Document:

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                                                               Exhibit 10.50

                         LIONBRIDGE TECHNOLOGIES, INC.,

                              LTI ACQUISITION CORP.

                                       AND

                                 INT'L.COM, INC.

                      AGREEMENT AND PLAN OF REORGANIZATION

                          Dated as of January 19, 2000

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                                TABLE OF CONTENTS

<S>                                                                                                                 <C>
ARTICLE I.  THE MERGER...............................................................................................1

1.1    The Merger....................................................................................................1
1.2    Effects of the Merger.........................................................................................1
1.3    Closing.......................................................................................................1
1.4    Approval by the Stockholders of INT'L.com.....................................................................2
1.5    Approval by the Stockholders of Parent........................................................................2

ARTICLE II.  CONVERSION AND EXCHANGE OF SHARES; DISSENTING SHARES....................................................2

2.1    Conversion of Shares of INT'L.com Stock.......................................................................2
2.2    Escrow Shares.................................................................................................5
2.3    Dissenting Shares.............................................................................................6
2.4    Delivery of Evidence of Ownership.............................................................................6
2.5    No Further Ownership Rights in INT'L.com Stock................................................................7
2.6    No Fractional Shares..........................................................................................7
2.7    Assumption of Stock Options...................................................................................7
2.8    Notes.........................................................................................................8

ARTICLE III.  REPRESENTATIONS AND WARRANTIES OF INT'L.COM............................................................8

3.1    Organization, Standing and Power; Subsidiaries................................................................8
3.2    Capital Structure.............................................................................................9
3.3    Authority....................................................................................................10
3.4    Compliance with Laws and Other Instruments; Non-Contravention................................................11
3.5    Technology and Intellectual Property Rights..................................................................12
3.6    Financial Statements; Business Information...................................................................14
3.7    Taxes........................................................................................................15
3.8    Absence of Certain Changes and Events........................................................................16
3.9    Leases in Effect.............................................................................................18
3.10  Personal Property; Real Estate................................................................................18
3.11  Certain Transactions..........................................................................................19
3.12  Litigation and Other Proceedings..............................................................................19
3.13  No Defaults...................................................................................................20
3.14  Major Contracts...............................................................................................20
3.15  Material Reductions...........................................................................................21
3.16  Insurance and Banking Facilities..............................................................................21
3.17  Employees.....................................................................................................21
3.18  Employee Benefit Plans........................................................................................22
3.19  Certain Agreements............................................................................................23
3.20  Guarantees and Suretyships....................................................................................23
3.21  Brokers and Finders...........................................................................................24
3.22  Certain Payments..............................................................................................24
3.23  Environmental Matters.........................................................................................24
3.24  Enforceability of Contracts, etc..............................................................................24
3.25  Accounting Matters............................................................................................25
3.26  Year 2000.....................................................................................................25
3.27  Disclosure....................................................................................................25
3.28  Reliance......................................................................................................25

ARTICLE IV.  REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB................................................26

4.1    Organization and Qualification...............................................................................26
4.2    Capitalization...............................................................................................26
4.3    Authority Relative to this Agreement.........................................................................27
4.4    Non-Contravention............................................................................................27

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4.5    Reports and Financial Statements.............................................................................27
4.6    Validity of Parent Merger Shares.............................................................................28
4.7    Consents and Approvals of Governmental Authorities...........................................................28
4.8    Absence of Certain Changes or Events.........................................................................28
4.9    Litigation and Other Proceedings.............................................................................29
4.10  Disclosure....................................................................................................29
4.11  Reliance......................................................................................................29
4.12  Brokers and Finders...........................................................................................29
4.13  Accounting Matters............................................................................................29

ARTICLE V.  COVENANTS OF INT'L.COM..................................................................................29

5.1    Conduct of Business in Ordinary Course.......................................................................29
5.2    Dividends, Issuance of, or Changes in Securities.............................................................30
5.3    Governing Documents..........................................................................................31
5.4    No Acquisitions..............................................................................................31
5.5    No Dispositions..............................................................................................31
5.6    Indebtedness.................................................................................................31
5.7    Compensation.................................................................................................31
5.8    Claims.......................................................................................................31
5.9    Access to Properties and Records.............................................................................31
5.10  Breach of Representations and Warranties......................................................................32
5.11  Consents......................................................................................................32
5.12  Tax Returns...................................................................................................32
5.13  Exclusivity; Acquisition Proposals............................................................................32
5.14  Notice of Events..............................................................................................33
5.15  Reasonable Best Efforts.......................................................................................33
5.16  Insurance.....................................................................................................33
5.17  Financial Statements..........................................................................................33

ARTICLE VI.  COVENANTS OF PARENT....................................................................................34

6.1    Breach of Representations and Warranties.....................................................................34
6.2    Additional Information; Access...............................................................................34
6.3    Consents.....................................................................................................34
6.4    Reasonable Best Efforts......................................................................................34
6.5    Officers and Directors.......................................................................................34
6.6    Nasdaq National Market Listing...............................................................................35
6.7    Notice of Events.............................................................................................35
6.8    Third Party Beneficiaries....................................................................................35

ARTICLE VII.  ADDITIONAL AGREEMENTS.................................................................................35

7.1   Preparation of the Form S-4 and the Proxy Statement; Stockholders Meeting.....................................35
7.2    Legal Conditions to the Merger...............................................................................38
7.3    Employee Benefits............................................................................................38
7.4    Expenses.....................................................................................................38
7.5    Additional Agreements........................................................................................38
7.6    Public Announcements.........................................................................................39
7.7    Confidentiality..............................................................................................39
7.8    Pooling......................................................................................................39
7.9    INT'L.com Voting Agreement...................................................................................40
7.10  Parent Voting Agreement.......................................................................................40
7.11  Hart-Scott-Rodino Filing......................................................................................40
7.12  Board of Directors Meetings...................................................................................40
7.13  Employment and Noncompetition Agreements......................................................................41
7.14    INT'L.com Conversion........................................................................................41

ARTICLE VIII.  CONDITIONS PRECEDENT.................................................................................41

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<S>                                                                                                                <C>
8.1    Conditions to Each Party's Obligation to Effect the Merger...................................................41
8.2    Conditions of Obligations of Parent and Merger Sub...........................................................42
8.3    Conditions of Obligation of INT'L.com........................................................................44

ARTICLE IX.  INDEMNIFICATION........................................................................................46

9.1    Indemnification Relating to Agreement........................................................................46
9.2    Third Party Claims...........................................................................................46
9.3    Limitations..................................................................................................47
9.4    Binding Effect...............................................................................................47
9.5    Time Limit...................................................................................................47
9.6    Sole Remedy..................................................................................................48

ARTICLE X.  TERMINATION.............................................................................................48

10.1  Mutual Agreement..............................................................................................48
10.2  Termination by Parent.........................................................................................48
10.3  Termination by INT'L.com......................................................................................48
10.4  Outside Date..................................................................................................49
10.5  Effect of Termination.........................................................................................49

ARTICLE XI.  MISCELLANEOUS..........................................................................................49

11.1   Entire Agreement.............................................................................................49
11.2   Governing Law; Consent to Jurisdiction.......................................................................49
11.3   Notices......................................................................................................50
11.4   Severability.................................................................................................51
11.5   Survival of Representations and Warranties...................................................................51
11.6   Assignment...................................................................................................51
11.7   Counterparts.................................................................................................52
11.8   Amendment....................................................................................................52
11.9   Extension, Waiver............................................................................................52
11.10 Interpretation................................................................................................52
11.11 Knowledge.....................................................................................................52
11.12 Transfer, Sales, Documentary, Stamp and Other Similar Taxes...................................................52

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EXHIBITS

EXHIBIT 1.1       --     Merger Documents

EXHIBIT 2.2       --      Escrow Agreement Exhibit 2.4 -- Letter of Transmittal
EXHIBIT 7.1       --     Registration Rights Agreement
EXHIBIT 7.8(b)    --     INT'L.com Affiliate Agreement
EXHIBIT 7.8(c)    --     Parent Affiliate Agreement
EXHIBIT 7.9       --     INT'L.com Voting Agreement
EXHIBIT 7.10      --     Parent Voting Agreement
Exhibit 7.14      --     Conversion Notice
EXHIBIT 8.2       --     Opinion of Neal, Gerber & Eisenberg
EXHIBIT 8.3       --     Opinion of Testa, Hurwitz & Thibeault, LLP

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                      AGREEMENT AND PLAN OF REORGANIZATION

         AGREEMENT AND PLAN OF REORGANIZATION, dated as of January 19, 2000
(this "AGREEMENT"), by and among Lionbridge Technologies, Inc., a Delaware
corporation ("PARENT"); LTI Acquisition Corp., a Delaware corporation and a
wholly-owned subsidiary of Parent ("MERGER SUB"); and INT'L.com, Inc., a
Delaware corporation ("INT'L.COM").

         Intending to be legally bound, and in consideration of the mutual
representations, warranties, covenants and agreements contained herein, Parent,
Merger Sub and INT'L.com agree as follows:

                                    ARTICLE I

                                   THE MERGER

         1.1 THE MERGER. Subject to the terms and conditions hereof, and in
accordance with the Delaware General Corporation Law (the "DGCL"), Merger Sub
will be merged with and into INT'L.com (the "MERGER"). A Certificate of Merger
and any other required documents (collectively, the "MERGER DOCUMENTS"),
substantially in the form attached as EXHIBIT 1.1, will be duly prepared,
executed and acknowledged by INT'L.com and Merger Sub and thereafter delivered
to the Secretary of State of Delaware for filing in accordance with the DGCL
contemporaneously with the Closing (as defined in Section 1.3). The Merger will
become effective at such time as the Merger Documents have been filed with the
Secretary of State of Delaware (the "EFFECTIVE TIME"). Following the Merger,
INT'L.com will continue as the surviving corporation of the Merger (the
"SURVIVING CORPORATION") under the laws of the State of Delaware, and the
separate corporate existence of Merger Sub will cease.

         1.2 EFFECTS OF THE MERGER. At and after the Effective Time, (i) the
Merger will have all of the effects provided by the Certificate of Merger and
applicable law, (ii) the Certificate of Incorporation of INT'L.com will be
amended in the form attached as APPENDIX A to EXHIBIT 1.1 until duly further
amended, (iii) the bylaws of Merger Sub will be the bylaws of the Surviving
Corporation until duly amended, (iv) the directors of Merger Sub will be the
directors of the Surviving Corporation, to hold office in accordance with the
bylaws of the Surviving Corporation, (v) the officers of INT'L.com will be the
officers of the Surviving Corporation, to hold office in accordance with the
bylaws of the Surviving Corporation and (vi) the issued and outstanding
certificates for the capital stock of Merger Sub will be the issued and
outstanding certificates initially representing all of the issued capital stock
of the Surviving Corporation. The Merger is intended to be a reorganization
within the meaning of Section 368(a)(2)(E) of the Internal Revenue Code of 1986,
as amended (the "CODE"), and this Agreement is intended to constitute a "plan of
reorganization" within the meaning of the regulations promulgated under Section
368 of the Code.

         1.3 CLOSING. The closing of the transactions contemplated by this
Agreement (the "CLOSING") will take place as soon as practicable (but no more
than three (3) business days) after satisfaction or waiver of the last to be
fulfilled of the conditions set forth in Article VIII that by their terms are
not to occur at the Closing (the "CLOSING DATE"), but in no event later than
June 30, 2000, at the offices of Testa, Hurwitz & Thibeault, LLP in Boston,
Massachusetts, unless another date or place is agreed to in writing by Parent
and INT'L.com. If all of the conditions set forth in Article VIII hereof are
determined to be satisfied (or duly waived) at the Closing, concurrently with
the Closing the parties hereto will cause the Merger to be consummated by the
filing of the Merger Documents with the Secretary of State of Delaware. The
Closing will be deemed to have concluded at the Effective Time.

         1.4 APPROVAL BY THE STOCKHOLDERS OF INT'L.COM. INT'L.com will take all
action necessary in accordance with the DGCL, its Charter Documents (as defined
below) and any agreements to which it is a party to solicit the approval of this
Agreement, the Merger and all of the transactions contemplated hereby by all
stockholders of INT'L.com by means of a duly convened meeting of stockholders.
INT'L.com will use its reasonable best efforts to obtain such stockholder
approval. INT'L.com represents

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and warrants that its Board of Directors has duly (i) approved the Merger in
accordance with the DGCL and (ii) resolved to recommend to the stockholders of
INT'L.com that they approve this Agreement, the Merger and all of the
transactions contemplated hereby.

         1.5 APPROVAL BY THE STOCKHOLDERS OF PARENT. Parent will take all action
necessary to obtain the approval of the issuance of its shares in connection
with the Merger by the stockholders of Parent by means of a duly convened
meeting of the stockholders of Parent, as required by the rules of the Nasdaq
Stock Market, in accordance with the applicable requirements of the DGCL, its
Charter Documents and any agreements to which it is a party. Parent will use its
reasonable best efforts to obtain such stockholder approval. Parent represents
and warrants that its Board of Directors has duly (i) approved the Merger in
accordance with the DGCL and (ii) resolved to recommend to the stockholders of
Parent that they approve the issuance of its shares in connection with the
Merger.

                                   ARTICLE II

              CONVERSION AND EXCHANGE OF SHARES; DISSENTING SHARES

         2.1 CONVERSION OF SHARES OF INT'L.COM STOCK. (a) Subject, without
limitation, to the provisions of Section 2.3 hereof, at the Effective Time, all
of (i) the shares of Series A common stock, $0.01 par value per share, of
INT'L.com ("INT'L.COM SERIES A COMMON STOCK"), Series B common stock, $0.01 par
value per share, of INT'L.com ("INT'L.COM SERIES B COMMON STOCK" and along with
the Int'l Series A Common Stock, the "INT'L.COM COMMON STOCK"), Series A
preferred stock, $0.01 par value per share, of INT'L.com ("INT'L.COM SERIES A
PREFERRED Stock"), and Series B preferred stock, $0.01 par value per share, of
INT'L.com ("INT'L.COM SERIES B PREFERRED Stock" and along with the INT'L.com
Series A Common Stock, the INT'L.com Series B Common Stock and the INT'L.com
Series A Preferred Stock, "INT'L.COM CAPITAL STOCK") issued and outstanding
immediately prior to the Effective Time excluding any INT'L.com Capital Stock
held by Parent or Merger Sub or any other subsidiary of Parent, or by INT'L.com
or any subsidiary of INT'L.com, which shares ("EXCLUDED SHARES") will be
automatically canceled in the Merger without payment of any consideration
therefor, and excluding Dissenting Shares (as defined in Section 2.3 hereof))
will automatically, by virtue of the Merger and without any action on the part
of the holder thereof, be converted into shares of common stock, $0.01 par value
per share, of Parent ("PARENT COMMON STOCK") in accordance with Section 2.1(e),
and cash (rounded down to the nearest whole cent) in lieu of fractional shares,
if any, pursuant to Section 2.6 below. Shares of INT'L.com Capital Stock that
are actually issued and outstanding immediately prior to the Effective Time
(excluding the Excluded Shares) are sometimes referred to herein as the
"OUTSTANDING INT'L.COM CAPITAL STOCK SHARES." All rights, warrants or options to
acquire INT'L.com Common Stock and securities convertible into INT'L.com Common
Stock (except for the INT'L.com Series A Preferred Stock, the INT'L.com Series B
Preferred Stock, the Series C preferred stock, $0.01 par value per share, of
INT'L.com ("INT'L.COM SERIES C PREFERRED STOCK") and the Series D preferred
stock, $0.01 par value per share, of INT'L.com ("INT'L.COM SERIES D PREFERRED
STOCK") and the INT'L.com Notes (as defined in Section 2.8 below)) that are
outstanding immediately prior to the Effective Time and do not expire pursuant
to their terms on or before the Closing (each of which is specifically
identified in Section 3.2 of the INT'L.com Disclosure Schedule (as defined
below)) are sometimes referred to herein as the "OUTSTANDING INT'L.COM OPTIONS."

                  (b) The aggregate number of shares of Parent Common Stock to
be issued in exchange for the acquisition of all Outstanding INT'L.com Capital
Stock Shares and the assumption of all Outstanding INT'L.com Options will be
equal to the Modified Share Amount (as defined in (d) below). Such shares are
herein referred to as the "PARENT STOCK MERGER SHARES".

                  (c) Subject, without limitation, to the provisions of Section
2.3 hereof, at the Effective Time, all of the shares of INT'L.com Series C
Preferred Stock issued and outstanding immediately prior to the Effective Time
(excluding any INT'L.com Series C Preferred Stock held by Parent or Merger Sub
or any other subsidiary of Parent, or by INT'L.com or any subsidiary of
INT'L.com, which shares ("EXCLUDED SERIES C SHARES") will be automatically
canceled in the Merger without payment of any consideration therefor, and
excluding Dissenting Shares (as defined in Section 2.3 hereof)), will
automatically, by virtue

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of the Merger and without any action on the part of the holder thereof, be
converted into shares of Parent Common Stock in accordance with Section 2.1(f),
and cash (rounded down to the nearest whole cent) in lieu of fractional shares,
if any, pursuant to Section 2.6 below. Shares of INT'L.com Series C Preferred
Stock that are actually issued and outstanding immediately prior to the
Effective Time, excluding the Excluded Series C Shares, are sometimes referred
to herein as the "OUTSTANDING INT'L.COM SERIES C SHARES." Subject, without
limitation, to the provisions of Section 2.3 hereof, at the Effective Time, all
of the shares of INT'L.com Series D Preferred Stock issued and outstanding
immediately prior to the Effective Time (excluding any INT'L.com Series D
Preferred Stock held by Parent or Merger Sub or any other subsidiary of Parent,
or by INT'L.com or any subsidiary of INT'L.com, which shares ("EXCLUDED SERIES D
SHARES") will be automatically canceled in the Merger without payment of any
consideration therefor, and excluding Dissenting Shares (as defined in Section
2.3 hereof)), will automatically, by virtue of the Merger and without any action
on the part of the holder thereof, be converted into shares of Parent Common
Stock in accordance with Section 2.1(g), and cash (rounded down to the nearest
whole cent) in lieu of fractional shares, if any, pursuant to Section 2.6 below.
Shares of INT'L.com Series D Preferred Stock that are actually issued and
outstanding immediately prior to the Effective Time, excluding the Excluded
Series D Shares, are sometimes referred to herein as the "OUTSTANDING INT'L.COM
SERIES D SHARES" and along with the Outstanding INT'L.com Capital Stock Shares
and the Outstanding INT'L.com Series C Shares, collectively the "OUTSTANDING
INT'L.COM SHARES."

                  (d) The aggregate number of shares of Parent Common Stock to
be issued in exchange for the acquisition of all Outstanding INT'L.com Series C
Shares will be equal to the INT'L.com Series C Base Amount divided by the Parent
Average Closing Price. Such shares are herein referred to as the "PARENT SERIES
C MERGER SHARES". The aggregate number of shares of Parent Common Stock to be
issued in exchange for the acquisition of all Outstanding INT'L.com Series D
Shares will be equal to the INT'L.com Series D Base Amount divided by the Parent
Average Closing Price. Such shares are herein referred to as the "PARENT SERIES
D MERGER SHARES" and along with the Parent Stock Merger Shares and the Parent
Series C Merger Shares, collectively the "PARENT MERGER SHARES".

         The following definitions will be used in making the foregoing
calculations and for all other purposes of this Agreement:

         "INT'L.COM SERIES C BASE AMOUNT" will mean the aggregate accrued
liquidation preference of INT'L.com Series C Preferred Stock calculated as of
the Closing Date in accordance with the terms of the Charter Documents of
INT'L.com.

         "INT'L.COM SERIES D BASE AMOUNT" will mean the aggregate accrued
liquidation preference of INT'L.com Series D Preferred Stock calculated as of
the Closing Date in accordance with the terms of the Charter Documents of
INT'L.com.

         "PARENT AVERAGE CLOSING PRICE" will be equal to the weighted average
closing price of the Parent Common Stock as publicly reported by the Wall Street
Journal over the twenty Trading Days ending two Trading Days prior to the date
of this Agreement.

         "MODIFIED SHARE AMOUNT" will mean the Share Amount LESS (i) the number
of Note Payment Shares (as defined in Section 2.8 below) (ii) the number of Debt
Payment Shares (as defined in Section 7.15 below) and (iii) such number of
shares of Parent Common Stock having a value (as determined using the Parent
Average Closing Price) equal to any expenses to be borne by the stockholders of
INT'L.com pursuant to Section 7.4.

         "SHARE AMOUNT" will mean 8,500,000 shares of Parent Common Stock
(appropriately adjusted for any stock split, stock dividend, recapitalization or
similar event).

          "TRADING DAY" will mean days on which closing prices for purchases and
sales of Parent Common Stock are reported by the Nasdaq National Market.

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                  (e) The ratio at which one Outstanding INT'L.com Capital Stock
Share will be converted into shares of Parent Common Stock at the Effective Time
is herein called the "CONVERSION RATIO" and will be calculated as set forth in
this Section 2.1(e). Subject to Section 2.3, at the Effective Time, each
Outstanding INT'L.com Capital Stock Share will be converted into the right to
receive that number (which may be a fraction) of shares of Parent Common Stock
that equals the quotient obtained by DIVIDING the number of Parent Stock Merger
Shares by the sum of the number of Outstanding INT'L.com Capital Stock Shares
PLUS the number of shares of INT'L.com Common Stock issuable upon the exercise
or conversion of all Outstanding INT'L.com Options. Each holder of Outstanding
INT'L.com Capital Stock Shares will be entitled to receive that aggregate number
of shares of Parent Common Stock equal to the Conversion Ratio multiplied by the
number of Outstanding INT'L.com Capital Stock Shares held by such holder
immediately prior to the Effective Time, subject to Section 2.3 herein.

                  (f) The ratio at which one Outstanding INT'L.com Series C
Share will be converted into shares of Parent Common Stock at the Effective Time
is herein called the "SERIES C CONVERSION RATIO" and will be calculated as set
forth in this Section 2.1(f). Subject to Section 2.3, at the Effective Time,
each Outstanding INT'L.com Series C Share will be converted into the right to
receive that number (which may be a fraction) of shares of Parent Common Stock
that equals the quotient obtained by DIVIDING the number of Parent Series C
Merger Shares by the number of Outstanding INT'L.com Series C Shares. Each
holder of Outstanding INT'L.com Series C Shares will be entitled to receive that
aggregate number of shares of Parent Common Stock equal to the Series C
Conversion Ratio multiplied by the number of Outstanding INT'L.com Series C
Shares held by such holder immediately prior to the Effective Time, subject to
Section 2.3 herein.

                  (g) The ratio at which one Outstanding INT'L.com Series D
Share will be converted into shares of Parent Common Stock at the Effective Time
is herein called the "SERIES D CONVERSION RATIO" and will be calculated as set
forth in this Section 2.1(g). Subject to Section 2.3, at the Effective Time,
each Outstanding INT'L.com Series D Share will be converted into the right to
receive that number (which may be a fraction) of shares of Parent Common Stock
that equals the quotient obtained by DIVIDING the number of Parent Series D
Merger Shares by the number of Outstanding INT'L.com Series D Shares. Each
holder of Outstanding INT'L.com Series D Shares will be entitled to receive that
aggregate number of shares of Parent Common Stock equal to the Series D
Conversion Ratio multiplied by the number of Outstanding INT'L.com Series D
Shares held by such holder immediately prior to the Effective Time, subject to
Section 2.3 herein.

                  (h) At the Effective Time, each share of common stock, $0.01
par value, of Merger Sub issued and outstanding immediately prior to the
Effective Time will, by virtue of the Merger and without any action on the part
of the holder hereof, be converted into one share of common stock, $0.01 par
value per share, of the Surviving Corporation.

         2.2 ESCROW SHARES. Ten percent (10%) of the Parent Merger Shares
issuable at Closing (excluding any Parent Merger Shares issuable after the
Closing with respect to Outstanding INT'L.com Options, the Excluded Shares, the
Series C Excluded Shares and the Series D Excluded Shares), rounded up to the
nearest whole share (the "ESCROW SHARES") will be deposited and held in escrow
in accordance with the Escrow Agreement attached as EXHIBIT 2.2 (the "ESCROW
AGREEMENT") as the sole source of indemnification payments that may become due
to Parent pursuant to Article IX or otherwise prior to the release of the Escrow
Shares pursuant to Section 3.1 of the Escrow Agreement; provided that the
aggregate liability of any single stockholder for indemnification obligations
pursuant to Article IX of this Agreement shall be equal to a dollar amount equal
to the Parent Average Closing Price multiplied by the aggregate number of Escrow
Shares deposited in escrow by or on behalf of such stockholder; and provided,
further, that each INT'L.com stockholder shall be severally (and not jointly)
liable beyond such holder's allocable portion of the Escrow Shares solely in
respect of any breach by such stockholder of any representation or warranty
contained in a Letter of Transmittal (as defined in Section 2.4 below) delivered
by such stockholder. The Escrow Shares will be withheld on a pro rata basis
among the holders of the Outstanding INT'L.com Shares based on the number of
Parent Merger Shares issuable at the closing to such holders. The exact number
of Escrow Shares held for the account of each INT'L.com stockholder will be
determined at the Closing by the agreement in writing of Parent and INT'L.com.
The delivery of the

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Escrow Shares will be made on behalf of the holders of the Outstanding INT'L.com
Shares in accordance with the provisions hereof, with the same force and effect
as if such shares had been delivered by Parent directly to such holders and
subsequently delivered by such holders to the Escrow Agent. The adoption of this
Agreement by stockholders of INT'L.com will also constitute their approval of
the terms and provisions of the Escrow Agreement, including, without limitation,
the appointment of Steven Fingerhood as the Indemnification Representative (as
defined in the Escrow Agreement), which is an integral term of the Merger.

         2.3 DISSENTING SHARES. Any holder of shares of INT'L.com Capital Stock,
INT'L.com Series C Preferred Stock and INT'L.com Series D Preferred Stock
(collectively, the "INT'L.COM STOCK") that are outstanding on the record date
for the determination of which holders will be entitled to vote for or against
the Merger who objects to the Merger and complies with all of the provisions of
the DGCL concerning the rights of holders to dissent from the Merger and require
appraisal (such shares are referred to as "DISSENTING SHARES") will be entitled
to exercise appraisal rights pursuant to Section 262 of the DGCL with respect to
such Dissenting Shares PROVIDED THAT such holder meets all of the requirements
of the DGCL with respect to such Dissenting Shares, and will not be entitled to
receive Parent Merger Shares, unless otherwise provided by the DGCL or agreed in
writing by Parent. INT'L.com will, after consultation with Parent, give such
notices with respect to appraisal rights as may be required by the DGCL as soon
as practicable.

         2.4 DELIVERY OF EVIDENCE OF OWNERSHIP. Prior to the Closing, Parent
shall send a notice and transmittal form in substantially the form of EXHIBIT
2.4 hereto (individually, a "Letter of Transmittal" and collectively, the
"LETTERS OF TRANSMITTAL") to each holder of a certificate or other documentation
representing Outstanding INT'L.com Shares, other than Dissenting Shares, each
holder of a certificate or other documentation representing Outstanding
INT'L.com Shares, other than Dissenting Shares, will surrender such certificates
or other documentation to Parent or its designee, and, if not previously
delivered, (i) a duly executed counterpart of the Escrow Agreement, (ii) a duly
executed Letter of Transmittal and (iii) such other duly executed documentation
as may be reasonably required by Parent to effect a transfer of such shares, and
upon such surrender and after the Effective Time each such holder will be
entitled to receive promptly from Parent or its transfer agent certificates
registered in the name of such holder representing the applicable number of
Parent Merger Shares, and the cash (calculated pursuant to Section 2.6, which
will be paid by check), to which such holder is entitled pursuant to the
provisions of this Agreement, with a portion of such shares to be deposited in
escrow pursuant to the Escrow Agreement, as provided in Section 2.2. The
adoption of this Agreement by stockholders of INT'L.com will also constitute
their approval of the terms and provisions of the Letter of Transmittal. In the
event any certificates or instruments representing Outstanding INT'L.com Shares
or Outstanding INT'L.com Options shall have been lost, stolen or destroyed, upon
the making and delivery of an affidavit of that fact by the person claiming same
to have been lost, stolen or destroyed and the posting by such person of a
bonding such reasonable amount as Parent may direct as indemnity against any
claim that would be made against Parent with respect to such certificate or
instrument, Parent will issue in exchange for such lost, stolen or destroyed
certificate or instrument the Parent Merger Shares and cash deliverable in
respect thereof pursuant to this Agreement.

         2.5 NO FURTHER OWNERSHIP RIGHTS IN INT'L.COM STOCK. The Merger and its
approval by the stockholders of INT'L.com and the execution of this Agreement
will be deemed, at the Effective Time, to constitute full satisfaction and
termination of all rights and agreements pertaining to INT'L.com Stock pursuant
to the DGCL, by contract or otherwise, except for any rights pertaining to this
Agreement. After the Effective Time, there will be no transfers on the stock
transfer books of INT'L.com of INT'L.com Stock or exercises of any options,
warrants or other rights to acquire INT'L.com Stock. Prior to or upon Closing,
INT'L.com will cause rights to purchase or acquire INT'L.com Stock other than
the Outstanding INT'L.com Options assumed pursuant to Section 2.7 below to
either be exercised or canceled. Until surrendered to Parent, each certificate
for INT'L.com Stock will, after the Effective Time, represent only the right to
receive the right to receive cash and Parent Merger Shares into which the shares
of INT'L.com Stock formerly represented thereby will have been converted
pursuant to this Agreement. Any dividends or other distribution declared after
the Effective Time with respect to Parent Common Stock will be paid to

                                      -8-

<PAGE>

the holder of any certificate for shares of INT'L.com Stock when the holder
thereof is entitled to receive a certificate for such holder's Parent Merger
Shares in accordance with this Agreement.

         2.6 NO FRACTIONAL SHARES. No certificates or scrip for fractional
shares of Parent Common Stock will be issued, no Parent stock split or dividend
will be paid in respect of any fractional share interest, and no such fractional
share interest will entitle the owner thereof to vote or to any rights of or as
a stockholder of Parent. In lieu of such fractional shares, any holder of
Outstanding INT'L.com Shares who would otherwise be entitled to a fraction of a
share of Parent Common Stock (after aggregating all fractional shares of Parent
Common Stock to be received by such holder) will be paid the cash value of such
fraction (rounded down to the nearest whole cent), which will be equal to such
fraction MULTIPLIED BY the Parent Average Closing Price.

         2.7 ASSUMPTION OF STOCK OPTIONS. At the Effective Time, Parent shall
assume each Outstanding INT'L.com Option and each holder thereof (each an
"OPTION HOLDER") shall thereby be entitled to acquire, by virtue of the Merger
and without any action on the part of the Option Holder, on substantially the
same terms (including the dates and extent of exercisability) and subject to the
same conditions, including vesting, as such Outstanding INT'L.com Option, the
number of shares of Parent Common Stock determined by MULTIPLYING the number of
shares of INT'L.com Common Stock for which such Outstanding INT'L.com Option is
then exercisable in accordance with its terms immediately prior to the Effective
Time by the Conversion Ratio (rounded down to the nearest whole share), at an
exercise or conversion price per share of Parent Common Stock (rounded up to the
nearest whole cent) determined by dividing the exercise price per share of
INT'L.com Common Stock of such Outstanding INT'L.com Option immediately prior to
the Effective Time by the Conversion Ratio.

         2.8 NOTES. The $2,000,000 in convertible promissory notes dated August
20, 1999 of INT'L.com and any interest accrued thereon (the "INT'L.COM Notes")
shall be paid in full and cancelled by delivery of the Note Payment Shares to
the holders thereof in proportion to their respective interests in the INT'L.com
Notes. "Note Payment Shares" shall mean a number of shares of Parent Common
Stock determined by dividing $2,000,000 plus any interest accrued on the
INT'L.com Notes as of the Closing by the Parent Average Closing Price. In lieu
of any fractional shares, any holder of an INT'L.com Note who would otherwise be
entitled to a fraction of a share of Parent Common Stock (after aggregating all
fractional shares of Parent Common Stock to be received by such holder) will be
paid the cash value of such fraction (rounded down to the nearest whole cent),
which will be equal to such fraction MULTIPLIED BY the Parent Average Closing
Price.

                                   ARTICLE III

                   REPRESENTATIONS AND WARRANTIES OF INT'L.COM

         Except as set forth in the disclosure schedule of INT'L.com dated as of
the date hereof and delivered herewith to Parent (the "INT'L.COM DISCLOSURE
SCHEDULE") which identifies the section and subsection to which each disclosure
therein relates (PROVIDED, HOWEVER, that INT'L.com will be deemed to have
adequately disclosed with respect to any section or subsection any matters that
are clearly described elsewhere in such document if the applicability of such
disclosure to such non-referenced sections or subsections is apparent), and
whether or not the INT'L.com Disclosure Schedule is referred to in a specific
section or subsection, INT'L.com represents and warrants to Parent and Merger
Sub as follows:

         3.1      ORGANIZATION, STANDING AND POWER; SUBSIDIARIES.

                  (a) INT'L.com is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware, has all
requisite corporate power and authority to own, lease and operate its properties
and to carry on its businesses as now being conducted, and is duly qualified and
in good standing to do business in each jurisdiction in which a failure to so
qualify would have a material adverse effect on the Business Condition (as
hereinafter defined) of INT'L.com.

                                      -9-

<PAGE>

                  As used in this Agreement, "BUSINESS CONDITION" with respect
to any Person (as defined below) means the business, financial condition,
results of operations, assets or prospects (as defined below) (without giving
effect to the consequences of the transactions contemplated by this Agreement
and the announcement thereof, and other than any changes arising out of
conditions affecting the economy or industry of the Person in general which does
not affect the Person in a materially disproportionate manner relative to other
participants in the economy or such industry, respectively) of such Person or
Persons including its Subsidiaries taken as a whole. In this Agreement, a
"SUBSIDIARY" of any Person means a corporation, partnership, limited liability
company, joint venture or other entity of which such Person directly or
indirectly owns or controls a majority of the equity interests or voting
securities or other interests that are sufficient to elect a majority of the
Board of Directors or other managers of such corporation, partnership, limited
liability company, joint venture or other entity. In this Agreement, the
"Material INT'L.com Subsidiaries" shall mean the following Subsidiaries of
INT'L.com: International Communications Europe GmbH; International Language
Engineering Corporation; International Communications Asia; and ILE Netherlands
BV. In this Agreement, "PROSPECTS" means events, conditions, facts or
developments that are known to INT'L.com or any Subsidiary and that in the
reasonable course of events are expected to have an effect on future operations
of the business as presently conducted by INT'L.com and its Subsidiaries, but
will exclude the results of any changes that are made at the specific written
direction of Parent, that are specifically contemplated herein, or that directly
result from this transaction or the announcement hereof. In this Agreement,
"PERSON" means any natural person, corporation, partnership, limited liability
company, joint venture or other entity. In this Agreement, "ordinary course of
business" means in the ordinary course of business and consistent with past
practices.

                  All Subsidiaries of INT'L.com and their jurisdiction of
incorporation are completely and correctly listed in Section 3.1 of the
INT'L.com Disclosure Schedule. Each Subsidiary is a corporation duly organized
and validly existing under the laws of the jurisdiction of its incorporation.
INT'L.com has delivered to Parent complete and correct copies of the articles or
certificate of incorporation, bylaws and/or other primary charter and
organizational documents ("CHARTER DOCUMENTS") of INT'L.com and the Material
INT'L.com Subsidiaries, in each case, as amended to the date hereof. The minute
books and stock records of INT'L.com and its Subsidiaries are complete. Section
3.1 of the INT'L.com Disclosure Schedule contains a complete and correct list of
the officers and directors of INT'L.com and any stockholders who beneficially
own (as defined in Rule 13d of the Securities Act) 5% or more of the outstanding
capital stock of INT'L.com.

                  (b) INT'L.com does not currently own, and has not owned since
January 1, 1998, directly or indirectly, any capital stock or other equity
securities of any corporation or have direct or indirect equity or ownership
interest in any partnership, limited liability company, joint venture or other
entity. All of the outstanding shares of capital stock of each Subsidiary of
INT'L.com are owned beneficially and of record by INT'L.com, one of its other
Subsidiaries, or any combination thereof, in each case free and clear of any
security interests, liens, charges, restrictions, claims, encumbrances or
assessments of any nature whatsoever ("LIENS"); and there are no outstanding
subscriptions, warrants, options, convertible securities, or other rights
(contingent or other) pursuant to which any of the Subsidiaries is or may become
obligated to issue any shares of its capital stock to any Person other than
INT'L.com or one of the other Subsidiaries.

         3.2      CAPITAL STRUCTURE.

                  (a) As of January 17, 2000, the authorized capital stock of
INT'L.com consisted of (i) 5,472,047 shares of preferred stock, $0.01 par value
per share ("INT'L.COM PREFERRED STOCK"), of which 867,047 shares had been
designated INT'L.com Series A Preferred Stock, 867,047 of which were issued and
outstanding, of which 3,500,000 shares had been designated INT'L.com Series B
Preferred Stock, 2,621,477 of which were issued and outstanding, of which 5,000
had been designated INT'L.com Series C Preferred Stock, 5,000 of which were
issued and outstanding, and of which 1,100,000 shares had been designated
INT'L.com Series D Preferred Stock, 936,991 of which were issued and
outstanding; as of the date of this Agreement; and (ii) 14,527,953 shares of
INT'L.com Common Stock, $0.01 par value per share, of which 11,077,953 shares
had been designated INT'L.com Series A Common Stock, and 3,450,000 shares had
been designated INT'L.com Series B Common Stock, and 5,879,271 shares of Common
Stock

                                      -10-

<PAGE>

were issued and outstanding as of the date of this Agreement and no shares of
INT'L.com Common Stock were issued and held as treasury shares by INT'L.com. The
INT'L.com Disclosure Schedule sets forth all holders of INT'L.com Common Stock
and INT'L.com Preferred Stock and the number of shares owned. The INT'L.com
Disclosure Schedule also sets forth any options, warrants, calls, conversion
rights, commitments, agreements, contracts, understandings, restrictions,
arrangements or rights of any character (each, an "INT'L.COM OPTION") to which
INT'L.com is a party or by which INT'L.com may be bound obligating INT'L.com to
issue, deliver or sell, or cause to be issued, delivered or sold, additional
shares of INT'L.com Common Stock, or obligating INT'L.com to grant, extend, or
enter into any such option, warrant, call, conversion right, conversion payment,
commitment, agreement, contract, understanding, restriction, arrangement or
right. INT'L.com does not have any outstanding options, warrants, calls,
conversion rights, commitments, agreements, contracts, understandings,
restrictions, arrangements or rights of any character to which INT'L.com is a
party or by which INT'L.com may be bound obligating INT'L.com to issue, deliver
or sell, or cause to be issued, delivered or sold, additional shares of
INT'L.com Preferred Stock.

                  (b) All outstanding shares of INT'L.com Common Stock and
INT'L.com Preferred Stock are, and any shares of INT'L.com Common Stock issued
upon exercise of any Outstanding INT'L.com Options will be, validly issued,
fully paid, nonassessable and not subject to any preemptive rights (other than
those which have been duly waived), or to any agreement to which INT'L.com is a
party or by which INT'L.com may be bound. Except for the INT'L.com Notes,
INT'L.com does not have outstanding any bonds, debentures, notes or other
indebtedness the holders of which (i) have the right to vote (or convertible or
exercisable into securities having the right to vote) with holders of shares of
INT'L.com Common Stock on any matter ("INT'L.COM VOTING DEBT") or (ii) are or
will become entitled to receive any payment as a result of the execution of this
Agreement or the completion of the transactions contemplated hereby.

         3.3 AUTHORITY. The execution, delivery and performance of this
Agreement and all other agreements contemplated hereby by INT'L.com have been
duly authorized by all necessary action of the Board of Directors of INT'L.com,
and if the Closing shall occur, shall have been duly authorized by all necessary
action of the stockholders of INT'L.com (the "INT'L.com Requisite Stockholder
Approval"). Certified copies of the resolutions adopted by the Board of
Directors of INT'L.com and its stockholders approving this Agreement, all other
agreements contemplated hereby and the Merger have been or will be provided to
Parent prior to the Closing. INT'L.com has duly and validly executed and
delivered this Agreement and has, or prior to Closing, will have duly and
validly executed and delivered all other agreements contemplated hereby to be
executed by INT'L.com, and each of this Agreement and such other agreements
constitutes or upon execution and delivery at or prior to the Closing will
constitute a valid, binding and enforceable obligation of INT'L.com in
accordance with its terms.

         3.4 COMPLIANCE WITH LAWS AND OTHER INSTRUMENTS; NON-CONTRAVENTION.
INT'L.com and its Subsidiaries hold, and at all times have held or subsequently
obtained, all licenses, permits and authorizations from all Governmental
Entities (as defined below) necessary for the lawful conduct of their respective
businesses pursuant to all applicable statutes, laws, ordinances, rules and
regulations of all such Governmental Entities having jurisdiction over them or
any part of their operations. There are no material violations or claimed
violations known by INT'L.com or any Subsidiary of any such license, permit or
authorization or any such statute, law, ordinance, rule or regulation. Assuming
the receipt of all Consents (as defined below), neither the execution, delivery
or performance of this Agreement and all other agreements contemplated hereby by
INT'L.com, nor the consummation of the Merger or any other transaction described
herein, does or will, after the giving of notice, or the lapse of time, or
otherwise, conflict with, result in a breach of, or constitute a default under,
the Charter Documents of INT'L.com or any Material INT'L.com Subsidiary or any
federal, foreign, state or local court or administrative order or process,
statute, law, ordinance, rule or regulation, or any contract, agreement or
commitment to which INT'L.com or any Material INT'L.com Subsidiary is a party,
or under which INT'L.com or any Material INT'L.com Subsidiary is obligated, or
by which INT'L.com or any Material INT'L.com Subsidiary or any of the rights,
properties or assets of INT'L.com are subject or bound; result in the creation
of any Lien upon, or otherwise adversely affect, any of the rights, properties
or assets of INT'L.com or any Material INT'L.com Subsidiary; terminate, amend

                                      -11-

<PAGE>

or modify, or give any party the right to terminate, amend, modify, abandon or
refuse to perform or comply with, any contract, agreement or commitment to which
INT'L.com or any Material INT'L.com Subsidiary is a party, or under which
INT'L.com or any Material INT'L.com Subsidiary is obligated, or by which
INT'L.com or any of the rights, properties or assets of INT'L.com or any
Material INT'L.com Subsidiary are subject or bound; or accelerate, postpone or
modify, or give any party the right to accelerate, postpone or modify, the time
within which, or the terms and conditions under which, any liabilities, duties
or obligations are to be satisfied or performed, or any rights or benefits are
to be received, under any contract, agreement or commitment to which INT'L.com
or any Material INT'L.com Subsidiary is a party, or under which INT'L.com or any
Material INT'L.com Subsidiary may be obligated, or by which INT'L.com or any
Material INT'L.com Subsidiary or any of the rights, properties or assets of
INT'L.com or any Material INT'L.com Subsidiary are subject or bound. Section 3.4
of the INT'L.com Disclosure Schedule sets forth each agreement, contract or
other instrument binding upon INT'L.com requiring a notice or consent (by its
terms or as a result of any conflict or other contravention required to be
disclosed in the INT'L.com Disclosure Schedule pursuant to the preceding
provisions of this Section 3.4) as a result of the execution, delivery or
performance of this Agreement and all other agreements contemplated hereby by
INT'L.com or the consummation of the Merger or any other transaction described
herein (each such notice or consent, a "CONSENT"). No consent, approval, order,
or authorization of or registration, declaration, or filing with or exemption
(also a "CONSENT") by, any court, administrative agency or commission or other
governmental authority or instrumentality, whether domestic or foreign (each a
"GOVERNMENTAL ENTITY") is required by or on behalf of INT'L.com or any Material
INT'L.com Subsidiary in connection with the execution, delivery or performance
of this Agreement and all other agreements contemplated hereby by INT'L.com or
the consummation of the Merger or any other transaction described herein, except
for the filing by INT'L.com and Merger Sub of the appropriate Merger Documents
with the Secretary of State of Delaware.

         3.5      TECHNOLOGY AND INTELLECTUAL PROPERTY RIGHTS.

                  (a) For the purposes of this Agreement, "INT'L.COM
INTELLECTUAL PROPERTY" consists of the following intellectual property:

                  (i) all patents, trademarks, trade names, service marks, trade
         dress, copyrights and any renewal rights therefor, mask works,
         schematics, software, firmware, technology, manufacturing processes,
         supplier lists, customer lists, trade secrets, know-how, moral rights
         and applications and registrations for any of the foregoing;

                  (ii) all documents, records and files relating to design, end
         user documentation, manufacturing, quality control, sales, marketing or
         customer support for all intellectual property described herein;

                  (iii) all other tangible or intangible proprietary information
and materials; and

                  (iv) all license and other rights in any third party product
         or any third party intellectual property described in (i) through (iii)
         above;

that are owned or held by or on behalf of INT'L.com or any Material INT'L.com
Subsidiary or that are being used, and/or have been used since January 1, 1999,
or are currently under development by or for INT'L.com or any Material INT'L.com
Subsidiary for use, in the business of INT'L.com or any Material INT'L.com
subsidiary as it has been, is currently or is currently planned to be conducted
in 2000; PROVIDED, HOWEVER, that the term INT'L.com Intellectual Property does
not include any commercially available third party software or related
intellectual property.

                  (b) Section 3.5 of the INT'L.com Disclosure Schedule lists:
(i) all patents, copyright registrations, mask works, registered trademarks,
registered service marks, trade dress, any renewal rights for any of the
foregoing, and any applications and registrations for any of the foregoing, that
are included in INT'L.com Intellectual Property and owned by or on behalf of
INT'L.com or any Material INT'L.com Subsidiary; (ii) all hardware products and
tools, software products and tools and services that are currently published,
offered, or under development by INT'L.com or any Material INT'L.com

                                      -12-

<PAGE>

Subsidiary; and (iii) all licenses, sublicenses and other agreements to which
INT'L.com is a party and pursuant to which INT'L.com or any Material INT'L.com
Subsidiary or any other person is authorized to use any INT'L.com Intellectual
Property or exercise any other right with regard thereto.

                  (c) INT'L.com Intellectual Property consists solely of items
and rights that are either: (i) owned solely by INT'L.com; (ii) in the public
domain; or (iii) rightfully used and authorized for use by INT'L.com pursuant to
a valid license. All INT'L.com Intellectual Property that consists of license or
other rights to third party property is separately set forth in Section 3.5 of
the INT'L.com Disclosure Schedule. INT'L.com has all rights in INT'L.com
Intellectual Property necessary to carry out INT'L.com's, and each of its
Subsidiaries', current activities, their activities conducted by them since
January 1, 1999 and their future activities planned for 2000, including without
limitation rights to make, use, exclude others from using, reproduce, modify,
adapt, create derivative works based on, translate, distribute (directly and
indirectly), transmit, display and perform publicly, license, rent, lease,
assign and sell INT'L.com Intellectual Property in all geographic locations and
fields of use, and to sublicense any or all such rights to third parties,
including the right to grant further sublicenses.

                  (d) Assuming the receipt of all Consents, INT'L.com is not,
nor as a result of the execution or delivery of this Agreement and all other
agreements contemplated hereby, or performance of INT'L.com's obligations
hereunder or the consummation of the Merger, will INT'L.com be, in violation of
any license, sublicense or other agreement relating to any INT'L.com
Intellectual Property to which INT'L.com is a party or otherwise bound.
INT'L.com is not obligated to provide any consideration (whether financial or
otherwise) to any third party, nor is any third party otherwise entitled to any
consideration, with respect to any exercise of rights by INT'L.com or the
Surviving Corporation, as successor to INT'L.com, in INT'L.com Intellectual
Property.

                  (e) To the knowledge of INT'L.com or any of the Material
INT'L.com Subsidiaries, the use, reproduction, modification, distribution,
licensing, sublicensing, sale, or any other exercise of rights in any product,
work, technology, service or process as used, provided, or offered at any time,
or as proposed for use, reproduction, modification, distribution, licensing,
sublicensing, sale, or any other exercise of rights, by INT'L.com or any
Material INT'L.com Subsidiary does not infringe any copyright, patent, trade
secret, trademark, service mark, trade name, firm name, logo, trade dress, mask
work, moral right, other intellectual property right, right of privacy, or right
in personal data of any Person. No claims (i) challenging the validity,
effectiveness, or ownership by INT'L.com or any Material INT'L.com Subsidiary of
any INT'L.com Intellectual Property, or (ii) to the effect that the use,
reproduction, modification, manufacturing, distribution, licensing,
sublicensing, sale, or any other exercise of rights in any product, work,
technology, service, or process as used, provided or offered at any time, or as
proposed for use, reproduction, modification, distribution, licensing,
sublicensing, sale, or any other exercise of rights, by INT'L.com or any
Material INT'L.com Subsidiary infringes or will infringe on any intellectual
property or other proprietary or personal right of any Person have been asserted
to INT'L.com or any Material INT'L.com Subsidiary in writing by any Person.
Neither INT'L.com nor any Subsidiary has received notice of any legal or
governmental proceedings, including interference, re-examination, reissue,
opposition, nullity, or cancellation proceedings pending that relate to any
INT'L.com Intellectual Property, other than any review of pending applications
for patent. Neither INT'L.com nor any Subsidiary is aware of any information
indicating that any such proceedings are threatened or contemplated by any

                                      -13-

<PAGE>

Governmental Entity or any other Person. All granted or issued patents and mask
works and all registered trademarks and copyright registrations owned by
INT'L.com are valid, enforceable and subsisting. To the knowledge of INT'L.com,
there is no unauthorized use, infringement, or misappropriation of any INT'L.com
Intellectual Property by any third party, employee or former employee.

                  (f) INT'L.com and its Subsidiaries has secured from all
parties who have created any portion of, or otherwise have any rights in or to,
INT'L.com Intellectual Property, valid and enforceable written assignments of
any such work or other rights to INT'L.com.

                  (g) Each consultant and subcontractor of INT'L.com and its
Subsidiaries has entered into a confidentiality and assignment of inventions
agreement substantially in the form attached TO SECTION 3.5 OF THE INT'L.COM
DISCLOSURE SCHEDULE.

         3.6      FINANCIAL STATEMENTS; BUSINESS INFORMATION.

                  (a) INT'L.com has delivered to Parent an unaudited
consolidated balance sheet (the "UNAUDITED BALANCE SHEET") as of October 31,
1999 (the "UNAUDITED BALANCE SHEET DATE") and audited consolidated balance
sheets (the "AUDITED BALANCE SHEETS") as of February 28, 1999 (the "AUDITED
BALANCE SHEET DATE") and December 31, 1997, unaudited consolidated statements of
income and cash flows for the eight-month period ended -October 31, 1999 and
audited consolidated statements of income and cash flows for its fiscal years
ended December 31, 1997 and February 28, 1999 (all of such balance sheets and
statements of income and cash flows are collectively referred to as the
"FINANCIAL STATEMENTS"). The Financial Statements: (i) are in accordance with
the books and records of INT'L.com; (ii) present fairly, in all material
respects, the financial position of INT'L.com as of the date indicated and the
results of its operations and cash flows for such periods; and (iii) have been
prepared in accordance with generally accepted accounting principles
consistently applied (subject, in the case of unaudited statements, to the
absence of footnote disclosure and in the case of unaudited interim statements
to year-end adjustments, which will not be material either individually or in
the aggregate and except as described in the Section 3.6 of the INT'L.com
Disclosure Schedule). As of the Unaudited Balance Sheet Date, there were no
material liabilities, claims or obligations of any nature, whether accrued,
absolute, contingent, anticipated or otherwise, whether due or to become due,
that are not shown or provided for either in the Unaudited Balance Sheet or
Section 3.6 of the INT'L.com Disclosure Schedule, and since the Unaudited
Balance Sheet Date, INT'L.com has incurred no liabilities, claims or obligations
of any nature, whether accrued, absolute, contingent, anticipated or otherwise
other than in the ordinary course of business and except for liabilities
incurred by INT'L.com in connection with the preparation and execution of this
Agreement and the consummation of the transactions contemplated herein.

                  (b) All of the accounts, notes and other receivables which are
reflected in the Unaudited Balance Sheet were acquired in the ordinary course of
business; and, except to the extent reserved against in the Unaudited Balance
Sheet, all of the accounts, notes and other receivables which are reflected
therein have been collected in full, or, to the knowledge of INT'L.com or any
Subsidiary, are valid, binding and enforceable in accordance with their terms in
the ordinary course of business, and arise from bona fide transactions, and
neither INT'L.com nor any Subsidiary has received notice that the same are
subject to counterclaims, refusals to pay or other rights of setoff. All of the
accounts, notes and other receivables which have been acquired by INT'L.com or
any Subsidiary since the Unaudited Balance Sheet Date were acquired in the
ordinary course of business and have been collected in full, or to the knowledge
of INT'L.com or any Subsidiary, are valid, binding and enforceable in accordance
with their terms in the ordinary course of business, and arise from bona fide
transactions, and neither INT'L.com nor any Subsidiary has received notice that
the same are subject to counterclaims, refusals to pay

                                      -14-

<PAGE>

or other rights of setoff, subject to an appropriate reserve. No accounts, notes
or other receivables are contingent upon the performance by INT'L.com or any
Subsidiary of any obligation or contract. No Person has any Lien on any of such
receivables and no agreement for deduction or discount has been made with
respect thereto.

                  (c) The business information previously prepared by INT'L.com
and delivered to Parent was prepared in good faith, based on assumptions
INT'L.com deemed, as of the date such information was delivered to Parent, to be
reasonable, and was prepared for planning purposes, although no assurances are
given that INT'L.com can or will engage in the activities described therein or
achieve the results projected therein.

         3.7      TAXES.

                  (a) The term "TAXES" as used herein means all federal, state,
local and foreign income tax, alternative or add-on minimum tax, estimated,
gross income, gross receipts, sales, use, ad valorem, value added, transfer,
franchise, capital profits, lease, service, license, withholding, payroll,
employment, excise, severance, stamp, occupation, premium, property,
environmental or windfall profit taxes, customs, duties and other taxes,
governmental fees and other like assessments and charges of any kind whatsoever,
together with all interest, penalties, additions to tax and additional amounts
with respect thereto, and the term "TAX" means any one of the foregoing Taxes.
The term "TAX RETURNS" as used herein means all returns, declarations, reports,
claims for refund, information statements and other documents relating to Taxes,
including all schedules and attachments thereto, and including all amendments
thereof, and the term "TAX RETURN" means any one of the foregoing Tax Returns.

                  (b) INT'L.com and each of its Subsidiaries has timely filed
all Tax Returns required to be filed and has paid all Taxes owed (whether or not
shown as due on such Tax Returns), including, without limitation, all Taxes
which INT'L.com or such Subsidiary is obligated to withhold for amounts owing to
employees, creditors and third parties. All Tax Returns filed by INT'L.com and
each of its Subsidiaries were complete and correct in all respects, and such Tax
Returns correctly reflected the facts regarding the income, business, assets,
operations, activities, status and other matters of INT'L.com and each of its
Subsidiaries and any other information required to be shown thereon. None of the
Tax Returns filed by INT'L.com or any of its Subsidiaries or Taxes payable by
INT'L.com or any of its Subsidiaries have been the subject of an audit, action,
suit, proceeding, claim, examination, deficiency or assessment by any
Governmental Entity, and no such audit, action, suit, proceeding, claim,
examination, deficiency or assessment is currently pending or, to the knowledge
of INT'L.com or any of its Subsidiaries, threatened. Neither INT'L.com nor any
Subsidiary is currently the beneficiary of any extension of time within which to
file any Tax Return, and neither INT'L.com nor any Subsidiary has waived any
statute of limitation with respect to any Tax or agreed to any extension of time
with respect to a Tax assessment or deficiency. All material elections with
respect to Taxes affecting INT'L.com or any Subsidiary, as of the date of this
Agreement, are set forth in the Financial Statements or in Section 3.7 of the
INT'L.com Disclosure Schedule. None of the Tax Returns filed by INT'L.com or any
Subsidiary contain a disclosure statement under former Section 6661 of the Code
or Section 6662 of the Code (or any similar provision of state, local or foreign
Tax law). Neither INT'L.com nor any Subsidiary is a party to any Tax sharing
agreement or similar arrangement. Neither INT'L.com nor any Subsidiary has ever
been a member of a group filing a consolidated federal income Tax Return (other
than a group the common parent of which was INT'L.com), and neither INT'L.com
nor any Subsidiary has any liability for the Taxes of any Person (other than
INT'L.com) under Treasury Regulation Section 1.1502-6 (or any corresponding
provision of state, local or foreign Tax law), as a transferee or successor, by
contract, or otherwise.

                  (c) Neither INT'L.com nor any Subsidiary is a party to any
agreement, contract, arrangement or plan that has resulted or would result,
separately or in the aggregate, in the payment of (i) any "excess parachute
payments" within the meaning of Section 280G of the Code (without regard to the
exceptions set forth in Sections 280G(b)(4) and 280G(b)(5) of the Code) or (ii)
any amount for which a deduction would be disallowed or deferred under Section
162 or Section 404 of the Code. Neither INT'L.com nor any Subsidiary has agreed
to make any adjustment under Section 481(a) of the Code (or

                                      -15-

<PAGE>

any corresponding provision of state, local or foreign law) by reason of a
change in accounting method or otherwise, and INT'L.com will not be required to
make any such adjustment as a result of the transactions set forth in this
Agreement. Neither INT'L.com nor any Subsidiary has or has had a permanent
establishment in any foreign country, as defined in any applicable Tax treaty or
convention between the United States and such foreign country. No portion of the
Parent Merger Shares is subject to the Tax withholding provisions of Section
3406 of the Code, or of Subchapter A of Chapter 3 of the Code or of any other
provision of law. None of the assets of INT'L.com or any Subsidiary is property
which is required to be treated as being owned by any other Person pursuant to
the so-called "safe harbor lease" provisions of former Section 168(f)(8) of the
Code. None of the assets of INT'L.com or any Subsidiary directly or indirectly
secures any debt, the interest on which is tax exempt under Section 103(a) of
the Code. None of the assets of INT'L.com or any Subsidiary is "tax-exempt use
property" within the meaning of Section 168(h) of the Code. No claim has ever
been made by any Governmental Entity in a jurisdiction where INT'L.com or any
Subsidiary does not file Tax Returns that it is or may be subject to Tax in that
jurisdiction. Neither INT'L.com nor any Subsidiary has participated in an
international boycott as defined in Section 999 of the Code. None of the shares
of outstanding capital stock of INT'L.com or any Subsidiary are subject to a
"substantial risk of forfeiture" within the meaning of Section 83 of the Code.

                  (d) There are no liens for Taxes (other than for ad valorem
Taxes not yet due and payable) upon the assets of INT'L.com or any Subsidiary.
The unpaid Taxes of INT'L.com and its Subsidiaries did not, as of the Balance
Sheet Date, exceed the reserve for actual Taxes (as opposed to any reserve for
deferred Taxes established to reflect timing differences between book and Tax
income) as shown on the Unaudited Balance Sheet, and will not exceed such
reserve as adjusted for the passage of time through the Closing Date in
accordance with the past custom and practice of INT'L.com and its Subsidiaries
in filing their Tax Returns (taking into account any Taxes incurred as a result
of the transactions contemplated by this Agreement). Section 3.7 of the
INT'L.com Disclosure Schedule sets forth INT'L.com's and each Subsidiary's Tax
basis in each of their respective assets. Neither INT'L.com nor any Subsidiary
is a party to any joint venture, partnership, limited liability company or other
arrangement or contract which could be treated as a partnership for federal
income tax purposes.

         3.8 ABSENCE OF CERTAIN CHANGES AND EVENTS. Except for liabilities
incurred in connection with this Agreement and the transactions contemplated
hereby, from the Unaudited Balance Sheet Date, there has not been:

                  (a) Any transaction involving more than $50,000 entered into
by INT'L.com or any Subsidiary other than in the ordinary course of business;
any change (or any development or combination of developments of which INT'L.com
or any Subsidiary has knowledge which is reasonably likely to result in such a
change) in INT'L.com's Business Condition, other than changes in the ordinary
course of business which in the aggregate have not been and are not expected to
be materially adverse to INT'L.com's Business Condition; or, without limiting
the foregoing, any loss of or damage to any of the properties of INT'L.com or
any Subsidiary due to fire or other casualty or other loss, whether or not
insured, amounting to more than $50,000 in the aggregate;

                  (b) Any declaration, setting aside or payment of any dividend
or other distribution with respect to any shares of capital stock of INT'L.com
or any Subsidiary, or any repurchase, redemption, retirement or other
acquisition by INT'L.com or any

                                      -16-

<PAGE>

Subsidiary of any outstanding shares of capital stock, any INT'L.com Option, or
other securities of, or other equity or ownership interests in, INT'L.com or any
Subsidiary;

                  (c) Any discharge or satisfaction of any Lien or payment or
satisfaction of any obligation or liability (whether absolute, accrued,
contingent or otherwise and whether due or to become due) other than current
liabilities shown on the Unaudited Balance Sheet and current liabilities
incurred since the Unaudited Balance Sheet Date in the ordinary course of
business;

                  (d) Any amendment of any term of any outstanding security of
INT'L.com;

                  (e) Any incurrence, assumption or guarantee by INT'L.com or
any Subsidiary of any indebtedness for borrowed money other than in the ordinary
course of business and in an aggregate amount exceeding $50,000;

                  (f) Any creation or assumption by INT'L.com or any Subsidiary
         of any Lien on any asset in an aggregate amount exceeding $20,000;

                  (g) Any making of any loan, advance or capital contributions
to, or investment in, any Person by INT'L.com or any Subsidiary;

                  (h) Any sale, lease, pledge, transfer or other disposition of
any material capital asset;

                  (i) Any material transaction or commitment made, or any
material contract or agreement entered into, by INT'L.com or any Subsidiary
relating to its assets or business (including the acquisition or disposition of
any assets) with a value of $100,000 or more or any relinquishment by INT'L.com
or any Subsidiary of any contract or other right with a value of $100,000 or
more;

                  (j) Any (A) grant of any severance or termination pay to any
director, officer or employee of INT'L.com or any Subsidiary, (B) entering into
of any employment, severance, management, consulting, deferred compensation or
other similar agreement (or any amendment to any such existing agreement) with
any director, officer or employee of INT'L.com or any Subsidiary, (C) change in
benefits payable under existing severance or termination pay policies or
employment, severance, management, consulting or other similar agreements, (D)
change in compensation, bonus or other benefits payable to directors, officers
or employees of INT'L.com or any Subsidiary in excess of 7% or (E) change in the
payment or accrual policy with respect to any of the foregoing;

                  (k) Any labor dispute or any activity or proceeding by a labor
union or representative thereof to organize any employees of INT'L.com or any
Material INT'L.com Subsidiary, or any lockouts, strikes, slowdowns, work
stoppages or threats thereof by or with respect to any employees of INT'L.com or
any Material INT'L.com Subsidiary;

                  (l) Any issuance or sale of any stock, bonds, phantom stock
interest or other securities of which INT'L.com or any Subsidiary is the issuer,
or the grant, issuance

                                      -17-

<PAGE>

or change of any stock options, warrants, or other rights to purchase securities
of INT'L.com or any Subsidiary or phantom stock interest in INT'L.com or any
Subsidiary other than issuances of common stock in connection with exercises of
employee stock options;

                  (m) Any cancellation of any debts or claims or waiver of any
rights in an aggregate amount exceeding reserves in the Financial Statements by
$50,000 or more;

                  (n) Any sale, assignment or transfer of any INT'L.com
Intellectual Property, including licenses therefor;

                  (o) Any capital expenditures, or commitment to make any
capital expenditures, for additions to property, plant or equipment in an
aggregate amount exceeding $50,000; or

                  (p) Any agreement undertaking or commitment to do any of the
foregoing.

         3.9 LEASES IN EFFECT. All real property leases and subleases as to
which INT'L.com or any Subsidiary is a party and any amendments or modifications
thereof are listed in Section 3.9 of the INT'L.com Disclosure Schedule (each a
"LEASE" and collectively, the "LEASES") and are valid, in full force and effect
and enforceable, and there are no existing defaults on the part of INT'L.com or
any Subsidiary, and neither INT'L.com nor any Subsidiary has received or given
notice of default or claimed default with respect to any Lease, nor is there any
event that with notice or lapse of time, or both, would constitute a default on
the part of INT'L.com or any Subsidiary, or, to the knowledge of INT'L.com and
its Subsidiaries, any other party thereunder.

         3.10 PERSONAL PROPERTY; REAL ESTATE. (a) INT'L.com has good and
marketable title, free and clear of all title defects and Liens (including,
without limitation, leases, chattel mortgages, conditional sale contracts,
purchase money security interests, collateral security arrangements and other
title or interest-retaining agreements) to all inventory, receivables,
furniture, machinery, equipment and other personal property, tangible or
otherwise, reflected on the Unaudited Balance Sheet or used in INT'L.com's
business, except for acquisitions and dispositions since the Unaudited Balance
Sheet Date in the ordinary course of business. The INT'L.com Disclosure Schedule
lists (i) all computer equipment and (ii) all other personal property, in each
case having a depreciated book value of $10,000 or more, which are used by
INT'L.com or any Subsidiary in the conduct of its business, and all such
equipment and property, in the aggregate, is in good operating condition and
repair, reasonable wear and tear excepted. There is no asset used or required by
INT'L.com in the conduct of its business as presently operated which is not
either owned by it or licensed or leased to it.

                  (b) Section 3.10 of the INT'L.com Disclosure Schedule contains
a schedule setting forth all real property which is owned or leased by INT'L.com
or any Subsidiary, or in which INT'L.com or any Subsidiary has any other right,
title or interest. Neither INT'L.com nor any Subsidiary owns any real property.
True and complete copies of each lease have been provided to Parent, and such
leases constitute the entire understanding relating to INT'L.com's or any
Subsidiary's use and occupancy of the leased premises.

                  (c) INT'L.com and each Subsidiary has obtained consents for
all alterations made as of the date hereof to each leased premise described in
Section 3.10 of the INT'L Disclosure Schedule and, upon the expiration or
earlier termination of the lease or sublease with respect thereto, shall not be
obligated to remove any such

                                      -18-

<PAGE>

alterations or restore the premises to the condition they were in prior to the
time such alterations were undertaken, except for removal or restoration
obligations which individually or in the aggregate do not exceed $25,000. To the
knowledge of INT'L.com and its Subsidiaries, the improvements located on the
real property described in Section 3.10 of the INT'L.com Disclosure Schedule are
not the subject of and neither INT'L.com nor any Subsidiary has received written
notice of any official complaint or of a violation of any applicable zoning
ordinance or building code. There is no condemnation proceeding pending or, to
the knowledge of INT'L.com and its Subsidiaries, threatened against INT'L.com or
any Subsidiary and to the knowledge of INT'L.com and its Subsidiaries there are
no use or occupancy restrictions on the real property described in Section 3.10
of the INT'L.com Disclosure Schedule.

         3.11 CERTAIN TRANSACTIONS. Except for (a) relationships with INT'L.com
or any Subsidiary as an officer, director, or employee thereof (and compensation
by INT'L.com or any Subsidiary in consideration of such services) and (b)
relationships with INT'L.com as security holders therein, none of the directors,
officers, or stockholders of INT'L.com, or any member of any of their families,
is presently a party to, or was a party to during the year preceding the date of
this Agreement, any transaction, or series of similar transactions, with
INT'L.com or any Subsidiary, in which the amount involved exceeds $60,000,
including, without limitation, any contract, agreement, or other arrangement (i)
providing for the furnishing of services to or by, (ii) providing for rental of
real or personal property to or from, or (iii) otherwise requiring payments to
or from, any such Person or any other Person in which any such Person has or had
a 5%-or-more interest (as a stockholder, partner, beneficiary, or otherwise) or
is or was a director, officer, employee, or trustee, but excluding any
transaction pursuant to existing employee benefit plans. None of INT'L.com's
officers or directors has any interest in any property, real or personal,
tangible or intangible, including inventions, copyrights, trademarks, or trade
names, used in or pertaining to the business of INT'L.com or the Material
INT'L.com Subsidiaries, or, to the knowledge of INT'L.com, any material
supplier, distributor, or customer of INT'L.com or the Material INT'L.com
Subsidiaries, except for the normal rights of a securityholder, and except for
rights under existing employee benefit plans.

         3.12 LITIGATION AND OTHER PROCEEDINGS. There is no action, suit, claim,
proceeding, or to the knowledge of INT'L.com or any Subsidiary, investigation
pending against or, to the knowledge of INT'L.com or any Subsidiary, threatened
against INT'L.com or any Subsidiary or any of their respective properties and
assets before any court or arbitrator or any Governmental Entity. Neither
INT'L.com nor any Subsidiary is subject to any order, writ, judgment, decree, or
injunction.

         3.13 NO DEFAULTS. INT'L.com and the Material INT'L.com Subsidiaries are
not, nor has INT'L.com or any Material INT'L.com Subsidiary received notice that
it would be with the passage of time, in default or violation of any term,
condition, or provision of (i) its Charter Documents; (ii) any judgment, decree,
or order applicable to INT'L.com or any Material INT'L.com Subsidiary; or (iii)
any loan or credit agreement, note, bond, mortgage, indenture, contract,
agreement, lease, license, or other instrument to which INT'L.com or any
Material INT'L.com Subsidiary is now a party or by which it or any of its
properties or assets may be bound, except for defaults and violations which have
been validly waived, or which, individually or in the aggregate, would not have
a material adverse effect on the Business Condition of INT'L.com.

         3.14 MAJOR  CONTRACTS. Neither INT'L.com nor any Material INT'L.com
Subsidiary is a party to or subject to:

                  (a) Any union contract, or any employment contract or
arrangement in effect (other than "at-will" employment arrangements) providing
for future compensation, written or oral, with any officer, consultant,
director, or employee;

                                      -19-

<PAGE>

                  (b) Any plan or contract or arrangement, written or oral,
providing for non-standard bonuses, pensions, deferred compensation, retirement
payments, profit-sharing or the like;

                  (c) Any joint venture contract or arrangement or any other
agreement which has involved or is expected to involve a sharing of profits;

                  (d) Any OEM agreement, reseller or distribution agreement,
volume purchase agreement, corporate end user sales or service agreement,
reproduction or replication agreement or manufacturing agreement in which the
amount involved exceeds annually, or is expected to exceed in the aggregate over
the life of the contract, $50,000 or pursuant to which INT'L.com has granted or
received manufacturing rights, most favored nation pricing provisions, or
exclusive marketing, production, publishing or distribution rights related to
any product, group of products or territory;

                   (e) Any agreement, license, franchise, permit, indenture, or
authorization which has not been terminated or performed in its entirety and not
renewed which may be, by its terms, terminated, impaired, or adversely affected
by reason of the execution of this Agreement and all other agreements
contemplated hereby, the consummation of the Merger, or the consummation of the
transactions contemplated hereby or thereby;

                  (f) Except for trade indebtedness incurred in the ordinary
course of business, any instrument evidencing or related in any way to
indebtedness incurred in the acquisition of companies or other entities or
indebtedness for borrowed money by way of direct loan, sale of debt securities,
purchase money obligation, conditional sale, guarantee, or otherwise which
individually is in the amount of $50,000 or more;

                  (g) Any license agreement in effect, either as licensor or
licensee (excluding nonexclusive hardware and software licenses granted to
distributors or end-users and commercially available in-licensed software
applications);

                  (h) Any contract or agreement containing covenants purporting
to limit INT'L.com's or the Material INT'L.com Subsidiaries' freedom to compete
in any line of business in any geographic area; or

                  (i) Any contract or agreement not elsewhere specifically
disclosed pursuant to this Agreement, involving the payment or receipt by
INT'L.com of more than $250,000 in the aggregate.

         For purposes of this Section 3.14, a contract, agreement or arrangement
shall be considered "in effect" if INT'L.com or any Material Subsidiary shall
have any obligations or liabilities pursuant to such contract, agreement or
arrangement.

         All contracts, arrangements, plans, agreements, leases, licenses,
franchises, permits, indentures, authorizations, instruments and other
commitments which are listed in the INT'L.com Disclosure Schedule pursuant to
this Section 3.14 are valid and in full force and effect and neither INT'L.com
nor any Material INT'L.com Subsidiary has, nor, to the knowledge of INT'L.com
and the Material INT'L.com Subsidiaries, has any other party thereto, breached
any material provisions of, or entered into default in any material respect
under the terms thereof. INT'L.com has delivered to Parent copies of the
contracts or agreements,

                                      -20-

<PAGE>

and descriptions of any verbal agreements or arrangements, referred to in this
Section 3.14 as in effect on the date of this Agreement.

         3.15 MATERIAL REDUCTIONS. None of the parties to any of the contracts
identified in the INT'L.com Disclosure Schedule pursuant to Section 3.14 have
terminated, or in any way expressed in writing to INT'L.com or any Subsidiary an
intent to reduce or terminate the amount of its business with INT'L.com or any
Subsidiary in the future.

         3.16 INSURANCE AND BANKING FACILITIES. Section 3.16 of the INT'L.com
Disclosure Schedule contains a complete and correct list of (i) all contracts of
insurance or indemnity of INT'L.com in force at the date of this Agreement
(including name of insurer or indemnitor, agent, annual premium, coverage,
deductible amounts and expiration date) and (ii) the names and locations of all
banks in which INT'L.com has accounts or safe deposit boxes, the designation of
each such account and safe deposit box, and the names of all persons authorized
to draw on or have access to each such account and safe deposit box. All
premiums and other payments due from INT'L.com with respect to any such
contracts of insurance or indemnity have been paid, and neither INT'L.com nor
any Material INT'L.com Subsidiary knows of any fact, act, or failure to act
which has or could reasonably be expected to cause any such contract to be
canceled or terminated. All known claims for insurance or indemnity have been
presented or are described in Section 3.16 of the INT'L.com Disclosure Schedule.

         3.17 EMPLOYEES. The INT'L.com Disclosure Schedule sets forth a list as
of January 12, 2000 of (a) the names, titles, annual salaries and all bonuses of
all salaried employees of INT'L.com and its Subsidiaries (such term meaning
permanent and temporary, full-time and part-time employees) and (b) the wage
rates for non-salaried employees of INT'L.com and its Subsidiaries. Any persons
engaged by INT'L.com as independent contractors, rather than employees, have
been properly classified as such and have been so engaged in accordance with all
applicable federal, foreign, state or local laws. No employee that INT'L.com or
any Material INT'L.com Subsidiary wishes to retain has stated to INT'L.com or
any Material INT'L.com Subsidiary that such employee intends to resign or retire
as a result of the transactions contemplated by this Agreement or otherwise
within six months after the Closing Date. Hours worked by and payments made to
employees of INT'L.com and its Subsidiaries have not been in violation of the
Fair Labor Standards Act or any other applicable federal, foreign, state or
local laws dealing with such matters. Neither INT'L.com nor any Subsidiary is
engaged in any dispute or litigation with an employee or former employee
regarding matters pertaining to intellectual property or assignment of
inventions. Neither INT'L.com nor any Subsidiary, to the knowledge of INT'L.com
and its Subsidiaries, is subject to a union organizing effort. Neither INT'L.com
nor any Subsidiary has any written contract of employment or other employment,
severance or similar agreement with any of its employees or any established
policy or practice relating thereto, and all of its employees are
employees-at-will. Neither INT'L.com nor any Subsidiary is a party to any
pending, or to the knowledge of INT'L.com and its Subsidiaries, threatened,
labor dispute. INT'L.com and its Subsidiaries have complied in all material
respects with all applicable foreign, federal, state and local laws, ordinances,
rules and regulations and requirements relating to the employment of labor,
including but not limited to the provisions thereof relating to wages, hours,
collective bargaining and ensuring equality of opportunity for employment. There
are no claims pending, or, to the knowledge of INT'L.com and its Subsidiaries,
threatened to be brought, in any court or administrative agency by any former or
current employees of INT'L.com and its Subsidiaries for compensation, pending
severance benefits, vacation time, vacation pay or pension benefits, or any
other claim pending, or, to the knowledge of INT'L.com and its Subsidiaries,
threatened in any court or administrative agency from any current or former
employee or any other Person arising out of INT'L.com's or its Subsidiary's
status as employer, whether in the form of claims for employment discrimination,
harassment, unfair labor practices, grievances, wrongful discharge, or
otherwise.

         3.18 EMPLOYEE BENEFIT PLANS. Each Plan (as defined below) covering
active, former, or retired employees of INT'L.com or any Subsidiary is listed in
Section 3.18 of the INT'L.com Disclosure Schedule. "PLAN" means any employee
benefit plan as defined in ERISA (as defined below), maintained or contributed
to by INT'L.com or any of its Subsidiaries within the past six years, and also
includes any employment, severance or similar contract, arrangement or policy
and each plan or arrangement providing for insurance coverage (including any
self-insured arrangements), workers' compensation, disability

                                      -21-

<PAGE>

benefits, supplemental unemployment benefits, vacation benefits, pension or
retirement benefits or for deferred compensation, profit-sharing, bonuses,
phantom stock, stock options, stock appreciation rights or other forms of
incentive compensation or post-retirement insurance, compensation or benefits in
existence within the past three years or for which there is an unsatisfied
liability. INT'L.com has made available to Parent a copy (or description if no
document exists) of each Plan, and where applicable, any related trust
agreement, annuity, or insurance contract. All annual reports (Form 5500)
required to be filed with the Internal Revenue Service have been properly filed
on a timely basis, and INT'L.com has provided copies of the three most recently
filed Forms 5500 for each applicable Plan. Any Plan intended to be qualified
under Section 401(a) of the Code has been determined by the Internal Revenue
Service to be so qualified or, if no such determination letter has been
received, the form of such Plan complies with the Code's requirements for
qualification, except those requirements for which the remedial amendment period
has not expired, and no event has occurred which is reasonably likely to
threaten the tax-exempt status of such Plan or any trust for such Plan. No Plan
is covered by Title IV of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), or Section 412 of the Code. No "prohibited transaction,"
as defined in ERISA Section 406 or Code Section 4975 has occurred with respect
to any Plan, unless such a transaction was exempt from such rules or would not
give rise to a material tax or penalty. Each Plan has been maintained and
administered in material compliance with its terms and with the requirements
prescribed by any and all statutes, including but not limited to ERISA and the
Code, which are applicable to such Plans. There are no pending or, to the
knowledge of INT'L.com and its Subsidiaries, anticipated claims against or
otherwise involving any of the Plans and no suit, action, or other litigation
(excluding claims for benefits incurred in the ordinary course of Plan
activities) is currently pending against or with respect to any Plan for which
there is an unsatisfied liability. All contributions, reserves, or premium
payments to the Plan accrued to the date of this Agreement have been made or
provided for in accordance with prior funding and accrual practices. Within the
six year period preceding the Closing Date, neither INT'L.com nor any
Subsidiary, nor any entity which is considered one employer with INT'L.com or
any Subsidiary under Section 414 of the Code or Section 4001 of ERISA has ever
maintained or contributed to or incurred liability with respect to any Plan
subject to Title IV of ERISA or any "multi-employer plan" within the meaning of
Section 4001(a)(3) of ERISA, and neither INT'L.com nor any Subsidiary expects to
incur any such liability. There are no restrictions on the rights of INT'L.com
or any Subsidiary to amend or terminate any Plan, subject to any applicable
notice requirements without incurring any liability thereunder other than for
benefits accrued prior to the date of termination or amendment. Neither
INT'L.com nor any Subsidiary has engaged in and, to the knowledge of INT'L.com
and its Subsidiaries, it is not a successor or parent corporation to an entity
that has engaged in a transaction described in ERISA Section 4069. There have
been no written interpretations of, or announcements (whether or not written) by
INT'L.com or any Subsidiary relating to, or change in employee participation or
coverage under, any Plan that would increase the expense of maintaining such
Plan above the level of the expense incurred in respect thereof for the fiscal
year ended prior to the date hereof. Neither INT'L.com nor any of its ERISA
affiliates has any liability in respect of post-employment or post-retirement
welfare benefits for retired employees of INT'L.com or any Subsidiary. Neither
INT'L.com nor any Material INT'L.com Subsidiary nor any of their ERISA
Affiliates has any liability with respect to welfare benefits for former
employees other than health care continuation benefits required to be provided
under applicable law or which do not exceed three months in duration. No tax
under Section 4980B or 4980D of the Code has been incurred in respect of any
Plan that is a group health plan, as defined in Section 5000(b)(1) of the Code.

         3.19 CERTAIN AGREEMENTS. Except as contemplated by this Agreement,
neither the execution and delivery of this Agreement and all other agreements
contemplated hereby, nor the consummation of the transactions contemplated
hereby will: (i) result in any payment by INT'L.com or any Subsidiary
(including, without limitation, severance, unemployment compensation, parachute
payment, bonus or otherwise) becoming due to any director, employee, or
independent contractor of INT'L.com or any Subsidiary under any Plan, agreement,
or otherwise, (ii) increase any benefits otherwise payable under any Plan or
agreement or (iii) result in the acceleration of the time of payment or vesting
of any such benefits.

         3.20 GUARANTEES AND SURETYSHIPS. INT'L.com and its Subsidiaries have no
powers of attorney outstanding (other than those issued in the ordinary course
of business with respect to Tax matters), and INT'L.com and its Subsidiaries
have no material obligations or liabilities (absolute or contingent) as

                                      -22-

<PAGE>

guarantor, surety, cosigner, endorser, co-maker, indemnitor, or otherwise
respecting the obligations or liabilities of any Person.

         3.21 BROKERS AND FINDERS. INT'L.com has not retained any broker,
finder, or investment banker in connection with this Agreement or any of the
transactions contemplated by this Agreement, nor does or will INT'L.com or any
Subsidiary owe any fee or other amount to any broker, finder, or investment
banker in connection with this Agreement or the transactions contemplated by
this Agreement.

         3.22 CERTAIN PAYMENTS. Neither INT'L.com nor any Subsidiary, nor to the
knowledge of INT'L.com and its Subsidiaries, any Person acting on behalf of
INT'L.com or any Subsidiary has, directly or indirectly, on behalf of or with
respect to INT'L.com or any Subsidiary: (i) made an unreported political
contribution, (ii) made or received any payment which was not legal to make or
receive, (iii) engaged in any material transaction or made or received any
material payment which was not properly recorded on the books of INT'L.com and
its Subsidiaries, (iv) created or used any "off-book" bank or cash account or
"slush fund," or (v) engaged in any conduct constituting a violation of the
Foreign Corrupt Practices Act of 1977.

         3.23 ENVIRONMENTAL MATTERS. INT'L.com and its Subsidiaries have
complied in all material respects with all applicable federal, state and local
laws (including, without limitation, case law, rules, regulations, orders,
judgments, decrees, permits, licenses and governmental approvals) which are
intended to protect the environment and/or human health or safety (collectively,
"ENVIRONMENTAL LAWS"); neither INT'L.com nor any Subsidiary has handled,
generated, used, stored, transported or disposed of any material, substance or
waste which is regulated by Environmental Laws ("HAZARDOUS MATERIALS"), except
for ordinary office and/or office-cleaning supplies, products, equipment, fluids
and wastes customarily found, and in quantities customarily found, in a
commercial office setting, which have been used in compliance with Environmental
Laws; (iii) to the knowledge of INT'L.com and its Subsidiaries there is not now,
nor has there ever been, any underground storage tank or asbestos on any real
property owned, operated or leased by INT'L.com; (iv) INT'L.com has not
conducted, nor is it aware of, any environmental investigations, studies,
audits, tests, reviews or analyses, the purpose of which was to discover,
identify, or otherwise characterize the condition of the soil, groundwater, air
or the presence of Hazardous Materials at any real property owned, operated or
leased by INT'L.com; and (v) to the knowledge of INT'L.com and its Subsidiaries
there are no "Environmental Liabilities". For purposes of this Agreement,
"ENVIRONMENTAL LIABILITIES" are any claims, demands, or liabilities under
Environmental Laws which (i) arise out of or in any way relate to INT'L.com's or
its Subsidiary's operations or activities, or any real property at any time
owned, operated or leased by INT'L.com or a Subsidiary, or any stockholder's use
or ownership thereof, whether vested or unvested, contingent or fixed, actual or
potential, and (ii) arise from or relate to actions occurring (including any
failure to act) or conditions existing on or before the Closing Date.

         3.24     ENFORCEABILITY OF CONTRACTS, ETC.

                  (a) No Person that is a party to any contract, agreement,
commitment or plan to which INT'L.com or a Subsidiary is a party has a valid
defense, on account of non-performance or malfeasance by INT'L.com or a
Subsidiary, which would make any such contracts, agreement, commitment or plan
not valid and binding upon or enforceable against such parties in accordance
with their terms, except to the extent such enforceability may be subject to or
limited by bankruptcy, insolvency, reorganization, arrangement or similar laws
affecting the rights of creditors generally and usual equity principles.

                  (b) Neither INT'L.com, nor any Subsidiary, nor to the
knowledge of INT'L.com and its Subsidiaries, any other Person, is in breach or
violation of, or default under, any material contract, agreement, arrangement,
commitment or plan to which INT'L.com or a Subsidiary is a party, and no event
or action has occurred, is pending, or,

                                      -23-

<PAGE>

to the knowledge of INT'L.com and its Subsidiaries, is threatened, which, after
the giving of notice, or the lapse of time, or otherwise, would constitute a
breach or a default by INT'L.com or a Subsidiary or, to the knowledge of
INT'L.com and its Subsidiaries, any other Person, under any material contract,
agreement, arrangement, commitment or plan to which INT'L.com or a Subsidiary is
a party.

         3.25 ACCOUNTING MATTERS. To the knowledge of INT'L.com and its
Subsidiaries, neither INT'L.com nor any of its Subsidiaries or affiliates has
taken or agreed to, or plans to, take any action that would prevent Parent from
accounting for the Merger as a "pooling of interests" in accordance with
generally accepted accounting principles, Accounting Principles Board Opinion
No. 16 and all published rules, regulations and policies of the Securities and
Exchange Commission (the "Commission").

         3.26 YEAR 2000. All computer and other systems, software (whether
embedded or otherwise), hardware and other products owned or licensed by
INT'L.com or its Subsidiaries and used in connection with the services provided
by INT'L.com or its Subsidiaries and, to the knowledge of INT'L.com and its
Subsidiaries, all computer and other systems, software (whether embedded or
otherwise), hardware and other products produced by any third party that are
licensed by INT'L.com, in each case, have been written, manufactured and tested
to be Year 2000 Ready. For purposes of this Agreement, "YEAR 2000 READY" shall
mean, with respect to any systems, software (whether embedded or otherwise),
product, equipment or facility, that such system, product, equipment or facility
is capable of correctly processing, providing, receiving and manufacturing the
date data within and between the twentieth and twenty-first centuries, and its
operations and functionality has not been adversely affected and will not be
adversely affected in any material respect as a result of the advent of the Year
2000.

         3.27 DISCLOSURE. Neither the representations or warranties made by
INT'L.com in this Agreement, nor the INT'L.com Disclosure Schedule or any other
certificate executed and delivered by INT'L.com pursuant to this Agreement, when
taken together, contains any untrue statement of a material fact, or omits to
state a material fact necessary to make the statements or facts contained herein
or therein not misleading in light of the circumstances under which they were
furnished.

         3.28 RELIANCE. The foregoing representations and warranties are made by
INT'L.com with the knowledge and expectation that Parent and Merger Sub are
placing reliance thereon.

                                   ARTICLE IV

             REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB

         Except as set forth in either the documents delivered pursuant to
Section 4.5 or in the disclosure schedule of Parent dated as of the date hereof
and delivered herewith to INT'L.com (the "PARENT DISCLOSURE SCHEDULE") which
identifies the section and subsection to which each disclosure therein relates
(PROVIDED, HOWEVER, that Parent will be deemed to have adequately disclosed with
respect to any section or subsection any matters that are clearly described
elsewhere in such document if the applicability of such disclosure to such
non-referenced sections or subsections is apparent, and whether or not the
Parent Disclosure Schedule is) referred to in a specific section or subsection,
Parent and Merger Sub jointly and severally represent and warrant to INT'L.com
as follows:

         4.1 ORGANIZATION AND QUALIFICATION. Parent is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware, has all requisite corporate power and authority to own, lease and
operate its properties and to carry on its businesses as now being conducted,
and is duly qualified and in good standing to do business in each jurisdiction
in which a failure to so qualify would have a material adverse effect on the
Business Condition of Parent. Each Subsidiary of Parent is a corporation duly
organized and validly existing under the laws of the jurisdiction of its
incorporation, and Merger Sub is recently organized, is in good standing, and
has conducted no business activities, other than as contemplated by this
Agreement. In this Agreement, "Material Parent Subsidiaries" shall mean the

                                      -24-

<PAGE>

following: Lionbridge Technologies California, Inc., Lionbridge Technologies
(Ireland), Inc., Lionbridge Technologies, B.V. and Lionbridge Technologies
(France).

         4.2 CAPITALIZATION. (a) The authorized capital stock of Parent consists
of 5,000,000 shares of preferred stock, $0.01 par value per share, of which no
shares are issued or outstanding or held in Parent's treasury, and 100,000,000
shares of Parent Common Stock, of which, as of November 10, 1999: (a) 16,287,827
shares were validly issued and outstanding, fully paid and nonassessable and (b)
5,221,201 shares were reserved for issuance pursuant to Parent's stock option
and stock purchase plans for its employees and directors. Except for options and
rights relating to shares described in clause (b) of the preceding sentence and
except as set forth in Section 4.2 of the Parent Disclosure Schedule or the
Reports (as defined in Section 4.5), there are no options, warrants or other
rights, agreements or commitments or understandings or rights of any character
(contingent or otherwise) obligating Parent to issue, deliver or sell or cause
to be issued, delivered or sold shares of its capital stock or any other
securities convertible into or evidencing the right to subscribe to shares of
its capital stock. All of the outstanding shares of capital stock of each
Subsidiary of Parent are owned beneficially and of record by Parent, one of its
other Subsidiaries, or any combination thereof, in each case, free and clear of
any Liens; and there are no outstanding subscriptions, warrants, options,
convertible securities or other rights (contingent or other) pursuant to which
any of the Subsidiaries is or may become obligated to issue any shares of its
capital stock to any Person other than Parent or one of the other Subsidiaries.

                  (b) The authorized capital stock of Merger Sub consists of
1,000 shares of common stock, par value $0.01 per share, of which 1,000 shares
are issued and outstanding, all of which shares are owned beneficially and of
record by Parent.

         4.3 AUTHORITY RELATIVE TO THIS AGREEMENT. The execution, delivery and
performance of this Agreement and all other agreements contemplated hereby by
Parent and Merger Sub have been duly authorized by all necessary action of the
Boards of Directors and stockholders of Parent and Merger Sub. Certified copies
of the resolutions adopted by the Boards of Directors of Parent and Merger Sub
and Parent as sole stockholder of Merger Sub approving this Agreement, all other
agreements contemplated hereby and the Merger have been or will be provided to
INT'L.com. Each of Parent and Merger Sub has duly and validly executed and
delivered this Agreement and has, or prior to Closing, will have duly and
validly executed and delivered all other agreements contemplated hereby to be
executed by it, and each of this Agreement and such other agreements constitutes
a valid, binding and enforceable obligation of each of Parent and Merger Sub in
accordance with its terms.

         4.4 NON-CONTRAVENTION. Neither the execution, delivery or performance
of this Agreement and all other agreements contemplated hereby by Parent and
Merger Sub, nor the consummation of the Merger or any other transaction
described herein, does or will, after the giving of notice, or the lapse of
time, or otherwise, conflict with, result in a breach of, or constitute a
default under, the Charter Documents of Parent or Merger Sub or any federal,
foreign, state or local court or administrative order or process, statute, law,
ordinance, rule or regulation, or any contract, agreement or commitment to which
Parent is a party, or under which Parent or any Material Parent Subsidiary is
obligated, or by which Parent or any Material Parent Subsidiary or any of the
rights, properties or assets of Parent or any Material Parent Subsidiary are
subject or bound; result in the creation of any Lien upon, or otherwise
adversely affect, any of the rights, properties or assets of Parent or any
Material Parent Subsidiary; terminate, amend or modify, or give any party the
right to terminate, amend, modify, abandon or refuse to perform or comply with,
any contract, agreement or commitment to which Parent or any Material Parent
Subsidiary is a party, or under which Parent or any Material Parent Subsidiary
is obligated, or by which Parent or any Material Parent Subsidiary or any of the
rights, properties or assets of Parent or any Material Parent Subsidiary are
subject or bound; or accelerate, postpone or modify, or give any party the right
to accelerate, postpone or modify, the time within which, or the terms and
conditions under which, any liabilities, duties or obligations are to be
satisfied or performed, or any rights or benefits are to be received, under any
contract, agreement or commitment to which Parent or any Material Parent
Subsidiary is a party, or under which Parent or any Material Parent Subsidiary
may be obligated, or by which Parent or any of the rights, properties or assets
of Parent or any Material Parent Subsidiary are, subject or bound.

<PAGE>

         4.5 REPORTS AND FINANCIAL STATEMENTS. (a) Parent has previously
furnished to INT'L.com true and correct copies of its (i) Prospectus dated as of
August 20, 1999 contained in Parent's Registration Statement on Form S-1, (ii)
Quarterly Report on Form 10-Q for the period ended September 30, 1999 (the
"RECENT 10-Q") and (iii) all other reports filed by it with the Commission under
the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT") since
August 20, 1999.

              (b) Parent hereby agrees to furnish to INT'L.com true and
correct copies of all reports filed by it with the Commission after the date
hereof prior to the Closing all in the form (including exhibits) so filed
(collectively, the "REPORTS"). As of their respective dates, the Reports
complied or will comply in all material respects with the then applicable
published rules and regulations of the Commission with respect thereto at the
date of their issuance and did not or will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. As of the date hereof, no additional
filings or amendments to previously filed Reports are required pursuant to such
rules and regulations. Each of the audited consolidated financial statements and
unaudited interim financial statements included in Parent's Reports has been
prepared in accordance with generally accepted accounting principles applied on
a consistent basis (except as may be indicated therein or in the notes thereto)
and fairly presents the financial position of the entity or entities to which it
relates as at its date or the results of operations, stockholders' equity or
cash flows of such entity or entities (subject, in the case of unaudited
statements, to the absence of footnote disclosure and in the case of unaudited
interim statements to year-end adjustments, which will not be material either
individually or in the aggregate, and except as described in Section 4.5 of the
Parent Disclosure Schedule). As of the date of the Recent 10-Q, there were no
material liabilities, claims or obligations of any nature, whether accrued,
absolute, contingent, anticipated or otherwise, whether due or to become due,
that are not shown or provided for either in the Recent 10-Q or Section 4.5 of
the Parent Disclosure Schedule, and since the date of the Recent 10-Q, Parent
has incurred no liabilities, claims or obligations of any nature, whether
accrued, absolute, contingent, anticipated or otherwise other than in the
ordinary course of business and except for liabilities incurred by Parent in
connection with the preparation and execution of this Agreement and the
consummation of the transactions contemplated herein.

         4.6 VALIDITY OF PARENT MERGER SHARES. The Parent Merger Shares to be
issued in the Merger will, when issued, be, validly issued, fully paid and
nonassessable.

         4.7 CONSENTS AND APPROVALS OF GOVERNMENTAL AUTHORITIES. Except for (a)
the requirements of state securities (or "Blue Sky") laws, (b) the filing and
recording of the Merger Documents as provided by the DGCL, (c) the filing of
appropriate documents with the Nasdaq Stock Market, (d) the filing of the Proxy
Statement, the Form S-4 and a Form 8-K with the Commission, if applicable, and
(e) such other consents, approvals, orders, authorizations, registrations,
declarations and filings the failure of which to be obtained or made,
individually or in the aggregate, could not reasonably be expected to impair in
any material respect the ability of Parent or Merger Sub to perform its
obligations under this Agreement or prevent or materially delay the consummation
of any of the transactions contemplated by this Agreement, no consent, approval
or authorization of, or declaration, filing or registration with, any
Governmental Entity is required to be made or obtained by Parent or Merger Sub
in connection with the execution, delivery and performance of this Agreement or
the consummation of the transactions contemplated hereby.

         4.8 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except for liabilities
incurred in connection with this Agreement or the transactions contemplated
hereby, since September 30, 1999, there has not been any material adverse change
in the Business Condition of Parent.

         4.9 LITIGATION AND OTHER PROCEEDINGS. There is no action, suit, claim,
proceeding, or to the knowledge of Parent or any Subsidiary investigation
pending against or, to the knowledge of Parent or any Subsidiary, threatened
against Parent or any Subsidiary or any of their respective properties and
assets before any court or arbitrator or any Governmental Entity.

                                      -26-

<PAGE>

         4.10 DISCLOSURE. Neither the representations or warranties made by
Parent in this Agreement, nor the Parent Disclosure Schedule or any other
certificate executed and delivered by Parent pursuant to this Agreement, when
taken together and with knowledge of the contents of the Reports, contains any
untrue statement of a material fact, or omits to state a material fact necessary
to make the statements or facts contained herein or therein not misleading in
light of the circumstances under which they were furnished. Prior to the date of
this Agreement, Parent has disclosed to INT'L.com all material strategic and
financing transactions which Parent has taken action in furtherance of and
involving Parent or any Parent Subsidiary.

         4.11 RELIANCE. The foregoing representations and warranties are made by
Parent with the knowledge and expectation that INT'L.com are placing reliance
thereon.

         4.12 BROKERS AND FINDERS. Except for Prudential Securities, Inc.,
Parent has not retained any broker, finder, or investment banker in connection
with this Agreement or any of the transactions contemplated by this Agreement.

         4.13 ACCOUNTING MATTERS. To the knowledge of Parent, neither Parent nor
any of its affiliates has taken or agreed to, or plans to, take any action that
would prevent Parent from accounting for the Merger as a "pooling of interest"
in accordance with generally accepted accounting principles, Accounting
Principles board Opinion No. 16 and all published rules, regulations and
policies of the Commission.

                                    ARTICLE V

                             COVENANTS OF INT'L.COM

         References in this Article V to INT'L.com shall be deemed to include
all Subsidiaries of INT'L.com. During the period from the date of this Agreement
(except as otherwise indicated) and continuing until the earlier of the
termination of this Agreement or the Effective Time, INT'L.com agrees (except as
expressly set forth in Section 5 of the Parent Disclosure Schedule contemplated
by this Agreement or otherwise permitted with Parent's prior written consent):

         5.1 CONDUCT OF BUSINESS IN ORDINARY COURSE. INT'L.com will carry on its
business in the ordinary course in substantially the same manner as heretofore
conducted and, to the extent consistent with such business, use all reasonable
best efforts consistent with past practice and policies to preserve intact its
present business organization, keep available the services of its present
officers, consultants and employees and preserve its relationships with
customers, suppliers and distributors and others having business dealings with
it. INT'L.com will confer on a regular and frequent basis with representatives
of Parent to report operational matters of a material nature and to report the
general status of the ongoing operations of the business of INT'L.com. The
foregoing notwithstanding, INT'L.com will not:

                  (a) other than in the ordinary course of business consistent
with prior practice, enter into any material commitment or transaction,
including but not limited to any purchase of assets (other than raw materials,
supplies or cash equivalents) for a purchase price in excess of $50,000;

                  (b) grant any bonus, severance or termination pay to any
officer, director, independent contractor or employee of INT'L.com;

                  (c) enter into or amend any agreements pursuant to which any
other party is granted support, service, marketing or publishing rights, other
than in the ordinary course of business consistent

                                      -27-

<PAGE>

with prior practice, or is granted distribution rights of any type or scope with
respect to any products of INT'L.com;

                  (d) other than in the ordinary course of business consistent
with prior practice, enter into or terminate any contracts, arrangements, plans,
agreements, leases, licenses, franchises, permits, indentures, authorizations,
instruments, or commitments, or amend or otherwise change in any material
respect the terms thereof in a manner adverse to INT'L.com;

                  (e) commence a lawsuit other than: (i) for the routine
collection of bills, (ii) in such cases where INT'L.com in good faith determines
that failure to commence suit would result in a material impairment of a
valuable aspect of INT'L.com's business PROVIDED THAT INT'L.com consults with
Parent prior to filing such suit, or (iii) for a breach of this Agreement or any
agreement related hereto;

                  (f) modify in any material respect existing discounts or other
terms and conditions with dealers, distributors and other resellers of
INT'L.com's products or services in a manner adverse to INT'L.com;

                  (g) accelerate the vesting or otherwise modify any INT'L.com
Option, restricted stock or other outstanding rights or other securities other
than any acceleration or modification that results from the execution and
performance of this Agreement or any of the transactions contemplated hereby;

                  (h) take any action which would make any representation or
warranty in this Agreement untrue or incorrect, as if made as of such time; or

                  (i) agree in writing or otherwise to take any of the foregoing
actions.

         5.2 DIVIDENDS, ISSUANCE OF, OR CHANGES IN SECURITIES. INT'L.com will
not: (i) declare or pay any dividends on or make other distributions to its
stockholders (whether in cash, shares or property), (ii) issue, deliver, sell,
or authorize, propose, or agree to, or commit to the issuance, delivery, or sale
of any shares of its capital stock of any class, any Company Voting Debt or any
securities convertible into its capital stock, any options, warrants, calls,
conversion rights, commitments, agreements, contracts, understandings,
restrictions, arrangements or rights of any character obligating INT'L.com to
issue any such shares, INT'L.com Voting Debt or other convertible securities
except as any of the foregoing is required by Outstanding INT'L.com Options;
(iii) split, combine or reclassify any of its capital stock or issue or
authorize the issuance of any other securities in respect of, in lieu of or in
substitution for shares of capital stock of INT'L.com, (iv) repurchase or
otherwise acquire, directly or indirectly, any shares of its capital stock or
options or warrants related thereto, or (v) take any action in furtherance of
any of the foregoing.

         5.3 GOVERNING DOCUMENTS.   INT'L.com will not amend its Charter
Documents.

         5.4 NO ACQUISITIONS. INT'L.com will not authorize, recommend, propose
or announce an intention to authorize, recommend or propose, or enter into a
letter of intent (whether or not binding), an agreement in principle or an
agreement with respect to any merger, consolidation or business combination
(other than the Merger), or achieve a comparable effect through any acquisition
of assets or securities.

         5.5 NO DISPOSITIONS. INT'L.com will not sell, lease, license, transfer,
mortgage, encumber or otherwise dispose of any of its material assets or cancel,
release, or assign any material indebtedness or claim, except in the ordinary
course of business.

                                      -28-

<PAGE>

         5.6 INDEBTEDNESS. INT'L.com will not incur any indebtedness for
borrowed money by way of direct loan, sale of debt securities, purchase money
obligation, conditional sale, guarantee or otherwise.

         5.7 COMPENSATION. Except for the actions, adoptions, amendments,
modifications, and payments described in Section 5.1(b) of the Parent Disclosure
Schedule, INT'L.com will not adopt or amend, or modify in any material respect,
any Plan or pay any pension or retirement allowance not required by any existing
Plan. INT'L.com will not enter into or modify any employment or severance
contracts, increase the salaries, wage rates or fringe benefits of its officers,
directors or employees or pay bonuses or other remuneration except for current
salaries, severance and other remuneration for which INT'L.com is obligated
under arrangements existing prior to the Unaudited Balance Sheet Date to which
INT'L.com is a party and which have been disclosed in the INT'L.com Disclosure
Schedule.

         5.8 CLAIMS. INT'L.com will not settle any claim, action or proceeding,
except in the ordinary course of business consistent with prior practice.

         5.9 ACCESS TO PROPERTIES AND RECORDS. Subject to contractual and other
obligations, INT'L.com will give Parent and its representatives full access, at
a place reasonably acceptable to INT'L.com, during reasonable business hours and
following reasonable notice but in such a manner as not unduly to disrupt the
business of INT'L.com, to its senior management, senior technical personnel,
premises, properties, contracts, commitments, books, records and affairs, and
will provide Parent with such financial, technical and operating data and other
information pertaining to its business as Parent may request. With INT'L.com's
prior consent, which will not be unreasonably withheld, Parent will be entitled
in conjunction with INT'L.com personnel to make appropriate inquiries of third
parties in the course of its investigation.

         5.10 BREACH OF REPRESENTATIONS AND WARRANTIES. INT'L.com will not take
any action that would cause or constitute a breach of any of the representations
and warranties set forth in Article III or that would cause any of such
representations and warranties to be inaccurate in any material respect or that
would constitute a breach of any of its other obligations under this Agreement.
In the event of, and promptly after becoming aware of, the occurrence of or the
pending or threatened occurrence of any event that would cause or constitute
such a breach or inaccuracy, INT'L.com will give detailed notice thereof to
Parent and will use its reasonable best efforts to prevent or remedy promptly
such breach or inaccuracy.

         5.11 CONSENTS. INT'L.com will promptly apply for or otherwise seek and
use reasonable best efforts to obtain, all Consents, and make all filings with
Governmental Entities, required with respect to the consummation of the Merger.

         5.12 TAX RETURNS. INT'L.com will promptly provide or make available to
Parent copies of all tax returns, reports and information statements that have
been filed or are filed prior to the Closing Date.

         5.13 EXCLUSIVITY; ACQUISITION PROPOSALS. Unless and until this
Agreement will have been terminated by either party pursuant to Article X hereof
and thereafter subject to Section 10.5, INT'L.com will not (and will use its
reasonable best efforts to ensure that none of its officers, directors,
stockholders, agents, representatives or affiliates) take or cause or permit any
Person to take, directly or indirectly, any of the following actions with any
party other than Parent and its designees: (i) solicit, encourage, initiate or
participate in any negotiations, inquiries, or discussions with respect to any
offer or proposal to acquire all or any significant part of INT'L.com's
business, assets or capital stock, whether by merger, consolidation, other
business combination, purchase of assets, tender or exchange offer or otherwise
(each of the foregoing, an "ACQUISITION TRANSACTION"), (ii) disclose, in
connection with an Acquisition Transaction, any information not customarily
disclosed to any Person other than Parent or its representatives concerning
INT'L.com's business or properties or afford to any Person other than Parent or
its representatives access to its properties, books, or records, except in the
ordinary course of business and as required by law or pursuant to a governmental
request for information, (iii) enter into or execute any agreement relating to
an Acquisition Transaction, or (iv) make or authorize any public statement,
recommendation or solicitation in support of any Acquisition Transaction or any
offer or proposal relating to an Acquisition Transaction other than with respect
to the Merger PROVIDED, HOWEVER, that (a) INT'L.com may furnish or cause to be

                                      -29-

<PAGE>

furnished information concerning INT'L.com and its businesses, properties or
assets to a Person, (b) the Company may engage in discussions or negotiations
with such Person, (c) following receipt of a proposal or offer for an
Acquisition Transaction, may make disclosure to its stockholders and may
recommend such proposal or offer to its stockholders and (d) following receipt
of a proposal or offer for an Acquisition Transaction the Board of Directors of
INT'L.com may enter into an agreement in principle or a definitive agreement
with respect to such Acquisition Transaction, but in each case referred to in
the foregoing clauses (a) through (d) only to the extent that the Board of
Directors of INT'L.com shall conclude in good faith after consultation with
outside legal counsel that such action is necessary or appropriate because
failure to take such action would be inconsistent with the fiduciary duties owed
by the Board of Directors to the stockholders of INT'L.com under applicable law;
and PROVIDED, FURTHER, that the Board of Directors of INT'L.com shall not take
any of the foregoing actions referred to in clauses (a) through (d) without
prior written notice to Parent with respect to such action. In the event that
INT'L.com is contacted by any third party expressing an interest in discussing
an Acquisition Transaction, INT'L.com will promptly notify Parent of such
contact and the identity of the party so contacting INT'L.com.

         5.14 NOTICE OF EVENTS. Throughout the period between the date of this
Agreement and the Closing, INT'L.com will promptly advise and consult with
Parent regarding any and all material events and developments concerning its
financial position, results of operations, assets, liabilities or business or
any of the items or matters concerning INT'L.com covered by the representations,
warranties and covenants of INT'L.com contained in this Agreement.

         5.15 REASONABLE BEST EFFORTS. INT'L.com will use its reasonable best
efforts to effectuate the transactions contemplated hereby and to fulfill and
cause to be fulfilled the conditions to Closing under this Agreement.

         5.16 INSURANCE. INT'L.com will use its reasonable best efforts to
maintain in force at the Effective Time policies of insurance of the same
character and coverage as those described in the INT'L.com Disclosure Schedule,
and INT'L.com will promptly notify Parent in writing of any changes in such
insurance coverage occurring prior to the Effective Time.

         5.17 FINANCIAL STATEMENTS. INT'L.com will use its reasonable best
efforts to deliver to Parent audited consolidated balance sheets as of December
31, 1997, December 31, 1998 and December 31, 1999 and audited consolidated
statements of income and consolidated cash flows for the twelve months ended
December 31, 1997, December 31, 1998 and December 31, 1999 no later than
February 28, 2000.

         5.18 CONFIDENTIALITY AND ASSIGNMENT OF INVENTIONS AGREEMENTS. INTL.com
shall use its reasonable best efforts to cause each officer and employee of
INT'L.com and its Subsidiaries to enter into a confidentiality and assignment of
inventions agreement substantially in the form of such agreement used by Parent
and its Subsidiaries in the country in which such officer or employee performs
services for INT'L.com. Any officer or employee of INT'L.com or any Subsidiary
who has not entered into such agreement shall have been terminated by INTL.com
or such Subsidiary prior to the Closing.

                                   ARTICLE VI

                               COVENANTS OF PARENT

         During the period from the date of this Agreement and continuing until
the earlier of the termination of this Agreement or the Effective Time (or later
where so indicated), Parent and Merger Sub agree (except as expressly
contemplated by this Agreement or with INT'L.com's prior written consent):

         6.1 BREACH OF REPRESENTATIONS AND WARRANTIES. Neither Parent nor Merger
Sub will take any action which would cause or constitute a breach of any of the
representations and warranties set forth in Article IV or which would cause any
of such representations and warranties to be inaccurate in any material respect.
In the event of, and promptly after becoming aware of, the occurrence of or the
pending or threatened occurrence of any event which would cause or constitute
such a breach or inaccuracy, Parent

                                      -30-

<PAGE>

will give detailed notice thereof to INT'L.com and will use its reasonable best
efforts to prevent or remedy promptly such breach or inaccuracy.

         6.2 ADDITIONAL INFORMATION; ACCESS. Parent will provide INT'L.com and
its stockholders with the information relating to Parent referred to in Section
4.5 and the information relating to Parent to be included in the Form S-4. In
addition, Parent will afford to INT'L.com and to its counsel and to the persons
expected to become stockholders of Parent pursuant to the Merger access
throughout the period prior to the Effective Time to its senior management and
all other information concerning Parent as INT'L.com or such stockholder may
reasonably request. Such stockholders will also be afforded the opportunity to
ask questions and to receive accurate and complete answers from Parent
concerning the terms and conditions of the Merger and the issuance of the Parent
Merger Shares pursuant thereto.

         6.3 CONSENTS. Parent will promptly apply for or otherwise seek, and use
its reasonable best efforts to obtain, all consents and approvals, and make all
filings, required with respect to the consummation of the Merger.

         6.4 REASONABLE BEST EFFORTS. Each of Parent and Merger Sub will use its
reasonable best efforts to effectuate the transactions contemplated hereby and
to fulfill and cause to be fulfilled the conditions to Closing under this
Agreement.

         6.5 OFFICERS AND DIRECTORS. Parent agrees that all rights to
indemnification and all limitations on liability existing on the date hereof in
favor of, or for the benefit of, the present or former officers and directors of
INT'L.com and its Subsidiaries with respect to actions taken in their capacities
as directors or officers of INT'L.com or such INT'L.com Subsidiary prior to the
Effective Time as provided in the Charter Documents of INT'L.com will survive
the Merger and continue in full force and effect following the Effective Time
and will not be modified by Parent. Notwithstanding the foregoing, the
provisions of such Charter Documents will have no effect on the obligations of
any stockholders of INT'L.com pursuant to Article IX of this Agreement or the
Escrow Agreement.

         6.6 NASDAQ NATIONAL MARKET LISTING. Parent will promptly prepare and
submit a NASDAQ listing application and will use its reasonable best efforts to
cause the Parent Merger Shares to be authorized for trading on the Nasdaq
National Market as soon as practicable.

         6.7 NOTICE OF EVENTS. Throughout the period between the date of this
Agreement and the Closing, Parent will promptly advise and consult with
INT'L.com regarding any and all material adverse change to the representations,
warranties and covenants of Parent and Merger Sub contained in this Agreement
and will disclose to INT'L.com all material strategic and financing transactions
which Parent takes action in furtherance of which involve Parent or any Parent
Subsidiary.

         6.8 THIRD PARTY BENEFICIARIES. Section 6.5 will survive the
consummation of the Merger, is intended to benefit the stockholders of INT'L.com
that receive Parent Merger Shares (the "NEW PARENT Stockholders") and the
present and former officers and directors of INT'L.com and its Subsidiaries,
will be binding on Parent and its successors and assigns, and will be
enforceable by the officers and directors of INT'L.com and the New Parent
Stockholders.

         6.9 DIRECTORS OF PARENT. Prior to the date of the mailing of the Proxy
Statement, Parent shall nominate Roger Jeanty to serve as a director of Parent
in accordance with the policies for directors of Parent, and Parent shall take
such action as is necessary to cause such person to become a director of Parent
effective as of the Effective Time.

                                      -31-

<PAGE>

                                   ARTICLE VII

                              ADDITIONAL AGREEMENTS

         In addition to the foregoing, Parent, Merger Sub, and INT'L.com each
agree to take the following actions after the execution of this Agreement.

         7.1 PREPARATION OF THE FORM S-4 AND THE PROXY STATEMENT;
STOCKHOLDERS MEETING . (a) INT'L.com shall use its reasonable best efforts to
hold one or more special meetings of stockholders in accordance with the
applicable requirements of the DGCL and to obtain the INT'L.com Requisite
Stockholder Approval to enable the Merger to be effective on the Closing Date
(determined without regard to the condition to closing in Section 8.2(h)).
Parent shall use its reasonable best efforts to hold one or more special
meetings of stockholders to obtain the approval of the issuance of its shares
in connection with the Merger by the stockholders of Parent as required by
the rules of the Nasdaq Stock Market and in accordance with the applicable
requirements of the DCGL. In connection with obtaining the approval of its
stockholders, Parent shall prepare, with the assistance and cooperation of
INT'L.com, a Registration Statement on Form S-4 (the "Form S-4"). The Form
S-4 shall constitute a joint proxy and a prospectus and shall be used for
purposes of offering the Parent Merger Shares to the stockholders of
INT'L.com, soliciting proxies from such stockholders for the purpose of
obtaining the INT'L.com Requisite Stockholder Approval and soliciting proxies
from stockholders of Parent for the purposes of obtaining approval of the
issuance of its shares in connection with the Merger by the stockholders of
Parent (such proxy/ prospectus statement, together with the accompanying
letter to stockholders, notice of meeting and form of proxy shall be referred
to herein as the "Proxy Statement"). INT'L.com agrees to fully cooperate with
Parent in the preparation of the Form S-4, and shall, upon request, furnish
Parent with all information concerning it and its affiliates, directors,
officers and stockholders as Parent may reasonably request in connection with
the preparation of the Form S-4. INT'L.com shall prepare the portions of the
Form S-4, relating to INT'L.com and its subsidiaries including but not
limited to financial information, management of INT'L.com, description of
INT'L.com's business, executive compensation of the INT'L.com, the
recommendation of INT'L.com's Board of Directors, appraisal rights, risk
factors relating to INT'L.com, and INT'L.com portions of background of the
Merger, reasons for the Merger, interests of certain persons in the Merger
and security ownership of certain beneficial owners and management. INT'L.com
shall also prepare the disclosure concerning all payments which in the
absence of stockholder approval would be "Parachute Payments" as defined in
Code Section 280G(b)(2), which shall be in form and substance satisfactory to
Parent and its counsel, to satisfy all requirements applicable to INT'L.com
of applicable state and federal securities laws, the DGCL and Code Section
280G(b)(5)(B) and the regulations thereunder. No filing of, or amendment or
supplement to, the Form S-4 will be made by Parent and no amendment or
supplement to the Proxy Statement will be made by Parent or INT'L.com without
providing the other party the opportunity to review and comment thereon.
Parent will advise INT'L.com, promptly after it receives notice thereof, of
the time when the Form S-4 has become effective or any supplement or
amendment has been filed, the issuance of any stop order, the suspension of
the qualification of the Parent Merger Shares for offering or sale in any
jurisdiction, or any request by the Commission for amendment of the Proxy
Statement or

                                      -32-

<PAGE>

the Form S-4 or comments thereon and responses thereto or requests by the
Commission for additional information. If at any time prior to the Effective
Time any information relating to Parent or INT'L.com or any of their respective
affiliates, officers or directors, should be discovered by the Parent or
INT'L.com which should be set forth in an amendment or supplement to any of the
Form S-4 or the Proxy Statement, so that any of such documents would not include
any misstatement of a material fact or omit to state any material fact necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading, the party which discovers such information shall
promptly notify the other party hereto and an appropriate amendment or
supplement describing such information shall be promptly filed with the
Commission, and to the extent required by law, disseminated to the stockholders
of Parent and INT'L.com. If the Commission requires a Tax opinion in connection
with the filing of the Form S-4, INT'L.com shall cause Neal, Gerber & Eisenberg,
counsel to INT'L.com, to provide such opinion in the form required by the
Commission. The issuance of such opinion shall be conditioned upon the receipt
by Neal, Gerber & Eisenberg of customary representation letters from each of
INT'L.com and Parent in a form reasonably agreed to by the parties.

                  (b) Parent shall file the Form S-4 with the Commission and
shall, with the assistance of INT'L.com, promptly respond to any comments from
the Commission on the Form S-4 and shall otherwise use its best efforts to have
the Form S-4 declared effective under the Securities Act as promptly
practicable. Promptly following such time as the Form S-4 is declared effective,
INT'L.com shall distribute the Proxy Statement to its stockholders and Parent
shall distribute the Proxy Statement to its stockholders. Parent shall comply
with all applicable provisions of and rules under the Securities Act and the
Exchange Act and state securities laws in the preparation and filing of the S-4
Registration Statement, the offering and issuance of the Parent Merger Shares,
the filing and distribution of the Proxy Statement, the solicitation of proxies
thereunder, and the calling and holding of the special meeting of stockholders
of Parent. Parent shall also ensure that any Form S-4 filed by Parent does not
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading (provided that Parent shall not be responsible for the accuracy and
completeness of information relating to INT'L.com or any of its subsidiaries or
any other information furnished by INT'L.com specifically for inclusion in the
S-4 Registration Statement).

                  (c) INT'L.com shall ensure that the Proxy Statement does not
contain an untrue statement of material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statement made,
under the circumstances under which it is made, not misleading (provided that
INT'L.com shall not be responsible for the accuracy or completeness of any
information relating to Parent or any of its Subsidiaries or furnished by Parent
specifically for inclusion in the Proxy Statement).

                  (d) INT'L.com, acting through its Board of Directors, shall
include in the Proxy Statement the unanimous recommendation of its Board of
Directors eligible to vote on such matters that its stockholders vote in favor
of the adoption of this Agreement and the approval of the Merger.
Notwithstanding the foregoing, the obligation set forth in the foregoing
sentence shall not apply (and the Board of Directors shall be permitted to
modify or withdraw any such recommendation previously made) if the Board of
Directors of INT'L.com concludes in good faith, after consultation with its
outside legal

                                      -33-

<PAGE>

counsel, that fulfilling the obligations in the foregoing sentence would violate
the fiduciary duties of the Board of Directors under applicable law; PROVIDED,
HOWEVER, that nothing shall limit the obligation of INT'L.com to otherwise use
its reasonable best efforts to fulfill all of its obligations under this
Agreement, including without limitation, INT'L.com's obligations under Section
7.1(a) and (c).

                  (e) Parent, acting through its Board of Directors, shall
include in the Proxy Statement the unanimous recommendation of its Board of
Directors eligible to vote on such matters that the stockholders of Parent vote
in favor of the issuance of its shares in connection with the Merger.
Notwithstanding the foregoing, the obligation set forth in the foregoing
sentence shall not apply (and the Board of Directors shall be permitted to
modify or withdraw any such recommendation previously made) if the Board of
Directors of Parent concludes in good faith, after consultation with its outside
legal counsel, that fulfilling the obligations in the foregoing sentence would
violate the fiduciary duties of the Board of Directors under applicable law;
PROVIDED, HOWEVER, that nothing shall limit the obligation of the Parent to
otherwise use its reasonable best efforts to fulfill all of its obligations
under this Agreement, including without limitation, Parent's obligations under
Section 7.1 (a) and (b).

                  (f) All resales of shares of Parent Common Stock by each
INT'L.com Affiliate (as defined in Section 7.8(b)) will be subject to the
restrictions imposed by the third restated registration rights agreement of
Parent (the "REGISTRATION RIGHTS AGREEMENT") in the form attached as EXHIBIT
7.1, which will be entered into by the INT'L.com Affiliates. Parent will be
entitled to place the legends as referred to in the Registration Rights
Agreement on each certificate evidencing any shares of Parent Common Stock to be
received by the INT'L Affiliates pursuant to the terms of this Agreement and to
issue appropriate stop transfer instructions to the transfer agent for shares of
Parent Common Stock consistent with the terms of the Registration Rights
Agreement.

         7.2 LEGAL CONDITIONS TO THE MERGER. Each of Parent, Merger Sub, and
INT'L.com will use all reasonable best efforts to take actions necessary to
comply promptly with all legal requirements which may be imposed on it with
respect to the Merger. Each of Parent, Merger Sub and INT'L.com will use all
reasonable best efforts to take all actions to obtain (and to cooperate with the
other parties in obtaining) any consent required to be obtained or made by
INT'L.com, Merger Sub, or Parent in connection with the Merger, or the taking of
any action contemplated thereby or by this Agreement.

         7.3 EMPLOYEE BENEFITS. Nothing contained herein will, subject to
Section 6.5, be considered as requiring INT'L.com or Parent to continue any
specific plan or benefit, or to confer upon any employee, beneficiary,
dependent, legal representative or collective bargaining agent of such employee
any right or remedy of any nature or kind whatsoever under or by reason of this
Agreement, including without limitation any right to employment or to continued
employment for any specified period, at any specified location or under any
specified job category, except as specifically provided for in an offer letter
or other agreement of employment. It is specifically understood that continued
employment with INT'L.com or employment with Parent is not offered or implied
for any other employees of INT'L.com and any continuation of employment with
INT'L.com after the Closing will be at will except as specifically provided
otherwise in an offer letter or other agreement of employment. Parent agrees
that it will cause Merger Sub to comply with the WARN Act, to the extent
applicable to INT'l.com and its Subsidiaries in connection with actions taken at
and after the Effective Time.

         7.4 EXPENSES. Whether or not the Merger is consummated, all costs and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby and thereby, including investment banking, legal and
accounting expenses, will be paid by the party incurring such expense; PROVIDED,
HOWEVER, that any such expenses incurred by INT'L.com in excess of $400,000
shall be borne by the stockholders of INT'L.com (without regard to Section 9.4)
through the determination of the Modified Share Amount as set forth in Section
2.1(d); PROVIDED, FURTHER, that INT'L.com will itemize any such investment
banking, legal and accounting expenses of INT'L.com prior to Closing and provide
Parent with an invoice and certification from all organizations providing such
services at the Closing in a form reasonably acceptable to Parent; and PROVIDED,
FURTHER, that the provisions of this Section 7.4 shall not be construed to
relieve a party from liability resulting from such party's breach of this
Agreement.

                                      -34-

<PAGE>

         7.5 ADDITIONAL AGREEMENTS. In case at any time after the Effective Time
any further action is reasonably necessary or desirable to carry out the
purposes of this Agreement or to vest the Surviving Corporation with full title
to all properties, assets, rights, approvals, immunities and franchises of
INT'L.com, the proper officers and directors of each corporation which is a
party to this Agreement will take all such necessary action. Without limiting
the foregoing, on or prior to the Closing Date, INT'L.com will deliver to Parent
a properly executed statement satisfying the requirements of Treasury Regulation
Sections 1.897-2(h) and 1.1445-2(c)(3) in a form reasonably acceptable to
Parent.

         7.6 PUBLIC ANNOUNCEMENTS. Neither Parent nor INT'L.com will directly or
indirectly disseminate any press release or other announcement concerning this
Agreement or the transactions contemplated herein to any third party (except to
the directors, officers and employees of the parties to this Agreement whose
direct involvement is necessary for the consummation of the transactions
contemplated under this Agreement, to the attorneys, advisors and accountants of
the parties hereto, or except as Parent determines in good faith to be required
by applicable law after consultation with INT'L.com) without the prior written
agreement of the other parties.

         7.7 CONFIDENTIALITY. INT'L.com and Parent have entered into a Mutual
Nondisclosure Agreement dated October 7, 1999 concerning each party's
obligations to protect the confidential information of the other party.
INT'L.com and Parent each hereby affirm each of their obligations under such
agreement. If this Agreement is terminated in accordance with Article X hereof,
Parent will, and will cause its accountants, counsel and other representatives
to deliver to INT'L.com all documents and other material, and all copies
thereof, obtained by Parent or on its behalf from INT'L.com in connection with
this Agreement, whether so obtained before or after the execution hereof, and
will not disclose any such information or documents to any third parties or make
any use of such. If this Agreement is terminated in accordance with Article X
hereof, INT'L.com will, and will cause its accountants, counsel and other
representatives to, deliver to Parent all documents and other material, and all
copies thereof, obtained by INT'L.com or by an officer, director or
representative of INT'L.com from Parent in connection with this Agreement,
whether so obtained before or after the execution hereof, and will not disclose
any such information or documents to any third parties or make any use of such.

         7.8       POOLING.

                  (a) Parent, the Merger Sub and INT'L.com will use all
reasonable best efforts, will cooperate fully and will take all actions as are
reasonably necessary to allow the Merger and other transactions contemplated by
this Agreement to be accounted for as a "pooling of interests" in accordance
with United States generally accepted accounting principles and applicable rules
and regulations of the Commission.

                  (b) INT'L.com has delivered to Parent prior to the date of
this Agreement a letter from INT'L.com, prepared after consultation with its
counsel, that identifies all persons it believes may be "affiliates" of
INT'L.com, as such term is used in Rule 145 under the Securities Act and
applicable accounting pronouncements of the Commission (each such Person, an
"INT'L.COM AFFILIATE"). Each such INT'L.com Affiliate has executed and delivered
to Parent a written agreement (an "INT'L.COM AFFILIATE AGREEMENT") in the form
of EXHIBIT 7.8(B) hereto to the effect that such INT'L.com Affiliate (i) has not
made and will not make any disposition of any shares of INT'L.com Common Stock
or INT'L.com Preferred Stock or other securities of INT'L.com in the 30-day
period prior to the Effective Time, and (ii) will not make any disposition of
any of the Parent Merger Shares to be received by such Person after the
Effective Time until Parent shall have publicly released a report including the
combined financial results of Parent and INT'L.com for a period of at least 30
days of combined operations of Parent and INT'L.com.

                  (c) Section 7.8(c) of the Parent Disclosure Schedule
identifies each executive officer and director of Parent (each such Person, a
"PARENT AFFILIATE"). Each such Parent Affiliate has executed and delivered to
INT'L.com a written agreement (a "Parent AFFILIATE AGREEMENT") in the form of
EXHIBIT 7.8(C) hereto to the effect that such Parent Affiliate (i) has not made
and will not make any disposition of any shares of Parent Common Stock in the
30-day period prior to the Effective Time, and (ii)

                                      -35-

<PAGE>

will not make any disposition of any shares of Parent Common Stock owned by such
person until Parent shall have publicly released a report including the combined
financial results of Parent and INT'L.com for a period of at least 30 days of
combined operations of Parent and INT'L.com.

         7.9 INT'L.COM VOTING AGREEMENT. Simultaneous with the execution of this
Agreement, INT'L.com will cause the voting agreement in the form attached as
EXHIBIT 7.9 (the "INT'L.COM VOTING AGREEMENT") to be executed by all directors,
officers, affiliates and holders of 5% of the capital stock of INT'L.com and
their affiliates holding in the aggregate at least 60% of the Outstanding
INT'L.com Shares and at least 80% of each of the Outstanding INT'L.com Series C
Shares and the Outstanding INT'L.com Series D Shares, and to be delivered to
Parent.

         7.10 PARENT VOTING AGREEMENT. Simultaneous with the execution of this
Agreement, Parent will cause the voting agreement in the form attached as
EXHIBIT 7.10 (the "PARENT VOTING AGREEMENT") to be executed by all directors and
officers of Parent and their affiliates holding in the aggregate at least 60% of
the Parent shares of Parent Common Stock outstanding on the date hereof, and to
be delivered to INT'L.com.

         7.11 HART-SCOTT-RODINO FILING. If and to the extent applicable, Parent
and INT'L.com agree to file, and to cause any other Person obligated to do so as
a result of such person's stock holdings in Parent or INT'L.com, a Notification
and Report Form in accordance with the notification requirements of the
Hart-Scott-Rodino Antitrust Improvements Act of 1976 and the rules and
regulations thereunder (collectively, the "HSR ACT") with the Antitrust Division
of the United States Department of Justice and the Federal Trade Commission and
to use its and their reasonable best efforts to achieve the prompt termination
or expiration of the waiting period or any extension thereof provided for under
the HSR Act as a prerequisite to the consummation of the transactions provided
for herein.

         7.12 BOARD OF DIRECTORS MEETINGS. After the Closing of the Merger, for
as long as Cornerstone Equity Investors IV, L.P. holds at least one-half of the
Parent Merger Shares issued to them in connection with the Merger, Parent shall
permit one (1) representative of Cornerstone Equity Investors IV, L.P. (the
"CORNERSTONE OBSERVER") to attend, in a non-voting observer capacity, each
meeting of the Board of Directors of Parent and each meeting of any committee
thereof and to participate in all discussions during each such meeting. Parent
shall send to the Cornerstone Observer notice of the time and place of any such
meeting, in the same manner and at the same time as notice is sent to its
directors. Parent shall also provide to the Cornerstone Observer copies of all
notices, reports, minutes, contracts and other documents, at the time and in the
same manner as such documents are provided to the Board of Directors of Parent,
unless the Board of Directors or management of Parent shall determine that
delivery of such notice and/or materials to the Cornerstone Observer may be
detrimental to Parent. Upon the request of the Board of Directors of the
Company, the Cornerstone Observer will excuse himself from any portion of Board
or committee meetings if the Board of Directors shall determine that the
Cornerstone Observer's presence may violate the attorney-client privilege or may
create a conflict of interest or may be otherwise detrimental to Parent. Any
materials furnished to the Cornerstone Observer and the discussions and
presentations in connection with or at any meeting shall be considered
confidential information and the Cornerstone Observer will keep such materials
and discussions confidential and will not disclose or divulge such materials and
discussions to any third party.

         7.13 EMPLOYMENT, CONSULTING AND NONCOMPETITION AGREEMENTS. Simultaneous
with the execution of this Agreement, INT'L.com will cause each of Roger Jeanty
[, Steven Fingerhood] and Jonathan Clark to execute employment or consulting
and/or non-competition agreements with Parent to become effective at the
Effective Time in the form provided by Parent to INT'L.com.

         7.14 INT'L.COM CONVERSION. Simultaneous with the execution of this
Agreement, INT'L.com will cause the conversion notice in the form attached as
EXHIBIT 7.14 to be executed by the holders of INT'L.com Series A Preferred Stock
who, together with the parties executing an INT'L.com Voting Agreement, hold at
least 51% of the outstanding shares of INT'L.com Series A Preferred Stock and by
the holders of INT'L.com Series B Preferred Stock who, together with the parties
executing an INT'L.com Voting Agreement, hold at least 51% of the outstanding
shares of INT'L.com Series B Preferred Stock,

                                      -36-

<PAGE>

INT'L.com shall cause such notices to be delivered to Parent. INT'L.com hereby
elects that all outstanding shares of INT'L.com Series A Preferred Stock and all
of the outstanding shares of INT'L.com Series B Preferred Stock be converted to
shares of INT'L.com Series A Common Stock immediately prior to the Effective
Time.

         7.15 Debt Adjustments. In the event INT'L.com or its Subsidiaries shall
breach the covenants in Section 5.6 hereof, the aggregate amount of all breaches
of such Section 5.6 shall be deemed to be the "Debt Adjustment Amount" for
purposes of this Agreement. "Debt Payment Shares" shall mean a number of shares
of Parent Common Stock determined by dividing the Debt Adjustment Amount plus
any accrued interest on such amount as of the Closing by the Parent Average
Closing Price.

                                  ARTICLE VIII

                              CONDITIONS PRECEDENT

         8.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER. The
respective obligations of each party to effect the Merger will be subject to the
satisfaction prior to the Closing Date of the following conditions unless
waived:

                  (a) GOVERNMENTAL APPROVALS. Other than the filing of the
Merger Documents with the Secretary of State of Delaware, all statutory
requirements and all Consents of Governmental Entities legally required for the
consummation of the Merger and the transactions contemplated by this Agreement
will have been filed, occurred, or been obtained, other than such Consents for
which the failure to obtain would not have a material adverse effect on the
consummation of the Merger or the other transactions contemplated hereby or on
the Business Condition of Parent or INT'L.com. If and to the extent applicable,
the filing and waiting period requirements under the HSR Act will have been
complied with and will have expired or terminated.

                  (b) NO RESTRAINTS. No statute, rule or regulation, and no
final and nonappealable order, decree or injunction will have been enacted,
entered, promulgated or enforced by any court or Governmental Entity of
competent jurisdiction which enjoins or prohibits the consummation of the
Merger.

                  (c) PARENT STOCKHOLDER APPROVAL. The issuances of the shares
of Parent Common Stock in connection with the Merger will have been approved by
the requisite vote of the stockholders of Parent.

                  (d) QUOTATION. The shares of Parent Common Stock issuable to
INT'L.com's stockholders as contemplated by this Agreement shall have been
approved for quotation on the Nasdaq National Market, subject to official notice
of issuance.

                  (e) FORM S-4. The Form S-4 shall have become effective under
the Securities Act and shall not be the subject of any stop order or proceedings
seeking a stop order.

                  (f) PARENT POOLING LETTER. Parent will have received a letter
dated immediately prior to the Closing Date from PricewaterhouseCoopers LLP,
Parent's independent accountants, to the effect that such firm concurs with
Parent's management that no conditions exist that would preclude Parent from
accounting for the Merger as a "pooling of interests" in accordance with United
States generally accepted accounting principles and applicable rules and
regulations of the Commission and Parent shall have delivered a copy of such
letter to INT'L.com.

                  (g) INT'L.COM POOLING LETTER. Arthur Andersen LLP shall have
delivered to INT'L.com a letter dated immediately prior to the Closing Date to
the effect that INT'L.com is "poolable" for accounting purposes under Accounting
Principles Board Opinion No. 16, United States generally accepted accounting
principles and applicable rules and regulations of the Commission and INT'L.com
shall have delivered a copy of such letter to Parent.

                                      -37-

<PAGE>

         8.2 CONDITIONS OF OBLIGATIONS OF PARENT AND MERGER SUB. The obligations
of Parent and Merger Sub to effect the Merger are subject to the satisfaction of
the following conditions unless waived by Parent and Merger Sub:

                  (a) REPRESENTATIONS AND WARRANTIES OF INT'L.COM. The
representations and warranties of INT'L.com set forth in this Agreement will be
true and correct in all material respects as of the date of this Agreement and
as of the Closing Date as though made on and as of the Closing Date, except (i)
as otherwise contemplated by this Agreement, (ii) as a result of actions taken
or not taken pursuant to this Agreement or at the direction of or after
consultation with and written concurrence of Parent, (iii) for representations
and warranties specifically limited to an earlier date(s) and (iv) for breaches
which, individually or in the aggregate, would not have a material adverse
effect on the Business Condition of INT'L.com. Parent will have received a
certificate signed by the chief executive officer and the chief financial
officer of INT'L.com to such effect on the Closing Date.

                  (b) PERFORMANCE OF OBLIGATIONS OF INT'L.COM. INT'L.com will
have performed all agreements and covenants required to be performed by it under
this Agreement prior to the Closing Date except (i) as otherwise contemplated or
permitted by this Agreement, (ii) as a result of actions taken or not taken at
the direction of or after consultation with and written concurrence of Parent
and (iii) for such failures to perform which, individually or in the aggregate,
would not have a material adverse effect on the Business Condition of INT'L.com;
provided, that INT'L.com hereby acknowledges and agrees that any breaches of the
covenants set forth in Section 5.6 hereof which individually or in the aggregate
exceed $3,000,000 will be deemed for purposes of this Section 8.2(b) to have a
material adverse effect on the Business Condition of INT'L.com. Parent will have
received a certificate signed by the chief executive officer and the chief
financial officer of INT'L.com to such effect on the Closing Date.

                  (c) ESCROW AGREEMENTS. Parent will have received from
INT'L.com and the Indemnification Representative a duly executed Escrow
Agreement.

                  (d) LEGAL ACTION. There will not be pending or threatened in
writing any action, proceeding or other application before any court or
Governmental Entity brought by any Person or Governmental Entity: (i)
challenging or seeking to prohibit the consummation of the transactions
contemplated by this Agreement; or (ii) seeking to prohibit or impose any
limitations on Parent's ownership or operation of all or any portion of
INT'L.com's business or assets, or to compel Parent to dispose of or hold
separate all or any portion of its or INT'L.com's business or assets as a result
of the transactions contemplated by the Agreement which, in any such case
described in this clause (ii), if successful would have a material adverse
effect on the Business Condition of INT'L.com.

                  (e) OPINION OF COUNSEL. Parent will have received an opinion
dated as of the Closing Date of Neal, Gerber & Eisenberg, counsel to INT'L.com,
covering the matters set forth in EXHIBIT 8.2.

                  (f) CONSENTS. Parent will have received duly executed copies
of all Consents specified in Section 3.4 of the INT'L.com Disclosure Schedule
except where the failure to receive any such Consent either individually or
together with all other failures to receive a Consent would not have a material
adverse effect on the Business Condition of INT'L.com, and there will not be any
Consents which are required to be disclosed in INT'L.com Disclosure Schedule
which have not been so disclosed, and have not been received, if the failure to
receive such Consents would have a material adverse effect on the Business
Condition of INT'L.com, in each case except for such thereof as Parent and
INT'L.com will have agreed in writing will not be obtained.

                  (g) TERMINATION OF RIGHTS AND CERTAIN SECURITIES. Any
registration rights, rights of refusal, voting rights, rights to any liquidation
preference or redemption rights relating to any security of INT'L.com will have
been terminated or waived or satisfied as of the Closing.

                                      -38-

<PAGE>

                  (h) STOCKHOLDER APPROVALS. This Agreement and the Merger will
have been approved by stockholders of INT'L.com holding at least ninety percent
(90%) of the voting power of the Outstanding INT'L.com Shares.

                  (i) TERMINATION OF 401K PLAN. The INT'L.com Board of Directors
will have passed and not rescinded resolutions satisfactory to Parent's counsel
effectively terminating INT'L.com's 401(k) Plan immediately prior to the
Closing.

                  (j) CORPORATE PROCEEDINGS SATISFACTORY. All corporate and
other proceedings to be taken by INT'L.com in connection with the transactions
contemplated hereby and all documents incident thereto will be satisfactory in
form and substance to Parent and its counsel, and Parent and its counsel will
have received all such counterpart originals or certified or other copies of
such documents as they reasonably may request.

                  (k) LETTER FROM ARTHUR ANDERSEN. The Parent shall have
received a letter dated as of a date not more than two days prior to the date
that the Form S-4 is declared effective and shall have received a subsequent
similar letter dated as of a date not more than two days prior to the Effective
Time, from Arthur Andersen LLP, auditors for INT'L.com, addressed to Parent in a
customary form reasonably satisfactory to Parent, containing statements and
information of the type ordinarily included in an accountants' "comfort letters"
with respect to the financial statements and financial information of INT'L.com
included in the Form S-4.

                  (l) INT'L.COM NOTES. The INT'L.com Notes will have been
cancelled and be of no further force and effect.

                  (m) REGISTRATION RIGHTS AGREEMENT. Parent will have received
an executed Registration Rights Agreement from the INT'L.com Affiliates.

                  (n) Termination of Certain Agreement and Arrangements. The
agreements and arrangements described in Section 8.2(n) of the INT'L.com
Disclosure Schedule will have been terminated with no liability to INT'L.com and
evidence of such termination will have been delivered to Parent.

         8.3 CONDITIONS OF OBLIGATION OF INT'L.COM. The obligation of INT'L.com
to effect the Merger is subject to the satisfaction of the following conditions
unless waived by INT'L.com:

                  (a) REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB.
The representations and warranties of Parent and Merger Sub set forth in this
Agreement will be true and correct in all material respects as of the date of
this Agreement and as of the Closing Date as though made on and as of the
Closing Date, except (i) as otherwise contemplated by this Agreement, (ii) as a
result of actions taken or not taken pursuant to this Agreement, (iii) for
representations and warranties specifically limited to an earlier date(s) and
(iv) for breaches which, individually or in the aggregate, would not have a
material adverse effect on the Business Condition of Parent. INT'L.com will have
received a certificate signed on behalf of Parent by a duly authorized officer
of Parent to such effect on the Closing Date.

                  (b) PERFORMANCE OF OBLIGATIONS OF PARENT AND MERGER SUB.
Parent and Merger Sub will have performed all agreements and covenants required
to be performed by them under this Agreement prior to the Closing Date except
(i) as otherwise contemplated or permitted by this Agreement, and (ii) for such
failures to perform which, individually or in the aggregate, would not have a
material adverse effect on the Business Condition of Parent. INT'L.com will have
received a certificate signed on behalf of Parent by officers of Parent to such
effect on the Closing Date.

                  (c) OPINION OF PARENT'S COUNSEL. INT'L.com have received an
opinion dated the Closing Date of Testa, Hurwitz & Thibeault, LLP, substantially
in the form attached as EXHIBIT 8.3.

                                      -39-

<PAGE>

                  (d) STOCKHOLDER APPROVAL. This Agreement and the Merger will
have been approved and adopted by the requisite vote of the stockholders of
Merger Sub, as required by the DGCL and Merger Sub's Certificate of
Incorporation (the "Requisite Stockholder Approval").

                  (e) ESCROW AGREEMENT. Parent shall have duly executed and
delivered the Escrow Agreement.

                  (f) TAX-FREE REORGANIZATION. INT'L.com shall have received a
written opinion from Neal, Gerber & Eisenberg to the effect that the Merger
should constitute a reorganization within the meaning of Section 368 of the
Code. In preparing such tax opinion, counsel may rely on reasonable assumptions
and reasonable written representations from Parent and INT'L.com and their
respective officers relating thereto.

                  (g) LEGAL ACTION. There will not be pending or threatened in
writing any action, proceeding or other application before any court or
Governmental Entity brought by any Person or Governmental Entity: (i)
challenging or seeking to prohibit the consummation of the transactions
contemplated by this Agreement or (ii) restricting in any way the receipt,
ownership, or ability to dispose of the consideration to be received by any
stockholder of INT'L.com in the transactions contemplated by this Agreement;
PROVIDED, HOWEVER, that INT'L.com will automatically be deemed to waive this
condition if Parent agrees to indemnify, defend and hold any such named party
harmless against any such action.

                  (h) BOARD OF DIRECTORS. Roger Jeanty shall have been elected
as a member of the Board of Directors of Parent.

                  (i) REGISTRATION RIGHTS AGREEMENT. Parent and any other party
required to execute the Registration Rights Agreement shall have duly executed
and delivered the Registration Rights Agreement to Cornerstone and Dakota.

                                   ARTICLE IX

                                 INDEMNIFICATION

         9.1 INDEMNIFICATION RELATING TO AGREEMENT. Subject to Sections 9.3 and
9.5, as an integral term of the Merger, all stockholders of INT'L.com who accept
the Parent Merger Shares and execute the Escrow Agreement (which is a condition
to receiving such consideration), severally and not jointly, hereby agree to
defend, indemnify and hold Parent harmless from and against, and to reimburse
Parent with respect to, any and all losses, damages, liabilities, claims,
judgments, settlements, fines, costs and expenses (including reasonable
attorneys' fees), determined as provided in Section 9.3 ("INDEMNIFIABLE
AMOUNTS"), of every nature whatsoever incurred by Parent (which will be deemed
to include any of the foregoing incurred by the Surviving Corporation) by reason
of or arising out of or in connection with (i) any breach, or any claim
(including claims by parties other than Parent) that constitutes a breach, by
INT'L.com of any representation or warranty of INT'L.com contained in this
Agreement or in any certificate or other document delivered to Parent pursuant
to this Agreement, other than any breach or related claim in respect of actions
taken or not taken pursuant to this Agreement or at the written direction of or
after consultation with and written concurrence of Parent and (ii) the failure,
partial or total, of INT'L.com or any Subsidiary to perform any agreement or
covenant required by this Agreement to be performed by it or them other than any
breach or related claim in respect of actions taken or not taken pursuant to
this Agreement or at the written direction of or after consultation with and
written concurrence of Parent. The foregoing obligations to indemnify Parent
will be determined without regard to any right to indemnification to which any
Person may have in his or her capacity as an officer, director, employee, agent
or any other capacity of INT'L.com or any Subsidiary, and no stockholder of
INT'L.com will be entitled to any indemnification from INT'L.com or the
Surviving Corporation for amounts paid hereunder. There will be no right of
contribution or subrogation from Parent or the Surviving Corporation for
indemnification payments made by or for the account of the stockholders of
INT'L.com. Notwithstanding any provision in this Agreement

                                      -40-

<PAGE>

to the contrary, Indemnifiable Amounts shall not include (i) any lost profits,
lost revenues or lost business opportunities, or (ii) any amounts which shall
have been recovered by Parent under any insurance policies.

         9.2 THIRD PARTY CLAIMS. With respect to any claims or demands by third
parties as to which Parent may seek indemnification hereunder whenever Parent
will have received a written notice that such a claim or demand has been
asserted or threatened, Parent will promptly notify the "Indemnification
Representative" (as designated in the Escrow Agreement) of such claim or demand
and of the facts within Parent's knowledge that relate thereto. The
Indemnification Representative will then have the right to defend, contest,
negotiate or settle any such claim or demand through counsel of his own
selection, reasonably satisfactory to Parent, and solely at the Indemnification
Representative's own cost and expense, which costs and expenses will be
reimbursed pursuant to the Escrow Agreement. Notwithstanding the preceding
sentence, the Indemnification Representative will not settle, compromise, or
offer to settle or compromise any such claim or demand without the prior written
consent of Parent, which consent will not be unreasonably withheld. Without
limiting Parent's rights to object for other reasons, Parent may object to a
settlement or compromise which includes any provision which in its reasonable
judgment may have an adverse impact on or establish an adverse precedent for the
Business Condition of Parent or any of its Subsidiaries. If the Indemnification
Representative gives notice to Parent within thirty (30) calendar days after
Parent has notified the Indemnification Representative that any such claim or
demand has been made in writing, that the Indemnification Representative elects
to have Parent defend, contest, negotiate, or settle any such claim or demand,
then Parent will have the right to contest and/or settle any such claim or
demand and seek indemnification pursuant to this Article IX as to any
Indemnifiable Amounts; PROVIDED, HOWEVER, that Parent will not settle,
compromise, or offer to settle or compromise any such claim or demand without
the prior written consent (which may include a general or limited consent) of
the Indemnification Representative, which consent will not be unreasonably
withheld. If the Indemnification Representative fails to give written notice to
Parent of his intention to contest or settle any such claim or demand within
thirty (30) calendar days after Parent has notified the Indemnification
Representative that any such claim or demand has been made in writing, or if any
such notice is given but any such claim or demand is not contested by the
Indemnification Representative within a reasonable time thereafter, Parent will
have the right to contest and/or settle any such claim or demand in its sole
discretion and seek indemnification pursuant to this Article IX as to any
Indemnifiable Amounts. The adoption of this Agreement by the stockholders of
INT'L.com will also constitute their approval of the Indemnification
Representative.

         9.3 LIMITATIONS. Notwithstanding any other provision in this Article
IX, Parent will be entitled to indemnification pursuant to this Article IX only
to the extent that the aggregate Indemnifiable Amounts (which shall be
determined for all purposes of this Article IX disregarding any qualification in
any representation or warranty as to "materially" or "material" or "material
adverse effect") exceed Five Hundred Thousand Dollars ($500,000) (the "THRESHOLD
AMOUNT") PROVIDED THAT at such time as the amount to which Parent is entitled to
be indemnified exceeds the Threshold Amount, Parent shall be entitled to be
indemnified up to the full Indemnifiable Amounts including the Threshold Amount.
For purposes of indemnification under this Agreement, each Parent Merger Share
shall at all times be valued at the Parent Average Closing Price. The aggregate
amount to which Parent will be entitled to be indemnified pursuant to this
Article IX will not exceed a dollar amount equal to the value of the aggregate
number of Escrow Shares held in escrow pursuant to the terms of the Escrow
Agreement valued at the Parent Average Closing Price per share , and the
liability of any single stockholder for indemnification obligations pursuant to
this Article IX shall be limited to such stockholder's PRO RATA share of any
Indemnifiable Amounts based on the number of Escrow Shares deposited in escrow
by such stockholder relative to the aggregate number of Escrow Shares and the
aggregate liability of any single stockholder for indemnification obligations
pursuant to this Article IX shall be equal to a dollar amount equal to the
Parent Average Closing Price multiplied by the aggregate number of Escrow Shares
deposited in escrow by such stockholder; PROVIDED, HOWEVER, that there will be
no limitation on the obligations of any person for Indemnifiable Amounts arising
out of criminal activity or fraud by such person, including, without limitation,
any actions in such person's capacity as an employee, officer or director of
INT'L.com or its Subsidiaries, or for any stockholder of INT'L.com for breaches
of any representation or warranty contained in the Letter of Transmittal
delivered by such stockholder.

                                      -41-

<PAGE>

         9.4 BINDING EFFECT. The indemnification obligations contained in this
Article IX are an integral part of this Agreement and the Merger in the absence
of which Parent would not have entered into this Agreement.

         9.5 TIME LIMIT. The representations, warranties, covenants and
agreements of INT'L.com set forth in this Agreement and the certificates and
schedules executed or delivered pursuant to this Agreement will survive the
Closing for one year; PROVIDED, HOWEVER, that claims relating to the
representations and warranties in Sections 3.6(a) and (b) may be made only on or
before the date that Parent publishes audited financial results covering at
least 30 days combined operations of Parent and INT'L.com.

         9.6 SOLE REMEDY. Notwithstanding any other provision in this Agreement
to the contrary, the provisions of this Article IX and the provisions of the
Escrow Agreement will be the sole and exclusive remedy of (and corresponding
liability of any stockholder of INT'L.com, in such stockholder's capacity as
such, to) Parent, Merger Sub and the Surviving Corporation for any damage,
claim, cause of action or right of any nature arising out of or relating to any
breach of representations, warranties, covenants and agreements of INT'L.com set
forth in this Agreement and the certificates and schedules executed or delivered
by it pursuant to this Agreement.

                                    ARTICLE X

                                   TERMINATION

         10.1 MUTUAL AGREEMENT. This Agreement may be terminated at any time
prior to the Effective Time by the written consent of Parent and INT'L.com.

         10.2 TERMINATION BY PARENT. This Agreement may be terminated by Parent
(PROVIDED THAT it is not then in material breach of any representation,
warranty, covenant or agreement contained in this Agreement) alone, by means of
written notice to INT'L.com, if there has been a material breach by INT'L.com or
any Subsidiary of any representation, warranty, covenant or agreement set forth
in this Agreement or other ancillary agreements, which breach would in Parent's
reasonable opinion render it impossible for INT'L.com to satisfy the closing
conditions contained in Section 8.2 and has not been cured within twenty (20)
business days following receipt by INT'L.com of notice of such breach.

         10.3 TERMINATION BY INT'L.COM. (a) This Agreement may be terminated by
INT'L.com by means of written notice to Parent and payment of the Termination
Fee (as defined below) if it has fulfilled its obligations under Section 7.1(a)
and (c) hereof but has failed to obtain the INT'L.com Requisite Stockholder
Approval. The Termination Fee shall be paid by wire transfer of immediately
available funds to an account designated by Parent and any termination pursuant
to this Section 10.3(a) shall only be effective upon receipt of the Termination
Fee in such account. THE "TERMINATION FEE" SHALL BE A DOLLAR AMOUNT EQUAL TO 5%
OF THE RESULT OF MULTIPLYING (I) THE PARENT AVERAGE CLOSING PRICE BY (II) THE
NUMBER OF PARENT MERGER SHARES THAT WOULD HAVE BEEN ISSUABLE BY PARENT IF THE
CLOSING HAD OCCURRED ON THE DATE OF SUCH TERMINATION, ASSUMING THAT THERE WERE
NO EXCLUDED SHARES, NO SERIES C EXCLUDED SHARES AND NO SERIES D EXCLUDED SHARES
AND THAT ALL OUTSTANDING INT'L.COM OPTIONS WERE EXERCISED IMMEDIATELY PRIOR TO
SUCH DATE.

         (B) This Agreement may also be terminated by INT'L.com (PROVIDED THAT
it is not then in material breach of any representation, warranty, covenant or
agreement contained in this Agreement) alone, by means of written notice to
Parent, if there has been a material breach by Parent or any Subsidiary of any
representation, warranty, covenant or agreement set forth in the Agreement or
other ancillary agreements, which breach would in INT'L.com's reasonable opinion
render it impossible for INT'L.com to satisfy the closing conditions contained
in Section 8.3 and has not been cured within twenty (20) business days following
receipt by Parent of notice of such breach,

         10.4 OUTSIDE DATE. This Agreement may be terminated by Parent alone or
by INT'L.com alone by means of written notice if the Effective Time does not
occur on or prior to June 30, 2000;

                                      -42-

<PAGE>

PROVIDED, HOWEVER, that the right to terminate this Agreement pursuant to the
preceding clause will not be available to any party whose failure to fulfill any
obligation under this Agreement has been a significant cause of, or resulted in,
the failure of the Effective Time to occur on or before such date.

         10.5 EFFECT OF TERMINATION. In the event of termination of this
Agreement by either INT'L.com or Parent as provided in this Article, this
Agreement will forthwith become void and have no effect, and there will be no
liability or obligation on the part of Parent, INT'L.com, Merger Sub or their
respective officers or directors, except that (i) the provisions of Sections
7.4, 7.6, 7.7 and 11.2 will survive any such termination and abandonment, and
(ii) no party will be released or relieved from any liability arising from the
willful breach by such party prior to termination of any of its representations,
warranties, covenants or agreements as set forth in this Agreement.

                                   ARTICLE XI

                                  MISCELLANEOUS

         11.1 ENTIRE AGREEMENT. This Agreement, including the exhibits,
schedules and other agreements delivered pursuant to this Agreement contain all
of the terms and conditions agreed upon by the parties relating to the subject
matter of this Agreement and supersede all prior agreements, negotiations,
correspondence, undertakings and communications of the parties, whether oral or
written, respecting that subject matter.

         11.2 GOVERNING LAW; CONSENT TO JURISDICTION. The Merger and this
Agreement will be governed by the internal laws of the State of Delaware. Legal
proceedings relating to this Agreement, the agreements executed in connection
with this Agreement or the transactions contemplated hereby or thereby may be
commenced only in the state or federal courts in the State of Delaware. Each of
the parties hereby consents to the exclusive jurisdiction of such courts (and of
the appropriate appellate courts) in any such action or proceeding and waives
any objection to venue laid therein. The foregoing provisions will not be
construed to preclude any party from bringing a counter-claim in any action or
proceeding properly commenced in accordance with the foregoing provisions.
Process in any such action or proceeding may be served on any party anywhere in
the world. Notwithstanding the foregoing, any dispute relating to a claim under
the Escrow Agreement will be resolved in accordance with the arbitration
provisions of the Escrow Agreement.

         11.3 NOTICES. All notices, requests, demands or other communications
which are required or may be given pursuant to the terms of this Agreement will
be in writing and will be deemed to have been duly given: (i) on the date of
delivery if personally delivered by hand, (ii) upon the third day after such
notice is deposited in the United States mail, if mailed by registered or
certified mail, postage prepaid, return receipt requested, (iii) upon the date
scheduled for delivery after such notice is sent by a nationally recognized
overnight express courier or (iv) by fax upon written confirmation (including
the automatic confirmation that is received from the recipient's fax machine) of
receipt by the recipient of such notice:

         IF TO PARENT OR MERGER SUB            Lionbridge Technologies, Inc.
         --------------------------            950 Winter Street
                                               Waltham, Massachusetts 02451
                                               Attention: Rory J. Cowan
                                               Telephone No.:  (781) 434-6000
                                               Fax No.: (781) 434-6034

                                      -43-

<PAGE>

                         WITH COPIES TO:

                                           Testa, Hurwitz & Thibeault, LLP
                                           125 High Street
                                           Boston, Massachusetts 02110
                                           Attention: George W. Lloyd, Esq. &
                                                      Kathy A. Fields, Esq.
                                           Telephone No.: (617) 248-7000
                                           Fax No.: (617) 248-7100

 IF TO INT'L.COM:                          INT'L.com, Inc.
 ----------------
                                           492 Old Connecticut Path
                                           Framingham, Massachusetts 01701
                                           Attention:  Chief Executive Officer
                                           Telephone No.: (508) 620-3900
                                           Fax No.: (508) 620-3999

                                           With copies to:

                                           INT'L.com, Inc.
                                           301 Mission Street, Suite 350
                                           San Francisco, CA 94105
                                           Attention:  Steven L. Fingerhood
                                           Telephone No.:  (415) 546-6895
                                           Fax No.: (415) 495-4926

                                           Cornerstone Equity IV, L.P.
                                           717 Fifth Avenue, Suite 1100
                                           New York, NY 10022
                                           Attention:  Michael Najjar
                                           Telephone:  (212) 207-2372
                                           Fax No.:  (212) 826-6798

                                           Dakota/EGI, LLC
                                           c/o Equity Group Investments
                                           Two N. Riverside Plaza
                                           Suite 700
                                           Chicago, IL 60606
                                           Attn:  Alisa Singer, Esq.
                                           Telephone:  (312) 466-3196
                                           Fax No:  (312) 454-0335

                                           Neal, Gerber & Eisenberg
                                           Two North LaSalle Street, Suite 2200
                                           Chicago, IL  60602
                                           Attn:  Jon Wasserman
                                           Telephone No.: (312) 269-8000
                                           Fax No.: (312) 269-1747

         Such addresses may be changed, from time to time, by means of a notice
given in the manner provided in this Section 11.3.

         11.4 SEVERABILITY. If any provision of this Agreement is held to be
unenforceable for any reason, it will be modified rather than voided, if
possible, in order to achieve the intent of the parties to this

                                      -44-

<PAGE>

Agreement to the extent possible. In any event, all other provisions of this
Agreement will be deemed valid and enforceable to the full extent.

         11.5 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties of Parent contained in this Agreement and schedules and
certificates executed or delivered pursuant to this Agreement, will survive the
Effective Time, but any claims for breach thereof may only be made on or before
the first yearly anniversary of the Closing.

         11.6 ASSIGNMENT. No party to this Agreement may assign, by operation of
law or otherwise, all or any portion of its rights, obligations, or liabilities
under this Agreement without the prior written consent of INT'L.com, Merger Sub
and Parent, which consent may be withheld in the absolute discretion of the
party asked to grant such consent. Any attempted assignment by Merger Sub or
Parent, on the one hand, or by INT'L.com, on the other hand, in violation of
this Section 11.6 will be voidable and will entitle INT'L.com or Parent,
respectively, to terminate this Agreement at its option.

         11.7 COUNTERPARTS. This Agreement may be executed in two or more
partially or fully executed counterparts each of which will be deemed an
original and will bind the signatory, but all of which together will constitute
but one and the same instrument. The execution and delivery of a Signature Page
to this Agreement and Plan of Reorganization in the form annexed to this
Agreement, including a facsimile copy of the actual signature, by any party
hereto who will have been furnished the final form of this Agreement will
constitute the execution and delivery of this Agreement by such party.

         11.8 AMENDMENT. This Agreement may not be amended except by an
instrument in writing executed by INT'L.com, Merger Sub and Parent.

         11.9 EXTENSION, WAIVER. At any time prior to the Effective Time, any
party hereto may, to the extent legally allowed and without prejudice to the
rights of any other party: (i) extend the time for the performance of any of the
obligations or other acts of any other party hereto to the party extending such
time, (ii) waive any inaccuracies in the representations and warranties made to
such party contained herein or in any document delivered pursuant hereto, and
(iii) waive compliance with any of the agreements, covenants or conditions for
the benefit of such party contained herein. Any agreement on the part of a party
hereto to any such extension or waiver will be valid only if set forth in an
instrument in writing signed on behalf of such party.

         11.10 INTERPRETATION. When a reference is made in this Agreement to
Sections, Exhibits or Schedules, such reference will be to a Section, Exhibit or
Schedule to this Agreement unless otherwise indicated. The words "include,"
"includes," and "including" when used therein will be deemed in each case to be
followed by the words "without limitation." The table of contents, index to
defined terms, and headings contained in this Agreement are for reference
purposes only and will not affect in any way the meaning or interpretation of
this Agreement.

         11.11 KNOWLEDGE. For purposes of this Agreement, the term "KNOWLEDGE"
(including any derivation thereof such as "know" or "knowing", and similar such
as "aware" and regardless of whether such word starts with an initial capital)
in reference to INT'L.com or any Subsidiary will mean the knowledge of the
directors and executive officers of INT'L.com or such Subsidiary as the case may
be, and in reference to Parent or any Subsidiary will mean the knowledge of the
directors and executive officers of Parent or such Subsidiary as the case may
be.

         11.12 TRANSFER, SALES, DOCUMENTARY, STAMP AND OTHER SIMILAR TAXES. Any
and all transfer, sales, documentary, stamp and other similar Taxes imposed in
connection with the transactions contemplated by this Agreement will be paid by
the stockholder of INT'L.com with respect to which such Tax relates. At Parent's
discretion, the amount paid to any Person pursuant to this Agreement will be
reduced by the amount of Taxes payable by such Person pursuant to this Section
11.12. Any amounts so withheld will be promptly remitted to the appropriate
taxing authority.

                                      -45-

<PAGE>

                                SIGNATURE PAGE TO
                      AGREEMENT AND PLAN OF REORGANIZATION

         IN WITNESS WHEREOF, Parent, Merger Sub and, INT'L.com have executed
this Agreement as of the date first written above.

LIONBRIDGE TECHNOLOGIES, INC.                    INT'L.COM, INC.

By:    /s/ Rory J. Cowan                         By:    /s/ Roger O. Jeanty
   --------------------------------------           ----------------------------
      Rory J. Cowan                              Name:  Roger O. Jeanty
      Chief Executive Officer & President        Title:  Chief Executive Officer

LTI ACQUISITION CORP.

By:    /s/ Rory J. Cowan
   --------------------------------------
      Rory J. Cowan
      Chief Executive Officer & President

                                      -46-<PAGE>

                                                                    Exhibit 10.2

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

                              AMENDED AND RESTATED
                            364-DAY CREDIT AGREEMENT

                                     among

                      VIRGINIA ELECTRIC AND POWER COMPANY

                              The Several Lenders
                        from Time to Time Parties Hereto

                                      and

                           THE CHASE MANHATTAN BANK,
                            as Administrative Agent

                             CHASE SECURITIES INC.,
                       as Lead Arranger and Book Manager

                            Dated as of June 7, 1996
                   as amended and restated as of June 4, 1999

===============================================================================
<PAGE>

                                 TABLE OF CONTENTS

                                                            Page
<TABLE>
<CAPTION>

<S>                                                                   <C>
SECTION 1.  DEFINITIONS.............................................   1
     1.1  Defined Terms.............................................   1
          -------------
     1.2  Other Definitional Provisions.............................  11
          -----------------------------

SECTION 2.  AMOUNT AND TERMS OF THE CREDIT FACILITIES...............  11
     2.1  The Commitments...........................................  11
          ---------------
     2.2  Procedure for Revolving Credit Borrowing..................  12
          ----------------------------------------
     2.3  Facility Fee..............................................  12
          ------------
     2.4  Termination or Reduction of Commitments...................  12
          ---------------------------------------
     2.5  Repayment of Loans; Evidence of Debt......................  12
          ------------------------------------
     2.6  Optional Prepayments......................................  13
          --------------------
     2.7  Conversion and Continuation Options.......................  13
          -----------------------------------
     2.8  Minimum Amounts and Maximum Number of Tranches............  14
          ----------------------------------------------
     2.9  The Competitive Loans.....................................  14
          ---------------------
     2.10  Procedure for and Payment of Competitive Loan Borrowing..  14
           -------------------------------------------------------
     2.11  Interest Rates and Payment Dates.........................  18
           --------------------------------
     2.12  Computation of Interest and Fees.........................  18
           --------------------------------
     2.13  Inability to Determine Interest Rate.....................  19
           ------------------------------------
     2.14  Pro Rata Treatment and Payments..........................  19
           -------------------------------
     2.15  Illegality...............................................  20
           ----------
     2.16  Additional Costs.........................................  20
           ----------------
     2.17  Taxes....................................................  22
           -----
     2.18  Indemnity................................................  24
           ---------
     2.19  Change of Lending Office.................................  25
           ------------------------
     2.20  Replacement of Lenders under Certain Circumstances.......  25
           --------------------------------------------------
     2.21  Extension of Termination Date............................  25
           -----------------------------

SECTION 3.  REPRESENTATIONS AND WARRANTIES..........................  26

     3.1  Financial Condition.......................................  26
          -------------------
     3.2  No Change.................................................  26
          ---------
     3.3  Corporate Existence; Compliance with Law..................  27
          ----------------------------------------
     3.4  Corporate Power; No Legal Bar.............................  27
          -----------------------------
     3.5  Authorization; Enforceability.............................  27
          -----------------------------
     3.6  ERISA.....................................................  27
          -----
     3.7  No Material Litigation....................................  27
          ----------------------
     3.8  Taxes.....................................................  28
          -----
     3.9  Purpose of Loans..........................................  28
          ----------------
     3.10  Year 2000................................................  28
           ---------

SECTION 4.  CONDITIONS PRECEDENT....................................  28
     4.1  Conditions to Initial Loans...............................  28
          ---------------------------
</TABLE>
<PAGE>

<TABLE>

<S>                                                                   <C>
     4.2  Conditions to Each Loan...................................  29
          -----------------------

SECTION 5.  COVENANTS...............................................  30
     5.1  Financial Statements......................................  30
          --------------------
     5.2  Conduct of Business and Compliance........................  31
          ----------------------------------

     5.3  Books and Records.........................................  31
          -----------------
     5.4  Notices...................................................  31
          -------
     5.5  Limitation on Liens.......................................  31
          -------------------
     5.6  Limitation on Fundamental Changes.........................  31
          ---------------------------------
     5.7  Limitation on Guarantee Obligations.......................  32
          -----------------------------------
     5.8  Maintenance of Net Worth..................................  32
          ------------------------

SECTION 6.  EVENTS OF DEFAULT.......................................  32

SECTION 7.  THE ADMINISTRATIVE AGENT................................  34
     7.1  Appointment...............................................  34
          -----------
     7.2  Delegation of Duties......................................  35
          --------------------
     7.3  Exculpatory Provisions....................................  35
          ----------------------
     7.4  Reliance by Administrative Agent..........................  35
          --------------------------------
     7.5  Notice of Default.........................................  35
          -----------------
     7.6  Non-Reliance on Administrative Agent and Other Lenders....  36
          ------------------------------------------------------
     7.7  Indemnification...........................................  36
          ---------------
     7.8  Administrative Agent in Its Individual Capacity...........  37
          -----------------------------------------------
     7.9  Successor Administrative Agent............................  37
          ------------------------------

SECTION 8.  MISCELLANEOUS...........................................  37
     8.1  Amendments and Waivers....................................  37
          ----------------------
     8.2  Notices...................................................  37
          -------
     8.3  No Waiver; Cumulative Remedies............................  38
          ------------------------------
     8.4  Survival..................................................  38
          --------
     8.5  Payment of Expenses.......................................  38
          -------------------
     8.6  Transfer Provisions.......................................  39
          -------------------
     8.7  Adjustments...............................................  41
          -----------
     8.8  Counterparts..............................................  41
          ------------
     8.9  Severability..............................................  41
          ------------
     8.10  Integration..............................................  41
           -----------

     8.11  GOVERNING LAW............................................  41
           -------------
     8.12  WAIVERS OF JURY TRIAL....................................  41
           ---------------------
     8.13  Confidentiality..........................................  42
           ---------------
</TABLE>
<PAGE>

SCHEDULES

I    Facility Fee/Applicable Margin
II   Permitted Guarantee Obligations

EXHIBITS

A-1  Form of Revolving Credit Note
A-2  Form of Competitive Loan Note
B-1  Form of Competitive Loan Confirmation
B-2  Form of Competitive Loan Offer
B-3  Form of Competitive Loan Request
C    Form of Closing Certificate
D-1  Form of Legal Opinion of Borrower's Counsel
D-2  Form of Legal Opinion of Simpson Thacher & Bartlett
E    Form of Assignment and Acceptance
<PAGE>

          364-DAY CREDIT AGREEMENT, dated as of June 7, 1996, as amended and
restated as of June 4, 1999, among VIRGINIA ELECTRIC AND POWER COMPANY, a
Virginia public service corporation (the "Borrower"), the several banks and
                                          --------
other financial institutions from time to time parties to this Agreement (the
"Lenders") and The Chase Manhattan Bank, a New York banking corporation, as
 -------
administrative agent for the Lenders hereunder (in such capacity, the
"Administrative Agent").
 --------------------

                                 INTRODUCTORY STATEMENT

          The Borrower, certain of the Lenders, certain other banks and
financial institutions and the Administrative Agent are parties to the 364-Day
Credit Agreement, dated as of June 7, 1996, as such has been extended through
June 4, 1999 (the "Existing Credit Agreement").
                   -------------------------

          The Borrower has requested that the Termination Date (as defined in
the Existing Credit Agreement) be extended to June 2, 2000 and certain other
amendments to the Existing Credit Agreement.

          The Borrower, the Lenders and the Administrative Agent desire to amend
and restate the Existing Credit Agreement pursuant to this Agreement.

          Accordingly, the parties hereto hereby agree that on the Effective
Date the Existing Credit Agreement shall be amended and restated in its entirety
as follows:

                                 SECTION 1.  DEFINITIONS

          0.1 Defined Terms.  As used in this Agreement, the following terms
              -------------
shall have the following meanings:

          "ABR":  for any day, a rate per annum (rounded upwards, if necessary,
           ---
     to the next 1/16 of 1%) equal to the greater of (a) the Prime Rate in
     effect on such day and (b) the Federal Funds Effective Rate in effect on
     such day plus 1/2 of 1%. Any change in the ABR due to a change in the Prime
     Rate or the Federal Funds Effective Rate shall be effective as of the
     opening of business on the effective day of such change in the Prime Rate
     or the Federal Funds Effective Rate.

          "ABR Loans":  Revolving Credit Loans the rate of interest applicable
           ---------
     to which is the ABR.

          "Additional Costs":  as defined in subsection 2.16(a).
           ----------------

          "Affiliate":  as to any Person, any other Person which, directly or
           ---------
     indirectly, is in control of, is controlled by, or is under common control
     with, such Person.  For purposes of this definition, "control" of a Person
     means the power, directly or indirectly, either to
<PAGE>

     (a) vote 10% or more of the securities having ordinary voting power for the
     election of directors of such Person or (b) direct or cause the direction
     of the management and policies of such Person, whether by contract or
     otherwise.

          "Agreement":  this 364-Day Credit Agreement, as amended, supplemented
           ---------
     or otherwise modified from time to time.

          "Applicable Lending Office":  each Lender's lending office designated
           -------------------------
     on such Lender's signature page hereto or such other office of such Lender
     notified to the Administrative Agent and Borrower.

          "Applicable Margin":  the rate per annum set forth in Schedule I under
           -----------------
     the applicable S&P Bond Rating and Moody's Bond Rating.

          "Assignee":  as defined in subsection 8.6(c).
           --------

          "Board":  the Board of Governors of the Federal Reserve System (or any
           -----
     successor).

          "Borrowing Date":  any Business Day specified in a notice given by the
           --------------
     Borrower pursuant to subsection 2.2 or 2.10 as a date on which the Loans
     are to be made hereunder.

          "Business Day":  a day other than a Saturday, Sunday or other day on
           ------------
     which commercial banks in New York City are authorized or required by law
     to close, except that, when used in connection with a LIBOR Loan or LIBOR
     Competitive Loan, the term "Business Day" shall mean any Business Day on
     which dealings in foreign currencies and exchange between banks may be
     carried on in London, England and New York, New York.

          "CD Assessment Rate":  for any day as applied to any CD Rate Loan, the
           ------------------
     annual assessment rate in effect on such day which is payable by a member
     of the Bank Insurance Fund maintained by the Federal Deposit Insurance
     Corporation (the "FDIC") classified as well-capitalized and within
                       ----
     supervisory subgroup "B" (or a comparable successor assessment risk
     classification) within the meaning of 12 C.F.R. (S) 327.4(a) (or any
     successor provision) to the FDIC (or any successor) for the FDIC's (or such
     successor's) insuring time deposits at offices of such institution in the
     United States.

          "CD Base Rate":  with respect to each day during each Interest Period
           ------------
     pertaining to a CD Rate Loan, the rate of interest per annum determined by
     the Agent to be the rate notified to the Agent by Chase as the average rate
     bid at 9:00 A.M., New York City time, or as soon thereafter as practicable,
     on the first day of such Interest Period by a total of three certificate of
     deposit dealers of recognized standing selected by Chase for the purchase
     at face value from Chase of its certificates of deposit in an amount
     comparable to the CD Rate Loan of Chase to which such Interest Period
     applies and having a maturity comparable to such Interest Period.
<PAGE>

          "CD Rate":  with respect to each day during each Interest Period
           -------
     pertaining to a CD Rate Loan, a rate per annum determined for such day in
     accordance with the following formula (rounded upward to the nearest
     1/100th of 1%):

                        CD Base Rate          + CD Assessment Rate
                 ----------------------------
                 1.00 - CD Reserve Percentage

          "CD Rate Loans":  Loans the rate of interest applicable to which is
           -------------
     based upon the CD Rate.

          "CD Reserve Percentage":  for any day as applied to any CD Rate Loan,
           ---------------------
     that percentage (expressed as a decimal) which is in effect on such day, as
     prescribed by the Board, for determining the maximum reserve requirement
     for a Depositary Institution (as defined in Regulation D of the Board) in
     respect of new non-personal time deposits in Dollars having a maturity
     comparable to the Interest Period for such CD Rate Loan.

          "Chase":  The Chase Manhattan Bank.
           -----

          "Closing Date":  the date on which the conditions precedent set forth
           ------------
     in subsection 4.1 shall be satisfied or waived in accordance with
     subsection 8.1.

          "Code":  the Internal Revenue Code of 1986, as amended from time to
           ----
     time.

          "Commitment":  as to any Lender, the obligation of such Lender to make
           ----------
     Revolving Credit Loans in an aggregate principal amount at any one time
     outstanding not to exceed the amount set forth on such Lender's signature
     page hereto, as such amount may be changed from time to time in accordance
     with this Agreement.

          "Commitment Percentage":  as to any Lender at any time, the percentage
           ---------------------
     which such Lender's Commitment then constitutes of the aggregate
     Commitments (or, at any time after the Commitments shall have expired or
     terminated, the percentage which the aggregate principal amount of such
     Lender's Loans then outstanding constitutes of the aggregate principal
     amount of the Loans then outstanding).

          "Commitment Period":  the period from and including the Effective Date
           -----------------
     to but not including the Termination Date or such earlier date on which the
     Commitments shall terminate as provided herein.

          "Commonly Controlled Entity":  an entity, whether or not incorporated,
           --------------------------
     which is under common control with the Borrower within the meaning of
     Section 4001 of ERISA or is part of a group which includes the Borrower and
     which is treated as a single employer under Section 414 of the Code.
<PAGE>

          "Competitive Loan Confirmation":  each confirmation by the Borrower of
           -----------------------------
     its acceptance of Competitive Loan Offers, which Competitive Loan
     Confirmation shall be substantially in the form of Exhibit B-1 and shall be
     delivered to the Administrative Agent in writing or by facsimile
     transmission.

          "Competitive Loan Lender":  each Lender that has agreed to offer to
           -----------------------
     make Competitive Loans hereunder and each other Lender that shall hereafter
     become a Competitive Loan Lender in accordance with the provisions of
     subsection 8.6.

          "Competitive Loan Maturity Date":  as to any Competitive Loan, the
           ------------------------------
     date specified by the Borrower pursuant to subsection 2.10(d)(ii) in its
     acceptance of the related Competitive Loan Offer.

          "Competitive Loan Note":  as defined in subsection 2.10(i).
           ---------------------

          "Competitive Loan Offer":  each offer by a Competitive Loan Lender to
           ----------------------
     make Competitive Loans pursuant to a Competitive Loan Request, which
     Competitive Loan Offer shall contain the information specified in Exhibit
     B-2 and shall be delivered to the Administrative Agent by telephone,
     immediately confirmed by facsimile transmission.

          "Competitive Loan Request":  each request by the Borrower for
           ------------------------
     Competitive Loans, which request shall contain the information specified in
     Exhibit B-3 and shall be delivered to the Administrative Agent in writing
     or by facsimile transmission, or by telephone, immediately confirmed by
     facsimile transmission.

          "Competitive Loan":  each loan made pursuant to subsection 2.9.
           ----------------

          "Consolidated Net Worth":  as of the date of determination, all items
           ----------------------
     which in conformity with GAAP would be included under stockholders' equity
     on a consolidated balance sheet of the Borrower and its consolidated
     Subsidiaries, if any, at such date, including preferred stock issued by the
     Borrower.

          "Decision Date":  as defined in subsection 2.21(b).
           -------------

          "Default":  any of the events specified in Section 6, whether or not
           -------
     any requirement for the giving of notice, the lapse of time, or both, or
     any other condition, has been satisfied.

          "Dollars" and "$":  dollars in lawful currency of the United States of
           -------       -
     America.

          "Dominion Resources":  Dominion Resources, Inc., a Virginia
           ------------------
     corporation.

          "Effective Date":  June 4, 1999; provided the conditions precedent set
           --------------                  --------
     forth in subsection 4.1 have been satisfied.
<PAGE>

          "ERISA":  the Employee Retirement Income Security Act of 1974, as
           -----
     amended from time to time.

          "Eurocurrency Reserve Requirements":  for any day as applied to a
           ---------------------------------
     LIBOR Loan or a LIBOR Competitive Loan, as the case may be, the aggregate
     (without duplication) of the rates (expressed as a decimal fraction) of
     reserve requirements in effect on such day (including, without limitation,
     basic, supplemental, marginal and emergency reserves under any regulations
     of the Board or other Governmental Authority having jurisdiction with
     respect thereto) dealing with reserve requirements prescribed for
     eurocurrency funding (currently referred to as "Eurocurrency Liabilities"
     in Regulation D of the Board) maintained by a member bank of the Federal
     Reserve System.

          "Event of Default":  any of the events specified in Section 6,
           ----------------
     provided that any requirement for the giving of notice, the lapse of time,
     --------
     or both, or any other condition, has been satisfied.

          "Existing Credit Agreement":  as defined in the Introductory Statement
           -------------------------
     hereto.

          "Facility Fee Rate":  the rate per annum set forth in Schedule I under
           -----------------
     the applicable S&P Bond Rating and Moody's Bond Rating.

          "Federal Funds Effective Rate":  for any day, the weighted average of
           ----------------------------
     the rates on overnight federal funds transactions with members of the
     Federal Reserve System arranged by federal funds brokers, as published on
     the next succeeding Business Day by the Federal Reserve Bank of New York,
     or, if such rate is not so published for any day which is a Business Day,
     the average of the quotations for the day of such transactions received by
     the Administrative Agent from three federal funds brokers of recognized
     standing selected by it.

          "First Mortgage Bond Indenture":  the first mortgage bond indenture,
           -----------------------------
     dated November 1, 1935, by and between the Company and Chase Manhattan
     Bank, as supplemented and amended.

          "Fixed Rate Competitive Loan Request":  any Competitive Loan Request
           -----------------------------------
     requesting the Competitive Loan Lenders to offer to make Fixed Rate
     Competitive Loans.

          "Fixed Rate Competitive Loans":  Competitive Loans the rate of
           ----------------------------
     interest applicable to which is equal to a fixed percentage rate per annum
     specified by the Competitive Loan Lender making such Loan in its
     Competitive Loan Offer (as opposed to a rate composed of LIBOR plus or
     minus a margin).

          "GAAP":  generally accepted accounting principles in the United States
           ----
     of America in effect from time to time.
<PAGE>

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

          "Guarantee Obligation":  as to any Person (the "guaranteeing person"),
           --------------------                           -------------------
     any obligation of:

          (a)  the guaranteeing person or

          (b)  another Person (including, without limitation, any bank under any
               letter of credit), when the creation of such obligation was
               induced by a reimbursement, counterindemnity or similar
               obligation issued by the guaranteeing person,

     in either case guaranteeing or in effect guaranteeing any Indebtedness,
     leases, dividends or other obligations (the "primary obligations") of any
                                                  -------------------
     other third Person (the "primary obligor") in any manner, whether directly
                              ---------------
     or indirectly, including, without limitation, any obligation of the
     guaranteeing person, whether or not contingent, (i) to purchase any such
     primary obligation or any property constituting direct or indirect security
     therefor, (ii) to advance or supply funds (1) for the purchase or payment
     of any such primary obligation or (2) to maintain working capital or equity
     capital of the primary obligor or otherwise to maintain the net worth or
     solvency of the primary obligor, (iii) to purchase property, securities or
     services primarily for the purpose of assuring the owner of any such
     primary obligation of the ability of the primary obligor to make payment of
     such primary obligation or (iv) otherwise to assure or hold harmless the
     owner of any such primary obligation against loss in respect thereof;
     provided, however, that the term Guarantee Obligation shall not include
     --------  -------
     endorsements of instruments for deposit or collection in the ordinary
     course of business.  The amount of any Guarantee Obligation of any
     guaranteeing person shall be deemed to be the lower of (a) an amount equal
     to the stated or determinable amount of the primary obligation in respect
     of which such Guarantee Obligation is made and (b) the maximum amount for
     which such guaranteeing person may be liable pursuant to the terms of the
     instrument embodying such Guarantee Obligation, unless such primary
     obligation and the maximum amount for which such guaranteeing person may be
     liable are not stated or determinable, in which case the amount of such
     Guarantee Obligation shall be such guaranteeing person's maximum reasonably
     anticipated liability in respect thereof as determined by the Borrower in
     good faith.

          "Indebtedness": of any Person at any date, (a) all indebtedness of
           ------------
     such Person for borrowed money or for the deferred purchase price of
     property or services (other than current trade liabilities incurred in the
     ordinary course of business and payable in accordance with customary
     practices), (b) any other indebtedness of such Person which is evidenced by
     a note, bond, debenture or similar instrument, (c) all obligations of such
     Person as lessee which are capitalized in accordance with GAAP, (d) all
     obligations of such Person in respect of acceptances issued or created for
     the account of such Person and
<PAGE>

     (e) all liabilities secured by any Lien on any property owned by such
     Person even though such Person has not assumed or otherwise become liable
     for the payment thereof.

          "Interest Payment Date":  (a) as to any ABR Loan, the last day of each
           ---------------------
     March, June, September and December and the Termination Date, (b) as to any
     LIBOR Loan having an Interest Period of three months or less and any CD
     Rate Loan having an Interest Period of 90 days or less, the last day of
     such Interest Period, (c) as to any LIBOR Loan or CD Rate Loan having an
     Interest Period longer than three months or 90 days, respectively, each day
     which is three months or 90 days, respectively, or a whole multiple
     thereof, after the first day of such Interest Period and the last day of
     such Interest Period, (d) as to any Fixed Rate Competitive Loan, each
     interest payment date specified by the Borrower for such Loan in the
     related Competitive Loan Request (including, in any event, the applicable
     Competitive Loan Maturity Date) and (e) as to any LIBOR Competitive Loan,
     (i) the applicable Competitive Loan Maturity Date and (ii) each date (if
     any) occurring prior to such Competitive Loan Maturity Date which is three
     months, or a whole multiple thereof, after the Borrowing Date in respect of
     such Loan.

          "Interest Period":  (a)  with respect to any LIBOR Loan:
           ---------------

                    (i)  initially, the period commencing on the borrowing or
          conversion date, as the case may be, with respect to such LIBOR Loan
          and ending one, two, three, six or, to the extent available as
          determined by the Administrative Agent, nine or twelve months
          thereafter, as selected by the Borrower in its notice of borrowing or
          notice of conversion, as the case may be, given with respect thereto;
          and

                    (ii)  thereafter, each period commencing on the last day of
          the next preceding Interest Period applicable to such LIBOR Loan and
          ending one, two, three, six or, to the extent available as determined
          by the Administrative Agent, nine or twelve months thereafter, as
          selected by the Borrower by irrevocable notice to the Administrative
          Agent not less than three Business Days prior to the last day of the
          then current Interest Period with respect thereto;

     and (b) with respect to any CD Rate Loan:

                    (i)  initially, the period commencing on the borrowing or
          conversion date, as the case may be, with respect to such CD Rate Loan
          and ending 30, 60, 90 or 180 days thereafter, as selected by the
          Borrower in its notice of borrowing or notice of conversion, as the
          case may be, given with respect thereto; and

                    (ii)  thereafter, each period commencing on the last day of
          the next preceding Interest Period applicable to such CD Rate Loan and
          ending 30, 60, 90 or 180 days thereafter, as selected by the Borrower
          by irrevocable notice to the Agent not less than three Business Days
          prior to the last day of the then current Interest Period with respect
          thereto;
<PAGE>

     and (c) with respect to any LIBOR Competitive Loan, the period specified in
     the Competitive Loan Request for the LIBOR Competitive Loan with the
     maturity date corresponding to the LIBOR Competitive Loan accepted by the
     Borrower in the Competitive Loan Confirmation;

     provided that, all of the foregoing provisions relating to Interest Periods
     --------
     are subject to the following:

               (1)  if any Interest Period pertaining to a LIBOR Loan would
          otherwise end on a day that is not a Business Day, such Interest
          Period shall be extended to the next succeeding Business Day unless
          the result of such extension would be to carry such Interest Period
          into another calendar month in which event such Interest Period shall
          end on the immediately preceding Business Day;

               (2)  if any Interest Period pertaining to a CD Rate Loan would
          otherwise end on a day that is not a Business Day, such Interest
          Period shall be extended to the next succeeding Business Day;

               (3)  any Interest Period that would otherwise extend beyond the
          Termination Date shall end on the Termination Date;

               (4)  any Interest Period pertaining to a LIBOR Loan that begins
          on the last Business Day of a calendar month (or on a day for which
          there is no numerically corresponding day in the calendar month at the
          end of such Interest Period) shall end on the last Business Day of a
          calendar month; and

               (5)  the Borrower shall select Interest Periods so as not to
          require a payment or prepayment of any LIBOR Loan or CD Rate Loan
          during an Interest Period for such Loan.

          "LIBOR":  with respect to each day during each Interest Period
           -----
     pertaining to a LIBOR Loan or a LIBOR Competitive Loan, the rate per annum
     equal to the rate at which Chase is offered Dollar deposits at or about
     11:00 A.M., London time, two Business Days prior to the beginning of such
     Interest Period, in the London interbank eurodollar market where the
     eurodollar and foreign currency and exchange operations in respect of its
     LIBOR Loans are then being conducted, for delivery on the first day of such
     Interest Period for the number of days comprised therein and in an amount
     comparable to the amount of its LIBOR Loan (or, in the case of a LIBOR
     Competitive Loan, an amount that would have been Chase's portion of such
     LIBOR Competitive Loan had such Loan been a LIBOR Loan) to be outstanding
     during such Interest Period.

          "LIBOR Competitive Loan":  Competitive Loans the rate of interest
           ----------------------
     applicable to which is equal to LIBOR plus or minus a margin.
<PAGE>

          "LIBOR Competitive Loan Request":  any Competitive Loan Request
           ------------------------------
     requesting the Competitive Loan Lenders to offer to make LIBOR Competitive
     Loans.

          "LIBOR Loans":  Revolving Credit Loans the rate of interest applicable
           -----------
     to which is based upon LIBOR.

          "Lien": any mortgage, pledge, hypothecation, assignment, deposit
           ----
     arrangement, encumbrance, lien (statutory or other), charge or other
     security interest or any preference, priority or other security agreement
     or preferential arrangement of any kind or nature whatsoever (including,
     without limitation, any conditional sale or other title retention agreement
     and any capitalized lease obligation having substantially the same economic
     effect as any of the foregoing).

          "Loan":  any Revolving Credit Loan or Competitive Loan made by any
           ----
     Lender pursuant to this Agreement.

          "Loan Documents":  this Agreement and any Notes.
           --------------

          "Majority Lenders":  at any time, Lenders the Commitment Percentages
           ----------------
     of which aggregate more than 50%.

          "Material Subsidiary":  means a Subsidiary of the Borrower whose total
           -------------------
     assets, as determined in accordance with GAAP, represent at least 20% of
     the total assets of the Borrower, on a consolidated basis, as determined in
     accordance with GAAP.

          "Moody's Bond Rating" means for any day, the rating of the Borrower's
           -------------------
     senior secured long-term debt or if there is no senior secured debt, the
     Borrower's senior long-term unsecured debt by Moody's Investor Service,
     Inc. in effect at 11:00 A.M., New York City time, on such day.

          "Non-Excluded Taxes":  as defined in subsection 2.17(a).
           ------------------

          "Notes":  the collective reference to the Revolving Credit Notes and
           -----
     the Competitive Loan Notes.

          "Participant":  as defined in subsection 8.6(b).
           -----------

          "PBGC":  the Pension Benefit Guaranty Corporation established pursuant
           ----
     to Subtitle A of Title IV of ERISA.

          "Person":  an individual, partnership, corporation, business trust,
           ------
     joint stock company, trust, unincorporated association, joint venture,
     Governmental Authority or other entity of whatever nature.
<PAGE>

          "Plan":  at a particular time, any employee benefit plan which is
           ----
     covered by ERISA and in respect of which the Borrower or a Commonly
     Controlled Entity is (or, if such plan were terminated at such time, would
     under Section 4069 of ERISA be deemed to be) an "employer" as defined in
     Section 3(5) of ERISA.

          "Prime Rate":  the rate of interest per annum publicly announced from
           ----------
     time to time by Chase as its prime rate in effect at its principal office
     in New York City (the Prime Rate not being intended to be the lowest rate
     of interest charged by Chase in connection with extensions of credit to
     debtors).

          "Register":  as defined in subsection 8.6(d).
           --------

          "Regulatory Change":  shall mean, as to any Lender, any change
           -----------------
     occurring or taking effect after the date of this Agreement in Federal,
     state, local or foreign laws or regulations, or the adoption or making or
     taking effect after such date of any interpretations, directives, or
     requests applying to a class of lenders including the Lenders of or under
     any Federal, state, local or foreign laws or regulations (whether or not
     having the force of law) by any court or governmental or monetary authority
     charged with the interpretation or administration thereof.

          "Requirement of Law":  as to any Person, the Certificate of
           ------------------
     Incorporation and By-Laws or other organizational or governing documents of
     such Person, and any law, treaty, rule or regulation or determination of an
     arbitrator or a court or other Governmental Authority, in each case
     applicable to or binding upon such Person or any of its property or to
     which such Person or any of its property is subject.

          "Responsible Officer":  any President, Vice President, Treasurer or
           -------------------
     Assistant Treasurer of the Borrower.

          "Revolving Credit Loans":  as defined in subsection 2.1.
           ----------------------

          "Revolving Credit Note":  as defined in subsection 2.5(e).
           ---------------------

          "S&P Bond Rating": means for any day, the rating of the Borrower's
           ---------------
     senior secured long-term debt or if there is no senior secured debt, the
     Borrower's senior long-term unsecured debt by Standard & Poor's Ratings
     Group in effect at 11:00 A.M., New York City time, on such day.

          "Subsidiary":  as to any Person, a corporation, partnership or other
           ----------
     entity of which shares of stock or other ownership interests having
     ordinary voting power (other than stock or such other ownership interests
     having such power only by reason of the happening of a contingency) to
     elect a majority of the board of directors or other managers of such
     corporation, partnership or other entity are at the time owned, or the
     management of which is otherwise controlled, directly or indirectly through
     one or more intermediaries, or both, by such Person. Unless otherwise
     qualified, all references to a
<PAGE>

     "Subsidiary" or to "Subsidiaries" in this Agreement shall refer to a
     Subsidiary or Subsidiaries of the Borrower.

          "Termination Date":  June 2, 2000, or as otherwise extended pursuant
           ----------------
     to subsection 2.21 hereof.

          "Tranche":  the collective reference to LIBOR Loans or CD Rate Loans
           -------
     the then current Interest Periods with respect to all of which begin on the
     same date and end on the same later date (whether or not such Loans shall
     originally have been made on the same day); Tranches may be identified as
     "LIBOR Tranches" or "CD Rate Tranches", as applicable.

          "Transferee":  as defined in subsection 8.6(f).
           ----------

          "Type":  (a) as to any Revolving Credit Loan, its nature as an ABR
           ----
     Loan, a CD Rate Loan or a LIBOR Loan and (b) as to any Competitive Loan,
     its nature as a Fixed Rate Competitive Loan or a LIBOR Competitive Loan.

          1.2  Other Definitional Provisions.  (a)  Unless otherwise specified
          ----------------------------------
therein, all terms defined in this Agreement shall have the defined meanings
when used in the Notes or any certificate or other document made or delivered
pursuant hereto or thereto.

          (b)  As used herein and in the Notes and any certificate or other
document made or delivered pursuant hereto or thereto, accounting terms relating
to the Borrower and its Subsidiaries not defined in subsection 1.1 and
accounting terms partly defined in subsection 1.1, to the extent not defined,
shall have the respective meanings given to them under GAAP, and the parties
hereto agree that upon any change to GAAP that has the effect of materially
altering any of the terms herein, the parties hereto will negotiate in good
faith to amend the terms affected thereby to place the parties in a position as
nearly equivalent as possible to what existed prior to such change to GAAP.

          (c)  The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and Section, subsection,
Schedule and Exhibit references are to this Agreement unless otherwise
specified.

          (d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
<PAGE>

SECTION 2. AMOUNT AND TERMS OF THE CREDIT FACILITIES

          2.1  The Commitments.  (a) Subject to the terms and conditions hereof,
          --------------------
each Lender severally agrees to make revolving credit loans ("Revolving Credit
                                                              ----------------
Loans") to the Borrower from time to time during the Commitment Period in an
-----
aggregate principal amount at any one time outstanding not to exceed the amount
of such Lender's Commitment.  During the Commitment Period the Borrower may use
the Commitments by borrowing, prepaying the Revolving Credit Loans in whole or
in part, and reborrowing, all in accordance with the terms and conditions
hereof.  Notwithstanding anything to the contrary in this Agreement, in no event
may Revolving Credit Loans be borrowed under this Section 2 if, after giving
effect thereto, the aggregate principal amount of the Loans then outstanding
would exceed the aggregate Commitments then in effect.

          (b) The Revolving Credit Loans may from time to time be (i) LIBOR
Loans, (ii) ABR Loans, (iii) CD Rate Loans or (iv) a combination thereof, as
determined by the Borrower and notified to the Agent in accordance with
subsections 2.2 and 2.7, provided that no Revolving Credit Loan shall be made as
                         --------
a LIBOR Loan or a CD Rate Loan after the day that is one month or 30 days,
respectively, prior to the Termination Date.

          2.2  Procedure for Revolving Credit Borrowing.  The Borrower may
          ---------------------------------------------
borrow under the Commitments during the Commitment Period on any Business Day,

provided that the Borrower shall give the Administrative Agent irrevocable
--------
written notice, which notice must be received by the Administrative Agent prior
to (a) 12:00 P.M., New York City time, three Business Days prior to the
requested Borrowing Date, in the case of LIBOR Loans or CD Rate Loans, or (b)
10:30 A.M. New York City time, on the requested Borrowing Date, in the case of
ABR Loans.  Each such notice shall specify (i) the amount to be borrowed, (ii)
the requested Borrowing Date, (iii) whether the borrowing is to be of ABR Loans,
CD Rate Loans, LIBOR Loans, or a combination thereof and (iv) if the borrowing
is to be entirely or partly of LIBOR Loans or CD Rate Loans, the respective
lengths of the initial Interest Periods therefor.  Each borrowing under the
Commitments shall be in an amount equal to $10,000,000 or a whole multiple of
$1,000,000 in excess thereof.  Upon receipt of any such notice from the
Borrower, the Administrative Agent shall promptly notify each Lender thereof.
Each Lender will make the amount of its pro rata share of each borrowing
available to the Administrative Agent for the account of the Borrower at the
office of the Administrative Agent specified in subsection 8.2 prior to 2:00
P.M., New York City time, on the Borrowing Date requested by the Borrower in
funds immediately available to the Administrative Agent.  Such borrowing will
then be made available to the Borrower by the Administrative Agent crediting the
account of the Borrower on the books of such office with the aggregate of the
amounts made available to the Administrative Agent by the Lenders and in like
funds as received by the Administrative Agent.

          2.3  Facility Fee.  The Borrower agrees to pay to the Administrative
          -----------------
Agent for the account of each Lender a facility fee for the period from and
including the first day of the Commitment Period to the Termination Date,
computed at the Facility Fee Rate on the average daily amount of the Commitment
(whether used or unused) of such Lender during the period for which payment is
made, payable quarterly in arrears on the last day of each March, June,
<PAGE>

September and December and on the date on which the Commitments shall terminate
as provided herein, commencing on the first of such dates to occur after the
date hereof.

          2.4  Termination or Reduction of Commitments.  The Borrower may, upon
          --------------------------------------------
not less than three Business Days' written notice to the Administrative Agent,
terminate or reduce the unutilized amount of the Commitments.  Any reduction of
the Commitments shall be in an amount equal to $10,000,000 or a whole multiple
of $1,000,000 in excess thereof and shall reduce permanently the Commitments
then in effect.

          2.5  Repayment of Loans; Evidence of Debt.  (a)  The Borrower hereby
          -----------------------------------------
unconditionally promises to pay to the Administrative Agent for the account of
each Lender the then unpaid principal amount of each Revolving Credit Loan of
such Lender on the Termination Date (or such earlier date on which the Revolving
Credit Loans become due and payable pursuant to Section 6).  The Borrower hereby
further agrees to pay interest on the unpaid principal amount of the Loans from
time to time outstanding from the date hereof until payment in full thereof at
the rates per annum, and on the dates, set forth in subsection 2.11.

          (b)  Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing indebtedness of the Borrower to such Lender
resulting from each Loan of such Lender from time to time, including the amounts
of principal and interest payable and paid to such Lender from time to time
under this Agreement.

          (c)  The Administrative Agent shall maintain the Register pursuant to
subsection 8.6(d), and a subaccount therein for each Lender, in which shall be
recorded (i) the amount of each Loan made hereunder, the Type thereof and each
Interest Period applicable thereto, (ii) the amount of any principal or interest
due and payable or to become due and payable from the Borrower to each Lender
hereunder and (iii) both the amount of any sum received by the Administrative
Agent hereunder from the Borrower and each Lender's share thereof.

          (d)  The entries made in the Register and the accounts of each Lender
maintained pursuant to subsection 2.5(b) shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
                   ----- -----
obligations of the Borrower therein recorded; provided, however, that the
                                              --------  -------
failure of any Lender or the Administrative Agent to maintain the Register or
any such account, or any error therein, shall not in any manner affect the
obligation of the Borrower to repay (with applicable interest) the Loans made to
such Borrower by such Lender in accordance with the terms of this Agreement.

          (e)  The Borrower agrees that, upon the request to the Administrative
Agent by any Lender, the Borrower will execute and deliver to such Lender a
promissory note of the Borrower evidencing the Revolving Credit Loans of such
Lender, substantially in the form of Exhibit A-1 with appropriate insertions as
to date and principal amount (a "Revolving Credit Note").
                                 ---------------------

          2.6  Optional Prepayments.  The Borrower may at any time and from time
          -------------------------
to time prepay the Revolving Credit Loans, in whole or in part, without premium
or penalty, upon at
<PAGE>

least four Business Days' irrevocable notice to the Administrative Agent. Each
such notice shall specify the date and amount of prepayment and whether the
prepayment is of ABR Loans, CD Rate Loans, LIBOR Loans, or a combination
thereof, and, if of a combination thereof, the amount allocable to each. Upon
receipt of any such notice the Administrative Agent shall promptly notify each
Lender thereof. If any such notice is given, the amount specified in such notice
shall be due and payable on the date specified therein, together with any
amounts payable pursuant to subsection 2.18. Partial prepayments shall be in an
aggregate principal amount of $10,000,000 or a whole multiple of $1,000,000 in
excess thereof. Prepayments of the Competitive Loans shall not be permitted.

          2.7  Conversion and Continuation Options.  (a)  The Borrower may elect
          ----------------------------------------
from time to time to convert LIBOR Loans or CD Rate Loans to ABR Loans, by
giving the Administrative Agent at least one Business Day's prior irrevocable
notice of such election, provided that any such conversion of LIBOR Loans or CD
                         --------
Rate Loans may only be made on the last day of an Interest Period with respect
thereto.  The Borrower may elect from time to time to convert ABR Loans or CD
Rate Loans to LIBOR Loans , and/or to convert LIBOR Loans or ABR Loans to CD
Rate Loans, by giving the Administrative Agent at least three Business Days'
prior irrevocable notice of such election, provided that any such conversion of
                                           --------
LIBOR Loans or CD Rate Loans may only be made on the last day of an Interest
Period with respect thereto.  Any such notice of conversion to LIBOR Loans or CD
Rate Loans shall specify the length of the initial Interest Period or Interest
Periods therefor.  Upon receipt of any such notice the Administrative Agent
shall promptly notify each Lender thereof.  All or any part of outstanding LIBOR
Loans, ABR Loans and CD Rate Loans may be converted as provided herein, provided
                                                                        --------
that (i) no Loan may be converted into a LIBOR Loan or a CD Rate Loan when any
Event of Default has occurred and is continuing and the Administrative Agent has
or the Majority Lenders have determined that such a conversion is not
appropriate and (ii) no Loan may be converted into a LIBOR Loan or a CD Rate
Loan after the date that is one month or 30 days, respectively, prior to the
Termination Date.

          (b)  Any LIBOR Loans or CD Rate Loans may be continued as such upon
the expiration of the then current Interest Period with respect thereto by the
Borrower giving notice to the Administrative Agent, in accordance with the
applicable provisions of the term "Interest Period" set forth in subsection 1.1,
of the length of the next Interest Period to be applicable to such Loans,
provided that no LIBOR Loan or CD Rate Loan may be continued as such (i) when
--------
any Event of Default has occurred and is continuing and the Agent has or the
Majority Lenders have determined that such a continuation is not appropriate or
(ii) after the date that is one month or 30 days prior to, respectively, the
Termination Date and provided, further, that if the Borrower shall fail to give
                     --------  -------
such notice or if such continuation is not permitted such Loans shall be
automatically converted to ABR Loans on the last day of such then expiring
Interest Period.

          2.8  Minimum Amounts and Maximum Number of Tranches.  All borrowings,
          ---------------------------------------------------
prepayments, conversions and continuations of Loans hereunder and all selections
of Interest Periods hereunder shall be in such amounts and be made pursuant to
such elections so that, after giving effect thereto, the aggregate principal
amount of the Loans comprising each LIBOR Tranche or each CD Rate Tranche shall
be equal to $10,000,000 or a whole multiple of
<PAGE>

$1,000,000 in excess thereof. In no event shall there be more than 5 LIBOR
Tranches or 5 CD Rate Tranches outstanding at any time.

          2.9  The Competitive Loans.  Subject to the terms and conditions of
          --------------------------
this Agreement, the Borrower may borrow Competitive Loans in Dollars from time
to time on any Business Day during the period from the date hereof through the
date 14 days prior to the Termination Date; provided, that in no event may
                                            --------
Competitive Loans be borrowed hereunder if, after giving effect thereto the
aggregate principal amount of Loans then outstanding would exceed the aggregate
Commitments then in effect.  Within the limits and on the conditions herein set
forth with respect to Competitive Loans, the Borrower from time to time may
borrow, repay and reborrow Competitive Loans.

          2.10  Procedure for and Payment of Competitive Loan Borrowing.  (a)
          -------------------------------------------------------------
The Borrower shall request Competitive Loans by delivering a Competitive Loan
Request to the Administrative Agent, not later than 2:00 P.M. (New York City
time) four Business Days prior to the proposed Borrowing Date (in the case of a
LIBOR Competitive Loan Request), and not later than 1:00 P.M. (New York City
time) one Business Day prior to the proposed Borrowing Date (in the case of a
Fixed Rate Competitive Loan Request).  Each Competitive Loan Request may solicit
bids for Competitive Loans in an aggregate principal amount of $10,000,000 or an
integral multiple of $1,000,000 in excess thereof and having not more than three
alternative maturity dates.  The maturity date for each Fixed Rate Competitive
Loan shall be not less than 14 days nor more than 180 days after the Borrowing
Date therefor and the maturity date for each LIBOR Competitive Loan shall be not
less than one month nor more than six months after the Borrowing Date therefor,
and in any event shall be not later than the Termination Date.  The
Administrative Agent shall notify each Competitive Loan Lender promptly by
facsimile transmission of the contents of each Competitive Loan Request received
by the Administrative Agent.

          (b)  In the case of a LIBOR Competitive Loan Request, upon receipt of
notice from the Administrative Agent of the contents of such Competitive Loan
Request, each Competitive Loan Lender may elect, in its sole discretion, to
offer irrevocably, subject to Section 4, to make one or more Competitive Loans
at LIBOR plus or minus a margin determined by such Competitive Loan Lender in
its sole discretion for each such Competitive Loan.  Any such irrevocable offer
shall be made by delivering a Competitive Loan Offer to the Administrative
Agent, before 10:30 A.M. (New York City time) on the day that is three Business
Days before the proposed Borrowing Date, setting forth:

               (i)  the maximum amount of Competitive Loans for each maturity
     date and the aggregate maximum amount of Competitive Loans for all maturity
     dates which such Competitive Loan Lender would be willing to make (which
     amounts may, subject to subsection 2.9, exceed such Competitive Loan
     Lender's Commitment); and

               (ii)  the margin above or below LIBOR at which such Competitive
     Loan Lender is willing to make each such Competitive Loan.
<PAGE>

The Administrative Agent shall advise the Borrower before 11:00 A.M. (New York
City time) on the date which is three Business Days before the proposed
Borrowing Date of the contents of each such Competitive Loan Offer received by
it.  If the Administrative Agent, in its capacity as a Competitive Loan Lender,
shall elect, in its sole discretion, to make any such Competitive Loan Offer, it
shall advise the Borrower of the contents of its Competitive Loan Offer before
10:15 A.M. (New York City time) on the date which is three Business Days before
the proposed Borrowing Date.

          (c)  In the case of a Fixed Rate Competitive Loan Request, upon
receipt of notice from the Administrative Agent of the contents of such
Competitive Loan Request, each Competitive Loan Lender may elect, in its sole
discretion, to offer irrevocably, subject to Section 4, to make one or more
Competitive Loans at a rate of interest determined by such Competitive Loan
Lender in its sole discretion for each such Competitive Loan.  Any such
irrevocable offer shall be made by delivering a Competitive Loan Offer to the
Administrative Agent before 9:30 A.M. (New York City time) on the proposed
Borrowing Date, setting forth:

               (i)  the maximum amount of Competitive Loans for each maturity
     date, and the aggregate maximum amount for all maturity dates, which such
     Competitive Loan Lender would be willing to make (which amounts may,
     subject to subsection 2.9, exceed such Competitive Loan Lender's Revolving
     Credit Commitment); and

               (ii)  the rate of interest at which such Competitive Loan Lender
     is willing to make each such Competitive Loan.

The Administrative Agent shall advise the Borrower before 10:00 A.M. (New York
City time) on the proposed Borrowing Date of the contents of each such
Competitive Loan Offer received by it.  If the Administrative Agent, in its
capacity as a Competitive Loan Lender, shall elect, in its sole discretion, to
make any such Competitive Loan Offer, it shall advise the Borrower of the
contents of its Competitive Loan Offer before 9:15 A.M. (New York City time) on
the proposed Borrowing Date.

          (d)  Before 12:00 P.M. (New York City time) three Business Days before
the proposed Borrowing Date (in the case of LIBOR Competitive Loans) and before
10:30 A.M. (New York City time) on the proposed Borrowing Date (in the case of
Fixed Rate Competitive Loans), the Borrower, in its absolute discretion, shall:

               (i)  cancel such Competitive Loan Request by giving the
     Administrative Agent telephone notice to that effect, or

               (ii)  by giving telephone notice to the Administrative Agent
     (immediately confirmed by delivery to the Administrative Agent of a
     Competitive Loan Confirmation in writing or by facsimile transmission) (1)
     subject to the provisions of subsection 2.10(e), accept one or more of the
     offers made by any Competitive Loan Lender or Competitive Loan Lenders of
     the amount of Competitive Loans for each relevant maturity date and (2)
     reject any remaining offers made by Competitive Loan Lenders.
<PAGE>

          (e)  The Borrower's acceptance of Competitive Loans in response to any
Competitive Loan Request shall be subject to the following limitations:

               (i)  The amount of Competitive Loans accepted for each maturity
     date specified by any Competitive Loan Lender in its Competitive Loan Offer
     shall not exceed the maximum amount for such maturity date specified in
     such Competitive Loan Offer;

               (ii)  the aggregate amount of Competitive Loans accepted for all
     maturity dates specified by any Competitive Loan Lender in its Competitive
     Loan Offer shall not exceed the aggregate maximum amount specified in such
     Competitive Loan Offer for all such maturity dates;

               (iii)  the Borrower may not accept offers for Competitive Loans
     for any maturity date in an aggregate principal amount in excess of the
     maximum principal amount requested in the related Competitive Loan Request;
     and

               (iv)  if the Borrower accepts any of such offers, (1) it must
     accept such offers based solely upon the lowest pricing for such relevant
     maturity date (including any amounts which shall be payable to the relevant
     Competitive Loan Lender in respect of the relevant Competitive Loans
     pursuant to subsection 2.17) and upon no other criteria whatsoever and (2)
     if (x) two or more Competitive Loan Lenders submit offers for any maturity
     date at identical pricing and the Borrower accepts any of such offers but
     does not wish to (or by reason of the limitations set forth in subsection
     2.9 or in this subsection 2.10, cannot) borrow the total amount offered by
     such Competitive Loan Lenders with such identical pricing, the Borrower
     shall accept offers from all of such Competitive Loan Lenders in amounts
     allocated among them pro rata according to the amounts offered by such
                          --- ----
     Competitive Loan Lenders (or as nearly pro rata as shall be practicable
                                            --- ----
     after giving effect to the requirement that Competitive Loans made by a
     Competitive Loan Lender on a Borrowing Date for each relevant maturity date
     shall be in a principal amount of $10,000,000 or an integral multiple of
     $1,000,000 in excess thereof) or (y) a Competitive Loan Lender submits
     offers for multiple maturity dates specifying a maximum aggregate principal
     amount for all maturity dates, and the Borrower accepts offers from such
     Competitive Loan Lender for more than one maturity date, then the Borrower
     shall instruct the Administrative Agent how to apportion the Borrower's
     acceptances among such offers for different maturity dates to the extent,
     if any, necessary to provide for acceptance of offers from such Competitive
     Loan Lender equal to but not exceeding such specified maximum aggregate
     amount.

          (f)  If the Borrower notifies the Administrative Agent that a
Competitive Loan Request is cancelled pursuant to subsection 2.10(d)(i), the
Administrative Agent shall give prompt telephone notice thereof to the
Competitive Loan Lenders.

          (g)  If the Borrower accepts pursuant to subsection 2.10(d)(ii) one or
more of the offers made by any one or more Competitive Loan Lenders, the
Administrative Agent promptly shall notify each Competitive Loan Lender which
has made such a Competitive Loan Offer of (i)
<PAGE>

the aggregate amount of such Competitive Loans to be made on such Borrowing Date
for each maturity date, (ii) the acceptance or rejection of any offers to make
such Competitive Loans made by such Competitive Loan Lender and (iii) in the
case of LIBOR Competitive Loans, LIBOR in respect thereof. Before 12:30 P.M.
(New York City time) on the Borrowing Date specified in the applicable
Competitive Loan Request, each Competitive Loan Lender whose Competitive Loan
Offer has been accepted shall make available to the Administrative Agent at its
office set forth in subsection 8.2 the amount of Competitive Loans to be made by
such Competitive Loan Lender, in immediately available funds. The Administrative
Agent will make such funds available to the Borrower as soon as practicable on
such date at the Administrative Agent's aforesaid address. As soon as
practicable after each Borrowing Date, the Administrative Agent shall notify
each Competitive Loan Lender of the aggregate amount of Competitive Loans
advanced on such Borrowing Date, the respective maturity dates thereof and the
respective interest rates applicable thereto.

          (h) The Borrower hereby unconditionally promises to pay to the
Administrative Agent for the account of each Competitive Loan Lender the then
unpaid principal amount of each Competitive Loan of such Competitive Loan Lender
on the applicable Competitive Loan Maturity Date.  The Borrower hereby further
agrees to pay interest on the unpaid principal amount of the Competitive Loans
from time to time outstanding from the date hereof until payment in full thereof
at the rates per annum, and on the dates, set forth in subsection 2.11.  Each
Competitive Loan Lender shall maintain accounts and the Administrative Agent
shall maintain the Register with respect to Competitive Loans as provided in
subsections 2.5(b), (c) and (d).

          (i) The Borrower agrees that, upon the request to the Administrative
Agent by any Competitive Loan Lender, the Borrower will execute and deliver to
such Competitive Loan Lender a promissory note of the Borrower evidencing the
Competitive Loans of such Competitive Loan Lender, substantially in the form of
Exhibit A-2 with appropriate insertions as to date and principal amount (a
"Competitive Loan Note").
 ---------------------

          2.11  Interest Rates and Payment Dates.  (a)  Each LIBOR Loan shall
          --------------------------------------
bear interest for each day during each Interest Period with respect thereto at a
rate per annum equal to LIBOR determined for such day plus the Applicable
Margin.

          (b)  Each ABR Loan shall bear interest at a rate per annum equal to
the ABR plus the Applicable Margin.

          (c)  Each CD Rate Loan shall bear interest for each day during each
Interest Period with respect thereto at a rate per annum equal to the CD Rate
determined for such day plus the Applicable Margin.

          (d)  Each Competitive Loan shall bear interest for each day from the
applicable Borrowing Date to (but excluding) the applicable Competitive Loan
Maturity Date at the rate of interest specified in the Competitive Loan Offer
accepted by the Borrower in connection with such Competitive Loan.
<PAGE>

          (e)  If all or a portion of (i) the principal amount of any Loan, (ii)
any interest payable thereon or (iii) any fee or other amount payable hereunder
shall not be paid when due (whether at the stated maturity, by acceleration or
otherwise), such overdue amount shall, to the extent permitted by applicable
law, bear interest at a rate per annum which is (x) in the case of overdue
principal (except as otherwise provided in clause (y) below), the rate that
would otherwise be applicable thereto pursuant to the foregoing provisions of
this subsection 2.11 plus 2% or (y) in the case of principal of any Competitive
                     ----
Loan which remains overdue past the applicable Competitive Loan Maturity Date,
or any overdue interest, fee or other amount, the rate described in subsection
2.11(b) plus 2%, in each case from the date of such non-payment until such
        ----
overdue principal, interest, fee or other amount is paid in full (as well after
as before judgment).

          (f)  Interest shall accrue from and including the first day of an
Interest Period to but excluding the last day of such Interest Period.  Interest
shall be payable in arrears on each Interest Payment Date, provided that
                                                           --------
interest accruing pursuant to paragraph (e) of this subsection shall be payable
from time to time on demand.

          2.12 Computation of Interest and Fees.  (a) Facility fees and,
          -------------------------------------
whenever it is calculated on the basis of the ABR, interest shall be calculated
on the basis of a 365- (or 366-, as the case may be) day year for the actual
days elapsed; and, otherwise, interest shall be calculated on the basis of a
360-day year for the actual days elapsed.  The Administrative Agent shall as
soon as practicable notify the Borrower and the Lenders of each determination of
LIBOR or of a CD Rate.  Any change in the interest rate on a Loan resulting from
a change in the CD Assessment Rate or the CD Reserve Percentage shall become
effective as of the opening of business on the day on which such change becomes
effective.  The Administrative Agent shall as soon as practicable notify the
Borrower and the Lenders of the effective date and the amount of each such
change in interest rate.

          (b)  Each determination of an interest rate by the Administrative
Agent pursuant to any provision of this Agreement shall be conclusive and
binding on the Borrower and the Lenders in the absence of manifest error.  The
Administrative Agent shall, at the request of the Borrower, deliver to the
Borrower upon request a statement showing the quotations used by the
Administrative Agent in determining any interest rate pursuant to subsection
2.11(c).

          2.13 Inability to Determine Interest Rate.  If prior to the first day
          -----------------------------------------
of any Interest Period:

          (a)  the Administrative Agent shall have determined (which
     determination shall be conclusive and binding upon the Borrower) that, by
     reason of circumstances affecting the relevant market, adequate and
     reasonable means do not exist for ascertaining LIBOR or the CD Rate for
     such Interest Period, or

          (b)  the Administrative Agent shall have received notice from the
     Majority Lenders that LIBOR or the CD Rate determined or to be determined
     for such Interest Period will not adequately and fairly reflect the cost to
     such Lenders (as conclusively
<PAGE>

     certified by such Lenders) of making or maintaining their affected Loans
     during such Interest Period,

the Administrative Agent shall give telecopy or telephonic notice thereof to the
Borrower and the Lenders as soon as practicable thereafter.  If such notice is
given (x) any LIBOR Loans, CD Rate Loans or LIBOR Competitive Loans, as the case
may be, requested to be made on the first day of such Interest Period shall be
made as ABR Loans, (y) any Loans that were to have been converted on the first
day of such Interest Period to LIBOR Loans or CD Rate Loans, as the case may be,
shall be converted to or continued as ABR Loans and (z) any outstanding LIBOR
Loans or CD Rate Loans, as the case may be, shall be converted, on the first day
of such Interest Period, to ABR Loans.  Until such notice has been withdrawn by
the Administrative Agent, no further LIBOR Loans, CD Rate Loans or LIBOR
Competitive Loans, as the case may be, shall be made or continued as such, nor
shall the Borrower have the right to convert Loans to LIBOR Loans or CD Rate
Loans, as the case may be.

          2.14  Pro Rata Treatment and Payments.  (a)  Each borrowing by the
          -------------------------------------
Borrower from the Lenders of a Revolving Credit Loan, each payment by the
Borrower on account of any facility fee hereunder and any reduction of the
Commitments of the Lenders shall be made pro rata according to the respective
Commitment Percentages of the Lenders.  Each payment (including each prepayment)
by the Borrower on account of principal of and interest on the Loans shall be
made pro rata according to the respective outstanding principal amounts of the
Loans for which such payment is being made.  All payments (including
prepayments) to be made by the Borrower hereunder, whether on account of
principal, interest, fees or otherwise, shall be made without set off or
counterclaim and shall be made prior to 2:00 P.M., New York City time, on the
due date thereof to the Administrative Agent, for the account of the Lenders, at
the Administrative Agent's office specified in subsection 8.2, in Dollars and in
immediately available funds.  The Administrative Agent shall distribute such
payments to the Lenders promptly upon receipt in like funds as received.  If any
payment hereunder becomes due and payable on a day other than a Business Day,
such payment shall be extended to the next succeeding Business Day, and, with
respect to payments of principal, interest thereon shall be payable at the then
applicable rate during such extension.

          (b)   Unless the Administrative Agent shall have been notified in
writing by any Lender prior to a borrowing that such Lender will not make the
amount that would constitute its share of such borrowing available to the
Administrative Agent, the Administrative Agent may assume that such Lender is
making such amount available to the Administrative Agent, and the Administrative
Agent may, in reliance upon such assumption, make available to the Borrower a
corresponding amount.  If such amount is not made available to the
Administrative Agent by the required time on the Borrowing Date therefor, such
Lender shall pay to the Administrative Agent, on demand, such amount with
interest thereon at a rate equal to the daily average Federal Funds Effective
Rate for the period until such Lender makes such amount immediately available to
the Administrative Agent.  A certificate of the Administrative Agent submitted
to any Lender with respect to any amounts owing under this subsection shall be
conclusive in the absence of manifest error.  If such Lender's share of such
borrowing is not made available to the Administrative Agent by such Lender
within three Business Days of such Borrowing Date, the
<PAGE>

Administrative Agent shall also be entitled to recover such amount with interest
thereon at the rate per annum applicable to ABR Loans hereunder, on demand, from
the Borrower.

          2.15  Illegality.  Notwithstanding any other provision herein, if the
          ----------------
adoption of or any change in any Requirement of Law or in the interpretation or
application thereof shall make it unlawful for any Lender to make or maintain
LIBOR Loans or LIBOR Competitive Loans as contemplated by this Agreement (a)
such Lender shall promptly give notice thereof to the Borrower and the
Administrative Agent, (b) the commitment of such Lender hereunder to make LIBOR
Loans, continue LIBOR Loans as such and convert ABR Loans or CD Rate Loans to
LIBOR Loans shall forthwith be cancelled, (c) such Lender's outstanding LIBOR
Loans, if any, shall be converted automatically to ABR Loans on the respective
last days of the then current Interest Periods with respect to such Loans or
within such earlier period as required by law and (d) the Borrower shall, with
respect to any LIBOR Competitive Loan of such Lender, take such action as such
Lender may reasonably request.  If any such conversion of a LIBOR Loan occurs on
a day which is not the last day of the then current Interest Period with respect
thereto, the Borrower shall pay to such Lender such amounts, if any, as may be
required pursuant to subsection 2.18.

          2.16  Additional Costs.  (a)  If, as a result of any Regulatory
          ----------------------
Change:

                (i)   the basis of taxation of payments to any Lender of the
     principal of or interest on any LIBOR Loans, any CD Rate Loans or LIBOR
     Competitive Loans or any other amounts payable under this Agreement in
     respect thereof (other than Non-Excluded Taxes covered by subsection 2.17
     and taxes imposed on the overall net income of any Lender) is changed;

                (ii)  any reserve, special deposit, or capital adequacy, or
     similar requirements relating to any extensions of credit or other assets
     of, or any deposits with or other liabilities of, any Lender are imposed,
     modified, or deemed applicable; or

                (iii) any other condition affecting this Agreement or any LIBOR
     Loans, any CD Rate Loans or LIBOR Competitive Loans is imposed on any
     Lender after the date hereof; and

any Lender determines that, by reason thereof, the cost (or in the case of
clause (i) above, the actually incurred cost) to such Lender of making or
maintaining its Commitment or any of its LIBOR Loans, CD Rate Loans or LIBOR
Competitive Rate Loans to the Borrower is increased or any amount receivable by
such Lender hereunder in respect of any of such Loans is reduced, in each case
by an amount reasonably deemed by such Lender to be material (such increases in
cost and reductions in amounts receivable being herein called "Additional
                                                               ----------
Costs"), then the Borrower shall pay to such Lender upon its request the
additional amount or amounts as will compensate such Lender for such Additional
Costs within 15 Business Days after such written notice is received; provided,
                                                                     --------
however, that if all or any such Additional Costs would not have been payable or
-------
incurred but for such Lender's voluntary decision to designate a new Applicable
Lending Office, the Borrower shall have no obligation under this subsection 2.16
to compensate
<PAGE>

such Lender for such amount relating to such Lender's decision; provided,
                                                                --------
further, that the Borrower shall not be required to make any payments to such
-------
Lender for Additional Costs resulting from capital adequacy requirements unless
(A) such Lender has given at least 60 days' prior written notice of its intent
to request such payments and (B) such payments are with respect to Additional
Costs which accrued and were incurred after the expiration of such 60-day notice
period. Each Lender will notify the Borrower and the Administrative Agent of any
Regulatory Change occurring after the date of this Agreement which will entitle
such Lender to compensation pursuant to this subsection 2.16(a) as promptly as
practicable after it obtains knowledge thereof and determines to request such
compensation. If such Lender requests compensation under this subsection 2.16(a)
in respect of any Regulatory Change, the Borrower may, by notice to such Lender,
require that such Lender forward to the Borrower a statement setting forth the
basis for requesting such compensation and the method for determining the amount
thereof.

          (b)  Without limiting the effect of the provisions of subsection
2.16(a) (but without duplication thereof), the Borrower will pay to any Lender,
within 15 Business Days of receipt by the Borrower of notice from such Lender,
for each day such Lender is required to maintain reserves against "Eurocurrency
liabilities" under Regulation D of the Board as in effect on the date of this
Agreement, an additional amount determined by such Lender equal to the product
of the following:

               (i)   the principal amount of the LIBOR Loan or LIBOR Competitive
     Loan, as the case may be;

               (ii)  the remainder of (x) a fraction the numerator of which is
     LIBOR for such LIBOR Loan or LIBOR Competitive Loan, as the case may be,
     and the denominator of which is one minus the rate at which such reserve
     requirements are imposed on such Lender on such day minus (y) such
                                                         -----
     numerator; and

               (iii) 1/360.

Such Lender shall request payment under this subsection 2.16(b) by giving notice
to the Borrower as of the last day of each Interest Period for each LIBOR Loan
and LIBOR Competitive Loan, as the case may be (and, if such Interest Period
exceeds three months' duration, also as of three months, or a whole multiple
thereof, after the first day of such Interest Period).  Such notice shall
specify the basis for requesting such compensation and the method for
determining the amount thereof.  Such Lender shall provide any evidence of such
requirement to maintain reserves as the Borrower may reasonably request.

          (c)  Determinations by any Lender for purposes of this subsection 2.16
of the effect of any Regulatory Change shall be conclusive, provided that such
determinations are made absent manifest error.  The agreements in this
subsection shall survive the termination of this Agreement and the payment of
the Loans and all other amounts payable hereunder.
<PAGE>

          2.17  Taxes.  (a)  All payments made by the Borrower under this
          -----------
Agreement and any Notes shall be made free and clear of, and without deduction
or withholding for or on account of, any present or future income, stamp or
other taxes, levies, imposts, duties, charges, fees, deductions or withholdings,
now or hereafter imposed, levied, collected, withheld or assessed by any
Governmental Authority, excluding net income taxes and franchise taxes (imposed
in lieu of net income taxes) imposed on the Administrative Agent, any Lender or
any Applicable Lending Office as a result of a present or former connection
between the Administrative Agent, such Lender or Applicable Lending Office and
the jurisdiction of the Governmental Authority imposing such tax or any
political subdivision or taxing authority thereof or therein (other than any
such connection arising solely from the Administrative Agent or such Lender
having executed, delivered or performed its obligations or received a payment
under, or enforced, this Agreement or any Note).  If any such non-excluded
taxes, levies, imposts, duties, charges, fees deductions or withholdings ("Non-
                                                                           ---
Excluded Taxes") are required to be withheld from any amounts payable to the
--------------
Administrative Agent or any Lender hereunder or under any Note, the amounts so
payable to the Administrative Agent or such Lender shall be increased to the
extent necessary so that the amount received by the Administrative Agent or such
Lender (after payment of all Non-Excluded Taxes) shall be equal to the interest
or any such other amounts it would have received had no such withholding been
required, provided, however, that the Borrower shall not be required to increase
          --------  -------
any such amounts payable to any Lender that is not organized under the laws of
the United States of America or a state thereof if such Lender fails to comply
with the requirements of paragraph (b) of this subsection.  Whenever any Non-
Excluded Taxes are payable by the Borrower, as promptly as practicable
thereafter the Borrower shall send to the Administrative Agent for its own
account or for the account of such Lender, as the case may be, evidence
reasonably satisfactory to the Administrative Agent or such Lender, as the case
may be, of such payment.  If the Borrower fails to pay any Non-Excluded Taxes
payable by the Borrower when due to the appropriate taxing authority or fails to
remit to the Administrative Agent the receipts therefor or other required
documentary evidence, the Borrower shall indemnify the Administrative Agent and
the Lenders for any incremental taxes, interest or penalties that may become
payable by the Administrative Agent or any Lender as a result of any such
failure.  The agreements in this subsection shall survive the termination of
this Agreement and the payment of the Loans and all other amounts payable
hereunder.

          (b)   Each Lender that is not incorporated under the laws of the
United States of America or a state thereof shall:

                (i)  deliver to the Borrower and the Administrative Agent (A)
     two duly completed copies of United States Internal Revenue Service Form
     1001 or 4224, or successor applicable form, as the case may be, and (B) an
     Internal Revenue Service Form W-8 or W-9, or successor applicable form, as
     the case may be;

                (ii) deliver to the Borrower and the Administrative Agent two
     further copies of any such form or certification on or before the date that
     any such form or certification expires or becomes obsolete and after the
     occurrence of any event requiring a change in the most recent form
     previously delivered by it to the Borrower; and
<PAGE>

               (iii) obtain such extensions of time for filing and complete
     such forms or certifications as may reasonably be requested by the Borrower
     or the Administrative Agent;

unless in any such case 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 so advises the Borrower and the
Administrative Agent.  Such Lender shall certify (i) in the case of a Form 1001
or 4224, that it is entitled to receive payments under this Agreement without
deduction or withholding of any United States federal income taxes and (ii) in
the case of a Form W-8 or W-9, that it is entitled to an exemption from United
States backup withholding tax.  Each Person that shall become a Lender or a
Participant pursuant to subsection 8.6 shall, no later than the effectiveness of
the related transfer, be required to provide all of the forms and statements
required pursuant to this subsection, provided that in the case of a Participant
such Participant shall furnish all such required forms and statements to the
Lender from which the related participation shall have been purchased.

          (c)  Any Lender claiming any amount pursuant to this subsection 2.17
shall use reasonable efforts (consistent with legal and regulatory restrictions)
to file any certificate or document reasonably requested by the Borrower if such
a filing would avoid the need for or reduce the amount payable by the Borrower
under this subsection 2.17 and would not, in the good faith determination of
such Lender, be otherwise disadvantageous to such Lender.

          (d)  Refunds.  If a Lender or the Administrative Agent (as the case
               -------
may be) shall become aware that it is entitled to claim a refund (or a refund in
the form of a credit) (each, a "Refund") from a Governmental Authority (as a
result of any error in the amount of Non-Excluded Taxes paid to such
Governmental Authority) of Non-Excluded Taxes which the Borrower has paid, or
with respect to which the Borrower has paid additional amounts, pursuant to this
subsection 2.17, it shall promptly notify the Borrower of the availability of
such Refund and shall, within 30 days after receipt of written notice by the
Borrower, make a claim to such Governmental Authority for such Refund at the
Borrower's expense if, in the judgment of such Lender or the Administrative
Agent (as the case may be), the making of such claim will not be otherwise
disadvantageous to it; provided that nothing in this subsection 2.17(d) shall be
                       --------
construed to require any Lender or the Administrative Agent to institute any
administrative proceeding (other than the filing of a claim for any such Refund)
or judicial proceeding to obtain such Refund.  If a Lender or the Administrative
Agent (as the case may be) receives a Refund from a Governmental Authority (as a
result of any error in the amount of Non-Excluded Taxes paid to such
Governmental Authority) of any Non-Excluded Taxes which have been paid by the
Borrower, or with respect to which the Borrower has paid additional amounts
pursuant to this subsection 2.17, it shall promptly pay to the Borrower the
amount so received (but only to the extent of payments made, or additional
amounts paid, by the Borrower under this subsection 2.17 with respect to Non-
Excluded Taxes giving rise to such Refund), net of all reasonable out-of-pocket
expenses (including the net amount of taxes, if any, imposed on such Lender or
the Administrative Agent with respect to such Refund) of such Lender or the
Administrative Agent,
<PAGE>

and without interest (other than interest paid by the relevant Governmental
Authority with respect to such Refund); provided, however, that the Borrower,
                                        --------  -------
upon the request of such Lender or the Administrative Agent, agrees to repay the
amount paid over to the Borrower (plus penalties, interest or other charges) to
such Lender or the Administrative Agent in the event such Lender or the
Administrative Agent is required to repay such Refund to such Governmental
Authority. Nothing contained in this subsection 2.17(d) shall require any Lender
or the Administrative Agent to make available any of its tax returns (or any
other information that it deems to be confidential or proprietary).

          (e)  For purposes of this subsection 2.17, the term "Lender" includes
(i) an "Assignee" within the meaning of, and after compliance with the
requirements of, subsection 8.6(c), and (ii) a "Participant" within the meaning
of subsection 8.6(b); provided that such Participant shall have complied with
                      --------
the requirements of subsection 2.17(c) to the extent applicable and provided,
                                                                    --------
further, that such Participant shall not be entitled to receive any greater
-------
amount pursuant to this subsection 2.17 than the transferor Lender would have
been entitled to receive had no such transfer occurred.

          2.18 Indemnity.  The Borrower agrees to indemnify each Lender and to
          --------------
hold each Lender harmless from any loss or expense which such Lender may sustain
or incur as a consequence of (a) default by the Borrower in making a borrowing
of LIBOR Loans, CD Rate Loans or Competitive Loans, or in the conversion into or
continuation of LIBOR Loans or CD Rate Loans, after the Borrower has given a
notice requesting or accepting the same in accordance with the provisions of
this Agreement, (b) default by the Borrower in making any prepayment after the
Borrower has given a notice thereof in accordance with the provisions of this
Agreement, or (c) the making of a prepayment of LIBOR Loans, CD Rate Loans or
Competitive Loans on a day which is not the last day of an Interest Period or
the applicable Competitive Loan Maturity Date, as the case may be, with respect
thereto.  Such indemnification may include an amount equal to the excess, if
any, of (i) the amount of interest which would have accrued on the amount so
prepaid, or not so borrowed, converted or continued, for the period from the
date of such prepayment or of such failure to borrow, convert or continue to the
last day of the relevant Interest Period (or proposed Interest Period) or, in
the case of Competitive Loans, the applicable Competitive Loan Maturity Date (or
proposed Competitive Loan Maturity Date), in each case at the applicable rate of
interest for such Loans provided for herein (excluding, however, the Applicable
Margin or any positive margin applicable to LIBOR Competitive Loans included
therein, if any) over (ii) the amount of interest (as reasonably determined by
                 ----
such Lender) which would have accrued to such Lender on such amount by placing
such amount on deposit for a comparable period with leading banks in the
interbank eurodollar market. The agreements in this subsection shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.

          2.19 Change of Lending Office.  Each Lender agrees that if it makes
          -----------------------------
any demand for payment under subsection 2.16 or 2.17(a), or if any adoption or
change of the type described in subsection 2.15 shall occur with respect to it,
it will use reasonable efforts (consistent with its internal policy and legal
and regulatory restrictions and so long as such efforts would not be
disadvantageous to it, as determined in its sole discretion) to designate a
different Applicable Lending Office if the making of such a designation would
reduce or obviate the need for the
<PAGE>

Borrower to make payments under subsection 2.16 or 2.17(a), or would eliminate
or reduce the effect of any adoption or change described in subsection 2.15.

          2.20  Replacement of Lenders under Certain Circumstances.  The
          --------------------------------------------------------
Borrower shall be permitted to replace any Lender which (a) requests
reimbursement for amounts owing pursuant to subsection 2.16 or 2.17 (other than
with respect to LIBOR Competitive Loans), (b) is affected in the manner
described in subsection 2.15 (other than with respect to LIBOR Competitive
Loans) and as a result thereof any of the actions described in said subsection
is required to be taken, (c) defaults in its obligation to make Revolving Credit
Loans hereunder or (d) fails to consent to the extension of the Termination Date
pursuant to subsection 2.21, with a replacement bank or other financial
institution; provided that (i) such replacement does not conflict with any
             --------
Requirement of Law, (ii) no Event of Default shall have occurred and be
continuing at the time of such replacement, (iii) the Borrower shall repay (or
the replacement bank or institution shall purchase, at par) all Loans and other
amounts owing to such replaced Lender prior to the date of replacement, (iv) the
Borrower shall be liable to such replaced Lender under subsection 2.18 if any
LIBOR Loan or CD Rate Loan owing to such replaced Lender shall be prepaid (or
purchased) other than on the last day of the Interest Period relating thereto or
any Competitive Loan owing to such replaced Lender shall be paid other than on
the relevant Competitive Loan Maturity Date, (v) the replacement bank or
institution, if not already a Lender, shall be reasonably satisfactory to the
Administrative Agent, (vi) the replaced Lender shall be obligated to make such
replacement in accordance with the provisions of subsection 8.6 (provided that
the Borrower shall be obligated to pay the registration and processing fee
referred to therein), (vii) until such time as such replacement shall be
consummated, the Borrower shall pay all additional amounts (if any) required
pursuant to subsection 2.16 or 2.17, as the case may be, and (viii) any such
replacement shall not be deemed to be a waiver of any rights which the Borrower,
the Administrative Agent or any other Lender shall have against the replaced
Lender.

          2.21  Extension of Termination Date.   (a)  On or before the date
          -----------------------------------
which is 60 days (but no more than 90 days) prior to the then-existing
Termination Date, the Borrower may make a request to the Administrative Agent
(which shall promptly notify each Lender of its receipt of such request) on
behalf of the Lenders for an extension of the then-existing Termination Date to
the date 364 days after the then-existing Termination Date.

          (b)   In the case of each requested extension, each Lender shall
promptly (and in no case later than the date (the "Decision Date") 45 days prior
                                                   -------------
to the then-existing Termination Date) notify the Administrative Agent as to
whether or not in such Lender's sole discretion such Lender consents to such
extension; provided, that each Lender shall be permitted to revoke its consent
           --------
at any time on or prior to the date 30 days prior to the then-existing
Termination Date.  The Administrative Agent shall notify the Borrower on the
Business Day immediately following such Decision Date as to which Lenders shall
have consented to such request and which Lenders shall not have consented to
such request.  In the event that any Lender does not consent to such request,
the Borrower shall be permitted to replace such Lender with a replacement bank
or other financial institution effective on the then-existing Termination Date
pursuant to subsection 2.20.  The then-existing Termination Date shall be
extended only if (i) all of the Lenders consent, (ii) all non-consenting Lenders
have been replaced by the replacement banks or other financial
<PAGE>

institutions in accordance with subsection 2.20 such that the aggregate amount
of Commitments is not reduced or (iii) in the event that not all non-consenting
Lenders have been replaced, (A) the Borrower notifies the Administrative Agent
that it wishes to extend the then-existing Termination Date notwithstanding the
reduced amount of aggregate Commitments and (B) each consenting Lender and each
replacement bank or other financial institution in its sole discretion consents
to such extension after receiving notice of such reduced amount of aggregate
Commitments. In the event that the then-existing Termination Date is extended
pursuant to clause (iii) of the preceding sentence, on the then-existing
Termination Date the Borrower shall pay to the Administrative Agent for the
benefit of each non-consenting Lender that is not replaced with a replacement
bank or other financial institution, all amounts due with respect to such non-
consenting Lender.

SECTION 3.  REPRESENTATIONS AND WARRANTIES

          To induce the Administrative Agent and the Lenders to enter into this
Agreement and to make the Loans, the Borrower hereby represents and warrants to
the Administrative Agent and each Lender that:

          3.1  Financial Condition.  The balance sheets of the Borrower as at
          ------------------------
December 31, 1998 and the related statements of income, earnings reinvested in
business, and cash flows for the fiscal year then ended on such date, reported
on by Deloitte & Touche LLP, copies of which have heretofore been furnished to
each Lender, present fairly the financial condition of the Borrower as at such
date, and the results of its operations and its cash flows for the fiscal year
then ended.  The unaudited balance sheet of the Borrower as at March 31, 1999
and the related unaudited statements of income, earnings reinvested in business,
and cash flows for the three-month period ended on such date, certified by a
Responsible Officer, copies of which have heretofore been furnished to each
Lender, are complete and correct and present fairly the financial condition of
the Borrower as at such date, and the results of its operations and its cash
flows for the three-month period then ended (subject to normal year-end audit
adjustments).  All such financial statements, including the related schedules
and notes thereto, have been prepared in accordance with GAAP applied
consistently throughout the periods involved (except as approved by such
accountants or Responsible Officer, as the case may be, and as disclosed
therein).  During the period from December 31, 1998 to and including the date
hereof there has been no sale, transfer or other disposition by the Borrower of
any material part of its business or property and no purchase or other
acquisition of any business or property (including any capital stock of any
other Person) material in relation to the financial condition of the Borrower at
December 31, 1998.

          3.2  No Change.  From December 31, 1998 through the date hereof there
          --------------
has been no development or event which has had or could reasonably be expected
to have a material adverse effect on the financial position or business
operations of the Borrower.

          3.3  Corporate Existence; Compliance with Law.  Each of the Borrower
          ---------------------------------------------
and its Material Subsidiaries, if any, (a) is duly organized, validly existing
and in good standing under the laws of the jurisdiction of its organization, (b)
has the corporate power and authority, and the
<PAGE>

legal right, to own and operate its property, to lease the property it operates
as lessee and to conduct the business in which it is currently engaged, (c) is
duly qualified as a foreign corporation and in good standing under the laws of
each jurisdiction where its ownership, lease or operation of property or the
conduct of its business requires such qualification other than in such
jurisdictions where the failure so to qualify would not, individually or in the
aggregate, have a material adverse effect on the financial position or business
operations of the Borrower and (d) is in compliance with all Requirements of Law
except to the extent that the failure to comply therewith could not, in the
aggregate, have a material adverse effect on the financial position or business
operations of the Borrower.

          3.4  Corporate Power; No Legal Bar.  The execution, delivery, and
               -----------------------------
performance by the Borrower of this Agreement and any Note are within its
corporate powers, have been duly authorized by all necessary corporate action,
and do not violate any provision of law or any agreement, indenture, note, or
other instrument binding upon or affecting it or its charter or by-laws or give
cause for acceleration of any of its Indebtedness.

          0.2  Authorization; Enforceability.  All authorizations, approvals,
               -----------------------------
and other actions by, and notices to and filings with all Governmental
Authorities required for the due execution, delivery and performance of this
Agreement and any Note have been obtained or made and are in full force and
effect. Each of this Agreement and each Note executed in connection herewith is
a legal, valid and binding obligation of the Borrower enforceable against the
Borrower in accordance with its terms, subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium or other similar
laws relating to or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.

          0.3  ERISA.  No "prohibited transaction" (as defined in Section 406 of
               -----
ERISA or Section 4975 of the Code) or "accumulated funding deficiency" (as
defined in Section 302 of ERISA) or "reportable event" (herein defined as any of
the events set forth in Section 4043(b) of ERISA or the regulations thereunder)
has occurred since July 1, 1974 with respect to any Plan which would materially
and adversely affect the financial condition of the Borrower.  The present value
of all benefits vested under all Plans maintained by the Borrower or any
Commonly Controlled Entity (based on those assumptions used to fund the Plans)
did not, as of the last annual valuation date, exceed the value of the assets of
the Plan allocable to such vested benefits.

          0.4  No Material Litigation.  As of the date hereof, except as
               ----------------------
heretofore disclosed pursuant to Section 13 of the Securities Exchange Act of
1934, as amended, there are no legal or arbitral proceedings or any proceedings
by or before any governmental or regulatory authority or agency, now pending or,
to the knowledge of the Borrower, threatened against the Borrower or any of its
Material Subsidiaries, which the Borrower would be required to disclose pursuant
to Section 13 of the Securities Exchange Act of 1934, as amended.

          0.5  Taxes.  The Borrower (or Dominion Resources for years in which
               -----
the Borrower filed a consolidated return with Dominion Resources) and its
Material Subsidiaries have filed all United States Federal income tax returns
and all other tax returns which are
<PAGE>

required to be filed by them and have paid all taxes due pursuant to such
returns or pursuant to any assessment received by the Borrower or any such
Material Subsidiary. The charges, accruals and reserves on the books of the
Borrower and such Material Subsidiaries in respect of taxes and other
governmental charges are, in the opinion of the Borrower, adequate.

          0.6  Purpose of Loans.  The proceeds of the Loans shall be used by the
               ----------------
Borrower for general corporate purposes, including commercial paper back-up, and
no part of the proceeds of any Loans will be used in violation of Regulations U
or X of the Board as now and from time to time hereafter in effect.

          0.7  Year 2000.   The Borrower has (a) initiated a review and
               ---------
assessment of all areas within its and each of its Material Subsidiaries'
businesses and operations that could be adversely affected by the risk that
computer applications may not be able to recognize and properly perform date-
sensitive functions after December 31, 1999 (the "Year 2000 Problem"), (b)
                                                  -----------------
developed a plan and timeline for addressing the Year 2000 Problem on a timely
basis, and (c) to date, implemented such plan in accordance with such timetable.
Based on the foregoing, the Borrower reasonably believes that all computer
applications that are critical to its or any of its Material Subsidiaries'
businesses and operations will on a timely basis be able to properly perform
date-sensitive functions for all dates before and after January 1, 2000 (that
is, to be "Year 2000 Ready"), except to the extent that a failure to do so could
not be reasonably expected to have a material adverse effect on the ability of
the Borrower to perform its obligations under this Agreement.

                        SECTION 1. CONDITIONS PRECEDENT

          1.1  Conditions to Initial Loans.  The effectiveness of this Agreement
               ---------------------------
is subject to the satisfaction of the following conditions precedent on or prior
to June 4, 1999:

          (a)  Execution of Agreement.  (i)  This Agreement shall have been
               ----------------------
     executed and delivered by a duly authorized officer of each of the Borrower
     and the Administrative Agent and (ii) the Administrative Agent shall have
     received an executed counterpart hereof (or a copy thereof by facsimile
     transmission) from each Lender.

          (b)  Closing Certificate.  The Administrative Agent shall have
               -------------------
     received a certificate of the Borrower, dated the Closing Date,
     substantially in the form of Exhibit C, executed by any Assistant Treasurer
     and the Secretary or any Assistant Secretary of the Borrower, and attaching
     the documents referred to in subsections 4.1(c), (d) and (e).

          (c)  Corporate Proceedings.  The Administrative Agent shall have
               ---------------------
     received a copy of the resolutions, in form and substance satisfactory to
     the Administrative Agent, of the Board of Directors of the Borrower (or a
     duly authorized committee thereof) authorizing (i) the execution, delivery
     and performance of this Agreement and (ii) the borrowings contemplated
     hereunder.
<PAGE>

          (d)  Corporate Documents.  The Administrative Agent shall have
               -------------------
     received a copy of the articles of incorporation and by-laws of the
     Borrower.

          (e)  Regulatory Approvals.  The Administrative Agent shall have
               --------------------
     received copies of any required orders of the Virginia State Corporation
     Commission or any other state utilities commission approving the Borrower's
     execution, delivery and performance of this Agreement and the borrowings
     hereunder.

          (f)  Legal Opinions.  The Administrative Agent shall have received the
               --------------
     following executed legal opinions, with a copy for each Lender:

               (i)   the executed legal opinion of McGuire Woods Battle & Boothe
          LLP, counsel to the Borrower, substantially in the form of Exhibit D-
          1; and

               (ii)  the executed legal opinion of Simpson Thacher & Bartlett,
          special counsel to the Administrative Agent, substantially in the form
          of Exhibit D-2.

          (g)  Representations and Warranties; No Default.  Each of the
               ------------------------------------------
     representations and warranties made by the Borrower in or pursuant to the
     Loan Documents shall be true and correct in all material respects on and as
     of such date as if made on and as of such date and no Default or Event of
     Default shall have occurred and be continuing on such date.

          (h)  Existing Credit Agreement.  All interest and fees under the
               -------------------------
     Existing Credit Agreement through the Effective Date shall have been paid.

          1.2  Conditions to Each Loan.  The agreement of each Lender to make
               -----------------------
any Loan requested to be made by it on any date (including, without limitation,
its initial Loan) is subject to the satisfaction of the following conditions
precedent:

          (a)  Representations and Warranties.  Each of the representations and
               ------------------------------
     warranties made by the Borrower in or pursuant to the Loan Documents shall
     be true and correct in all material respects on and as of such date as if
     made on and as of such date.

          (b)  No Default.  No Default or Event of Default shall have occurred
               ----------
     and be continuing on such date or after giving effect to the Loans
     requested to be made on such date.

Each borrowing by the Borrower hereunder shall constitute a representation and
warranty by the Borrower as of the date thereof that the conditions contained in
this subsection 4.2 have been satisfied.
<PAGE>

                             SECTION 2. COVENANTS

          The Borrower hereby agrees that, so long as the Commitments remain in
effect or any amount is owing to any Lender or the Administrative Agent
hereunder or under any other Loan Document:

          2.1  Financial Statements.  The Borrower shall furnish to the
               --------------------
Administrative Agent, who shall forward to each Lender:

          (a)  as soon as practicable, but in any event within 120 days after
     the end of each fiscal year of the Borrower, a copy of the consolidated
     balance sheet of the Borrower and its consolidated Subsidiaries, if any, as
     at the end of such year and the related consolidated statements of income,
     earnings reinvested in business, and cash flows for such year, setting
     forth in each case in comparative form the figures for the previous year,
     reported on, by Deloitte & Touche LLP or other independent certified public
     accountants of nationally recognized standing; and

          (b)  as soon as practicable, but in any event not later than 60 days
     after the end of each of the first three quarterly periods of each fiscal
     year of the Borrower, the unaudited consolidated balance sheet of the
     Borrower and its consolidated Subsidiaries, if any, as at the end of such
     quarter and the related unaudited consolidated statements of income,
     earnings reinvested in business, and cash flows for such quarter and the
     portion of the fiscal year through the end of such quarter, setting forth
     in each case in comparative form the figures for the previous year
     certified by a Responsible Officer as being fairly stated in all material
     respects (subject to normal year-end audit adjustments);

          (c)  within fourteen days after the same are sent, copies of all
     financial statements and reports which the Borrower sends to its
     stockholders generally, and within fourteen days after the same are filed,
     copies of all financial statements and reports which the Borrower may make
     to, or file with, the Securities and Exchange Commission or any successor
     or analogous Governmental Authority; and

          (d)  promptly, such additional financial and other information as the
     Administrative Agent, or any Lender through the Administrative Agent, may
     from time to time reasonably request.

          All such financial statements in (a) and (b) shall be (i) complete and
correct in all material respects, (ii) prepared in reasonable detail and in
accordance with GAAP applied consistently throughout the periods reflected
therein and with prior periods (except as approved by such accountants or
officer, as the case may be, and disclosed therein) and (iii) accompanied by a
compliance certificate signed by a Responsible Officer of the Borrower setting
forth the Consolidated Net Worth of the Borrower as of the date of such
financial statements.

          Unless accompanied by a statement of a Responsible Officer setting
forth the details of each Default which has occurred and is continuing and the
steps which the Borrower
<PAGE>

proposes to take to remedy such Default, each delivery of financial statements
pursuant to clauses (a) and (b) of this subsection 5.1 shall be deemed to
constitute a certification by the Borrower that no Default has occurred and is
continuing.

          2.2  Conduct of Business and Compliance.  The Borrower will continue
               ----------------------------------
to engage in business of the same general type as now conducted by it, and the
Borrower will, and will cause each of its Subsidiaries, if any, to comply with
all Requirements of Law except to the extent that failure to comply therewith
would not materially and adversely affect the ability of the Borrower to perform
its obligations hereunder.

          2.3  Books and Records.  The Borrower will, and will cause each of its
               -----------------
Material Subsidiaries, if any, to, keep proper books of records and account in
which full, true and correct entries in conformity with GAAP and all
Requirements of Law shall be made of all dealings and transactions in relation
to its business and activities.

          2.4  Notices.  The Borrower shall promptly give notice to the
               -------
Administrative Agent, and the Administrative Agent shall in turn give notice to
each Lender, of:

          (a)  the occurrence of any Default or Event of Default, which such
     notice shall state that such notice is a "notice of default";

          (b)  the existence or imposition of any judgments against the
     Borrower or any of its Material Subsidiaries in an amount in excess of
     $25,000,000;

          (c)  the failure of the Borrower or any of its Material Subsidiaries
     to pay any principal or interest in an aggregate amount of $25,000,000 or
     more on any Indebtedness; and

          (d)  promptly following the Borrower's receipt, any change in the
     Moody's Bond Rating or the S&P Bond Rating.

          Each notice pursuant to clause (a) shall be accompanied by a statement
of a Responsible Officer setting forth details of the occurrence referred to
therein and stating what action the Borrower proposes to take with respect
thereto.

          2.5  Limitation on Liens.  The Borrower shall not, nor shall it permit
               -------------------
any of its Material Subsidiaries to, create, incur, assume or suffer to exist
any Lien upon any of its property, assets or revenues, whether now owned or
hereafter acquired, except for (i) Liens permitted by the First Mortgage Bond
Indenture and (ii) Liens created in the ordinary course of business.

          2.6  Limitation on Fundamental Changes.  The Borrower will not enter
               ---------------------------------
into any merger, consolidation or amalgamation, or liquidate, wind up or
dissolve itself (or suffer any liquidation or dissolution), or convey, sell,
lease, assign, transfer or otherwise dispose of, a material part of its
property, business or assets, except the Borrower may be merged or consolidated
with another Person that is a corporation duly organized and existing under the
laws
<PAGE>

of any state in the United States provided that (i) the survivor shall continue
to use and operate the Borrower's public utility business, (ii) the survivor
shall assume the Borrower's obligations hereunder in accordance with
documentation acceptable to the Administrative Agent and the Majority Lenders
and (iii) after giving effect to such merger or consolidation no Default or
Event of Default shall have occurred or be continuing.

          2.7  Limitation on Guarantee Obligations.  The Borrower shall not
               -----------------------------------
create, incur, assume or suffer to exist any Guarantee Obligation except for (a)
Guarantee Obligations in existence on the date hereof and listed on Schedule II;
(b) Guarantee Obligations made in the ordinary course of its business by the
Borrower of obligations of any of its Subsidiaries; and (c) Guarantee
Obligations guaranteeing securities issued by a corporation, partnership or
trust formed at the direction of the Borrower, provided that (i) the proceeds
                                               --------
from the issuance of such securities (other than to cover offering expenses)
were used solely by such corporation, partnership or trust to purchase from the
Borrower securities issued by the Borrower and (ii) the Guarantee Obligations
exist only so long as and only to the extent that such corporation, partnership
or trust holds such securities issued by the Borrower.

          2.8  Maintenance of Net Worth.  The Borrower will not permit
               ------------------------
Consolidated Net Worth to be less than $3.75 billion.

                         SECTION 3. EVENTS OF DEFAULT

          If any of the following events shall occur and be continuing:

          (a)  The Borrower shall fail to pay any principal of any Loan when
     due in accordance with the terms hereof, or to pay any interest on any
     Loan, or any other amount payable hereunder, within 5 Business Days after
     any such amount becomes due in accordance with the terms hereof;

          (b)  Any representation or warranty made to the Administrative Agent
     or any Lender in connection with the execution and delivery of this
     Agreement or the making of Loans hereunder proves to have been incorrect in
     any material respect when made, and the future financial position or
     business operations of the Borrower could reasonably be expected to be
     materially and adversely affected from what would be the case had such
     representation and warranty not been incorrect;

          (c)  The Borrower shall default in the performance of any other term,
     covenant, or provision contained in this Agreement (other than as provided
     in paragraphs (a) and (b) of this Section) and such default shall continue
     unremedied for 30 days;

          (d)  The Borrower or any of its Material Subsidiaries shall (i) apply
     for or consent to the appointment of, or the taking of possession by, a
     receiver, custodian, trustee, or
<PAGE>

     liquidator of itself or of all or a substantial part of its property, (ii)
     admit in writing its inability, or be generally unable, to pay its debts as
     such debts become due, (iii) make a general assignment for the benefit of
     its creditors, (iv) commence a voluntary case under the federal bankruptcy
     laws (as now or hereafter in effect), (v) file a petition seeking to take
     advantage of any other law relating to bankruptcy, insolvency,
     reorganization, winding-up, or composition or readjustment of debts, (vi)
     fail to controvert in a timely and appropriate manner, or acquiesce in
     writing to, any petition filed against the Borrower or any of its Material
     Subsidiaries in an involuntary case under such federal laws, or (vii) take
     any corporate action for the purpose of affecting any of the foregoing;

          (e)  A case or other proceeding shall be commenced (including
     commencement of such case or proceeding by way of service of process on the
     Borrower or any of its Material Subsidiaries), in any court of competent
     jurisdiction, seeking (i) the liquidation, reorganization, dissolution or
     winding-up, or the composition or readjustment of debts of the Borrower or
     any of its Material Subsidiaries, (ii) the appointment of a trustee,
     receiver, custodian, liquidator, or the like of the Borrower or any of its
     Material Subsidiaries or of all or any substantial part of their respective
     assets, (iii) similar relief in respect of the Borrower or any of its
     Material Subsidiaries under any law relating to bankruptcy, insolvency,
     reorganization, winding up, or composition or readjustment of debts, or a
     warrant of attachment, execution, or similar process shall be issued
     against a substantial part of the property of the Borrower or any of its
     Material Subsidiaries and such case, proceeding, warrant, or process shall
     continue undismissed or unstayed and in effect for a period of 45 days, or
     an order, judgment, or decree approving or ordering any of the foregoing
     shall be entered in an involuntary case under such federal bankruptcy laws;

          (f)  A trustee shall be appointed to administer any Plan under Section
     4042 of ERISA, or the PBGC shall institute proceedings to terminate, or to
     have a trustee appointed to administer any Plan and such proceedings shall
     continue undismissed or unstayed and in effect for a period of 30 days, and
     any such event shall result in any liability which is material in relation
     to the consolidated financial condition of the Borrower and its
     consolidated Subsidiaries, if any;

          (g)  The Borrower or any of its Material Subsidiaries shall (i)
     default in any payment of principal or interest in an aggregate amount of
     $25,000,000 or more (or in the payment of any guarantee thereof) beyond the
     period of grace, if any, provided in the instrument or agreement under
     which such Indebtedness or guarantee thereof was created or (ii) default
     beyond any applicable grace period in the observance or performance of any
     other agreement or condition relating to any Indebtedness in an aggregate
     amount of $25,000,000 or more or any guarantee thereof or contained in any
     instrument or agreement evidencing, securing or relating thereto, or any
     other event shall occur or condition exist, the effect of which default or
     other event or condition is to cause, or to permit the holder or holders of
     such Indebtedness to cause, with the giving of notice if required, such
     Indebtedness to become due prior to its stated maturity; provided, however,
                                                              --------  -------
     if such default shall be cured by the Borrower or any Material Subsidiary
     or
<PAGE>

     waived by the holders of such Indebtedness and any acceleration of maturity
     having resulted from such default shall be rescinded or annulled, in each
     case in accordance with the terms of such agreement or instrument, without
     (i) any modification of the terms of such Indebtedness requiring the
     Borrower or any such Material Subsidiary to furnish additional or other
     security therefor, reducing the average life to maturity thereof or
     increasing the principal amount thereof or (ii) any agreement by the
     Borrower or any such Material Subsidiary to furnish additional or other
     security therefor or to issue in lieu thereof Indebtedness secured by
     additional or other collateral or with a shorter average life to maturity
     or in a greater principal amount, then any default hereunder by reason
     thereof shall be deemed likewise to have been thereupon cured or waived; or

          (h)  There shall have been entered by a court of competent
     jurisdiction within the United States and shall not have been vacated,
     discharged or stayed within sixty (60) days from the entry thereof (or such
     longer period as may be provided by law) one or more final judgments or
     final decrees for payment of money against the Borrower or any of its
     Material Subsidiaries involving in the aggregate a liability (to the extent
     not paid or covered by insurance) in excess of $25,000,000;

then, and in any such event, (A) if such event is an Event of Default specified
in paragraph (d) or (e) of this Section with respect to the Borrower,
automatically the Commitments shall immediately terminate and the Loans
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement shall immediately become due and payable, and (B) if such event is any
other Event of Default, either or both of the following actions may be taken:
(i) with the consent of the Majority Lenders, the Administrative Agent may, or
upon the request of the Majority Lenders, the Administrative Agent shall, by
notice to the Borrower declare the Commitments to be terminated forthwith,
whereupon the Commitments shall immediately terminate; and (ii) with the consent
of the Majority Lenders, the Administrative Agent may, or upon the request of
the Majority Lenders, the Administrative Agent shall, by notice to the Borrower,
declare the Loans hereunder (with accrued interest thereon) and all other
amounts owing under this Agreement to be due and payable forthwith, whereupon
the same shall immediately become due and payable.  Except as expressly provided
above in this Section, presentment, demand, protest and all other notices of any
kind are hereby expressly waived.
<PAGE>

                      SECTION 4. THE ADMINISTRATIVE AGENT

          4.1  Appointment.  Each Lender hereby irrevocably designates and
               -----------
appoints the Administrative Agent as the agent of such Lender under this
Agreement and the other Loan Documents, and each such Lender irrevocably
authorizes the Administrative Agent, in such capacity, to take such action on
its behalf under the provisions of this Agreement and the other Loan Documents;
and to exercise such powers and perform such duties as are expressly 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.
Notwithstanding any provision to the contrary elsewhere in this Agreement, the
Administrative Agent shall not have any duties or responsibilities, except those
expressly set forth herein, or any fiduciary relationship with any Lender, and
no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Administrative Agent.

          4.2  Delegation of Duties.  The Administrative Agent may execute any
               --------------------
of its duties under this Agreement and the other Loan Documents by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrative Agent shall
not be responsible for the negligence or misconduct of any agents or attorneys
in-fact selected by it with reasonable care.

          4.3  Exculpatory Provisions.  Neither the Administrative Agent nor any
               ----------------------
of its officers, directors, employees, agents, attorneys-in-fact or Affiliates
shall be (i) liable for any action lawfully taken or omitted to be taken by it
or such Person under or in connection with this Agreement or any other Loan
Document (except for its or such Person's own gross negligence or willful
misconduct) or (ii) responsible in any manner to any of the Lenders for any
recitals, statements, representations or warranties made by the Borrower or any
officer thereof contained in this Agreement or any other Loan Document or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Administrative Agent under or in connection with, this
Agreement or any other Loan Document or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other Loan
Document or for any failure of the Borrower to perform its obligations hereunder
or thereunder.  The Administrative Agent shall not be under any obligation to
any Lender to ascertain or to inquire as to the observance or performance of any
of the agreements contained in, or conditions of, this Agreement or any other
Loan Document, or to inspect the properties, books or records of the Borrower.

          4.4  Reliance by Administrative Agent.  The Administrative Agent shall
               --------------------------------
be entitled to rely, and shall be fully protected in relying, upon any Note,
writing, resolution, notice, consent, certificate, affidavit, letter, telecopy,
telex or teletype message, statement, order or other document or conversation
believed by it to be genuine and correct and to have been signed, sent or made
by the proper Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to the Borrower), independent
accountants and other experts selected by the Administrative Agent.  The
Administrative Agent may deem and treat the payee of any Note as the owner
thereof for all purposes unless a written notice of assignment,
<PAGE>

negotiation or transfer thereof shall have been filed with the Administrative
Agent. The Administrative Agent shall be fully justified in failing or refusing
to take any action under this Agreement or any other Loan Document unless it
shall first receive such advice or concurrence of the Majority Lenders as it
deems appropriate or it shall first be indemnified to its satisfaction by the
Lenders against any and all liability and expense which may be incurred by it by
reason of taking or continuing to take any such action. The Administrative Agent
shall in all cases be fully protected in acting, or in refraining from acting,
under this Agreement and the other Loan Documents in accordance with a request
of the Majority Lenders, and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Lenders and all future holders of
the Loans.

          4.5 Notice of Default.  The Administrative Agent shall not be deemed
              -----------------
to have knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Administrative Agent has received notice from a Lender or
the Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default".  In the event
that the Administrative Agent receives such a notice, the Administrative Agent
shall give notice thereof to the Lenders.  The Administrative Agent shall take
such action with respect to such Default or Event of Default as shall be
reasonably directed by the Majority 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 or Event of Default as it shall
deem advisable in the best interests of the Lenders.

          4.6 Non-Reliance on Administrative Agent and Other Lenders.  Each
              ------------------------------------------------------
Lender expressly acknowledges that neither the Administrative Agent nor any of
its officers, directors, employees, agents, attorneys-in-fact or Affiliates has
made any representations or warranties to it and that no act by the
Administrative Agent hereafter taken, including any review of the affairs of the
Borrower, shall be deemed to constitute any representation or warranty by the
Administrative Agent to any Lender.  Each Lender represents to the
Administrative Agent that it has, independently and without reliance upon the
Administrative Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial and other
condition and creditworthiness of the Borrower and made its own decision to make
its Loans hereunder and enter into this Agreement.  Each Lender also represents
that it will, independently and without reliance upon the Administrative Agent
or any other Lender, and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement and
the other Loan Documents, and to make such investigation as it deems necessary
to inform itself as to the business, operations, property, financial and other
condition and creditworthiness of the Borrower.  Except for notices, reports and
other documents expressly required to be furnished to the Lenders by the
Administrative Agent hereunder, the Administrative Agent shall not have any duty
or responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of the Borrower which may come into
the possession of the Administrative Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates.
<PAGE>

          4.7 Indemnification.  The Lenders agree to indemnify the
              ---------------
Administrative Agent in its capacity as such (to the extent not reimbursed by
the Borrower and without limiting the obligation of the Borrower to do so),
ratably according to their respective Commitment Percentages in effect on the
date on which indemnification is sought (or, if indemnification is sought after
the date upon which the Commitments shall have terminated and the Loans shall
have been paid in full, ratably in accordance with their Commitment Percentages
immediately prior to such date), from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind whatsoever which may at any time
(including, without limitation, at any time following the payment of the Loans)
be imposed on, incurred by or asserted against the Administrative Agent in any
way relating to or arising out of, the Commitments, this Agreement, any of the
other Loan Documents or any documents contemplated by or referred to herein or
therein or the transactions contemplated hereby or thereby or any action taken
or omitted by the Administrative Agent under or in connection with any of the
foregoing; provided that no Lender shall be liable for the payment of any
           --------
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting solely from the
Administrative Agent's gross negligence or willful misconduct.  The agreements
in this subsection shall survive the payment of the Loans and all other amounts
payable hereunder.

          4.8 Administrative Agent in Its Individual Capacity.  The
              -----------------------------------------------
Administrative Agent and its Affiliates may make loans to, accept deposits from
and generally engage in any kind of business with the Borrower as though the
Administrative Agent were not the Administrative Agent hereunder and under the
other Loan Documents.  With respect to the Loans made by it, the Administrative
Agent shall have the same rights and powers under this Agreement and the other
Loan Documents as any Lender and may exercise the same as though it were not the
Administrative Agent, and the terms "Lender" and "Lenders" shall include the
Administrative Agent in its individual capacity.

          4.9 Successor Administrative Agent.  The Administrative Agent may
              ------------------------------
resign as Administrative Agent upon 10 days' notice to the Lenders.  If the
Administrative Agent shall resign as Administrative Agent under this Agreement
and the other Loan Documents, then the Majority Lenders shall appoint from among
the Lenders a successor agent for the Lenders, which successor agent shall be
approved by the Borrower, whereupon such successor agent shall succeed to the
rights, powers and duties of the Administrative Agent, and the term
"Administrative Agent" shall mean such successor agent effective upon such
appointment and approval, and the former Administrative Agent's rights, powers
and duties as Administrative Agent shall be terminated, without any other or
further act or deed on the part of such former Administrative Agent or any of
the parties to this Agreement or any holders of the Loans.  After any retiring
Administrative Agent's resignation as Administrative Agent, the provisions of
this Section 7 shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Administrative Agent under this Agreement and the
other Loan Documents.
<PAGE>

                           SECTION 5. MISCELLANEOUS

          5.1 Amendments and Waivers.  The Majority Lenders may, or, with the
              ----------------------
written consent of the Majority Lenders, the Administrative Agent may, from time
to time, enter into with the Borrower written amendments, supplements,
modifications or waivers hereto and to the other Loan Documents provided,
                                                                --------
however, that no such waiver and no such amendment, supplement or modification
-------
shall (i) reduce the amount or extend the scheduled date of maturity of any
Loan, or reduce the stated rate of any interest or fee payable hereunder or
extend the scheduled date of any payment thereof or increase the amount or
extend the expiration date of any Lender's Commitment, in each case without the
consent of each Lender affected thereby, or (ii) amend, modify or waive any
provision of this subsection, the provision of Section 8.6(a) requiring the
written consent of each Lender for the assignment or transfer by the Borrower of
its rights and obligations under this Agreement, or reduce the percentage
specified in the definition of Majority Lenders, in each case without the
written consent of all the Lenders, or (iii) amend, modify or waive any
provision of Section 7 without the written consent of the then Administrative
Agent.

          5.2 Notices.  All notices, requests and demands to or upon the
              -------
respective parties hereto to be effective shall be in writing (including by
facsimile transmission) and, unless otherwise expressly provided herein, shall
be deemed to have been duly given or made (a) in the case of delivery by hand,
when delivered, (b) in the case of delivery by mail, 5 days after being
deposited in the mails, postage prepaid, or (c) in the case of delivery by
facsimile transmission, when sent and receipt has been confirmed, addressed as
follows in the case of the Borrower and the Administrative Agent, and, in the
case of the other parties hereto, as set forth on the signature page of such
other parties hereto, or to such other address as may be hereafter notified by
the respective parties hereto:

  The Borrower:               Treasurer
                              Virginia Electric and Power Company
                              701 E. Cary Street
                              P.O. Box 26666
                              Richmond, VA  23261
                              Fax:  (804) 771-4066

  The Administrative Agent:   The Chase Manhattan Bank
                              270 Park Avenue
                              New York, New York  10017
                              Attention:  Paul Farrell
                              Fax: 212-270-3089

  with a copy to:             The Chase Manhattan Bank
                              Agency Bank Services
                              One Chase Manhattan Plaza
                              New York, New York
<PAGE>

provided that any notice, request or demand to or upon the Administrative Agent
--------
or the Lenders pursuant to subsection 2.2, 2.4, 2.6, 2.7, 2.10 or 2.14 shall not
be effective until received.

          5.3 No Waiver; Cumulative Remedies.  No failure to exercise and no
              ------------------------------
delay in exercising, on the part of the Administrative Agent or any Lender, any
right, remedy, power or privilege hereunder or under the other Loan Documents
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein provided are cumulative and
not exclusive of any rights, remedies, powers and privileges provided by law.

          5.4 Survival.  All representations and warranties made hereunder, in
              --------
the other Loan Documents and in any document, certificate or statement delivered
pursuant hereto or in connection herewith or therewith shall survive the
execution and delivery of this Agreement and the making of the Loans hereunder.

          5.5 Payment of Expenses.  The Borrower agrees (a) to pay or reimburse
              -------------------
the Administrative Agent for all its reasonable out-of-pocket costs and expenses
incurred in connection with the development, preparation and execution of, and
any amendment, supplement or modification to, this Agreement and the other Loan
Documents including, without limitation, the reasonable fees and disbursements
of counsel to the Administrative Agent, (b) to pay or reimburse each Lender and
the Administrative Agent for all its costs and expenses incurred in connection
with the enforcement or preservation of any rights under this Agreement or the
other Loan Documents including, without limitation, the fees and disbursements
of counsel (and the allocated fees and expenses of in-house counsel) to each
Lender and of counsel to the Administrative Agent and (c) to pay, indemnify, and
hold each Lender and the Administrative Agent harmless from and against any and
all other liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever with respect to the execution, delivery, enforcement, performance and
administration of this Agreement and the other Loan Documents (all the foregoing
in this clause (c), collectively, the "indemnified liabilities"), provided, that
                                                                  --------
the Borrower shall have no obligation hereunder to the Administrative Agent or
any Lender with respect to indemnified liabilities arising from the gross
negligence or willful misconduct of the Administrative Agent or any such Lender
or the failure of the Administrative Agent or any such Lender to comply with
this Agreement.  The agreements in this subsection shall survive repayment of
the Loans and all other amounts payable hereunder.

          5.6 Transfer Provisions.  (a)  Successors and Assigns.  This Agreement
              -------------------        ----------------------
shall be binding upon and inure to the benefit of the Borrower, the Lenders, the
Administrative Agent and their respective successors and assigns, except that
the Borrower may not assign or transfer any of its rights or obligations under
this Agreement without the prior written consent of each Lender.
<PAGE>

          (b)  Participations.  Any Lender may, in the ordinary course of its
               --------------
commercial banking business and in accordance with applicable law, at any time
sell to one or more banks or other entities ("Participants") participating
                                              ------------
interests in any Loan owing to such Lender, any Commitment of such Lender or any
other interest of such Lender hereunder and under the other Loan Documents.  In
the event of any such sale by a Lender of a participating interest to a
Participant, such Lender's obligations under this Agreement to the other parties
to this Agreement shall remain unchanged, such Lender shall remain solely
responsible for the performance thereof, such Lender shall remain the holder of
any such Loan for all purposes under this Agreement and the other Loan
Documents, and the Borrower and the Administrative Agent 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.

          (c)  Assignments.  Any Lender may, in the ordinary course of its
               -----------
commercial banking business and in accordance with applicable law, at any time
and from time to time assign to any Lender or any affiliate thereof or, with the
consent of the Borrower and the Administrative Agent (which in each case shall
not be unreasonably withheld), to an additional bank or financial institution
("an Assignee") all or any part of its rights and obligations under this
     --------
Agreement and the other Loan Documents pursuant to an Assignment and Acceptance,
substantially in the form of Exhibit E, executed by such Assignee, such
assigning Lender (and, in the case of an Assignee that is not then a Lender or
an affiliate thereof, by the Borrower and the Administrative Agent) and
delivered to the Administrative Agent for its acceptance and recording in the
Register, provided that, (i) in the case of any such assignment to an additional
          --------
bank or financial institution, the sum of the aggregate principal amount of the
Commitment being assigned shall not be less than $10,000,000 (or such lesser
amount as may be agreed to by the Borrower and the Administrative Agent) and
(ii) any such assignment may, but need not, include rights of the assigning
Lender in respect of Competitive Loans.  Upon such execution, delivery,
acceptance and recording, from and after the effective date determined pursuant
to such Assignment and Acceptance, (x) the Assignee thereunder shall be a party
hereto and, to the extent provided in such Assignment and Acceptance, have the
rights and obligations of a Lender hereunder with a Commitment as set forth
therein, and (y) the assigning Lender thereunder shall, to the extent provided
in such Assignment and Acceptance, be released from its obligations under this
Agreement (and, in the case of an Assignment and Acceptance covering all or the
remaining portion of an assigning Lender's rights and obligations under this
Agreement, such assigning Lender shall cease to be a party hereto).

          (d)  The Register.  The Administrative Agent, on behalf of the
               ------------
Borrower, shall maintain at the address of the Administrative Agent referred to
in subsection 8.2 a copy of each Assignment and Acceptance delivered to it and a
register (the "Register") for the recordation of the names and addresses of the
               --------
Lenders and the Commitment of, and principal amounts of the Loans owing to, each
Lender from time to time.  The entries in the Register shall be conclusive, in
the absence of manifest error, and the Borrower, the Administrative Agent and
the Lenders may (and, in the case of any Loan or other obligation hereunder not
evidenced by a Note, shall) treat each Person whose name is recorded in the
Register as the owner of a Loan or other obligation hereunder as the owner
thereof for all purposes of this Agreement and the other Loan Documents,
notwithstanding any notice to the contrary.  Any assignment of any Loan or other
<PAGE>

obligation hereunder not evidenced by a Note shall be effective only upon
appropriate entries with respect thereto being made in the Register. The
Register shall be available for inspection by the Borrower or any Lender at any
reasonable time and from time to time upon reasonable prior notice.

          (e)  Recordation.  Upon its receipt of an Assignment and Acceptance
               -----------
executed by an assigning Lender and an Assignee (and, in the case of an Assignee
that is not then a Lender or an affiliate thereof, by the Borrower and the
Administrative Agent) together with payment by the Assignee or the Assignor (or,
in the event of a replacement of a Lender pursuant to subsection 2.20, the
replacement Lender) to the Administrative Agent of a registration and processing
fee of $1,500, the Administrative Agent shall (i) promptly accept such
Assignment and Acceptance and (ii) on the effective date determined pursuant
thereto record the information contained therein in the Register and give notice
of such acceptance and recordation to the Lenders and the Borrower.

          (f)  Disclosure.  The Borrower authorizes each Lender to disclose to
               ----------
any Participant or Assignee (each, a "Transferee") and any prospective
                                      ----------
Transferee, any and all financial information in such Lender's possession
concerning the Borrower and its Subsidiaries, which has been delivered to such
Lender by or on behalf of the Borrower pursuant to this Agreement or which has
been delivered to such Lender by or on behalf of the Borrower in connection with
such Lender's credit evaluation of the Borrower and its Subsidiaries prior to
becoming a party to this Agreement.

          (g)  Pledges.  For avoidance of doubt, the parties to this Agreement
               -------
acknowledge that the provisions of this subsection concerning assignments of
Loans and Notes relate only to absolute assignments and that such provisions do
not prohibit assignments creating security interests, including, without
limitation, any pledge or assignment by a Lender of any Loan or Note to any
Federal Reserve Bank in accordance with applicable law.

          5.7  Adjustments.  If any Lender (a "benefitted Lender") shall at any
               -----------                     -----------------
time receive any payment of all or part of its Loans, or interest thereon, or
receive any collateral in respect thereof (whether voluntarily or involuntarily,
by set-off, pursuant to events or proceedings of the nature referred to in
Section 6(d) or (e), or otherwise), in a greater proportion than any such
payment to or collateral received by any other Lender, if any, in respect of
such other Lender's Loans that are then due and payable, or interest thereon,
such benefitted Lender shall purchase for cash from the other Lenders a
participating interest in such portion of each such other Lender's Loans, or
shall provide such other Lenders with the benefits of any such collateral, or
the proceeds thereof, as shall be necessary to cause such benefitted Lender to
share the excess payment or benefits of such collateral or proceeds ratably with
each of the Lenders; provided, however, that if all or any portion of such
                     --------  -------
excess payment or benefits is thereafter recovered from such benefitted Lender,
such purchase shall be rescinded, and the purchase price and benefits returned,
to the extent of such recovery, but without interest.

          5.8  Counterparts.  This Agreement may be executed by one or more of
               ------------
the parties to this Agreement on any number of separate counterparts (including
by facsimile transmission),
<PAGE>

and all of said counterparts taken together shall be deemed to constitute one
and the same instrument. A set of the copies of this Agreement signed by all the
parties shall be lodged with the Borrower and the Administrative Agent.

          5.9  Severability.  Any provision of this Agreement which is
               ------------
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 hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

          5.10 Integration.  This Agreement and the other Loan Documents
               -----------
represent the agreement of the Borrower, the Administrative Agent and the
Lenders with respect to the subject matter hereof, and there are no promises,
undertakings, representations or warranties by the Administrative Agent or any
Lender relative to subject matter hereof not expressly set forth or referred to
herein or in the other Loan Documents.

          5.11 GOVERNING LAW.  THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
               -------------
THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

          5.12 WAIVERS OF JURY TRIAL.  THE BORROWER, THE ADMINISTRATIVE AGENT
               ---------------------
AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN
ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.  THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT.

          5.13 Confidentiality.  Each Lender agrees to keep confidential any
               ---------------
written or oral information (a) provided to it by or on behalf of the Borrower
pursuant to or in connection with this Agreement or (b) obtained by such Lender
based on a review of the books and records of the Borrower; provided that
                                                            --------
nothing herein shall prevent any Lender from disclosing any such information (i)
to its affiliates, the Administrative Agent or any other Lender, (ii) to any
Transferee which agrees to comply with the provisions of this subsection, (iii)
to its employees, directors, agents, attorneys, accountants and other
professional advisors, (iv) upon the request or demand of any Governmental
Authority having jurisdiction over such Lender, (v) in response to any order of
any court or other Governmental Authority or as may otherwise be required
pursuant to any Requirement of Law, (vi) which has been publicly disclosed other
than in breach of this Agreement, or (vii) in connection with the exercise of
any remedy hereunder.  In the event that a Lender determines to disclose
information pursuant to clause (v) of this subsection 8.13, such Lender will, to
the extent permitted by applicable law, notify the Borrower prior to disclosing
such information.
<PAGE>

          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their proper and duly authorized officers as
of the day and year first above written.

                              VIRGINIA ELECTRIC AND POWER COMPANY

                              By:____________________________
                                Name:
                                Title:
<PAGE>

                              THE CHASE MANHATTAN BANK,
                                as Administrative Agent and as a Lender

                              By:______________________________
                                 Name:
                                 Title:

                              Commitment:

               SIGNATURE PAGE TO 364-DAY CREDIT AGREEMENT WITH
                      VIRGINIA ELECTRIC AND POWER COMPANY
<PAGE>

FIRST UNION NATIONAL BANK,
 as a Lender

By:__________________________
  Name:
  Title:

Address for notices:

For overnight delivery:
901 East Cary Street, 2nd Floor
Richmond, Virginia  23219
Attention:
Facsimile:

For U.S. mail:
Post Office Box 26944
Richmond, Virginia  23261
Attention:
Facsimile:

Commitment:

               SIGNATURE PAGE TO 364-DAY CREDIT AGREEMENT WITH
                      VIRGINIA ELECTRIC AND POWER COMPANY
<PAGE>

                                         MORGAN GUARANTY TRUST COMPANY OF
                                           NEW YORK, as a Lender

                                         By:__________________________________
                                         Name:
                                         Title:

                                         Address for notices:

                                         500 Stanton-Christiana Road
                                         Newark, DE 19713
                                         Attention:
                                         Facsimile:

                                         Commitment:

<PAGE>

NATIONSBANK, N.A.,
 as a Lender

By:______________________________
  Name:   Gretchen P. Burud
  Title: Vice President

Address for notices:

100 North Tryon, 8th Floor
Charlotte, NC  28255
Attention:
Facsimile:

Commitment:

               SIGNATURE PAGE TO 364-DAY CREDIT AGREEMENT WITH
                      VIRGINIA ELECTRIC AND POWER COMPANY
<PAGE>

                                        THE FIRST NATIONAL BANK OF CHICAGO,
                                         as a Lender

                                        By:_______________________________
                                        Name:
                                        Title:

                                        Address for notices:

                                        One First National Plaza
                                        Chicago, IL  60670
                                        Attention:
                                        Facsimile:

                                        Commitment:  $15,000,000

               SIGNATURE PAGE TO 364-DAY CREDIT AGREEMENT WITH
                      VIRGINIA ELECTRIC AND POWER COMPANY
<PAGE>

THE SUMITOMO BANK, LIMITED, as a Lender

By:______________________________________
  Name:
  Title:

Address for notices:

277 Park Avenue
New York, New York  10172
Attention:
Facsimile:

Commitment:  12,000,000

               SIGNATURE PAGE TO 364-DAY CREDIT AGREEMENT WITH
                      VIRGINIA ELECTRIC AND POWER COMPANY
<PAGE>

                                             WACHOVIA BANK, N.A.,
                                               as a Lender

                                             By:________________________________
                                             Name:  Diana H. Davis
                                             Title:  Assistant Vice President

                                             Address for notices:

                                             100 North Main Street
                                             Winston Salem, NC  27101
                                             Attention:
                                             Facsimile:

                                             Commitment:

               SIGNATURE PAGE TO 364-DAY CREDIT AGREEMENT WITH
                      VIRGINIA ELECTRIC AND POWER COMPANY
<PAGE>

ABN AMRO BANK N.V. (NEW YORK
 BRANCH), as a Lender

By:_________________________________
   Name:
   Title:

By:_________________________________
   Name:
   Title:

Address for notices:

500 Park Avenue
New York, NY 10022
Attention:
Facsimile:

Commitment:
<PAGE>

                                        THE BANK OF NOVA SCOTIA,
                                          as a Lender

                                        By:_________________________________
                                        Name:
                                        Title:

                                        Address for notices:

                                        One Liberty Plaza
                                        New York, New York 10006
                                        Attention:
                                        Facsimile:

                                        Commitment:
<PAGE>

CRESTAR BANK,
 as a Lender

By:_______________________________
   Name:
   Title:

Address for notices:

919 East Main Street
Richmond, VA 23219
Attention:
Facsimile:

Commitment:

<PAGE>

                                        BAYERISCHE LANDESBANK GIROZENTRALE,
                                        as a Lender

                                        By:_______________________________
                                        Name:
                                        Title:

                                        Address for notices:

                                        560 Lexington Avenue
                                        New York, NY 10022

                                        Commitment:

<PAGE>

MELLON BANK, N.A.,
  as a Lender

By:_______________________________
   Name:
   Title:

Address for notices:

One Mellon Bank Centre
Pittsburgh, PA 15258-001

Commitment:
<PAGE>

                                       FLEET NATIONAL BANK
                                       as a lender

                                       By:____________________________________
                                       Name:
                                       Title:

                                       Address for notices:

                                       1 Federal Street
                                       Boston, MA 02110
<PAGE>

WESTDEUTSCHE LANDESBANK
GIROZENTRALE, NEW YORK BRANCH,
  as a Lender

By:__________________________________
  Name:
  Title:

Address for notices:

1211 Avenue of the Americas
New York, NY 10036

Commitment:
<PAGE>

                                                            SCHEDULE I

     FACILITY FEE/APPLICABLE MARGIN

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------
<S>                    <C>             <C>             <C>                 <C>               <C>
Senior Secured         Level 1         Level 2          Level 3             Level 4               Level 5
Ratings S&P/Moody's    A/A2 or                                             BBB/Baa2
-------------------    higher           A-/A3          BBB+/Baa1           --------          BBB-/Baa3 or lower
                       ------           -----          ---------                             ------------------
---------------------------------------------------------------------------------------------------------------
Facility Fee Rate*      0.07%            0.09%            0.10%              0.15%                 0.20%
---------------------------------------------------------------------------------------------------------------

Applicable Margins*     0.23%           0.235%           0.275%             0.275%                0.425%
LIBOR                  0.355%            0.36%            0.40%              0.40%                 0.55%
CD Rate                  0.0%             0.0%             0.0%               0.0%                  0.0%
ABR
---------------------------------------------------------------------------------------------------------------
</TABLE>

*    In the event such ratings fall within different Levels, the foregoing will
     be based on the Level with the highest rating (i.e., the lower Level
                                                    ----
     number), except that in the event that the lower of such ratings is more
              ------
     than one Level below the higher of such ratings, the Facility Fee Rate and
     the Applicable Margin will be determined based on the Level one Level above
     the lower of such ratings. In the event that there is no Moody's Bond
     Rating or S&P Bond Rating available (other than due to both Moody's
     Investor Services, Inc. and Standard & Poor's Ratings Group ceasing to be
     engaged in the business of rating corporate debt securities), then the
     Facility Fee Rate and the Applicable Margin will be determined based on
     Level 5. In the event that both Moody's Investor Services, Inc. and
     Standard & Poor's Ratings Group cease to be engaged in the business of
     rating corporate debt securities, the parties hereto agree to negotiate in
     good faith to establish on an equitable basis new Facility Fee Rates and
     Applicable Margins. If on any day the aggregate principal amount of the
     Loans outstanding on such day is greater than 50% of the aggregate amount
     of the Commitments in effect on such date, the Applicable Margin in effect
     on such day for LIBOR and CD Rate shall be increased by 0.10%.
<PAGE>

                                                            SCHEDULE II

                        PERMITTED GUARANTEE OBLIGATIONS

1. Guarantee Agreement between Virginia Electric and Power Company and The Chase
   Manhattan Bank dated August 31, 1995.

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