Document:

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                                                                    Exhibit 10.3

                          E.SPIRE COMMUNICATIONS, INC.

                               PURCHASE AGREEMENT

                                                 As of September 19, 2000

To:      WRH Telecom Partners, L.L.C., as Investment Adviser for
         Honeywell International Inc.
         Master Retirement Trust
         50 South LaSalle Street
         Chicago, IL 60675

Ladies and Gentlemen:

       e.spire COMMUNICATIONS, INC. (the "Company"), a Delaware corporation,
hereby confirms its agreement with the HONEYWELL INTERNATIONAL INC. MASTER
RETIREMENT TRUST acting through its investment adviser, WRH TELECOM PARTNERS,
L.L.C. (the "Purchaser").

       1. Sale of Junior Securities to Third Parties. The Company hereby agrees
to use its commercially reasonable efforts to sell Junior Securities (as such
term is defined in Section 2(d) below) to third parties at a price, under
documentation and on terms (including without limitation registration rights and
the issuance of Transaction Fee Warrants (as such term is defined in Section 13
below)) no less favorable to such third parties than are specified herein with
respect to Purchaser Junior Securities (as such term is defined in Section 2(g)
below).

       2. Purchaser Obligation to Purchase.

       (a) Purchase Obligations. (i) From and after the Initial Closing (as such
term is defined in Section 2(a)(ii) below) but on or before September 30, 2001,
at each time that the Company gives written notice to The Huff Alternative
Income Fund, L.P. ("Huff") requiring Huff to purchase any Purchaser Junior
Securities pursuant to the Purchase Agreement of even date herewith between the
Company and Huff (the "Huff Purchase Agreement"), the Company also shall give
written notice(s) (each a "Purchase Notice") to the Purchaser that it is
requiring the Purchaser to purchase from the Company the same Purchaser Junior
Securities. Subject to satisfaction of the terms and conditions set forth
herein, the Purchaser hereby agrees to purchase such Purchaser Junior Securities
from the Company in the amount set forth in each Purchase Notice given in
accordance with this Agreement; provided, however, that notwithstanding anything
to the contrary contained in this Agreement, (i) the maximum purchase which the

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Purchaser shall be required to make in respect of any Purchase Notice shall in
no event be greater than the lower of the Purchaser's Pro Rata Share (as such
term is defined in Section 2(g) below) and the then outstanding Maximum Amount
(as such term is defined in Section 2(f) below), and (ii) the aggregate amount
of Purchaser Junior Securities which the Purchaser shall be required to purchase
in respect of all Purchase Notices given under this Agreement shall in no event
exceed the Maximum Amount. The purchase price payable by the Purchaser to the
Company for the purchase of Purchaser Junior Securities shall be the Junior
Securities Purchase Price (as such term is defined in Section 2(g) below). The
right of the Purchaser to purchase Purchaser Junior Securities pursuant to this
Section 2(a)(i) shall expire on September 30, 2001 (except with respect to
Purchase Notices given on or before September 30, 2001). Each closing of the
purchase of Purchaser Junior Securities hereunder is referred to herein as a
"Closing."

                     (ii) The initial closing (the "Initial Closing") of the
purchase of Purchaser Junior Securities hereunder shall occur simultaneously
with the execution and delivery of this Agreement. At the Initial Closing,
subject to satisfaction of the terms and conditions set forth herein, the
Company shall issue and sell to the Purchaser and the Purchaser shall purchase
from the Company an aggregate of 14,286 shares of Exchangeable Preferred Stock,
par value $1.00 per share (the "Exchangeable Preferred"), at a price of $1,000
per share for an aggregate purchase price of $14,286,000. The Exchangeable
Preferred purchased at the Initial Closing and at any subsequent Closing (and
all securities issued upon exchange of the Exchangeable Preferred) shall be
deemed to be Purchaser Junior Securities for all purposes of this Agreement, and
the gross proceeds received by the Company from the sale of Exchangeable
Preferred shall be deemed Junior Securities Proceeds for all purposes of this
Agreement.

              (b) "Credit Agreement" shall mean that certain First Amended and
Restated Credit Agreement, dated as of September 19, 2000, by any among the
Company, e.spire Finance Corporation, and the Lenders (as defined therein) and
other parties named therein.

              (c) "Junior Securities" shall mean Common Stock; warrants for
Common Stock; Exchangeable Preferred; Committed Preferred (as such term is
defined in the Credit Agreement); or other preferred stock of the Company issued
in accordance with the Credit Agreement and the Indentures governing the
Existing Senior Notes; or subordinated notes of the Company, provided that any
such subordinated notes shall (i) be unsecured, (ii) have a maturity not sooner
than six months after the final maturity date of the Loans, (iii) not be
guarantied by any Subsidiary, (iv) have no cash payments required prior to the
final maturity of the Loans, (v) have subordination terms satisfactory to the
Requisite Lenders, (vi) have terms no more restrictive to the Company and its
Subsidiaries (including without limitation in terms of covenants, events of
default, grace periods and other rights granted to holders thereof) than the
Existing Senior Notes, and (vii) be permitted to be issued under the Indentures
governing the Existing Senior Notes. Capitalized terms in this subsection 2(c)
not otherwise defined in this Agreement shall have the meanings therefor set
forth in the Credit Agreement.

              (d) "Junior Securities Proceeds" shall mean the total of the gross
proceeds received by the Company from the sale of Purchaser Junior Securities to
the Purchaser hereunder

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(including without limitation any proceeds actually received by the Company from
the sale of Exchangeable Preferred pursuant to this Agreement and on exercise of
any warrants included in the Purchaser Junior Securities).

              (e) "Junior Securities Purchase Price" shall mean:

                     (i) if the Purchaser Junior Securities shall consist of
Common Stock, $.01 par value, of the Company ("Common Stock"), an amount equal
to the lesser of (A) $ 3.367496 per share and (B) 80% of (x) the average of the
closing prices of the Company's Common Stock as reported on the principal
national securities exchange (including The NASDAQ Stock Market) on which it is
then traded on the 20 trading days immediately preceding the date of the closing
of the purchase of such Common Stock hereunder; or (y) if the Company's Common
Stock is not so traded, the fair market value per share of the Company's Common
Stock on the date the applicable Purchase Notice is given as determined by a
recognized investment banking firm or other appraiser specified (with the
approval of the Company in its reasonable discretion) by Huff (subject in any
such case to appropriate adjustment for stock dividends, stock splits,
recapitalizations, reorganizations and similar events) (the "Common Stock
Purchase Price");

                     (ii) if the Purchaser Junior Securities shall consist of
convertible preferred stock, an amount equal to 100% of the liquidation value of
such convertible preferred stock, with the initial conversion price of such
convertible preferred stock to be set at the Common Stock Purchase Price which
would have been in effect had Common Stock been purchased hereunder in respect
of the applicable Purchase Notice instead of such convertible preferred stock;

                     (iii) if the Purchaser Junior Securities shall consist of
Exchangeable Preferred an amount equal to $1,000 per share; or

                     (iv) if the Purchaser Junior Securities shall consist in
whole or in part of securities other than as described in clause (i), (ii) or
(iii) above, an amount specified by Huff, subject to the consent of the Company
not to be unreasonably withheld, and subject to Purchaser's reasonable
acceptance solely as a condition to Purchaser's obligations under Section 2(a),
providing the Purchaser with a value substantially equivalent (as determined by
a nationally recognized investment banking firm mutually acceptable to Huff and
the Company, the fees and expenses of which shall be paid by the Company) to
Common Stock or convertible preferred stock (whichever shall be specified by
Huff and shall be reasonably acceptable to Purchaser solely as a condition to
Purchaser's obligations under Section 2(a)) purchased at a price set forth under
clause (i) or (ii) above, as applicable, and assuming for purposes of
determining such value that the financial condition of the Company is no worse
on such date of determination than it is on the date hereof.

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              (f) "Maximum Amount" shall mean $21,238,572 minus the aggregate
amount of all Junior Securities Proceeds (as such term is defined in Section
2(d) above) received by the Company from the Purchaser on or before the date any
such Purchase Notice is given.

              (g) "Pro Rata Share" shall mean 50% of any Purchaser Junior
Securities sold to Huff pursuant to the Huff Purchase Agreement.

              (h) "Purchaser Junior Securities" shall mean any Junior Securities
(or any combination of Junior Securities) specified by Huff in its sole
discretion, provided that (i) in the case of the Company's convertible preferred
stock, such convertible preferred stock shall have terms and conditions
substantially the same (except as provided in this Agreement or as reasonably
specified by Huff with the approval of the Company not to be unreasonable
withheld and with the reasonable acceptance by Purchaser solely as a condition
to Purchaser's obligations under Section 2(a)) as the Committed Preferred; (ii)
in the case of the Company's warrants, such warrants shall have terms and
conditions substantially the same (except as to pricing, as provided in this
Agreement or as reasonably specified by Huff with the approval of the Company
not to be unreasonably withheld and with the reasonable acceptance by Purchaser
solely as a condition to Purchaser's obligations under Section 2(a)) as the
Warrants purchased by the Purchaser pursuant to that certain Warrant Agreement
(the "Warrant Agreement") dated as of March 1, 2000 among the Company, the
Purchaser and the other parties thereto; and (iii) in the case of Purchaser
Junior Securities other than the Company's Common Stock, convertible preferred
stock or warrants, such Purchaser Junior Securities shall have terms and
conditions (consistent with the provisions of the definition of Junior
Securities set forth in this Agreement) as are reasonably specified by Huff with
the approval of the Company not to be unreasonably withheld and as are
reasonably acceptable to Purchaser solely as a condition to Purchaser's
obligations under Section 2(a).

              (i) "Series A Preferred" shall mean the Company's Series A
Convertible Preferred Stock, par value $1.00 per share.

       3. Registration Rights; Transaction Documents.

              (a) The Purchaser and the direct and indirect transferees of the
Purchaser Junior Securities purchased hereunder (including without limitation
the shares of Exchangeable Preferred) and the Transaction Fee Warrants (as such
term is defined in Section 13 hereof) issued hereunder and any securities of the
Company issued upon conversion, exchange or exercise of such Purchaser Junior
Securities and Transaction Fee Warrants (the "Additional Securities" and
collectively with the Purchaser Junior Securities and Transaction Fee
Securities, the "Securities"), will be entitled to the benefits of registration
rights agreements (the "Registration Rights Agreements") (or, in the case of
warrants included in the Purchaser Junior Securities and Transaction Fee
Warrants, registration rights substantially the same as those set forth in the
Warrant Agreement, with such changes therein as may be reasonably specified by
Huff (with the consent of the Purchaser and the Company not to be unreasonably
withheld), which will require the Company, among other things, to file with the
Securities and Exchange Commission (the "Commission") one or more shelf
registration statements (the "Registration Statements")

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pursuant to Rule 415 under the Securities Act of 1933, as amended (the "Act"),
relating to the resale of such Securities and to use its reasonable best efforts
to cause such Registration Statements to be declared and remain effective in
accordance therewith. Subject to such changes therein as may be reasonably
specified by Huff (with the consent of the Purchaser and the Company not to be
unreasonably withheld), the Registration Rights Agreements shall have terms and
conditions substantially the same as that certain Registration Rights Agreement
dated as of March 1, 2000 among the Company, the Purchaser and the other
signatories thereto.

              (b) This purchase agreement (the "Agreement"), and all
certificates of designation, warrant agreements and related warrants, the
Registration Rights Agreements and the other documents and instruments
effectuating or relating to the Securities are herein collectively referred to
as the "Transaction Documents."

       4. Representations and Warranties. The Company represents and warrants to
and agrees with the Purchaser that:

              (a) Since January 1, 1999 and to the date of this Agreement, the
Company has filed with the Commission, a Proxy Statement on Schedule 14A with
respect to the Company's 2000 Annual Meeting of Stockholders, the Company's
Annual Report on Form 10-K for the year ended December 31, 1999, the Company's
Quarterly Reports on Form 10-Q for the fiscal quarter ended June 30, 2000, the
Company's Quarterly Report on Form 10-Q/A for the quarter ended March 31, 2000,
and the Company's Current Reports on Form 8-K filed on January 25, 2000,
February 3, 2000, March 14, 2000, April 10, 2000, June 22, 2000, July 11, 2000
and July 20, 2000 (including all exhibits to any of such documents)
(collectively the "SEC Reports"), which constitute all reports, schedules,
forms, statements and other documents required to be filed with the Commission
during such period by the Company. As of their respective dates, the SEC Reports
complied in all material respects with the requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and the rules and
regulations of the Commission promulgated thereunder applicable to the SEC
Reports, and none of the SEC Reports as of such dates contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein, in light of the circumstances under which they were made, not
misleading. Except to the extent that any SEC Report has been revised or
superseded by a later filed SEC Report, none of the SEC Reports contains any
untrue statement of a material fact or omits to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading. The
consolidated financial statements of the Company included in the SEC Reports
comply as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the Commission with
respect thereto, have been prepared in accordance with generally accepted
accounting principles (except, in the case of unaudited consolidated quarterly
statements, as permitted by Form 10-Q of the Commission) applied on a consistent
basis during the periods involved (except as may be indicated in the notes
thereto) and fairly present in all materials respects the consolidated financial
position of the Company and its consolidated subsidiaries as of the dates
thereof and the consolidated results of their operations

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and cash flows for the periods then ended (subject, in the case of unaudited
quarterly statements, to normal year-end audit adjustments).

              (b) The Company owns all the issued and outstanding capital stock
or other equity interests of each of its direct and indirect subsidiaries (the
"Subsidiaries"). Each of the Company and the Subsidiaries is duly incorporated
or organized, validly existing and in good standing as a corporation or a
limited liability company, as the case may be, under the laws of its
jurisdiction of incorporation or organization, with all requisite corporate or
limited liability company power and authority to own or lease its properties and
conduct its business as now conducted, and as proposed to be conducted as
described in the Company's SEC Reports. Each of the Company and the Subsidiaries
is duly qualified to do business as a foreign corporation in good standing in
the jurisdiction in which it has its principal place of business and in all
other jurisdictions where the ownership or leasing of its properties or the
conduct of its business requires such qualification, except where the failure to
be so qualified would not, singly or in the aggregate, have a material adverse
effect on the business, condition (financial or other), assets, nature of
assets, liabilities, operations, prospects or results of operations of the
Company and the Subsidiaries, taken as a whole (any such event, a "Material
Adverse Effect"). Except as described in the SEC Reports, the Company does not
own or control, directly or indirectly, any material interest in any other
corporation, association, or other business entity.

              (c) Except as set forth on Schedule 4(c)(i), all Securities to be
issued or sold hereunder and under any Transaction Document relating thereto and
the certificates of designation, warrants, agreements and the instruments,
documents and other Transaction Documents providing therefor or relating thereto
have been (or will be prior to the Closing of the purchase of the applicable
Purchaser Junior Securities by the Purchaser hereunder) duly authorized by the
Company. The Purchaser Junior Securities, when issued, sold and delivered in
accordance with the terms hereof and for the consideration expressed herein and
the applicable Transaction Documents relating thereto, and the Additional
Securities when issued in accordance with the terms of the Transaction Documents
relating thereto, (i) will be duly and validly issued and, in the case of any
shares of capital stock included in the Securities, fully paid and
nonassessable, (ii) will be free of any pledges, liens, security interests,
claims, rights or other encumbrances of any kind, (iii) assuming the accuracy of
the Purchaser's representations and warranties in this Agreement, will be issued
in compliance with all applicable federal and state securities laws, and (iv)
will not be issued in violation of any preemptive rights of stockholders. Except
as set forth on Schedule 4(c)(ii), all shares of capital stock included among
the Securities (including all shares issuable upon exercise, exchange or
conversion of Purchaser Junior Securities or any of the warrants referred to
herein, including without limitation any Transaction Fee Warrants) shall be duly
and validly reserved for issuance from and after the respective Closings of the
applicable purchases of Purchaser Junior Securities and issuances of any
warrants, including without limitation any Transaction Fee Warrants, hereunder
or as otherwise contemplated hereby.

              (d) The Company has all requisite corporate power and authority to
execute and deliver this Agreement and will on the dates of the respective
Closings for the

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purchase hereunder of Purchaser Junior Securities have the requisite corporate
power and authority to execute and deliver the other Transaction Documents
applicable thereto; this Agreement has been (and when executed and delivered the
other Transaction Documents will have been) duly authorized by the Company; and
(assuming due authorization, execution and delivery by the parties thereto other
than the Company) this Agreement constitutes and, when executed and delivered by
the Company the other Transaction Documents will constitute, valid and legally
binding agreements of the Company, enforceable against the Company in accordance
with their terms, except that (i) the enforcement thereof may be subject to (A)
bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or
other similar laws now or hereafter in effect relating to creditors' rights
generally, (B) general principles of equity and the discretion of the court
before which any proceeding therefor may be brought and (C) rights to indemnity
or contribution thereunder may be limited by federal and state securities laws
and public policy considerations.

              (e) The Company has (or will have on the dates of the respective
Closings for the purchase of the Purchaser Junior Securities hereunder) all
requisite corporate power to issue and deliver the Securities, and to consummate
the transactions contemplated hereby and the other Transaction Documents. This
Agreement and each other Transaction Document has been (or on the closing dates
for the purchase hereunder of the Purchaser Junior Securities will have been),
duly authorized, and this Agreement has been and each other Transaction Document
has been or on such closing dates will be duly executed and delivered by the
Company. No consent, approval, authorization or order of any foreign or domestic
national, state, provincial or local government or any instrumentality,
subdivision, court or governmental agency or body thereof, or any arbitral body
(each, a "Governmental Authority") having jurisdiction over the Company or the
Subsidiaries or their respective businesses (including, without limitation, the
Federal Communications Commission (the "FCC")) is required for the performance
of this Agreement and the other Transaction Documents by the Company or the
consummation by the Company of the transactions contemplated hereby or thereby,
except for (x) such consents as have been obtained or shall have been obtained
at or before the applicable closing dates for the purchase hereunder of the
Purchaser Junior Securities and are in full force and effect as of such closing
dates, (y) such consents as may be required under state securities or "Blue Sky"
laws in connection with the purchase and resale of the Securities by the
Purchaser and (z) any notification as may be required under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), or any consent as may be required by the FCC or any state
telecommunications regulatory authorities or commissions ("State
Telecommunications Authorities"), in each such case, as a result of the
Purchaser's purchase of Common Stock or other voting securities or the
conversion or exercise of any warrants, convertible preferred stock or
convertible indebtedness included in the Securities. Neither the Company nor any
of the Subsidiaries nor their operations is (i) in violation of its certificate
of incorporation or by-laws (or similar organizational document), (ii) in
violation of any statute, judgment, decree, order, rule or regulation applicable
to the Company or the Subsidiaries, which violation would, individually or in
the aggregate, be reasonably likely to have a Material Adverse Effect or (iii)
other than as disclosed in the Company's SEC Reports or as otherwise disclosed
in Schedule 4(e) and after giving effect to the Credit Agreement, in default in
the performance or observance of any

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obligation, agreement, covenant or condition contained in any indenture,
mortgage, deed of trust, loan agreement, note, lease, license, franchise
agreement, permit, certificate, contract or other agreement or instrument to
which the Company or the Subsidiaries is a party or to which the Company or the
Subsidiaries or their respective assets is subject, which default would,
individually or in the aggregate, be reasonably likely to have a Material
Adverse Effect.

              (f) Neither the issuance or sale of the Securities, nor the
execution, delivery and performance by the Company of the Transaction Documents
or the consummation of the transactions contemplated thereby, will (i) conflict
with the certificate of incorporation or by-laws of the Company, as the same
will be in effect as of each Closing (or other date of issuance of such
Securities) hereunder, (ii) constitute or result in a breach, default or
violation of (with or without the giving of notice, passage of time or both), or
result in the creation or imposition of a lien, charge or encumbrance on any
properties or assets of the Company or the Subsidiaries under any of the terms
or provisions of, any indenture, mortgage, deed of trust, loan agreement, note,
lease, license, franchise agreement, or other agreement or instrument to which
the Company is a party or to which the Company or its respective properties is
subject, (iii) require the consent of any third party or any Governmental
Authorities (including without limitation The NASDAQ Stock Market and any
related body ("NASDAQ")), other than (A) the Stockholder Approval (as such term
is hereinafter defined), (B) any required consents of the FCC or any State
Telecommunications Authority as a result of the Purchaser's purchase of Common
Stock or other voting securities of the Company or the conversion, exchange or
exercise of warrants, exchangeable or convertible preferred stock or
exchangeable or convertible indebtedness included in the Securities, which
consents will have been obtained and be in full force and effect as of each
Closing of the purchase or other date of issuance of Securities as contemplated
hereby and (C) in the case of any Security other than Committed Preferred,
Exchangeable Preferred, Series A Preferred, Common Stock or warrants for Common
Stock or Committed Preferred or Series A Preferred, consent under the Credit
Agreement; or (iv) (assuming compliance with all applicable state securities and
"Blue Sky" laws, all applicable rules and regulations of the FCC and State
Telecommunications Authorities, and the HSR Act, and assuming the receipt by the
Company of the Stockholder Approval and assuming the accuracy of the
representations and warranties of the Purchaser in Section 9 hereof) contravene
any statute, judgment, decree, order, rule or regulation of any Governmental
Authority applicable to the Company or any of its respective properties, except
for any conflict, breach, violation, default, lien, charge, contravention or
encumbrance referred to in clauses (ii) and (iii) of this Section 4(f) which
would not, individually or in the aggregate, be reasonably likely to have a
Material Adverse Effect. For purposes of this Agreement, "Stockholder Approval"
shall mean the affirmative vote of the holders of a majority of the shares of
the Company's Common Stock present in person or by proxy at a meeting of
stockholders of the Company duly called and held (and at which meeting a quorum
is present) approving (i) the issuance and sale hereunder of all Securities
contemplated by this Agreement (other than the Exchangeable Preferred, but
including all Purchaser Junior Securities issued upon exchange of the
Exchangeable Preferred), and (ii) the issuance and sale of all Junior Securities
to third parties contemplated by this Agreement. Subject to obtaining
Stockholder Approval, the issuance of Securities hereunder (other than the
Exchangeable Preferred) is not and at the time of issuance of such Securities
will not be in

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violation, breach or contravention of any rule or other requirement or any
criteria for listing or continued trading through NASDAQ (a "NASDAQ Rule") and
does not and will not require any consent of NASDAQ. The issuance of
Exchangeable Preferred hereunder is not and at the time of issuance of such
Exchangeable Preferred will not be in violation, breach or contravention of any
NASDAQ Rule and does not and will not require any consent of NASDAQ.

              (g) Except as described in the Company's SEC Reports, there is
neither pending nor, to the best knowledge of the Company after due inquiry,
threatened, any action, suit, proceeding, inquiry or investigation to which the
Company or any of the Subsidiaries is a party, or to which any of their
respective properties or assets are or would be subject, before or brought by
any Governmental Authority (including, without limitation, the FCC) that would,
individually or in the aggregate, be reasonably likely to have a Material
Adverse Effect or that seeks to restrain, enjoin, prevent the consummation of or
otherwise challenge or relate to the issuance or sale of the Securities to be
issued and sold hereunder or the consummation of the other transactions
contemplated herein or in the other Transaction Documents.

              (h) Except as disclosed on Schedule 4(h), each of the Company and
the Subsidiaries owns or possesses adequate licenses or other rights to use all
patents, trademarks, service marks, trade names, copyrights, know-how and other
intellectual property necessary to conduct the businesses operated by it, or as
proposed to be conducted by it as described in the Company's SEC Reports, except
for any the absence of which would not, individually or in the aggregate, be
reasonably likely to have a Material Adverse Effect, and neither the Company nor
the Subsidiaries has received any notice of infringement of, or conflict with
(or knows of any such infringement of or conflict with) asserted rights of
others with respect to any patents, trademarks, service marks, trade names,
copyrights or know-how necessary to conduct the businesses operated by it that,
if such assertion of infringement or conflict were sustained, would,
individually or in the aggregate, have a Material Adverse Effect.

              (i) Each of the Company and the Subsidiaries has obtained, or has
applied for and, as to any applied for, reasonably expects to be granted in a
timely manner and without materially adverse condition, all consents, approvals,
authorizations, orders, registrations, filings, qualifications, licenses
(including, without limitation, all licenses from the FCC and state, local or
other governmental authorities), permits, franchises and other governmental
authorizations necessary to conduct its businesses (or proposed businesses) as
described in the Company's SEC Reports, except for any the absence of which,
individually or in the aggregate, would not be reasonably likely to have a
Material Adverse Effect. Neither the Company nor any of the Subsidiaries has
received any notice of proceedings related to the revocation or materially
adverse modification of any such consent, approval, authorization, order,
registration, filing, qualification, license or permit, except for any which
would not, individually or in the aggregate, be reasonably likely to have a
Material Adverse Effect.

              (j) Except as disclosed in the SEC Reports, subsequent to June 30,
2000, (i) neither the Company nor any of the Subsidiaries has incurred any
liabilities or obligations, direct or contingent, or entered into any material
transactions not in the ordinary course of

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business that would, individually or in the aggregate, be reasonably likely to
have a Material Adverse Effect; and (ii) the Company has not purchased any of
its outstanding capital stock or (except for regularly scheduled pay-in-kind
dividends or other dividends payable in capital stock of the Company on shares
of preferred stock described under Section 4(r) below) declared, paid or
otherwise made any dividend or distribution of any kind on its capital stock.

              (k) There are no legal or governmental proceedings involving or
affecting the Company or any of the Subsidiaries or any of their respective
properties or assets (other than proceedings, individually or in the aggregate,
which would not, if the subject of an unfavorable decision, ruling or finding,
result in a Material Adverse Effect) that are not described in the SEC Reports.
Except as described in the SEC Reports or Schedule 4(e) and after giving effect
to the Credit Agreement, neither the Company nor any of the Subsidiaries is in
default under any contract, has received a notice or claim of any such default
or has knowledge of any breach of any such contract by the other party or
parties thereto, except such defaults or breaches which would not, individually
or in the aggregate, be reasonably likely to have a Material Adverse Effect.

              (l) Each of the Company and the Subsidiaries has filed all
necessary federal, state, local and foreign income, franchise and property tax
returns, except where the failure to so file such returns would not,
individually or in the aggregate, be reasonably likely to have a Material
Adverse Effect, and each of the Company and the Subsidiaries has paid all taxes
shown as due when due; and other than tax deficiencies that the Company or any
of the Subsidiaries is contesting in good faith and for which adequate reserves
have been provided, there is no tax deficiency that has been asserted against
the Company or any of the Subsidiaries that would, individually or in the
aggregate, be reasonably likely to have a Material Adverse Effect. The charges,
accruals and reserves on the consolidated books of the Company in respect of any
tax liability for any years not finally determined are adequate to meet any
assessments or re-assessments for additional tax for any years not finally
determined, except to the extent of any inadequacy that would not, individually
or in the aggregate, be reasonably likely to have a Material Adverse Effect.

              (m) Except as disclosed in the SEC Reports, each of the Company
and the Subsidiaries has good and marketable title to all real property and good
title to all personal property owned or claimed to be owned by it and good and
valid title to all leasehold interests in the real and personal property leased
by it (except for those leases of real property in which the Company has good
title and that would be marketable but for the requirement that the landlord
consent to an assignment or sublease of the lease), free and clear of all liens,
charges, encumbrances or restrictions, except to the extent the failure to have
such title or the existence of such liens, charges, encumbrances or restrictions
would not, individually or in the aggregate, be reasonably likely to have a
Material Adverse Effect. All leases, contracts and agreements to which the
Company or any of the Subsidiaries is a party or by which any of them is bound
are valid and enforceable against the Company or such Subsidiaries and are valid
and enforceable against the other party or parties thereto and are in full force
and effect with only such exceptions as would not, individually or in the
aggregate, be reasonably likely to have a Material Adverse

                                      -10-
<PAGE>   11

Effect. No real or personal property, rights-of-way, conduits, pole attachments
or fiber leased, licensed or used by the Company or any of the Subsidiaries lies
in an area that is, or to the best knowledge of the Company will be, subject to
zoning, use, or building code restrictions that would prohibit, and no state of
facts relating to the actions or inaction of another person or entity or his,
her or its ownership, leasing, licensing or use of any such real or personal
property, rights-of-way, conduits, pole attachments or fiber exists that would
prevent the continued effective leasing, licensing or use of such real or
personal property, rights-of-way, conduits, pole attachments or fiber in the
business of the Company or any of the Subsidiaries as presently conducted,
subject in each case to such exceptions as, individually or in the aggregate, do
not have and are not reasonably likely to have a Material Adverse Effect.

              (n) None of the Company or any of the Subsidiaries is and, after
giving effect to the offering and sale of the Securities and the application of
the proceeds therefrom as described herein, none will be, an "investment
company," as such term is defined in the Investment Company Act of 1940, as
amended, and the rules and regulations thereunder.

              (o) Neither the Company nor any of its directors, officers or
controlling persons (provided that the Purchaser is excluded from the warranty
in this Section 4(o)) has taken, directly or indirectly, any action designed, or
that might reasonably be expected, to cause or result, under the Act or
otherwise, in, or that has constituted, stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of any of
the Securities.

              (p) Each of the Company and the Subsidiaries (i) makes and keeps
accurate books and records and (ii) maintains internal accounting controls that
provide reasonable assurance that (A) transactions are executed in accordance
with management's authorization, (B) transactions are recorded as necessary to
permit preparation of its financial statements and to maintain accountability
for its assets, (C) access to its assets is permitted only in accordance with
management's authorization and (D) the reported accountability for its assets is
compared with existing assets at reasonable intervals.

              (q) None of the Company, any of the Subsidiaries or any of their
respective Affiliates (as defined in Rule 501(b) of Regulation D under the Act)
(provided that the Purchaser is excluded from the warranty in this Section 4(q))
has directly, or through any agent, (i) sold, offered for sale, solicited offers
to buy or otherwise negotiated in respect of, any "security" (as defined in the
Act) that is or could be integrated with the sale of the Securities in a manner
that would require the registration under the Act of the Securities or (ii)
engaged in any form of general solicitation or general advertising (as those
terms are used in Regulation D under the Act) in connection with the offering of
the Securities or in any manner involving a public offering within the meaning
of Section 4(2) of the Act. Assuming the accuracy of the representations and
warranties of the Purchaser in Section 9 hereof, it is not necessary in
connection with the offer, sale and delivery of the Securities to the Purchaser
in the manner contemplated by this Agreement or any other Transaction Document
to register any of the Securities under the Act.

                                      -11-
<PAGE>   12

              (r) Except as set forth on Schedule 4(r), as of the date of this
Agreement, the authorized capital of the Company consists of (i) 125,000,000
shares of Common Stock, of which 54,683,057 shares were issued and outstanding
and (ii) 3,000,000 shares of preferred stock, par value $1.00 per share, of
which (x) 400,000 shares have been designated 14.75% Redeemable Preferred Stock
due 2008 (the "14.75% Preferred Stock") of which 110,170.9428 shares are issued
and outstanding, (y) 200,000 shares have been designated Series A 12.75% Junior
Redeemable Preferred Stock due 2009 of which 18.25 shares are issued and
outstanding and (z) 700,000 shares have been designated Series B 12.75% Junior
Redeemable Preferred Stock (the "12.75% Preferred Stock") of which 211,701
shares are issued and outstanding. Except for (A) 1,347,247 shares of Common
Stock reserved for issuance under the Company's 1996 Employee Stock Purchase
Plan; (B) 1,000,000 shares of Common Stock reserved for issuance under the
Company's 1998 Restricted Stock Plan; (C) 5,646,355 shares of Common Stock
reserved for issuance upon exercise of the warrants issued by the Company in
connection with the sale of the 14.75% Preferred Stock; (D) 2,125,311 shares of
Common Stock reserved for issuance upon exercise of the warrants issued by the
Company in connection with the sale of the Company's 13% Senior Discount Notes
due 2005, (E) 4,890,577 shares of Common Stock reserved for issuance in
connection with the Company's non-plan employee stock options; (F) 9,471,992
shares of Common Stock reserved for issuance under the Company's 1994 Employee
Stock Option Plan as of May 31, 2000; (G) 601,103 shares of Common Stock
reserved for issuance under the Company's Annual Performance Plan; (H) 480,000
shares of Common Stock reserved for issuance in connection with stock options
granted to the Company's outside directors; (I) 295,407 shares of Common Stock
reserved for issuance upon exercise of warrants issued by the Company in
connection with certain preferred provider and local services agreements entered
into by the Company; (J) 262,474 shares of Common Stock reserved for issuance
upon the exercise of warrants registered pursuant to Form S-3, Commission File
No. 333-40337, (K) shares of Common Stock in an amount up to $862,500 reserved
for issuance in connection with a settlement agreement to be entered into
between the Company and a third party, (L) 18,216,526 shares of Common Stock
reserved to be issued upon conversion of the Series A Preferred and the Warrants
issued in connection therewith, and (M) shares of Common Stock to be reserved to
be issued in connection with this Purchase Agreement and the respective purchase
agreements, if any, between Greenwich and Honeywell and the Company, there are
not outstanding (and, except as contemplated by this Agreement, the Company does
not have any plan to issue, grant or enter into) options, warrants, rights
(including conversion or preemptive rights), subscriptions or agreements for the
purchase, or acquisition from or by the Company of any shares of its or any of
its Subsidiaries capital stock or any other securities convertible into or
exercisable for any shares of its or any of its Subsidiaries capital stock. As
of the date of this Agreement, except as set forth on Schedule 4(r) hereto,
there are no voting agreements, voting trust agreements, stockholder agreements
or other agreements relating to the capital stock of the Company or any of its
Subsidiaries or any other securities convertible into or exercisable for any
shares of its or any of its Subsidiaries capital stock. Except as disclosed in
Schedule 4(r), no outstanding options, warrants or other securities exercisable
for or convertible into Common Stock require or will require anti-dilution
adjustments by reason of the consummation of the transactions contemplated
hereby.

                                      -12-
<PAGE>   13

              (s) Other than as described in the SEC Reports or in Schedule
4(e), since June 30, 2000 (i) there has not been any change in the capital stock
or long-term indebtedness of the Company or any of the Subsidiaries which could,
individually or in the aggregate, be reasonably expected to have a Material
Adverse Effect and (ii) there has not occurred, nor has information become known
nor has any state of facts arisen that could, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect whether or not arising
in the ordinary course of business.

              (t) Except as set forth on Schedule 4(t), other than routine
individual grievances or disputes in an individual amount less than $50,000 and
in the aggregate less than $250,000, there is no strike, labor dispute, slowdown
or work stoppage with the employees of the Company or any of the Subsidiaries
that is pending or, to the knowledge of the Company or any of the Subsidiaries,
threatened. Neither the Company nor any Subsidiary is a party to any collective
bargaining agreement. The Company does not know of any activities or proceedings
of any labor organization (or representative thereof) to organize any employees
of the Company or any Subsidiary.

              (u) Each of the Company and the Subsidiaries carries insurance in
such amounts and covering such risks as is adequate for the conduct of its
business and the value of its properties.

              (v) The Company maintains, sponsors, contributes to, or has or has
had an obligation with respect to "employee benefit plans," within the meaning
of Section 3(3) of ERISA, and may or has had obligations with respect to other
bonus, profit sharing, compensation, pension, severance, deferred compensation,
fringe benefit, insurance, welfare, post-retirement, health, life, stock option,
stock purchase, restricted stock, tuition refund, service award, company car,
scholarship, relocation, disability, accident, sick, vacation, holiday,
termination, unemployment, individual employment, consulting, executive
compensation, incentive, commission, payroll practices, retention, change in
control, noncompetition, collective bargaining and other plans, agreements,
policies, trust funds, or arrangements (whether written or unwritten, insured or
self-insured) on behalf of employees, directors, or shareholders of the Company
(whether current, former, or retired) or their beneficiaries (each a "Plan" and,
collectively, the "Plans"). Neither the Company nor any ERISA Affiliate has any
liability, direct or indirect, or actual or contingent (but excluding any
contributions due in the ordinary course) with respect to any plan subject to
Section 412 of the Code, Section 302 of ERISA or Title IV of ERISA that has or
could reasonably be expected to have a Material Adverse Effect. The consummation
of the transactions contemplated by this Agreement will not give rise to any
liability with respect to any Plan that could reasonably be expected to have a
Material Adverse Effect, including, without limitation, liability for severance
pay, unemployment compensation, termination pay or withdrawal liability, or
accelerate the time of payment or vesting or increase the amount of compensation
or benefits due to any employee, director, or shareholder of the Company
(whether current, former, or retired) or their beneficiaries solely by reason of
such transactions. Except as would not individually or in the aggregate have, or
could not reasonably be expected to have, a Material Adverse Effect: (i) neither
the Company nor any ERISA Affiliate has made any promises or commitments to
create any additional plan, agreement, or

                                      -13-
<PAGE>   14

arrangement; (ii) no event, condition, or circumstance exists that could result
in an increase of the benefits provided under any Plan or the expense of
maintaining any Plan from the level of benefits or expense incurred for the most
recent fiscal year ended before Closing; and (iii) neither the Company nor any
ERISA Affiliate has or could be expected to have any liability for any
prohibited transaction as defined in Section 406 of ERISA or Section 4975 of the
Code. With respect to each of the Plans: (i) each Plan intended to qualify under
Section 401(a) of the Code has been qualified since its inception and has
received a determination letter under Revenue Procedure 93-39 from the IRS to
the effect that the Plan is qualified under Section 401 of the Code and any
trust maintained pursuant thereto is exempt from federal income taxation under
Section 501 of the Code and nothing has occurred or is expected to occur at or
before Closing that caused or could cause the loss of such qualification or
exemption or the imposition of any penalty or tax liability that has or could
reasonably be expected to have a Material Adverse Effect; (ii) no claim,
lawsuit, arbitration, audit or investigation or other action has been
threatened, asserted, instituted, or anticipated against the Plans (other than
non-material routine claims for benefits, and appeals of such claims), any
trustee or fiduciaries thereof, the Company, any ERISA Affiliate, any director,
officer, or employee thereof, or any of the assets of any trust of the Plans
that would have or could reasonably be expected to have a Material Adverse
Effect; (iii) the Plan complies in all material respects and has been maintained
and operated in all material respects in accordance with its terms and
applicable law, including, without limitation, ERISA and the Code; and (iv) with
respect to each Plan that is funded mostly or partially through an insurance
policy, the Company has no liability in the nature of retroactive rate
adjustment, loss sharing arrangement or other actual or contingent liability
arising wholly or partially out of events occurring on or before Closing that
has or could reasonably be expected to have a Material Adverse Effect.

              (w) Except for matters which would not in the aggregate have a
Material Adverse Effect,

                     (i) (A) the Company and each Subsidiary is in compliance
with all applicable Environmental Laws (as defined below); (B) all permits and
other authorizations of any Governmental Authority currently held by the Company
and each Subsidiary pursuant to the Environmental Laws are in full force and
effect, the Company and each Subsidiary is in compliance with all of the terms
of such permits and authorizations, and no other permits or authorizations are
required by the Company or any Subsidiary for the conduct of their respective
businesses on the date hereof; and (C) the management, handling, storage,
transportation, treatment, and disposal by the Company and each Subsidiary of
any Hazardous Materials (as defined below) has been in compliance with all
applicable Environmental Laws. Neither the Company nor any Subsidiary has
received any written communication that alleges that the Company or any
Subsidiary is not in compliance in all material respects with all applicable
Environmental Laws.

                     (ii) There is no Environmental Claim (hereinafter defined)
pending or, to the knowledge of the Company, threatened against or involving the
Company or any of the Subsidiaries or against any person or entity whose
liability for any Environmental

                                      -14-
<PAGE>   15

Claim the Company or any of the Subsidiaries has or may have retained or assumed
either contractually or by operation of law.

                     (iii) To the knowledge of the Company, there are no past or
present actions or activities by the Company or any Subsidiary including the
storage, treatment, release, emission, discharge, disposal or arrangement for
disposal of any Hazardous Materials, that could reasonably form the basis of any
Environmental Claim against the Company or any of the Subsidiaries or against
any person or entity whose liability for any Environmental Claim the Company or
any Subsidiary may have retained or assumed either contractually or by operation
of law.

                     (iv) As used herein, these terms shall have
the following meanings:

              (A)    "Environmental Claim" means any and all administrative,
       regulatory or judicial actions, suits, demands, demand letters,
       directives, claims, liens, investigations, proceedings or notices of
       noncompliance or violation (written or oral) by any person or
       governmental authority alleging potential liability arising out of based
       on or resulting from the presence, or release or threatened release into
       the environment, of any Hazardous Materials at any location owned or
       leased by the Company or any Subsidiary or other circumstances forming
       the basis of any violation or alleged violation of any Environmental Law.

              (B)    "Environmental Laws" means all applicable foreign,
       federal, state and local laws (including the common law), rules,
       requirements and regulations relating to pollution, the environment
       (including, without limitation, ambient air, surface water, groundwater,
       land surface or subsurface strata) or protection of human health as it
       relates to the environment including, without limitation, laws and
       regulations relating to releases of Hazardous Materials, or otherwise
       relating to the manufacture, processing, distribution, use, treatment,
       storage, disposal, transport or handling of Hazardous Materials or
       relating to management of asbestos in buildings.

              (C)    "Hazardous Materials" means wastes, substances, or
       materials (whether solids, liquids or gases) that are deemed hazardous,
       toxic, pollutants, or contaminants, including without limitation,
       substances defined as "hazardous substances", "toxic substances",
       "radioactive materials", or other similar designations in, or otherwise
       subject to regulation under, any Environmental Laws.

              (x) At each Closing (including without limitation the Initial
Closing) hereunder, the Company will deliver to the Trustees under each of the
indentures (the "Indentures") with respect to the Company's Existing Senior
Notes: (i) a resolution of the

                                      -15-
<PAGE>   16

Company's Board of Directors certifying that (A) the transactions contemplated
to be consummated at such Closing and by the Transaction Documents relating to
such Closing are on terms no less favorable to the Company than those that would
have been obtained in a comparable arms-length transaction by the Company with a
person or entity that is not an Affiliate (as such term is defined in the
respective Indentures), and (B) the transactions contemplated by this Agreement
have been approved by a majority of the Independent Directors (as such term is
defined in the respective Indentures) on the Company's Board of Directors, who
have determined that such transactions are in the best interests of the Company,
(ii) opinions of Houlihan Lokey Howard & Zukin (or another investment banking
firm of national standing) that such transactions are fair to the Company from a
financial point of view, and (iii) copies of the officers' certificates
delivered to the Trustees to the effect that such opinions comply with the
Indentures, all of the foregoing in conformity with the requirements of the
Indentures. None of such resolutions, opinions or certificates will have been at
the time of any such Closing withdrawn or modified in any material respect.

              (y) Except for payment of commissions, if any, required to be paid
to Marvin Saffian pursuant to the terms of the Consulting Agreement, dated
October 19, 1994, between Marvin Saffian and the Company and the issuance of
Transaction Fee Warrants under Section 13 below (each of which is the Company's
obligation), no broker, finder or investment banker is entitled to any
brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement or the other Transaction Documents
based upon arrangement made by or on behalf of the Company.

       Any certificate signed by any officer of the Company or any Subsidiary
and delivered to the Purchaser or to counsel for the Purchaser shall be deemed a
representation and warranty by the Company and each of its Subsidiaries to the
Purchaser as to the matters covered thereby.

       4A. Representations and Warranties of the Purchaser. The Purchaser
represents and warrants to and agrees with the Company that the source of funds
(the "Source") to be used by the Purchaser to pay the purchase price of the
Securities to be purchased by the Purchaser hereunder is one or more employee
benefits plans, or a separate account or trust fund comprised of one or more
employee benefits plans, each of which has ben identified to the Company in
writing. As used in this Section, the term "employee benefit plan" has the
meaning assigned to such term in Section 3 of ERISA.

       5. Purchase, Sale and Delivery of the Securities. The purchase and sale
of the Purchaser Junior Securities (other than the purchase and sale of shares
of Exchangeable Preferred at the Initial Closing which shall take place as set
forth in the next succeeding sentence hereof) shall take place at the offices of
Proskauer Rose LLP, 1585 Broadway, New York, New York 10036, within two (2)
business days following the satisfaction of the conditions set forth in this
Agreement required to be satisfied prior to the consummation of the purchase and
sale of the Purchaser Junior Securities hereunder, but in no event earlier than
15 business days after the applicable Purchase Notice has been given, or at such
other time and place as the Company and

                                      -16-
<PAGE>   17

the Purchaser mutually agree upon in writing. The purchase and sale of
Exchangeable Preferred at the Initial Closing shall take place at the aforesaid
offices simultaneously with the execution and delivery of this Agreement subject
to satisfaction of the conditions set forth in this Agreement required to be
satisfied prior to the consummation of the purchase and sale of the Exchangeable
Preferred at such Initial Closing. At each Closing hereunder the Company shall
deliver to the Purchaser one or more certificates representing any capital stock
being sold and issued, one or more executed warrants representing all of the
warrants (including without limitation the Transaction Fee Warrants) and one or
more executed promissory notes representing all of the indebtedness of the
Company being sold, all in such denomination or denominations and registered in
such name or names as the Purchaser shall request upon notice to the Company,
together with all such other Transaction Documents as may be reasonably
specified by Huff, subject to Purchaser's reasonable approval (in form and
substance reasonably specified by Huff, subject to the Purchaser's reasonable
approval), against payment by or on behalf of the Purchaser of the purchase
price for the Purchaser Junior Securities by wire transfer, payable to or upon
the order of the Company in immediately available funds.

       6. Covenants of the Company. The Company covenants and agrees with the
Purchaser (and in the case of the last sentence of Section 6(f), the Purchaser
agrees) that:

              (a) The Company will cooperate at its expense with the Purchaser
in arranging for the qualification of the Securities for offering and sale under
the securities or "Blue Sky" laws of such jurisdictions as the Purchaser may
designate and will continue such U.S. qualifications in effect for as long as
may be necessary to complete the resale of the Securities by the Purchaser;
provided, however, that in connection therewith the Company shall not be
required to qualify as a foreign corporation or to execute a general consent to
service of process in any jurisdiction or subject the Company to any tax in any
such jurisdiction where it is not then so subject. The Company will cooperate
with the Purchaser to (i) if requested, permit all warrants included in the
Securities, to the extent eligible for resale pursuant to Rule 144A, to be
designated PORTAL securities in accordance with the rules and regulations
adopted by the NASD relating to trading in the Private Offerings, Resales and
Trading through Automated Linkages Market (the "PORTAL Market"), (ii) if
requested, permit the Securities upon issuance and registration under the Act to
be eligible for clearance and settlement through The Depository Trust Company
and (iii) permit the Securities upon issuance and registration under the Act to
be listed for quotation through the Nasdaq National Market or listed on any
national securities exchange on which the Company's Common Stock is then listed.

              (b) The net proceeds from the issuance and sale of Securities
hereunder and the Junior Securities referred to in Section 1 above will be used
by the Company for general corporate purposes.

              (c) From time to time, and as soon as reasonably practicable upon
demand, the Company will provide to the Purchaser such additional information
regarding results of operations, financial condition, business or prospects of
the Company or the Subsidiaries, including without limitation, cash flow
analyses, financial statements, budgets, business plans,

                                      -17-
<PAGE>   18

projections and other financial information and minutes of any meetings of the
Board of Directors of the Company or the Subsidiaries, as may be reasonably
requested by the Purchaser. The Company shall also afford to the Purchaser (and
its representatives) access, at reasonable times and on reasonable prior notice,
to the books, records and properties of the Company and the Subsidiaries, and
shall permit the Purchaser (and its representatives) to make copies of such
books and records and also shall afford such access to meet and consult with
management and the advisors of the Company and its Subsidiaries with respect to
the business of the Company and its Subsidiaries.

              (d) Neither the Company nor any of its Affiliates (provided that
Huff shall be excluded from the Company's obligations under this Section 6(d))
will sell, offer for sale or solicit offers to buy or otherwise negotiate in
respect of any "security" (as defined in the Act) that could be integrated with
the sale of the Securities in a manner that would require the registration under
the Act of the Securities.

              (e) The Company will not, and will not permit any of the
Subsidiaries to, engage in any form of general solicitation or general
advertising (as those terms are used in Regulation D under the Act) in
connection with the offering of the Securities or in any manner involving a
public offering within the meaning of Section 4(2) of the Act.

              (f) The Company will take all action necessary in accordance with
applicable law and its Certificate of Incorporation and By-laws to convene a
special meeting of its stockholders as promptly as practicable to obtain the
Stockholder Approval. The Board of Directors of the Company shall, subject to
its fiduciary duties, recommend such approval to the stockholders of the Company
and the Company shall take all lawful actions and use its best efforts to
solicit and obtain such approval. The Company and the Purchaser hereby
acknowledge and agree that neither any Conversion Shares nor any Warrant Shares
(as such terms are defined in that certain Purchase Agreement dated March 1,
2000 between the Company and the Purchaser) may be voted at such meeting or
otherwise to obtain Stockholder Approval.

              (g) As soon as practicable (but not later than 15 days after the
Restatement Effective Date (as such term is defined in the Credit Agreement)),
the Company shall file a proxy statement in preliminary form with the Commission
in connection with the special meeting of the Company's stockholders to consider
and vote upon the Stockholder Approval. Such proxy statement shall include a
proposal seeking stockholder approval of an increase in the authorized Common
Stock of the Company for the reservation for issuance of a sufficient number of
shares of Common Stock issuable upon conversion, exchange, exercise or payment
of dividends with respect to the Securities. The Company shall make drafts of
the proxy statement (and amendments or supplements thereto) available to the
Purchaser for its review reasonably in advance of filing. The Purchaser agrees
to reasonably cooperate with the Company in the preparation of the proxy
statement. The definitive proxy statement ("Proxy Statement") for the
stockholders meeting shall be mailed to stockholders as soon as practicable. The
Company shall cause the Proxy Statement to comply in all material respects with
the requirements of the Exchange Act, and the applicable rules and regulations
thereunder, and to

                                      -18-
<PAGE>   19

contain no untrue statement of any material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances in which they were made, not misleading. In the
event that Huff determines at any time or from time to time that the number of
shares of Common Stock authorized pursuant to this Section 6(g) may be
insufficient, the Company shall promptly file such proxy statements and take
such other actions as Huff may reasonably request to promptly obtain the
authorization of such number of additional shares of Common Stock as may be
reasonably specified by Huff. The Company shall use its best efforts to cause
the proxy statement and any amendments and supplements to be cleared by the SEC
for mailing to the Company's stockholders as promptly as practicable.

              (h) At all times prior to the earlier to occur of the last Closing
to occur hereunder (the "Final Closing") or the termination of the Purchaser's
obligation to purchase Purchaser Junior Securities under this Agreement, the
Company will amend or supplement each SEC Report to the extent required to
correct any untrue statement of a material fact contained therein or any
omission of a material fact required to be stated therein to make the statements
in such SEC Report, in light of the circumstances under which they were made,
not misleading. From and after the date of this Agreement and at all times prior
to the earlier to occur of the Final Closing or such termination, the Company
shall timely file with the Commission true, accurate and complete copies of all
reports, schedules, forms, statements and other documents required to be filed
by the Company ("Required Filings"). All of such Required Filings shall comply
in all material respects with the requirements of the Act, or the Exchange Act,
as the case may be, and the rules and regulations of the Commission promulgated
thereunder applicable to the Required Filings.

              (i) The Company hereby covenants and agrees that, prior to the
earlier to occur of the Final Closing or the termination of the Purchaser's
obligation to purchase Purchaser Junior Securities under this Agreement, unless
otherwise expressly contemplated by this Agreement or consented to beforehand in
writing by Huff, the Company shall, and shall cause each Subsidiary to, operate
its business only in the usual and ordinary course consistent with past
practices.

              (j) The Company hereby covenants and agrees that, prior to each
Closing hereunder for the purchase and sale of preferred stock of the Company,
it shall file or cause to be filed with the Secretary of State of Delaware an
appropriate certificate of designation or other documentation reasonably
specified by the Purchaser consistent with the provisions of this Agreement.

              (k) The Company hereby covenants and agrees that, prior to the
earlier to occur of the Final Closing or termination of the Purchaser's
obligation to purchase Purchaser Junior Securities under this Agreement, unless
consented to in writing beforehand by Huff, and except for pay-in-kind dividends
or other dividends payable in capital stock of the Company in respect of the
14.75% Preferred Stock, the 12.75% Preferred Stock, the Series A Preferred, the
Exchangeable Preferred and any Junior Securities issued hereunder, and except
for issuances of Common Stock or other capital stock upon exercise of warrants
issued under the Warrant

                                      -19-
<PAGE>   20

Agreement, the Company will not issue or take any action to issue any capital
stock or securities convertible into or exercisable for any capital stock having
rights, privileges or preferences, including, without limitation, with respect
to the payment of dividends or payment upon liquidation of the Company
(bankruptcy or otherwise), that are on a par or senior to any payment on the
Series A Preferred or any Exchangeable Preferred in any respect, or that are
redeemable for cash, or that provide for the payment of dividends in cash ahead
of any payment on the Series A Preferred or any Exchangeable Preferred, whether
at the option or right of the holder or the Company or its affiliates, unless
expressly consented to beforehand in writing by Huff.

              (l) The Company shall timely file any and all statements or
reports required to be filed by it with the Commission under and in accordance
with the Act and the Exchange Act.

              (m) As soon as practicable after the Purchaser's request therefor,
the Company shall (at its sole expense) file any notices, requests,
registrations or approvals required to be filed with the FCC or any applicable
state regulatory agency or commission in connection with the sale of the
Securities and shall use its reasonable best efforts to cause such notices,
requests, registrations or approvals to be processed successfully or approved,
as the case may be.

              (n) As soon as practicable after the Purchaser's request therefor,
the Company shall (at its sole expense) file any notifications under the HSR Act
as may be required as a result of the issuance, conversion, exchange or exercise
of the Securities and shall use its reasonable best efforts and shall cooperate
with Purchaser to cause the early termination or expiration of the waiting
period for any such notifications.

              (o) The Company shall comply with all of its obligations in
respect of the MCI Preemptive Right.

       7. Expenses. The Company agrees to pay the following costs and expenses
and all other costs and expenses incident to the performance of its obligations
under this Agreement and the other Transaction Documents, whether or not the
transactions contemplated herein or therein are consummated or this Agreement is
terminated pursuant to Section 12 hereof: (i) the reasonable documented fees and
disbursements of counsel, accountants and any other experts or advisors retained
by the Company and/or the Purchaser, (ii) the preparation (including printing),
issuance and delivery to the Purchaser of certificates and other instruments
evidencing the Securities, including transfer agent's fees, (iii) the
qualification of the Securities under state securities and "Blue Sky" laws,
including filing fees and reasonable documented fees and disbursements of
counsel relating thereto, (iv) the fees and expenses of the transfer agent and
registrar of the Company, including fees and expenses of its counsel, (v) any
fees and expenses incurred by the Purchaser in connection with any filing
required to be made pursuant to the HSR Act, including filing fees and
reasonable documented fees and disbursements of their respective counsel
whenever such filings are made, (vi) Purchaser's documented appraisal costs not
to exceed $10,000 annually for each separate class or series of Security issued
or sold hereunder or

                                      -20-
<PAGE>   21

in connection herewith, (vii) all expenses and listing fees incurred in
connection with the application, if requested, for quotation of any Securities
on the PORTAL Market, to the extent eligible for resale under Rule 144A, (viii)
all other ongoing costs of holding or converting, exchanging or exercising the
Securities, but excluding ordinary custodial expenses, brokerage and/or
underwriting commissions and taxes, and (ix) such other reasonable documented
costs and expenses as may be incurred by the Purchaser as a result of the nature
of the transactions contemplated by this Agreement or the Securities to be
issued and sold hereunder. Without limiting the provisions of this Section 7
above, if the issuance and sale of the Securities provided for herein are not
consummated because any condition to the obligations of the Purchaser set forth
in Section 8 hereof is not satisfied or because of any failure, refusal or
inability on the part of the Company to perform all obligations and satisfy all
conditions on its part to be performed or satisfied hereunder (other than solely
by reason of a default by the Purchaser of its obligations hereunder after all
conditions hereunder have been satisfied in accordance herewith), the Company
will reimburse the Purchaser upon demand for all reasonable documented
out-of-pocket expenses (including reasonable documented counsel fees and
disbursements) that shall have been incurred by the Purchaser in connection with
the proposed purchase and sale of the Securities.

              8. Conditions of the Obligations of the Purchaser. (a) The
obligations of the Purchaser with respect to each Closing under this Agreement
are subject to the fulfillment at or before such Closing of each of the
following conditions (except that the conditions set forth in Section
8(a)(iv)(D), (vi), (x), (xiv), (xv) and (xvi) shall not be applicable to the
purchase and sale of Exchangeable Preferred at the Initial Closing):

                     (i) The Purchaser shall have received opinions, dated as of
such Closing, of (i) the opinion of Juliette Pryor, the General Counsel for the
Company; (ii) the opinion of Kelly Drye & Warren LLP, special regulatory counsel
for the Company; and (iii) the opinion of Davis Polk & Wardwell, special counsel
for the Company, all in form and substance consistent with the Company's
opinions in prior private placements as may be reasonably agreed upon by the
parties.

                     (ii) The representations and warranties of the Company
contained in this Agreement shall be true and correct when made and true and
correct at such Closing as if made on and as of such Closing (other than to the
extent any such representation or warranty is expressly made as to a certain
date); the Company shall have performed all covenants and agreements in all
material respects and satisfied all conditions on its part to be performed or
satisfied hereunder at or prior to such Closing; and subsequent to June 30, 2000
no event shall have occurred which has had, or in the judgment of the Purchaser,
is reasonably likely to have a Material Adverse Effect, other than (i) as
described in the SEC Reports, or (ii) as disclosed in Schedule 4(e).

                     (iii) The issuance and sale of the Securities pursuant to
this Agreement shall not be enjoined (temporarily or permanently) and no
restraining order or other injunctive order shall have been issued or any
action, suit or proceeding shall have been

                                      -21-
<PAGE>   22

commenced with respect to this Agreement or other Transaction Document before
any court or Governmental Authority (including, without limitation, the FCC).

                     (iv) The Purchaser shall have received certificates, dated
as of Closing, signed on behalf of the Company by its Chief Operating Officer
and its Chief Financial Officer to the effect that:

              (A) The representations and warranties of the Company in this
       Agreement were true and correct when made and true and correct at such
       Closing as if made on and as of such Closing (except to the extent any
       such representation or warranty is expressly made as to a certain date),
       and the Company has performed all covenants and agreements in all
       material respects and satisfied all conditions on its part to be
       performed or satisfied hereunder at or prior to such Closing;

              (B) Subsequent to June 30, 2000, no event has occurred that has
       had, or is reasonably likely to have, a Material Adverse Effect, other
       than (i) as described in the SEC Reports, or (ii) as disclosed in
       Schedule 4(e);

              (C) The issuance and sale of the Securities hereunder by the
       Company has not been enjoined (temporarily or permanently); and

              (D) With respect to any Closing occurring on or after October 1,
       2000, the Company and e.spire Finance Corporation were in compliance with
       each of the covenants and obligations of the Company and e.spire Finance
       Corporation set forth in Sections 6.5 and 6.6 of the Credit Agreement as
       of the March 31, June 30, September 30 or December 31 immediately
       preceding the date of such Closing (and after giving effect to all
       financial results, events and other circumstances through the close of
       business on such March 31, June 30, September 30 or December 31, as the
       case may be).

                     (v) All authorizations, approvals or permits, if any, of
any Governmental Authority (including without limitation the FCC and State
Telecommunications Authorities) that are required in connection with the lawful
issuance and sale of the Purchaser Junior Securities pursuant to this Agreement
or (subject to the matters set forth in Section 4 (e) and (f) above) the
Additional Securities pursuant to the terms thereof shall have been duly
obtained and be in full force and effect as of each Closing of the purchase of
Purchaser Junior Securities.

                     (vi) The applicable waiting period under the HSR Act in
respect of this issuance and sale of any Purchaser Junior Securities consisting
of Common Stock or other voting securities of the Company shall have expired.

                     (vii) Other than the Stockholder Approval and other than
any notification under the HSR Act and any consent of the FCC or any State
Telecommunications

                                      -22-
<PAGE>   23

Authority that may be required as a result of the conversion or exercise of the
Securities consisting of warrants, convertible stock and/or convertible
indebtedness, all consents and waivers, if any, of third parties that are
required in connection with any such Closing under this Agreement and the
consummation of the transactions contemplated hereby and by the applicable
Transaction Documents, shall be duly obtained and effective as of each such
Closing.

                     (viii) All corporate and other proceedings required in
connection with the transactions contemplated at such Closing and all documents
incident thereto shall be satisfactory in form and substance to the Purchaser
and its counsel and the Purchaser and such counsel shall have received such
counterpart originals and certified or other copies of such documents as they
may reasonably request.

                     (ix) On or before each such Closing, the Purchaser (and its
counsel) shall have received such further documents, certificates and schedules
or instruments relating to the business, corporate, legal and financial affairs
of the Company as they shall have heretofore reasonably requested from the
Company.

                     (x) The Company and the Purchaser shall have entered into a
Registration Rights Agreement and other Transaction Documents relating to the
transactions contemplated in connection with such Closing and related matters,
including without limitation warrant agreements for the Transaction Fee
Warrants, as reasonably specified by Huff, subject to the reasonable approval of
the Purchaser, consistent with the provisions of this Agreement.

                     (xi) The Company shall have filed with respect to any
preferred stock of the Company constituting Securities, any certificate of
designation specified by the Purchaser consistent with the provisions of this
Agreement with the Secretary of State of Delaware and the same shall have become
effective and be in full force and effect.

                     (xii) Since September 19, 2000, there shall not have been
any material adverse change in the price of the Common Stock.

                     (xiii) The certificates representing the shares of capital
stock included in the Securities purchased or issued at such Closing shall have
been executed and delivered by the Company to the Purchaser, the warrants and
any warrant agreements representing warrants included in the Securities
purchased or issued at such Closing shall have been executed and delivered by
the Company to the Purchaser, and the promissory notes and other instruments
provided hereunder representing indebtedness included in the Securities
purchased at such Closing shall have been executed and delivered by the Company
to the Purchaser.

                     (xiv) The Company shall have obtained Stockholder Approval.

                     (xv) With respect to any Closing occurring after December
1, 2000, the Company shall have prepared and submitted to the Purchaser its
final budget for the

                                      -23-
<PAGE>   24

fiscal year ended December 31, 2001 and Huff shall have approved such budget
(together with any updates or revisions thereof) or shall have waived in writing
such approval.

                     (xvi) With respect to any Closing occurring on or after
October 1, 2000, the Company and e.spire Finance Corporation will be in
compliance with each of the covenants and obligations of the Company and e.spire
Finance Corporation set forth in Sections 6.5 and 6.6 of the Credit Agreement as
of the March 31, June 30, September 30 or December 31 immediately preceding the
date of such Closing (and after giving effect to all financial results, events
and other circumstances through the close of business on such March 31, June 30,
September 30 or December 31, as the case may be).

                     (xvii) The Purchaser shall have received the funds
necessary to pay the purchase price for the Securities being purchased by the
Purchaser at such Closing in accordance with the capital call procedures
applicable to the Purchaser under the Purchaser's capital call instruments, but
in no event later than five business days after the Purchaser receives written
notice from the Company that all conditions to Closing set forth under Section 8
hereof have been satisfied.

                     (xviii) There shall not have been a suspension in trading
in securities of the Company or in securities generally on the New York Stock
Exchange, American Stock Exchange or The NASDAQ Stock Market and minimum or
maximum prices shall not have been established on any such exchange or market.

                     (xix) A banking moratorium shall not have been declared by
New York or United States authorities.

                     (xx) There shall not have been (A) an outbreak or
escalation of hostilities between the United States and any foreign power, or
(B) an outbreak or escalation of any other insurrection or armed conflict
involving the United States or any other national or international calamity or
emergency, or (C) any material adverse change in (1) the capital markets
generally, (2) the capital markets for equity securities or (3) the capital
markets for telecommunication company equity securities which, in the case of
(A), (B) or (C) above and in the sole judgment of the Purchaser, makes it
impracticable or inadvisable to proceed with the purchase and sale of the
Securities as contemplated at such closing.

              (b) In addition to the conditions set forth in Section 8(a) above
(other than the conditions set forth in Sections 8(a)(iv)(D), (vi), (xiv), (xv)
and (xvi)), the obligations of the Purchaser with respect to the Initial Closing
are subject to the fulfillment at or before the Initial Closing of each of the
following conditions:

                     (i)    The Company shall have filed with respect to the
Exchangeable Preferred a certificate of designation substantially in the form of
Exhibit A hereto with the Secretary of State of Delaware and the same shall have
become effective and be in full force and effect.

                                      -24-
<PAGE>   25

                     (ii)   The Company shall have filed with respect to the
Series A Preferred a certificate of amendment making the amendments and
corrections in the existing certificate of designation for the Series A
Preferred described on Exhibit B hereto and the same shall have become effective
and be in full force and effect. As a holder of such stock, the Purchaser hereby
consents to such amendments.

       References in this Agreement to facts, circumstances and events known to
the Purchaser (and similar references) shall exclude matters learned by
employees or other representatives of the Purchaser in their capacity as a
member of or observer on the board of directors of the Company or any
Subsidiary.

       9. Restrictions on Transfer. The Purchaser hereby represents and warrants
to the Company that:

              (a) The Securities to be purchased by the Purchaser will be
acquired for investment for its own account, and, except as contemplated by the
Registration Rights Agreements or otherwise in accordance with applicable
securities laws, not with a view to the resale or distribution of any part
thereof and without the present intention of selling, granting any participation
in, or otherwise distributing the same.

              (b) The Purchaser is an "accredited investor" within the meaning
of Rule 501(a) under the Act and can bear the economic risk of its investment
and has such knowledge and experience in financial or business matters that it
is capable of evaluating the merits and risks of the investment in the
Securities and has received all information from the Company that it has
requested with respect to the Company and the Securities.

              (c) The Purchaser understands that the Securities it is purchasing
are characterized as "restricted securities" under the federal securities laws
inasmuch as they are being acquired from the Company in a transaction not
involving a public offering and that under such laws and applicable regulations
such Securities may be resold without registration under the Act, only in
certain limited circumstances. In this connection, the Purchaser represents that
it is familiar with Rule 144 of the Commission, as presently in effect, and
understands the resale limitations imposed hereby by the Act.

              (d) The Purchaser understands that the certificates or other
instruments evidencing the Securities will bear a legend evidencing the
foregoing restrictions on transfer.

       The Securities shall not be required to bear a restrictive legend if a
registration statement under the Act is effective with respect to the transfer
of such securities or an opinion of counsel reasonably satisfactory to the
Company is delivered to the Company to the effect that neither the legend nor
the restrictions on transfer described in this Agreement are required to ensure
compliance with the Act. Whenever, pursuant to the preceding sentence, any
certificate or other instrument for any of the Securities is no longer required
to bear a restrictive legend, the

                                      -25-
<PAGE>   26

Company may and if requested by the holder thereof, shall, issue to the holder,
at the Company's expense any new certificate not bearing a restrictive legend.

       10. Indemnification. (a) The Company agrees to indemnify the Purchaser,
each of its affiliates and each officer, director, employee, member, partner
(whether general or limited) and agent of the Purchaser and of each of its
affiliates (the "Indemnified Parties") for, and to hold each Indemnified Party
harmless from and against any and all damages, losses, claims and other
liabilities of any and every kind, including, without limitation, judgments and
costs of settlement (or actions or other proceedings commenced or threatened in
respect thereof) and reasonable expenses that arise out of, result from or in
any way relate to this Agreement or any other Transaction Document, or in
connection with any of the transactions contemplated hereby or thereby,
including, without limitation, in connection with the preparation, filing with
the Commission and mailing to the Company's stockholders of the proxy statement
for the Stockholder Approval and any other proxy statement for the increase in
the authorized Common Stock referred to in Section 6(g) (other than ordinary
investment losses to the extent not arising in connection with (A) any actual or
alleged misrepresentation or breach of covenant, warranty duty or obligation by
the Company or (B) any actual or threatened action or proceeding arising out of,
resulting from or in any way relating to this Agreement or any other Transaction
Document, or any of the transactions contemplated hereby or thereby), and to
reimburse each Indemnified Party, upon its demand, for any reasonable legal or
other expenses incurred in connection with investigating, defending or
participating in any such loss, claim, damage, liability or action or other
proceeding (whether or not such person is a party to any action or proceeding
out of which such expenses arise). The Indemnified Parties shall have the right
to select counsel, subject to the prior consent of the Company, which consent
shall not be unreasonably withheld or delayed, to defend the Indemnified Parties
at the Company's expense in any action or proceeding that is the subject of
indemnification hereunder, provided, that the Company shall not be liable for
the fees and expenses of more than one counsel (plus any local counsel) for all
Indemnified Parties (unless any Indemnified Party shall have reasonably
determined that an actual or potential conflict of interest makes such common
representation inappropriate) in connection with any such action or proceeding.
The Company will not be required to indemnify any Indemnified Party for any
amount paid in settlement of any action or proceeding which is the subject of
indemnification hereunder unless the Company shall have consented in writing to
such settlement, such consent not to be unreasonably withheld or delayed. The
Company shall not, without the prior consent of the Indemnified Party, effect
any settlement or compromise of any pending or threatened proceeding in respect
of which any Indemnified Party is or could have been a party, or indemnity could
have been sought hereunder by such Indemnified Party, unless such settlement (A)
includes an unconditional written release of such Indemnified Party, in form and
substance reasonably satisfactory to such Indemnified Party, from all liability
on claims that are the subject matter of such proceeding and (B) does not
include any statement as to an admission of fault, culpability or failure to act
by or on behalf of any Indemnified Party.

              (b) If the indemnification provided for in Section 10(a) above is
for any reason unavailable to, or insufficient to hold harmless, an Indemnified
Party in respect of any

                                      -26-
<PAGE>   27

losses, claims, damages or liabilities referred to therein, then the Company, in
lieu of indemnifying such Indemnified Party thereunder and in order to provide
for just and equitable contribution, shall contribute to the amount paid or
payable by such Indemnified Party as a result of such losses, claims, damages or
liabilities in such proportion as is appropriate to reflect (i) the relative
benefits received by the Indemnified Party or Parties on the one hand and the
Company on the other from the offering of the Securities or (ii) if the
allocation provided by the foregoing clause (i) is not permitted by applicable
law, not only such relative benefits but also the relative fault of the Company
on the one hand and the Indemnified Party or Parties on the other in connection
with any statements or omissions or alleged statements or omissions or other
matters that resulted in such losses, claims, damages or liabilities (or actions
in respect thereof) as well as any other relevant equitable considerations. The
relative fault of the parties shall be determined by reference to, among other
things, whether any untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company on the one hand or such Indemnified Party, on the other,
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission, and any other equitable
considerations appropriate in the circumstances.

              (c) The parties agree that it would not be just and equitable if
contribution pursuant to this Section 10 were determined by pro rata allocation
(even if the Indemnified Parties were treated as one entity for such purpose) or
by any other method of allocation that does not take account of the equitable
considerations referred to in Section 10(b) above. The amount paid or payable by
the Company as a result of the losses, claims, damages and liabilities referred
to in Section 10(b) above shall be deemed to include, subject to the limitations
set forth above, any reasonable legal or other expenses actually incurred by
such Indemnified Party in connection with investigating or defending any such
action or claim.

       11. Survival Clause. The respective representations, warranties,
agreements, covenants, indemnities and other statements of the Company or its
officers and of the Purchaser set forth in this Agreement or made by or on
behalf of them, respectively, pursuant to this Agreement shall remain in full
force and effect, regardless of (i) any investigation made by or on behalf of
the Company or the Purchaser and (ii) delivery of and payment for the
Securities. The respective agreements, covenants, indemnities and other
statements set forth in Sections 6 and 10 hereof shall remain in full force and
effect, regardless of any termination or cancellation of this Agreement.

       12. Termination.

              (a) The obligation of the Purchaser to purchase all further
Purchaser Junior Securities under this Agreement may be terminated prior to any
Closing under the following circumstances and by the following persons:

                     (i) by the Purchaser, if subsequent to June 30, 2000, any
event shall have occurred which, in the sole judgment of the Purchaser, has had,
individually or in the aggregate, a Material Adverse Effect, or there shall have
been, in the sole judgment of the

                                      -27-
<PAGE>   28

Purchaser, any events or developments that, individually or in the aggregate,
have or could be reasonably likely to have a Material Adverse Effect (except for
the events disclosed in the SEC Reports or in Schedule 4(e));

                     (ii) by the mutual consent of the Purchaser and the
Company;

                     (iii) by the Purchaser at any time after October 15, 2001
or such later date as shall have been agreed to in writing by the parties
hereto, if at the time notice of such termination is given, any such Closing
shall not have been consummated;

                     (iv) by the Purchaser or the Company if any court of
competent jurisdiction in the United States or other United States Governmental
Authority has issued an order, decree or ruling or taken any other action
restraining, enjoining or otherwise prohibiting the transactions contemplated by
this Agreement or the other Transaction Documents and such order, decree, ruling
or other action shall have become final and nonappealable provided, that the
provisions of this clause (iv) shall not be available to any party whose failure
to fulfill its obligations pursuant to this Agreement shall have been the cause
of, or shall have resulted in, such order, decree, ruling or other action;

                     (v) by the Purchaser, if there has been a material
misrepresentation or omission or material breach on the part of the Company in
any of the representations, warranties, covenants or agreements of the Company
set forth herein or in any other Transaction Document, or if there has been any
material failure on the part of the Company to comply with its obligations and
satisfy all conditions on its part to be performed or satisfied hereunder at or
prior to such Closing including, without limitation, obtaining the Stockholder
Approval within 90 days after the Restatement Effective Date (as such term is
defined in the Credit Agreement); or

                     (vi) by the Purchaser, if third parties, the approvals of
which are necessary to consummate the transactions contemplated hereby or by the
other Transaction Documents, require changes to the terms of this Agreement or
any other Transaction Document that are adverse to the Purchaser, as determined
by the Purchaser in its sole judgment.

              (b) Termination of the Purchaser's obligation to make further
purchases of Securities under this Agreement pursuant to this Section 12 shall
be without liability of any party to any other party except as provided in
Sections 7, 10 and 11.

       13. Transaction Fee. As a transaction fee for the Purchaser's agreements
hereunder, the Company shall issue to the Purchaser, simultaneously with each
sale of Purchaser Junior Securities under this Agreement, warrants ("Transaction
Fee Warrants") for that number of shares of Common Stock (subject to appropriate
adjustment for stock dividends, stock splits, recapitalizations, reorganizations
and similar events) equal to (i) 60,000 divided by (ii) the Common Stock
Purchase Price in effect at the applicable Closing minus $.01, for each million
dollars of gross proceeds to the Company from such sales (prorated for any
portion of such million dollars of gross proceeds); provided, however, that in
the event that at each subsequent

                                      -28-
<PAGE>   29

Closing under this Purchase Agreement at which Transaction Fee Warrants are
issued the Common Stock Purchase Price is lower than the Common Stock Purchase
Price that was in effect at the immediately preceding Closing (a "Reduced
Purchase Price"), then additional Transaction Fee Warrants shall be issued in
respect of the immediately preceding Closing in such amount that such additional
Transaction Fee Warrants, when added to the Transaction Fee Warrants previously
issued in respect of such immediately preceding Closing, shall equal the number
of Transaction Fee Warrants that would have been issued at such immediately
preceding Closing had the Reduced Purchase Price been in effect at the time of
such immediately preceding Closing. The Transaction Fee Warrants shall have
terms and conditions substantially the same (except that the exercise price
thereof shall be $.01 per share of Common Stock subject thereto or as such terms
and conditions may be reasonably specified by Huff with the approval of the
Purchaser and the Company not to be unreasonably withheld) as the Warrants
purchased under the Warrant Agreement, and shall be evidenced by such
Transaction Documents as may be reasonably specified by Huff and are reasonably
acceptable to Purchaser. Purchaser may, in its discretion, elect to receive
Transaction Fee Warrants in respect of the shares of the Exchangeable Preferred
issued at the Initial Closing (and to enter into Transaction Documents relating
thereto) promptly after the Initial Closing rather than at the Initial Closing.

       14. Notices. All communications hereunder shall be in writing and, if
sent to the Purchaser, shall be mailed or delivered or telecopied and confirmed
in writing to the Purchaser at 101 Columbia Road, Morristown, NJ 07960,
Attention: Jay Burden, Telecopier Number (973) 455-6761; if sent to the Company,
shall be mailed or delivered or telecopied and confirmed in writing to the
Company at 12975 Worldgate Drive, Herndon, Virginia 21070, Attention: General
Counsel, Telecopier Number (703) 639-6011; with a copy to Davis Polk & Wardwell,
Attention: Richard Drucker, 450 Lexington Avenue, New York, New York 10017,
Telecopier Number (212) 474-3700.

       All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; five business days after
being deposited in the mail, postage prepaid, if mailed; and one business day
after being timely delivered to a next-day air courier; and when receipt is
acknowledged by the addressee, if telecopied.

       15. Successors. This Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective successors and legal
representatives, and nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any other person any legal or equitable
right, remedy or claim under or in respect of this Agreement, or any provisions
herein contained; this Agreement and all conditions and provisions hereof being
intended to be and being for the sole and exclusive benefit of such persons and
for the benefit of no other person except that the indemnities of the Company
contained in Section 10 of this Agreement shall also be for the benefit of any
Indemnified Party and any person or persons who control the Purchaser within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act.

       16. Equitable Adjustments. In the event that at any time after the date
hereof and prior to the issuance of any Securities there shall occur any event
which would trigger antidilution adjustments in connection with such Securities
had they been previously issued, the

                                      -29-
<PAGE>   30

number of shares of Common Stock issuable upon the conversion or exercise
thereof, and the conversion or exercise price applicable thereto, shall be
equitably adjusted to reflect such events.

       17. Entire Agreement. This Agreement, together with the Schedules hereto,
is intended by the parties as a final and exclusive statement of the agreement
and understanding of the parties hereto in respect of the subject matter
contained herein and therein and any and all prior oral or written agreements,
representations, or warranties, contracts, understandings, correspondence,
conversations and memoranda between the Purchaser on the one hand and the
Company on the other, or between or among any agents, representatives, parents,
subsidiaries, affiliates, predecessors in interest or successors in interest
with respect to the subject matter hereof and thereof are merged herein and
replaced hereby.

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

       19. APPLICABLE LAW. THE VALIDITY AND INTERPRETATION OF THIS AGREEMENT,
AND THE TERMS AND CONDITIONS SET FORTH HEREIN, SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING
EFFECT TO ANY PROVISIONS RELATING TO CONFLICTS OF LAW.

                                      -30-
<PAGE>   31

       If the foregoing correctly sets forth our understanding, please indicate
your acceptance thereof in the space provided below for that purpose, whereupon
this letter shall constitute a binding agreement between the Company and the
Purchaser.

                                Very truly yours,

                                e.spire COMMUNICATIONS, INC.

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

The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.

HONEYWELL INTERNATIONAL INC.
MASTER RETIREMENT TRUST

By:      WRH TELECOM PARTNERS, L.L.C.

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

                                      -31-<PAGE>   1
                                                                   Exhibit 10.4

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

                 FIRST AMENDED AND RESTATED CREDIT AGREEMENT

                        DATED AS OF SEPTEMBER 19, 2000

                                    AMONG

                         e.SPIRE COMMUNICATIONS, INC.

                         e.SPIRE FINANCE CORPORATION

                                AS BORROWERS,

                          THE LENDERS LISTED HEREIN,
                                 AS LENDERS,

                     GOLDMAN SACHS CREDIT PARTNERS L.P.,
                 AS SOLE LEAD ARRANGER AND SYNDICATION AGENT,

                            THE BANK OF NEW YORK,
                           AS ADMINISTRATIVE AGENT,

                          FIRST UNION NATIONAL BANK,
                            AS DOCUMENTATION AGENT

                                     AND

                      CIT LENDING SERVICES CORPORATION,
                             AS COLLATERAL AGENT

===============================================================================
<PAGE>   2

                         e.SPIRE COMMUNICATIONS, INC.
                         e.SPIRE FINANCE CORPORATION

                 FIRST AMENDED AND RESTATED CREDIT AGREEMENT

                              TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                   PAGE
<S>                                                                                                 <C>
  SECTION 1.    DEFINITIONS...........................................................................2

     1.1        Certain Defined Terms.................................................................2

     1.2        Accounting Terms; Utilization of GAAP for Purposes of Calculations Under
                Agreement............................................................................31

     1.3        Other Definitional Provisions and Rules of Construction..............................31

  SECTION 2.    AMOUNTS AND TERMS OF LOANS...........................................................32

     2.1        Loans; the Register; Notes...........................................................32

     2.2        Interest on the Loans................................................................34

     2.3        Fees.................................................................................38

     2.4        Prepayments; General Provisions Regarding Payments; Application of Proceeds of
                Collateral and Payments Under Subsidiary Guaranty....................................38

     2.5        Use of Proceeds......................................................................45

     2.6        Special Provisions Governing Eurodollar Rate Loans...................................45

     2.7        Increased Costs; Taxes; Capital Adequacy.............................................48

     2.8        Obligation of Lenders to Mitigate....................................................52

  SECTION 3.    CONDITIONS TO EFFECTIVENESS..........................................................53

     3.1        Conditions to Effectiveness..........................................................53

     3.2        Lender Acknowledgment and Consent....................................................55

  SECTION 4.    BORROWERS' REPRESENTATIONS AND WARRANTIES............................................55

     4.1        Organization, Powers, Qualification, Good Standing, Business and Subsidiaries........55

     4.2        Authorization, etc...................................................................57

     4.3        Financial Condition..................................................................58

     4.4        No Material Adverse Change; No Restricted Junior Payments............................58
</TABLE>

                                     -i-

<PAGE>   3

<TABLE>
<S>                                                                                                 <C>
     4.5        Title to Properties; Liens; Real Property............................................59

     4.6        Litigation; Adverse Facts............................................................59

     4.7        Payment of Taxes.....................................................................59

     4.8        Performance of Agreements; Materially Adverse Agreements; Material Contracts.........60

     4.9        Governmental Regulation..............................................................60

     4.10       Securities Activities................................................................60

     4.11       Employee Benefit Plans...............................................................60

     4.12       Certain Fees.........................................................................61

     4.13       Environmental Protection.............................................................61

     4.14       Employee Matters.....................................................................62

     4.15       Solvency.............................................................................62

     4.16       Matters Relating to Collateral.......................................................62

     4.17       Disclosure...........................................................................63

     4.18       Representations Concerning Cash Management System....................................63

  SECTION 5.    BORROWERS' AFFIRMATIVE COVENANTS.....................................................64

     5.1        Financial Statements and Other Reports...............................................64

     5.2        Corporate Existence, etc.............................................................70

     5.3        Payment of Taxes and Claims; Tax Consolidation.......................................70

     5.4        Maintenance of Properties; Insurance; Application of Net
                Insurance/Condemnation Proceeds......................................................70

     5.5        Inspection Rights; Audits of Inventory and Accounts Receivable; Lender Meeting.......72

     5.6        Compliance with Laws, etc............................................................72

     5.7        Environmental Review and Investigation, Disclosure, Etc.; Company's Actions
                Regarding Hazardous Materials Activities, Environmental Claims and Violations
                of Environmental Laws................................................................72

     5.8        Execution of Subsidiary Guaranty and Personal Property Collateral Documents by
                Certain Subsidiaries and Future Subsidiaries.........................................74

     5.9        Prepayment of Master Note............................................................76

     5.10       Interest Rate Protection.............................................................76

     5.11       Cash Management Systems..............................................................76

     5.12       Stockholder and NASDAQ Approvals for Committed Preferred.............................77

     5.13       Liquidity Requirement................................................................77
</TABLE>

                                     -ii-

<PAGE>   4

<TABLE>
<S>                                                                                                 <C>
  SECTION 6.    BORROWERS' NEGATIVE COVENANTS........................................................77

     6.1        Indebtedness.........................................................................77

     6.2        Liens and Related Matters............................................................78

     6.3        Investments; Joint Ventures..........................................................80

     6.4        Contingent Obligations...............................................................80

     6.5        Restricted Junior Payments...........................................................81

     6.6        Financial Covenants..................................................................82

     6.7        [Intentionally Omitted]..............................................................87

     6.8        Restriction on Fundamental Changes; Asset Sales......................................87

     6.9        Acquisitions.........................................................................89

     6.10       Sales and Lease-Backs................................................................89

     6.11       Sale or Discount of Receivables......................................................90

     6.12       Transactions with Shareholders and Affiliates........................................90

     6.13       Disposal of Subsidiary Stock.........................................................90

     6.14       Conduct of Business..................................................................90

     6.15       Amendments or Waivers of Certain Related Agreements..................................91

     6.16       Fiscal Year..........................................................................91

     6.17       Master Note and Intercompany Purchase Money Note.....................................92

  SECTION 7.    EVENTS OF DEFAULT....................................................................92

     7.1        Failure to Make Payments When Due....................................................92

     7.2        Default in Other Agreements..........................................................92

     7.3        Breach of Certain Covenants..........................................................92

     7.4        Breach of Warranty...................................................................92

     7.5        Other Defaults Under Loan Documents..................................................93

     7.6        Involuntary Bankruptcy; Appointment of Receiver, etc.................................93

     7.7        Voluntary Bankruptcy; Appointment of Receiver, etc...................................93

     7.8        Judgments and Attachments............................................................93

     7.9        Dissolution..........................................................................94

     7.10       Employee Benefit Plans...............................................................94

     7.11       Change in Control....................................................................94

     7.12       Invalidity of Subsidiary Guaranty; Failure of Security; Repudiation of
                Obligations..........................................................................94
</TABLE>

                                    -iii-

<PAGE>   5

<TABLE>
<S>                                                                                                 <C>
     7.13       Licenses.............................................................................95

     7.14       Stockholder and NASDAQ Approvals.....................................................95

  SECTION 8.    AGENTS...............................................................................96

     8.1        Appointment..........................................................................96

     8.2        Powers and Duties; General Immunity..................................................97

     8.3        Representations and Warranties; No Responsibility For Appraisal of
                Creditworthiness.....................................................................99

     8.4        Right to Indemnity...................................................................99

     8.5        Successor Administrative Agent.......................................................99

     8.6        Collateral Documents and Guaranties.................................................100

  SECTION 9.    MISCELLANEOUS.......................................................................101

     9.1        Assignments and Participations in Loans.............................................101

     9.2        Expenses............................................................................104

     9.3        Indemnity...........................................................................105

     9.4        Set-Off; Security Interest in Deposit Accounts......................................105

     9.5        Ratable Sharing.....................................................................106

     9.6        Amendments and Waivers..............................................................106

     9.7        Notices.............................................................................108

     9.8        Survival of Representations, Warranties and Agreements..............................108

     9.9        Failure or Indulgence Not Waiver; Remedies Cumulative...............................108

     9.10       Marshalling; Payments Set Aside.....................................................108

     9.11       Severability........................................................................109

     9.12       Obligations Several; Independent Nature of Lenders' Rights..........................109

     9.13       Headings............................................................................109

     9.14       Applicable Law......................................................................109

     9.15       Successors and Assigns..............................................................109

     9.16       Consent to Jurisdiction and Service of Process......................................109

     9.17       Waiver of Jury Trial................................................................110

     9.18       Confidentiality.....................................................................111

     9.19       Maximum Amount......................................................................111

     9.20       Entire Agreement....................................................................112

     9.21       Counterparts; Effectiveness.........................................................112
</TABLE>

                                     -iv-

<PAGE>   6

<TABLE>
<S>                                                                                                 <C>
     9.22       Acknowledgment and Consent..........................................................112

SIGNATURE PAGES.....................................................................................S-1
</TABLE>

                                     -v-

<PAGE>   7

                                   EXHIBITS

<TABLE>
<S>        <C>
I          [INTENTIONALLY OMITTED]
II         [INTENTIONALLY OMITTED]
III        FORM OF NOTICE OF CONVERSION/CONTINUATION
IV         FORM OF SERIES A REVOLVING NOTE
V          FORM OF SERIES B TERM NOTE
VI         FORM OF SERIES C TERM NOTE
VII        FORM OF BLOCKED ACCOUNT AGREEMENT
VIII       FORM OF COMPLIANCE CERTIFICATE
IX-A       FORM OF OPINION OF DAVIS, POLK & WARDWELL
IX-B       FORM OF OPINION OF COMPANY COUNSEL
X          FORM OF ACSI ESCROW AGREEMENT
XI         FORM OF ASSIGNMENT AGREEMENT
XII        FORM OF CERTIFICATE RE NON-BANK STATUS
XIII       FORM OF LOAN PUT AGREEMENT
XIV        PROJECTIONS FOR SALE OF CYBERGATE'S DIAL-UP DIVISION
XV         FORM OF CERTIFICATE OF DESIGNATION OF THE BRIDGE PREFERRED
XVI        FORM OF CERTIFICATE OF DESIGNATION OF THE COMMITTED PREFERRED
XVII       FORM OF COLLATERAL ACCOUNT AGREEMENT
</TABLE>

                                     -vi-

<PAGE>   8

                                  SCHEDULES

<TABLE>
<S>      <C>
1.2      UNRESTRICTED SUBSIDIARIES
2.1      LENDERS' LOANS AND PRO RATA SHARES
3.1      INTERCONNECTION AGREEMENTS
4.1      SUBSIDIARIES OF COMPANY
4.1E     LICENSES
4.2C     GOVERNMENTAL CONSENTS
4.6      LITIGATION
4.14     EMPLOYEE MATTERS
4.18     CASH MANAGEMENT SYSTEM
6.1      CERTAIN EXISTING INDEBTEDNESS
6.2      CERTAIN EXISTING LIENS
6.3      CERTAIN EXISTING INVESTMENTS
6.4      CERTAIN EXISTING CONTINGENT OBLIGATIONS
</TABLE>

                                    -vii-

<PAGE>   9

                         e.SPIRE COMMUNICATIONS, INC.
                         e.SPIRE FINANCE CORPORATION

                          FIRST AMENDED AND RESTATED
                               CREDIT AGREEMENT

         This FIRST AMENDED AND RESTATED CREDIT AGREEMENT is dated as of
September 19, 2000, and entered into by and among e.SPIRE COMMUNICATIONS,
INC., a Delaware corporation ("COMPANY"), e.SPIRE FINANCE CORPORATION, a
Delaware corporation ("FINANCE SUB"; Company and Finance Sub are each
individually referred to herein as a "BORROWER" and collectively as
"BORROWERS"), THE FINANCIAL INSTITUTIONS LISTED ON THE SIGNATURE PAGES HEREOF
(each individually referred to herein as a "LENDER" and collectively as
"LENDERS"), GOLDMAN SACHS CREDIT PARTNERS L.P., as sole lead arranger (in such
capacity, "ARRANGER") and syndication agent (in such capacity, "SYNDICATION
AGENT"), THE BANK OF NEW YORK ("BNY"), as administrative agent for Lenders (in
such capacity, "ADMINISTRATIVE AGENT"), FIRST UNION NATIONAL BANK, as
documentation agent (in such capacity, "DOCUMENTATION AGENT"), and CIT LENDING
SERVICES CORPORATION, f/k/a Newcourt Commercial Finance Corporation, as
collateral agent (in such capacity, "COLLATERAL AGENT").

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

         WHEREAS, pursuant to that certain Credit Agreement dated as of August
11, 1999 (as amended and otherwise modified through the date hereof, the
"ORIGINAL CREDIT AGREEMENT"; the capitalized terms used in the recitals
without definition having the meanings assigned to such terms in subsection
1.1 of this Agreement), Lenders have extended certain secured credit
facilities to Borrowers under which the following Loans are outstanding as of
the date hereof (after giving effect to the borrowings and prepayments
referred to in subsections 3.1J and 3.1O): (i) to Finance Sub, Series A
Revolving Loans in the principal amount of $35,000,000.00 used to finance
capital expenditures and for working capital and other general corporate
purposes, including permitted acquisitions and (ii) to Company, Series B Term
Loans in the principal amount of $4,329,268.29 and Series C Term Loans in the
principal amount of $99,670,731.71 used solely to provide purchase money
financing for the acquisition, construction or improvement of
Telecommunications Assets of Company and its Restricted Subsidiaries;

         WHEREAS, Borrowers, Lenders and Agents desire to amend and restate
the Original Credit Agreement in its entirety upon the terms, and subject to
the conditions, contained herein;

         WHEREAS, Company has loaned to Finance Sub all proceeds of the Series
B Term Loans and Series C Term Loans, which are evidenced by the Master Note
and secured by a pledge of the Intercompany Purchase Money Notes and security
therefor and all other assets of Finance Sub pursuant to the Finance Sub
Intercompany Pledge and Security Agreement;

                                      1

<PAGE>   10

         WHEREAS, Finance Sub has loaned to Restricted Subsidiaries the
proceeds of its borrowings under the Master Note to finance the cost of the
acquisition, construction or improvement of Telecommunications Assets and such
loans are evidenced by the Intercompany Purchase Money Note and are secured by
all of the assets of such Restricted Subsidiaries pursuant to the Intercompany
Pledge and Security Agreement;

         WHEREAS, Company has guaranteed the obligations of Finance Sub
hereunder and under the other Loan Documents and has secured all of its
obligations hereunder and under the other Loan Documents by granting a First
Priority pledge of the Master Note, together with all security interest in all
other assets of the Company and a First Priority pledge of the Capital Stock
of Finance Sub, pursuant to the Company Pledge and Security Agreement;

         WHEREAS, each of the Restricted Subsidiaries of Finance Sub has
guaranteed the Obligations of Finance Sub hereunder and under the other Loan
Documents with respect to the Series A Revolving Loans; and

         WHEREAS, each of Finance Sub and the Subsidiary Guarantors have
secured all of their respective Obligations under the Loan Documents with
respect to the Series A Revolving Loans by granting to Administrative Agent,
on behalf of Lenders, a First Priority pledge of all of the Capital Stock of
each of its Restricted Subsidiaries and all of their other assets, pursuant to
the Finance Sub and Other Subsidiary Pledge and Security Agreement;

         NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, Borrowers, Lenders and Agents agree
as follows:

                                  SECTION 1.
                                 DEFINITIONS

1.1      CERTAIN DEFINED TERMS.

         The following terms used in this Agreement shall have the following
         meanings:

                  "ACSI" means ACSI Network Technologies, Inc.

                  "ACSI ESCROW AGREEMENT" means an escrow agreement in the
         form of Exhibit X annexed hereto (other than solely with respect to
         the provisions relating to the indemnification of, expense
         reimbursement of, exculpation of, or compensation of, the escrow
         agent thereunder, to the extent such provisions as so modified are
         reasonable and customary).

                  "ACSI ESCROW FUNDS" means Cash and Cash Equivalents held in
         an escrow account which has been established to hold a portion of the
         proceeds from an ACSI Network Sale permitted under this Agreement
         pursuant to an ACSI Escrow Agreement; provided that the sole
         condition to the delivery of such Cash and Cash Equivalents to
         Company or its Restricted Subsidiaries is the delivery of UCC-3
         release statements with respect to the assets subject to such ACSI
         Network Sale by Administrative Agent in accordance with subsection
         8.6.

                                      2

<PAGE>   11

                  "ACSI NETWORK SALES" means Asset Sales by ACSI in the
         ordinary course of its business of designing and constructing
         networks for sale to other Persons.

                  "ADDITIONAL NOTES" means unsecured subordinated notes issued
         by Company after the Restatement Effective Date which (i) have terms
         that are no more restrictive to Company and its Subsidiaries
         (including without limitation in terms of covenants, events of
         default, grace periods and other rights granted to the holders
         thereof) than the Existing Senior Notes, (ii) have no required Cash
         payments of principal until after the Series C Maturity Date and no
         required Cash payments of interest until the date two years after the
         Restatement Effective Date, (iii) are not guaranteed by any
         Subsidiary of Company, (iv) have a maturity not sooner than six
         months after the Series C Maturity Date, and (v) are contractually
         subordinated to the Obligations on terms satisfactory to and approved
         by Requisite Lenders (including without limitation payment blockage
         rights).

                  "ADJUSTED EURODOLLAR RATE" means, for any Interest Rate
         Determination Date with respect to an Interest Period for a
         Eurodollar Rate Loan, the rate per annum obtained by dividing (i) (a)
         the per annum rate for deposits in Dollars for a period corresponding
         to the duration of the relevant Interest Period which appears on
         Telerate Page 3750 at approximately 11:00 a.m. (London time) on such
         Interest Rate Determination Date or (b) if such rate does not appear
         on Telerate Page 3750 on such Interest Rate Determination Date, the
         per annum rate (rounded upward to the nearest 1/16 of 1%) at which
         deposits in Dollars are offered by Administrative Agent to first
         class banks in the London interbank market, in the approximate amount
         of Administrative Agent's relevant Eurodollar Loan (which principal
         amount shall be deemed to be $1,000,000 in the event Administrative
         Agent is not making, converting to or continuing a Eurodollar Rate
         Loan) and having a maturity approximately equal to such Interest
         Period, at approximately 11:00 a.m. (London time) on such Interest
         Rate Determination Date by (ii) a percentage equal to 100% minus the
         stated maximum rate of all reserve requirements (including any
         marginal, emergency, supplemental, special or other reserves)
         applicable on such Interest Rate Determination Date to any member
         bank of the Federal Reserve System in respect of "Eurocurrency
         liabilities" as defined in Regulation D (or any successor category of
         liabilities under Regulation D). The reference to Telerate Page 3750
         in this definition shall be construed to be a reference to the
         relevant page or any other page that may replace such page on the
         Telerate service or any other service that may be nominated by the
         British Bankers' Association as the information vendor for the
         purpose of displaying British Bankers' Association Interest
         Settlement Rate for deposit in Dollars.

                  "ADMINISTRATIVE AGENT" has the meaning assigned to that term
         in the introduction to this Agreement and also means and includes any
         successor Administrative Agent appointed pursuant to subsection 8.5A.

                  "AFFECTED LENDER" has the meaning assigned to that term in
         subsection 2.6C.

                  "AFFILIATE", as applied to any Person, means any other
         Person directly or indirectly controlling, controlled by, or under
         common control with, that Person. For the purposes of this
         definition, "control" (including, with correlative meanings, the
         terms "controlling", "controlled by" and "under common control
         with"), as applied to any

                                      3

<PAGE>   12

         Person, means the possession, directly or indirectly, of the power to
         direct or cause the direction of the management and policies of that
         Person, whether through the ownership of voting securities or by
         contract or otherwise.

                  "AGENT" means, individually, each of Arranger, Syndication
         Agent, Documentation Agent, Collateral Agent and Administrative Agent
         and "AGENTS" means Arranger, Syndication Agent, Documentation Agent,
         Collateral Agent and Administrative Agent, collectively.

                  "AGREEMENT" means this First Amended and Restated Credit
         Agreement dated as of September 19, 2000, as it may be amended,
         supplemented or otherwise modified from time to time.

                  "APPLICABLE MARGIN" means (i) with respect to Series C Term
         Loans, 5.00% for Eurodollar Rate Loans and 4.00% for Base Rate Loans
         and (ii) with respect to Series A Revolving Loans and Series B Term
         Loans (a) 4.50% for Eurodollar Rate Loans and 3.50% for Base Rate
         Loans.

                  "ARRANGER" has the meaning assigned to that term in the
         introduction to this Agreement.

                  "ASSET SALE" means the sale, conveyance, transfer,
         assignment or other disposition by Company or any of its Restricted
         Subsidiaries to any Person other than Company or any of its
         Restricted Subsidiaries of (i) any of the Capital Stock of any
         Restricted Subsidiary, (ii) substantially all of the assets of any
         division or line of business of Company or any Restricted Subsidiary,
         or (iii) any other assets (whether tangible or intangible including
         without limitation duct or fiber sales made from non-switched cities)
         of Company or any Restricted Subsidiary other than assets sold in the
         ordinary course of business to the extent the aggregate value of such
         assets sold in any single transaction or related series of
         transactions does not exceed $150,000. Notwithstanding anything
         herein to the contrary, dispositions of assets pursuant to Use
         Agreements shall constitute Asset Sales.

                  "ASSIGNMENT AGREEMENT" means an Assignment Agreement in
         substantially the form of Exhibit XI annexed hereto.

                  "BNY" has the meaning assigned to that term in the
         introduction to this Agreement.

                  "BANKRUPTCY CODE" means Title 11 of the United States Code
         entitled "Bankruptcy", as now and hereafter in effect, or any
         successor statute.

                  "BASE RATE" means, at any time, the higher of (i) the Prime
         Rate or (ii) the rate which is 1/2 of 1% in excess of the Federal
         Funds Effective Rate.

                  "BASE RATE LOANS" means Loans bearing interest at rates
         determined by reference to the Base Rate as provided in subsection
         2.2A.

                                      4

<PAGE>   13

                  "BRIDGE PREFERRED" means the 30% Exchangeable Preferred
         Stock issued by Company on or after the date hereof in accordance
         with subsection 6.8(v).

                  "BUSINESS DAY" means (i) for all purposes other than as
         covered by clause (ii) below, any day excluding Saturday, Sunday and
         any day which is a legal holiday under the laws of the State of New
         York or is a day on which banking institutions located in such state
         are authorized or required by law or other governmental action to
         close, and (ii) with respect to all notices, determinations, fundings
         and payments in connection with the Adjusted Eurodollar Rate or any
         Eurodollar Rate Loans, any day that is a Business Day described in
         clause (i) above and that is also a day for trading by and between
         banks in Dollar deposits in the interbank eurodollar market.

                  "CAPITAL LEASE OBLIGATION" of any Person means the
         obligation to pay rent or other payment amounts under a lease of (or
         other indebtedness arrangement conveying the right to use) real or
         personal property of such Person which is required to be classified
         and accounted for as a capital lease or a liability on the face of a
         balance sheet of such Person prepared in accordance with GAAP and the
         stated maturity thereof shall be the date of the last payment of rent
         or any other amount due under such lease prior to the first date upon
         which such lease may be terminated by the lessee without payment of a
         penalty.

                  "CAPITAL STOCK" means, (i) in the case of a corporation,
         corporate stock, (ii) in the case of an association or business
         entity, any and all shares, interests, participations, rights or
         other equivalents (however designated) of corporate stock, (iii) in
         the case of a partnership, partnership interests, whether general or
         limited, (iv) in the case of a limited liability company, membership
         interests and (v) any other interest or participation that confers on
         a Person the right to receive a share of the profits and losses of,
         or distribution of assets of, the issuing Person.

                  "CASH" means money, currency or a credit balance in a
         Deposit Account.

                  "CASH BALANCE REQUIREMENT" means, as of any date of
         determination, the Cash Balances of the Company and its Restricted
         Subsidiaries shall be at least an amount equal to (i) $20,000,000 for
         the 30-day period following the Restatement Effective Date and
         $30,000,000 thereafter plus (ii) the aggregate amount of accrued and
         unpaid Cash interest on the Loans and the Existing Senior Notes.

                  "CASH BALANCES" means, with respect to any Person, as of any
         date of determination, the aggregate Dollar amount of Cash and Cash
         Equivalents held by such Person, minus (i) any Cash or Cash
         Equivalents held in an escrow or other restricted accounts, including
         without limitation permitted collateral accounts securing obligations
         other than the Obligations and (ii) accounts payable more than 60
         days past due; provided, that for purposes of determining the Cash
         Balances of Company and its Restricted Subsidiaries, (a) from and
         after the date 60 days after the Restatement Effective Date, Cash
         Balances shall include only such Cash and Cash Equivalents held in
         Deposit Accounts subject to Collateral Account Agreements in
         accordance with subsection 5.11 and (b) notwithstanding anything in
         clauses (i) or (a) of this definition to

                                      5

<PAGE>   14

         the contrary, from and after the UCC-3 Required Delivery Date, Cash
         Balances shall include ACSI Escrow Funds in an amount not to exceed
         $10,000,000.

                  "CASH EQUIVALENTS" means, as at any date of determination,
         (i) securities issued or directly and fully guaranteed or insured by
         the United States of America or any agency or instrumentality thereof
         (provided that the full faith and credit of the United States of
         America is pledged in support thereof); (ii) time deposits and
         certificates of deposit of any commercial bank organized in the
         United States having capital and surplus in excess of $500,000,000
         with a maturity date not more than one year from the date of
         acquisition; (iii) repurchase obligations with a term of not more
         than seven days for underlying security of the types described in
         clause (i) above entered into with any bank meeting the qualification
         specified in clause (ii) above; (iv) direct obligations issued by any
         state of the United States of America or any political subdivision of
         any such state or any public instrumentality thereof maturing, or
         subject to tender at the option of the holder thereof within 90
         calendar days after the date of acquisition thereof and, at the time
         of acquisition, having a rating of A or better from Standard & Poor's
         Ratings Group ("STANDARD & POOR'S") or A-2 or better from Moody's
         Investors Service, Inc. ("MOODY'S"); (v) commercial paper issued by
         the parent corporation of any commercial bank organized in the United
         States having capital and surplus in excess of $500,000,000 and
         commercial paper issued by others having one of the two highest
         ratings obtainable from either Standard & Poor's or Moody's and in
         each case maturing within 90 days after the date of acquisition; (vi)
         overnight bank deposits and bankers acceptances at any commercial
         bank organized in the United States having capital and surplus in
         excess of $500,000,000; (vii) deposits available for withdrawal on
         demand with a commercial bank organized in the United States having
         capital and surplus in excess of $500,000,000; and (viii) investments
         in money market funds substantially all of whose assets comprise
         securities of the types described in clauses (i) through (vii).

                  "CERTIFICATES OF DESIGNATION" means, collectively, (i) the
         Certificate of Designation of the Powers, Preferences and Relative,
         Participating, Optional and Other Special Rights of 14.75% Redeemable
         Preferred Stock due 2008 and Qualifications, Limitations and
         Restrictions Thereof, (ii) the Certificate of Designation of the
         Powers, Preferences and Relative, Participating, Optional and Other
         Special Rights of Preferred Stock and Qualifications, Limitations and
         Restrictions Thereof of 12 3/4% Series A Junior Redeemable Preferred
         Stock Due 2009 and 12 3/4% Series B Junior Redeemable Preferred Stock
         Due 2009, in each case of Company, (iii) the Certificate of
         Designation of the Series A Convertible Preferred Stock, (iv) the
         certificate of designation of the Bridge Preferred, (v) any
         certificate of designation for the Committed Preferred and (vi) the
         certificates of designation for any preferred stock issued in the
         future by Company in accordance with subsection 6.8(v).

                  "CERTIFICATE RE NON-BANK STATUS" means a certificate
         substantially in the form of Exhibit XII annexed hereto delivered by
         a Lender to Administrative Agent pursuant to subsection 2.7B(iii).

                  "CLOSING DATE" means August 11, 1999, the date of the
         closing of the Original Credit Agreement.

                                      6

<PAGE>   15

                  "COLLATERAL" means, collectively, all of the real, personal
         and mixed property (including Capital Stock) of Loan Parties in which
         Liens are purported to be granted pursuant to the Collateral
         Documents as security for the Obligations.

                  "COLLATERAL ACCOUNT AGREEMENT" means (i) a blocked account
         agreement for Deposit Accounts in substantially the form of Exhibit
         VII annexed hereto, (ii) a collateral account agreement for
         securities accounts in substantially the form of Exhibit XVII annexed
         hereto, and (iii) any other collateral account agreement or cash
         management letter, in each case executed and delivered by a Loan
         Party and Administrative Agent, as any such agreement may be amended,
         supplemented or otherwise modified from time to time.

                  "COLLATERAL DOCUMENTS" collectively, the Company Pledge and
         Security Agreement, the Finance Sub Intercompany Pledge and Security
         Agreement, the Finance Sub and Other Subsidiary Pledge and Security
         Agreement, the Intercompany Pledge and Security Agreement, any
         Collateral Account Agreement and all other instruments or documents
         delivered by any Loan Party pursuant to the Original Credit
         Agreement, this Agreement or any of the other Loan Documents, in
         order to grant to Administrative Agent, on behalf of Lenders, or to
         another Loan Party, a lien on any real, personal or mixed property of
         such Loan Party as security for the Obligations or any obligations of
         such Loan Party under the Master Note or Intercompany Purchase Money
         Note.

                  "COMMITTED PREFERRED" means up to $124,300,000 of
         convertible preferred stock of Company issued in accordance with
         subsection 6.8(v) to the Investors or other investors at least one of
         whom has committed to purchase such preferred stock from Company
         resulting in gross proceeds to Company of $124,300,000; provided that
         the gross proceeds received by Company upon the issuance of the
         Bridge Preferred shall be included in the calculation of the
         $124,300,000 (without giving effect to any Accreted Amounts as
         defined in the Bridge Preferred) upon the exchange of the Bridge
         Preferred for Committed Preferred.

                  "COMMUNICATIONS ACT" means the Communications Act of 1934,
         as amended (including, without limitation, the Telecommunications Act
         of 1996), or any successor statute or statutes thereto, and all
         Regulations thereunder, in each case as from time to time in effect.

                  "COMMUNICATIONS REGULATORY AUTHORITY" means the FCC, any
         State PUC and any future federal, state or local communications
         regulatory commission, agency, department, board or authority.

                  "COMPANY" has the meaning assigned to that term in the
         introduction to this Agreement.

                  "COMPANY GUARANTY" means the Company Guaranty executed and
         delivered by Company on the Closing Date, as such Company Guaranty
         may thereafter be amended, supplemented or otherwise modified from
         time to time.

                                      7

<PAGE>   16

                  "COMPANY PLEDGE AND SECURITY AGREEMENT" means the Company
         Pledge and Security Agreement executed and delivered by Company on
         the Closing Date, as such Company Pledge and Security Agreement may
         thereafter be amended, supplemented or otherwise modified from time
         to time.

                  "COMPLIANCE CERTIFICATE" means a certificate substantially
         in the form of Exhibit VIII annexed hereto delivered to
         Administrative Agent and Lenders by Company pursuant to subsection
         5.1(iv).

                  "CONSOLIDATED ADJUSTED EBITDA" means, with respect to any
         Person for any period, the sum for such Person for such period of
         Consolidated Net Income plus, to the extent reflected in the income
         statement of such Person for such period from which Consolidated Net
         Income is determined, without duplication, (i) Consolidated Interest
         Expense, (ii) provisions for taxes based on income, (iii) total
         depreciation expense, (iv) total amortization expense, (v) any
         non-cash expense related to the issuance to employees or
         non-employees of such Person of Capital Stock or options to purchase
         Capital Stock of such Person and (vi) any charge related to any
         premium or penalty paid in connection with redeeming or retiring any
         Indebtedness prior to its stated maturity and minus, (a) interest
         income and (b) to the extent reflected in the income statement of
         such Person for such period, any non-cash credits that have the
         effect of increasing Consolidated Net Income of such Person for such
         period, all of the foregoing as determined on a consolidated basis
         for such Person and its Restricted Subsidiaries in conformity with
         GAAP.

                  "CONSOLIDATED ANNUALIZED EBITDA" means, as of the last day
         of any Fiscal Quarter, Consolidated Adjusted EBITDA for such Fiscal
         Quarter multiplied by four.

                  "CONSOLIDATED CAPITAL EXPENDITURES" means, for any period,
         the sum of the aggregate of all expenditures (whether paid in cash or
         other consideration or accrued as a liability and including Capital
         Lease Obligations) by Company and its Restricted Subsidiaries during
         that period that, in conformity with GAAP, are included in "additions
         to property, plant or equipment" or comparable items reflected in the
         consolidated statement of cash flows of Company and its Restricted
         Subsidiaries.

                  "CONSOLIDATED CASH CAPITAL EXPENDITURES" means, for any
         period, Consolidated Capital Expenditures for such period excluding,
         however, any such expenditures not made in Cash.

                  "CONSOLIDATED CASH INTEREST EXPENSE" means, for any period,
         (i) Consolidated Interest Expense of Company and its Restricted
         Subsidiaries for such period excluding, however, any interest expense
         not payable in Cash (including amortization of discount and
         amortization of debt issuance costs) plus (ii) cash dividends paid by
         Company on the Preferred Stock.

                  "CONSOLIDATED CURRENT ASSETS" means, as at any date of
         determination, the total assets of Company and its Subsidiaries on a
         consolidated basis which may properly be

                                      8

<PAGE>   17

         classified as current assets in conformity with GAAP, excluding Cash
         and Cash Equivalents.

                  "CONSOLIDATED CURRENT LIABILITIES" means, as at any date of
         determination, the total liabilities of Company and its Subsidiaries
         on a consolidated basis which may properly be classified as current
         liabilities in conformity with GAAP.

                  "CONSOLIDATED EXCESS CASH FLOW" means, for any period, an
         amount (if positive) equal to (i) the sum, without duplication, of
         the amounts for such period of (a) Consolidated Adjusted EBITDA of
         Company and its Restricted Subsidiaries and (b) the Consolidated
         Working Capital Adjustment minus (ii) the sum, without duplication,
         of the amounts for such period of (a) voluntary and scheduled
         repayments of Consolidated Total Debt, (b) Consolidated Cash Capital
         Expenditures (net of any proceeds of any related financings with
         respect to such expenditures), (c) Cash paid to make
         Telecommunications Acquisitions to the extent permitted by subsection
         6.9, (d) Consolidated Cash Interest Expense, and (e) the provision
         for current taxes based on income of Company and its Restricted
         Subsidiaries and payable in Cash with respect to such period.

                  "CONSOLIDATED INTEREST EXPENSE" means, with respect to such
         Person, for any period, total interest expense (including Capital
         Lease Obligations and capitalized interest) of such Person and its
         Restricted Subsidiaries on a consolidated basis with respect to all
         outstanding Indebtedness of such Person and its Restricted
         Subsidiaries, including all commissions, discounts and other fees and
         charges owed with respect to letters of credit and bankers'
         acceptance financing and net costs under Interest Rate Agreements,
         but excluding, however, any amounts referred to in subsection 2.3
         payable to Agents and Lenders on or before the Closing Date.

                  "CONSOLIDATED NET INCOME" means, with respect to any Person,
         for any period, the net income (or loss) of a Person and its
         Restricted Subsidiaries on a consolidated basis for such period taken
         as a single accounting period determined in conformity with GAAP;
         provided that there shall be excluded from Consolidated Net Income
         (i) the income (or loss) of any other Person (other than a Restricted
         Subsidiary of such Person) in which any other Person (other than such
         Person or any of its Restricted Subsidiaries) has a joint interest,
         except to the extent of the amount of dividends or other
         distributions actually paid to such Person or any of its Restricted
         Subsidiaries by such other Person during such period, (ii) the income
         (or loss) of any other Person accrued prior to the date it becomes a
         Restricted Subsidiary of such Person or is merged into or
         consolidated with such Person or any of its Restricted Subsidiaries
         or that Person's assets are acquired by such Person or any of its
         Restricted Subsidiaries, (iii) the income of any Restricted
         Subsidiary of such Person to the extent that the declaration or
         payment of dividends or similar distributions by that Restricted
         Subsidiary of that income is not at the time permitted by operation
         of the terms of its charter or any agreement, instrument, judgment,
         decree, order, statute, rule or governmental regulation applicable to
         that Restricted Subsidiary, (iv) any after-tax gains or losses
         attributable to Asset Sales or returned surplus assets of any Pension
         Plan, and (v) (to the extent not included in clauses (i) through (iv)
         above) any net extraordinary gains or net non-cash extraordinary
         losses.

                                      9

<PAGE>   18

                  "CONSOLIDATED QUARTERLY REVENUES" means, with respect to any
         Person, as at any date of determination, the aggregate stated income
         statement amount of revenue of such Person and its Restricted
         Subsidiaries for the applicable Fiscal Quarter, determined on a
         consolidated basis in accordance with GAAP.

                  "CONSOLIDATED SENIOR DEBT" means, as at any date of
         determination, the aggregate stated balance sheet amount of all
         Indebtedness of Company and its Restricted Subsidiaries permitted to
         be outstanding under subsections 6.1(i) and (vi), determined on a
         consolidated basis in accordance with GAAP.

                  "CONSOLIDATED TOTAL DEBT" means, as at any date of
         determination, the aggregate stated balance sheet amount of all
         Indebtedness of Company and its Restricted Subsidiaries, determined
         on a consolidated basis in accordance with GAAP.

                  "CONSOLIDATED WORKING CAPITAL" means, as at any date of
         determination, the excess of Consolidated Current Assets over
         Consolidated Current Liabilities.

                  "CONSOLIDATED WORKING CAPITAL ADJUSTMENT" means, for any
         period on a consolidated basis, the amount (which may be a negative
         number) by which Consolidated Working Capital as of the beginning of
         such period exceeds (or is less than) Consolidated Working Capital as
         of the end of such period.

                  "CONTINGENT OBLIGATION", as applied to any Person, means any
         direct or indirect liability, contingent or otherwise, of that Person
         (i) with respect to any Indebtedness, lease, dividend or other
         obligation of another if the primary purpose or intent thereof by the
         Person incurring the Contingent Obligation is to provide assurance to
         the obligee of such obligation of another that such obligation of
         another will be paid or discharged, or that any agreements relating
         thereto will be complied with, or that the holders of such obligation
         will be protected (in whole or in part) against loss in respect
         thereof, (ii) with respect to any letter of credit issued for the
         account of that Person or as to which that Person is otherwise liable
         for reimbursement of drawings, or (iii) under Hedge Agreements.
         Contingent Obligations shall include (a) the direct or indirect
         guaranty, endorsement (otherwise than for collection or deposit in
         the ordinary course of business), co-making, discounting with
         recourse or sale with recourse by such Person of the obligation of
         another, (b) the obligation to make take-or-pay or similar payments
         if required regardless of non-performance by any other party or
         parties to an agreement, and (c) any liability of such Person for the
         obligation of another through any agreement (contingent or otherwise)
         (1) to purchase, repurchase or otherwise acquire such obligation or
         any security therefor, or to provide funds for the payment or
         discharge of such obligation (whether in the form of loans, advances,
         stock purchases, capital contributions or otherwise) or (2) to
         maintain the solvency or any balance sheet item, level of income or
         financial condition of another if, in the case of any agreement
         described under subclauses (1) or (2) of this sentence, the primary
         purpose or intent thereof is as described in the preceding sentence.
         The amount of any Contingent Obligation 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 Contingent Obligation
         is made and (b) the maximum amount for which such Person may be
         liable pursuant to the terms of the instrument

                                      10

<PAGE>   19

         creating such Contingent Obligation, unless such primary obligation
         and maximum amount are not stated or determinable, in which case the
         amount of such Contingent Obligation shall be the maximum reasonably
         anticipated liability in respect to such Contingent Obligation.

                  "CONTRACTUAL OBLIGATION", as applied to any Person, means
         any provision of any Security issued by that Person or of any
         material indenture, mortgage, deed of trust, contract, undertaking,
         agreement or other instrument to which that Person is a party or by
         which it or any of its properties is bound or to which it or any of
         its properties is subject.

                  "CURRENCY AGREEMENT" means any foreign exchange contract,
         currency swap agreement, futures contract, option contract, synthetic
         cap or other similar agreement or arrangement to which Company or any
         of its Subsidiaries is a party.

                  "CYBERGATE" means Cybergate, Inc., a Florida corporation.

                  "DEFERRED RESTRUCTURING FEE" has the meaning assigned to
         that term in subsection 2.3C.

                  "DEPOSIT ACCOUNT" means a demand, time, savings, passbook or
         like account with a bank, savings and loan association, credit union
         or like organization, other than an account evidenced by a negotiable
         certificate of deposit.

                  "DOCUMENTATION AGENT" has the meaning assigned that term in
         the introduction to this Agreement.

                  "DOLLARS" and the sign "$" mean the lawful money of the
         United States of America.

                  "ELIGIBLE ASSIGNEE" means (i) (a) a commercial bank
         organized under the laws of the United States or any state thereof;
         (b) a savings and loan association or savings bank organized under
         the laws of the United States or any state thereof; (c) a commercial
         bank organized under the laws of any other country or a political
         subdivision thereof; provided that (1) such bank is acting through a
         branch or agency located in the United States or (2) such bank is
         organized under the laws of a country that is a member of the
         Organization for Economic Cooperation and Development or a political
         subdivision of such country; and (d) any other entity which is an
         "accredited investor" (as defined in Regulation D under the
         Securities Act) which extends credit or buys loans as one of its
         businesses including insurance companies, mutual funds and lease
         financing companies; and (ii) any Lender, any Affiliate of any Lender
         and, with respect to any Lender that is an investment fund that
         invests in commercial loans, any other investment fund that invests
         in commercial loans and that is managed or advised by the same
         investment advisor as such Lender or by an Affiliate of such
         investment advisor; provided that no Affiliate of Company shall be an
         Eligible Assignee (other than the Huff Fund which shall be an
         Eligible Assignee hereunder to the extent and only to the extent it
         is required to purchase Loans pursuant to the Loan Put Agreement).

                                      11

<PAGE>   20

                  "EMPLOYEE BENEFIT PLAN" means any "employee benefit plan" as
         defined in Section 3(3) of ERISA which is or was maintained or
         contributed to by Company, any of its Subsidiaries or any of their
         respective ERISA Affiliates.

                  "ENVIRONMENTAL CLAIM" means any investigation, written
         notice, written notice of violation, claim, action, suit, proceeding,
         written demand, written abatement order or other written order or
         directive (conditional or otherwise), by any governmental authority
         or any other Person, arising (i) pursuant to or in connection with
         any actual or alleged violation of any Environmental Law, (ii) in
         connection with any Hazardous Materials or any actual or alleged
         Hazardous Materials Activity, or (iii) in connection with any actual
         or alleged damage, injury, threat or harm to health, safety, natural
         resources or the environment.

                  "ENVIRONMENTAL LAWS" means any and all current or future
         statutes, ordinances, orders, rules, regulations, judgments,
         Governmental Authorizations, or any other requirements of
         governmental authorities relating to (i) environmental matters,
         including those relating to any Hazardous Materials Activity, (ii)
         the generation, use, storage, transportation or disposal of Hazardous
         Materials, or (iii) occupational safety and health, industrial
         hygiene, land use or the protection of human, plant or animal health
         or welfare as relating to the environment, in any manner applicable
         to Company or any of its Subsidiaries or any Facility, including the
         Comprehensive Environmental Response, Compensation, and Liability Act
         (42 U.S.C. Section 9601 et seq.), the Hazardous Materials
         Transportation Act (49 U.S.C. Section 1801 et seq.), the Resource
         Conservation and Recovery Act (42 U.S.C. Section 6901 et seq.), the
         Federal Water Pollution Control Act (33 U.S.C. Section 1251 et seq.),
         the Clean Air Act (42 U.S.C. Section 7401 et seq.), the Toxic
         Substances Control Act (15 U.S.C. Section 2601 et seq.), the Federal
         Insecticide, Fungicide and Rodenticide Act (7 U.S.C. Section 136 et
         seq.), the Occupational Safety and Health Act (29 U.S.C. Section 651
         et seq.), the Oil Pollution Act (33 U.S.C. Section 2701 et seq.) and
         the Emergency Planning and Community Right-to-Know Act (42 U.S.C.
         Section 11001 et seq.), each as amended or supplemented, any
         analogous present or future state or local statutes or laws, and any
         regulations promulgated pursuant to any of the foregoing.

                  "ERISA" means the Employee Retirement Income Security Act of
         1974, as amended from time to time, and any successor thereto.

                  "ERISA AFFILIATE" means, as applied to any Person, (i) any
         corporation which is a member of a controlled group of corporations
         within the meaning of Section 414(b) of the Internal Revenue Code of
         which that Person is a member; (ii) any trade or business (whether or
         not incorporated) which is a member of a group of trades or
         businesses under common control within the meaning of Section 414(c)
         of the Internal Revenue Code of which that Person is a member; and
         (iii) any member of an affiliated service group within the meaning of
         Section 414(m) or (o) of the Internal Revenue Code of which that
         Person, any corporation described in clause (i) above or any trade or
         business described in clause (ii) above is a member.

                  "ERISA EVENT" means (i) a "reportable event" within the
         meaning of Section 4043 of ERISA and the regulations issued
         thereunder with respect to any Pension Plan

                                      12

<PAGE>   21

         (excluding those for which the provision for 30-day notice to the
         PBGC has been waived by regulation); (ii) the failure to meet the
         minimum funding standard of Section 412 of the Internal Revenue Code
         with respect to any Pension Plan (whether or not waived in accordance
         with Section 412(d) of the Internal Revenue Code) or the failure to
         make by its due date a required installment under Section 412(m) of
         the Internal Revenue Code with respect to any Pension Plan or the
         failure to make any required contribution to a Multiemployer Plan;
         (iii) the provision by the administrator of any Pension Plan pursuant
         to Section 4041(a)(2) of ERISA of a notice of intent to terminate
         such plan in a distress termination described in Section 4041(c) of
         ERISA; (iv) the withdrawal by Company, any of its Subsidiaries or any
         of their respective ERISA Affiliates from any Pension Plan with two
         or more contributing sponsors or the termination of any such Pension
         Plan resulting in liability pursuant to Section 4063 or 4064 of
         ERISA; (v) the institution by the PBGC of proceedings to terminate
         any Pension Plan, or the occurrence of any event or condition which
         might constitute grounds under ERISA for the termination of, or the
         appointment of a trustee to administer, any Pension Plan; (vi) the
         imposition of liability on Company, any of its Subsidiaries or any of
         their respective ERISA Affiliates pursuant to Section 4062(e) or 4069
         of ERISA, by reason of the application of Section 4212(c) of ERISA or
         on account of any liabilities arising by virtue of any former ERISA
         Affiliate of Company or any of its Subsidiaries under ERISA or the
         Code with respect to the period such entity was an ERISA Affiliate;
         (vii) the withdrawal of Company, any of its Subsidiaries or any of
         their respective ERISA Affiliates in a complete or partial withdrawal
         (within the meaning of Sections 4203 and 4205 of ERISA) from any
         Multiemployer Plan or the receipt by Company, any of its Subsidiaries
         or any of their respective ERISA Affiliates of notice from any
         Multiemployer Plan that it is in reorganization or insolvency
         pursuant to Section 4241 or 4245 of ERISA, or that it intends to
         terminate or has terminated under Section 4041A or 4042 of ERISA;
         (viii) the assertion of a material claim (other than routine claims
         for benefits) against any Employee Benefit Plan other than a
         Multiemployer Plan or the assets thereof, or against Company, any of
         its Subsidiaries or any of their respective ERISA Affiliates in
         connection with any Employee Benefit Plan; (ix) receipt from the
         Internal Revenue Service of notice of the failure of any Pension Plan
         (or any other Employee Benefit Plan intended to be qualified under
         Section 401(a) of the Internal Revenue Code) to qualify under Section
         401(a) of the Internal Revenue Code, or the failure of any trust
         forming part of any Pension Plan to qualify for exemption from
         taxation under Section 501(a) of the Internal Revenue Code; or (x)
         the imposition of a Lien pursuant to Section 401(a)(29) or 412(n) of
         the Internal Revenue Code or pursuant to ERISA with respect to any
         Pension Plan.

                  "EURODOLLAR RATE LOANS" means Loans bearing interest at
         rates determined by reference to the Adjusted Eurodollar Rate as
         provided in subsection 2.2A.

                  "EVENT OF DEFAULT" means each of the events set forth in
         Section 7.

                  "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
         amended from time to time, and any successor statute.

                                      13

<PAGE>   22
                  "EXISTING PREFERRED STOCK" means, collectively, the 12 3/4%
         Junior Redeemable Preferred Stock due 2009 issued by Company and the
         14 3/4% Redeemable Preferred Stock due 2008 issued by Company.

                  "EXISTING SENIOR NOTE INDENTURES" means the indentures
         pursuant to which the Existing Senior Notes were issued, as such
         indentures may be amended from time to time to the extent permitted
         under subsection 6.15.

                  "EXISTING SENIOR NOTES" means Company's (i) $190,000,000 in
         initial aggregate principal amount of 13% Senior Discount Notes due
         2005, (ii) $120,000,000 in initial aggregate principal amount of 12
         3/4% Senior Discount Notes due 2006, (iii) $220,000,000 in initial
         aggregate principal amount of 13 3/4% Senior Notes due 2007, and (iv)
         $375,000,000 in initial aggregate principal amount of 10.625% Senior
         Discount Notes due 2008.

                  "FACILITIES" means any and all real property (including all
         buildings, fixtures or other improvements located thereon) now,
         hereafter or heretofore owned, leased, operated or used by Company or
         any of its Subsidiaries or any of their respective predecessors or
         Affiliates.

                  "FEDERAL FUNDS EFFECTIVE RATE" means, for any period, a
         fluctuating interest rate equal for each day during such period to
         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 for such day (or, if such day is
         not a Business Day, for the next preceding 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 such day on such transactions received by
         Administrative Agent from three Federal funds brokers of recognized
         standing selected by Administrative Agent.

                  "FINANCE SUB" has the meaning assigned to that term in the
         introduction to this Agreement.

                  "FINANCE SUB AND OTHER SUBSIDIARY PLEDGE AND SECURITY
         AGREEMENT" means, the Finance Sub and Other Subsidiary Pledge and
         Security Agreement executed and delivered by Finance Sub and its
         Subsidiaries on the Closing Date, annexed hereto, as such agreement
         may be amended, supplemented or otherwise modified from time to time.

                  "FINANCE SUB INTERCOMPANY PLEDGE AND SECURITY AGREEMENT"
         means the Finance Sub Intercompany Pledge and Security Agreement
         executed and delivered by Finance Sub and Company on the Closing
         Date, as such agreement may hereafter be amended, supplemented or
         otherwise modified from time to time to the extent permitted under
         subsection 6.15.

                  "FINANCIAL PLAN" has the meaning assigned to that term in
         subsection 5.1(xiii).

                  "FIRST PRIORITY" means, with respect to any Lien purported
         to be created in any Collateral pursuant to any Collateral Document,
         that (i) such Lien has priority over any other Lien on such
         Collateral (other than Liens permitted pursuant to subsections

                                      14

<PAGE>   23

         6.2A(iii) and (iv)) and (ii) such Lien is the only Lien (other than
         Permitted Encumbrances and Liens permitted pursuant to subsection
         6.2) to which such Collateral is subject.

                  "FISCAL QUARTER" means a fiscal quarter of any Fiscal Year.

                  "FISCAL YEAR" means the fiscal year of Company and its
         Subsidiaries ending on December 31 of each calendar year. For
         purposes of this Agreement, any particular Fiscal Year shall be
         designated by reference to the calendar year in which such Fiscal
         Year ends.

                  "FUNDING AND PAYMENT OFFICE" means (i) the office of
         Administrative Agent located at One Wall Street, 16th Floor, New
         York, New York 10268 or (ii) such other office of Administrative
         Agent as may from time to time hereafter be designated as such in a
         written notice delivered by Administrative Agent to Company and each
         Lender.

                  "FUNDING DATE" means the date of the funding of a Loan.

                  "GAAP" means, subject to the limitations on the application
         thereof set forth in subsection 1.2, generally accepted accounting
         principles set forth in opinions and pronouncements of the Accounting
         Principles Board of the American Institute of Certified Public
         Accountants and statements and pronouncements of the Financial
         Accounting Standards Board or in such other statements by such other
         entity as may be approved by a significant segment of the accounting
         profession, in each case as the same are applicable to the
         circumstances as of the date of determination.

                  "GANE" has the meaning assigned to that term in subsection
         5.8C.

                  "GOVERNMENTAL AUTHORIZATION" means any permit, license,
         authorization, plan, directive, consent order or consent decree of or
         from any federal, state or local governmental authority, agency or
         court.

                  "GSCP" means Goldman Sachs Credit Partners L.P., a Bermuda
         limited partnership.

                  "HAZARDOUS MATERIALS" means (i) any chemical, material or
         substance at any time defined as or included in the definition of
         "hazardous substances", "hazardous wastes", "hazardous materials",
         "extremely hazardous waste", "acutely hazardous waste", "radioactive
         waste", "biohazardous waste", "pollutant", "toxic pollutant",
         "contaminant", "restricted hazardous waste", "infectious waste",
         "toxic substances", or any other term or expression intended to
         define, list or classify substances by reason of properties harmful
         to health, safety or the indoor or outdoor environment (including
         harmful properties such as ignitability, corrosivity, reactivity,
         carcinogenicity, toxicity, reproductive toxicity, "TCLP toxicity" or
         "EP toxicity" or words of similar import under any applicable
         Environmental Laws); (ii) any oil, petroleum, petroleum fraction or
         petroleum derived substance; (iii) any drilling fluids, produced
         waters and other wastes associated with the exploration, development
         or production of crude oil, natural gas or geothermal resources; (iv)
         any flammable substances or explosives; (v) any radioactive
         materials; (vi) any asbestos-containing materials; (vii) urea
         formaldehyde foam

                                      15

<PAGE>   24

         insulation; (viii) electrical equipment which contains any oil or
         dielectric fluid containing polychlorinated biphenyls; (ix)
         pesticides; and (x) any other chemical, material or substance,
         exposure to which is prohibited, limited or regulated by any
         governmental authority pursuant to Environmental Laws.

                  "HAZARDOUS MATERIALS ACTIVITY" means any past, current, or
         threatened activity, event or occurrence involving any Hazardous
         Materials, including the use, manufacture, possession, storage,
         holding, presence, existence, location, Release, threatened Release,
         discharge, placement, generation, transportation, processing,
         construction, treatment, abatement, removal, remediation, disposal,
         disposition or handling of any Hazardous Materials, and any
         corrective action or response action with respect to any of the
         foregoing.

                  "HEDGE AGREEMENT" means an Interest Rate Agreement or a
         Currency Agreement designed to hedge against fluctuations in interest
         rates or currency values, respectively.

                  "HUFF FUND" means The Huff Alternative Income Fund, L.P.

                  "HUFF PURCHASE AGREEMENT" means the purchase agreement
         entered between the Huff Fund and Company pursuant to subsection
         3.1I(i), as such purchase agreement may be amended from time to time
         to the extent permitted under subsection 6.15.

                  "ICP" means the reportable segment of Company's business
         identified as "Telecommunications" by Company in accordance with SFAS
         No. 131.

                  "INDEBTEDNESS", as applied to any Person, means (i) all
         indebtedness for borrowed money, (ii) all Capital Lease Obligations,
         (iii) notes payable and drafts accepted representing extensions of
         credit whether or not representing obligations for borrowed money,
         (iv) any obligation owed for all or any part of the deferred purchase
         price of property or services (excluding any such obligations
         incurred under ERISA), which purchase price is (a) due more than six
         months from the date of incurrence of the obligation in respect
         thereof or (b) evidenced by a note or similar written instrument, and
         (v) all indebtedness secured by any Lien on any property or asset
         owned or held by that Person regardless of whether the indebtedness
         secured thereby shall have been assumed by that Person or is
         nonrecourse to the credit of that Person. Obligations under Interest
         Rate Agreements and Currency Agreements constitute (1) in the case of
         Hedge Agreements, Contingent Obligations, and (2) in all other cases,
         Investments, and in neither case constitute Indebtedness.

                  "INDEMNITEE" has the meaning assigned to that term in
         subsection 9.3.

                  "INTELLECTUAL PROPERTY" means all patents, trademarks,
         tradenames, trade secrets, service marks, copyrights, technology,
         know-how, formulae and processes used in or necessary for the conduct
         of the business of Company and its Subsidiaries as currently
         conducted that are material to the condition (financial or
         otherwise), business or operations of Company and its Subsidiaries,
         taken as a whole.

                                      16

<PAGE>   25

                  "INTERCOMPANY LOAN DOCUMENTS" means the Master Note, the
         Intercompany Purchase Money Note, the Intercompany Note, the
         Intercompany Pledge and Security Agreement and the Finance Sub
         Intercompany Pledge and Security Agreement.

                  "INTERCOMPANY NOTE" means the promissory note executed by
         Company and its Restricted Subsidiaries evidencing intercompany
         Indebtedness (other than Indebtedness required to be evidenced by the
         Master Note or Intercompany Purchase Money Notes), as such document
         may be amended, supplemented or otherwise modified from time to time
         to the extent permitted by subsection 6.15.

                  "INTERCOMPANY PLEDGE AND SECURITY AGREEMENT" means the
         Intercompany Pledge and Security Agreement executed and delivered by
         each Restricted Subsidiary on the Closing Date, and to be executed
         and delivered by each new Restricted Subsidiary from time to time
         thereafter in accordance with Subsection 5.8, annexed hereto, as such
         document may be amended, supplemented or otherwise modified from time
         to time to the extent permitted by subsection 6.15.

                  "INTERCOMPANY PURCHASE MONEY NOTE" means the promissory note
         executed by the Restricted Subsidiaries in favor of Finance Sub
         evidencing any and all loans made by Finance Sub to each Restricted
         Subsidiary from proceeds of loans made by Company to Finance Sub
         under the Master Note, as such document may be amended, supplemented
         or otherwise modified from time to time to the extent permitted by
         subsection 6.15.

                  "INTERCONNECTION AGREEMENT" means an agreement entered into
         with an incumbent provider of local exchange telephone service in
         accord with Sections 251 and 252 of the Communications Act.

                  "INTEREST PAYMENT ADJUSTMENT DATE" shall mean the earlier of
         (i) the date the Liquidity Requirement is met or (ii) the date the
         aggregate principal amount of the Loans outstanding is less than
         $120,000,000.

                  "INTEREST PAYMENT DATE" means (i) with respect to any Base
         Rate Loan, (a) prior to the Interest Payment Adjustment Date, the
         last day of each calendar month and (b) after the Interest Payment
         Adjustment Date, each March 31, June 30, September 30 and December 31
         of each year, commencing on the first such date to occur after the
         Interest Payment Adjustment Date, and (ii) with respect to any
         Eurodollar Rate Loan, the last day of each Interest Period applicable
         to such Loan; provided that prior to the Interest Payment Adjustment
         Date, with respect to each Interest Period of longer than one month,
         "Interest Payment Date" shall also include the last day of each month
         following the commencement of such Interest Period.

                  "INTEREST PERIOD" has the meaning assigned to that term in
         subsection 2.2B.

                  "INTEREST RATE AGREEMENT" means any interest rate swap
         agreement, interest rate cap agreement, interest rate collar
         agreement or other similar agreement or arrangement to which Company
         or any of its Restricted Subsidiaries is a party.

                                      17

<PAGE>   26

                  "INTEREST RATE DETERMINATION DATE" means, with respect to
         any Interest Period, the second Business Day prior to the first day
         of such Interest Period.

                  "INTERNAL REVENUE CODE" means the Internal Revenue Code of
         1986, as amended to the date hereof and from time to time hereafter,
         and any successor statute.

                  "INVENTORY" means, with respect to any Person as of any date
         of determination, all goods, merchandise and other personal property
         which are then held by such Person for sale or lease, including raw
         materials and work in process.

                  "INVESTMENT" means (i) any direct or indirect purchase or
         other acquisition by Company or any Restricted Subsidiary of, or of a
         beneficial interest in, any Securities of any other Person (including
         any Subsidiary of Company), (ii) any direct or indirect redemption,
         retirement, purchase or other acquisition for value, by any
         Subsidiary of Company from any Person other than Company or any of
         its Subsidiaries, of any equity Securities of such Subsidiary, (iii)
         any direct or indirect loan, advance or capital contribution by
         Company or any of its Subsidiaries to any other Person, including all
         indebtedness and accounts receivable from that other Person that are
         not current assets or did not arise from sales to that other Person
         in the ordinary course of business, or (iv) Interest Rate Agreements
         or Currency Agreements not constituting Hedge Agreements. The amount
         of any Investment shall be (a) the original cost of such Investment
         plus (b) the cost of all additions thereto, without any adjustments
         for increases or decreases in value, or write-ups, write-downs or
         write-offs with respect to such Investment minus (c) the lesser of
         (1) the aggregate amount of any repayments, redemptions, dividends or
         other distributions thereon or proceeds from the sale thereof, in
         each case to the extent of any Cash payments (including any Cash
         received by way of deferred payment pursuant to, or by monetization
         of, a note receivable or otherwise, but only as and when so received)
         actually received by Company or any of its Restricted Subsidiaries in
         connection therewith, and (2) the aggregate amount described in the
         immediately preceding clauses (a) and (b).

                  "INVESTORS" means the Huff Fund, Greenwich Street Capital
         Partners II, L.P., GSCP Offshore Fund, L.P., Greenwich Fund, L.P.,
         Greenwich Street Employee Fund, L.P., TRV Executive Fund, L.P., and
         The Honeywell International Inc. Master Retirement Trust.

                  "JOINT VENTURE" means a joint venture, partnership or other
         similar arrangement, whether in corporate, partnership or other legal
         form; provided that in no event shall any corporate Subsidiary of any
         Person be considered to be a Joint Venture to which such Person is a
         party.

                  "LENDER" and "LENDERS" means the persons identified as
         "Lenders" and listed on the signature pages of this Agreement,
         together with their successors and permitted assigns pursuant to
         subsection 9.1.

                  "LEVERAGE RATIO" means, as of the last day of any Fiscal
         Quarter, the ratio of (i) Consolidated Total Debt to (ii)
         Consolidated Annualized EBITDA, in each case as set

                                      18

<PAGE>   27

         forth in the most recent Compliance Certificate delivered by Company
         to Administrative Agent pursuant to clause (iii) of subsection 5.1.

                  "LICENSES" means all licenses, authorizations,
         certifications, waivers and permits required from any Communications
         Regulatory Authority acting under the Communications Act or State
         Law.

                  "LIEN" means any lien (statutory or otherwise), mortgage,
         pledge, hypothecation, assignment, security interest, charge or
         encumbrance of any kind (including any conditional sale or other
         title retention agreement, any lease in the nature thereof, and any
         agreement to give any security interest) and any option, trust or
         other priority or preferential arrangement having the practical
         effect of any of the foregoing.

                  "LIQUIDITY REQUIREMENT" means the receipt by Company, in
         addition to the Required Junior Capital, of at least (i) $100,000,000
         in net Cash proceeds from the issuance and sale of Qualified
         Additional Capital on or before March 31, 2001 plus (ii) an
         additional $100,000,000 in net Cash proceeds from the issuance and
         sale of Qualified Additional Capital on or before September 30, 2001.

                  "LOAN" or "LOANS" means one or more of the Series A
         Revolving Loans, Series B Term Loans or Series C Term Loans, or any
         combination thereof.

                  "LOAN DOCUMENTS" means this Agreement, the Notes, the
         Company Guaranty, the Subsidiary Guaranty, the Collateral Documents,
         the Intercompany Loan Documents and the Loan Put Agreement.

                  "LOAN PARTY" means each of Finance Sub, Company and any
         Restricted Subsidiaries from time to time executing a Loan Document,
         and "LOAN PARTIES" means all such Persons, collectively.

                  "LOAN PUT AGREEMENT" means the Loan Put Agreement,
         substantially in the form of Exhibit XIII annexed hereto, executed
         and delivered by the Huff Fund, the Administrative Agent and the
         Lenders on or prior to the Restatement Effective Date, as such Loan
         Put Agreement may thereafter be amended, supplemented or otherwise
         modified from time to time.

                  "MANAGEMENT SHARES" means shares of Capital Stock in Company
         issued to management of Company from and after the Closing Date.

                  "MARGIN STOCK" has the meaning assigned to that term in
         Regulation U of the Board of Governors of the Federal Reserve System
         as in effect from time to time.

                  "MASTER NOTE" means the Master Note executed by Finance Sub
         on the Closing Date in favor of Company to evidence any and all loans
         made by Company to Finance Sub from the proceeds of Series B Term
         Loans or Series C Term Loans annexed hereto, as such Master Note may
         thereafter be amended, supplemented or otherwise modified from time
         to time to the extent permitted by subsection 6.15.

                                      19
<PAGE>   28

                  "MATERIAL ADVERSE EFFECT" means (i) a material adverse
         effect upon the business, operations, properties, assets, condition
         (financial or otherwise) or prospects of Company or any of its
         Restricted Subsidiaries or (ii) the impairment of the ability of any
         Loan Party to perform, or of Administrative Agent or Lenders to
         enforce, the Obligations.

                  "MATERIAL CONTRACT" means any contract or other arrangement
         to which Company or any of its Subsidiaries is a party (other than
         the Loan Documents) for which breach, nonperformance, cancellation or
         failure to renew would reasonably be expected to have a Material
         Adverse Effect.

                  "MATURITY DATE" means (i) February 11, 2006 with respect to
         the Series A Revolving Loans and Series B Term Loans and (ii) August
         11, 2006 with respect to the Series C Term Loans; provided that, in
         any case, the Maturity Date shall be (a) November 1, 2004, if Company
         has not refinanced the 13% Senior Notes due 2005 by November 1, 2004
         and (b) April 1, 2005, if Company has not refinanced the 12-3/4%
         Senior Notes due 2006 by April 1, 2005.

                  "MAXIMUM CONSOLIDATED CASH CAPITAL EXPENDITURE AMOUNT" has
         the meaning set forth in subsection 6.6C.

                  "MULTIEMPLOYER PLAN" means any Employee Benefit Plan which
         is a "multiemployer plan" as defined in Section 3(37) of ERISA.

                  "NET ASSET SALE PROCEEDS" means, with respect to any Asset
         Sale, Cash payments (including any Cash received by way of deferred
         payment pursuant to, or by monetization of, a note receivable or
         otherwise, but only as and when so received) received from such Asset
         Sale, net of any bona fide direct costs incurred in connection with
         such Asset Sale, including (i) income taxes reasonably estimated to
         be actually payable within two years of the date of such Asset Sale
         as a result of any gain recognized in connection with such Asset Sale
         and (ii) payment of the outstanding principal amount of, premium or
         penalty, if any, and interest on any Indebtedness (other than the
         Loans) that is secured by a Lien on the stock or assets in question
         and that is required to be repaid under the terms thereof as a result
         of such Asset Sale.

                  "NET INSURANCE/CONDEMNATION PROCEEDS" means any Cash
         payments or proceeds received by Company or any Restricted Subsidiary
         (i) under any business interruption or casualty insurance policy in
         respect of a covered loss thereunder or (ii) as a result of the
         taking of any assets of Company or any Restricted Subsidiary by any
         Person pursuant to the power of eminent domain, condemnation or
         otherwise, or pursuant to a sale of any such assets to a purchaser
         with such power under threat of such a taking, in each case net of
         any actual and reasonable documented costs incurred by Company or any
         Restricted Subsidiary in connection with the adjustment or settlement
         of any claims of Company or such Restricted Subsidiary in respect
         thereof.

                  "NON-RECOURSE INDEBTEDNESS" means Indebtedness as to which
         (i) neither Company nor any of its Restricted Subsidiaries (a)
         provides credit support (including any undertaking, agreement or
         instrument that would constitute Indebtedness), (b) is directly

                                      20

<PAGE>   29

         or indirectly liable (as a guarantor or otherwise)) or (c)
         constitutes the lender and (ii) no default with respect to such
         Indebtedness (including any rights which the holders thereof may have
         to take enforcement action against the relevant Subsidiary or its
         assets) would permit (upon notice, lapse of time or both) any holder
         of any other Indebtedness of Company or its Restricted Subsidiaries
         to declare a default on such other Indebtedness or cause the payment
         thereof to be accelerated or payable prior to its stated maturity.

                  "NOTES" means one or more of the Series A Revolving Notes,
         Series B Term Notes or Series C Term Notes, or any combination
         thereof.

                  "NOTICE OF CONVERSION/CONTINUATION" means a notice
         substantially in the form of Exhibit III annexed hereto delivered by
         Company or Finance Sub, as the case may be, to Administrative Agent
         pursuant to subsection 2.2D with respect to a proposed conversion or
         continuation of the applicable basis for determining the interest
         rate with respect to the Loans specified therein.

                  "OBLIGATIONS" means all obligations of every nature of each
         Loan Party from time to time owed to Agents, Lenders or their
         respective Affiliates or any of them under the Loan Documents,
         whether for principal, interest (including interest that would become
         due but for the operation of the automatic stay under Section 362(a)
         of the Bankruptcy Code, 11 U.S.C. Section 362(a)), fees, expenses,
         indemnification or otherwise.

                  "OFFICERS' CERTIFICATE" means, as applied to any
         corporation, a certificate executed on behalf of such corporation by
         its chairman of the board (if an officer) or its president or one of
         its vice presidents and by its chief financial officer or its
         treasurer; provided that every Officers' Certificate with respect to
         the compliance with a condition precedent to the making of any Loans
         hereunder shall include (i) a statement that the officer or officers
         making or giving such Officers' Certificate have read such condition
         and any definitions or other provisions contained in this Agreement
         relating thereto, (ii) a statement that, in the opinion of the
         signers, they have made or have caused to be made such examination or
         investigation as is necessary to enable them to express an informed
         opinion as to whether or not such condition has been complied with,
         and (iii) a statement as to whether, in the opinion of the signers,
         such condition has been complied with.

                  "ORIGINAL CREDIT AGREEMENT" has the meaning set forth in the
         Recitals.

                  "ORGANIZATIONAL DOCUMENTS" means (i) with respect to any
         corporation, its certificate or articles of incorporation and its
         bylaws, (ii) with respect to any limited partnership, its certificate
         of limited partnership and its partnership agreement, (iii) with
         respect to any general partnership, its partnership agreement, (iv)
         with respect to any limited liability company, its articles or
         certificate of organization and its operating agreement and (v) with
         respect to any other entity, its equivalent organizational, governing
         documents.

                  "PBGC" means the Pension Benefit Guaranty Corporation or any
         successor thereto.

                                      21

<PAGE>   30

                  "PENSION PLAN" means any Employee Benefit Plan, other than a
         Multiemployer Plan, which is subject to Section 412 of the Internal
         Revenue Code or Section 302 of ERISA.

                  "PERMITTED ENCUMBRANCES" means the following types of Liens
         (excluding any such Lien imposed pursuant to Section 401(a)(29) or
         412(n) of the Internal Revenue Code or by ERISA, any such Lien
         relating to or imposed in connection with any Environmental Claim,
         and any such Lien expressly prohibited by any applicable terms of any
         of the Collateral Documents):

                           (i)      Liens for taxes, assessments or
                  governmental charges or claims the payment of which is not,
                  at the time, required by subsection 5.3;

                           (ii)     statutory Liens of landlords, statutory
                  Liens of banks and rights of set-off, statutory Liens of
                  carriers, warehousemen, mechanics, repairmen, workmen and
                  materialmen, and other Liens imposed by law, in each case
                  incurred in the ordinary course of business (a) for amounts
                  not yet overdue or (b) for amounts that are overdue and that
                  (in the case of any such amounts overdue for a period in
                  excess of 10 days) are being contested in good faith by
                  appropriate proceedings, so long as (1) such reserves or
                  other appropriate provisions, if any, as shall be required
                  by GAAP shall have been made for any such contested amounts,
                  and (2) in the case of a Lien with respect to any portion of
                  the Collateral, such contest proceedings conclusively
                  operate to stay the sale of any portion of the Collateral on
                  account of such Lien;

                           (iii)    Liens incurred or deposits made in the
                  ordinary course of business (a) in connection with workers'
                  compensation, unemployment insurance and other types of
                  social security, or (b) to secure the performance of
                  tenders, statutory obligations, surety and appeal bonds,
                  bids, leases, government contracts, trade contracts,
                  performance bonds (including standby letters of credit
                  issued in respect of such performance bonds) and
                  return-of-money bonds and other similar obligations
                  (exclusive of obligations for the payment of borrowed money)
                  provided that the amounts in respect of performance bonds
                  and standby letters of credit in respect of performance
                  bonds secured by such Liens do not in the aggregate exceed
                  $30,000,000, so long as no foreclosure, sale or similar
                  proceedings have been commenced with respect to any portion
                  of the Collateral on account thereof;

                           (iv)     any attachment or judgment Lien not
                  constituting an Event of Default under subsection 7.8;

                           (v)      leases or subleases granted to third
                  parties in accordance with any applicable terms of the
                  Collateral Documents and not interfering in any material
                  respect with the ordinary conduct of the business of Company
                  or any of its Subsidiaries or resulting in a material
                  diminution in the value of any Collateral as security for
                  the Obligations and rights granted to third parties under
                  Use Agreements;

                                      22

<PAGE>   31

                           (vi)     easements, rights-of-way, restrictions,
                  encroachments, and other minor defects or irregularities in
                  title, in each case which do not and will not interfere in
                  any material respect with the ordinary conduct of the
                  business of Company or any of its Subsidiaries or result in
                  a material diminution in the value of any Collateral as
                  security for the Obligations;

                           (vii)    any (a) interest or title of a lessor or
                  sublessor under a lease, (b) restriction or encumbrance that
                  the interest or title of such lessor or sublessor may be
                  subject to, or (c) subordination of the interest of the
                  lessee or sublessee under such lease to any restriction or
                  encumbrance referred to in the preceding clause (b), so long
                  as the holder of such restriction or encumbrance agrees to
                  recognize the rights of such lessee or sublessee under such
                  lease;

                           (viii)   Liens arising from filing UCC financing
                  statements relating solely to leases permitted by this
                  Agreement;

                           (ix)     Liens in favor of customs and revenue
                  authorities arising as a matter of law to secure payment of
                  customs duties in connection with the importation of goods;

                           (x)      any zoning or similar law or right
                  reserved to or vested in any governmental office or agency
                  to control or regulate the use of any real property; and

                           (xi)     Liens securing obligations (other than
                  obligations representing Indebtedness for borrowed money)
                  under operating, reciprocal easement or similar agreements
                  entered into in the ordinary course of business of Company
                  and its Subsidiaries.

                  "PERMITTED HOLDERS" means the Huff Fund, ING Equity
         Partners, L.P.I., Apex Investment Fund I, L.P., Apex Investment Fund
         II, L.P., The Productivity Fund II, L.P., George Schmitt, Acqua
         Wellington, Promethean Investment Group and the respective Affiliates
         (other than Company and its Restricted Subsidiaries) of each of the
         foregoing.

                  "PERSON" means and includes natural persons, corporations,
         limited partnerships, general partnerships, limited liability
         companies, limited liability partnerships, joint stock companies,
         Joint Ventures, associations, companies, trusts, banks, trust
         companies, land trusts, business trusts or other organizations,
         whether or not legal entities, and governments (whether federal,
         state or local, domestic or foreign, and including political
         subdivisions thereof) and agencies or other administrative or
         regulatory bodies thereof.

                  "PLEDGED COLLATERAL" means, collectively, the "Pledged
         Collateral" as defined in the Company Pledge and Security Agreement,
         the Finance Sub and Other Subsidiary Pledge and Security Agreement,
         and the Finance Sub Intercompany Pledge and Security Agreement.

                  "POTENTIAL EVENT OF DEFAULT" means a condition, act or event
         that, with the giving of notice or lapse of time or both, would
         constitute an Event of Default.

                                      23

<PAGE>   32

                  "PRIME RATE" means the rate that BNY publicly announces from
         time to time as its prime lending rate, as in effect from time to
         time its Funding and Payment Office. The Prime Rate is a reference
         rate and does not necessarily represent the lowest or best rate
         actually charged to any customer. BNY or any other Lender may make
         commercial loans or other loans at rates of interest at, above or
         below the Prime Rate.

                  "PRO RATA SHARE" means (i) with respect to all payments,
         computations and other matters relating to the Series A Revolving
         Loans of any Lender, the percentage obtained by dividing (a) the
         Series A Revolving Loan Exposure of that Lender by (b) the aggregate
         Series A Revolving Loan Exposure of all Lenders, (ii) with respect to
         all payments, computations and other matters relating to the Series B
         Term Loan Commitment or the Series B Term Loans of any Lender the
         percentage obtained by dividing (a) the Series B Term Loan Exposure
         of that Lender by (b) the aggregate Series B Term Loan Exposure of
         all Lenders, (iii) with respect to all payments, computations and
         other matters relating to the Series C Term Loan Commitment or the
         Series C Term Loans of any Lender, the percentage obtained by
         dividing (a) the Series C Term Loan Exposure of that Lender by (b)
         the aggregate Series C Term Loan Exposure of all Lenders, and (iv)
         for all other purposes with respect to each Lender, the percentage
         obtained by dividing (a) the sum of the Series A Revolving Loan
         Exposure of that Lender plus the Series B Term Loan Exposure of that
         Lender plus the Series C Term Loan Exposure of that Lender by (b) the
         sum of the aggregate Series A Revolving Loan Exposure of all Lenders
         plus the aggregate Series B Term Loan Exposure of all Lenders plus
         the aggregate Series C Term Loan Exposure of all Lenders in any such
         case as the applicable percentage may be adjusted by assignments
         permitted pursuant to subsection 9.1. The Pro Rata Share of each
         Lender as of the date of this Agreement for purposes of each of
         clauses (i), (ii), (iii) and (iv) of the preceding sentence is set
         forth opposite the name of that Lender in Schedule 2.1 annexed
         hereto.

                  "PURCHASE MONEY DEBT ALLOWANCE" has the meaning given such
         term in the Existing Senior Note Indentures.

                  "QUALIFIED ADDITIONAL CAPITAL" means the net Cash proceeds
         received by Company from (i) the issuance of Capital Stock of the
         Company in accordance with the terms of this Agreement, (ii) the
         issuance of Additional Notes in accordance with the terms of this
         Agreement, (iii) indebtedness incurred in accordance with subsection
         6.1(vi) at any time after the Company has received the Required
         Junior Capital (for purposes of this clause (iii), unfunded firm
         commitments to provide Loans pursuant to executed loan or credit
         agreements containing only customary funding conditions shall
         constitute Qualified Additional Capital) or (iv) the aggregate amount
         of Net Asset Sale Proceeds received after the Restatement Effective
         Date which are permitted to be reinvested in Telecommunications
         Assets pursuant to subsection 2.4(B)(iii)(a).

                  "REGISTER" has the meaning assigned to that term in
         subsection 2.1D.

                  "REGULATION D" means Regulation D of the Board of Governors
         of the Federal Reserve System, as in effect from time to time.

                                      24

<PAGE>   33

                  "RELATED AGREEMENTS" means, collectively, (i) the Existing
         Senior Note Indentures and Existing Senior Notes, (ii) the
         Certificates of Designation and (iii) the Huff Purchase Agreement and
         the Voting Agreement.

                  "RELATED TELECOMMUNICATIONS BUSINESS" means the business of
         being an inter-exchange carrier, a competitive local exchange
         carrier, an incumbent local exchange carrier, an internet service
         provider, a long-distance reseller, a backbone data provider or a
         data local exchange carrier, the business of designing, constructing,
         selling and leasing of telecommunications network infrastructure or
         the business of owning fiber for telecommunications purposes.

                  "RELEASE" means any release, spill, emission, leaking,
         pumping, pouring, injection, escaping, deposit, disposal, discharge,
         dispersal, dumping, leaching or migration of Hazardous Materials into
         the indoor or outdoor environment (including the abandonment or
         disposal of any barrels, containers or other closed receptacles
         containing any Hazardous Materials), including the movement of any
         Hazardous Materials through the air, soil, surface water or
         groundwater.

                  "REQUISITE LENDERS" means Lenders having or holding more
         than 50% of the sum of the aggregate Series A Revolving Loan Exposure
         of all Lenders plus the aggregate Series B Term Loan Exposure of all
         Lenders plus the aggregate Series C Term Loan Exposure of all
         Lenders; provided, that the Huff Fund and its Affiliates shall be
         excluded from the term "Lenders" for purposes of the definition of
         Requisite Lenders.

                  "REQUIRED JUNIOR CAPITAL" means receipt by Company on or
         after the date hereof of gross proceeds of $124,300,000 from the sale
         and issuance of (i) the Committed Preferred, the Bridge Preferred or
         other preferred stock of the Company issued in accordance with
         subsection 6.8(v), provided that Company shall not be deemed to have
         received any additional gross proceeds constituting Required Junior
         Capital upon the exchange of the Bridge Preferred for Committed
         Preferred, (ii) common stock or warrants for common stock of the
         Company and/or (iii) Additional Notes that have no required Cash
         payments until after the Series C Maturity Date.

                  "RESTATEMENT EFFECTIVE DATE" means the date on or before
         September 20, 2000, upon which all of the conditions set forth in
         Section 3 have been satisfied.

                  "RESTRICTED JUNIOR PAYMENT" shall mean (i) any dividend or
         other distribution, direct or indirect, on account of any shares of
         any class of stock of Company now or hereafter outstanding, except a
         dividend payable solely in shares of that class of stock to the
         holders of that class or in shares of common stock, (ii) any
         redemption, retirement, sinking fund or similar payment, purchase or
         other acquisition for value, direct or indirect, of any shares of any
         class of stock of Company now or hereafter outstanding, (iii) any
         payment made to retire, or to obtain the surrender of, any
         outstanding warrants, options or other rights to acquire shares of
         any class of stock of Company now or hereafter outstanding, and (iv)
         any payment or prepayment of principal of, premium, if any, or
         interest on, or redemption, purchase, retirement, defeasance
         (including

                                      25

<PAGE>   34

         in-substance or legal defeasance), sinking fund or similar payment
         with respect to any Subordinated Indebtedness, the Existing Senior
         Notes or any Additional Notes.

                  "RESTRICTED SUBSIDIARY" means each direct and indirect
         Subsidiary of Company (including Subsidiaries of Subsidiaries)
         currently existing or hereafter formed or acquired which is not an
         Unrestricted Subsidiary.

                  "RESTRUCTURING" means (i) the formation of Finance Sub as a
         Wholly Owned Subsidiary of Company and (ii) the contribution by
         Company to Finance Sub of all issued and outstanding Capital Stock of
         the Restricted Subsidiaries.

                  "SEC" means the Securities and Exchange Commission and any
         successor thereto.

                  "SECURITIES" means any stock, shares, partnership interests,
         voting trust certificates, certificates of interest or participation
         in any profit-sharing agreement or arrangement, options, warrants,
         bonds, debentures, notes, or other evidences of indebtedness, secured
         or unsecured, convertible, subordinated or otherwise, or in general
         any instruments commonly known as "securities" or any certificates of
         interest, shares or participations in temporary or interim
         certificates for the purchase or acquisition of, or any right to
         subscribe to, purchase or acquire, any of the foregoing.

                  "SECURITIES ACT" means the Securities Act of 1933, as
         amended from time to time, and any successor statute.

                  "SERIES A CONVERTIBLE PREFERRED STOCK" means the convertible
         preferred stock of Company with a stated value of $1,000 per share
         issued pursuant to that certificate of designation filed with the
         Secretary of State of the State of Delaware on March 3, 2000.

                  "SERIES A REVOLVING LOANS" means the Loans made by Lenders
         to Finance Sub pursuant to subsection 2.1A(i) of the Original Credit
         Agreement.

                  "SERIES A REVOLVING LOAN COMMITMENT" means the commitment of
         a Lender to make a Series A Revolving Loan to Finance Sub pursuant to
         subsection 2.1A(i) of the Original Credit Agreement, and "SERIES A
         REVOLVING LOAN COMMITMENTS" means such commitments of all Lenders in
         the aggregate.

                  "SERIES A REVOLVING LOAN EXPOSURE" means, with respect to
         any Lender as of any date of determination, the aggregate outstanding
         principal amount of the Series A Revolving Loans of that Lender.

                  "SERIES A REVOLVING LOAN NOTES" means any promissory notes
         of Finance Sub issued pursuant to (i) subsection 2.1E(i) of the
         Original Credit Agreement on the Closing Date or (ii) the last
         sentence of subsection 9.1B(i) hereof or, if issued prior to the
         Restatement Effective Date, of the Original Credit Agreement in
         connection with assignments of the Series A Revolving Loans of any
         Lenders, in each case substantially in the form of Exhibit IV annexed
         hereto, as they may be amended, supplemented or otherwise modified
         from time to time.

                                      26

<PAGE>   35

                  "SERIES B TERM LOAN COMMITMENT" means the commitment of a
         Lender to make Series B Term Loans to Company pursuant to subsection
         2.1A(ii) of the Original Credit Agreement, and "SERIES B TERM LOAN
         COMMITMENTS" means such commitments of all Lenders in the aggregate.

                  "SERIES B TERM LOAN EXPOSURE" means, with respect to any
         Lender as of any date of determination, the aggregate outstanding
         principal amount of the Series B Term Loans of that Lender.

                  "SERIES B TERM LOANS" means the Loans made by Lenders to
         Company pursuant to subsection 2.1A(ii) of the Original Credit
         Agreement.

                  "SERIES B TERM NOTES" means any promissory notes issued by
         Company pursuant to (i) subsection 2.1E(i) of the Original Credit
         Agreement on the Closing Date or (ii) the last sentence of subsection
         9.1B(i) hereof or, if issued prior to the Restatement Effective Date,
         of the Original Credit Agreement in each case substantially in the
         form of Exhibit V annexed hereto, as they may be amended,
         supplemented or otherwise modified from time to time.

                  "SERIES C TERM LOAN COMMITMENT" means the commitment of a
         Lender to make Series C Term Loans to Company pursuant to subsection
         2.1A(iii) of the Original Credit Agreement, and "SERIES C TERM LOAN
         COMMITMENTS" means such commitments of all Lenders in the aggregate.

                  "SERIES C TERM LOAN EXPOSURE" means, with respect to any
         Lender as of any date of determination, the aggregate outstanding
         principal amount of the Series C Term Loans of that Lender.

                  "SERIES C TERM LOANS" means the Loans made by Lenders to
         Company pursuant to subsection 2.1A(iii) of the Original Credit
         Agreement.

                  "SERIES C TERM NOTES" means any promissory notes issued by
         Company pursuant to (i) subsection 2.1E(i) of the Original Credit
         Agreement on the Closing Date or (ii) the last sentence of subsection
         9.1B(i) hereof or, if issued prior to the Restatement Effective Date,
         of the Original Credit Agreement in each case substantially in the
         form of Exhibit VI annexed hereto, as they may be amended,
         supplemented or otherwise modified from time to time.

                  "SOLVENT" means, with respect to any Person, that as of the
         date of determination both (i) (a) the then fair saleable value of
         the property of such Person is (1) greater than the total amount of
         liabilities (including contingent liabilities) of such Person and (2)
         not less than the amount that will be required to pay the probable
         liabilities on such Person's then existing debts as they become
         absolute and matured considering all financing alternatives and
         potential asset sales reasonably available to such Person; (b) such
         Person's capital is not unreasonably small in relation to its
         business or any contemplated or undertaken transaction; and (c) such
         Person does not intend to incur, or believe (nor should it reasonably
         believe) that it will incur, debts beyond its ability to pay such
         debts as they become due; and (ii) such Person is "solvent" within
         the meaning given that term

                                      27

<PAGE>   36

         and similar terms under applicable laws relating to fraudulent
         transfers and conveyances. For purposes of this definition, the
         amount of any contingent liability at any time shall be computed as
         the amount that, in light of all of the facts and circumstances
         existing at such time, represents the amount that can reasonably be
         expected to become an actual or matured liability.

                  "STATE LAW" means any state law pertaining to or regulating
         intrastate and local telecommunications services, or any successor
         statute or statutes thereto, and all State Regulations pursuant to
         such State Law, in each case as from time to time in effect.

                  "STATE PUC" means any state public utility commission or any
         other state commission, agency, department, board or authority with
         responsibility for regulating intrastate and local telecommunications
         services.

                  "STATE REGULATIONS" means all rules, regulations, written
         policies, orders and decisions of any State PUC.

                  "STOCKHOLDER APPROVAL" means all requisite approvals of the
         stockholders of Company for the issuance of the Committed Preferred.

                  "SUBORDINATED INDEBTEDNESS" means any Indebtedness of
         Company subordinated in right of payment to the Obligations.

                  "SUBSEQUENT JUNIOR CAPITAL" means the net Cash proceeds
         received by Company from the issuance and sale of (i) Additional
         Notes issued in accordance with subsection 6.1(iii), (ii) common
         stock of Company, and/or (iii) preferred stock of Company issued in
         accordance with subsection 6.8(v), after the date on which both the
         Liquidity Requirement has been met and Company has received the
         Required Junior Capital.

                  "SUBSIDIARY" means, with respect to any Person, any
         corporation, partnership, limited liability company, association,
         joint venture or other business entity of which more than 50% of the
         total voting power of shares of stock or other ownership interests
         entitled (without regard to the occurrence of any contingency) to
         vote in the election of the Person or Persons (whether directors,
         managers, trustees or other Persons performing similar functions)
         having the power to direct or cause the direction of the management
         and policies thereof is at the time owned or controlled, directly or
         indirectly, by that Person or one or more of the other Subsidiaries
         of that Person or a combination thereof.

                  "SUBSIDIARY GUARANTOR" means any Restricted Subsidiary of
         Company (other than Finance Sub) that executes and delivers a
         counterpart of the Subsidiary Guaranty on the Closing Date or from
         time to time thereafter pursuant to subsection 5.8.

                  "SUBSIDIARY GUARANTY" means the Subsidiary Guaranty executed
         and delivered by existing Restricted Subsidiaries of Company on the
         Closing Date and to be executed and delivered by additional
         Restricted Subsidiaries of Company from time to time thereafter in
         accordance with subsection 5.8, as such Subsidiary Guaranty may
         hereafter be amended, supplemented or otherwise modified from time to
         time.

                                      28

<PAGE>   37

                  "SUPPLEMENTAL COLLATERAL AGENT" has the meaning assigned to
         that term in subsection 9.1D.

                  "SYNDICATION AGENT" has the meaning assigned to that term in
         the introduction to this Agreement.

                  "TAX" or "TAXES" means any present or future tax, levy,
         impost, duty, charge, fee, deduction or withholding of any nature and
         whatever called, by whomsoever, on whomsoever and wherever imposed,
         levied, collected, withheld or assessed; provided that "TAX ON THE
         OVERALL NET INCOME" of a Person shall be construed as a reference to
         a tax imposed by the jurisdiction in which that Person is organized
         or in which that Person's principal office (and/or, in the case of a
         Lender, its lending office) is located or in which that Person
         (and/or, in the case of a Lender, its lending office) is deemed to be
         doing business on all or part of the net income, profits or gains
         (whether worldwide, or only insofar as such income, profits or gains
         are considered to arise in or to relate to a particular jurisdiction,
         or otherwise) of that Person (and/or, in the case of a Lender, its
         lending office).

                  "TELECOMMUNICATIONS ACQUISITIONS" means acquisitions by
         Finance Sub or its Restricted Subsidiaries of Persons principally
         engaged in a Related Telecommunications Business, provided that the
         Person acquired shall become a Wholly Owned Restricted Subsidiary and
         a Subsidiary Guarantor.

                  "TELECOMMUNICATIONS ASSETS" means, with respect to any
         Person, assets (including, without limitation, rights-of-way,
         trademarks and licenses to use copyrighted material), that are
         utilized by such Person, directly or indirectly, in a
         Telecommunications Business. Telecommunications Assets shall include
         stock, joint venture or partnership interests in another Person;
         provided that substantially all of the assets of such other Person
         consist of Telecommunications Assets.

                  "TELECOMMUNICATIONS BUSINESS" means the business of (i)
         transmitting, or providing services relating to the transmission of,
         voice, video or data through owned or leased transmission facilities,
         (ii) creating, developing or marketing communications-related network
         equipment, software and other devices for use in (i) above or (iii)
         evaluating, participating or pursuing any other activity or
         opportunity that is related to those specified in (i) or (ii) above.

                  "TOTAL GROSS CAPITALIZATION" means the (i) sum of (a)
         Consolidated Total Debt plus (b) paid-in capital which shall include
         (1) preferred stock and (2) stock issued to employees as compensation
         in the ordinary course of business consistent with past practice but
         shall exclude (3) additional equity issued as pay-in-kind dividends
         on issued and outstanding equity securities and (4) any warrants for
         equity securities issued in connection with Securities evidencing
         Indebtedness and which shall be determined without giving effect to
         any accumulated deficits resulting from operations minus (ii) the
         aggregate cumulative amount of Investments made by Company or its
         Restricted Subsidiaries from and after the Closing Date pursuant to
         subsection 6.3(vii).

                                      29

<PAGE>   38

                  "UCC" means the Uniform Commercial Code (or any similar or
         equivalent legislation) as in effect in any applicable jurisdiction.

                  "UCC-3 REQUIRED DELIVERY DATE" means, with respect to any
         ACSI Network Sale, the fifth Business Day after the date the
         Administrative Agent has received the notice, Officer's Certificate,
         UCC-3 release statements, and the ACSI Escrow Agreement required
         pursuant to subsection 8.6 in form and substance reasonably
         satisfactory to Administrative Agent; provided that if any such
         documents are not reasonably satisfactory to Administrative Agent,
         Administrative Agent shall give written notice to the Company within
         five Business Days after receipt thereof specifying in particular the
         errors or omissions in such documents.

                  "UNRESTRICTED SUBSIDIARY" means (i) each direct and indirect
         Subsidiary of Company which is designated as an Unrestricted
         Subsidiary on Schedule 1.2 annexed hereto and (ii) each other
         indirect Subsidiary of Company formed or acquired after the Closing
         Date which is designated by the Board of Directors of Company as an
         Unrestricted Subsidiary; provided, however, that in the case of each
         of clauses (i) and (ii), (a) such Subsidiary has total assets of
         $1,000 or less or the designation of such Subsidiary as an
         Unrestricted Subsidiary is effective immediately upon such Person
         becoming a Subsidiary of Company, (b) such Subsidiary has no
         Indebtedness other than Non-Recourse Indebtedness, (c) neither
         Company nor any Restricted Subsidiary is party to any agreement which
         requires Company or any Restricted Subsidiary to maintain or preserve
         such Subsidiary's financial condition or to cause such Subsidiary to
         achieve any specified financial or operating results and (d) such
         Subsidiary constitutes an "Unrestricted Subsidiary" under each
         indenture pursuant to which Company has outstanding Indebtedness. If,
         at any time, any Unrestricted Subsidiary would fail to meet any of
         the foregoing requirements to constitute an Unrestricted Subsidiary,
         it shall thereafter cease to be an Unrestricted Subsidiary and any
         Indebtedness of such Subsidiary shall be deemed to be incurred by a
         Restricted Subsidiary as of such date. Notice of the designation of
         any Subsidiary of Company as an Unrestricted Subsidiary shall be set
         forth in an Officers' Certificate delivered to Administrative Agent.

                  "USE AGREEMENT" means any agreement pursuant to which
         Company or any Restricted Subsidiary sells ownership rights to, or
         rights to use (on an indefeasible right of use basis or otherwise),
         fiber optic cable, fiber conduits, innerducts, switches or similar
         assets.

                  "VOTING AGREEMENT" has the meaning assigned to that term in
         subsection 3.1I(ii).

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

                  "WEIGHTED AVERAGE LIFE TO MATURITY" means, when applied to
         any Indebtedness at any date, the number of years obtained by
         dividing (i) the sum of the product obtained by multiplying (a) the
         amount of each then remaining installment, sinking fund, serial

                                      30

<PAGE>   39

         maturity or other required payments of principal, including payment
         at final maturity, in respect thereof, by (b) the number of years
         (calculated to the nearest one-twelfth) that will elapse between such
         date and the making of such payment, by (ii) the then outstanding
         principal amount of such Indebtedness.

                  "WHOLLY OWNED" means, with respect to any Person, a
         Subsidiary of such Person all of the outstanding Capital Stock or
         other equity interests (other than directors' qualifying shares) of
         which shall at the time be owned by such Person or by one or more
         Wholly Owned Subsidiaries of such Person or by such Person and one or
         more Wholly Owned Subsidiaries of such Person.

1.2      ACCOUNTING TERMS; UTILIZATION OF GAAP FOR PURPOSES OF CALCULATIONS
         UNDER AGREEMENT.

         Except as otherwise expressly provided in this Agreement, all
accounting terms not otherwise defined herein shall have the meanings assigned
to them in conformity with GAAP. Financial statements and other information
required to be delivered by Company to Lenders pursuant to clauses (i), (ii),
(iii), (xiii) and (xxi) of subsection 5.1 shall be prepared in accordance with
GAAP as in effect from time to time (and delivered together with the
reconciliation statements provided for in subsection 5.1(v)). Calculations in
connection with the definitions, covenants and other provisions of this
Agreement shall utilize accounting principles and policies applicable to
Company and its Subsidiaries in accordance with GAAP as of the Restatement
Effective Date and in conformity with those used to prepare the financial
statements referred to in subsection 4.3. If there is any change in the
accounting principles and policies applicable to Company and its Subsidiaries
in accordance with GAAP after the date hereof, Borrowers and the Lenders may
(but shall not be obligated to) amend the definitions, covenants and other
provisions of this Agreement to take into account such changes in accounting
principles and policies.

1.3      OTHER DEFINITIONAL PROVISIONS AND RULES OF CONSTRUCTION.

         (A) Any of the terms defined herein may, unless the context otherwise
requires, be used in the singular or the plural, depending on the reference.

         (B) References to "Sections" and "subsections" shall be to Sections
and subsections, respectively, of this Agreement unless otherwise specifically
provided.

         (C) The use herein of the word "include" or "including", when
following any general statement, term or matter, shall not be construed to
limit such statement, term or matter to the specific items or matters set
forth immediately following such word or to similar items or matters, whether
or not nonlimiting language (such as "without limitation" or "but not limited
to" or words of similar import) is used with reference thereto, but rather
shall be deemed to refer to all other items or matters that fall within the
broadest possible scope of such general statement, term or matter.

         (D) Any reference to any agreement or instrument shall be deemed to
include a reference to such agreement or instrument as assigned, amended,
supplemented or otherwise modified from time to time in accordance with
subsection 6.15.

                                      31

<PAGE>   40

                                  SECTION 2.
                          AMOUNTS AND TERMS OF LOANS

2.1      LOANS; THE REGISTER; NOTES.

         (A) LOANS. Each Lender has previously extended to Borrowers the Loans
as described in subsections 2.1A(i), 2.1A(ii) and 2.1A(iii).

                  (i)      Series A Revolving Loans.  Each Lender which had a
         Series A Revolving Loan Commitment under the Original Credit
         Agreement has loaned to Finance Sub an aggregate amount not exceeding
         its Pro Rata Share of the aggregate amount of the Series A Revolving
         Loan Commitments, which amount was used for the purposes identified
         in subsection 2.5A.  The amount of each Lender's outstanding Series A
         Revolving Loan as of the Restatement Effective Date, after giving
         effect to the borrowing of the Series A Revolving Loans referred to
         in subsection 3.1O is set forth opposite its name on Schedule 2.1
         annexed hereto and the aggregate amount of the Series A Revolving
         Loan, after giving effect to such borrowing, is $35,000,000; provided
         that the Series A Revolving Loans shall be adjusted to give effect to
         any assignments of the Series A Revolving Loans pursuant to
         subsection 9.1B.  All outstanding Series A Revolving Loans and all
         other amounts owed hereunder with respect to the Series A Revolving
         Loans shall be paid in full no later than the Maturity Date.  All
         Series A Revolving Loans made under the Original Credit Agreement
         shall continue under this Agreement.  As of the Restatement Effective
         Date, after giving effect to the borrowing of the Series A Revolving
         Loans contemplated by subsection 3.1O, all Series A Revolving Loan
         Commitments of the Lenders shall be terminated and amounts previously
         borrowed under subsection 2.1A(i) of the Original Credit Agreement
         and repaid may not be reborrowed.

                  (ii)     Series B Term Loans.  Each Lender which had a
         Series B Term Loan Commitment under the Original Credit Agreement has
         loaned to Company an aggregate amount not exceeding its Pro Rata
         Share of the aggregate amount of the Series B Term Loan Commitments,
         which amount was used for the purposes identified in subsection 2.5B.
         The amount of each Lender's outstanding Series B Term Loan as of the
         Restatement Effective Date, after giving effect to the prepayments
         thereof referred to in subsections 3.1J and 3.1O, is set forth
         opposite its name on Schedule 2.1 annexed hereto; provided that the
         Series B Term Loans shall be adjusted to give effect to any
         assignments of the Series B Term Loans pursuant to subsection 9.1B.
         All Series B Term Loans and all other amounts owed hereunder with
         respect to the Series B Term Loans shall be paid in full no later
         than the Maturity Date.  All outstanding Series B Term Loans made
         under the Original Credit Agreement shall continue under this
         Agreement.  As of the Restatement Effective Date, all Series B Term
         Loan Commitments of the Lenders shall be terminated and amounts
         borrowed under subsection 2.1A(ii) of the Original Credit Agreement
         and repaid may not be reborrowed.

                  (iii)    Series C Term Loans.  Each Lender which had a
         Series C Term Loan Commitment under the Original Credit Agreement has
         loaned to Company an aggregate amount not exceeding its Pro Rata
         Share of the aggregate amount of the Series C Term Loan Commitments,
         which amount was used for the purposes identified in subsection

                                      32

<PAGE>   41

         2.5B.  The amount of each Lender's Series C Term Loan as of the
         Restatement Effective Date, after giving effect to the prepayments
         thereof referred to in Section 3.1J, is set forth opposite its name
         on Schedule 2.1 annexed hereto; provided that the Series C Term Loan
         of Lenders shall be adjusted to give effect to any assignments of the
         Series C Term Loans pursuant to subsection 9.1B.  All Series C Term
         Loans and all other amounts owed hereunder with respect to the Series
         C Term Loans shall be paid in full no later than the Maturity Date.
         All outstanding Series C Term Loans made under the Original Credit
         Agreement shall continue under this Agreement.  Amounts borrowed
         under subsection 2.1A(iii) of the Original Credit Agreement and
         repaid may not be reborrowed.

                  (iv)     Limitations on Loans. Anything contained in this
         Agreement to the contrary notwithstanding, the Loans shall be subject
         to the following limitations: (a) in no event shall the sum of the
         aggregate principal amounts of Series B Term Loans and Series C Term
         Loans outstanding exceed 80% of the cost of the acquisition,
         construction or improvement of the Telecommunications Assets
         acquired, constructed or improved with the proceeds of such Loans;
         and (b) in no event shall the sum of the aggregate principal amounts
         of Series B Term Loans and Series C Term Loans outstanding, plus the
         aggregate amount of any Indebtedness outstanding in accordance with
         subsection 6.1(vi), exceed the Purchase Money Debt Allowance.

         (B) [INTENTIONALLY OMITTED]

         (C) [INTENTIONALLY OMITTED]

         (D) THE REGISTER.

                  (i)      Administrative Agent shall maintain, at its address
         referred to in subsection 9.7, a register for the recordation of the
         names and addresses of Lenders and the Loans (whether or not
         evidenced by a Note) of each Lender from time to time (the
         "REGISTER"). The Register shall be available for inspection by
         Borrowers or any Lender at any reasonable time and from time to time
         upon reasonable prior notice.

                  (ii)     Administrative Agent shall record in the Register
         the Series A Revolving Loans, Series B Term Loans and Series C Term
         Loans from time to time of each Lender, and each repayment or
         prepayment in respect of the principal amount of the Series A
         Revolving Loans, Series B Term Loans or Series C Term Loans of each
         Lender. Any such recordation shall be conclusive and binding on
         Company and each Lender, absent manifest error; provided that failure
         to make any such recordation, or any error in such recordation, shall
         not affect Company's Obligations in respect of any applicable Loans.

                  (iii)    Each Lender shall record on its internal records
         (including the Notes held by such Lender) the amount of each Series A
         Revolving Loan, Series B Term Loan and Series C Term Loan made by it
         and each payment in respect thereof. Any such recordation shall be
         conclusive and binding on Borrowers, absent manifest error; provided
         that failure to make any such recordation, or any error in such
         recordation, shall not affect either Borrower's Obligations in
         respect of any applicable Loans; and

                                      33

<PAGE>   42

         provided, further that in the event of any inconsistency between the
         Register and any Lender's records, the recordations in the Register
         shall govern.

                  (iv)     Borrowers, Administrative Agent and Lenders shall
         deem and treat the Persons listed as Lenders in the Register as the
         holders and owners of the corresponding Loans listed therein for all
         purposes hereof, and no assignment or transfer of any such Loan shall
         be effective, in each case unless and until an Assignment Agreement
         effecting the assignment or transfer thereof shall have been accepted
         by Administrative Agent and recorded in the Register as provided in
         subsection 9.1B(ii).  Prior to such recordation, all amounts owed
         with respect to the applicable Loan shall be owed to the Lender
         listed in the Register as the owner thereof, and any request,
         authority or consent of any Person who, at the time of making such
         request or giving such authority or consent, is listed in the
         Register as a Lender shall be conclusive and binding on any
         subsequent holder, assignee or transferee of the corresponding Loans.

                  (v)      Each Borrower hereby designates BNY to serve as
         such Borrower's agent solely for purposes of maintaining the Register
         as provided in this subsection 2.1D, and Company hereby agrees that,
         to the extent BNY serves in such capacity, BNY and its officers,
         directors, employees, agents and affiliates shall constitute
         Indemnitees for all purposes under subsection 9.3.

         (E) NOTES. Upon request of any Lender, the applicable Borrower shall
execute and deliver to that Lender (or to Administrative Agent for that
Lender) (a) a Series A Revolving Loan Note substantially in the form of
Exhibit IV annexed hereto to evidence that Lender's Series A Revolving Loan,
in the principal amount of that Lender's Series A Revolving Loan and with
other appropriate insertions, (b) a Series B Term Note substantially in the
form of Exhibit V annexed hereto to evidence that Lender's Series B Term
Loans, in the principal amount of that Lender's Series B Term Loan and with
other appropriate insertions, and (c) a Series C Term Note substantially in
the form of Exhibit VI annexed hereto to evidence that Lender's Series C Term
Loans, in the principal amount of that Lender's Series C Term Loan and with
other appropriate insertions.

2.2      INTEREST ON THE LOANS.

         (A) RATE OF INTEREST. Subject to the provisions of subsections 2.6
and 2.7, each Loan shall bear interest on the unpaid principal amount thereof
from the date made through maturity (whether by acceleration or otherwise) at
a rate determined by reference to the Base Rate or the Adjusted Eurodollar
Rate. The basis for determining the interest rate with respect to any Loan may
be changed from time to time pursuant to subsection 2.2D. If on any day a Loan
is outstanding with respect to which notice has not been delivered to
Administrative Agent in accordance with the terms of this Agreement specifying
the applicable basis for determining the rate of interest, then for that day
that Loan shall bear interest determined by reference to the Base Rate.

         Subject to the provisions of subsections 2.2E and 2.7, the Loans
shall bear interest through maturity as follows:

                                      34

<PAGE>   43

                  (i)      if a Base Rate Loan, then at the sum of the Base
         Rate plus the relevant Applicable Margin (as in effect from time to
         time); or

                  (ii)     if a Eurodollar Rate Loan, then at the sum of the
         Adjusted Eurodollar Rate plus the relevant Applicable Margin (as in
         effect from time to time during the applicable Interest Period).

         (B) INTEREST PERIODS. In connection with each Eurodollar Rate Loan,
the applicable Borrower may, pursuant to the applicable Notice of
Conversion/Continuation select an interest period (each an "INTEREST PERIOD")
to be applicable to such Loan, which Interest Period shall be, at the
applicable Borrower's option, either a one-, two- or three-month period;
provided that:

                  (i)      the initial Interest Period for any Eurodollar Rate
         Loan shall commence on the Funding Date in respect of such Loan, in
         the case of a Loan initially made as a Eurodollar Rate Loan, or on
         the date specified in the applicable Notice of
         Conversion/Continuation, in the case of a Loan converted to a
         Eurodollar Rate Loan;

                  (ii)     in the case of immediately successive Interest
         Periods applicable to a Eurodollar Rate Loan continued as such
         pursuant to a Notice of Conversion/Continuation, each successive
         Interest Period shall commence on the day on which the next preceding
         Interest Period expires;

                  (iii)    if an Interest Period would otherwise expire on a
         day that is not a Business Day, such Interest Period shall expire on
         the next succeeding Business Day; provided that, if any Interest
         Period would otherwise expire on a day that is not a Business Day but
         is a day of the month after which no further Business Day occurs in
         such month, such Interest Period shall expire on the next preceding
         Business Day;

                  (iv)     any Interest Period 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, subject to clauses (v), (vi) and (vii)
         of this subsection 2.2B, end on the last Business Day of a calendar
         month;

                  (v)      no Interest Period with respect to any portion of
         the Loans shall extend beyond the Maturity Date for such Loans;

                  (vi)     no Interest Period with respect to any portion of
         the Series A Revolving Loans shall extend beyond a date on which
         Finance Sub is required to make a scheduled payment of principal on
         the Series A Revolving Loans unless the sum of (a) the aggregate
         principal amount of Series A Revolving Loans that are Base Rate Loans
         plus (b) the aggregate principal amount of Series A Revolving Loans
         that are Eurodollar Rate Loans with Interest Periods expiring on or
         before such date equals or exceeds the principal amount required to
         be paid on the Series A Revolving Loans on such date.

                  (vii)    no Interest Period with respect to any portion of
         the Series B Term Loans or Series C Term Loans shall extend beyond a
         date on which Company is required to make a scheduled payment of
         principal of the Series B Term Loans or Series C Term loans, as the
         case may be, unless the sum of (a) the aggregate principal amount of
         Series

                                      35

<PAGE>   44

         B Term Loans or Series C Term Loans, as the case may be, that are
         Base Rate Loans plus (b) the aggregate principal amount of Series B
         Term Loans or Series C Term Loans, as the case may be, that are
         Eurodollar Rate Loans with Interest Periods expiring on or before
         such date equals or exceeds the principal amount required to be paid
         on the Series B Term Loans or Series C Term Loans, as the case may
         be, on such date;

                  (viii)   [Intentionally Omitted]

                  (ix)     there shall be no more than ten (10) Interest
         Periods outstanding at any time; and

                  (x)      in the event a Borrower fails to specify an
         Interest Period for any Eurodollar Rate Loan in the applicable Notice
         of Conversion/Continuation, such shall be deemed to have selected an
         Interest Period of one month.

         Any Loan made prior to the Restatement Closing Date shall continue
with the Interest Period it had under the Original Credit Agreement subject to
the provisions of subsection 2.2D below.

         (C) INTEREST PAYMENTS. Subject to the provisions of subsection 2.2E,
interest on each Loan shall be payable in arrears on and to each Interest
Payment Date applicable to that Loan, upon any prepayment of that Loan (to the
extent accrued on the amount being prepaid) and at maturity (including final
maturity).

         (D) CONVERSION OR CONTINUATION. Subject to the provisions of
subsection 2.6, each Borrower shall have the option (i) to convert at any time
all or any part of its outstanding Loans equal to $5,000,000 and integral
multiples of $1,000,000 in excess of that amount from Loans bearing interest
at a rate determined by reference to one basis to Loans bearing interest at a
rate determined by reference to an alternative basis or (ii) upon the
expiration of any Interest Period applicable to a Eurodollar Rate Loan, to
continue all or any portion of such Loan equal to $5,000,000 and integral
multiples of $1,000,000 in excess of that amount as a Eurodollar Rate Loan;
provided, however, that a Eurodollar Rate Loan may only be converted into a
Base Rate Loan on the expiration date of an Interest Period applicable
thereto.

         The applicable Borrower shall deliver a Notice of
Conversion/Continuation to Administrative Agent no later than 10:00 A.M. (New
York City time) at least one Business Day in advance of the proposed
conversion date (in the case of a conversion to a Base Rate Loan) and at least
three Business Days in advance of the proposed conversion/continuation date
(in the case of a conversion to, or a continuation of, a Eurodollar Rate
Loan). A Notice of Conversion/Continuation shall specify (i) the proposed
conversion/continuation date (which shall be a Business Day), (ii) the amount
and type of the Loan to be converted/continued, (iii) the nature of the
proposed conversion/continuation, (iv) in the case of a conversion to, or a
continuation of, a Eurodollar Rate Loan, the requested Interest Period, and
(v) in the case of a conversion to, or a continuation of, a Eurodollar Rate
Loan, that no Potential Event of Default or Event of Default has occurred and
is continuing. In lieu of delivering the above-described Notice of
Conversion/Continuation, such Borrower may give Administrative Agent
telephonic notice by the required time of any proposed conversion/continuation
under this subsection 2.2D;

                                      36

<PAGE>   45

provided that such notice shall be promptly confirmed in writing by delivery
of a Notice of Conversion/Continuation to Administrative Agent on or before
the proposed conversion/continuation date. Upon receipt of written or
telephonic notice of any proposed conversion/continuation under this
subsection 2.2D, Administrative Agent shall promptly transmit such notice by
telefacsimile or telephone to each Lender.

         Neither Administrative Agent nor any Lender shall incur any liability
to either Borrower in acting upon any telephonic notice referred to above that
Administrative Agent believes in good faith to have been given by a duly
authorized officer or other person authorized to act on behalf of such
Borrower or for otherwise acting in good faith under this subsection 2.2D, and
upon conversion or continuation of the applicable basis for determining the
interest rate with respect to any Loans in accordance with this Agreement
pursuant to any such telephonic notice the applicable Borrower shall have
effected a conversion or continuation, as the case may be, hereunder.

         Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G, a
Notice of Conversion/Continuation for conversion to, or continuation of, a
Eurodollar Rate Loan (or telephonic notice in lieu thereof) shall be
irrevocable on and after the related Interest Rate Determination Date, and the
applicable Borrower shall be bound to effect a conversion or continuation in
accordance therewith.

         (E) DEFAULT INTEREST. Any principal payments on the Loans not paid
when due and, to the extent permitted by applicable law, any interest payments
on the Loans or any fees or other amounts owed hereunder not paid when due, in
each case whether at stated maturity, by notice of prepayment, by acceleration
or otherwise, shall thereafter bear interest (including post-petition interest
in any proceeding under the Bankruptcy Code or other applicable bankruptcy
laws) payable on demand at a rate which is 2% per annum in excess of the
interest rate otherwise payable under this Agreement with respect to the
applicable Loans (or, in the case of any such fees and other amounts, at a
rate which is 2% per annum in excess of the interest rate otherwise payable
under this Agreement for Base Rate Loans); provided that, in the case of
Eurodollar Rate Loans, upon the expiration of the Interest Period in effect at
the time any such increase in interest rate is effective such Eurodollar Rate
Loans shall thereupon become Base Rate Loans and shall thereafter bear
interest payable upon demand at a rate which is 2% per annum in excess of the
interest rate otherwise payable under this Agreement for Base Rate Loans.
Payment or acceptance of the increased rates of interest provided for in this
subsection 2.2E is not a permitted alternative to timely payment and shall not
constitute a waiver of any Event of Default or otherwise prejudice or limit
any rights or remedies of Administrative Agent or any Lender.

         (F) COMPUTATION OF INTEREST. Interest on the Loans shall be computed
(i) in the case of Base Rate Loans, on the basis of a 365-day or 366-day year,
as the case may be, and (ii) in the case of Eurodollar Rate Loans, on the
basis of a 360-day year, in each case for the actual number of days elapsed in
the period during which it accrues. In computing interest on any Loan, the
date of the making of such Loan or the first day of an Interest Period
applicable to such Loan or, with respect to a Base Rate Loan being converted
from a Eurodollar Rate Loan, the date of conversion of such Eurodollar Rate
Loan to such Base Rate Loan, as the case may be, shall be included, and the
date of payment of such Loan or the expiration date of an Interest Period
applicable to such Loan or, with respect to a Base Rate Loan being converted
to a Eurodollar

                                      37

<PAGE>   46

Rate Loan, the date of conversion of such Base Rate Loan to such Eurodollar
Rate Loan, as the case may be, shall be excluded; provided that if a Loan is
repaid on the same day on which it is made, one day's interest shall be paid
on that Loan.

2.3      FEES.

         (A) [INTENTIONALLY OMITTED]

         (B) OTHER FEES. Borrowers agree to pay to Arranger and Administrative
Agent such other fees in the amounts and at the times separately agreed upon
between Company, Arranger and Administrative Agent.

         (C) RESTRUCTURING FEE. Borrowers shall pay to Administrative Agent,
for distribution to Lenders executing this Agreement in accordance with their
Pro Rata Shares, a restructuring fee equal to 1.25% of the aggregate
outstanding principal amount of Loans (after giving effect to the prepayments
referred to in subsection 3.1J), 1.00% payable in Cash upon the Restatement
Effective Date and the remaining 0.25% payable from Net Asset Sale Proceeds
received following the Restatement Effective Date (such 0.25%, the "DEFERRED
RESTRUCTURING FEE").

2.4      PREPAYMENTS; GENERAL PROVISIONS REGARDING PAYMENTS; APPLICATION OF
         PROCEEDS OF COLLATERAL AND PAYMENTS UNDER SUBSIDIARY GUARANTY.

         (A) SCHEDULED REPAYMENTS OF LOANS.

                  (i)      Scheduled Payments of Series A Revolving Loans.
         Company shall make payments of principal on the Series A Revolving
         Loans in installments on the dates and in the amounts set forth
         below:

<TABLE>
<CAPTION>
                                SCHEDULED REPAYMENT
                               OF SERIES A REVOLVING
           DATE                        LOANS
-------------------------- ------------------------------
<S>                        <C>
November 11, 2005                     $12,500,000
-------------------------- ------------------------------
February 11, 2006                     $22,500,000
-------------------------- ------------------------------
</TABLE>

         ; provided that each scheduled installment of principal of the Series
         A Revolving Loans set forth above shall be reduced in connection with
         any voluntary or mandatory repayments of the Series A Revolving Loans
         in accordance with subsection 2.4B(iv).

                  (ii)     Scheduled Payments of Series B Term Loans.  Company
         shall make payments of principal on the Series B Term Loans in
         installments on the dates and in the amounts set forth below:

                                      38

<PAGE>   47

<TABLE>
<CAPTION>
                DATE                     SCHEDULED REPAYMENT OF SERIES B TERM LOANS
------------------------------------- --------------------------------------------------
<S>                                   <C>
November 11, 2003                                            $354,213
------------------------------------- --------------------------------------------------
February 11, 2004                                            $354,213
------------------------------------- --------------------------------------------------
May 11, 2004                                                 $354,213
------------------------------------- --------------------------------------------------
August 11, 2004                                              $354,213
------------------------------------- --------------------------------------------------
November 11, 2004                                            $531,319
------------------------------------- --------------------------------------------------
February 11, 2005                                            $531,319
------------------------------------- --------------------------------------------------
May 11, 2005                                                 $531,319
------------------------------------- --------------------------------------------------
August 11, 2005                                              $531,319
------------------------------------- --------------------------------------------------
November 11, 2005                                         $787,140.29
------------------------------------- --------------------------------------------------
</TABLE>

         ; provided that each scheduled installment of principal of the Series
         B Term Loans set forth above shall be reduced in connection with any
         voluntary or mandatory repayments of the Series B Term Loans in
         accordance with subsection 2.4B(iv).

                  (iii)    Scheduled Payments of Series C Term Loans. Company
         shall make payments of principal on the Series C Term Loans in
         installments on the dates and in the amounts set forth below:

<TABLE>
<CAPTION>

                DATE                     SCHEDULED REPAYMENT OF SERIES C TERM LOANS
------------------------------------- --------------------------------------------------
<S>                                   <C>
November 11, 2003                                            $249,176
------------------------------------- --------------------------------------------------
February 11, 2004                                            $249,176
------------------------------------- --------------------------------------------------
May 11, 2004                                                 $249,176
------------------------------------- --------------------------------------------------
August 11, 2004                                              $249,176
------------------------------------- --------------------------------------------------
November 11, 2004                                            $249,176
------------------------------------- --------------------------------------------------
February 11, 2005                                            $249,176
------------------------------------- --------------------------------------------------
May 11, 2005                                                 $249,176
------------------------------------- --------------------------------------------------
August 11, 2005                                              $249,176
------------------------------------- --------------------------------------------------
November 11, 2005                                            $249,176
------------------------------------- --------------------------------------------------
February 11, 2006                                            $249,176
------------------------------------- --------------------------------------------------
May 11, 2006                                                 $249,176
------------------------------------- --------------------------------------------------
August 11, 2006                                        $96,929,795.71
------------------------------------- --------------------------------------------------
</TABLE>

                                      39

<PAGE>   48

         ; provided that each scheduled installment of principal of the Series
         C Term Loans set forth above shall be reduced in connection with any
         voluntary or mandatory repayments of the Series C Term Loans in
         accordance with subsection 2.4B(iv).

         (B)      PREPAYMENTS.

                  (i)      Voluntary Prepayments.  Borrowers may, upon not
         less than one Business Day's prior written or telephonic notice, in
         the case of Base Rate Loans, and three Business Days' prior written
         or telephonic notice, in the case of Eurodollar Rate Loans, in each
         case given to Administrative Agent by 12:00 Noon (New York City time)
         on the date required and, if given by telephone, promptly confirmed
         in writing to Administrative Agent (which original written or
         telephonic notice Administrative Agent will promptly transmit by
         telefacsimile or telephone to each Lender), at any time and from time
         to time prepay any Loans on any Business Day in whole or in part in
         an aggregate minimum amount of $5,000,000 and integral multiples of
         $1,000,000 in excess of that amount; provided, however, that with
         respect to any Eurodollar Rate Loan prepaid prior to the expiration
         of the Interest Period applicable thereto, Borrowers shall pay all
         amounts payable pursuant to subsection 2.6D.  Notice of prepayment
         having been given as aforesaid, the principal amount of the Loans
         specified in such notice shall become due and payable on the
         prepayment date specified therein.  Any such voluntary prepayment
         shall be applied as specified in subsection 2.4B(iv).

                  (ii)     [Intentionally omitted].

                  (iii)    Mandatory Prepayments. The Loans shall be prepaid
         in the amounts and under the circumstances set forth below, all such
         prepayments to be applied as set forth below or as more specifically
         provided in subsection 2.4B(iv):

                           (a)      Prepayments From Net Asset Sale Proceeds.
                  No later than the first Business Day following the date of
                  receipt by Company or any of its Restricted Subsidiaries of
                  any Net Asset Sale Proceeds in respect of any Asset Sale
                  (excluding ACSI Network Sales only to the extent the Net
                  Asset Sale Proceeds received from such Asset Sales are
                  accounted for as revenue (whether currently or on a deferred
                  basis) from continuing operations in accordance with GAAP),
                  Company or Finance Sub, as applicable, shall apply such Net
                  Asset Sale Proceeds first to pay the Deferred Restructuring
                  Fee to the full extent thereof, and second to prepay the
                  Loans.  Notwithstanding the foregoing, as long as no Event
                  of Default or Potential Event of Default shall have occurred
                  and be continuing and the Deferred Restructuring Fee has
                  been paid in full, Company or Finance Sub, as applicable,
                  may reinvest within 270 days from the date of receipt
                  thereof up to 50% of the Net Asset Sale Proceeds in
                  Telecommunications Assets used by Company and its Restricted
                  Subsidiaries in the conduct of its business and to the
                  extent of the amount of Net Asset Sale Proceeds so
                  reinvested (up to such 50% limit) no prepayment of Loans
                  shall be required under this subsection 2.4(B)(iii)(a).  If
                  upon any Asset Sale, Company elects to reinvest up to 50% of
                  the Net Asset Sale Proceeds as permitted under this
                  subsection 2.4B(iii)(a), (1) no later than the first
                  Business Day following the consummation of such Asset Sale,

                                      40

<PAGE>   49

                  Company shall deliver an Officers' Certificate to
                  Administrative Agent demonstrating the derivation of the Net
                  Asset Sale Proceeds of such Asset Sale from the gross sales
                  prices thereof and certifying the portion of such proceeds
                  which Company elects to reinvest in Telecommunications
                  Assets and certifying that no Event of Default or Potential
                  Event of Default shall have occurred and be continuing and
                  (2) upon the expiration of 270 days after the date of
                  receipt of the Net Asset Sale Proceeds certified as being
                  scheduled for reinvestment, Company shall deliver to
                  Administrative Agent an Officers' Certificate indicating the
                  amount of Net Asset Sale Proceeds reinvested as of such
                  date, the assets in which such Net Asset Sale Proceeds have
                  been reinvested, and the amount of any remaining Net Asset
                  Sale Proceeds which shall be applied to prepay the Loans as
                  set forth in this subsection 2.4B(iii)(a).

                           (b)      Prepayments from Net
                  Insurance/Condemnation Proceeds. No later than the second
                  Business Day following the date of receipt by Administrative
                  Agent or by Company or any of its Subsidiaries of any Net
                  Insurance/Condemnation Proceeds that are required to be
                  applied to prepay the Loans pursuant to the provisions of
                  subsection 5.4C, Company or Finance Sub, as applicable,
                  shall prepay the Loans in an aggregate amount equal to the
                  amount of such Net Insurance/Condemnation Proceeds.

                           (c)      Prepayments from Consolidated Excess Cash
                  Flow. In the event that there shall be Consolidated Excess
                  Cash Flow for any Fiscal Year (commencing with Fiscal Year
                  2002), Company or Finance Sub, as applicable, shall, no
                  later than 100 days after the end of such Fiscal Year,
                  prepay the Loans in an aggregate amount equal to 75% of such
                  Consolidated Excess Cash Flow.

                           (d)      Prepayments Due to Restrictions on Loans.
                  Company shall from time to time prepay the Series B Term
                  Loans and Series C Term Loans to the extent necessary to
                  give effect to the limitations set forth in subsection
                  2.1A(iv).

                           (e)      Prepayments Due to Payments of Master
                  Note. Company shall, from time to time, prepay the Series B
                  Term Loans and the Series C Term Loans to the extent
                  necessary so that the aggregate outstanding amount of Series
                  B Term Loans and the Series C Term Loans shall not at any
                  time exceed the aggregate amount outstanding under the
                  Master Note.

                           (f)      Calculations of Net Proceeds Amounts,
                  Additional Prepayments and Reductions Based on Subsequent
                  Calculations.  Concurrently with any prepayment of the Loans
                  pursuant to subsections 2.4B(iii)(a)-(c), Company shall
                  deliver to Administrative Agent an Officers' Certificate
                  demonstrating the calculation of the amount (the "NET
                  PROCEEDS AMOUNT") of the applicable Net Asset Sale Proceeds
                  or Net Insurance/Condemnation Proceeds (as such terms are
                  defined in subsections 2.4B(iii)(a) and (b) respectively) or
                  the applicable Consolidated Excess Cash Flow, as the case
                  may be, that gave rise to such prepayment and/or reduction.
                  In the event that Company shall subsequently determine that
                  the actual Net Proceeds Amount was greater than the amount
                  set

                                      41

<PAGE>   50

                  forth in such Officers' Certificate, Company or Finance Sub,
                  as applicable, shall promptly make an additional prepayment
                  of the Loans in an amount equal to the amount of such
                  excess, and Company shall concurrently therewith deliver to
                  Administrative Agent an Officers' Certificate demonstrating
                  the derivation of the additional Net Proceeds Amount
                  resulting in such excess.

                  (iv)     Application of Prepayments.

                           (a)      Application of Prepayments by Type of
                  Loans.  Any amount (the "APPLIED AMOUNT") to be applied as a
                  voluntary prepayment pursuant to subsection 2.4B(i) or
                  mandatory prepayment pursuant to subsections
                  2.4B(iii)(a)-(c) shall be applied to reduce the aggregate
                  amount of Loans of Lenders in accordance with their Pro Rata
                  Shares (as determined pursuant to clause (iv) of the
                  definition thereof).  With respect to each Lender's
                  outstanding Loans, prepayments shall be applied first, to
                  reduce such Lender's outstanding Series B Term Loans,
                  second, to reduce such Lender's Series C Term Loans and
                  third, to reduce such Lender's Series A Revolving Loans
                  (provided that the Lenders may agree among themselves to
                  reallocate prepayments otherwise payable to the Series A
                  Revolving Loans).  Voluntary prepayments pursuant to
                  subsection 2.4B(i) shall be applied to reduce scheduled
                  installments of principal of the Series A Revolving Loans,
                  Series B Term Loans and Series C Term Loans on a pro rata
                  basis.  Mandatory prepayments pursuant to subsection
                  2.4B(iii)(a)-(c) shall be applied to reduce scheduled
                  installments of principal of the Series A Revolving Loans,
                  Series B Term Loans and Series C Term Loans in inverse order
                  of maturity.

                           (b)      Application of Prepayments to Base Rate
                  Loans and Eurodollar Rate Loans. Any prepayment of Loans
                  shall be applied first to Base Rate Loans to the full extent
                  thereof before application to Eurodollar Rate Loans, in each
                  case in a manner which minimizes the amount of any payments
                  required to be made pursuant to subsection 2.6D.

                  (v)      Prepayment Fees.  If any portion of the Series C
         Term Loans is prepaid on or prior to the second anniversary of the
         Closing Date, Company shall pay to Administrative Agent, for
         distribution to Lenders having Series C Term Loans so prepaid in
         accordance with their Pro Rata Shares, a fee equal to (1) 3.00% of
         the principal amount of Series C Term Loans so prepaid during the
         period commencing on the Closing Date and ending on the day prior to
         the first anniversary of the Closing Date and (2) 2.00% of the
         principal amount of Series C Term Loans so prepaid during the period
         commencing on the first anniversary of the Closing Date and ending on
         the second anniversary of the Closing Date; provided, however, that
         such prepayment fees shall not be payable with respect to (a) the
         prepayments made in accordance with subsections 3.1J and 3.1O, (b)
         mandatory prepayments made pursuant to subsection 2.4B(iii)(a)-(c) or
         (c) voluntary prepayments pursuant to subsection 2.4B(i) made within
         90 days after the Restatement Effective Date.

                                      42

<PAGE>   51

         (C) GENERAL PROVISIONS REGARDING PAYMENTS.

                  (i)      Manner and Time of Payment. All payments by each
         Borrower of principal, interest, fees and other Obligations hereunder
         and under the Notes shall be made in Dollars in same day funds,
         without defense, setoff or counterclaim, free of any restriction or
         condition, and delivered to Administrative Agent not later than 12:00
         Noon (New York City time) on the date due at the Funding and Payment
         Office for the account of Lenders; funds received by Administrative
         Agent after that time on such due date shall be deemed to have been
         paid by such Borrower on the next succeeding Business Day.

                  (ii)     Application of Payments to Principal and Interest.
         All payments in respect of the principal amount of any Loan shall
         include payment of accrued interest on the principal amount being
         repaid or prepaid, and all such payments shall be applied to the
         payment of interest before application to principal.

                  (iii)    Apportionment of Payments.  Aggregate principal and
         interest payments in respect of Loans shall be apportioned among all
         outstanding Loans to which such payments relate, in each case
         proportionately to Lenders' respective Pro Rata Shares, subject to
         the provisions of subsection 2.4B(iv)(a). Administrative Agent shall
         promptly distribute to each Lender, at its primary address set forth
         below its name on the appropriate signature page hereof or at such
         other address as such Lender may request, its Pro Rata Share of all
         such payments received by Administrative Agent and the commitment
         fees of such Lender when received by Administrative Agent pursuant to
         subsection 2.3.  Notwithstanding the foregoing provisions of this
         subsection 2.4C(iii), if, pursuant to the provisions of subsection
         2.6C, any Notice of Conversion/Continuation is withdrawn as to any
         Affected Lender or if any Affected Lender makes Base Rate Loans in
         lieu of its Pro Rata Share of any Eurodollar Rate Loans,
         Administrative Agent shall give effect thereto in apportioning
         payments received thereafter.

                  (iv)     Payments on Business Days. Whenever any payment to
         be made hereunder shall be stated to be due on a day that is not a
         Business Day, such payment shall be made on the next succeeding
         Business Day and such extension of time shall be included in the
         computation of the payment of interest hereunder or of the commitment
         fees hereunder, as the case may be.

                  (v)      Notation of Payment. Each Lender agrees that before
         disposing of any Note held by it, or any part thereof (other than by
         granting participations therein), that Lender will make a notation
         thereon of all Loans evidenced by that Note and all principal
         payments previously made thereon and of the date to which interest
         thereon has been paid; provided that the failure to make (or any
         error in the making of) a notation of any Loan made under such Note
         shall not limit or otherwise affect the obligations of Borrowers
         hereunder or under such Note with respect to any Loan or any payments
         of principal or interest on such Note.

                                      43

<PAGE>   52

         (D) APPLICATION OF PROCEEDS OF COLLATERAL AND PAYMENTS UNDER
SUBSIDIARY GUARANTY.

                  (i)      Application of Proceeds of Collateral. Except as
         provided in subsection 2.4B(iii)(a) with respect to prepayments from
         Net Asset Sale Proceeds, all proceeds received by Administrative
         Agent in respect of any sale of, collection from, or other
         realization upon all or any part of the Collateral under any
         Collateral Document may, in the discretion of Administrative Agent,
         be held by Administrative Agent as Collateral for, and/or (then or at
         any time thereafter) applied in full or in part by Administrative
         Agent against, the applicable Secured Obligations (as defined in such
         Collateral Document) in the following order of priority:

                           (a)      To the payment of all costs and expenses
                  of such sale, collection or other realization, including
                  reasonable compensation to Administrative Agent and its
                  agents and counsel, and all other expenses, liabilities and
                  advances made or incurred by Administrative Agent in
                  connection therewith, and all amounts for which
                  Administrative Agent is entitled to indemnification under
                  such Collateral Document and all advances made by
                  Administrative Agent thereunder for the account of the
                  applicable Loan Party, and to the payment of all costs and
                  expenses paid or incurred by Administrative Agent in
                  connection with the exercise of any right or remedy under
                  such Collateral Document, all in accordance with the terms
                  of this Agreement and such Collateral Document;

                           (b)      thereafter, to the extent of any excess
                  such proceeds, to the payment of all other such Secured
                  Obligations for the ratable benefit of the holders thereof;
                  and

                           (c)      thereafter, to the extent of any excess
                  such proceeds, to the payment to or upon the order of such
                  Loan Party or to whosoever may be lawfully entitled to
                  receive the same or as a court of competent jurisdiction may
                  direct.

                  (ii)     Application of Payments Under Subsidiary Guaranty.
         All payments received by Administrative Agent under the Subsidiary
         Guaranty shall be applied promptly from time to time by
         Administrative Agent in the following order of priority:

                           (a)      To the payment of the costs and expenses
                  of any collection or other realization under the Subsidiary
                  Guaranty, including reasonable compensation to
                  Administrative Agent and its agents and counsel, and all
                  expenses, liabilities and advances made or incurred by
                  Administrative Agent in connection therewith, all in
                  accordance with the terms of this Agreement and the
                  Subsidiary Guaranty;

                           (b)      thereafter, to the extent of any excess
                  such payments, to the payment of all other Guarantied
                  Obligations (as defined in the Subsidiary Guaranty) for the
                  ratable benefit of the holders thereof; and

                           (c)      thereafter, to the extent of any excess
                  such payments, to the payment to the applicable Subsidiary
                  Guarantor or to whosoever may be lawfully entitled to
                  receive the same or as a court of competent jurisdiction may
                  direct.

                                      44

<PAGE>   53

                  (iii)    Ratable Sharing of Proceeds of Collateral and
         Subsidiary Guaranty.  Any and all amounts received by Administrative
         Agent in connection with the enforcement of any of the Collateral
         Documents or the Subsidiary Guaranty or in connection with a
         distribution in a bankruptcy, insolvency or similar proceeding to be
         applied against any of the Obligations hereunder shall be shared
         ratably by all Lenders hereunder in accordance with their Pro Rata
         Shares (as determined pursuant to clause (iv) of the definition
         thereof), irrespective of whether the Obligations of all Lenders or
         only the Obligations of Lenders having outstanding Series A Revolving
         Loans, Series B Term Loans or Series C Term Loans are secured by the
         Collateral with respect to which such amounts are received or
         guaranteed by the Subsidiary Guaranty.

2.5      USE OF PROCEEDS.

         (A) SERIES A REVOLVING LOANS. The proceeds of the Series A Revolving
Loans were applied by Finance Sub for working capital and for other general
corporate purposes, including the financing of capital expenditures from time
to time.

         (B) SERIES B TERM LOANS AND SERIES C TERM LOANS. The proceeds of the
Series B Term Loans and Series C Term Loans were applied by Company solely to
finance the acquisition, construction or improvement of Telecommunications
Assets of Company and its Restricted Subsidiaries; provided that Company used
all proceeds of any Series B Term Loans and Series C Term Loans to make
intercompany loans to Finance Sub pursuant to the Master Note which were
secured by the Finance Sub Pledge and Security Agreement, and Finance Sub in
turn made intercompany loans of such proceeds to the applicable Restricted
Subsidiary of Finance Sub pursuant to the Intercompany Purchase Money Note
which were secured by the Intercompany Pledge and Security Agreement.

         (C) MARGIN REGULATIONS. No portion of the proceeds of any borrowing
under this Agreement was used by Company or any of its Subsidiaries in any
manner that might cause the borrowing or the application of such proceeds to
violate Regulation U, Regulation T or Regulation X of the Board of Governors
of the Federal Reserve System or any other regulation of such Board or to
violate the Exchange Act, in each case as in effect on the date or dates of
such borrowing and such use of proceeds.

2.6      SPECIAL PROVISIONS GOVERNING EURODOLLAR RATE LOANS.

         Notwithstanding any other provision of this Agreement to the
contrary, the following provisions shall govern with respect to Eurodollar
Rate Loans as to the matters covered:

         (A) DETERMINATION OF APPLICABLE INTEREST RATE. As soon as practicable
after 10:00 A.M. (New York City time) on each Interest Rate Determination
Date, Administrative Agent shall determine (which determination shall, absent
manifest error, be final, conclusive and binding upon all parties) the
interest rate that shall apply to the Eurodollar Rate Loans for which an
interest rate is then being determined for the applicable Interest Period and
shall promptly give notice thereof (in writing or by telephone confirmed in
writing) to Company or Finance Sub, as applicable, and each Lender.

                                      45

<PAGE>   54

         (B) INABILITY TO DETERMINE APPLICABLE INTEREST RATE. In the event
that Administrative Agent shall have determined (which determination shall be
final and conclusive and binding upon all parties hereto), on any Interest
Rate Determination Date with respect to any Eurodollar Rate Loans, that by
reason of circumstances affecting the interbank Eurodollar market adequate and
fair means do not exist for ascertaining the interest rate applicable to such
Loans on the basis provided for in the definition of Adjusted Eurodollar Rate,
Administrative Agent shall on such date give notice (by telefacsimile or by
telephone confirmed in writing) to Company or Finance Sub, as applicable, and
each Lender of such determination, whereupon (i) no Loans may be made as, or
converted to, Eurodollar Rate Loans until such time as Administrative Agent
notifies Company or Finance Sub, as applicable, and Lenders that the
circumstances giving rise to such notice no longer exist and (ii) any Notice
of Borrowing or Notice of Conversion/Continuation given by either Borrower
with respect to the Loans in respect of which such determination was made
shall be deemed to be rescinded by such Borrower.

         (C) ILLEGALITY OR IMPRACTICABILITY OF EURODOLLAR RATE LOANS. In the
event that on any date any Lender shall have determined (which determination
shall be final and conclusive and binding upon all parties hereto but shall be
made only after consultation with Company and Administrative Agent) that the
making, maintaining or continuation of its Eurodollar Rate Loans (i) has
become unlawful as a result of compliance by such Lender in good faith with
any law, treaty, governmental rule, regulation, guideline or order (or would
conflict with any such treaty, governmental rule, regulation, guideline or
order not having the force of law even though the failure to comply therewith
would not be unlawful) or (ii) has become impracticable, or would cause such
Lender material hardship, as a result of contingencies occurring after the
date of this Agreement which materially and adversely affect the interbank
Eurodollar market, then, and in any such event, such Lender shall be an
"AFFECTED LENDER" and it shall on that day give notice (by telefacsimile or by
telephone confirmed in writing) to Borrowers and Administrative Agent of such
determination (which notice Administrative Agent shall promptly transmit to
each other Lender). Thereafter (a) the obligation of the Affected Lender to
make Loans as, or to convert Loans to, Eurodollar Rate Loans shall be
suspended until such notice shall be withdrawn by the Affected Lender, (b) to
the extent such determination by the Affected Lender relates to a Eurodollar
Rate Loan then being requested by a Borrower pursuant to a Notice of Borrowing
or a Notice of Conversion/Continuation, the Affected Lender shall make such
Loan as (or convert such Loan to, as the case may be) a Base Rate Loan, (c)
the Affected Lender's obligation to maintain its outstanding Eurodollar Rate
Loans (the "AFFECTED LOANS") shall be terminated at the earlier to occur of
the expiration of the Interest Period then in effect with respect to the
Affected Loans or when required by law, and (d) the Affected Loans shall
automatically convert into Base Rate Loans on the date of such termination.
Notwithstanding the foregoing, to the extent a determination by an Affected
Lender as described above relates to a Eurodollar Rate Loan then being
requested by a Borrower pursuant to a Notice of Borrowing or a Notice of
Conversion/Continuation, such Borrower shall have the option, subject to the
provisions of subsection 2.6D, to rescind such Notice of Borrowing or Notice
of Conversion/Continuation as to all Lenders by giving notice (by
telefacsimile or by telephone confirmed in writing) to Administrative Agent of
such rescission on the date on which the Affected Lender gives notice of its
determination as described above (which notice of rescission Administrative
Agent shall promptly transmit to each other Lender). Except as provided in the
immediately preceding sentence, nothing in this subsection 2.6C shall affect
the obligation of any Lender other than an

                                      46

<PAGE>   55

Affected Lender to make or maintain Loans as, or to convert Loans to,
Eurodollar Rate Loans in accordance with the terms of this Agreement.

         (D) COMPENSATION FOR BREAKAGE OR NON-COMMENCEMENT OF INTEREST
PERIODS. Each Borrower shall compensate each Lender, upon written request by
that Lender (which request shall set forth the basis for requesting such
amounts), for all reasonable losses, expenses and liabilities (including any
interest paid by that Lender to lenders of funds borrowed by it to make or
carry its Eurodollar Rate Loans and any loss, expense or liability sustained
by that Lender in connection with the liquidation or re-employment of such
funds) which that Lender may sustain: (i) if for any reason (other than a
default by that Lender) a borrowing of any Eurodollar Rate Loan does not occur
on a date specified therefor in a Notice of Borrowing or a telephonic request
for borrowing, or a conversion to or continuation of any Eurodollar Rate Loan
does not occur on a date specified therefor in a Notice of
Conversion/Continuation or a telephonic request for conversion or
continuation, (ii) if any prepayment (including any prepayment pursuant to
subsection 2.4B(i)) or other principal payment or any conversion of any of its
Eurodollar Rate Loans occurs on a date prior to the last day of an Interest
Period applicable to that Loan, (iii) if any prepayment of any of its
Eurodollar Rate Loans is not made on any date specified in a notice of
prepayment given by such Borrower, or (iv) as a consequence of any other
default by such Borrower in the repayment of its Eurodollar Rate Loans when
required by the terms of this Agreement.

         (E) BOOKING OF EURODOLLAR RATE LOANS. Any Lender may make, carry or
transfer Eurodollar Rate Loans at, to, or for the account of any of its branch
offices or the office of an Affiliate of that Lender.

         (F) ASSUMPTIONS CONCERNING FUNDING OF EURODOLLAR RATE LOANS.
Calculation of all amounts payable to a Lender under this subsection 2.6 and
under subsection 2.7A shall be made as though that Lender had actually funded
each of its relevant Eurodollar Rate Loans through the purchase of a
Eurodollar deposit bearing interest at the rate obtained pursuant to clause
(i) of the definition of Adjusted Eurodollar Rate in an amount equal to the
amount of such Eurodollar Rate Loan and having a maturity comparable to the
relevant Interest Period and through the transfer of such Eurodollar deposit
from an offshore office of that Lender to a domestic office of that Lender in
the United States of America; provided, however, that each Lender may fund
each of its Eurodollar Rate Loans in any manner it sees fit and the foregoing
assumptions shall be utilized only for the purposes of calculating amounts
payable under this subsection 2.6 and under subsection 2.7A.

         (G) EURODOLLAR RATE LOANS AFTER DEFAULT. After the occurrence of and
during the continuation of a Potential Event of Default or an Event of Default
and upon notice to such effect to Borrowers from the Administrative Agent or
Requisite Lenders which notice may be delivered after delivery of a Notice of
Borrowing or Notice of Conversion/Continuation but prior to the funding or
continuation or conversion of Loans pursuant thereto, (i) no Borrower may
elect to have a Loan be made or maintained as, or converted to, a Eurodollar
Rate Loan after the expiration of any Interest Period then in effect for that
Loan and (ii) subject to the provisions of subsection 2.6D, any Notice of
Borrowing or Notice of Conversion/Continuation given by a Borrower with
respect to a requested borrowing or conversion/continuation that has not yet
occurred shall be deemed to be rescinded by such Borrower.

                                      47

<PAGE>   56

2.7      INCREASED COSTS; TAXES; CAPITAL ADEQUACY.

         (A) COMPENSATION FOR INCREASED COSTS AND TAXES. Subject to the
provisions of subsection 2.7B (which shall be controlling with respect to the
matters covered thereby), in the event that any Lender shall determine (which
determination shall, absent manifest error, be final and conclusive and
binding upon all parties hereto) that any law, treaty or governmental rule,
regulation or order, or any change therein or in the interpretation,
administration or application thereof (including the introduction of any new
law, treaty or governmental rule, regulation or order), or any determination
of a court or governmental authority, in each case that becomes effective
after the date hereof, or compliance by such Lender with any guideline,
request or directive issued or made after the date hereof by any central bank
or other governmental or quasi-governmental authority (whether or not having
the force of law):

                  (i)      subjects such Lender (or its applicable lending
         office) to any additional Tax (other than any Tax on the overall net
         income of such Lender) with respect to this Agreement or any of its
         obligations hereunder or any payments to such Lender (or its
         applicable lending office) of principal, interest, fees or any other
         amount payable hereunder;

                  (ii)     imposes, modifies or holds applicable any reserve
         (including any marginal, emergency, supplemental, special or other
         reserve), special deposit, compulsory loan, FDIC insurance or similar
         requirement against assets held by, or deposits or other liabilities
         in or for the account of, or advances or loans by, or other credit
         extended by, or any other acquisition of funds by, any office of such
         Lender (other than any such reserve or other requirements with
         respect to Eurodollar Rate Loans that are reflected in the definition
         of Adjusted Eurodollar Rate); or

                  (iii)    imposes any other condition (other than with
         respect to a Tax matter) on or affecting such Lender (or its
         applicable lending office) or its obligations hereunder or the
         interbank Eurodollar market;

and the result of any of the foregoing is to increase the cost to such Lender
of agreeing to make, making or maintaining Loans hereunder or to reduce any
amount received or receivable by such Lender (or its applicable lending
office) with respect thereto; then, in any such case, the applicable Borrower
shall promptly pay to such Lender, upon receipt of the statement referred to
in the next sentence, such additional amount or amounts (in the form of an
increased rate of, or a different method of calculating, interest or otherwise
as such Lender in its sole discretion shall determine) as may be necessary to
compensate such Lender for any such increased cost or reduction in amounts
received or receivable hereunder. Such Lender shall deliver as soon as
reasonably practicable to each Borrower (with a copy to Administrative Agent)
a written statement, setting forth in reasonable detail the basis for
calculating the additional amounts owed to such Lender by such Borrower under
this subsection 2.7A, which statement shall be conclusive and binding upon all
parties hereto absent manifest error.

                                      48

<PAGE>   57

(B) WITHHOLDING OF TAXES.

                  (i)      Payments to Be Free and Clear. All sums payable by
         each Borrower under this Agreement and the other Loan Documents shall
         (except to the extent required by law) be paid free and clear of, and
         without any deduction or withholding on account of, any Tax (other
         than a Tax on the overall net income of any Lender) imposed, levied,
         collected, withheld or assessed by or within the United States of
         America or any political subdivision in or of the United States of
         America or any other jurisdiction from or to which a payment is made
         by or on behalf of Company or by any federation or organization of
         which the United States of America or any such jurisdiction is a
         member at the time of payment.

                  (ii)     Grossing-up of Payments. If a Borrower or any other
         Person is required by law to make any deduction or withholding on
         account of any such Tax from any sum paid or payable by such Borrower
         to Administrative Agent or any Lender under any of the Loan
         Documents:

                           (a)      Such Borrower shall notify Administrative
                  Agent of any such requirement or any change in any such
                  requirement as soon as Company becomes aware of it;

                           (b)      Such Borrower shall pay any such Tax
                  before the date on which penalties attach thereto, such
                  payment to be made (if the liability to pay is imposed on
                  such Borrower) for its own account or (if that liability is
                  imposed on Administrative Agent or such Lender, as the case
                  may be) on behalf of and in the name of Administrative Agent
                  or such Lender;

                           (c)      the sum payable by such Borrower in
                  respect of which the relevant deduction, withholding or
                  payment is required shall be increased to the extent
                  necessary to ensure that, after the making of that
                  deduction, withholding or payment, Administrative Agent or
                  such Lender, as the case may be, receives on the due date a
                  net sum equal to what it would have received had no such
                  deduction, withholding or payment been required or made; and

                           (d)      within 30 days after paying any sum from
                  which it is required by law to make any deduction or
                  withholding, and within 30 days after the due date of
                  payment of any Tax which it is required by clause (b) above
                  to pay, such Borrower shall deliver to Administrative Agent
                  evidence satisfactory to the other affected parties of such
                  deduction, withholding or payment and of the remittance
                  thereof to the relevant taxing or other authority;

         provided that no such additional amount shall be required to be paid
         to any Lender under clause (c) above except to the extent that any
         change after the date hereof (in the case of each Lender listed on
         the signature pages hereof) or after the date of the Assignment
         Agreement pursuant to which such Lender became a Lender (in the case
         of each other Lender) in any such requirement for a deduction,
         withholding or payment as is mentioned therein shall result in an
         increase in the rate of such deduction, withholding or payment

                                      49

<PAGE>   58

         from that in effect at the date of this Agreement or at the date of
         such Assignment Agreement, as the case may be, in respect of payments
         to such Lender.

                  (iii)    Evidence of Exemption from U.S. Withholding Tax.

                           (a)      Each Lender that is not a U.S. person as
                  defined in Section 7701(a)(30) of the Code (for purposes of
                  this subsection 2.7B(iii), a "NON-US LENDER") shall deliver
                  to Administrative Agent for transmission to Borrowers, on or
                  prior to the Closing Date (in the case of each Lender listed
                  on the signature pages hereof) or on or prior to the date of
                  the Assignment Agreement pursuant to which it becomes a
                  Lender (in the case of each other Lender), and at such other
                  times as may be necessary in the determination of Borrowers
                  or Administrative Agent (each in the reasonable exercise of
                  its discretion), (1) two original copies of Internal Revenue
                  Service Form 1001 or 4224 (or any successor forms), properly
                  completed and duly executed by such Lender, together with
                  any other certificate or statement of exemption required
                  under the Internal Revenue Code or the regulations issued
                  thereunder to establish that such Lender is exempt from
                  United States federal income tax with respect to any
                  payments to such Lender of principal, interest, fees or
                  other amounts payable under any of the Loan Documents or (2)
                  if such Lender is not a "bank" or other Person described in
                  Section 881(c)(3) of the Internal Revenue Code and cannot
                  deliver either Internal Revenue Service Form 1001 or 4224
                  pursuant to clause (1) above, a Certificate re Non-Bank
                  Status together with two original copies of Internal Revenue
                  Service Form W-8 (or any successor form), properly completed
                  and duly executed by such Lender, together with any other
                  certificate or statement of exemption required under the
                  Internal Revenue Code or the regulations issued thereunder
                  to establish that such Lender is not subject to deduction or
                  withholding of United States federal income tax with respect
                  to any payments to such Lender of interest payable under any
                  of the Loan Documents.

                           (b)      Each Lender required to deliver any forms,
                  certificates or other evidence with respect to United States
                  federal income tax withholding matters pursuant to
                  subsection 2.7B(iii)(a) hereby agrees, from time to time
                  after the initial delivery by such Lender of such forms,
                  certificates or other evidence, whenever a lapse in time or
                  change in circumstances renders such forms, certificates or
                  other evidence obsolete or inaccurate in any material
                  respect, that such Lender shall promptly (1) deliver to
                  Administrative Agent for transmission to Borrowers two new
                  original copies of Internal Revenue Service Form 1001 or
                  4224, or a Certificate re Non-Bank Status and two original
                  copies of Internal Revenue Service Form W-8, as the case may
                  be, properly completed and duly executed by such Lender,
                  together with any other certificate or statement of
                  exemption required in order to confirm or establish that
                  such Lender is not subject to deduction or withholding of
                  United States federal income tax with respect to payments to
                  such Lender under the Loan Documents or (2) notify
                  Administrative Agent and Borrowers of its inability to
                  deliver any such forms, certificates or other evidence.

                                      50

<PAGE>   59

                           (c)      Borrowers shall not be required to pay any
                  additional amount to any Non-US Lender under clause (c) of
                  subsection 2.7B(ii) if such Lender shall have failed to
                  satisfy the requirements of clause (a) or (b)(1) of this
                  subsection 2.7B(iii); provided that if such Lender shall
                  have satisfied the requirements of subsection 2.7B(iii)(a)
                  on the Closing Date (in the case of each Lender listed on
                  the signature pages hereof) or on the date of the Assignment
                  Agreement pursuant to which it became a Lender (in the case
                  of each other Lender), nothing in this subsection
                  2.7B(iii)(c) shall relieve Borrowers of its obligation to
                  pay any additional amounts pursuant to clause (c) of
                  subsection 2.7B(ii) in the event that, as a result of any
                  change in any applicable law, treaty or governmental rule,
                  regulation or order, or any change in the interpretation,
                  administration or application thereof, such Lender is no
                  longer properly entitled to deliver forms, certificates or
                  other evidence at a subsequent date establishing the fact
                  that such Lender is not subject to withholding as described
                  in subsection 2.7B(iii)(a).

                  (iv)     Payment of Refunds.  If the Administrative Agent or
         any Lender receives a refund in respect of any Taxes paid by a
         Borrower pursuant to Section 2.7(B)(ii)(b), which in the reasonable
         judgment of such Lender is allocable to such payment, it shall
         promptly pay such refund, together with any other amounts paid by the
         relevant Borrower in connection with such Taxes, to such Borrower,
         net of all out-of-pocket expenses of such Lender incurred in
         obtaining such refund, provided, however, that such Borrower agrees
         to promptly return such refund to the Administrative Agent or the
         applicable Lender, as the case may be, if it receives notice from the
         Administrative Agent or applicable Lender that such Administrative
         Agent or Lender is required to repay such refund.

         (C) CAPITAL ADEQUACY ADJUSTMENT. If any Lender shall have determined
that the adoption, effectiveness, phase-in or applicability after the date
hereof of any law, rule or regulation (or any provision thereof) regarding
capital adequacy, or any change therein or in the interpretation or
administration thereof by any governmental authority, central bank, the
National Association of Insurance Commissioners, or comparable agency charged
with the interpretation or administration thereof, or compliance by any Lender
(or its applicable lending office) with any guideline, request or directive
regarding capital adequacy (whether or not having the force of law) of any
such governmental authority, central bank, the National Association of
Insurance Commissioners or comparable agency, has or would have the effect of
reducing the rate of return on the capital of such Lender or any corporation
controlling such Lender as a consequence of, or with reference to, such
Lender's Loans or participations therein or other obligations hereunder with
respect to the Loans to a level below that which such Lender or such
controlling corporation could have achieved but for such adoption,
effectiveness, phase-in, applicability, change or compliance (taking into
consideration the policies of such Lender or such controlling corporation with
regard to capital adequacy) by an amount which such Lender deems material,
then from time to time, within five Business Days after receipt by Borrowers
from such Lender of the statement referred to in the next sentence, the
applicable Borrower shall pay to such Lender such additional amount or amounts
as will compensate such Lender or such controlling corporation on an after-tax
basis for such reduction. Such Lender shall deliver to Borrowers (with a copy
to Administrative Agent) a written statement, setting forth in reasonable
detail the basis of the calculation of such additional amounts, which
statement shall be conclusive and binding upon all

                                      51

<PAGE>   60

parties hereto absent manifest error; provided that Borrowers shall not be
required to compensate a Lender pursuant to this subsection 2.7C for any
amounts incurred more than six months prior to the date that such Lender
notifies Borrowers of such Lender's intention to claim compensation therefor,
except that, if the circumstances giving rise to such claim have a retroactive
effect, then such six-month period shall be extended to include the period of
such retroactive effect.

         (D) SUBSTITUTE LENDERS. In the event Company is required under the
provisions of this subsection 2.7 to make payments in a material amount to any
Lender or in the event any Lender fails to lend to Borrowers in accordance
with this Agreement, Borrowers may, so long as no Event of Default or
Potential Event of Default shall have occurred and be continuing, elect to
terminate such Lender as a party to this Agreement; provided that,
concurrently with such termination, (i) each Borrower shall pay that Lender
all principal, interest and fees and other amounts (including without
limitation, amounts, if any, owed under this subsection 2.7) owed to such
Lender through such date of termination, (ii) another financial institution
satisfactory to Administrative Agent (or if Administrative Agent is also the
Lender to be terminated, the successor Administrative Agent) shall agree, as
of such date, to become a Lender for all purposes under this Agreement
(whether by assignment or amendment) and to assume all obligations of the
Lender to be terminated as of such date, and (iii) all documents and
supporting materials necessary, in the judgment of Administrative Agent (or if
Administrative Agent is also the Lender to be terminated, the successor
Administrative Agent), to evidence the substitution of such Lender shall have
been received and approved by Administrative Agent as of such date.

2.8      OBLIGATION OF LENDERS TO MITIGATE.

         Each Lender agrees that, as promptly as practicable after the officer
of such Lender responsible for administering the Loans of such Lender becomes
aware of the occurrence of an event or the existence of a condition that would
cause such Lender to become an Affected Lender or that would entitle such
Lender to receive payments under subsection 2.7, it will, to the extent not
inconsistent with the internal policies of such Lender and any applicable
legal or regulatory restrictions, use reasonable efforts (i) to maintain the
affected Loans of such Lender through another lending office of such Lender,
or (ii) take such other measures as such Lender may deem reasonable, if as a
result thereof the circumstances which would cause such Lender to be an
Affected Lender would cease to exist or the additional amounts which would
otherwise be required to be paid to such Lender pursuant to subsection 2.7
would be materially reduced and if, as determined by such Lender in its sole
discretion, the maintaining of such Loans through such other lending office or
in accordance with such other measures, as the case may be, would not
otherwise materially adversely affect such Loans or the interests of such
Lender; provided that such Lender will not be obligated to utilize such other
lending office pursuant to this subsection 2.8 unless Company agrees to pay
all incremental expenses incurred by such Lender as a result of utilizing such
other lending office as described in clause (i) above. A certificate as to the
amount of any such expenses payable by Company pursuant to this subsection 2.8
(setting forth in reasonable detail the basis for requesting such amount)
submitted by such Lender to Company (with a copy to Administrative Agent)
shall be conclusive absent manifest error.

                                      52

<PAGE>   61

                                  SECTION 3.
                         CONDITIONS TO EFFECTIVENESS

3.1      CONDITIONS TO EFFECTIVENESS.

         This Agreement shall become effective only upon satisfaction or
written waiver by Requisite Lenders of the following conditions:

         (A) LOAN PARTY DOCUMENTS. On or before the Restatement Effective
Date, Borrowers shall, and shall cause each other Loan Party requested by
Requisite Lenders to, deliver to Lenders (or to Administrative Agent for
Lenders with sufficient originally executed copies, where appropriate, for
each Lender and its counsel) the following with respect to each Borrower or
such Loan Party, as the case may be, each, unless otherwise noted, dated the
Restatement Effective Date:

                  (i)      Executed originals of the Loan Documents to which
         such Person is a party; and

                  (ii)     Such other documents as Arranger or Administrative
         Agent may reasonably request.

         (B) NO MATERIAL ADVERSE EFFECT. Since June 30, 2000, no Material
Adverse Effect (in the opinion of Arranger and Administrative Agent) shall
have occurred.

         (C) [INTENTIONALLY OMITTED]

         (D) SECURITY INTERESTS IN PERSONAL AND MIXED PROPERTY. Each of
Arranger and Administrative Agent shall be satisfied that Borrowers and
Subsidiary Guarantors shall have taken or caused to be taken all such actions,
executed and delivered or caused to be executed and delivered all such
agreements, documents and instruments, and made or caused to be made all such
filings and recordings that may be necessary or, in the opinion of Arranger
and Administrative Agent, desirable in order to create in favor of
Administrative Agent, for the benefit of Lenders, a valid and perfected First
Priority security interest in the entire personal and mixed property
Collateral.

         (E) [INTENTIONALLY OMITTED]

         (F) OPINIONS OF COUNSEL TO LOAN PARTIES. Lenders shall have received
originally executed copies of a written opinion of Davis Polk & Wardwell,
counsel for Loan Parties, and Juliette Williams Pryor, Senior Vice President
and General Counsel of Company, in form and substance reasonably satisfactory
to Administrative Agent and Arranger and its counsel, dated as of the
Restatement Effective Date and setting forth substantially the matters in the
opinions designated in Exhibit IX-A and Exhibit IX-B annexed hereto and as to
such other matters as Administrative Agent or Arranger acting on behalf of
Lenders may reasonably request and (ii) evidence satisfactory to Arranger and
Administrative Agent that Company has requested such counsel to deliver such
opinions to Lenders.

                                      53

<PAGE>   62

         (G) REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF AGREEMENTS.
Borrowers shall have delivered to Arranger and Administrative Agent an
Officers' Certificate of Borrowers, in form and substance satisfactory to
Arranger and Administrative Agent, to the effect that, after giving effect to
this Agreement, the representations and warranties in Section 4 hereof are
true, correct and complete in all material respects on and as of the
Restatement Effective Date to the same extent as though made on and as of that
date (or, to the extent such representations and warranties specifically
relate to an earlier date, that such representations and warranties were true,
correct and complete in all material respects on and as of such earlier date)
and that Borrowers shall have performed in all material respects all
agreements and satisfied all conditions which this Agreement provides shall be
performed or satisfied by it on or before the Restatement Effective Date
except as otherwise disclosed to and agreed to in writing by Arranger,
Administrative Agent and Requisite Lenders.

         (H) LIQUIDITY PROJECTIONS. Agents and Lenders shall have received, in
form and substance satisfactory to the Arranger and the Administrative Agent,
projections prepared by Borrowers demonstrating adequate liquidity through
December 31, 2001.

         (I)      ADDITIONAL JUNIOR CAPITAL AGREEMENTS.  Each of the following
shall have occurred:

                  (i)      Company and the Investors or other investors shall
         have entered into the Huff Purchase Agreement dated as of the date
         hereof relating to the purchase of $124,300,000 of the Committed
         Preferred, such agreement to be in form and substance satisfactory to
         Requisite Lenders.

                  (ii)     The Huff Fund and Company shall have entered into a
         valid and enforceable voting agreement (the "VOTING AGREEMENT")
         pursuant to which the Huff Fund agrees to vote all shares of Capital
         Stock of the Company owned by it (representing a minimum of
         14,000,000 shares of voting securities of Company) in favor of the
         issuance of the Committed Preferred, such agreement to be in form and
         substance satisfactory to Requisite Lenders.

                  (iii)    The Huff Fund shall have entered into the Loan Put
         Agreement with the Lenders.

         (J)      VOLUNTARY PREPAYMENT.  Company shall have made a voluntary
prepayment of the Loans in the principal amount of $25,000,000 as follows: (a)
$15,000,000 paid on July 14, 2000 and (b) the remaining $10,000,000 paid on or
before the Restatement Effective Date.

         (K)      UPDATED BORROWERS' QUESTIONNAIRE. Arranger and
Administrative Agent shall have received an updated Borrowers' Questionnaire
duly completed and in form and substance satisfactory to the Arranger and
Administrative Agent.

         (L)      OFFICERS' CERTIFICATE REGARDING USE OF PROCEEDS. Lenders
shall have received an Officers' Certificate in form and substance
satisfactory to the Arranger and the Administrative Agent setting forth in
reasonable detail (i) the dates and amounts of each Series B Term Loan and
Series C Term Loan made under this Agreement and the respective
Telecommunications Assets purchased with the proceeds of such Series B Term
Loans and Series C Term Loans, (ii) the amounts due and owing by each
Subsidiary of Finance Sub to Finance Sub under the

                                      54

<PAGE>   63

Intercompany Purchase Money Note and (iii) all purchase money Indebtedness,
demonstrating compliance with subsections 2.1(A)(iv) and 6.1(vi) of this
Agreement.

         (M)      PROFESSIONAL ADVISOR MATERIALS. Lenders shall have received
copies of any engagement letters or other agreements pursuant to which the
Company has engaged any professional advisor to advise them with respect to
potential asset sales or other strategic alternatives and copies of any draft
or final offering memorandum or similar documents prepared in connection with
any proposed asset sales or other strategic alternatives as of the Restatement
Effective Date.

         (N)      PAYMENTS OF AMOUNTS DUE. All costs, fees, expenses
(including, without limitation, legal fees and expenses and the fee payable
under subsection 2.3C (other than the Deferred Restructuring Fee) and other
compensation contemplated hereby payable to Arranger, Administrative Agent or
the Lenders shall have been paid to the extent due as of the Restatement
Effective Date.

         (O)      REALLOCATION OF LOANS. On the Restatement Effective Date,
Finance Sub shall have borrowed the remaining $5,000,000 available under the
Series A Loan Commitments under the Original Credit Agreement from Lenders and
made a voluntary repayment of $5,000,000 on the Series B Term Loans.

         (P)      CASH MANAGEMENT SYSTEMS. Arranger and Administrative Agent
shall have received at least five Business Days prior to the Restatement
Effective Date, in form and substance reasonably satisfactory to Arranger and
Administrative Agent, Schedule 4.18 describing the cash management system of
the Loan Parties and Arranger and Administrative Agent shall be satisfied that
Company and its Restricted Subsidiaries are in compliance with the covenants
set forth in subsection 5.11.

3.2      LENDER ACKNOWLEDGMENT AND CONSENT.

         Each Lender by delivering its signature page to this Agreement on the
Restatement Effective Date shall be deemed to have acknowledged receipt of,
and consented to and approved (as long as substantially in the form delivered
to Lenders, including any changed pages thereto delivered to Lenders), each
Loan Document and each other document required to be approved by Requisite
Lenders or Lenders, as applicable.

                                  SECTION 4.
                  BORROWERS' REPRESENTATIONS AND WARRANTIES

         In order to induce Lenders to enter into this Agreement and to
continue the Loans and to induce other Lenders to purchase participations
therein, each Borrower represents and warrants to each Lender, on the date of
this Agreement, that the following statements are true, correct and complete:

4.1      ORGANIZATION, POWERS, QUALIFICATION, GOOD STANDING, BUSINESS AND
         SUBSIDIARIES.

         (A)      ORGANIZATION AND POWERS. Each Loan Party is duly organized,
validly existing and in good standing under the laws of its jurisdiction of
organization as specified in Schedule 4.1

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<PAGE>   64

annexed hereto. Each Loan Party has all requisite power and authority to own
and operate its properties, to carry on its business as now conducted and as
proposed to be conducted, to enter into the Loan Documents to which it is a
party and to carry out the transactions contemplated thereby.

         (B) QUALIFICATION AND GOOD STANDING. Each Loan Party is qualified to
do business and in good standing in every jurisdiction where its assets are
located and wherever necessary to carry out its business and operations,
except in jurisdictions where the failure to be so qualified or in good
standing has not had and could not reasonably be expected to have a Material
Adverse Effect.

         (C) CONDUCT OF BUSINESS. Loan Parties are engaged only in the
businesses permitted to be engaged in pursuant to subsection 6.14.

         (D) SUBSIDIARIES. All of the Subsidiaries of Company are identified
in Schedule 4.1 annexed hereto, as said Schedule 4.1 may be supplemented from
time to time pursuant to the provisions of subsection 5.1(xvi). The Capital
Stock of each of the Subsidiaries of Company identified in Schedule 4.1
annexed hereto (as so supplemented) is duly authorized, validly issued, fully
paid and nonassessable and none of such Capital Stock constitutes Margin
Stock. Each of the Subsidiaries of Company identified in Schedule 4.1 annexed
hereto (as so supplemented) is duly organized, validly existing and in good
standing under the laws of its respective jurisdiction of organization set
forth therein, has all requisite power and authority to own and operate its
properties and to carry on its business as now conducted and as proposed to be
conducted, and is qualified to do business and in good standing in every
jurisdiction where its assets are located and wherever necessary to carry out
its business and operations, in each case except where failure to be so
qualified or in good standing or a lack of such corporate power and authority
has not had and could not reasonably be expected to have a Material Adverse
Effect. Schedule 4.1 annexed hereto (as so supplemented) correctly sets forth
the ownership interest of Company and each of its Subsidiaries in each of the
Subsidiaries of Company identified therein.

         (E) REGULATORY AUTHORIZATIONS.

                  (i)      Licenses.  Except as set forth in Part I of
         Schedule 4.1E annexed hereto as such Schedule 4.1E may be
         supplemented from time to time pursuant to the provisions of
         subsection 5.1(xvii), each of the Loan Parties has obtained all
         licenses, permits, certifications or other authorizations required by
         the Communications Regulatory Authorities under the Communications
         Act, State Law and local law in order to carry out its business and
         operations as presently conducted and as proposed to be conducted,
         including the provision of the telecommunications services set forth
         in any Licenses except to the extent the failure to obtain such
         licenses, permits, certifications or other authorizations would not
         individually or in the aggregate have a Material Adverse Effect. Part
         II of Schedule 4.1E (as so supplemented) annexed hereto accurately
         lists all Licenses, including their expiration dates, held by each of
         the Loan Parties as of the date of this Agreement.  Each such License
         was duly and validly issued by the FCC, the appropriate State PUC or
         local governmental authority pursuant to procedures which materially
         comply with all requirements of all applicable federal, state or
         local laws and is in full force and effect except to the extent the
         failure to be in full force and effect

                                      56

<PAGE>   65

         could not reasonably be expected individually or in the aggregate to
         have a Material Adverse Effect.  None of the Loan Parties has any
         knowledge of the occurrence of any event or the existence of any
         circumstance which, in the reasonable judgment of such Loan Party, is
         likely to lead to the revocation, suspension, non-renewal or adverse
         modification of any material Licenses.

                  (ii)     Compliance with Applicable Laws.  The Loan Parties
         are in compliance with the terms of all applicable Regulations except
         to the extent noncompliance could not reasonably be expected
         individually or in the aggregate to have a Material Adverse Effect.
         Each of the Loan Parties has duly filed in a timely manner all
         filings, including tariff filings, required by the FCC, any State PUC
         or any local governmental authority to be filed by such Loan Party as
         a precondition to the provision of the telecommunications services
         which it offers except to the extent failure to do so could not
         reasonably be expected individually or in the aggregate to have a
         Material Adverse Effect.  None of the Loan Parties is a party as a
         defendant to, or is aware of any overt threat of, any litigation,
         proceeding, action, notice of violation or apparent liability, order
         to show cause, order of forfeiture, formal or informal complaint,
         inquiry or investigation by or before the FCC, any State PUC or any
         local governmental authority with jurisdiction over the services
         which it offers as to which there is a reasonable possibility of an
         adverse determination and, which if adversely determined, could
         reasonably be expected, individually or in the aggregate, to have a
         Material Adverse Effect.

4.2      AUTHORIZATION, ETC.

         (A) AUTHORIZATION. The execution, delivery and performance of the
Loan Documents have been duly authorized by all necessary action on the part
of each Loan Party that is a party thereto.

         (B) NO CONFLICT. The execution, delivery and performance by Loan
Parties of the Loan Documents to which they are parties and the consummation
of the transactions contemplated by the Loan Documents do not and will not (i)
violate any provision of any law or any governmental rule or regulation
applicable to any Loan Party or any of its Subsidiaries, the Organizational
Documents of any Loan Party or any of its Subsidiaries or any order, judgment
or decree of any court or other agency of government binding on any Loan Party
or any of its Subsidiaries, (ii) conflict with, result in a breach of or
constitute (with due notice or lapse of time or both) a default under any
Contractual Obligation of any Loan Party or any of its Subsidiaries, (iii)
result in or require the creation or imposition of any Lien upon any of the
properties or assets of any Loan Party or any of its Subsidiaries (other than
any Liens created under any of the Loan Documents in favor of Administrative
Agent on behalf of Lenders), or (iv) require any approval of stockholders or
any approval or consent of any Person under any Contractual Obligation of any
Loan Party or any of its Subsidiaries, except for such approvals or consents
which will be obtained on or before the Closing Date and disclosed in writing
to Lenders (other than, in the case of the issuance and sale of the Committed
Preferred, the Stockholder Approval and any required approval of NASDAQ and,
in the case of the issuance and sale of certain other Required Junior Capital
or Subsequent Junior Capital, approval by the stockholders of Company and any
required approval of any securities regulatory authorities or securities
exchange).

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<PAGE>   66

         (C) GOVERNMENTAL CONSENTS. The execution, delivery and performance by
Loan Parties of the Loan Documents to which they are parties and the
consummation of the transactions contemplated by the Loan Documents do not and
will not require any registration with, consent or approval of, or notice to,
or other action to, with or by, any federal, state or other governmental
authority or regulatory body except (i) consents, authorizations, filings and
notices described in Schedule 4.2C annexed hereto, which consents,
authorizations, filings and notices have been obtained or made and are in full
force and effect and (ii) in the case of the issuance and sale of certain
Required Junior Capital or Subsequent Junior Capital, registration with,
consent or approval of, notice to, or other action to, with or by applicable
securities regulatory authorities and securities exchange.

         (D) BINDING OBLIGATION. Each of the Loan Documents has been duly
executed and delivered by each Loan Party that is a party thereto and is the
legally valid and binding obligation of such Loan Party, enforceable against
such Loan Party in accordance with its respective terms, except as may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or limiting creditors' rights generally or by equitable principles
relating to enforceability.

4.3      FINANCIAL CONDITION.

         Company has heretofore delivered to Lenders, at Lenders' request, the
following financial statements and information: (i) the audited consolidated
balance sheets of Company and its Subsidiaries as at December 31, 1999 and the
related consolidated statements of income, stockholders' equity and cash flows
of Company and its Subsidiaries for the Fiscal Year then ended and (ii) the
unaudited consolidated balance sheet of Company and its Subsidiaries as at
June 30, 2000 and the related unaudited consolidated statements of income,
stockholders' equity and cash flows of Company and its Subsidiaries for the
six months then ended. All such statements were prepared in conformity with
GAAP and fairly present, in all material respects, the financial position (on
a consolidated basis of the entities described in such financial statements as
at the respective dates thereof and the results of operations and cash flows
(on a consolidated basis) of the entities described therein for each of the
periods then ended, subject, in the case of any such unaudited financial
statements, to changes resulting from audit and normal year-end adjustments.
Neither Company nor its Subsidiaries has (and except as expressly permitted by
this Agreement, will not following the funding of the initial Loans have) any
Contingent Obligation, contingent liability or liability for taxes, long-term
lease or unusual forward or long-term commitment that is not reflected in the
foregoing financial statements or the notes thereto and which in any such case
is material in relation to the business, operations, properties, assets,
condition (financial or otherwise) or prospects of Company or any of its
Subsidiaries.

4.4      NO MATERIAL ADVERSE CHANGE; NO RESTRICTED JUNIOR PAYMENTS.

         Since June 30, 2000, no event or change has occurred that has caused
or evidences, either in any case or in the aggregate, a Material Adverse
Effect. Neither Company nor any of its Subsidiaries has directly or indirectly
declared, ordered, paid or made, or set apart any sum or property for, any
Restricted Junior Payment or agreed to do so except as permitted by subsection
6.5.

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<PAGE>   67

4.5      TITLE TO PROPERTIES; LIENS; REAL PROPERTY.

         (A) TITLE TO PROPERTIES; LIENS. Each of the Loan Parties has (i)
good, sufficient and legal title to (in the case of fee interests in real
property), (ii) valid leasehold interests in (in the case of leasehold
interests in real or personal property), or (iii) good title to (in the case
of all other personal property), all of their respective properties and assets
reflected in the financial statements referred to in subsection 4.3 or in the
most recent financial statements delivered pursuant to subsection 5.1, in each
case except for assets disposed of since the date of such financial statements
in the ordinary course of business or as otherwise permitted under subsection
6.8. Except as permitted by this Agreement, all such properties and assets are
free and clear of Liens.

         (B) REAL PROPERTY. Each material lease, sublease or assignment of
lease (together with all amendments, modifications, supplements, renewals or
extensions of any thereof) affecting each interest of any Loan Party in any
real property, regardless of whether such Loan Party is the Landlord or tenant
(whether directly or as an assignee or successor in interest) under such
lease, sublease or assignment is in full force and effect and no Borrower has
knowledge of any material default that has occurred and is continuing
thereunder, and each such agreement constitutes the legally valid and binding
obligation of each applicable Loan Party, enforceable against such Loan Party
in accordance with its terms, except as enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws relating to
or limiting creditors' rights generally or by equitable principles.

4.6      LITIGATION; ADVERSE FACTS.

         There are no actions, suits, proceedings, arbitrations or
governmental investigations (whether or not purportedly on behalf of any Loan
Party or any of its Subsidiaries) at law or in equity, or before or by any
federal, state, municipal or other governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign (including any
Environmental Claims) that are pending or, to the knowledge of either
Borrower, threatened against any Loan Party or any of its Subsidiaries or any
property of any Loan Party or any of its Subsidiaries and that, individually
or in the aggregate, could reasonably be expected to result in a Material
Adverse Effect. No Loan Party nor any of its Subsidiaries (i) is in violation
of any applicable laws (including Environmental Laws) that, individually or in
the aggregate, could reasonably be expected to result in a Material Adverse
Effect, or (ii) is subject to or in default with respect to any final
judgments, writs, injunctions, decrees, rules or regulations of any court or
any federal, state, municipal or other governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect.

4.7      PAYMENT OF TAXES.

         Except to the extent permitted by subsection 5.3, all material tax
returns and reports of Company and its Subsidiaries required to be filed by
any of them have been timely filed, and all material taxes shown on such tax
returns to be due and payable and all material assessments, fees and other
governmental charges upon Company and its Subsidiaries and upon their
respective properties, assets, income, businesses and franchises which are due
and payable have been paid

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<PAGE>   68

when due and payable. Neither Borrower knows of any material proposed tax
assessment against any Loan Party or any of its Subsidiaries which is not
being actively contested by such Loan Party or such Subsidiary in good faith
and by appropriate proceedings; provided that such reserves or other
appropriate provisions, if any, as shall be required in conformity with GAAP
shall have been made or provided therefor.

4.8      PERFORMANCE OF AGREEMENTS; MATERIALLY ADVERSE AGREEMENTS; MATERIAL
         CONTRACTS.

         (A) No Loan Party nor any of its Subsidiaries is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any of its Contractual Obligations, and no condition
exists that, with the giving of notice or the lapse of time or both, would
constitute such a default, except where the consequences, direct or indirect,
of such default or defaults, if any, could not reasonably be expected to have
a Material Adverse Effect.

         (B) No Loan Party nor any of its Subsidiaries is a party to or is
otherwise subject to any agreements or instruments or any charter or other
internal restrictions which, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect.

4.9      GOVERNMENTAL REGULATION.

         No Loan Party nor any of its Subsidiaries is subject to regulation
under the Public Utility Holding Company Act of 1935, the Federal Power Act,
the Interstate Commerce Act or the Investment Company Act of 1940 or under any
other federal or state statute or regulation (other than Regulation X of the
Board of Governors of the Federal Reserve System) which may limit its ability
to incur Indebtedness or which may otherwise render all or any portion of the
Obligations unenforceable.

4.10     SECURITIES ACTIVITIES.

         No Loan Party nor any of its Subsidiaries (i) is engaged principally,
or as one of its important activities, in the business of extending credit for
the purpose of purchasing or carrying any Margin Stock or (ii) will use the
proceeds of any Loans to purchase Margin Stock or in any manner whatsoever to
cause a violation of Regulation U of the Board of Governors of the Federal
Reserve System.

4.11     EMPLOYEE BENEFIT PLANS.

         (A) Each Loan Party and each of their respective ERISA Affiliates are
in material compliance with all applicable provisions and requirements of
ERISA and the regulations and published interpretations thereunder with
respect to each Employee Benefit Plan, and have performed all their
obligations under each Employee Benefit Plan, except where the failure to
comply or perform could not reasonably be expected to result in a Material
Adverse Effect. Each Employee Benefit Plan which is intended to qualify under
Section 401(a) of the Internal Revenue Code has received a favorable
determination letter from the IRS and nothing, to the best knowledge of the
Loan Parties, has occurred with respect to the operation of an Employee
Benefit Plan since the date of such letter which would reasonably be expected
to cause it to be no longer valid or effective.

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<PAGE>   69

         (B) No ERISA Event has occurred or is reasonably expected to occur
that could reasonably be expected to have a Material Adverse Effect.

         (C) As of the most recent valuation date for any Pension Plan, the
amount of unfunded benefit liabilities (as defined in Section 4001(a)(18) of
ERISA), individually or in the aggregate for all Pension Plans (excluding for
purposes of such computation any Pension Plans with respect to which assets
exceed benefit liabilities), does not exceed an amount, which if immediately
due and payable, could reasonably be expected to have a Material Adverse
Effect.

         (D) As of the most recent valuation date for each Multiemployer Plan
for which the actuarial report has been provided to Borrowers, the potential
liability of Loan Parties and their respective ERISA Affiliates for a complete
withdrawal from such Multiemployer Plan (within the meaning of Section 4203 of
ERISA), when aggregated with such potential liability for a complete
withdrawal from all Multiemployer Plans, could not reasonably be expected to
have a Material Adverse Effect.

4.12     CERTAIN FEES.

         No broker's or finder's fee or commission will be payable with
respect to this Agreement or any of the transactions contemplated hereby, and
Borrowers hereby indemnify Lenders against, and agree that each of them will
hold Lenders harmless from, any claim, demand or liability for any such
broker's or finder's fees alleged to have been incurred in connection herewith
or therewith and any expenses (including reasonable fees, expenses and
disbursements of counsel) arising in connection with any such claim, demand or
liability.

4.13     ENVIRONMENTAL PROTECTION.

                  (i)      No Loan Party nor any of its Subsidiaries nor any
         of their respective Facilities or operations are subject to any
         outstanding written order, consent decree or settlement agreement
         with any Person relating to (a) any Environmental Law, (b) any
         Environmental Claim, or (c) any Hazardous Materials Activity that,
         individually or in the aggregate, could reasonably be expected to
         have a Material Adverse Effect;

                  (ii)     No Loan Party nor any of its Subsidiaries has
         received any letter or request for information under Section 104 of
         the Comprehensive Environmental Response, Compensation, and Liability
         Act (42 U.S.C. Section 9604) or any comparable state law;

                  (iii)    There are and, to Borrowers' knowledge, have been
         no conditions, occurrences, or Hazardous Materials Activities which
         could reasonably be expected to form the basis of an Environmental
         Claim against any Loan Party or any of its Subsidiaries that,
         individually or in the aggregate, could reasonably be expected to
         have a Material Adverse Effect;

                  (iv)     Except as could not, individually or in the
         aggregate, reasonably be expected to have a Material Adverse Effect,
         no Loan Party nor any of its Subsidiaries nor, to Borrower's
         knowledge, any predecessor of Company or any of its Subsidiaries has
         filed any notice under any Environmental Law indicating past or
         present treatment of

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<PAGE>   70

         Hazardous Materials at any Facility, and no Loan Party or any of its
         Subsidiaries' operations involves the generation, transportation,
         treatment, storage or disposal of hazardous waste, as defined under
         40 C.F.R. Parts 260-270 or any state equivalent;

                  (v)      Compliance with all current or, to the best
         knowledge of each Loan Party, reasonably foreseeable future
         requirements pursuant to or under Environmental Laws could not,
         individually or in the aggregate, be reasonably expected to have a
         Material Adverse Effect.

         Notwithstanding anything in this subsection 4.13 to the contrary, no
event or condition has occurred or is occurring with respect to any Loan Party
or any of its Subsidiaries relating to any Environmental Law, any Release of
Hazardous Materials, or any Hazardous Materials Activity which individually or
in the aggregate has had or could reasonably be expected to have a Material
Adverse Effect.

4.14     EMPLOYEE MATTERS.

         Except as set forth in Schedule 4.14 annexed hereto, no Loan Party or
any of its Subsidiaries is as of the date hereof, a party to any collective
bargaining agreement and, to the knowledge of any Loan Party, no union
representation question exists as of the date hereof with respect to the
employees of any Loan Party or any of its Subsidiaries. There is no strike,
work stoppage, slowdown, lockout or any other labor dispute pending, or to the
knowledge of Borrowers threatened, involving any Loan Party or any of its
Subsidiaries that individually or in the aggregate could reasonably be
expected to have a Material Adverse Effect.

4.15     SOLVENCY.

         Each Loan Party is and, upon the incurrence of any Obligations by
such Loan Party on any date on which this representation is made, will be,
Solvent.

4.16     MATTERS RELATING TO COLLATERAL.

         (A) CREATION, PERFECTION AND PRIORITY OF LIENS. The execution and
delivery of the Collateral Documents by Loan Parties, together with (i) the
actions taken on or prior to the date hereof pursuant to the Original Credit
Agreement and thereafter pursuant to subsection 5.8 and (ii) the delivery to
Administrative Agent of any Pledged Collateral not delivered to Administrative
Agent at the time of execution and delivery of the applicable Collateral
Document (all of which Pledged Collateral has been so delivered) are effective
to create in favor of Administrative Agent for the benefit of Lenders, as
security for the respective Secured Obligations (as defined in the applicable
Collateral Document in respect of any Collateral), a valid and perfected First
Priority Lien on all of the Collateral, and all filings and other actions
necessary or desirable to perfect and maintain the perfection and First
Priority status of such Liens have been duly made or taken and remain in full
force and effect, other than the periodic filing of UCC continuation
statements in respect of UCC financing statements filed by or on behalf of
Administrative Agent.

         (B) GOVERNMENTAL AUTHORIZATIONS. No authorization, approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required for either

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<PAGE>   71

(i) the pledge or grant by any Loan Party of the Liens purported to be created
in favor of Administrative Agent pursuant to any of the Collateral Documents
or (ii) the exercise by Administrative Agent of any rights or remedies in
respect of any Collateral (whether specifically granted or created pursuant to
any of the Collateral Documents or created or provided for by applicable law),
except for filings or recordings contemplated by subsection 4.16A and except
as may be required, in connection with the disposition of any Pledged
Collateral, by laws generally affecting the offering and sale of securities.

         (C) ABSENCE OF THIRD-PARTY FILINGS. Except such as may have been
filed in favor of Administrative Agent as contemplated by subsection 4.16A and
in respect of Liens permitted under subsection 6.2A, no effective UCC
financing statement, fixture filing or other instrument similar in effect
covering all or any part of the Collateral is on file in any filing or
recording office.

         (D) MARGIN REGULATIONS. The pledge of the Pledged Collateral pursuant
to the Collateral Documents does not violate Regulation T, U or X of the Board
of Governors of the Federal Reserve System.

         (E) INFORMATION REGARDING COLLATERAL. All information supplied to
Administrative Agent by or on behalf of any Loan Party with respect to any of
the Collateral (in each case taken as a whole with respect to any particular
Collateral) is accurate and complete in all material respects.

4.17     DISCLOSURE.

         As of the date hereof or if later the Restatement Effective Date, no
representation or warranty of any Loan Party or any of its Subsidiaries
contained in any Loan Document or in any other document, certificate or
written statement furnished to Lenders by or on behalf of any Loan Party or
any of its Subsidiaries for use in connection with the transactions
contemplated by this Agreement contained any untrue statement of a material
fact or omitted to state a material fact necessary in order to make the
statements contained herein or therein not misleading in light of the
circumstances in which the same were made. Any projections and pro forma
financial information contained in such materials are based upon good faith
estimates and assumptions believed by management of Borrowers to be reasonable
at the time made, it being recognized by Lenders that such projections as to
future events are not to be viewed as facts and that actual results during the
period or periods covered by any such projections may differ from the
projected results. There are no facts known (or which should upon the
reasonable exercise of diligence be known) as of the date hereof or if later
the Restatement Effective Date, to either Borrower (other than matters of a
general economic nature) that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect and that have
not been disclosed herein or in such other documents, certificates and
statements furnished to Lenders for use in connection with the transactions
contemplated hereby.

4.18     REPRESENTATIONS CONCERNING CASH MANAGEMENT SYSTEM.

         The description of the Loan Parties' cash management system set forth
in Schedule 4.18 annexed hereto is accurate and complete in all respects as of
the Restatement Effective Date. No

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Loan Party owns or maintains any Deposit Account which is not described in
Schedule 4.18 or otherwise permitted pursuant to subsection 5.11.

                                  SECTION 5.
                       BORROWERS' AFFIRMATIVE COVENANTS

         Each Borrower covenants and agrees that until payment in full of all
of the Loans and other Obligations unless Requisite Lenders shall otherwise
give prior written consent, such Borrower shall perform, and shall cause each
of its Subsidiaries to perform, all covenants in this Section 5.

5.1      FINANCIAL STATEMENTS AND OTHER REPORTS.

         Each Borrower will maintain, and cause each of its Subsidiaries to
maintain, a system of accounting established and administered in accordance
with sound business practices to permit preparation of financial statements in
conformity with GAAP. Company will deliver to Administrative Agent and
Lenders:

                  (i)      Monthly Financials:  as soon as available and in
         any event within 30 days after the end of each month other than the
         last month of each Fiscal Quarter, the consolidated balance sheet of
         Company and its Subsidiaries as at the end of such month and the
         related consolidated statements of income and cash flows of Company
         and its Subsidiaries for such month and for the period from the
         beginning of the then current Fiscal Year to the end of such month,
         setting forth in each case in comparative form the corresponding
         figures for the corresponding periods of the previous Fiscal Year and
         the corresponding figures from the Financial Plan for the current
         Fiscal Year, to the extent prepared on a monthly basis, all in
         reasonable detail and certified by the chief financial officer of
         Company that they fairly present, in all material respects, the
         financial condition of Company and its Subsidiaries as at the dates
         indicated and the results of their operations and their cash flows
         for the periods indicated, subject to changes resulting from audit
         and normal year-end adjustments;

                  (ii)     Quarterly Financials:  as soon as available and in
         any event within 45 days after the end of each Fiscal Quarter, (a)
         the consolidated balance sheet of Company and its Subsidiaries as at
         the end of such Fiscal Quarter and the related consolidated
         statements of income, stockholders' equity and cash flows of Company
         and its Subsidiaries for such Fiscal Quarter and for the period from
         the beginning of the then current Fiscal Year to the end of such
         Fiscal Quarter, setting forth in each case in comparative form the
         corresponding figures for the corresponding periods of the previous
         Fiscal Year and the corresponding figures from the Financial Plan for
         the current Fiscal Year, all in reasonable detail and certified by
         the chief financial officer of Company that they fairly present, in
         all material respects, the financial condition of Company and its
         Subsidiaries as at the dates indicated and the results of their
         operations and their cash flows for the periods indicated, subject to
         changes resulting from audit and normal year-end adjustments, and (b)
         a narrative report describing the operations of Company and its
         Subsidiaries in the form prepared for presentation to senior
         management for such Fiscal

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<PAGE>   73

         Quarter and for the period from the beginning of the then current
         Fiscal Year to the end of such Fiscal Quarter;

                  (iii)    Year-End Financials:  as soon as available and in
         any event within 90 days after the end of each Fiscal Year, (a) the
         consolidated balance sheet of Company and its Subsidiaries as at the
         end of such Fiscal Year and the related consolidated statements of
         income, stockholders' equity and cash flows of Company and its
         Subsidiaries for such Fiscal Year, setting forth in each case in
         comparative form the corresponding figures for the previous Fiscal
         Year and the corresponding figures from the Financial Plan for the
         Fiscal Year covered by such financial statements, all in reasonable
         detail and certified by the chief financial officer of Company that
         they fairly present, in all material respects, the financial
         condition of Company and its Subsidiaries as at the dates indicated
         and the results of their operations and their cash flows for the
         periods indicated, (b) a narrative report describing the operations
         of Company and its Subsidiaries in the form prepared for presentation
         to senior management for such Fiscal Year, and (c) in the case of
         such consolidated financial statements, a report thereon of KPMG Peat
         Marwick LLP or other independent certified public accountants of
         recognized national standing selected by Company and satisfactory to
         Administrative Agent, which report shall be unqualified, shall
         express no doubts about the ability of Company and its Subsidiaries
         to continue as a going concern, and shall state that such
         consolidated financial statements fairly present, in all material
         respects, the consolidated financial position of Company and its
         Subsidiaries as at the dates indicated and the results of their
         operations and their cash flows for the periods indicated in
         conformity with GAAP applied on a basis consistent with prior years
         (except as otherwise disclosed in such financial statements) and that
         the examination by such accountants in connection with such
         consolidated financial statements has been made in accordance with
         generally accepted auditing standards;

                  (iv)     Officers' and Compliance Certificates:  together
         with each delivery of financial statements of Company and its
         Subsidiaries pursuant to subdivisions (ii) and (iii) above, (a) an
         Officers' Certificate of Company stating that the signers have
         reviewed the terms of this Agreement and have made, or caused to be
         made under their supervision, a review in reasonable detail of the
         transactions and condition of Company and its Subsidiaries during the
         accounting period covered by such financial statements and that such
         review has not disclosed the existence during or at the end of such
         accounting period, and that the signers do not have knowledge of the
         existence as at the date of such Officers' Certificate, of any
         condition or event that constitutes an Event of Default or Potential
         Event of Default, or, if any such condition or event existed or
         exists, specifying the nature and period of existence thereof and
         what action Company has taken, is taking and proposes to take with
         respect thereto; and (b) a Compliance Certificate demonstrating in
         reasonable detail compliance during and at the end of the applicable
         accounting periods with the restrictions contained in Section 6, in
         each case to the extent compliance with such restrictions is required
         to be tested at the end of the applicable accounting period;

                  (v)      Reconciliation Statements:  if, as a result of any
         change in accounting principles and policies from those used in the
         preparation of the audited financial statements referred to in
         subsection 4.3, the consolidated financial statements of

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         Company and its Subsidiaries delivered pursuant to subdivisions (i),
         (ii), (iii) or (xiii) of this subsection 5.1 will differ in any
         material respect from the consolidated financial statements that
         would have been delivered pursuant to such subdivisions had no such
         change in accounting principles and policies been made, then (a)
         together with the first delivery of financial statements pursuant to
         subdivision (i), (ii), (iii) or (xiii) of this subsection 5.1
         following such change, consolidated financial statements of Company
         and its Subsidiaries for (1) the current Fiscal Year to the effective
         date of such change and (2) the two full Fiscal Years immediately
         preceding the Fiscal Year in which such change is made, in each case
         prepared on a pro forma basis as if such change had been in effect
         during such periods, and (b) together with each delivery of financial
         statements pursuant to subdivision (i), (ii), (iii) or (xiii) of this
         subsection 5.1 following such change, a written statement of the
         chief accounting officer or chief financial officer of Company
         setting forth the differences (including any differences that would
         affect any calculations relating to the financial covenants set forth
         in subsection 6.6) which would have resulted if such financial
         statements had been prepared without giving effect to such change;

                  (vi)     Accountants' Certification:  together with each
         delivery of consolidated financial statements of Company and its
         Subsidiaries pursuant to subdivision (iii) above, a written statement
         by the independent certified public accountants giving the report
         thereon (a) stating that their audit examination has included a
         review of the terms of this Agreement and the other Loan Documents as
         they relate to accounting matters, (b) stating whether, in connection
         with their audit examination, any condition or event that constitutes
         an Event of Default or Potential Event of Default has come to their
         attention and, if such a condition or event has come to their
         attention, specifying the nature and period of existence thereof;
         provided that such accountants shall not be liable by reason of any
         failure to obtain knowledge of any such Event of Default or Potential
         Event of Default that would not be disclosed in the course of their
         audit examination, and (c) stating that based on their audit
         examination nothing has come to their attention that causes them to
         believe either or both that the information contained in the
         certificates delivered therewith pursuant to subdivision (iv) above
         is not correct or that the matters set forth in the Compliance
         Certificates delivered therewith pursuant to clause (b) of
         subdivision (iv) above for the applicable Fiscal Year are not stated
         in accordance with the terms of this Agreement;

                  (vii)    Accountants' Reports: promptly upon receipt thereof
         (unless restricted by applicable professional standards), copies of
         all reports submitted to Company by independent certified public
         accountants in connection with each annual, interim or special audit
         of the financial statements of Company and its Subsidiaries made by
         such accountants, including any comment letter (including any draft
         letter containing comments which remain unresolved 30 days after the
         submission thereof) submitted by such accountants to management in
         connection with their annual audit;

                  (viii)   SEC Filings and Press Releases:  promptly upon
         their becoming available, copies of (a) all financial statements,
         reports, notices and proxy statements sent or made available
         generally by Company to its security holders or by any Subsidiary of
         Company to its security holders other than Company or another
         Subsidiary of Company, (b) all regular and periodic reports and all
         registration statements (other than on Form S-8 or a

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<PAGE>   75

         similar form) and prospectuses, if any, filed by Company or any of
         its Subsidiaries with any securities exchange or with the Securities
         and Exchange Commission, and (c) all press releases and other
         statements made available generally by Company or any of its
         Subsidiaries to the public concerning material developments in the
         business of Company or any of its Subsidiaries;

                  (ix)     Events of Default, Failure to Meet Cash Balances
         Requirement, etc.:  promptly upon any officer of Company obtaining
         knowledge (a) of any condition or event that constitutes an Event of
         Default or Potential Event of Default, or becoming aware that any
         Lender has given any notice (other than to Administrative Agent) or
         taken any other action with respect to a claimed Event of Default or
         Potential Event of Default, (b) that Borrowers are not in compliance
         with the Cash Balances Requirement set forth in subsection 6.6(A)(v),
         (c) that any Person has given any notice to Company or any of its
         Subsidiaries or taken any other action with respect to a claimed
         default or event or condition of the type referred to in subsection
         7.2, (d) of any condition or event that would be required to be
         disclosed in a current report filed by Company with the Securities
         and Exchange Commission on Form 8-K (Items 1, 2, 4, 5 and 6 of such
         Form as in effect on the Closing Date) if Company were required to
         file such reports under the Exchange Act, or (e) of the occurrence of
         any event or change that has caused or evidences, or could reasonably
         be expected to cause or evidence, either in any case or in the
         aggregate, a Material Adverse Effect, an Officers' Certificate
         specifying the nature and period of existence of such condition,
         event or change, or specifying the notice given or action taken by
         any such Person and the nature of such claimed Event of Default,
         Potential Event of Default, default, event or condition, and what
         action Company has taken, is taking and proposes to take with respect
         thereto;

                  (x)      Litigation or Other Proceedings: promptly upon any
         officer of Company obtaining knowledge of (a) the institution of, or
         non-frivolous threat of, any action, suit, proceeding (whether
         administrative, judicial or otherwise), governmental investigation or
         arbitration against or affecting any Loan Party or any of its
         Subsidiaries or any property of any Loan Party or any of its
         Subsidiaries (collectively, "PROCEEDINGS") not previously disclosed
         in writing by Company to Lenders or (b) any material development in
         any Proceeding that, in any case:

                                    (1)      if adversely determined, has a
                           reasonable possibility of giving rise to a Material
                           Adverse Effect; or

                                    seeks to enjoin or otherwise prevent the
                           consummation of, or to recover any damages or
                           obtain relief as a result of, the transactions
                           contemplated hereby;

         written notice thereof together with such other information as may be
         reasonably available to Company to enable Lenders and their counsel
         to evaluate such matters;

                  (xi)     ERISA Events: promptly upon becoming aware of the
         occurrence of or forthcoming occurrence of any ERISA Event that could
         reasonably be expected to have a Material Adverse Effect, a written
         notice specifying the nature thereof, what action Loan

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<PAGE>   76

         Parties or any of their respective ERISA Affiliates has taken, is
         taking or proposes to take with respect thereto and, when known, any
         action taken or threatened by the Internal Revenue Service, the
         Department of Labor or the PBGC with respect thereto;

                  (xii)    ERISA Notices: with reasonable promptness, copies
         of (a) if requested by Administrative Agent, each Schedule B
         (Actuarial Information) to the annual report (Form 5500 Series) filed
         by Loan Parties or any of their respective ERISA Affiliates with the
         Internal Revenue Service with respect to each Pension Plan; (b) all
         notices received by Loan Parties or any of their respective ERISA
         Affiliates from a Multiemployer Plan sponsor concerning an ERISA
         Event that could reasonably be expected to have a Material Adverse
         Effect; and (c) copies of such other documents or governmental
         reports or filings relating to any Employee Benefit Plan as
         Administrative Agent shall reasonably request;

                  (xiii)   Financial Plans:  as soon as practicable and in any
         event no later than 45 days after the end of each Fiscal Year, a
         consolidated plan and financial forecast for the next succeeding
         Fiscal Year (the "FINANCIAL PLAN"), consisting of (a) a forecasted
         consolidated balance sheet and forecasted consolidated statements of
         income and cash flows of Company and its Subsidiaries for such Fiscal
         Year, together with a pro forma Compliance Certificate for such
         Fiscal Year and an explanation of the assumptions on which such
         forecasts are based, (b) forecasted consolidated statements of income
         and cash flows of Company and its Subsidiaries for each month of such
         Fiscal Year, together with an explanation of the assumptions on which
         such forecasts are based, and (c) such other information and
         projections as any Lender may reasonably request;

                  (xiv)    Insurance: as soon as practicable and in any event
         by the last day of each Fiscal Year, a report in form and substance
         satisfactory to Administrative Agent outlining all material insurance
         coverage maintained as of the date of such report by Company and its
         Subsidiaries and all material insurance coverage planned to be
         maintained by Company and its Subsidiaries in the immediately
         succeeding Fiscal Year;

                  (xv)     Board of Directors:  with reasonable promptness,
         written notice of any change in the Board of Directors of Company;

                  (xvi)    New Subsidiaries: promptly upon any Person becoming
         a Subsidiary of Company, a written notice setting forth with respect
         to such Person (a) the date on which such Person became a Subsidiary
         of Company and (b) all of the data required to be set forth in
         Schedule 4.1 annexed hereto with respect to all Subsidiaries of
         Company (it being understood that such written notice shall be deemed
         to supplement Schedule 4.1 annexed hereto for all purposes of this
         Agreement);

                  (xvii)   Licenses, etc.:  promptly upon (a) receipt of
         notice of (1) any forfeiture, non-renewal, cancellation, termination,
         revocation, suspension, impairment or material modification of any
         material License held by Company or any of its Subsidiaries, or any
         notice of default or forfeiture with respect to any such material
         License, or (2) any refusal by any Communications Regulatory
         Authority to renew or extend any such material License, an Officers'
         Certificate specifying the nature of such event, the period of

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<PAGE>   77

         existence thereof, and what action Company or its Subsidiaries are
         taking and propose to take with respect thereto, and (b) any
         acquisition of a Related Telecommunications Business, a written
         notice setting forth with respect to the business acquired all of the
         data required to be set forth in Schedule 4.1E under subsection 4.1E
         with respect to such business and the material Licenses required in
         connection with the operation of such business (it being understood
         that such written notice shall be deemed to supplement Schedule 4.1E
         annexed hereto for all purposes of this Agreement);

                  (xviii)  UCC Search Report: As promptly as practicable after
         the Closing Date or the date of delivery to Administrative Agent of
         any subsequent UCC financing statements executed by any Loan Party
         pursuant to subsection 3.1H(iv) of the Original Credit Agreement or
         subsection 5.8A hereof, upon request of Administration Agent, copies
         of completed UCC searches evidencing the proper filing, recording and
         indexing of all such UCC financing statements and listing all other
         effective financing statements that name such Loan Party as debtor,
         together with copies of all such other financing statements not
         previously delivered to Administrative Agent by or on behalf of
         Company or such Loan Party;

                  (xix)    Updated Financial Forecast Projections:  no later
         than October 30, 2000, updated financial forecast projections in form
         and substance reasonably satisfactory to Arranger and Administrative
         Agent;

                  (xx)     Professional Advisor Materials: The Company shall
         deliver to Lenders copies of any final engagement letters or other
         agreements (with any specific compensation terms redacted therefrom),
         pursuant to which the Company has engaged any professional advisor to
         advise them with respect to potential asset sales or other strategic
         alternatives and copies of any final offering memorandum or similar
         documents prepared in connection with any proposed asset sales or
         other strategic alternatives;

                  (xxi)    Officers' Certificate for Cash Balance Requirement:
         Concurrently with delivery of the monthly financial statements to be
         delivered under subsection 6.1(i) and at any time within two Business
         Days after request by Administrative Agent therefor, Company shall
         deliver an Officers' Certificate certifying the compliance of Company
         and its Restricted Subsidiaries with the Cash Balance Requirement and
         setting forth the calculation of the Cash Balances including separate
         line items stating the total amount of Cash and Cash Equivalents, the
         amount of Cash or Cash Equivalents held in escrow or other restricted
         accounts (including a separate line item for any ACSI Escrow Funds
         permitted to be included in Cash Balances) and the amount of accounts
         payable more than 60 days past due; and

                  (xxii)   Other Information:  With reasonable promptness,
         such other information and data with respect to Company or any of its
         Subsidiaries as from time to time may be reasonably requested by any
         Lender.

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5.2      CORPORATE EXISTENCE, ETC.

         Except as permitted under subsection 6.8, each Borrower will, and
will cause each of its Restricted Subsidiaries to, at all times preserve and
keep in full force and effect its corporate existence and all rights and
franchises material to its business; provided, however that neither Company
nor any of its Restricted Subsidiaries shall be required to preserve any such
right or franchise if the Board of Directors of Company or such Subsidiary
shall determine that the preservation thereof is no longer desirable in the
conduct of the business of Company or such Subsidiary, as the case may be, and
that the loss thereof is not disadvantageous in any material respect to
Company, such Subsidiary or Lenders.

5.3      PAYMENT OF TAXES AND CLAIMS; TAX CONSOLIDATION.

         (A) Company will, and will cause each of its Subsidiaries to, pay all
material taxes, assessments and other governmental charges imposed upon it or
any of its properties or assets or in respect of any of its income, businesses
or franchises before any material penalty accrues thereon, and all material
claims (including claims for labor, services, materials and supplies) for sums
that have become due and payable and that by law have or may become a Lien
upon any of its properties or assets, prior to the time when any material
penalty or fine shall be incurred with respect thereto; provided that no such
charge or claim need be paid if it is being contested in good faith by
appropriate proceedings promptly instituted and diligently conducted, so long
as (1) such reserve or other appropriate provision, if any, as shall be
required in conformity with GAAP shall have been made therefor and (2) in the
case of a charge or claim which has or may become a Lien against any of the
Collateral, such contest proceedings conclusively operate to stay the sale of
any portion of the Collateral to satisfy such charge or claim.

         (B) Neither Borrower will, nor will it permit any of its Subsidiaries
to, file or consent to the filing of any consolidated income tax return with
any Person (other than Company or any of its Subsidiaries).

5.4      MAINTENANCE OF PROPERTIES; INSURANCE; APPLICATION OF NET
         INSURANCE/CONDEMNATION PROCEEDS.

         (A) MAINTENANCE OF PROPERTIES. Each Borrower will, and will cause
each of its Subsidiaries to, maintain or cause to be maintained in good
repair, working order and condition, ordinary wear and tear excepted, all
material properties used or useful in the business of Company and its
Subsidiaries (including all Intellectual Property) and from time to time will
make or cause to be made all appropriate repairs, renewals and replacements
thereof.

         (B) INSURANCE. Company will maintain or cause to be maintained, with
financially sound and reputable insurers, such public liability insurance,
third party property damage insurance, business interruption insurance and
casualty insurance with respect to liabilities, losses or damage in respect of
the assets, properties and businesses of Company and its Subsidiaries as may
customarily be carried or maintained under similar circumstances by
corporations of established reputation engaged in similar businesses, in each
case in such amounts (giving effect to self-insurance), with such deductibles,
covering such risks and otherwise on such terms and conditions as shall be
customary for corporations similarly situated in the industry. Without

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limiting the generality of the foregoing, Company will maintain or cause to be
maintained replacement value casualty insurance on the Collateral under such
policies of insurance, with such insurance companies, in such amounts, with
such deductibles, and covering such risks as are at all times satisfactory to
Administrative Agent in its commercially reasonable judgment. Each such policy
of insurance shall (a) name Administrative Agent for the benefit of Lenders as
an additional insured thereunder as its interests may appear and (b) in the
case of each business interruption and casualty insurance policy, contain a
loss payable clause or endorsement, satisfactory in form and substance to
Administrative Agent, that names Administrative Agent for the benefit of
Lenders as the loss payee thereunder and provides for at least 30 days prior
written notice to Administrative Agent of any modification or cancellation of
such policy.

         (C)      APPLICATION OF NET INSURANCE/CONDEMNATION PROCEEDS.

                  (i)      Business Interruption Insurance. Upon receipt by
         Company or any of its Restricted Subsidiaries of any business
         interruption insurance proceeds constituting Net
         Insurance/Condemnation Proceeds, (a) so long as no Event of Default
         or Potential Event of Default shall have occurred and be continuing,
         Company or such Subsidiary may retain and apply such Net
         Insurance/Condemnation Proceeds for working capital purposes, and (b)
         if an Event of Default or Potential Event of Default shall have
         occurred and be continuing, Company shall apply an amount equal to
         such Net Insurance/Condemnation Proceeds to prepay the Loans as
         provided in subsection 2.4B(iii)(b);

                  (ii)     Casualty Insurance/Condemnation Proceeds.  Upon
         receipt by Company or any of its Restricted Subsidiaries of any Net
         Insurance/Condemnation Proceeds other than from business interruption
         insurance, (a) so long as no Event of Default or Potential Event of
         Default shall have occurred and be continuing, Company may deliver to
         Administrative Agent an Officers' Certificate setting forth the
         amount of the Net Insurance/Condemnation Proceeds received and that
         Company or such Subsidiary intends to use such Net
         Insurance/Condemnation Proceeds within 270 days of such date of
         receipt to pay or reimburse the costs of repairing, restoring or
         replacing the assets in respect of which such Net
         Insurance/Condemnation Proceeds were received or to reinvest in
         equipment or other Telecommunications Assets and Company shall, or
         shall cause one or more of its Subsidiaries to, promptly and
         diligently apply such to pay or reimburse the costs of repairing,
         restoring or replacing the assets in respect of which such Net
         Insurance/Condemnation Proceeds were received or reinvest all or a
         portion thereof in equipment or other Telecommunications Assets or,
         to the extent not so applied or reinvested, to prepay the Loans as
         provided in subsection 2.4B(iii)(b), and (b) if an Event of Default
         or Potential Event of Default shall have occurred and be continuing,
         Company shall apply an amount equal to such Net
         Insurance/Condemnation Proceeds to prepay the Loans as provided in
         subsection 2.4B(iii)(b).

                  (iii)    Net Insurance/Condemnation Proceeds Received by
         Administrative Agent.  Upon receipt by Administrative Agent of any
         Net Insurance/Condemnation Proceeds as loss payee, (a) if and to the
         extent Company would have been required to apply such Net
         Insurance/Condemnation Proceeds (if it had received them directly) to
         prepay the Loans, Administrative Agent shall, and Company hereby
         authorizes

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         Administrative Agent to, apply such Net Insurance/Condemnation
         Proceeds to prepay the Loans as provided in subsection 2.4B(iii)(b),
         and (b) to the extent the foregoing clause (a) does not apply,
         Administrative Agent shall deliver such Net Insurance/Condemnation
         Proceeds to Company, and Company shall, or shall cause one or more of
         its Subsidiaries to, promptly and diligently apply such Net
         Insurance/Condemnation Proceeds in accordance with subsection
         5.4C(i)(a) or 5.4C(ii)(a), as applicable.

5.5      INSPECTION RIGHTS; AUDITS OF INVENTORY AND ACCOUNTS RECEIVABLE;
         LENDER MEETING.

         (A) INSPECTION RIGHTS. Each Borrower shall, and shall cause each of
its Subsidiaries to, permit any authorized representatives designated by any
Lender to visit and inspect any of the properties of Company or of any of its
Subsidiaries, to inspect, copy their financial and accounting records, and to
discuss its and their affairs, finances and accounts with its and their
officers and independent public accountants (provided that Company may, if it
so chooses, be present at or participate in any such discussion), all upon
reasonable notice and at such reasonable times during normal business hours
and as often as may reasonably be requested.

         (B) LENDER MEETING. Each Borrower will, upon the request of Arranger,
Administrative Agent or Requisite Lenders, participate in a meeting of
Administrative Agent and Lenders once during each Fiscal Year to be held at
Company's corporate offices (or at such other location as may be agreed to by
Company and Administrative Agent) at such time as may be agreed to by Company
and Administrative Agent.

5.6      COMPLIANCE WITH LAWS, ETC.

         Each Borrower shall comply, and shall cause each of its Subsidiaries
to comply, with the requirements of all applicable laws, rules, regulations
and orders of any governmental authority (including all Environmental Laws),
noncompliance with which could reasonably be expected to cause, individually
or in the aggregate, a Material Adverse Effect.

5.7      ENVIRONMENTAL REVIEW AND INVESTIGATION, DISCLOSURE, ETC.; COMPANY'S
         ACTIONS REGARDING HAZARDOUS MATERIALS ACTIVITIES, ENVIRONMENTAL
         CLAIMS AND VIOLATIONS OF ENVIRONMENTAL LAWS.

         (A) ENVIRONMENTAL REVIEW AND INVESTIGATION. Each Borrower agrees that
Administrative Agent may, from time to time and in its reasonable discretion,
(i) retain, at Company's expense, an independent professional consultant to
review any environmental audits, investigations, analyses and reports relating
to Hazardous Materials prepared by or for any Loan Party and (ii) in the event
(a) Administrative Agent reasonably believes that any Loan Party has breached
any representation, warranty or covenant contained in subsection 4.6, 4.13,
5.6 or 5.7 which individually or in the aggregate could reasonably be expected
to have a Material Adverse Effect or that there has been a violation of
Environmental Laws which individually or in the aggregate could reasonably be
expected to have a Material Adverse Effect at any Facility or by Company or
any of its Subsidiaries at any other location or (b) an Event of Default has
occurred and is continuing, conduct its own investigation of any Facility;
provided that, in the case of any Facility no longer owned, leased, operated
or used by Company or any of its Subsidiaries, Company shall only be obligated
to use commercially reasonable efforts to obtain permission for

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Administrative Agent's professional consultant to conduct an investigation of
such Facility. For purposes of conducting such a review and/or investigation,
each Borrower to the extent it has the power and authority to do so hereby
grants to Administrative Agent and its agents, employees, consultants and
contractors the right to enter into or onto any Facilities currently owned,
leased, operated or used by Company or any of its Subsidiaries and to perform
such tests on such property (including taking samples of soil, groundwater and
suspected asbestos-containing materials) as are reasonably necessary in
connection therewith. Any such investigation of any Facility shall be
conducted, unless otherwise agreed to by Borrowers and Administrative Agent,
during normal business hours and, to the extent reasonably practicable, shall
be conducted so as not to interfere with the ongoing operations at such
Facility or to cause any damage or loss to any property at such Facility.
Borrowers and Administrative Agent hereby acknowledge and agree that any
report of any investigation conducted at the request of Administrative Agent
pursuant to this subsection 5.7A will be obtained and shall be used by
Administrative Agent and Lenders for the purposes of Lenders' internal credit
decisions, to monitor and police the Loans and to protect Lenders' security
interests, if any, created by the Loan Documents. Administrative Agent agrees
to deliver a copy of any such report to Borrowers with the understanding that
each Borrower acknowledges and agrees that (1) it will indemnify and hold
harmless Administrative Agent and each Lender from any costs, losses or
liabilities relating to such Borrower's use of or reliance on such report, (2)
neither Administrative Agent nor any Lender makes any representation or
warranty with respect to such report, and (3) by delivering such report to
each Borrower, neither Administrative Agent nor any Lender is requiring or
recommending the implementation of any suggestions or recommendations
contained in such report.

         (B) ENVIRONMENTAL DISCLOSURE.  Borrowers will deliver to
Administrative Agent and Lenders:

                  (i)      Environmental Audits and Reports. As soon as
         practicable following receipt thereof, copies of all material and
         non-privileged environmental audits, investigations, analyses and
         reports of any kind or character, whether prepared by personnel of
         Company or any of its Subsidiaries or by independent consultants,
         governmental authorities or any other Persons, with respect to
         significant environmental matters at any Facility which, individually
         or in the aggregate, could reasonably be expected to result in a
         Material Adverse Effect or with respect to any Environmental Claims
         which, individually or in the aggregate, could reasonably be expected
         to result in a Material Adverse Effect;

                  (ii)     Notice of Certain Releases, Remedial Actions, Etc.
         Promptly upon the occurrence thereof, written notice describing in
         reasonable detail (a) any Release required to be reported to any
         federal, state or local governmental or regulatory agency under any
         applicable Environmental Laws that could individually or in the
         aggregate reasonably be expected to have a Material Adverse Effect,
         (b) any remedial action taken by Company or any other Person in
         response to (1) any Hazardous Materials Activities the existence of
         which has a reasonable possibility of resulting in one or more
         Environmental Claims that could, individually or in the aggregate,
         reasonably be expected to have a Material Adverse Effect, or (2) any
         Environmental Claims that could, individually or in the aggregate,
         reasonably be expected to have a reasonable possibility of resulting
         in a Material Adverse Effect.

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                  (iii)    Written Communications Regarding Environmental
         Claims, Releases, Etc.  As soon as practicable following the sending
         or receipt thereof by Company or any of its Subsidiaries, a copy of
         any and all material and non-privileged written communications with
         respect to (a) any Environmental Claims that, individually or in the
         aggregate, could reasonably be expected to have a Material Adverse
         Effect, (b) any Release required to be reported to any federal, state
         or local governmental or regulatory agency that could reasonably be
         expected to have, individually or in the aggregate, a Material
         Adverse Effect, and (c) any request for information from any
         governmental agency that suggests such agency is investigating
         whether Company or any of its Subsidiaries may be potentially
         responsible for any Hazardous Materials Activity that could
         reasonably be expected to have, individually or in the aggregate, a
         Material Adverse Effect.

                  (iv)     Notice of Certain Proposed Actions Having
         Environmental Impact.  Prompt written notice describing in reasonable
         detail (a) any proposed acquisition of stock, assets, or property by
         Company or any of its Subsidiaries that could reasonably be expected
         to (1) expose Company or any of its Subsidiaries to, or result in,
         Environmental Claims that could reasonably be expected to have,
         individually or in the aggregate, a Material Adverse Effect or (2)
         affect the ability of Company or any of its Subsidiaries to maintain
         in full force and effect all material Governmental Authorizations
         required under any Environmental Laws for their respective operations
         and (b) any proposed action to be taken by Company or any of its
         Subsidiaries to commence manufacturing or other industrial operations
         or to modify current operations in a manner that could reasonably be
         expected to subject Company or any of its Subsidiaries to any
         additional obligations or requirements under any Environmental Laws
         that could reasonably be expected to have, individually or in the
         aggregate, a Material Adverse Effect.

                  (v)      Other Information. With reasonable promptness, such
         other non-privileged documents and information as from time to time
         may be reasonably requested by Administrative Agent in relation to
         any matters disclosed pursuant to this subsection 5.7.

         (C) BORROWERS' ACTIONS REGARDING ENVIRONMENTAL CLAIMS AND VIOLATIONS
OF ENVIRONMENTAL LAWS. Each Borrower shall promptly take, and shall cause each
of its Subsidiaries promptly to take, any and all actions necessary to (i)
cure any violation of applicable Environmental Laws by Company or its
Subsidiaries that would reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect except when, and only to the extent that,
such Borrower's or such Subsidiary's obligation to comply with Environmental
Laws is being contested in good faith by such Borrower or Subsidiary, and (ii)
make an appropriate response to any Environmental Claim against Company or any
of its Subsidiaries and discharge any obligations it may have to any Person
thereunder where failure to do so could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.

5.8      EXECUTION OF SUBSIDIARY GUARANTY AND PERSONAL PROPERTY COLLATERAL
         DOCUMENTS BY CERTAIN SUBSIDIARIES AND FUTURE SUBSIDIARIES.

         (A) EXECUTION OF SUBSIDIARY GUARANTY AND PERSONAL PROPERTY COLLATERAL
DOCUMENTS. In the event that any Person becomes a Restricted Subsidiary of
Finance Sub after the date

                                      74

<PAGE>   83

hereof, Borrowers will promptly notify Administrative Agent of that fact and
cause such Restricted Subsidiary (i) to execute and deliver to Administrative
Agent counterparts of the Subsidiary Guaranty, the Finance Sub and Other
Subsidiary Pledge and Security Agreement, the Intercompany Pledge and Security
Agreement and the Intercompany Purchase Money Note and (ii) to take all such
further actions and execute all such further documents and instruments
(including actions, documents and instruments comparable to those described in
subsection 3.1H of the Original Credit Agreement) as may be necessary or
requested by Administrative Agent.

         (B) SUBSIDIARY ORGANIZATIONAL DOCUMENTS, LEGAL OPINIONS, ETC.
Borrowers shall deliver to Administrative Agent, together with the documents
required to be delivered pursuant to subsection 5.8A (the "SUBSIDIARY
DOCUMENTS"), (i) certified copies of such Subsidiary's Organizational
Documents certified by the Secretary of State of its jurisdiction of
organization, if such certification is generally available, and in each other
case by its secretary or assistant secretary together with, to the extent
generally available, a good standing certificate from the Secretary of State
of the jurisdiction of its organization and each other state in which such
Person is qualified as a foreign entity to do business, and a certificate or
other evidence of good standing as to payment of any applicable franchise or
similar taxes from the appropriate taxing authority of each of such
jurisdictions, each to be dated a recent date prior to their delivery to
Administrative Agent, (ii) a certificate executed by the secretary or an
assistant secretary of such Restricted Subsidiary as to (a) the fact that the
attached resolutions of the Board of Directors or board of managers or other
required authorizing authority of such Restricted Subsidiary approving and
authorizing the execution, delivery and performance of such Subsidiary
Documents are in full force and effect and have not been modified or amended
and (b) the incumbency and signatures of the officers of such Restricted
Subsidiary executing such Subsidiary Documents, and (iv) a favorable opinion
of counsel to such Restricted Subsidiary, in form and substance satisfactory
to Administrative Agent and its counsel, as to (a) the due organization and
good standing of such Restricted Subsidiary, (b) the due authorization,
execution and delivery by such Subsidiary of such Subsidiary Documents, (c)
the enforceability of such Subsidiary Documents against such Subsidiary, (d)
such other matters (including matters relating to the creation and perfection
of Liens in any Collateral pursuant to such Subsidiary Documents) as
Administrative Agent may reasonably request, all of the foregoing to be
satisfactory in form and substance to Administrative Agent and its counsel.

         (C) FOREIGN SUBSIDIARIES. Notwithstanding anything in the foregoing
subsection 5.8A to the contrary, in the event that (i) any Person becomes a
Subsidiary of Finance Sub after the date hereof and such Subsidiary is a
controlled foreign corporation (as defined in Section 957(a) or a successor
provision of the Internal Revenue Code) and (ii) the execution of a
counterpart of the Subsidiary Guaranty and the Collateral Documents required
to be executed by such Subsidiary pursuant to this subsection 5.8A or such
Subsidiary continuing to be a party to the Subsidiary Guaranty and the
Collateral Documents, if previously executed, will result in material negative
tax consequences to Company, then the Lenders hereby agree to enter into an
amendment to this Agreement providing that (a) such foreign subsidiary shall
not be required to execute counterparts of the Subsidiary Guaranty or the
Collateral Documents or shall be released from the Subsidiary Guaranty and
Collateral Documents to which it is a party, if previously executed, and (b)
Finance Sub or its Subsidiaries, as the case may be, shall only be required to
pledge, or continue to pledge, 65% of the Capital Stock of such foreign
subsidiary, pursuant to the Collateral Documents, if permitted under
applicable foreign law, or pursuant to an additional

                                      75

<PAGE>   84

pledge agreement or other documentation in conformity with applicable foreign
law to perfect Administrative Agent's security interest in such Capital Stock;
provided that (1) Borrowers shall agree to such amendments to this Agreement
as Lenders reasonably determine are necessary with respect to such foreign
subsidiary and (2) such amendment shall otherwise be in form and substance
reasonably satisfactory to Requisite Lenders. It being understood that if
following any such amendment in accordance with this subsection 5.8C, (x)
Administrative Agent or Requisite Lenders and Company reasonably determine at
any time that additional pledges of Capital Stock of any such foreign
subsidiary in excess of the 65% of the outstanding Capital Stock of such
foreign subsidiary or a guarantee from, or other creditors rights or security
interests in the assets of, any such foreign subsidiary (such additional
pledged stock, guaranties and creditors' rights and security interests in
assets, collectively, "ADDITIONAL SECURITY") may be obtained without Company
incurring any material tax liabilities, or (y) Administrative Agent and
Requisite Lenders agree to pay any additional tax liabilities incurred in
connection with the taking of Additional Security, Company shall cause such
Additional Security to be granted to Administrative Agent for the benefit of
Lenders, together with such supporting opinions of counsel and other documents
as Administrative Agent or Requisite Lenders shall reasonably request
consistent with the documents required to be delivered pursuant to subsection
5.8A.

         Notwithstanding anything in this subsection 5.8C to the contrary, the
provisions of this subsection 5.8C shall not apply to Global Advanced Networks
(Europe) B.V. ("GANE") as long as GANE (i) satisfies the conditions set forth
in clauses (b) and (c) of the definition of an Unrestricted Subsidiary, (ii)
conducts no business activities and (ii) does not have assets in excess of
$25,000.

5.9      PREPAYMENT OF MASTER NOTE.

         Finance Sub shall from time to time prepay the Master Note to the
extent necessary so that the aggregate outstanding amount under the Master
Note shall not at any time exceed the aggregate principal amounts outstanding
under the Intercompany Purchase Money Note.

5.10     INTEREST RATE PROTECTION.

         For the period beginning 60 days after the Closing Date until the
third anniversary of the Closing Date, Borrowers shall maintain in effect one
or more Interest Rate Agreements such that not less than 50% of Consolidated
Total Debt of Company and its Restricted Subsidiaries bears interest at a
fixed rate or is capped or swapped into a fixed rate pursuant to an Interest
Rate Agreement, each such Interest Rate Agreement to be in form and substance
satisfactory to Administrative Agent.

5.11     CASH MANAGEMENT SYSTEMS.

         Each Borrower shall, and shall cause each of its Restricted
Subsidiaries to, maintain the cash management system as described in Schedule
4.18 (as such system may be modified as permitted under this subsection 5.11,
the "CASH MANAGEMENT SYSTEM"). No later than 60 days after the Restatement
Effective Date, Borrowers shall have taken all action and executed all
documents reasonably requested by Administrative Agent to cause all Cash of
Company and each Subsidiary to be swept daily, in accordance with the Cash
Management System, into one or

                                      76

<PAGE>   85

more Deposit Accounts held in the name of Finance Sub, subject to Collateral
Account Agreements giving Administrative Agent, for the benefit of Lenders, a
First Priority perfected security interest in such accounts. Notwithstanding
the above, Borrowers and the Restricted Subsidiaries may open and close
Deposit Accounts and make other changes to the Cash Management System in the
ordinary course of business upon prior written notice to Administrative Agent
and as long as (i) no Event of Default or Potential Event of Default has
occurred and is continuing or would result therefrom, (ii) such changes,
either individually or in the aggregate, do not impair any rights of
Administrative Agent under the Collateral Documents and (iii) Borrowers remain
in compliance with this subsection 5.11.

5.12     STOCKHOLDER AND NASDAQ APPROVALS FOR COMMITTED PREFERRED.

         Company shall use its best efforts to obtain the Stockholder Approval
and any required NASDAQ approval as expeditiously as possible and to keep the
Lenders informed as to the progress of such efforts, including (i) filing a
preliminary proxy statement with the SEC in connection with calling a special
meeting of the stockholders to vote to approve the issuance of the Committed
Preferred and effect any increase in the authorized shares of the Company
necessary in connection therewith as soon as practicable after the Restatement
Effective Date, (ii) mailing the definitive proxy statement to stockholders as
soon as practicable after receiving SEC clearance, (iii) convening a special
meeting of stockholders as soon as practicable thereafter, and (iv) delivering
to Lenders copies of the preliminary and definitive proxy statements and any
correspondence with the SEC relating thereto.

5.13     LIQUIDITY REQUIREMENT.

         Company shall satisfy the Liquidity Requirement.

                                  SECTION 6.
                        BORROWERS' NEGATIVE COVENANTS

         Each Borrower covenants and agrees that until payment in full of all
of the Loans and other Obligations, unless Requisite Lenders shall otherwise
give prior written consent, each Borrower shall perform, and shall cause each
Restricted Subsidiary to perform, all covenants in this Section 6.

6.1      INDEBTEDNESS.

         Borrowers shall not, and shall not permit any Restricted Subsidiary
to, directly or indirectly, create, incur, assume or guaranty, or otherwise
become or remain directly or indirectly liable with respect to, any
Indebtedness, except:

                  (i)      Borrowers may become and remain liable with respect
         to the Obligations;

                  (ii)     Company may remain liable with respect to the
         Existing Senior Notes;

                  (iii)    Company may become and remain liable with respect
         to Additional Notes, provided, however, that Company shall be in pro
         forma compliance with the covenants contained in this Agreement after
         giving effect to the issuance thereof;

                                      77

<PAGE>   86

                  (iv)     Company and its Restricted Subsidiaries may become
         and remain liable with respect to Contingent Obligations permitted by
         subsection 6.4 and, upon any matured obligations actually arising
         pursuant thereto, the Indebtedness corresponding to the Contingent
         Obligations so extinguished;

                  (v)      Company and any Restricted Subsidiary of Company
         may become and remain liable with respect to Indebtedness to Company
         or any Restricted Subsidiary of Company; provided that all such
         intercompany Indebtedness shall be evidenced by intercompany
         promissory notes in the form of the Master Note, the Intercompany
         Purchase Money Note or the Intercompany Note, as applicable; and

                  (vi)     (a) Company and its Restricted Subsidiaries may
         become and remain liable with respect to existing Indebtedness
         described in Schedule 6.1 annexed hereto, (b) Company may become and
         remain liable with respect to Capital Lease Obligations and purchase
         money Indebtedness, the proceeds of which are used within 180 days of
         the incurrence thereof to purchase Telecommunications Assets in the
         ordinary course of business, provided that (1) such Capital Lease
         Obligations and purchase money Indebtedness are not secured by any
         Lien on any asset of Company or any Restricted Subsidiary other than
         such assets purchased with the proceeds of such Indebtedness (except,
         in the case of purchase money Indebtedness, for Liens expressly
         permitted by subsection 6.2A(iv)) and (2) at least 75% of the
         purchase price plus installation costs of such assets is provided by
         the proceeds of such Indebtedness, and (c) Company may become and
         remain liable with respect to Indebtedness incurred to extend, renew
         or refinance, in whole or in part, Indebtedness permitted under
         clauses (a) and (b) of this clause (vi), provided that (1) the
         principal amount of such refinancing Indebtedness does not exceed the
         principal amount of, premium, if any, and accrued interest on, the
         Indebtedness being refinanced immediately prior to such extension,
         renewal or refinancing and (2) such refinancing Indebtedness has a
         final maturity date not earlier than the maturity date of the
         Indebtedness being refinanced and a Weighted Average Life to Maturity
         equal to or greater than the Weighted Average Life to Maturity of the
         Indebtedness being refinanced; provided that at no time shall (x) the
         aggregate principal amount of Indebtedness outstanding under this
         subsection 6.1(vi) exceed (1) $50,000,000 prior to the date Company
         has received the Required Junior Capital or $200,000,000 after the
         date the Company has received the Required Junior Capital plus (2) on
         or after the later of (A) January 1, 2002 and (B) the date on which
         both the Liquidity Requirement has been satisfied and Company has
         received the Required Junior Capital (the "TRIGGER DATE") an amount
         equal to two multiplied by the amount of any Subsequent Junior
         Capital issued by the Company after the Trigger Date or (y) the sum
         of the aggregate principal amount of Indebtedness outstanding under
         this subsection 6.1(vi) plus the sum of the aggregate principal
         amounts of Series B Term Loans and Series C Term Loans outstanding
         exceed the Purchase Money Debt Allowance.

6.2      LIENS AND RELATED MATTERS.

         (A) PROHIBITION ON LIENS. Borrowers shall not, and shall not permit
any Restricted Subsidiary to, directly or indirectly, create, incur, assume or
permit to exist any Lien on or with respect to any property or asset of any
kind (including any document or instrument in respect of

                                      78

<PAGE>   87

goods or accounts receivable) of Borrowers or any of its Restricted
Subsidiaries, whether now owned or hereafter acquired, or any income or
profits therefrom, or file or permit the filing of, or permit to remain in
effect, any financing statement or other similar notice of any Lien with
respect to any such property, asset, income or profits under the Uniform
Commercial Code of any State or under any similar recording or notice statute,
except:

                  (i)      Permitted Encumbrances;

                  (ii)     Liens granted pursuant to the Collateral Documents;

                  (iii)    Existing Liens described in Schedule 6.2 annexed
         hereto; and

                  (iv)     Liens securing Indebtedness permitted pursuant to
         subsection 6.1(vi) so long as such Liens relate solely to the assets
         financed with such Indebtedness; provided that purchase money
         Indebtedness permitted pursuant to subsection 6.1(vi) may also be
         secured by subordinated Liens on the Collateral if the holder of such
         Indebtedness enters into an intercreditor agreement in form and
         substance satisfactory to Requisite Lenders in their sole discretion
         pursuant to which (a) such Liens are subordinate to the Liens on the
         Collateral granted to the Administrative Agent for the benefit of
         Lenders and (b) any deficiency claims of such holder related to such
         Indebtedness are subordinated to the Obligations.

         (B) NO FURTHER NEGATIVE PLEDGES. Except with respect to specific
property encumbered to secure payment of particular Indebtedness (including
Indebtedness permitted under subsection 6.1(vi)) or to be sold pursuant to an
executed agreement with respect to an Asset Sale, neither Borrower nor any of
its Restricted Subsidiaries shall enter into any agreement (other than any
agreement prohibiting only the creation of Liens securing Subordinated
Indebtedness) prohibiting the creation or assumption of any Lien upon any of
its properties or assets, whether now owned or hereafter acquired (other than
in connection with Additional Notes permitted under subsection 6.1(iii),
provided that the covenants regarding Liens are no more restrictive to Company
and its Subsidiaries than those in the Existing Senior Note Indentures).

         (C) NO RESTRICTIONS ON SUBSIDIARY DISTRIBUTIONS TO COMPANY OR OTHER
SUBSIDIARIES. Except as provided herein, each Borrower will not, and will not
permit any Restricted Subsidiaries to, create or otherwise cause or suffer to
exist or become effective any consensual encumbrance or restriction of any
kind on the ability of any such Restricted Subsidiary to (i) pay dividends or
make any other distributions on any of such Restricted Subsidiary's Capital
Stock owned by Company or any other Restricted Subsidiary of Company, (ii)
repay or prepay any Indebtedness owed by such Restricted Subsidiary to Company
or any other Restricted Subsidiary of Company, (iii) make loans or advances to
Company or any other Restricted Subsidiary of Company, or (iv) transfer any of
its property or assets to Company or any other Restricted Subsidiary of
Company, except for such encumbrances or restrictions existing under or by
reason of (a) any restrictions existing under the Loan Documents and (b) any
restriction with respect to a Restricted Subsidiary imposed pursuant to an
agreement that has been entered into in connection with the disposition of all
or substantially all of the Capital Stock or assets of such Restricted
Subsidiary.

                                      79

<PAGE>   88

6.3      INVESTMENTS; JOINT VENTURES.

         Borrowers shall not, and shall not permit any Restricted Subsidiaries
to, directly or indirectly, make or own any Investment in any Person,
including any Joint Venture, except:

                  (i)      Company and its Restricted Subsidiaries may make
         and own Investments in Cash and Cash Equivalents;

                  (ii)     Company and its Restricted Subsidiaries may make
         intercompany loans to the extent permitted under subsection 6.1(v);

                  (iii)    Company and its Restricted Subsidiaries may
         continue to own the Investments owned by them and described on
         Schedule 6.3 annexed hereto;

                  (iv)     Company and its Restricted Subsidiaries may
         continue to own the Investments owned by them as of the Closing Date
         (after giving effect to the Restructuring) in any Subsidiaries of
         Company;

                  (v)      Company and its Restricted Subsidiaries may make
         additional Investments in Restricted Subsidiaries;

                  (vi)     Company and its Restricted Subsidiaries may make
         and own Telecommunications Acquisitions to the extent permitted by
         subsection 6.9;

                  (vii)    Company and its Restricted Subsidiaries may make
         and own Investments in Joint Ventures or other Persons; provided that
         the aggregate amount of such Investments does not exceed $10,000,000
         at any time;

                  (viii)   Company and its Restricted Subsidiaries may make
         loans and advances to members of management of Company, provided that
         the aggregate amount of such management loans outstanding shall not
         exceed $2,200,000 at any time; and

                  (ix)     Company and its Restricted Subsidiaries may make
         Investments consisting of notes received in connection with any Asset
         Sale permitted pursuant to subsection 6.8; provided that in each case
         the principal amount of such notes received shall not exceed 25% of
         the total consideration received for the assets or property sold in
         such Asset Sale and any promissory note or notes received in
         connection with any single Asset Sale or series of related Asset
         Sales in excess of $200,000 shall be pledged to Administrative Agent,
         for the benefit of Lenders, to secure the Obligations.

6.4      CONTINGENT OBLIGATIONS.

         Borrowers shall not, and shall not permit any Restricted Subsidiaries
to, directly or indirectly, create or become or remain liable with respect to
any Contingent Obligation, except:

                  (i)      Company may become and remain liable with respect
         to Contingent Obligations in respect of the Company Guaranty, and
         Restricted Subsidiaries of

                                      80

<PAGE>   89

         Company may become and remain liable with respect to Contingent
         Obligations in respect of the Subsidiary Guaranty;

                  (ii)     Company may become and remain liable with respect
         to Contingent Obligations under Hedge Agreements;

                  (iii)    Company and its Restricted Subsidiaries, as
         applicable, may remain liable with respect to Contingent Obligations
         described in Schedule 6.4 annexed hereto;

                  (iv)     Company may become and remain liable with respect
         to standby letters of credit provided by Company in the ordinary
         course of business in an aggregate principal amount not to exceed
         $30,000,000 at any time outstanding; and

                  (v)      Company may become and remain liable with respect
         to guaranties of liabilities of Restricted Subsidiaries and Restricted
         Subsidiaries may become and remain liable with respect to guaranties of
         liabilities of other Restricted Subsidiaries, in each case to the
         extent such guarantied liabilities are permitted to be incurred
         hereunder.

6.5      RESTRICTED JUNIOR PAYMENTS.

         Company shall not, directly or indirectly, declare, order, pay, make
or set apart any sum for any Restricted Junior Payment; provided that so long
as no Event of Default or Potential Event of Default shall have occurred and
be continuing or shall be caused thereby:

                  (i)      Company may make regularly scheduled interest
         payments in respect of the Existing Senior Notes and any Additional
         Notes in accordance with the terms of, and only to the extent
         required by, and subject to the subordination provisions, if any,
         contained in, the Existing Senior Note Indentures or any indenture or
         indentures pursuant to which any Additional Notes are issued;

                  (ii)     Company may declare and pay regularly scheduled
         dividends in respect of the Existing Preferred Stock, provided that
         (a) the Leverage Ratio is equal to or less than 5.0:1.0, and (b)
         Company shall be in compliance with each covenant under subsection
         6.6 after giving pro forma effect to such dividend;

                  (iii)    Company may (a) repurchase or redeem outstanding
         Capital Stock of Company with the net proceeds received by Company
         from the issuance of its Capital Stock of the same class or Capital
         Stock which is junior to the Capital Stock being repurchased or
         redeemed, provided that notwithstanding any other provision in this
         Agreement to the contrary, to the extent the proceeds of any issuance
         of Capital Stock are used to repurchase or redeem outstanding Capital
         Stock in accordance with this subsection 6.5(iii)(a), such Capital
         Stock shall not constitute Required Junior Capital, Qualified
         Additional Capital or Subsequent Junior Capital, (b) make Cash
         Payments to repurchase or redeem fractional shares of Capital Stock
         in connection with a repurchase or redemption permitted pursuant to
         clause (a) of this subsection 6.5(iii), and (c) make Cash Payments in
         lieu of the issuance of fractional shares of preferred stock in
         connection with the payment of pay-in-kind dividends on the preferred
         stock; provided

                                      81

<PAGE>   90

         the aggregate amount of Cash Payments made pursuant to clauses (b)
         and (c) of this subsection 6.5(iii) shall not exceed $200,000 in any
         Fiscal Year; and

                  (iv)     to the extent Company makes any issuance of
         Additional Notes, Company may use the net Cash proceeds from such
         Additional Notes to redeem, repurchase or defease Indebtedness of
         Company and its Restricted Subsidiaries, provided that
         notwithstanding any other provision in this Agreement to the
         contrary, to the extent the proceeds of any Additional Notes are used
         to redeem, repurchase or defease Indebtedness of Company and its
         Restricted Subsidiaries in accordance with this subsection 6.5(iv),
         such Additional Notes shall not constitute Required Junior Capital,
         Qualified Additional Capital or Subsequent Junior Capital.

6.6      FINANCIAL COVENANTS

         (A) PHASE 1 FINANCIAL COVENANTS. From June 30, 2000 through August
11, 2006, Borrowers shall comply with the following financial covenants:

                  (i)      Consolidated Total Debt to Total Gross
         Capitalization; and Consolidated Senior Debt to Total Gross
         Capitalization. As of the last day of any Fiscal Quarter, (a)
         Borrowers' ratio of Consolidated Total Debt to Total Gross
         Capitalization shall not exceed (1) 0.70:1 for the Fiscal Quarter
         ended June 30, 2000 or (2) 0.75:1 thereafter and (b) Borrowers' ratio
         of Consolidated Senior Debt to Total Gross Capitalization shall not
         exceed 0.25:1.

                  (ii)     Minimum Consolidated Quarterly Revenues. As of the
         last day of any Fiscal Quarter specified below, Borrowers shall not
         permit (a) Consolidated Quarterly Revenue for ACSI or (b) as long as
         Cybergate is a Restricted Subsidiary of Company, Consolidated
         Quarterly Revenue for Cybergate and ICP on a combined basis or (c) at
         any time after Cybergate ceases to be a Restricted Subsidiary of
         Company, Consolidated Quarterly Revenue for ICP on a stand alone
         basis, for such Fiscal Quarter to be less than the correlative amount
         indicated below:

<TABLE>
<CAPTION>
                                          MINIMUM CONSOLIDATED QUARTERLY REVENUE
                                                     (in thousands)
                                ---------------------------------------------------------
        QUARTER ENDED                  ACSI         CYBERGATE AND ICP         ICP
------------------------------- ------------------- ------------------ ------------------
<S>                             <C>                 <C>                <C>
June 30, 2000                         $13,250             $59,000            $52,000
------------------------------- ------------------- ------------------ ------------------
September 30, 2000                     12,775              58,000             52,000
------------------------------- ------------------- ------------------ ------------------
December 31, 2000                      12,000              63,000             56,000
------------------------------- ------------------- ------------------ ------------------
March 31, 2001                         11,500              71,000             62,000
------------------------------- ------------------- ------------------ ------------------
June 30, 2001                          11,000              77,000             67,000
------------------------------- ------------------- ------------------ ------------------
September 30, 2001                     11,000              83,000             72,000
------------------------------- ------------------- ------------------ ------------------
December 31, 2001                      11,500              91,000             77,000
------------------------------- ------------------- ------------------ ------------------
March 31, 2002                         10,500              94,000             79,000
------------------------------- ------------------- ------------------ ------------------
</TABLE>

                                      82

<PAGE>   91

<TABLE>
<CAPTION>
                                         MINIMUM CONSOLIDATED QUARTERLY REVENUE
                                                     (in thousands)
                                ---------------------------------------------------------
        QUARTER ENDED                  ACSI         CYBERGATE AND ICP         ICP
------------------------------- ------------------- ------------------ ------------------
<S>                             <C>                 <C>                <C>
June 30, 2002                           9,500             101,000             84,000
------------------------------- ------------------- ------------------ ------------------
September 30, 2002                      8,500             107,000             89,000
------------------------------- ------------------- ------------------ ------------------
December 31, 2002                       7,250             115,000             94,000
------------------------------- ------------------- ------------------ ------------------
March 31, 2003                         12,500             119,000             96,000
------------------------------- ------------------- ------------------ ------------------
June 30, 2003                          13,250             128,000            101,000
------------------------------- ------------------- ------------------ ------------------
September 30, 2003                     14,000             137,000            107,000
------------------------------- ------------------- ------------------ ------------------
December 31, 2003                      14,750             148,000            112,000
------------------------------- ------------------- ------------------ ------------------
March 31, 2004                         15,500             153,000            114,000
------------------------------- ------------------- ------------------ ------------------
June 30, 2004                          16,250             164,000            119,000
------------------------------- ------------------- ------------------ ------------------
September 30, 2004                     17,000             176,000            125,000
------------------------------- ------------------- ------------------ ------------------
December 31, 2004                      17,750             187,000            130,000
------------------------------- ------------------- ------------------ ------------------
March 31, 2005                         18,750             194,000            136,000
------------------------------- ------------------- ------------------ ------------------
June 30, 2005                          19,750             207,000            142,000
------------------------------- ------------------- ------------------ ------------------
September 30, 2005                     20,000             220,000            145,000
------------------------------- ------------------- ------------------ ------------------
December 31, 2005                      20,750             230,000            150,000
------------------------------- ------------------- ------------------ ------------------
March 31, 2006                         21,500             240,000            155,000
------------------------------- ------------------- ------------------ ------------------
June 30, 2006                          22,250             250,000            160,000
------------------------------- ------------------- ------------------ ------------------
</TABLE>

                  Notwithstanding anything herein to the contrary, compliance
         with the covenant set forth in subsection 6.6A(ii)(a) shall be tested
         on the basis of (i) Consolidated Quarterly Revenue of ACSI for the
         Fiscal Quarter ended June 30, 2000, (ii) the quarterly average of
         Consolidated Quarterly Revenue of ACSI for the two-Fiscal Quarter
         period ended September 30, 2000, (iii) the quarterly average of
         Consolidated Quarterly Revenue of ACSI for the three-Fiscal Quarter
         period ended December 31, 2000 and (iv) thereafter, the quarterly
         average of Consolidated Quarterly Revenue of ACSI for the rolling
         four-Fiscal Quarter period then ended (i.e., Consolidated Quarterly
         Revenue of ACSI for the four-Fiscal Quarter period then ended divided
         by four).

                  (iii)    Minimum Consolidated Adjusted EBITDA. As of the
         last day of any Fiscal Quarter specified below, Borrowers shall not
         permit Consolidated Adjusted EBITDA of Company and its Restricted
         Subsidiaries for such Fiscal Quarter to be less than the correlative
         amount indicated:

                                      83

<PAGE>   92

<TABLE>
<CAPTION>
                                          MINIMUM CONSOLIDATED ADJUSTED EBITDA
        QUARTER ENDED                               (in thousands)
------------------------------ ----------------------------------------------------------
<S>                            <C>
June 30, 2000                                          $(16,200)
------------------------------ ----------------------------------------------------------
September 30, 2000                                     (20,200)
------------------------------ ----------------------------------------------------------
December 31, 2000                                      (16,250)
------------------------------ ----------------------------------------------------------
March 31, 2001                                         (15,700)
------------------------------ ----------------------------------------------------------
June 30, 2001                                          (13,350)
------------------------------ ----------------------------------------------------------
September 30, 2001                                     (10,850)
------------------------------ ----------------------------------------------------------
December 31, 2001                                       (5,600)
------------------------------ ----------------------------------------------------------
March 31, 2002                                          (6,900)
------------------------------ ----------------------------------------------------------
June 30, 2002                                           (3,950)
------------------------------ ----------------------------------------------------------
September 30, 2002                                       (850)
------------------------------ ----------------------------------------------------------
December 31, 2002                                        2,700
------------------------------ ----------------------------------------------------------
March 31, 2003                                           3,500
------------------------------ ----------------------------------------------------------
June 30, 2003                                            8,300
------------------------------ ----------------------------------------------------------
September 30, 2003                                      13,000
------------------------------ ----------------------------------------------------------
December 31, 2003                                       18,700
------------------------------ ----------------------------------------------------------
March 31, 2004                                          21,400
------------------------------ ----------------------------------------------------------
June 30, 2004                                           28,000
------------------------------ ----------------------------------------------------------
September 30, 2004                                      33,600
------------------------------ ----------------------------------------------------------
December 31, 2004                                       39,500
------------------------------ ----------------------------------------------------------
March 31, 2005                                          49,000
------------------------------ ----------------------------------------------------------
June 30, 2005                                           57,750
------------------------------ ----------------------------------------------------------
September 30, 2005                                      60,000
------------------------------ ----------------------------------------------------------
December 31, 2005                                       67,500
------------------------------ ----------------------------------------------------------
March 31, 2006                                          72,000
------------------------------ ----------------------------------------------------------
June 30, 2006                                           76,500
------------------------------ ----------------------------------------------------------
</TABLE>

                  For purposes of determining compliance with this covenant,
         the Consolidated Adjusted EBITDA for ACSI to be included in such
         calculations shall be determined on the basis of (i) Consolidated
         Adjusted EBITDA of ACSI for the Fiscal Quarter ended June 30, 2000,
         (ii) the quarterly average of Consolidated Adjusted EBITDA of ACSI
         for the two-Fiscal Quarter period ended September 30, 2000, (iii) the
         quarterly average of Consolidated Adjusted EBITDA for ACSI for the
         three-Fiscal Quarter period ended December 31, 2000 and (iv)
         thereafter the quarterly average of Consolidated Adjusted EBITDA for
         ACSI for the rolling four Fiscal Quarter period then ended (i.e.,
         Consolidated Adjusted EBITDA of ACSI for the four-Fiscal Quarter
         period then ended divided by four).

                                      84

<PAGE>   93

                  (iv)     Adjustment. In the event that Cybergate's dial-up
         division is sold separately, the covenant levels for Minimum
         Consolidated Quarterly Revenue for Cybergate and ICP and Minimum
         Consolidated Adjusted EBITDA for the Company and its Restricted
         Subsidiaries shall each be reduced by the corresponding Consolidated
         Quarterly Revenue and Consolidated Adjusted EBITDA attributable to
         such division as set forth in the projections which are attached
         hereto as Exhibit XIV.

                  (v)      Minimum Cash Balances.  Borrowers shall not permit
         the Cash Balances of the Company and its Restricted Subsidiaries at
         any time be less than the Cash Balance Requirement.

         (B) PHASE 2 FINANCIAL COVENANTS. From and after January 1, 2004
(except as otherwise specified), Borrowers shall comply with the following
financial covenants:

                  (i)      [Intentionally Omitted]

                  (ii)     [Intentionally Omitted].

                  (iii)    Maximum Leverage Ratio. Borrowers shall not permit
         (a) the ratio of Consolidated Senior Debt to Consolidated Annualized
         EBITDA of Company and its Restricted Subsidiaries or (b) the ratio of
         Consolidated Total Debt to Consolidated Annualized EBITDA of Company
         and its Restricted Subsidiaries as of the last day of any Fiscal
         Quarter set forth below to exceed the correlative ratios indicated:

<TABLE>
<CAPTION>
               QUARTER ENDED                   SENIOR DEBT RATIO      TOTAL DEBT RATIO
--------------------------------------------- --------------------- ---------------------
<S>                                           <C>                   <C>
March 31, 2004                                       8.50:1                20.00:1
--------------------------------------------- --------------------- ---------------------
June 30, 2004                                        7.00:1                16.00:1
--------------------------------------------- --------------------- ---------------------
September 30, 2004                                   6.00:1                13.50:1
--------------------------------------------- --------------------- ---------------------
December 31, 2004                                    5.50:1                11.75:1
--------------------------------------------- --------------------- ---------------------
March 31, 2005                                       4.75:1                10.00:1
--------------------------------------------- --------------------- ---------------------
June 30, 2005                                        4.25:1                8.75:1
--------------------------------------------- --------------------- ---------------------
September 30, 2005                                   4.00:1                7.75:1
--------------------------------------------- --------------------- ---------------------
December 31, 2005                                    3.00:1                7.00:1
--------------------------------------------- --------------------- ---------------------
March 31, 2006                                       3.00:1                6.50:1
--------------------------------------------- --------------------- ---------------------
June 30, 2006                                        3.00:1                6.25:1
--------------------------------------------- --------------------- ---------------------
</TABLE>

                  (iv)     Certain Calculations.  With respect to calculations
         of Consolidated Adjusted EBITDA, Consolidated Cash Interest Expense
         and Consolidated Quarterly Revenues for purposes of determining
         compliance with subsections 6.6A(ii) and (iii) and 6.6B(iii), for any
         Fiscal Quarter during which any Telecommunications Acquisition
         permitted under this Agreement was consummated or any Asset Sale (as
         defined in clauses (i) or (ii) of the definition of Asset Sale)
         permitted under this Agreement was

                                      85

<PAGE>   94

         consummated, such calculations shall be made on a pro forma basis
         assuming, in each case, that such Telecommunications Acquisition or
         such Asset Sale was consummated on the first day of the applicable
         Fiscal Quarter.  All such calculations shall be in form and substance
         satisfactory to Arranger and Administrative Agent.

         (C) CONSOLIDATED CASH CAPITAL EXPENDITURES. From and after March 31,
2000, Borrowers shall not, and shall not permit any Restricted Subsidiaries to
make or incur Consolidated Cash Capital Expenditures, in any six-month period
indicated below, in an aggregate amount in excess of the corresponding amount
(the "MAXIMUM CONSOLIDATED CASH CAPITAL EXPENDITURES AMOUNT") set forth below
opposite such period; provided that the Maximum Consolidated Cash Capital
Expenditures Amount for any six-month period shall be increased by an amount
equal to the excess, if any, (but in no event more than 50% of such excess) of
the Maximum Consolidated Cash Capital Expenditures Amount for the previous
six-month period (as adjusted in accordance with this proviso) over the actual
amount of Consolidated Cash Capital Expenditures for such previous six-month
period:

<TABLE>
<CAPTION>
                                                      MAXIMUM CONSOLIDATED CASH
                                                         CAPITAL EXPENDITURES
           SIX-MONTH PERIOD ENDED                           (in thousands)
--------------------------------------------- -------------------------------------------
<S>                                           <C>
September 30, 2000                                             $124,000
--------------------------------------------- -------------------------------------------
March 31, 2001                                                  126,000
--------------------------------------------- -------------------------------------------
September 30, 2001                                               71,000
--------------------------------------------- -------------------------------------------
March 31, 2002                                                   53,000
--------------------------------------------- -------------------------------------------
September 30, 2002                                               52,000
--------------------------------------------- -------------------------------------------
March 31, 2003                                                   53,000
--------------------------------------------- -------------------------------------------
September 30, 2003                                               57,000
--------------------------------------------- -------------------------------------------
March 31, 2004                                                   59,000
--------------------------------------------- -------------------------------------------
September 30, 2004                                               59,000
--------------------------------------------- -------------------------------------------
March 31, 2005                                                   65,000
--------------------------------------------- -------------------------------------------
September 30, 2005                                               65,000
--------------------------------------------- -------------------------------------------
March 31, 2006                                                   65,000
--------------------------------------------- -------------------------------------------
</TABLE>

In addition to the foregoing, from and after the date Company has received the
Required Junior Capital, Borrowers and any Restricted Subsidiaries may make
Consolidated Cash Capital Expenditures in an aggregate amount up to
$50,000,000.

         Notwithstanding anything in the foregoing to the contrary, (i)
Company and its Restricted Subsidiaries shall not be permitted to make or
incur Consolidated Cash Capital Expenditures, except within existing markets
of Company and its Restricted Subsidiaries as of the Restatement Effective
Date and (ii) ACSI shall not make or incur any Consolidated Cash Capital
Expenditures except (a) to design networks for third parties in the ordinary
course of business

                                      86

<PAGE>   95

not to exceed an aggregate amount of $5,000,000 and (b) to build networks for
third party customers in the ordinary course of business pursuant to binding
written contracts with such customers. Prior to the date the Liquidity
Requirement is met, any Cash used to make Telecommunications Acquisitions
shall be counted as Consolidated Cash Capital Expenditures for purposes of
this subsection 6.1C. From and after the date the Liquidity Requirement is
met, one-third of the Cash used to make Telecommunications Acquisitions shall
be counted as Consolidated Cash Capital Expenditures for purposes of this
subsection 6.1C.

         (D) Minimum Access Lines. Borrowers shall not permit the combined
total of voice, data and ISP lines (DSO Equivalents) of Company and its
Restricted Subsidiaries as of the end of any Fiscal Quarter to be less than
the correlative amount indicated.

<TABLE>
<CAPTION>
               QUARTER ENDED                             MINIMUM ACCESS LINES
--------------------------------------------- -------------------------------------------
<S>                                           <C>
June 30, 2000                                                      183,000
--------------------------------------------- -------------------------------------------
September 30, 2000                                                 208,000
--------------------------------------------- -------------------------------------------
December 31, 2000                                                  240,000
--------------------------------------------- -------------------------------------------
March 31, 2001                                                     266,000
--------------------------------------------- -------------------------------------------
June 30, 2001                                                      282,000
--------------------------------------------- -------------------------------------------
September 30, 2001                                                 300,000
--------------------------------------------- -------------------------------------------
December 31, 2001                                                  318,000
--------------------------------------------- -------------------------------------------
March 31, 2002                                                     338,000
--------------------------------------------- -------------------------------------------
June 30, 2002                                                      358,000
--------------------------------------------- -------------------------------------------
September 30, 2002                                                 378,000
--------------------------------------------- -------------------------------------------
December 31, 2002                                                  398,000
--------------------------------------------- -------------------------------------------
March 31, 2003                                                     421,000
--------------------------------------------- -------------------------------------------
June 30, 2003                                                      445,000
--------------------------------------------- -------------------------------------------
September 30, 2003                                                 468,000
--------------------------------------------- -------------------------------------------
December 31, 2003 and each quarter                                 491,000
thereafter
--------------------------------------------- -------------------------------------------
</TABLE>

6.7      [INTENTIONALLY OMITTED]

6.8      RESTRICTION ON FUNDAMENTAL CHANGES; ASSET SALES.

         Company shall at no time create, acquire or otherwise have any direct
Subsidiary other than Finance Sub. Borrowers shall not, and shall not permit
any Restricted Subsidiary to, alter the corporate, capital or legal structure
of Borrowers or any Restricted Subsidiaries, or enter into any transaction of
merger or consolidation, or liquidate, wind-up or dissolve itself (or suffer
any liquidation or dissolution), or convey, sell, lease or sub-lease (as
lessor or sublessor), transfer or otherwise dispose of, in one transaction or
a series of transactions, all or any part of its business, property or assets,
whether now owned or hereafter acquired, except:

                                      87

<PAGE>   96

                  (i)      any Restricted Subsidiary of Company may be merged
         with or into any Wholly Owned Subsidiary Guarantor, or be liquidated,
         wound up or dissolved, or all or any part of its business, property
         or assets may be conveyed, sold, leased, transferred or otherwise
         disposed of, in one transaction or a series of transactions, to any
         Wholly Owned Subsidiary Guarantor; provided that, in the case of such
         a merger, such Wholly Owned Subsidiary Guarantor shall be the
         continuing or surviving corporation;

                  (ii)     Borrowers and Restricted Subsidiaries may dispose
         of obsolete, worn out or surplus property in the ordinary course of
         business;

                  (iii)    Borrowers and Restricted Subsidiaries may sell or
         otherwise dispose of assets in transactions that do not constitute
         Asset Sales; provided that the consideration received for such assets
         shall be in an amount at least equal to the fair market value
         thereof;

                  (iv)     subject to subsection 6.13, Borrowers and
         Restricted Subsidiaries may during any Fiscal Year make Asset Sales
         of assets which generated revenues comprising not more than 15% of
         consolidated revenues of Company and its Restricted Subsidiaries for
         the prior Fiscal Year; provided that (a) the consideration received
         for such assets shall be in an amount at least equal to the fair
         market value thereof; (b) 75% of the consideration received shall be
         Cash; and (c) the proceeds of such Asset Sales shall be applied as
         required by subsection 2.4B(iii)(a);

                  (v)      Company may issue (a) common stock and warrants to
         purchase common stock, (b) the Bridge Preferred and/or the Committed
         Preferred having terms (other than pricing) substantially identical
         (and in any event with no changes which are adverse to the Lenders)
         to those set forth in the certificates of designation in the forms of
         Exhibit XV and Exhibit XVI, respectively, annexed hereto or, to the
         extent the terms of the Bridge Preferred or Committed Preferred are
         not substantially identical to such terms, such non-conforming terms
         (1) relate to which holders or the percentage of holders that may
         exercise voting rights or consent to amendments and waivers, (2) are
         to the seniority, registration rights or anti-dilution provisions, or
         (3) are to the covenant or default provisions as long as such
         covenants and defaults as so modified are no more restrictive to the
         Company than those set forth in Exhibit XV and Exhibit XVI,
         respectively, and (c) other preferred stock and warrants to purchase
         preferred stock; provided that the terms of such preferred stock and
         warrants to purchase preferred stock referenced in this clause (c)
         are approved by Requisite Lenders;

                  (vi)     Borrowers and Restricted Subsidiaries may make
         Asset Sales consisting of dispositions of assets pursuant to Use
         Agreements, provided that the proceeds of such Asset Sales shall be
         applied as required pursuant to subsection 2.4B(iii)(a);

                  (vii)    ACSI may make ACSI Network Sales; and

                  (viii)   Borrowers may sell all of the Capital Stock or all
         or substantially all of the assets of ACSI and/or Cybergate, provided
         that the consideration received therefor shall

                                      88

<PAGE>   97

         be in an amount at least equal to the fair market value thereof and
         subject to documentation in form and substance reasonably
         satisfactory to Requisite Lenders.

6.9      ACQUISITIONS.

         Borrowers shall not, and shall not permit any Restricted Subsidiaries
to, acquire by purchase or otherwise all or substantially all of the business,
property or fixed assets of, or stock or other evidence of beneficial
ownership of, any Person or any division or line of business of any Person,
except:

                  (i)      Company and its Restricted Subsidiaries may make
         Consolidated Cash Capital Expenditures permitted under subsection
         6.6C;

                  (ii)     Telecommunications Acquisitions; provided that (a)
         prior to the date the Liquidity Requirement is met, the aggregate
         cumulative Cash consideration for all such acquisitions shall not
         exceed $10,000,000 per Fiscal Year, (b) from and after the date the
         Liquidity Requirement is met, the aggregate Cash consideration for
         all such acquisitions shall not exceed $30,000,000 per Fiscal Year
         and (c) at least five Business Days prior to the date of the
         consummation of such acquisition, Company shall deliver to the
         Lenders and Administrative Agent (1) pro forma financial statements
         for the acquired Person giving effect to such acquisition
         demonstrating that the pro forma annualized EBITDA for the acquired
         Person (based upon the last two quarters multiplied by two) is either
         positive or, if negative, is not negative in an amount greater than
         $1,000,000 and (2) projected financial statements for Company and its
         Restricted Subsidiaries on a consolidated basis through the Maturity
         Date giving pro forma effect to such acquisition demonstrating that
         Borrowers shall be in pro forma compliance with all of the covenants
         contained in this Agreement through the Maturity Date; and

                  (iii)    Telecommunications Acquisitions for which the
         consideration is common stock of the Company.

         In the event Borrowers desire to obtain the consent of Requisite
Lenders to any acquisition not otherwise permitted under this subsection 6.9,
Company shall notify Administrative Agent. Administrative Agent shall notify
Lenders as soon as practicable following receipt of a request for consent to
an acquisition from Company and shall cooperate with Company in seeking to
obtain Requisite Lenders' approval of such request within a commercially
reasonable time period taking into account all relevant factors at the time of
such request.

6.10     SALES AND LEASE-BACKS.

         Borrowers shall not, and shall not permit any Restricted Subsidiary
to, directly or indirectly, become or remain liable as lessee or as a
guarantor or other surety with respect to any lease, whether an Operating
Lease or a Capital Lease, of any property (whether real, personal or mixed),
whether now owned or hereafter acquired, (i) which Borrowers or any Restricted
Subsidiary has sold or transferred or is to sell or transfer to any other
Person (other than Borrower or any Restricted Subsidiaries) or (ii) which
Borrowers or any Restricted Subsidiary intends to use for substantially the
same purpose as any other property which has been or is to be

                                      89

<PAGE>   98

sold or transferred by Company or any Restricted Subsidiary to any Person
(other than Borrower or any Restricted Subsidiaries) in connection with such
lease.

6.11     SALE OR DISCOUNT OF RECEIVABLES.

         Borrowers shall not, and shall not permit any Restricted Subsidiary
to, directly or indirectly, sell with recourse, or discount or otherwise sell
for less than the face value thereof, any of its notes or accounts receivable.
Nothing in this subsection 6.11 shall prevent Borrowers or any Restricted
Subsidiary from (i) settling an account with the obligor thereon for less than
the face value of such account if in the ordinary course of business it is
determined that such settlement is necessary to collect such account or (ii)
selling delinquent accounts at a discount to a third party for collection
purposes.

6.12     TRANSACTIONS WITH SHAREHOLDERS AND AFFILIATES.

         Borrowers shall not, and shall not permit any Restricted Subsidiary
to, directly or indirectly, enter into or permit to exist any transaction
(including the purchase, sale, lease or exchange of any property or the
rendering of any service) with any holder of 5% or more of any class of equity
Securities of Company or with any Affiliate of Company or of any such holder,
on terms that are less favorable to Borrower or that Restricted Subsidiary, as
the case may be, than those that would be obtained at the time from Persons
who are not such a holder or Affiliate; provided that the foregoing
restriction shall not apply to (i) any transaction between Borrowers and any
of its Wholly Owned Subsidiaries or between any of its Wholly Owned
Subsidiaries, (ii) reasonable and customary fees paid or stock options awarded
to members of the Boards of Directors of Borrowers and their Restricted
Subsidiaries, (iii) the transactions pursuant to the Huff Purchase Agreement
(including without limitation in Section 1 thereof) and (iv) the transactions
pursuant to the agreement referred to in subsection 3.1I(ii).

6.13     DISPOSAL OF SUBSIDIARY STOCK.

         Except for any sale of 100% of the Capital Stock of a Subsidiary in
compliance with subsection 6.8, Borrowers shall not:

                  (i)      directly or indirectly sell, assign, pledge or
         otherwise encumber or dispose of any shares of Capital Stock or other
         equity Securities of any Restricted Subsidiaries, except to qualify
         directors if required by applicable law; or

                  (ii)     permit any Restricted Subsidiary directly or
         indirectly to sell, assign, pledge or otherwise encumber or dispose
         of any shares of Capital Stock or other equity Securities of any
         Restricted Subsidiaries (including such Subsidiary), except to
         Company, another Restricted Subsidiary of Company, or to qualify
         directors if required by applicable law.

6.14     CONDUCT OF BUSINESS.

         From and after the Closing Date, Borrowers shall not, and shall not
permit any Restricted Subsidiary to, engage in any business other than the
telecommunications businesses engaged in by Company and its Restricted
Subsidiaries on the Closing Date and similar or related businesses

                                      90

<PAGE>   99

and such other lines of business as may be consented to by Requisite Lenders.
From and after the Closing Date, Company shall not engage in any business or
activities other than (a) owning the stock of Finance Sub, (b) performing its
obligations under the Loan Documents, Existing Senior Notes and Existing
Senior Note Indentures and under the Additional Notes and any agreements
governing such Additional Notes, (c) activities associated with the
maintenance of its corporate existence and with respect to the payment of
consolidated tax liabilities of Company and its Subsidiaries and (c) the
making of Restricted Junior Payments to the extent permitted under subsection
6.5. From and after the Closing Date, Finance Sub shall not engage in any
business or activities other than holding the stock of its Subsidiaries and
performing its obligations under the Loan Documents and shall have no assets
or liabilities other than those under the Loan Documents, Cash or Cash
Equivalents held in Collateral Accounts and the stock of its Subsidiaries.
From and after the Closing Date, no Subsidiary of Company shall be principally
engaged in a Telecommunications Business unless such Subsidiary is a direct or
indirect Wholly Owned Subsidiary of Finance Sub and no Subsidiary of Company
shall be formed or acquired to principally engage in the Telecommunications
Business unless such Subsidiary is a direct or indirect Wholly Owned
Subsidiary of Finance Sub.

6.15     AMENDMENTS OR WAIVERS OF CERTAIN RELATED AGREEMENTS.

         Neither Company nor any of its Subsidiaries will agree to any
amendment to, or request any waiver of (other than a waiver for which no fee
is paid and no other concessions or considerations are granted by Company or
its Subsidiaries), or waive any of their respective rights under, any of the
Related Agreements (other than any amendment or waiver described in the next
succeeding sentence) without in each case obtaining the prior written consent
of Administrative Agent and Requisite Lenders to such amendment, request or
waiver and giving notice to Arranger. Notwithstanding the foregoing, Company
and its Subsidiaries may agree to amend or waive any provisions of the Related
Agreements (i) to cure any ambiguity, to correct or supplement any provision
therein which may be defective or inconsistent with any other provision
therein, or (ii) to comply with the Trust Indenture Act of 1939, as amended,
or (iii) to make modifications of a technical or clarifying nature or which
are no less favorable to the Lenders, in the reasonable opinion of
Administrative Agent and Requisite Lenders, than the provisions of the Related
Agreements as in effect on the Restatement Effective Date (for the purposes of
this subsection 6.15, any amendment, modification or change which would extend
the maturity or reduce the amount of any payment of principal on the Existing
Senior Notes or which would reduce the rate or extend the date for payment of
interest thereon, provided that no fee is payable in connection therewith,
shall be deemed to be an amendment, modification or change that is no less
favorable to the Lenders). Neither Company, Finance Sub nor any Restricted
Subsidiary shall agree to any amendment or any waiver of any of the
Intercompany Loan Documents without the prior written consent of Requisite
Lenders.

6.16     FISCAL YEAR

         Borrowers shall not change their Fiscal Year-end from December 31.

                                      91

<PAGE>   100

6.17     MASTER NOTE AND INTERCOMPANY PURCHASE MONEY NOTE.

         Borrowers shall not permit at any time the aggregate principal amount
outstanding under the Master Note to differ from (i) the aggregate principal
amount of Series B Term Loans and Series C Term Loans outstanding or (ii) the
aggregate principal amount outstanding under the Intercompany Purchase Money
Note.

                                  SECTION 7.
                              EVENTS OF DEFAULT

         If any of the following conditions or events ("EVENTS OF DEFAULT")
shall occur:

7.1      FAILURE TO MAKE PAYMENTS WHEN DUE.

         Failure by either Borrower to pay any installment of principal of any
Loan when due, whether at stated maturity, by acceleration, by notice of
voluntary prepayment, by mandatory prepayment or otherwise; or failure by
either Borrower to pay any interest on any Loan or any fee or any other amount
due under this Agreement within five days after the date due; or

7.2      DEFAULT IN OTHER AGREEMENTS.

                  (i)      Failure of either Borrower or any of its
         Subsidiaries to pay when due any principal of or interest on or any
         other amount payable in respect of one or more items of Indebtedness
         (other than Indebtedness referred to in subsection 7.1) or Contingent
         Obligations in an individual principal amount of $2,000,000 or more
         or with an aggregate principal amount of $5,000,000 or more, in each
         case beyond the end of any grace period provided therefor; or (ii)
         breach or default by either Borrower or any of its Subsidiaries with
         respect to any other material term of (a) one or more items of
         Indebtedness or Contingent Obligations in the individual or aggregate
         principal amounts referred to in clause (i) above or (b) any loan
         agreement, mortgage, indenture or other agreement relating to such
         item(s) of Indebtedness or Contingent Obligation(s), if the effect of
         such breach or default is to cause, or to permit the holder or
         holders of that Indebtedness or Contingent Obligation(s) (or a
         trustee on behalf of such holder or holders) to cause, that
         Indebtedness or Contingent Obligation(s) to become or be declared due
         and payable prior to its stated maturity or the stated maturity of
         any underlying obligation, as the case may be (upon the giving or
         receiving of notice, lapse of time, both, or otherwise); or

7.3      BREACH OF CERTAIN COVENANTS.

         Failure of either Borrower to perform or comply with any term or
condition contained in subsections 2.5, 5.2 or 5.13 or Section 6 of this
Agreement; or

7.4      BREACH OF WARRANTY.

         Any representation, warranty, certification or other statement made
by any Loan Party in any Loan Document or in any statement or certificate at
any time given by any Loan Party in writing pursuant hereto or thereto or in
connection herewith or therewith shall be false in any material respect on the
date as of which made; or

                                      92

<PAGE>   101

7.5      OTHER DEFAULTS UNDER LOAN DOCUMENTS.

         Any Loan Party shall default in the performance of or compliance with
any term contained in this Agreement or any of the other Loan Documents, other
than any such term referred to in any other subsection of this Section 7, and
such default shall not have been remedied or waived within 30 days after the
earlier of (i) an officer of such Loan Party becoming aware of such default or
(ii) receipt by Borrowers of notice from Administrative Agent or any Lender of
such default; or

7.6      INVOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.

                  (i)      A court having jurisdiction in the premises shall
         enter a decree or order for relief in respect of any Loan Party in an
         involuntary case under the Bankruptcy Code or under any other
         applicable bankruptcy, insolvency or similar law now or hereafter in
         effect, which decree or order is not stayed; or any other similar
         relief shall be granted under any applicable federal or state law; or
         (ii) an involuntary case shall be commenced against any Loan Party
         under the Bankruptcy Code or under any other applicable bankruptcy,
         insolvency or similar law now or hereafter in effect; or a decree or
         order of a court having jurisdiction in the premises for the
         appointment of a receiver, liquidator, sequestrator, trustee,
         custodian or other officer having similar powers over any Loan Party,
         or over all or a substantial part of its property, shall have been
         entered; or there shall have occurred the involuntary appointment of
         an interim receiver, trustee or other custodian of any Loan Party for
         all or a substantial part of its property; or a warrant of
         attachment, execution or similar process shall have been issued
         against any substantial part of the property of any Loan Party, and
         any such event described in this clause (ii) shall continue for 60
         days unless dismissed, bonded or discharged; or

7.7      VOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.

                  (i)      Any Loan Party shall have an order for relief
         entered with respect to it or commence a voluntary case under the
         Bankruptcy Code or under any other applicable bankruptcy, insolvency
         or similar law now or hereafter in effect, or shall consent to the
         entry of an order for relief in an involuntary case, or to the
         conversion of an involuntary case to a voluntary case, under any such
         law, or shall consent to the appointment of or taking possession by a
         receiver, trustee or other custodian for all or a substantial part of
         its property; or any Loan Party shall make any assignment for the
         benefit of creditors; or (ii) any Loan Party shall be unable, or
         shall fail generally, or shall admit in writing its inability, to pay
         its debts as such debts become due; or the Board of Directors of any
         Loan Party (or any committee thereof) shall adopt any resolution or
         otherwise authorize any action to approve any of the actions referred
         to in clause (i) above or this clause (ii); or

7.8      JUDGMENTS AND ATTACHMENTS.

         Any money judgment, writ or warrant of attachment or similar process
involving (i) in any individual case an amount in excess of $2,000,000 or (ii)
in the aggregate at any time an amount in excess of $5,000,000 (in either case
not adequately covered by insurance as to which a

                                      93

<PAGE>   102

solvent and unaffiliated insurance company has acknowledged coverage) shall be
entered or filed against any Loan Party or any of their respective assets and
shall remain undischarged, unvacated, unbonded or unstayed for a period of 60
days (or in any event later than five days prior to the date of any proposed
sale thereunder); or

7.9      DISSOLUTION.

         Any order, judgment or decree shall be entered against any Loan Party
decreeing the dissolution or split up of such Loan Party and such order shall
remain undischarged or unstayed for a period in excess of 30 days; or

7.10     EMPLOYEE BENEFIT PLANS.

         There shall occur one or more ERISA Events which individually or in
the aggregate results in or would reasonably be expected to result in
liability of any Loan Party or any of their respective ERISA Affiliates in
excess of $2,000,000 during the term of this Agreement; or there shall exist
as of the most recently ended plan year an amount of unfunded benefit
liabilities (as defined in Section 4001(a)(18) of ERISA), individually or in
the aggregate for all Pension Plans (excluding for purposes of such
computation any Pension Plans with respect to which assets exceed benefit
liabilities), which exceeds $5,000,000 and which if required to be fully paid
could reasonably be expected to have a Material Adverse Effect; or

7.11     CHANGE IN CONTROL.

                  (i)      Company shall cease to own 100% of the outstanding
         Capital Stock of Finance Sub; (ii) any "Change of Control" shall
         occur under the Existing Senior Note Indentures; or (iii) any
         "Person" or "group" (within the meaning of Sections 13(d)(3) and
         14(d)(2) of the Exchange Act or any successor provision to either of
         the foregoing, including any group acting for the purpose of
         acquiring, holding or disposing of securities within the meaning of
         Rule 13d-5(b)(i) under the Exchange Act), other than any Permitted
         Holder, becomes the "beneficial owner" (as defined in Rule 13d-3
         under the Exchange Act) of more than 35% of the total voting power of
         all classes of the Voting Stock of Company and/or warrants or options
         to acquire such Voting Stock, calculated on a fully diluted basis,
         and such voting power percentage is greater than or equal to the
         total voting power percentage then beneficially owned by the
         Permitted Holders in the aggregate; or (iv) during any period of two
         consecutive years, individuals who at the beginning of such period
         constituted the board of directors of Company (together with any new
         directors whose election or appointment by such board or whose
         nomination for election by the shareholders of Company was approved
         by a vote of a majority of the directors then still in office who
         were either directors at the beginning of such period or whose
         election or nomination for election was previously so approved) cease
         for any reason to constitute a majority of the board of directors
         then in office; or

7.12     INVALIDITY OF SUBSIDIARY GUARANTY; FAILURE OF SECURITY; REPUDIATION
         OF OBLIGATIONS.

         At any time after the execution and delivery thereof, (i) the
Subsidiary Guaranty for any reason, other than the satisfaction in full of all
Obligations, shall cease to be in full force and effect (other than in
accordance with its terms) or shall be declared to be null and void, (ii) any

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Collateral Document or Intercompany Loan Document shall cease to be in full
force and effect (other than by reason of a release of Collateral thereunder
in accordance with the terms hereof or thereof, the satisfaction in full of
the Obligations or any other termination of such Collateral Document in
accordance with the terms hereof or thereof) or shall be declared null and
void, or Administrative Agent shall not have or shall cease to have a valid
and perfected First Priority Lien in any Collateral purported to be covered
thereby in each case for any reason other than the failure of Administrative
Agent or any Lender to take any action within its control, or (iii) any Loan
Party shall contest the validity or enforceability of any Loan Document or
Intercompany Loan Document in writing or deny in writing that it has any
further liability, including with respect to future advances by Lenders, under
any Loan Document to which it is a party; or

7.13     LICENSES.

         Any of the following shall occur, the result of which would
reasonably be expected to have a Material Adverse Effect: (i) any material
License shall be cancelled, terminated, rescinded, revoked, suspended,
materially impaired or otherwise finally denied renewal, or shall cease to be
in full force and effect; (ii) any proceeding shall have been instituted by or
shall have been commenced before any court or any Communications Regulatory
Authority that would reasonably be expected to result in (a) cancellation,
termination, rescission, revocation, material impairment, suspension or denial
of renewal of a material License, or (b) a modification of a material License
in a material adverse respect or a renewal thereof on terms that materially
and adversely affect the economic or commercial value or usefulness thereof;
or (iii) any material Interconnection Agreement shall be terminated, reformed,
suspended or otherwise materially impaired, or shall be renegotiated and
renewed or replaced on terms that materially and adversely affect the economic
or commercial value or usefulness thereof, whether by action of the parties
thereto or by action of or under, modification to, or rescinding of the
Communications Act, State Law or any Regulations, in whole or in part; or

7.14     STOCKHOLDER AND NASDAQ APPROVALS.

         The proxy statement relating to the Stockholder Approval for the
Committed Preferred shall not have been filed with the SEC within 15 days
after the Restatement Effective Date or the Stockholder Approval and any
required NASDAQ approval for the Committed Preferred shall not have been
obtained within 90 days after the Restatement Effective Date;

THEN (i) upon the occurrence of any Event of Default described in subsection
7.6 or 7.7, each of (a) the unpaid principal amount of and accrued interest on
the Loans and (b) all other Obligations shall automatically become immediately
due and payable, without presentment, demand, protest or other requirements of
any kind, all of which are hereby expressly waived by Borrowers and (ii) upon
the occurrence and during the continuation of any other Event of Default,
Administrative Agent shall, upon the request or with the consent of Requisite
Lenders, by written notice to Borrowers, (1) declare all or any portion of the
amounts described in clauses (a) and (b) above to be, and the same shall
forthwith become, immediately due and payable, and the obligation of each
Lender to make any Loan hereunder shall thereupon terminate and (2) subject to
the terms of the Loan Documents, take any and all other actions requested by
Requisite Lenders.

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         Notwithstanding anything contained in the second preceding paragraph,
if at any time within 60 days after an acceleration of the Loans pursuant to
clause (ii) of such paragraph Borrowers shall pay all arrears of interest and
all payments on account of principal which shall have become due otherwise
than as a result of such acceleration (with interest on principal and, to the
extent permitted by law, on overdue interest, at the rates specified in this
Agreement) and all Events of Default and Potential Events of Default (other
than non-payment of the principal of and accrued interest on the Loans, in
each case which is due and payable solely by virtue of acceleration) shall be
remedied or waived pursuant to subsection 9.6, then Requisite Lenders, by
written notice to Borrowers, may at their option rescind and annul such
acceleration and its consequences; but such action shall not affect any
subsequent Event of Default or Potential Event of Default or impair any right
consequent thereon. The provisions of this paragraph are intended merely to
bind Lenders to a decision which may be made at the election of Requisite
Lenders and are not intended, directly or indirectly, to benefit Borrowers,
and such provisions shall not at any time be construed so as to grant
Borrowers the right to require Lenders to rescind or annul any acceleration
hereunder or to preclude Administrative Agent or Lenders from exercising any
of the rights or remedies available to them under any of the Loan Documents,
even if the conditions set forth in this paragraph are met.

                                  SECTION 8.
                                    AGENTS

8.1      APPOINTMENT.

         (A) APPOINTMENT OF AGENTS. GSCP is hereby appointed Arranger and
Syndication Agent hereunder, and each Lender hereby authorizes Arranger and
Syndication Agent to act as its agent in accordance with the terms of this
Agreement and the other Loan Documents. BNY is hereby appointed Administrative
Agent hereunder and under the other Loan Documents and each Lender hereby
authorizes Administrative Agent to act as its agent in accordance with the
terms of this Agreement and the other Loan Documents. First Union National
Bank is hereby appointed Documentation Agent hereunder and CIT Lending
Services Corporation is hereby appointed Collateral Agent hereunder and each
Lender hereby authorizes Documentation Agent and Collateral Agent to act as
its agent in accordance with the terms of this Agreement and the other Loan
Documents. Each Agent hereby agrees to act upon the express conditions
contained in this Agreement and the other Loan Documents, as applicable. The
provisions of this Section 8 are solely for the benefit of Agents and Lenders
and Borrowers shall have no rights as a third party beneficiaries of any of
the provisions thereof. In performing its functions and duties under this
Agreement, each Agent shall act solely as an agent of Lenders and does not
assume and shall not be deemed to have assumed any obligation towards or
relationship of agency or trust with or for Borrowers or any of their
Subsidiaries. Each of Arranger and Syndication Agent, without consent of or
notice to any party hereto, may assign any and all of its rights or
obligations hereunder to any of its Affiliates. As of the Closing Date, all
obligations of Arranger, Syndication Agent, Documentation Agent and Collateral
Agent hereunder shall terminate other than the obligations of Syndication
Agent under subsection 2.1A(vi).

         (B) APPOINTMENT OF SUPPLEMENTAL COLLATERAL AGENTS. It is the purpose
of this Agreement and the other Loan Documents that there shall be no
violation of any law of any jurisdiction denying or restricting the right of
banking corporations or associations to transact

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business as agent or trustee in such jurisdiction. It is recognized that in
case of litigation under this Agreement or any of the other Loan Documents,
and in particular in case of the enforcement of any of the Loan Documents, or
in case Administrative Agent deems that by reason of any present or future law
of any jurisdiction it may not exercise any of the rights, powers or remedies
granted herein or in any of the other Loan Documents or take any other action
which may be desirable or necessary in connection therewith, it may be
necessary that Administrative Agent appoint an additional individual or
institution as a separate trustee, co-trustee, collateral agent or collateral
co-agent (any such additional individual or institution being referred to
herein individually as a "SUPPLEMENTAL COLLATERAL AGENT" and collectively as
"SUPPLEMENTAL COLLATERAL AGENTS").

         In the event that Administrative Agent appoints a Supplemental
Collateral Agent with respect to any Collateral, (i) each and every right,
power, privilege or duty expressed or intended by this Agreement or any of the
other Loan Documents to be exercised by or vested in or conveyed to
Administrative Agent with respect to such Collateral shall be exercisable by
and vest in such Supplemental Collateral Agent to the extent, and only to the
extent, necessary to enable such Supplemental Collateral Agent to exercise
such rights, powers and privileges with respect to such Collateral and to
perform such duties with respect to such Collateral, and every covenant and
obligation contained in the Loan Documents and necessary to the exercise or
performance thereof by such Supplemental Collateral Agent shall run to and be
enforceable by either Agent or such Supplemental Collateral Agent, and (ii)
the provisions of this Section 8 and of subsections 9.2 and 9.3 that refer to
Administrative Agent shall inure to the benefit of such Supplemental
Collateral Agent and all references therein to Administrative Agent shall be
deemed to be references to Administrative Agent and/or such Supplemental
Collateral Agent, as the context may require.

         Should any instrument in writing from Company or any other Loan Party
be required by any Supplemental Collateral Agent so appointed by
Administrative Agent for more fully and certainly vesting in and confirming to
him or it such rights, powers, privileges and duties, Company shall, or shall
cause such Loan Party to, execute, acknowledge and deliver any and all such
instruments promptly upon request by Administrative Agent. In case any
Supplemental Collateral Agent, or a successor thereto, shall die, become
incapable of acting, resign or be removed, all the rights, powers, privileges
and duties of such Supplemental Collateral Agent, to the extent permitted by
law, shall vest in and be exercised by Administrative Agent until the
appointment of a new Supplemental Collateral Agent.

8.2      POWERS AND DUTIES; GENERAL IMMUNITY.

         (A) POWERS; DUTIES SPECIFIED. Each Lender irrevocably authorizes each
Agent to take such action on such Lender's behalf and to exercise such powers,
rights and remedies hereunder and under the other Loan Documents as are
specifically delegated or granted to such Agent by the terms hereof and
thereof, together with such powers, rights and remedies as are reasonably
incidental thereto. Each Agent shall have only those duties and
responsibilities that are expressly specified in this Agreement and the other
Loan Documents. Each Agent may exercise such powers, rights and remedies and
perform such duties by or through its agents or employees. No Agent shall
have, by reason of this Agreement or any of the other Loan Documents, a
fiduciary relationship in respect of any Lender; and nothing in this Agreement
or any of the other Loan

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Documents, expressed or implied, is intended to or shall be so construed as to
impose upon any Agent any obligations in respect of this Agreement or any of
the other Loan Documents except as expressly set forth herein or therein.

         (B) NO RESPONSIBILITY FOR CERTAIN MATTERS. No Agent shall be
responsible to any Lender for the execution, effectiveness, genuineness,
validity, enforceability, collectibility or sufficiency of this Agreement or
any other Loan Document or for any representations, warranties, recitals or
statements made herein or therein or made in any written or oral statements or
in any financial or other statements, instruments, reports or certificates or
any other documents furnished or made by any of Agent to Lenders or by or on
behalf of either Borrower to any Agent or any Lender in connection with the
Loan Documents and the transactions contemplated thereby or for the financial
condition or business affairs of either Borrower or any other Person liable
for the payment of any Obligations, nor shall any Agent be required to
ascertain or inquire as to the performance or observance of any of the terms,
conditions, provisions, covenants or agreements contained in any of the Loan
Documents or as to the use of the proceeds of the Loans or as to the existence
or possible existence of any Event of Default or Potential Event of Default.
Anything contained in this Agreement to the contrary notwithstanding,
Administrative Agent shall not have any liability arising from confirmations
of the amount of outstanding Loans or the component amounts thereof.

         (C) EXCULPATORY PROVISIONS. None of Agents nor any of their
respective officers, partners, directors, employees or agents shall be liable
to Lenders for any action taken or omitted by any Agent under or in connection
with any of the Loan Documents except to the extent caused by such Agent's
gross negligence or willful misconduct. Each Agent shall be entitled to
refrain from any act or the taking of any action (including the failure to
take an action) in connection with this Agreement or any of the other Loan
Documents or from the exercise of any power, discretion or authority vested in
it hereunder or thereunder unless and until such Agent shall have received
instructions in respect thereof from Requisite Lenders (or such other Lenders
as may be required to give such instructions under subsection 9.6) and, upon
receipt of such instructions from Requisite Lenders (or such other Lenders, as
the case may be), such Agent shall be entitled to act or (where so instructed)
refrain from acting, or to exercise such power, discretion or authority, in
accordance with such instructions. Without prejudice to the generality of the
foregoing, (i) each Agent shall be entitled to rely, and shall be fully
protected in relying, upon any communication, instrument or document believed
by it to be genuine and correct and to have been signed or sent by the proper
person or persons, and shall be entitled to rely and shall be protected in
relying on opinions and judgments of attorneys (who may be attorneys for
Borrowers and their Subsidiaries), accountants, experts and other professional
advisors selected by it; and (ii) no Lender shall have any right of action
whatsoever against any Agent as a result of such Agent acting or (where so
instructed) refraining from acting under this Agreement or any of the other
Loan Documents in accordance with the instructions of Requisite Lenders (or
such other Lenders as may be required to give such instructions under
subsection 9.6).

         (D) AGENT ENTITLED TO ACT AS LENDER. The agency hereby created shall
in no way impair or affect any of the rights and powers of, or impose any
duties or obligations upon, any Agent in its individual capacity as a Lender
hereunder. With respect to its participation in the Loans and the Letters of
Credit, each Agent shall have the same rights and powers hereunder as any
other Lender and may exercise the same as though it were not performing the
duties and functions

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delegated to it hereunder, and the term "Lender" or "Lenders" or any similar
term shall, unless the context clearly otherwise indicates, include each Agent
in its individual capacity. Any Agent and its Affiliates may accept deposits
from, lend money to and generally engage in any kind of banking, trust,
financial advisory or other business with Company or any of its Affiliates as
if it were not performing the duties specified herein, and may accept fees and
other consideration from Borrowers for services in connection with this
Agreement and otherwise without having to account for the same to Lenders.

8.3      REPRESENTATIONS AND WARRANTIES; NO RESPONSIBILITY FOR APPRAISAL OF
         CREDITWORTHINESS.

         Each Lender represents and warrants that it has made its own
independent investigation of the financial condition and affairs of the Loan
Parties in connection with the making of the Loans hereunder and that it has
made and shall continue to make its own appraisal of the creditworthiness of
the Loan Parties. No Agent shall have any duty or responsibility, either
initially or on a continuing basis, to make any such investigation or any such
appraisal on behalf of Lenders or to provide any Lender with any credit or
other information with respect thereto, whether coming into its possession
before the making of the Loans or at any time or times thereafter, and no
Agent shall have any responsibility with respect to the accuracy of or the
completeness of any information provided to Lenders.

8.4      RIGHT TO INDEMNITY.

         Each Lender, in proportion to its Pro Rata Share, severally agrees to
indemnify each Agent, to the extent that such Agent shall not have been
reimbursed by Borrowers, for and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses
(including counsel fees and disbursements) or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by or asserted against
such Agent in exercising its powers, rights and remedies or performing its
duties hereunder or under the other Loan Documents or otherwise in its
capacity as such Agent in any way relating to or arising out of this Agreement
or the other Loan Documents; provided that no Lender shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from such Agent's
gross negligence or willful misconduct. If any indemnity furnished to any
Agent for any purpose shall, in the opinion of such Agent, be insufficient or
become impaired, such Agent may call for additional indemnity and cease, or
not commence, to do the acts indemnified against until such additional
indemnity is furnished.

8.5      SUCCESSOR ADMINISTRATIVE AGENT.

         (A) SUCCESSOR ADMINISTRATIVE AGENT. Administrative Agent may resign
at any time by giving 30 days' prior written notice thereof to Lenders and
Borrowers, and Administrative Agent may be removed at any time with or without
cause by an instrument or concurrent instruments in writing delivered to
Borrowers and Administrative Agent and signed by Requisite Lenders. Upon any
such notice of resignation or any such removal, Requisite Lenders shall have
the right, upon five Business Days' notice to Borrowers, to appoint a
successor Administrative Agent, which successor Administrative Agent shall,
unless an Event of Default shall have occurred and be continuing, be subject
to approval of Borrowers (such approval not to be unreasonably

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withheld or delayed). Upon the acceptance of any appointment as Administrative
Agent hereunder by a successor Administrative Agent, that successor
Administrative Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring or removed
Administrative Agent and the retiring or removed Administrative Agent shall be
discharged from its duties and obligations under this Agreement. After any
retiring or removed Administrative Agent's resignation or removal hereunder as
Administrative Agent, the provisions of this Section 8 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Agent under this Agreement.

         (B)      INTENTIONALLY OMITTED.

8.6      COLLATERAL DOCUMENTS AND GUARANTIES.

         Each Lender hereby further authorizes Administrative Agent, on behalf
of and for the benefit of Lenders, to enter into each Collateral Document as
secured party and to be the agent for and representative of Lenders under the
Subsidiary Guaranty, and each Lender agrees to be bound by the terms of each
Collateral Document and the Subsidiary Guaranty; provided that Administrative
Agent shall not (i) enter into or consent to any material amendment,
modification, termination or waiver of any provision contained in any
Collateral Document or the Subsidiary Guaranty or (ii) release any Collateral
(except as otherwise expressly permitted or required pursuant to the terms of
this Agreement or the applicable Collateral Document), in each case without
the prior consent of Requisite Lenders (or, if required pursuant to subsection
9.6, all Lenders); provided further, however, that, without further written
consent or authorization from Lenders, Administrative Agent shall, in
accordance with the terms of this subsection 8.6 and the Loan Documents,
execute any documents or instruments necessary to (a) release any Lien
encumbering any item of Collateral that is the subject of a sale or other
disposition of assets permitted by this Agreement or to which Requisite
Lenders have otherwise consented or (b) release any Subsidiary Guarantor from
the Subsidiary Guaranty if all of the Capital Stock of such Subsidiary
Guarantor is sold to any Person (other than an Affiliate of Company) pursuant
to a sale or other disposition permitted hereunder or to which Requisite
Lenders have otherwise consented. In the event Collateral is sold in an Asset
Sale permitted hereunder or otherwise consented to by Requisite Lenders,
Administrative Agent shall, without further consent or authorization from
Lenders, release the Liens granted under the Collateral Documents on the
Collateral that is the subject of such Asset Sale concurrently with the
consummation of such Asset Sale; provided that Administrative Agent (and its
counsel) shall have received (i) not less than 5 Business Days' prior to the
consummation of such Asset Sale from Company unless a shorter notice period is
agreed to by Administrative Agent, notice of such Asset Sale in the form of an
Officers' Certificate (1) certifying that no Event of Default or Potential
Event of Default shall have occurred and be continuing as of the date of such
release of Collateral, (2) setting forth a detailed description of the
Collateral subject to such Asset Sale, (3) certifying that such Asset Sale is
permitted under this Agreement and that all conditions precedent to such Asset
Sale under this Agreement have been met, (4) attaching UCC-3 release
statements correctly prepared in form and substance reasonably satisfactory to
Administrative Agent for execution by Administrative Agent to release the
Lenders' Lien on the Collateral subject to such Asset Sale and (5) attaching,
if applicable, in the case of an ACSI Network Sale, a true and correct copy of
the ACSI Escrow Agreement; (ii) upon consummation of such Asset Sale, written
notice of the consummation thereof; and (iii) in the case of an Asset Sale
other than an ACSI Asset Sale prior

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to or simultaneously with the consummation of such Asset Sale, Administrative
Agent shall have received the Officers' Certificate required pursuant to
subsection 2.4B(iii)(f) together with all Net Asset Sale Proceeds of such
Asset Sale, if any, then required to be applied to repay Secured Obligations
under this Agreement. Upon payment in full of all of the Obligations,
Administrative Agent shall release the Liens on such Collateral granted
pursuant to the Collateral Documents. Upon any release of Collateral pursuant
to the foregoing, Administrative Agent shall, at Borrowers' expense, execute
and deliver such documents (without recourse or representation or warranty) as
reasonably requested to evidence such release. Anything contained in any of
the Loan Documents to the contrary notwithstanding, Company, Administrative
Agent and each Lender hereby agree that (1) no Lender shall have any right
individually to realize upon any of the Collateral under any Collateral
Document or to enforce the Subsidiary Guaranty, it being understood and agreed
that all powers, rights and remedies under the Collateral Documents and the
Subsidiary Guaranty may be exercised solely by Administrative Agent for the
benefit of Lenders in accordance with the terms thereof, and (2) in the event
of a foreclosure by Administrative Agent on any of the Collateral pursuant to
a public or private sale, Administrative Agent or any Lender may be the
purchaser of any or all of such Collateral at any such sale and Administrative
Agent, as agent for and representative of Lenders (but not any Lender or
Lenders in its or their respective individual capacities unless Requisite
Lenders shall otherwise agree in writing) shall be entitled, for the purpose
of bidding and making settlement or payment of the purchase price for all or
any portion of the Collateral sold at any such public sale, to use and apply
any of the Obligations as a credit on account of the purchase price for any
Collateral payable by Administrative Agent at such sale.

                                  SECTION 9.
                                MISCELLANEOUS

9.1      ASSIGNMENTS AND PARTICIPATIONS IN LOANS.

         (A) GENERAL. Subject to subsection 9.1B, each Lender shall have the
right at any time to (i) sell, assign or transfer to any Eligible Assignee, or
(ii) sell participations to any Person in, all or any part of any Loan or
Loans made by it or any other interest herein or in any other Obligations owed
to it; provided that no such sale, assignment, transfer or participation
shall, without the consent of Borrowers, require Borrowers to file a
registration statement with the SEC or apply to qualify such sale, assignment,
transfer or participation under the securities laws of any state; provided
further that no such sale, assignment or transfer described in clause (i)
above shall be effective unless and until an Assignment Agreement effecting
such sale, assignment or transfer shall have been accepted by Administrative
Agent and recorded in the Register as provided in subsection 9.1B(ii). Except
as otherwise provided in this subsection 9.1, no Lender shall, as between
Borrowers and such Lender, be relieved of any of its obligations hereunder as
a result of any sale, assignment or transfer of, or any granting of
participations in, all or any part of its Loans, or the other Obligations owed
to such Lender.

         (B) ASSIGNMENTS.

                  (i)      Amounts and Terms of Assignments.  Each Loan or
         other Obligation may (a) be assigned in any amount to another Lender,
         or to an Affiliate of the assigning Lender or another Lender, with
         the giving of notice to Borrowers and Administrative

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         Agent or (b) be assigned in an aggregate amount of not less than
         $1,000,000 in the case of the Series A Revolving Loans and $1,000,000
         in the case of the Series B Term Loans and the Series C Term Loans
         (in each case, other than for assignments to other Lenders or
         Affiliates of such Lender or other Lenders) (or such lesser amount as
         shall constitute the aggregate amount of the Loans and other
         Obligations of the assigning Lender) to any other Eligible Assignee
         with the giving of notice to Borrowers and with the consent of
         Company (except with respect to any assignment under the Loan Put
         Agreement or upon the occurrence and during the continuance of an
         Event of Default) and Administrative Agent (which consent of Company
         and Administrative Agent shall not be unreasonably withheld or
         delayed).  To the extent of any such assignment in accordance with
         either clause (a) or (b) above, the assigning Lender shall be
         relieved of its obligations with respect to its Loans or other
         Obligations or the portion thereof so assigned.  The parties to each
         such assignment shall execute and deliver to Administrative Agent,
         for its acceptance and recording in the Register, an Assignment
         Agreement, together with a processing and recordation fee of $3,500
         with respect to assignments by any Lender (other than GSCP) to any
         person and $500 with respect to assignments by or to GSCP, and such
         forms, certificates or other evidence, if any, with respect to United
         States federal income tax withholding matters as the assignee under
         such Assignment Agreement may be required to deliver to
         Administrative Agent pursuant to subsection 2.7B(iii)(a).  Upon such
         execution, delivery, acceptance and recordation, from and after the
         effective date specified in such Assignment Agreement, (1) the
         assignee thereunder shall be a party hereto and, to the extent that
         rights and obligations hereunder have been assigned to it pursuant to
         such Assignment Agreement, shall have the rights and obligations of a
         Lender hereunder and (2) the assigning Lender thereunder shall, to
         the extent that rights and obligations hereunder have been assigned
         by it pursuant to such Assignment Agreement, relinquish its rights
         (other than any rights which survive the termination of this
         Agreement under subsection 9.8B) and be released from its obligations
         under this Agreement (and, in the case of an Assignment Agreement
         covering all or the remaining portion of an assigning Lender's rights
         and obligations under this Agreement, such Lender shall cease to be a
         party hereto.  If any such assignment occurs after the issuance of
         any Notes hereunder, the assigning Lender shall, upon the
         effectiveness of such assignment or as promptly thereafter as
         practicable, surrender its applicable Notes to Administrative Agent
         for cancellation, and thereupon, upon the request of the assignee
         and/or the assigning Lender, new Notes shall be issued to the
         assignee and/or to the assigning Lender, substantially in the form of
         Exhibit IV, Exhibit V or Exhibit VI annexed hereto, as the case may
         be, with appropriate insertions, to reflect the new Loans of the
         assignee and/or the assigning Lender.

                  (ii)     Acceptance by Administrative Agent; Recordation in
         Register.  Upon its receipt of an Assignment Agreement executed by an
         assigning Lender and an assignee representing that it is an Eligible
         Assignee, together with the processing and recordation fee referred
         to in subsection 9.1B(i) and any forms, certificates or other
         evidence with respect to United States federal income tax withholding
         matters that such assignee may be required to deliver to
         Administrative Agent pursuant to subsection 2.7B(iii)(a),
         Administrative Agent shall, if Administrative Agent and Company have
         consented to the assignment evidenced thereby (in each case to the
         extent such consent is required pursuant to subsection 9.1B(i)), (a)
         accept such Assignment Agreement by executing a

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         counterpart thereof as provided therein (which acceptance shall
         evidence any required consent of Administrative Agent to such
         assignment), (b) record the information contained therein in the
         Register, and (c) give prompt notice thereof to Company.
         Administrative Agent shall maintain a copy of each Assignment
         Agreement delivered to and accepted by it as provided in this
         subsection 9.1B(ii).

                  (iii)    Notwithstanding anything to the contrary set forth
         in this subsection 9.1, any assignments of Loans made pursuant to the
         Loan Put Agreement shall be permitted assignments hereunder.

         (C) PARTICIPATIONS. The holder of any participation, other than an
Affiliate of the Lender granting such participation, shall not be entitled to
require such Lender to take or omit to take any action hereunder except action
directly affecting (i) the extension of the regularly scheduled maturity of
any portion of the principal amount of or interest on any Loan allocated to
such participation or (ii) a reduction of the principal amount of or the rate
of interest payable on any Loan allocated to such participation, and all
amounts payable by Company hereunder (including amounts payable to such Lender
pursuant to subsections 2.6D and 2.7) shall be determined as if such Lender
had not sold such participation. Company and each Lender hereby acknowledge
and agree that, solely for purposes of subsections 9.4 and 9.5, (a) any
participation will give rise to a direct obligation of Company to the
participant and (b) the participant shall be considered to be a "Lender".

         (D) ASSIGNMENTS TO FEDERAL RESERVE BANKS. In addition to the
assignments and participations permitted under the foregoing provisions of
this subsection 9.1, any Lender may assign and pledge all or any portion of
its Loans, the other Obligations owed to such Lender, and its Notes (i) to any
Federal Reserve Bank as collateral security pursuant to Regulation A of the
Board of Governors of the Federal Reserve System and any operating circular
issued by such Federal Reserve Bank or (ii) to a trustee in connection with a
Loan securitization transaction; provided that (i) no Lender shall, as between
Borrowers and such Lender, be relieved of any of its obligations hereunder as
a result of any such assignment and pledge and (ii) in no event shall any
Federal Reserve Bank be considered to be a "Lender" or be entitled to require
the assigning Lender to take or omit to take any action hereunder.

         (E) INFORMATION. Each Lender may furnish any information concerning
the Loan Parties in the possession of that Lender from time to time to
assignees and participants (including prospective assignees and participants),
subject to subsection 9.18.

         (F) REPRESENTATIONS OF LENDERS. Each Lender listed on the signature
pages hereof hereby represents and warrants (i) that it is an Eligible
Assignee described in clause (i) of the definition thereof; (ii) that it has
experience and expertise in the making of or investing in loans such as the
Loans; and (iii) that it will make its Loans for its own account in the
ordinary course of its business and without a view to distribution of such
Loans within the meaning of the Securities Act or the Exchange Act or other
federal securities laws (it being understood that, subject to the provisions
of this subsection 9.1, the disposition of such Loans or any interests therein
shall at all times remain within its exclusive control). Each Lender that
becomes a party hereto pursuant to an Assignment Agreement shall be deemed to
agree that the representations

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and warranties of such Lender contained in Section 2(c) of such Assignment
Agreement are incorporated herein by this reference.

9.2      EXPENSES.

         Whether or not the transactions contemplated hereby shall be
consummated, Borrowers agree, jointly and severally, to pay promptly (i) all
the actual and reasonable costs and expenses of preparation of the Loan
Documents and any consents, amendments, waivers or other modifications
thereto; (ii) all the costs of furnishing all opinions by counsel for
Borrowers (including any opinions requested by Lenders as to any legal matters
arising hereunder) and of Borrowers' performance of and compliance with all
agreements and conditions on its part to be performed or complied with under
this Agreement and the other Loan Documents including with respect to
confirming compliance with environmental, insurance and solvency requirements;
(iii) the reasonable fees, expenses and disbursements of counsel to Arranger
and counsel to Administrative Agent (in each case including allocated costs of
internal counsel) in connection with the negotiation, preparation, execution
and administration of the Loan Documents and any consents, amendments, waivers
or other modifications thereto and any other documents or matters requested by
Borrowers; (iv) all the actual costs and reasonable expenses of creating and
perfecting Liens in favor of Administrative Agent on behalf of Lenders
pursuant to any Collateral Document, including filing and recording fees,
expenses and taxes, stamp or documentary taxes, search fees, title insurance
premiums, and reasonable fees, expenses and disbursements of counsel to
Arranger and counsel to Administrative Agent and of counsel providing any
opinions that Arranger, Administrative Agent or Requisite Lenders may request
in respect of the Collateral Documents or the Liens created pursuant thereto;
(v) all the actual costs and reasonable expenses and disbursements of any
auditors, accountants or appraisers and any environmental or other
consultants, advisors and agents employed or retained by Administrative Agent
or Arranger and its counsel; (vi) all the actual costs and reasonable expenses
disbursements of any consultants, advisors and agents employed or retained by
Administrative Agent and its counsel; (vii) all other actual and reasonable
costs and expenses incurred by Syndication Agent, Arranger or Administrative
Agent in connection with the syndication of the Loans and the negotiation,
preparation and execution of the Loan Documents and any consents, amendments,
waivers or other modifications thereto and the transactions contemplated
thereby; and (viii) after the occurrence of an Event of Default, all costs and
expenses, including reasonable attorneys' fees (including allocated costs of
internal counsel) and costs of settlement, incurred by Arranger,
Administrative Agent and Lenders in enforcing any Obligations of or in
collecting any payments due from any Loan Party hereunder or under the other
Loan Documents by reason of such Event of Default (including in connection
with the sale of, collection from, or other realization upon any of the
Collateral or the enforcement of the Subsidiary Guaranty) or in connection
with any refinancing or restructuring of the credit arrangements provided
under this Agreement in the nature of a "work-out" or pursuant to any
insolvency or bankruptcy proceedings. Agents and Lenders agree that as long as
no Event of Default or Potential Event of Default shall have occurred and be
continuing, they shall notify Borrowers of any consultants to be engaged and
discuss with Borrowers the consultant's proposed fees.

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9.3      INDEMNITY.

         In addition to the payment of expenses pursuant to subsection 9.2,
whether or not the transactions contemplated hereby shall be consummated,
Borrowers agree, jointly and severally, to defend (subject to Indemnitees'
selection of counsel), indemnify, pay and hold harmless Agents and Lenders,
and the officers, partners, directors, employees, agents and affiliates of any
of Agents and Lenders (collectively called the "INDEMNITEES"), from and
against any and all Indemnified Liabilities (as hereinafter defined); provided
that neither Borrower shall have any obligation to any Indemnitee hereunder
with respect to any Indemnified Liabilities to the extent such Indemnified
Liabilities arise solely from the gross negligence or willful misconduct of
that Indemnitee as determined by a final, non-appealable judgment of a court
of competent jurisdiction.

         As used herein, "INDEMNIFIED LIABILITIES" means, collectively, any
and all liabilities, obligations, losses, damages (including natural resource
damages), penalties, actions, judgments, suits, claims (including
Environmental Claims), costs (including the costs of any investigation, study,
sampling, testing, abatement, cleanup, removal, remediation or other response
action necessary to remove, remediate, clean up or abate any Hazardous
Materials Activity), expenses and disbursements of any kind or nature
whatsoever (including the reasonable fees and disbursements of counsel for
Indemnitees in connection with any investigative, administrative or judicial
proceeding commenced or threatened by any Person, whether or not any such
Indemnitee shall be designated as a party or a potential party thereto, and
any fees or expenses incurred by Indemnitees in enforcing this indemnity),
whether direct, indirect or consequential and whether based on any federal,
state or foreign laws, statutes, rules or regulations (including securities
and commercial laws, statutes, rules or regulations and Environmental Laws),
on common law or equitable cause or on contract or otherwise, that may be
imposed on, incurred by, or asserted against any such Indemnitee, in any
manner relating to or arising out of (i) this Agreement or the other Loan
Documents or the transactions contemplated hereby or thereby (including
Lenders' agreement to make the Loans hereunder or the use or intended use of
the proceeds thereof, or any enforcement of any of the Loan Documents
(including any sale of, collection from, or other realization upon any of the
Collateral or the enforcement of the Subsidiary Guaranty)), (ii) the
statements contained in the commitment letter delivered by any Lender to
Company with respect thereto, or (iii) any Environmental Claim or any
Hazardous Materials Activity relating to or arising from, directly or
indirectly, any past or present activity, operation, land ownership, or
practice of Company or any of its Subsidiaries.

         To the extent that the undertakings to defend, indemnify, pay and
hold harmless set forth in this subsection 9.3 may be unenforceable in whole
or in part because they are violative of any law or public policy, Borrowers
shall contribute the maximum portion that it is permitted to pay and satisfy
under applicable law to the payment and satisfaction of all Indemnified
Liabilities incurred by Indemnitees or any of them.

9.4      SET-OFF; SECURITY INTEREST IN DEPOSIT ACCOUNTS.

         In addition to any rights now or hereafter granted under applicable
law and not by way of limitation of any such rights, upon the occurrence of
any Event of Default each Lender is hereby authorized by Borrowers at any time
or from time to time, without notice to Borrowers or to any

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other Person, any such notice being hereby expressly waived, to set off and to
appropriate and to apply any and all deposits (general or special, including
Indebtedness evidenced by certificates of deposit, whether matured or
unmatured, but not including trust accounts) and any other Indebtedness at any
time held or owing by that Lender to or for the credit or the account of such
Borrower against and on account of the obligations and liabilities of such
Borrower to that Lender under this Agreement and the other Loan Documents,
including all claims of any nature or description arising out of or connected
with this Agreement or any other Loan Document, irrespective of whether or not
(i) that Lender shall have made any demand hereunder or (ii) the principal of
or the interest on the Loans or any other amounts due hereunder shall have
become due and payable pursuant to Section 7 and although said obligations and
liabilities, or any of them, may be contingent or unmatured. Borrowers hereby
further grant to Administrative Agent and each Lender a security interest in
all deposits and accounts maintained with Administrative Agent or such Lender
as security for the Obligations.

9.5      RATABLE SHARING.

         Lenders hereby agree among themselves that if any of them shall,
whether by voluntary payment (other than a voluntary prepayment of Loans made
and applied in accordance with the terms of this Agreement), by realization
upon security, through the exercise of any right of set-off or banker's lien,
by counterclaim or cross action or by the enforcement of any right under the
Loan Documents or otherwise, or as adequate protection of a deposit treated as
cash collateral under the Bankruptcy Code, receive payment or reduction of a
proportion of the aggregate amount of principal, interest, fees and other
amounts then due and owing to that Lender hereunder or under the other Loan
Documents (collectively, the "AGGREGATE AMOUNTS DUE" to such Lender) which is
greater than the proportion received by any other Lender in respect of the
Aggregate Amounts Due to such other Lender, then the Lender receiving such
proportionately greater payment shall (i) notify Administrative Agent and each
other Lender of the receipt of such payment and (ii) apply a portion of such
payment to purchase participations (which it shall be deemed to have purchased
from each seller of a participation simultaneously upon the receipt by such
seller of its portion of such payment) in the Aggregate Amounts Due to the
other Lenders so that all such recoveries of Aggregate Amounts Due shall be
shared by all Lenders in proportion to the Aggregate Amounts Due to them;
provided that if all or part of such proportionately greater payment received
by such purchasing Lender is thereafter recovered from such Lender upon the
bankruptcy or reorganization of either Borrower or otherwise, those purchases
shall be rescinded and the purchase prices paid for such participations shall
be returned to such purchasing Lender ratably to the extent of such recovery,
but without interest. Borrowers expressly consent to the foregoing arrangement
and agrees that any holder of a participation so purchased may exercise any
and all rights of banker's lien, set-off or counterclaim with respect to any
and all monies owing by Borrowers to that holder with respect thereto as fully
as if that holder were owed the amount of the participation held by that
holder.

9.6      AMENDMENTS AND WAIVERS.

         No amendment, modification, termination or waiver of any provision of
the Loan Documents, or consent to any departure by Loan Parties therefrom,
shall in any event be effective without the written concurrence of Requisite
Lenders; provided that no such amendment, modification, termination, waiver or
consent shall, without the consent of each

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<PAGE>   115

Lender (with Obligations directly affected in the case of the following clause
(i)): (i) extend the scheduled final maturity of any Loan or Note or waive,
reduce or postpone any scheduled repayments of the Loans pursuant to
subsection 2.4A or reduce the rate of interest on any Loan (other than any
waiver of any increase in the interest rate applicable to any Loan pursuant to
subsection 2.2E) or any commitment fees payable hereunder, or extend the time
for payment of any such interest or fees, or reduce the principal amount of
any Loan or (ii) amend, modify, terminate or waive any provision of subsection
2.4D(iii), subsection 9.5 or this subsection 9.6, (iii) reduce the percentage
specified in the definition of "Requisite Lenders", (iv) consent to the
assignment or transfer by either Borrower of any of its rights and obligations
under this Agreement or (v) release all or substantially all of the Collateral
or all or substantially all of the Subsidiary Guarantors from the Subsidiary
Guaranty except as expressly provided in the Loan Documents; provided, further
that no such amendment, modification, termination or waiver shall amend,
modify, terminate or waive any provision of Section 8 as the same applies to
any Agent, or any other provision of this Agreement as the same applies to the
rights or obligations of any Agent, in each case without the consent of such
Agent, and provided further that, subject to the agreement of the Lenders not
to take certain actions without the consent of the Huff Fund in Section 7 of
the Loan Put Agreement, neither the Huff Fund nor any Affiliate of the Huff
Fund shall have any voting rights under this subsection 9.6 or otherwise under
the Loan Documents in respect of the Assigned Loans (as defined in the Loan
Put Agreement) including in any bankruptcy proceedings. The immediately
preceding proviso shall terminate with respect to Loans that are duly assigned
pursuant to subsection 9.1 to a Person that is not an Affiliate of the Huff
Fund. Administrative Agent may, but shall have no obligation to, with the
concurrence of any Lender, execute amendments, modifications, waivers or
consents on behalf of that Lender. Any waiver or consent shall be effective
only in the specific instance and for the specific purpose for which it was
given. No notice to or demand on Borrowers in any case shall entitle Borrowers
to any other or further notice or demand in similar or other circumstances.
Any amendment, modification, termination, waiver or consent effected in
accordance with this subsection 9.6 shall be binding upon each Lender at the
time outstanding, each future Lender and, if signed by Borrowers, on
Borrowers.

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9.7      NOTICES.

         Unless otherwise specifically provided herein, any notice or other
communication herein required or permitted to be given shall be in writing and
may be personally served, telexed or sent by telefacsimile or United States
mail or courier service and shall be deemed to have been given when delivered
in person or by courier service, upon receipt of telefacsimile or telex, or
three Business Days after depositing it in the United States mail with postage
prepaid and properly addressed; provided that notices to Arranger, Syndication
Agent or Administrative Agent shall not be effective until received. For the
purposes hereof, the address of each party hereto shall be as set forth under
such party's name on the signature pages hereof or (i) as to Borrowers and
Administrative Agent, such other address as shall be designated by such Person
in a written notice delivered to the other parties hereto and (ii) as to each
other party, such other address as shall be designated by such party in a
written notice delivered to Administrative Agent.

9.8      SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.

         (A) All representations, warranties and agreements made herein shall
survive the execution and delivery of this Agreement.

         (B) Notwithstanding anything in this Agreement or implied by law to
the contrary, the agreements of Borrowers set forth in subsections 2.6D, 2.7,
9.2, 9.3 and 9.4 and the agreements of Lenders set forth in subsections 8.2C,
8.4 and 9.5 shall survive the payment of the Loans and the termination of this
Agreement.

9.9      FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE.

         No failure or delay on the part of Administrative Agent or any Lender
in the exercise of any power, right or privilege hereunder or under any other
Loan Document shall impair such power, right or privilege or be construed to
be a waiver of any default or acquiescence therein, nor shall any single or
partial exercise of any such power, right or privilege preclude other or
further exercise thereof or of any other power, right or privilege. All rights
and remedies existing under this Agreement and the other Loan Documents are
cumulative to, and not exclusive of, any rights or remedies otherwise
available.

9.10     MARSHALLING; PAYMENTS SET ASIDE.

         Neither Administrative Agent nor any Lender shall be under any
obligation to marshal any assets in favor of Company or any other party or
against or in payment of any or all of the Obligations. To the extent that
either Borrower makes a payment or payments to Administrative Agent or Lenders
(or to Administrative Agent for the benefit of Lenders), or Administrative
Agent or Lenders enforce any security interests or exercise their rights of
setoff, and such payment or payments or the proceeds of such enforcement or
setoff or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside and/or required to be repaid to a
trustee, receiver or any other party under any bankruptcy law, any other state
or federal law, common law or any equitable cause, then, to the extent of such
recovery, the obligation or part thereof originally intended to be satisfied,
and all Liens, rights and remedies

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therefor or related thereto, shall be revived and continued in full force and
effect as if such payment or payments had not been made or such enforcement or
setoff had not occurred.

9.11     SEVERABILITY.

         In case any provision in or obligation under this Agreement or the
Notes shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction,
shall not in any way be affected or impaired thereby.

9.12     OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF LENDERS' RIGHTS.

         The obligations of Lenders hereunder are several and no Lender shall
be responsible for the obligations of any other Lender hereunder. Nothing
contained herein or in any other Loan Document, and no action taken by Lenders
pursuant hereto or thereto, shall be deemed to constitute Lenders as a
partnership, an association, a joint venture or any other kind of entity. The
amounts payable at any time hereunder to each Lender shall be a separate and
independent debt, and each Lender shall be entitled to protect and enforce its
rights arising out of this Agreement and it shall not be necessary for any
other Lender to be joined as an additional party in any proceeding for such
purpose.

9.13     HEADINGS.

         Section and subsection headings in this Agreement are included herein
for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.

9.14     APPLICABLE LAW.

         THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT
REGARD TO INCONSISTENT CONFLICTS OF LAWS PRINCIPLES.

9.15     SUCCESSORS AND ASSIGNS.

         This Agreement shall be binding upon the parties hereto and their
respective successors and assigns and shall inure to the benefit of the
parties hereto and the successors and assigns of Lenders (it being understood
that Lenders' rights of assignment are subject to subsection 9.1). Neither
Borrowers' rights or obligations hereunder nor any interest therein may be
assigned or delegated by Borrowers without the prior written consent of all
Lenders.

9.16     CONSENT TO JURISDICTION AND SERVICE OF PROCESS.

         ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST EITHER BORROWER ARISING OUT
OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN

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DOCUMENT, OR ANY OBLIGATIONS THEREUNDER, MAY BE BROUGHT IN ANY STATE OR
FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE, COUNTY AND CITY OF NEW
YORK. BY EXECUTING AND DELIVERING THIS AGREEMENT, EACH BORROWER, FOR ITSELF
AND IN CONNECTION WITH ITS PROPERTIES, IRREVOCABLY (I) ACCEPTS GENERALLY AND
UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS; (II)
WAIVES ANY DEFENSE OF FORUM NON CONVENIENS; (III) AGREES THAT SERVICE OF ALL
PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR
CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO COMPANY AT ITS ADDRESS PROVIDED
IN ACCORDANCE WITH SUBSECTION 9.7; (IV) AGREES THAT SERVICE AS PROVIDED IN
CLAUSE (III) ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER SUCH
BORROWER IN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES
EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT; (V) AGREES THAT LENDERS RETAIN
THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING
PROCEEDINGS AGAINST SUCH BORROWER IN THE COURTS OF ANY OTHER JURISDICTION; AND
(VI) AGREES THAT THE PROVISIONS OF THIS SUBSECTION 9.16 RELATING TO
JURISDICTION AND VENUE SHALL BE BINDING AND ENFORCEABLE TO THE FULLEST EXTENT
PERMISSIBLE UNDER NEW YORK GENERAL OBLIGATIONS LAW SECTION 5-1402 OR
OTHERWISE.

9.17     WAIVER OF JURY TRIAL.

         EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR ANY
DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION
OR THE LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. The scope of
this waiver is intended to be all-encompassing of any and all disputes that
may be filed in any court and that relate to the subject matter of this
transaction, including contract claims, tort claims, breach of duty claims and
all other common law and statutory claims. Each party hereto acknowledges that
this waiver is a material inducement to enter into a business relationship,
that each has already relied on this waiver in entering into this Agreement,
and that each will continue to rely on this waiver in their related future
dealings. Each party hereto further warrants and represents that it has
reviewed this waiver with its legal counsel and that it knowingly and
voluntarily waives its jury trial rights following consultation with legal
counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED
EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER
SPECIFICALLY REFERRING TO THIS SUBSECTION 9.17 AND EXECUTED BY EACH OF THE
PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR ANY OF THE OTHER
LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS
MADE HEREUNDER. In the event of litigation, this Agreement may be filed as a
written consent to a trial by the court.

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9.18     CONFIDENTIALITY.

         Each Lender shall hold all non-public information obtained pursuant
to the requirements of this Agreement which has been identified as
confidential by Borrowers in accordance with such Lender's customary
procedures for handling confidential information of this nature and in
accordance with prudent lending or investing practices, it being understood
and agreed by Borrowers that in any event a Lender may make disclosures to
Affiliates of such Lender or disclosures reasonably required by any bona fide
assignee, transferee or participant in connection with the contemplated
assignment or transfer by such Lender of any Loans or any participations
therein (it being understood that the Persons to whom such disclosure is made
will be informed of the confidential nature of such information and will have
agreed to keep such information confidential) or disclosures required by any
governmental agency or representative thereof or by the National Association
of Insurance Commissioners or pursuant to legal process; provided that, unless
specifically prohibited by applicable law or court order, each Lender shall
notify Borrowers of any request by any governmental agency or representative
thereof (other than any such request in connection with any examination of the
financial condition of such Lender by such governmental agency) for disclosure
of any such non-public information prior to disclosure of such information;
and provided, further that in no event shall any Lender be obligated or
required to return any materials furnished by Company or any of its
Subsidiaries.

9.19     MAXIMUM AMOUNT.

         (A) It is the intention of Borrowers and Lenders to conform strictly
to the usury and similar laws relating to interest from time to time in force,
and all agreements between Borrowers, Administrative Agent and Lenders,
whether now existing or hereafter arising and whether oral or written, are
hereby expressly limited so that in no contingency or event whatsoever,
whether by acceleration of maturity hereof or otherwise, shall the amount paid
or agreed to be paid in the aggregate to Lenders or to Administrative Agent on
behalf of Lenders as interest hereunder or under the other Loan Documents or
in any other security agreement given to secure the Obligations, or in any
other document evidencing, securing or pertaining to the indebtedness
evidenced hereby or thereby, exceed the maximum amount permissible under
applicable usury or such other laws (the "MAXIMUM AMOUNT"). If under any
circumstances whatsoever fulfillment of any provision hereof, or of any of the
other Loan Documents, at the time performance of such provision shall be due,
shall involve exceeding the Maximum Amount, then, ipso facto, the obligation
to be fulfilled shall be reduced to the Maximum Amount. For the purposes of
calculating the actual amount of interest paid and/or payable hereunder in
respect of laws pertaining to usury or such other laws, all sums paid or
agreed to be paid to Lenders for the use, forbearance or detention of the
indebtedness of Company evidenced hereby, outstanding from time to time shall,
to the extent permitted by applicable law, be amortized, pro rated, allocated
and spread from the date of disbursement of the proceeds of the Loans until
payment in full of all of such indebtedness, so that the actual rate of
interest on account of such indebtedness is uniform throughout the term
hereof. The terms and provisions of this subsection shall control and
supersede every other provision of all agreements between Company,
Administrative Agent and Lenders.

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         (B) If under any circumstances Lenders shall receive an amount which
would exceed the Maximum Amount, such amount shall be deemed a payment in
reduction of the principal amount of the Loans and shall be treated as a
voluntary prepayment under subsection 2.4B(i), and shall be so applied in
accordance with subsection 2.4B(iv) hereof, or if such amount exceeds the
unpaid balance of the Loans and any other indebtedness of Company in favor of
Lenders, the excess shall be deemed to have been a payment made by mistake and
shall be refunded to Company.

9.20     ENTIRE AGREEMENT.

         This Agreement, together with the other Loan Documents and other
documents delivered pursuant hereto and thereto, represent the entire
agreement among the parties hereto with respect to the subject matter hereof
and supersede all prior agreements and understandings of the parties relating
to the subject matter hereof.

9.21     COUNTERPARTS; EFFECTIVENESS.

         This Agreement and any amendments, waivers, consents or supplements
hereto or in connection herewith may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when
so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and
attached to a single counterpart so that all signature pages are physically
attached to the same document. This Agreement shall become effective upon the
execution of a counterpart hereof by each of the parties hereto and receipt by
Company and Administrative Agent of written or telephonic notification of such
execution and authorization of delivery thereof.

9.22     ACKNOWLEDGMENT AND CONSENT.

         Each Loan Party hereby acknowledges that it has reviewed the terms
and provisions of this Agreement. Each Loan Party hereby confirms that each
Loan Document to which it is a party or otherwise bound and all Collateral
encumbered thereby will continue to guaranty or secure, as the case may be, to
the fullest extent possible the payment and performance of all "Guarantied
Obligations" and "Secured Obligations" as the case may be (in each case as
such terms are defined in the applicable Loan Document), including without
limitation the payment and performance of all such "Guarantied Obligations" or
"Secured Obligations," as the case may be, in respect of the Obligations of
Borrowers now or hereafter existing under or in respect of this Agreement.
Each Loan Party acknowledges and agrees that any of the Loan Documents entered
with respect to the Original Credit Agreement and to which it is a party or
otherwise bound shall continue in full force and effect and that all of its
obligations thereunder shall be valid and enforceable and shall not be
impaired or limited by the execution or effectiveness of this Agreement,
except with respect to the Original Credit Agreement, to the extent expressly
modified by this Agreement. Each Loan Party (other than Borrowers)
acknowledges and agrees that (i) notwithstanding the conditions to
effectiveness set forth in this Loan Party is not required by the terms of the
Original Credit Agreement or any other Loan Document to consent to this
Agreement and (ii) nothing in this Agreement or any other Loan Document shall
be deemed to

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require the consent of such Loan Party to any future amendments, consents or
waivers to this Agreement.

         Each of the Loan Parties hereby, to the fullest extent permitted by
applicable law, acknowledges and confirms that it does not have any grounds
and hereby agrees not to challenge (or to allege or to pursue any matter,
cause or claim arising under or with respect to) the Original Credit
Agreement, this Agreement or any of the other Loan Documents, any of the terms
or conditions thereof or thereunder, or the status of any thereof as legal,
valid and binding obligations enforceable in accordance with their respective
terms; and it does not possess (and hereby forever waives, remises, releases,
discharges and holds harmless the Lenders and the Agents, and their respective
affiliates, stockholders, directors, officers, employees, attorneys, agents
and representatives and each of their respective heirs, executors,
administrators, successors and assigns (collectively, the "INDEMNIFIED
PARTIES") from and against, and agrees not to allege or pursue) any action,
cause of action, suit, debt, claim, counterclaim, cross-claim, demand,
defense, offset, opposition, demand and other right of action whatsoever,
whether in law, equity or otherwise (which it, all those claiming by, through
or under it, or its successors or assigns, have or may have) against the
Indemnified Parties, or any of them, prior to or as of the Restatement
Effective Date for, upon, or by reason of, any matter, cause or thing
whatsoever, arising out of, or relating to the Original Credit Agreement, this
Agreement or any of the other Loan Documents (including, without limitation,
any payment, performance, validity or enforceability of any or all of the
terms or conditions thereof or thereunder) or any transaction relating to any
of the foregoing, or any or all actions, courses of conduct or other matters
in any manner whatsoever relating to or otherwise connected with any of the
foregoing.

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

                          BORROWERS:

                          e.spire COMMUNICATIONS, INC.

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

                          e.spire FINANCE CORPORATION

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

                          LENDERS:

                          GOLDMAN SACHS CREDIT PARTNERS
                          L.P., individually, as Arranger and as
                          Syndication Agent

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

                          THE BANK OF NEW YORK, individually and as
                          Administrative Agent

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

                                     S-1

<PAGE>   123

                          FIRST UNION NATIONAL BANK, individually
                          and as Documentation Agent

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

                          CIT LENDING SERVICES CORPORATION
                          (f/k/a Newcourt Commercial Finance
                          Corporation), an affiliate of The CIT Group,
                          Inc., individually and as Collateral Agent

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

                          BANKERS LIFE AND CASUALTY COMPANY

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

                          CONSECO ANNUITY ASSURANCE COMPANY

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

                          DEUTSCHE BANK AG NEW YORK BRANCH

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

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

                                     S-2
<PAGE>   124

                          FOOTHILL CAPITAL CORPORATION

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

                          FRANKLIN FLOATING RATE TRUST

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

                          MERRILL LYNCH GLOBAL
                          INVESTMENT SERIES INCOME
                          STRATEGIES PORTFOLIO

                          By:  Merrill Lynch Investment Managers,
                               L.P., as Investment Advisor

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

                          MERRILL LYNCH SENIOR FLOATING
                          RATE FUND INC.

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

                                     S-3

<PAGE>   125

                          FOR PURPOSES OF SECTION 9.22 ONLY:

                          SUBSIDIARY GUARANTORS:

                          e.spire LEASING CORPORATION

                          e.spireDATA, INC.

                          ACSI LOCAL SWITCHED SERVICES, INC.

                          ACSI LOCAL SWITCHED SERVICES OF VIRGINIA, INC.

                          ACSI LONG DISTANCE, INC.

                          ACSI NETWORK TECHNOLOGIES, INC.

                          AMERICAN COMMUNICATION SERVICES OF ALBUQUERQUE, INC.

                          AMERICAN COMMUNICATION SERVICES OF AMARILLO, INC.

                          AMERICAN COMMUNICATION SERVICES OF ATLANTA, INC.

                          AMERICAN COMMUNICATION SERVICES OF AUSTIN, INC.

                          AMERICAN COMMUNICATION SERVICES OF BATON ROUGE, INC.

                          AMERICAN COMMUNICATION SERVICES OF BIRMINGHAM, INC.

                          AMERICAN COMMUNICATION SERVICES OF BOISE, INC.

                          AMERICAN COMMUNICATION SERVICES OF CHARLESTON, INC.

                          AMERICAN COMMUNICATION SERVICES OF CHATTANOOGA, INC.

                                     S-4

<PAGE>   126

                          AMERICAN COMMUNICATION SERVICES OF COLORADO
                          SPRINGS, INC.

                          AMERICAN COMMUNICATION SERVICES OF COLUMBIA, INC.

                          AMERICAN COMMUNICATION SERVICES OF COLUMBUS, INC.

                          AMERICAN COMMUNICATION SERVICES OF CORPUS CHRISTI,
                          INC.

                          AMERICAN COMMUNICATION SERVICES OF DALLAS, INC.

                          AMERICAN COMMUNICATION SERVICES OF D.C., INC.

                          AMERICAN COMMUNICATION SERVICES OF EL PASO, INC.

                          AMERICAN COMMUNICATION SERVICES OF FORT WORTH, INC.

                          AMERICAN COMMUNICATION SERVICES OF GREENVILLE, INC.

                          AMERICAN COMMUNICATION SERVICES OF HUNTSVILLE, INC.

                          AMERICAN COMMUNICATION SERVICES OF IRVING, INC.

                          AMERICAN COMMUNICATION SERVICES OF JACKSON, INC.

                          AMERICAN COMMUNICATION SERVICES OF JACKSONVILLE,
                          INC.

                          AMERICAN COMMUNICATION SERVICES OF KANSAS CITY, INC.

                          AMERICAN COMMUNICATION SERVICES OF LAS VEGAS, INC.

                          AMERICAN COMMUNICATION SERVICES OF LEXINGTON, INC.

                                     S-5

<PAGE>   127

                          AMERICAN COMMUNICATION SERVICES OF LITTLE ROCK, INC.

                          AMERICAN COMMUNICATION SERVICES, OF LOUISIANA, INC.

                          AMERICAN COMMUNICATION SERVICES OF LOUISVILLE, INC.

                          AMERICAN COMMUNICATION SERVICES OF LUBBOCK, INC.

                          AMERICAN COMMUNICATION SERVICES OF MARYLAND, INC.

                          AMERICAN COMMUNICATION SERVICES OF MIAMI, INC.

                          AMERICAN COMMUNICATION SERVICES OF MOBILE, INC.

                          AMERICAN COMMUNICATION SERVICES OF MONTGOMERY, INC.

                          AMERICAN COMMUNICATION SERVICES OF PIMA COUNTY, INC.

                          AMERICAN COMMUNICATION SERVICES OF RIO RANCHO, INC.

                          AMERICAN COMMUNICATION SERVICES OF ROANOKE, INC.

                          AMERICAN COMMUNICATION SERVICES OF SAN ANTONIO, INC.

                          AMERICAN COMMUNICATION SERVICES OF SAVANNAH, INC.

                          AMERICAN COMMUNICATION SERVICES OF SHREVEPORT, INC.

                          AMERICAN COMMUNICATION SERVICES OF SPARTANBURG, INC.

                          AMERICAN COMMUNICATION SERVICES OF TAMPA, INC.

                                     S-6

<PAGE>   128

                          AMERICAN COMMUNICATION SERVICES OF TULSA, INC.

                          AMERICAN COMMUNICATION SERVICES OF VIRGINIA, INC.

                          AMERICAN COMMUNICATION SERVICES OF WILMINGTON, INC.

                          AMERICAN COMMUNICATIONS SERVICES INTERNATIONAL, INC.

                          CYBERGATE, INC.

                          FLORIDANET, INC.

                          Each by:
                                  ----------------------------------------
                                Name:
                                Title: Authorized Signatory of each of the
                                       foregoing Subsidiary Guarantors

                                     S-7

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