  on all such  Documents;  and (c)  execute and deliver to Secured
Party such other  agreements,  documents  and  instruments  as Secured Party may
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 4.4 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 Section 2.7(a) of the Credit Agreement.

         Section 4.5  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 4.6  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 4.6. 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  4.7  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

SECURITY AGREEMENT (Savvis Communications Corporation)

<PAGE>

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  4.8 Books and  Records;  Information.  Debtor  shall  maintain
appropriate  books of record and account in  accordance  with GAAP  consistently
applied in which true, full and correct entries will be made of its dealings and
business affairs.

         Section 4.9 Collateral.

              (a) Debtor shall keep the Collateral at the locations specified in
         Section 3.4 hereto or at such other  places  within the U.S.  where all
         action  required to perfect Secured  Party's  security  interest in the
         Collateral with the priority required by this Agreement shall have been
         taken;  provided  that if any  Collateral  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 thirty (30)
         days) notice thereof to Secured Party.

              (b) Debtor shall  maintain the  Collateral  in good  condition and
         repair  (ordinary  wear and tear of the  Collateral  excepted).  Debtor
         shall not permit any waste or  destruction  of the  Collateral.  Debtor
         shall not permit the  Collateral  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 the  Collateral to be used in any manner
         or for any purpose  other than in the ordinary  course of business that
         would impair its value or expose it to unusual risk.

              (c)  Within  forty-five  (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 Collateral.

         Section 4.10 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,  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.

SECURITY AGREEMENT (Savvis Communications Corporation)
<PAGE>

         Section 4.11  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  Nortel  Networks
Equipment or to Debtor's knowledge any of the Nortel Networks Software,  (b) any
material change in any of the Nortel Networks Equipment or to Debtor's knowledge
any of the Nortel Networks Software, 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 have a Material  Adverse  Effect on the Nortel  Networks  Equipment  or to
Debtor's  knowledge any of the Nortel Networks Software or the security interest
created hereunder.

         Section  4.12  Transfers  and Other  Liens.  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.

         Section 4.13 Possession;  Reasonable Care. Following the occurrence and
during the continuation of an Event of Default,  Secured Party shall be entitled
to take  possession  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 taking any necessary steps
to preserve rights against any parties with respect to any Collateral.

                                    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 and from time to
time  thereafter,  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
         specified in Section 8.5 of the Credit Agreement;

SECURITY AGREEMENT (Savvis Communications Corporation)

<PAGE>

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

              (c) (i) 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;  (ii) 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;  (iii) 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 thereof
         and to enforce  any other right in respect of any  Collateral;  (iv) to
         defend any suit,  action or  proceeding  brought  against  Debtor  with
         respect  to any  Collateral;  (v) 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;  (vi) to add or  release  any  guarantor,  indorser,
         surety or other party to any of the Collateral;  (vii) 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 specified in Section 8.5 of the Credit Agreement); and (viii)
         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 4.13.  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 whether or not the  Obligations  are then
due. 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.

SECURITY AGREEMENT (Savvis Communications Corporation)
<PAGE>

         Section  5.3  Assignment  by  Secured  Party.  In  accordance  with the
provisions of the Credit Agreement,  any of Secured Party and the Lenders may at
any time  assign or  otherwise  transfer  all or any  portion  of its rights and
obligations  under  this  Agreement  and the other  Loan  Documents  (including,
without  limitation,  the Obligations),  in connection with an assignment of the
Obligations,  to any other Person,  and such other Person shall thereupon become
vested with all the benefits  thereof  granted to Secured Party and the Lenders,
respectively, herein or otherwise.

         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  obligation  of Debtor  under  this
Agreement.

                                    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 with respect to the Collateral:

                  (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, 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

SECURITY AGREEMENT (Savvis Communications Corporation)

<PAGE>

         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
         (5) 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 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 any of the Collateral.

                  (c) 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.

                  (d) 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.

SECURITY AGREEMENT (Savvis Communications Corporation)

<PAGE>

                                    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,  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.

         Section 7.4 Notices. All notices and other communications  provided for
in this  Agreement  shall  be  given  or  made by  telecopy  or in  writing  and
telecopied,  mailed by certified mail return receipt requested,  or delivered to
the intended  recipient at the "Address for Notices" specified below its name on
the signature pages hereof,  or, as to any party, at such other address as shall
be  designated  by such party in a notice to the other party given in accordance
with this Section 7.4. Except as otherwise provided in this Agreement,  all such
communications  shall be  deemed to have been duly  given  when  transmitted  by
telecopy or when personally  delivered or, in the case of a mailed notice, three
(3) Business Days after deposit in the mails, in each case given or addressed as
aforesaid;  provided,  however,  that  notices to Secured  Party shall be deemed
given when received by Secured Party.

         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 (1) THE  U.S.  DISTRICT  COURT  FOR

SECURITY AGREEMENT (Savvis Communications Corporation)

<PAGE>

THE SOUTHERN  DISTRICT OF NEW YORK,  (2) ANY NEW YORK STATE COURT SITTING IN NEW
YORK, NEW YORK, (3) THE U.S.  DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS,
AND (4) 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 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.

SECURITY AGREEMENT (Savvis Communications Corporation)

<PAGE>

         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  4.13 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.

         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.

         [The remainder of this page has been intentionally left blank.]

SECURITY AGREEMENT (Savvis Communications Corporation)
<PAGE>

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

                               DEBTOR:

                               SAVVIS COMMUNICATIONS CORPORATION,
                             a Missouri corporation

                               By:   /s/ David J. Frear
                                    --------------------------------------------
                               Name:     David J. Frear
                               Title:    Executive Vice President,
                                         Chief Financial Officer

                              Address for Notices:

                               -------------------
                               12007 Sunrise Valley Drive

                             Reston, Virginia 20191

                               Attention: Chief Financial Officer
                               Telephone: (703) 453-7500
                               Telecopy:  (703) 716-1059

                               and

                              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

SECURITY AGREEMENT (Savvis Communications Corporation)

<PAGE>

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

                                 NORTEL NETWORKS INC.,
                                 as Administrative Agent

                                 By:  /s/ Mitchell L. Stone
                                    --------------------------------------------

                                 Name:    Mitchell L. Stone
                                 Title:   Director, Customer Finance Americas

                                 Address for Notices:
                                 -------------------
                                 Nortel Networks Inc.
                                 Mail Stop 991 15 A40
                                 2221 Lakeside Blvd.
                                 Richardson, Texas 75082-4399
                                 Attention:  Mitchell L. Stone
                                             Director, Customer Finance Americas
                                 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

SECURITY AGREEMENT (Savvis Communications Corporation)

<PAGE>

                                   SCHEDULE 1

                              TRADE AND OTHER NAMES

Diamond.Net ISP, Inc.
Interconnected Associates Inc. (merged into Debtor in March 1998)
SAVVIS Communications Enterprises L.L.C. (merged into Debtor in April 1998)

<PAGE>

                                   SCHEDULE 2

         UNIFORM COMMERCIAL CODE FINANCING STATEMENTS; FILING LOCATIONS

         To be attached.

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