
                            EXHIBIT 4-1

                NOTE AND WARRANT PURCHASE AGREEMENT

                        DATED MAY 22, 1995

                      BY AND AMONG ACC CORP.,

                  FLEET VENTURE RESOURCES, INC.,

                  FLEET EQUITY PARTNERS VI, L.P.,

                                AND

                    CHISHOLM PARTNERS II, L.P.

<PAGE>
                         TABLE OF CONTENTS

                                                             Page

1.   Authorization and Closing..................................1
     1A.  Authorization of the Notes and the Warrants...........1
     1B.  Purchase and Sale of the Notes and the Warrants.......1
     1C.  The Closing...........................................2

2.   Conditions of Each Purchaser's Obligation at the Closing...2
     2A.  Representations and Warranties; Covenants.............2
     2B.  Amendment of Certificate of Incorporation.............2
     2C.  Certificate of Designation............................3
     2D.  Registration Agreement................................3
     2E.  Participation Agreement...............................3
     2F.  Securities Law Compliance.............................3
     2G.  Opinion of the Company's Counsel......................3
     2H.  Closing Documents.....................................3
     2I.  Proceedings...........................................4
     2J.  Waiver................................................4
     2K.  Expenses..............................................4
     2L.  Compliance with Applicable Laws.......................5

3.   Covenants..................................................5
     3A.  Financial Statements and Other Information............5
     3B.  Inspection Rights.....................................9
     3C.  Attendance at Board Meetings..........................9
     3D.  Designation of Director..............................10
     3E.  Amendment to Certificate ............................11
     3F.  Restrictive Covenants................................11
     3G.  Affirmative Covenants................................13
     3H.  Use of Proceeds......................................14
     3I.  Current Public Information...........................14
     3J.  First Offer Rights...................................15
     3K.  SBIC Regulatory Provisions...........................16
     3L.  Regulatory Compliance Cooperation....................17
     3M.  Springing Warrants...................................18
     3N.  Consultant's Report..................................18

4.   Transfer of Restricted Securities.........................19
     4A.  General Provisions...................................19
     4B.  Opinion Delivery.....................................19
     4C.  Rule 144A............................................19
     4D.  Legend Removal.......................................19
     4E.  Foreign Ownership Restrictions.......................20

5.   Representations and Warranties of the Company.............20
     5A.  Organization, Corporate Power and Licenses...........20
     5B.  Capital Stock and Related Matters....................20
     5C.  Material Subsidiaries; Investments...................21
     5D.  Authorization; No Breach.............................22
     5E.  Financial Statements.................................23
     5F.  Absence of Undisclosed Liabilities...................23
     5G.  No Material Adverse Change...........................24
     5H.  Absence of Certain Developments......................24
     5I.  Assets...............................................25
     5J.  Tax Matters..........................................26
     5K.  Contracts and Commitments............................28
     5L.  Intellectual Property Rights.........................30
     5M.  Litigation, etc......................................31
     5N.  Brokerage............................................32
     5O.  Governmental Consent, etc............................32
     5P.  Insurance............................................33
     5Q.  Employees............................................33
     5R.  ERISA................................................33
     5S.  Compliance with Laws.................................35
     5T.  Small Business Matters...............................36
     5U.  Affiliated Transactions..............................36
     5V.  Investment Company...................................37
     5W.  Margin Securities....................................37
     5X.  Disclosure...........................................37
     5Y.  Reports with the Securities and Exchange Commission..37
     5Z.  Knowledge............................................38

Section 6.  Representations and Warranties of the Purchasers...38
     6A.  Organization, Power and Licenses.....................38
     6B.  Authorization; No Breach.............................38

7.  Definitions................................................39
     7A.  Definitions..........................................39

8.  Miscellaneous..............................................44
     8A.  Expenses.............................................44
     8B.  Remedies.............................................44
     8C.  Purchaser's Investment Representations...............44
     8D.  Consent to Amendments................................45
     8E.  Survival of Representations and Warranties...........46
     8F.  Successors and Assigns...............................46
     8G.  Capital and Surplus; Special Reserves................46
     8H.  Severability.........................................46
     8I.  Counterparts.........................................47
     8J.  Descriptive Headings; Interpretation.................47
     8K.  Governing Law........................................47
     8L.  Notices..............................................47
     8M.  Consideration for Warrants...........................48
     8N.  Understanding Among the Purchasers...................48
     8O.  No Strict Construction...............................48
     8P.  Indemnification......................................49
     8Q.  Payment Set Aside....................................49
     8R.  Subordination........................................50


SCHEDULES AND EXHIBITS

Schedule of Purchasers
List of Exhibits
List of Disclosure Schedules
<PAGE>
                                 ACC CORP.

                NOTE AND WARRANT PURCHASE AGREEMENT


          THIS  AGREEMENT  is  made  as  of May 22, 1995,  by and among ACC
Corp., a Delaware corporation (the "Company"),  and  the  Persons listed on
the Schedule of Purchasers attached hereto (collectively referred to herein
as  the  "Purchasers"  and  individually  as  a  "Purchaser").   Except  as
otherwise  indicated  herein, capitalized terms used herein are defined  in
Section 7 hereof.

          The parties hereto agree as follows:

     Section 1      AUTHORIZATION AND CLOSING.

     A.  AUTHORIZATION  OF  THE  NOTES AND THE WARRANTS.  The Company shall
authorize  the  issuance  and  sale  to  the  Purchasers  of  (i)  its  12%
Subordinated  Convertible  Notes  in  an  aggregate   principal  amount  of
$10,000,000 and containing the terms and conditions and  in  the  form  set
forth  in  EXHIBIT A attached hereto (the "Notes"), (ii) its Stock Purchase
Warrants to  acquire an aggregate of 100,000 shares of the Company's Common
Stock, par value $.015 per share (the "Common Stock"), containing the terms
and conditions  and in the form set forth in EXHIBIT B attached hereto (the
"Closing Warrants"),  and  (iii)  the  Warrants referred to in paragraph 3M
hereof  (the "Springing Stock Purchase Warrants"  and,  together  with  the
Closing Warrants,  the  "Warrants").  The Notes are convertible into shares
Common Stock at the Conversion  Price  (as  defined  in the Notes), and are
also  automatically  convertible  into  shares  of the Company's  Series  A
Preferred Stock, par value $1.00 per share (the "Series A Preferred"), upon
authorization of such class by the Company's stockholders.

     B.  PURCHASE AND SALE OF THE NOTES AND THE WARRANTS.   At the Closing,
the  Company  shall  sell to each Purchaser and, subject to the  terms  and
conditions set forth herein, each Purchaser shall purchase from the Company
(i)  a Note in the aggregate  principal  amount  set  forth  opposite  such
Purchaser's  name  on the Schedule of Purchasers attached hereto at a price
equal to the price set forth opposite such Purchaser's name on the Schedule
of Purchasers and (ii)  a  Closing Warrant to purchase the number of shares
of Common Stock set forth opposite such Purchaser's name on the Schedule of
Purchasers  at  a  price  equal  to  the  price  set  forth  opposite  such
Purchaser's  name on the Schedule  of  Purchasers.   In  addition,  at  the
Closing, each Purchaser shall pay the Company the amount set forth opposite
such Purchaser's  name  on  the Schedule of Purchasers in consideration for
the issuance of the Springing  Warrants.    The  sale  of the Notes and the
Warrants to each Purchaser shall constitute a separate sale hereunder.

     C.  THE CLOSING.  The closing of the separate purchases  and  sales of
the  Notes and the Warrants (the "Closing") shall take place at the offices
of Kirkland & Ellis in Chicago, Illinois, at 10:00 a.m. on May 22, 1995, or
at such  other  place or on such other date as may be mutually agreeable to
the Company and each  Purchaser.  At the Closing, the Company shall deliver
to each Purchaser instruments  evidencing  the  Note and the Warrants to be
purchased by such Purchaser, payable to the order  of such Purchaser or its
nominee  or   registered  in  such  Purchaser's  or  its  nominee's   name,
respectively, upon payment of the purchase price thereof by a cashier's  or
certified  check, or by wire transfer of immediately available funds to the
Company's account at Marine Midland Bank, N.A., in the aggregate amount set
forth opposite such Purchaser's name on the Schedule of Purchasers.

     Section 2.     CONDITIONS   OF  EACH  PURCHASER'S  OBLIGATION  AT  THE
CLOSING.  The obligation of each Purchaser  to  purchase  and  pay  for the
Notes and the Warrants at the Closing is subject to the satisfaction  as of
the Closing of the following conditions:

     A.   REPRESENTATIONS  AND  WARRANTIES; COVENANTS.  The representations
and warranties contained in Section  5  hereof shall be true and correct in
all material respects at and as of the Closing  as though then made, except
to the extent of changes caused by the transactions  expressly contemplated
herein, and the Company shall have performed in all material  respects  all
of  the  covenants  required to be performed by it hereunder at or prior to
the Closing.

     B.  AMENDMENT OF  CERTIFICATE  OF INCORPORATION.  The amendment to the
Company's Certificate of Incorporation (the "Certificate of Incorporation")
set forth in EXHIBIT C attached hereto  (the  "Amendment")  shall have been
authorized  by  the  Company's  board  of directors for submission  to  the
Company's   stockholders  at  the  Company's   next   annual   meeting   of
stockholders.

     C.   CERTIFICATE   OF   DESIGNATION.   A  certificate  of  designation
containing  the  terms  set  forth   in  EXHIBIT  D  attached  hereto  (the
"Certificate of Designation") shall have  been  approved  by  the Company's
board  of  directors to be effective upon the filing of the Amendment  with
the Delaware Secretary of State.

     D.  REGISTRATION AGREEMENT.  The Company and the Purchasers shall have
entered into a registration agreement in form and substance as set forth in
EXHIBIT  E  attached   hereto   (the  "Registration  Agreement"),  and  the
Registration Agreement shall be in full force and effect as of the Closing.

     E.  PARTICIPATION AGREEMENT.   The Purchasers and Richard T. Aab shall
have entered into a participation agreement in form and substance set forth
in  EXHIBIT  F  attached hereto (the "Participation  Agreement"),  and  the
Participation Agreement  shall  be  in  full  force  and  effect  as of the
Closing.

     F.   SECURITIES  LAW  COMPLIANCE.   The  Company  shall  have made all
filings under all applicable federal and state securities laws necessary to
consummate  the  issuance  of the Notes and the Warrants pursuant  to  this
Agreement in compliance with such laws.

     G.   OPINION OF THE COMPANY'S  COUNSEL.   Each  Purchaser  shall  have
received from Underberg & Kessler, counsel for the Company, an opinion with
respect to  the matters set forth in EXHIBIT G attached hereto, which shall
be addressed  to  each Purchaser, dated the date of the Closing and in form
and substance reasonably satisfactory to each Purchaser.

     H.  CLOSING DOCUMENTS.   The  Company  shall  have  delivered  to each
Purchaser all of the following documents:

          (i)   an  Officer's  Certificate,  dated the date of the Closing,
     stating that the conditions specified in  Section  1 and paragraphs 2A
     through 2F, inclusive, have been fully satisfied;

          (ii) certified  copies  of  the resolutions duly adopted  by  the
     Company's board of directors authorizing  the  execution, delivery and
     performance of this Agreement, the Registration  Agreement and each of
     the other agreements contemplated hereby, the Amendment,  the issuance
     and  sale  of  the  Notes, the issuance and sale of the Warrants,  the
     reservation  for issuance  upon  conversion  of  the  Notes  or  (when
     authorized and  issued)  the Series A Preferred or the exercise of the
     Springing  Warrants  and the  exercise  of  the  Closing  Warrants  an
     aggregate of 725,000 shares  of  Common  Stock and the consummation of
     all other transactions contemplated by this Agreement;

          (iii)     certified  copies  of  the  Company's   Certificate  of
     Incorporation and bylaws, each as in effect at the Closing;

          (iv) copies   of  all  third  party  and  governmental  consents,
     approvals and filings  required in connection with the consummation of
     the transactions hereunder  (including  all  blue  sky law filings and
     waivers of all preemptive rights and rights of first refusal);

          (v)  for  the  Purchasers  which  are  SBICs, duly completed  and
     executed SBA Forms 480, 652 and 1031 (Part A)  together  with a 5-year
     business  plan  showing  the  Company's  financial projections  and  a
     written  statement  from the Company regarding  its  intended  use  of
     proceeds; and

          (vi) such  other   documents   relating   to   the   transactions
     contemplated by this Agreement as any Purchaser or its special counsel
     may reasonably request.

     I.   PROCEEDINGS.   All  corporate  and  other  proceedings  taken  or
required  to  be  taken  by the Company in connection with the transactions
contemplated hereby to be  consummated  at  or prior to the Closing and all
documents incident thereto shall be reasonably  satisfactory  in  form  and
substance to each Purchaser and its special counsel.

     J.   WAIVER.   Any condition specified in this Section 2 may be waived
if consented to by each  Purchaser;  provided  that no such waiver shall be
effective  against  any  Purchaser  unless it is set  forth  in  a  writing
executed by such Purchaser.

     K.   EXPENSES.  At the Closing,  the Company shall have reimbursed the
Purchasers for fees and expenses to the  extent  provided  in  paragraph 8A
hereof.

     L.   COMPLIANCE WITH APPLICABLE LAWS.  The purchase of the  Notes  and
the  Warrants  by  each  Purchaser hereunder shall not be prohibited by any
applicable law or governmental  rule  or  regulation  and shall not subject
such  Purchaser  to  any  penalty,  liability or, in such Purchaser's  sole
judgment, other onerous condition under  or  pursuant to any applicable law
or governmental rule or regulation, and the purchase  of  the Notes and the
Warrants by each Purchaser hereunder shall be permitted by  laws, rules and
regulations of the jurisdictions and governmental authorities  and agencies
to which such Purchaser is subject.

     Section 3.     COVENANTS.

     A.   FINANCIAL  STATEMENTS  AND OTHER INFORMATION.  The Company  shall
deliver to each Purchaser (so long as such Purchaser holds at least 2.5% of
the outstanding principal amount of  the   Notes  or  at  least 2.5% of the
outstanding shares of Series A Preferred) and to each holder  of  at  least
10% of the outstanding principal amount of the Notes and each holder of  at
least 10% of the outstanding shares of Series A Preferred:

          (i)  as  soon  as available but in any event within 30 days after
     the  end  of each monthly  accounting  period  in  each  fiscal  year,
     unaudited consolidated  statements  of  income  and  cash flows of the
     Company  and  its Subsidiaries and of each of the U.S.,  Canadian  and
     U.K. long distance  operations  and  its U.S. local service operations
     for such monthly period and for the period  from  the beginning of the
     fiscal  year  to  the  end  of such month, and unaudited  consolidated
     balance sheets of the Company  and  its  Subsidiaries as of the end of
     such monthly period, setting forth in each  case  comparisons  to  the
     Company's  annual  budget  and  to  the  corresponding  period  in the
     preceding  fiscal  year, and all such statements shall be prepared  in
     accordance with generally accepted accounting principles, consistently
     applied, subject to  the absence of footnote disclosures and to normal
     year-end adjustments for recurring accruals, and shall be certified by
     the Company's chief financial  officer;  in addition to the foregoing,
     such  financial  statements shall set forth  total  billable  minutes,
     revenue per minute and network cost per minute for such period for the
     Company  and  each of  its  U.S.,  Canadian  and  U.K.  long  distance
     operations;

          (ii) as soon  as  available but in any event within 45 days after
     the end of each quarterly  accounting  period  in  each  fiscal  year,
     unaudited consolidating and consolidated statements of income and cash
     flows  of  the  Company  and its Subsidiaries and of each of the U.S.,
     Canadian and U.K. long distance  operations and the U.S. local service
     operations for such quarter and for  the  period from the beginning of
     the   fiscal  year  to  the  end  of  such  quarter,   and   unaudited
     consolidating  and  consolidated balance sheets of the Company and its
     Subsidiaries as of the end of such quarter, setting forth in each case
     comparisons to the Company's  annual  budget  and to the corresponding
     period in the preceding fiscal year, and all such  statements shall be
     prepared in accordance with generally accepted accounting  principles,
     consistently  applied,  subject to the absence of footnote disclosures
     and to normal year-end adjustments  for  recurring accruals, and shall
     be certified by the Company's chief financial officer;

          (iii)     accompanying the financial  statements  referred  to in
     subparagraph  (i)  an  Officer's  Certificate stating that there is no
     Event of Default, Potential Event of  Default,  Event of Noncompliance
     or Potential Event of Noncompliance in existence  and that neither the
     Company  nor any of its Subsidiaries is in default under  any  of  its
     other material agreements or, if any Event of Default, Potential Event
     of Default, Event of Noncompliance or Potential Event of Noncompliance
     or any such  default  exists,  specifying  the  nature  and  period of
     existence  thereof  and  what actions the Company and its Subsidiaries
     have taken and propose to take with respect thereto;

          (iv) within  90  days  after   the   end  of  each  fiscal  year,
     consolidating and consolidated statements of  income and cash flows of
     the   Company  and  its  Subsidiaries  for  such  fiscal   year,   and
     consolidating  and  consolidated balance sheets of the Company and its
     Subsidiaries as of the  end of such fiscal year, setting forth in each
     case comparisons to the Company's  annual  budget and to the preceding
     fiscal  year,  all  prepared  in  accordance with  generally  accepted
     accounting principles, consistently  applied,  and  accompanied by (a)
     with  respect  to  the  consolidated  portions of such statements,  an
     opinion  containing  no  exceptions  or  qualifications   (except  for
     qualifications  regarding  specified  contingent  liabilities)  of  an
     independent accounting firm of recognized national standing, and (b) a
     certificate  from  such  accounting firm, addressed to  the  Company's
     board of directors, stating  that  in the course of its examination in
     connection  with  its  customary annual  audit  nothing  came  to  its
     attention that caused it  to  believe  that  there  was  an  Event  of
     Default,  Potential  Event  of  Default,  Event  of  Noncompliance  or
     Potential  Event  of  Noncompliance in existence or that there was any
     other default by the Company  or  any Subsidiary in the fulfillment of
     or  compliance  with  any  of  the  terms,  covenants,  provisions  or
     conditions of any other material agreement to which the Company or any
     Subsidiary is a party or, if such accountants  have  reason to believe
     any   Event   of  Default,  Potential  Event  of  Default,  Event   of
     Noncompliance or  Potential Event of Noncompliance or other default by
     the Company or any  Subsidiary  exists,  a  certificate specifying the
     nature and period of existence thereof;

          (v)  within 120 days after the end of each fiscal year, a copy of
     the annual management letter from the Company's independent accounting
     firm to the board of directors;

          (vi) promptly  upon  receipt  thereof,  any  additional  reports,
     management   letters   or   other   detailed  information   concerning
     significant aspects of the Company's  operations  or financial affairs
     given to the Company by its independent accountants (and not otherwise
     contained in other materials provided hereunder);

          (vii)     at least 30 days but not more than 90 days prior to the
     first fiscal year end following the Closing, a budget  prepared  on  a
     monthly  basis  for  the  Company  and  its  Subsidiaries for the next
     succeeding fiscal year and on an annual basis  for  the second through
     the fifth succeeding fiscal years (displaying in each case anticipated
     statements of income and cash flows and balance sheets),  and promptly
     upon preparation thereof any other significant budgets prepared by the
     Company and any revisions of such budget, and within 30 days after any
     monthly period in which there is a material adverse deviation from the
     annual budget, a written explanation of such deviation;

          (viii)    promptly  (but in any event within five business  days)
     after the discovery or receipt  of  notice  of  any  Event of Default,
     Potential Event of Default, Event of Noncompliance or  Potential Event
     of  Noncompliance,  any default under any other material agreement  to
     which it or any of its Subsidiaries is a party, any condition or event
     which has resulted in  or  is  reasonably  likely  to  result  in  any
     material  liability  under  any  federal,  state  or  local statute or
     regulation  relating  to public health and safety, worker  health  and
     safety or pollution or  protection  of  the  environment  or any other
     material  adverse change, event or circumstance affecting the  Company
     or any Subsidiary  (including  the  filing  of any material litigation
     against the Company or any Subsidiary or the  existence of any dispute
     with  any  Person  which  involves  a  reasonable likelihood  of  such
     litigation being commenced), an Officer's  Certificate  specifying the
     nature  and  period of existence thereof and what actions the  Company
     and its Subsidiaries  have  taken  and  propose  to  take with respect
     thereto;

          (ix) within ten days after transmission thereof,  copies  of  all
     financial  statements, proxy statements, reports and any other general
     written communications  which the Company sends to its stockholders or
     to  its Subsidiaries' stockholders  and  copies  of  all  registration
     statements  and  all  regular, special or periodic reports which it or
     its Subsidiaries file,  or  any of its officers or directors file with
     respect to the Company, with the Securities and Exchange Commission or
     with any securities exchange  on  which any of its securities are then
     listed, and copies of all press releases  and  other  statements  made
     available  generally  by the Company to the public concerning material
     developments in the Company's and its Subsidiaries' businesses; and

          (x)  with  reasonable  promptness,  such  other  information  and
     financial data concerning  the  Company  and  its  Subsidiaries as any
     Person  entitled  to receive information under this paragraph  3A  may
     reasonably request  (including  separate  financial statements for the
     U.S.,   Canadian   and  U.K.  operations  of  the  Company   and   its
     Subsidiaries).

Each of the financial statements  referred to in subparagraph (i) and (iii)
shall be true and correct in all material  respects as of the dates and for
the periods stated therein, subject in the case  of the unaudited financial
statements  to  changes  resulting  from  normal year-end  adjustments  for
recurring accruals (none of which would, alone  or  in  the  aggregate,  be
materially  adverse  to the financial condition, operating results, assets,
operations or business  prospects of the Company and its Subsidiaries taken
as a whole).

     B.   INSPECTION RIGHTS.   The Company shall permit any representatives
designated by any Purchaser (so  long as such Purchaser holds at least 2.5%
of the outstanding principal amount  of  the  Notes or at least 2.5% of the
outstanding shares of Series A Preferred) or any  holder of at least 10% of
the  outstanding  principal  amount of the Notes or at  least  10%  of  the
outstanding shares of Series A Preferred, upon reasonable notice and during
normal business hours to (i) visit and inspect any of the properties of the
Company and its Subsidiaries,  (ii)  examine  the  corporate  and financial
records  of  the  Company  and its Subsidiaries and make copies thereof  or
extracts therefrom and (iii)  discuss the affairs, finances and accounts of
any such corporations with the directors, officers and key employees of the
Company and its Subsidiaries.   Upon  the  reasonable  request  of any such
Purchaser or any such holder of Notes or shares of Series A Preferred,  the
Company   shall  permit  its  independent  accountants  to  participate  in
discussions  with  such Persons regarding the Company and its Subsidiaries.
Each holder of Notes,  Series  A Preferred or Underlying Common Stock which
is a "venture capital operating company" for purpose of Department of Labor
Regulation  Section 2510.3-101 shall  in  addition  to  all  other  rights
granted under  this  Agreement have the right, at reasonable times and upon
reasonable notice, to  consult  with and advise the officers of the Company
with respect to the management of the Company and its Subsidiaries.

     C.   ATTENDANCE AT BOARD MEETINGS.  The Company shall give each holder
of at least $5,000,000 of the outstanding principal amount of the Notes and
each holder of at least 5,000 shares  of  Series A Preferred written notice
of each meeting of its or any of its non-wholly-owned  Subsidiaries'  board
of  directors,  and  each committee thereof at the same time notice of such
meeting is given to directors and the Company shall permit a representative
of each such Person to  attend  as  an observer all meetings of its and its
non-wholly-owned  Subsidiaries'  board  of  directors  and  all  committees
thereof; provided that in the case  of  telephonic  meetings  conducted  in
accordance  with  the  Company's  or  any  such  Subsidiaries'  bylaws  and
applicable  law,  each  such  Person's  representative  shall  be given the
opportunity  to  listen  to  such telephonic meetings.  Each representative
shall be entitled to receive all  written  materials  and other information
(including copies of meeting minutes) given to directors in connection with
such meetings at the same time such materials and information  are given to
the  directors.  If the Company or any of its non-wholly-owned Subsidiaries
proposes  to take any action by written consent in lieu of a meeting of its
board of directors  or  of  any  committee  thereof, the Company shall give
written notice thereof to each such Person prior  to  the effective date of
such consent describing in reasonable detail the nature  and  substance  of
such  action.   In the event that the director designated by the holders of
Notes or Series A Preferred pursuant to paragraph 3D hereof or the director
elected by the holder of the Series A Preferred pursuant to the Certificate
of Designation, as  applicable,  does  not  attend  any  board or committee
meeting, the Company shall pay the reasonable out-of-pocket expenses of one
representative of such holders (to be determined by the holders  a majority
of  the  outstanding  principal  amount  of the Notes or a majority of  the
outstanding shares of the Series A Preferred,  as  applicable)  incurred in
connection with attending such board and committee meetings.

     D.   DESIGNATION  OF  DIRECTOR.   So  long  as  more  than  33% of the
original principal amount of the Notes remains outstanding, the holders  of
the  Notes shall have the right to select a representative to be elected to
the Company's  board  of  directors,  and  the  Company shall nominate such
representative for election to the board of directors  and  solicit proxies
from   the  Company's  stockholders  in  favor  of  the  election  of  such
representative.   Such  representative shall initially be Robert Van Degna.
The Company shall use its  best  efforts to cause such representative to be
elected  to  the  board of directors  (including  voting  all  unrestricted
proxies in favor of  such  representation)  and  shall  not take any action
which would diminish the prospects of such representatives being elected to
the board of directors.  The Company shall appoint such representative  or,
if  applicable,  the  director  elected  by  the  holders  of  the Series A
Preferred pursuant to the Certificate of Designation, to be a member of the
Executive   Committee,  the  Compensation  Committee  and  the  Independent
Committee of the Company's board of directors and, upon the request of such
representative,  to any other board committee of the Company and shall vote
its  securities  of   any   non-wholly   owned  Subsidiary  to  elect  such
representative to the board of directors (or  any similar body) of any non-
wholly owned Subsidiary and any board committee  of  any  non-wholly  owned
Subsidiary.   All  out-of-pocket  expenses of each board member incurred in
connection  with  attending regular and  special  board  meetings  and  any
meeting of any board  committee  shall  be  paid by the Company.  The board
representative designated hereunder or elected by the holders of the Series
A Preferred shall be entitled to fees and other  compensation paid to board
members who are not employees of the Company or its Subsidiaries.

     E.   AMENDMENT  TO  CERTIFICATE  OF  INCORPORATION   AND   FILING   OF
CERTIFICATE  OF  DESIGNATION. The Company shall submit the Amendment to the
Company's stockholders  for  approval  at the Company's next annual meeting
and shall solicit proxies from the Company's  stockholders  in favor of the
approval of the Amendment.  The Company shall use its best efforts to cause
the  Amendment  to  be  approved  by  the Company's stockholders (including
recommending approval and voting all unrestricted  proxies  in favor of the
Amendment) and shall not take any action which would diminish the prospects
of the Amendment being so approved.  Upon such approval, the  Company shall
cause the Amendment and the Certificate of Designation to be filed with the
Delaware Secretary of State.

     F.   RESTRICTIVE COVENANTS.  So long as any of the Notes or any shares
of  Series  A Preferred remain outstanding, the Company shall not,  without
the prior written  consent  of the holders of a majority of the outstanding
principal  amount  of the Notes  or  the  holders  of  a  majority  of  the
outstanding shares of Series A Preferred:

          (i)  directly  or indirectly declare or pay any dividends or make
     any distributions upon any shares of its capital stock or other equity
     securities, except for (a) dividends on the Series A Preferred and (b)
     dividends  payable  in   shares   of  Common  Stock  issued  upon  the
     outstanding shares of Common Stock,  or  permit  any  non-wholly-owned
     Subsidiary to directly or indirectly declare or pay any  dividends  or
     make  any  distributions upon any shares of its capital stock or other
     equity securities;

          (ii) directly   or   indirectly  redeem,  purchase  or  otherwise
     acquire, or permit any Subsidiary  to  redeem,  purchase  or otherwise
     acquire,  any  of  the Company's or any Subsidiary's capital stock  or
     other equity securities  (including warrants, options and other rights
     to acquire such capital stock  or  other equity securities) other than
     the Series A Preferred or directly or  indirectly  redeem, purchase or
     make  any  payments  with  respect  to any stock appreciation  rights,
     phantom stock plans or similar rights or plans;

          (iii)     enter into, or permit any Subsidiary to enter into, the
     ownership, active management or operation  of  any business other than
     the businesses of providing telecommunications services  and plant and
     equipment related thereto;

          (iv)      make  any amendment to the Certificate of Incorporation
     or the Company's bylaws,  or  file  any  resolution  of  the  board of
     directors   with  the  Delaware  Secretary  of  State  containing  any
     provisions, which  would  (a) adversely affect or otherwise impair the
     rights or relative priority  of  the holders of the Series A Preferred
     under  this  Agreement,  the  Certificate   of  Incorporation  or  the
     Company's bylaws or (b) change or include anti-takeover  provisions in
     the Certificate of Incorporation or the Company's bylaws;

          (v)  become  subject  to,  or  permit any of its Subsidiaries  to
     become subject to, (including by way  of  amendment to or modification
     of) any agreement or instrument which by its  terms  would  (under any
     circumstances) restrict (a) the right of any Subsidiary to make  loans
     or  advances  or  pay dividends to, transfer property to, or repay any
     Indebtedness owed to,  the  Company or another Subsidiary (except with
     respect to any indebtedness or  credit  facility  which  is  senior in
     right  of payment to the Notes and the Series A Preferred) or (b)  the
     Company's  right  to  perform  the  provisions  of this Agreement, the
     Notes,   the  Amendment  or  the  Registration  Agreement   (including
     provisions  relating  to  the payment of principal and interest on the
     Notes and the redemption of, and payment of dividends with respect to,
     the Series A Preferred);

          (vi) enter into, amend,  modify  or  supplement,  or  permit  any
     Subsidiary  to enter into, amend, modify or supplement, any agreement,
     transaction,  commitment  or  arrangement  with  any  of  its  or  any
     Subsidiary's officers, directors or Affiliates  or with any individual
     related  by blood, marriage or adoption to any such individual or with
     any entity  in  which  any such Person or individual owns a beneficial
     interest (other than any such agreements, transactions, commitments or
     arrangements between the  Company  and  any  Subsidiary),  except  for
     compensation,   options   and   benefit   programs   approved  by  the
     Compensation  Committee of the Company's board of directors  or  other
     transactions approved  by  an  independent  committee of the Company's
     board of directors and except as otherwise expressly  contemplated  by
     this Agreement.

     G.   AFFIRMATIVE COVENANTS.  So long as any of the Notes or any shares
of  Series  A  Preferred  remain  outstanding, the Company shall, and shall
cause each Subsidiary to, unless it  has received the prior written consent
of the holders of a majority of the outstanding  principal  amount  of  the
Notes  and  the holders of a majority of the outstanding shares of Series A
Preferred:

          (i)  at  all  times  cause  to  be  done  all things necessary to
     maintain, preserve and renew its corporate existence  (except  that  a
     wholly-owned  Subsidiary  may be merged or liquidated into the Company
     or another Subsidiary) and  all  material licenses, authorizations and
     permits necessary to the conduct of its businesses;

          (ii) maintain and keep its material  properties  in  good repair,
     working order and condition, and from time to time make all  necessary
     or  desirable repairs, renewals and replacements to its properties  so
     that  its  businesses  may be properly and advantageously conducted at
     all times in all material respects;

          (iii)     pay and discharge  when  payable  all  material  taxes,
     assessments  and  governmental charges imposed upon its properties  or
     upon the income or  profits  therefrom  (in  each case before the same
     becomes  delinquent  and  before  penalties accrue  thereon)  and  all
     material claims for labor, materials or supplies which if unpaid would
     by law become a Lien upon any of its property unless and to the extent
     that the same are being contested in  good  faith  and  by appropriate
     proceedings  and  adequate reserves (as determined in accordance  with
     generally accepted  accounting  principles, consistently applied) have
     been established on its books with respect thereto;

          (iv) comply with all other material  obligations  which it incurs
     pursuant  to  any  contract  or  agreement,  whether  oral or written,
     express or implied, as such obligations become due, unless  and to the
     extent  that  the  same  are  being  contested  in  good  faith and by
     appropriate  proceedings  and  adequate  reserves  (as  determined  in
     accordance with generally accepted accounting principles, consistently
     applied) have been established on its books with respect thereto;

          (v)  comply  with  all applicable laws, rules and regulations  of
     all governmental authorities,  the violation of which would reasonably
     be  expected  to have a material adverse  effect  upon  the  financial
     condition, operating results, assets, operations or business prospects
     of the Company and its Subsidiaries taken as a whole;

          (vi) continue in force the insurance coverages existing as of the
     date hereof, with  such  additional  or  supplemental  insurance as is
     customary for corporations of similar size engaged in similar lines of
     business; and

          (vii)     maintain  proper  books  of  record  and account  which
     present  fairly in all material respects its financial  condition  and
     results of  operations and make provisions on its financial statements
     for  all such  proper  reserves  as  in  each  case  are  required  in
     accordance with generally accepted accounting principles, consistently
     applied.

     H.   USE  OF PROCEEDS.  The Company shall not, nor shall it permit any
Subsidiary to, use  any  proceeds  from  the  sale  of the Notes hereunder,
directly  or  indirectly, for the purposes of purchasing  or  carrying  any
"margin securities"  within the meaning of Regulation G or T promulgated by
the Board of Governors  of  the Federal Reserve Board or for the purpose of
arranging for the extension of  credit  secured, directly or indirectly, in
whole or in part by collateral that includes any "margin securities."

     I.   CURRENT PUBLIC INFORMATION.  The  Company  shall file all reports
required  to  be  filed by it under the Securities Act and  the  Securities
Exchange Act and the  rules  and  regulations adopted by the Securities and
Exchange Commission thereunder and  shall  take  such further action as any
holder or holders of Restricted Securities may reasonably  request,  all to
the  extent  required  to enable such holders to sell Restricted Securities
pursuant to (i) Rule 144  adopted by the Securities and Exchange Commission
under the Securities Act (as such rule may be amended from time to time) or
any similar rule or regulation  hereafter  adopted  by  the  Securities and
Exchange Commission or (ii) a registration statement on Form S-2  or S-3 or
any  similar  registration  form  hereafter  adopted  by the Securities and
Exchange Commission.  Upon request, the Company shall deliver to any holder
of Restricted Securities a written statement as to whether  it has complied
with such requirements.

     J.   FIRST OFFER RIGHTS.

     (i)  Except for issuances of Common Stock (a) pursuant to  options for
Common Stock granted to the employees of the Company or any Subsidiary, (b)
upon  the  conversion  of  the Notes or the Series A Preferred or upon  the
exercise of the Warrants, (c)  in  connection with the acquisition (however
effected) of another company or business, (d) pursuant to a public offering
registered  under the Securities Act,  (e)  to  the  Company's  lenders  in
connection with  the provision or extension of senior debt financing to the
Company or any Subsidiary  or  (f)  for  strategic investment by any entity
which  directly  or  through one or more subsidiaries  is  engaged  in  the
business of providing  telecommunication services or other utility services
as a material portion of its business, if the Company proposes the issuance
or sale of any shares of  Common Stock or any securities containing options
or rights to acquire any shares  of  Common Stock (other than as a dividend
on the outstanding Common Stock), the  Company shall first offer to sell to
each  holder  of  Underlying  Common  Stock a  portion  of  such  stock  or
securities equal to the quotient determined  by  dividing (1) the number of
shares of Underlying Common Stock held by such holder by (2) the sum of the
total number of shares of Underlying Common Stock  and the number of shares
of  Common  Stock  outstanding  which are not shares of  Underlying  Common
Stock.   Each  holder of Underlying  Common  Stock  shall  be  entitled  to
purchase such stock  or  securities  at the most favorable price and on the
most favorable terms as such stock or  securities  are to be offered to any
other Persons; provided that if all Persons entitled to purchase or receive
such stock or securities are required to also purchase  other securities of
the Company, the holders of Underlying Common Stock exercising their rights
pursuant  to  this  paragraph shall also be required to purchase  the  same
strip of securities (on  the  same  terms  and  conditions) that such other
Persons are required to purchase.  The purchase price  for  all  stock  and
securities  offered  to the holders of the Underlying Common Stock shall be
payable in cash or, to  the  extent  otherwise  required  hereunder,  notes
issued by such holders.

     (ii) In  order to exercise its purchase rights hereunder, a holder  of
Underlying Common Stock must within 15 days after receipt of written notice
from the Company  describing  in  reasonable detail the stock or securities
being  offered, the purchase price thereof,  the  payment  terms  and  such
holder's  percentage  allotment  deliver  a  written  notice to the Company
describing  its  election  hereunder.  If all of the stock  and  securities
offered to the holders of Underlying  Common  Stock is not fully subscribed
by such holders, the remaining stock and securities  shall  be reoffered by
the Company to the holders purchasing their full allotment upon  the  terms
set  forth  in this paragraph, except that such holders must exercise their
purchase rights within five days after receipt of such reoffer.

     (iii)     Upon the expiration of the offering periods described above,
the Company shall  be  entitled  to sell such stock or securities which the
holders of Underlying Common Stock  have not elected to purchase during the
90 days following such expiration at  a price no less than 90% of the price
at which such stock or securities were offered to such holders and on other
terms and conditions no more favorable  in  any  material  respect  to  the
purchasers  thereof  than  those  offered  to  such  holders.  Any stock or
securities offered or sold by the Company after such 90-day  period must be
reoffered to the holders of Underlying Common Stock pursuant to  the  terms
of this paragraph.

     K.   SBIC REGULATORY PROVISIONS.

     (i)  Within  75  days  after  the Closing and at the end of each month
thereafter until all of the proceeds from the Financing hereunder have been
used by the Company and its Subsidiaries, the Company shall deliver to each
SBIC Holder a written statement certified  by  the  Company's  president or
chief  financial  officer  describing in reasonable detail the use  of  the
proceeds of the Financing hereunder  by  the  Company and its Subsidiaries.
In addition to any other rights granted hereunder,  the Company shall grant
each SBIC Holder and the United States Small Business  Administration  (the
"SBA") access to the Company's records for the purpose of verifying the use
of such proceeds.

     (ii) Upon  the  occurrence  of  a Regulatory Violation or in the event
that any SBIC Holder determines in its  reasonable good faith judgment that
a Regulatory Violation has occurred, in addition  to  any  other rights and
remedies  to  which  it  may  be  entitled  as a holder of Notes, Series  A
Preferred or Underlying Common Stock (whether  under  this  Agreement,  the
Certificate of Incorporation or otherwise), each SBIC Holder shall have the
right  to  the  extent  required  under  the SBIC Regulations to demand the
immediate repurchase of all of the Notes, Series A Preferred and Underlying
Common Stock owned by such SBIC Holder at  a  price  equal to the aggregate
unpaid  principal amount of the Notes and all accrued and  unpaid  interest
thereon and  the  amount paid for such stock hereunder, plus all accrued or
declared and unpaid dividends thereon, by delivering written notice of such
demand to the Company.   The  Company shall pay the purchase price for such
securities  by  a cashier's or certified  check  or  by  wire  transfer  of
immediately available funds to each SBIC Holder demanding repurchase within
30 days after the  Company's  receipt  of  the demand notice, and upon such
payment,  each  such  SBIC  Holder  shall  deliver   the   instruments  and
certificates evidencing the Notes, Series A Preferred and Underlying Common
Stock to be repurchased duly endorsed for transfer or accompanied  by  duly
executed forms of assignment.

     (iii)     The   Company  shall  use  the  proceeds  of  the  Financing
hereunder to repay Indebtedness  in  the  United States, to acquire capital
assets  in  the  United  States, to provide working  capital  to  its  U.S.
operations and for other purposes complying with the SBA Regulations.

     (iv) For purposes of  this  paragraph,  "REGULATORY  VIOLATION" means,
with  respect to any SBIC Holder providing Financing under this  Agreement,
(a) a diversion  of  the  proceeds  of such Financing from the reported use
thereof on the use of proceeds statement  delivered  by  the Company on SBA
Form 1031 delivered at the Closing, if such diversion was  effected without
obtaining  the  prior  written  consent of the SBIC Holders (which  may  be
withheld  in their sole discretion)  or  (b)  a  change  in  the  principal
business activity  of  the  Company  and its Subsidiaries  to an ineligible
business activity (within the meaning  of  the  SBIC  Regulations)  if such
change  occurs  within  one  year  after  the date of the initial Financing
hereunder; and the term "FINANCING" shall have the meaning set forth in the
SBIC Regulations.

     L.   REGULATORY COMPLIANCE COOPERATION.   In  the  event that any SBIC
Holder determines that it has a Regulatory Problem (as defined  below), the
Company  shall  take  all such actions as are reasonably requested by  such
SBIC Holder in order to effectuate and facilitate any transfer by such SBIC
Holder of any securities  of  the  Company then held by such SBIC Holder to
any  Person designated by such SBIC Holder  to  alleviate  such  Regulatory
Problem.   For purposes of this Agreement, a "REGULATORY PROBLEM" means any
set  of facts  or  circumstances  wherein  it  has  been  asserted  by  any
governmental  regulatory agency (or such SBIC Holder believes that there is
a substantial risk  of  such  assertion)  that  such  SBIC  Holder  and its
Affiliates are not entitled to hold, or exercise any significant right with
respect to, the Series A Preferred or the Common Stock.

     M.   SPRINGING WARRANTS.

     (i)  At  the  Closing,  the  Company  shall issue to each Purchaser of
Notes a Springing Warrant substantially in the form of EXHIBIT G hereto for
the consideration set forth in paragraph 1B hereof.  Each Springing Warrant
shall provide that upon any Optional Prepayment  of  the  Notes or Optional
Redemption  of  the  Series A Preferred, the holders of the Notes  and  the
holders of the Series A Preferred shall have the right to acquire initially
the same number of shares  of  Common  Stock into which the portion of such
holder's Note or such holder's shares of  Series  A Preferred, the case may
be, being repaid (the "Repaid Amount") is convertible  as  of  the  payment
date.  The initial exercise price for each share of Common Stock under  the
Springing Warrant shall be equal to the Conversion Price under the Notes or
the  Series  A  Preferred as of the payment date, and the Springing Warrant
shall be exercisable  at  any  time  thereafter  and  shall  expire (unless
previously exercised) on the seventh anniversary of the Closing,  but in no
event   shall  the  Springing  Warrants  be  exercisable  after  the  sixth
anniversary of the prepayment of all of the SBIC Holder's Notes.

     (ii) Terms  used in this paragraph 3M and not otherwise defined herein
have the meanings set forth in the Notes or the Amendment, as applicable.

     N.   CONSULTANT'S  REPORT.   Within  30  days  after  the Closing, the
Company shall retain Somerville & Company, Inc. and cause it to prepare and
deliver  an  organizational study of the Company's senior management  team;
provided that  the cost of such study is not reasonably projected to exceed
the amount equal  to  (i) $400,000 LESS (ii) the amount of expenses payable
by the Company pursuant to paragraph 8A(i) below.

     Section 4.     TRANSFER OF RESTRICTED SECURITIES.

     A.   GENERAL PROVISIONS.   Restricted Securities are transferable only
pursuant to (i) public offerings  registered under the Securities Act, (ii)
Rule 144 or Rule 144A of the Securities  and  Exchange  Commission  (or any
similar  rule  or  rules then in force) if such rule is available and (iii)
subject to the conditions  specified  in  paragraph  4B  below,  any  other
legally available means of transfer.

     B.   OPINION  DELIVERY.   In  connection  with  the  transfer  of  any
Restricted  Securities  (other than a transfer described in paragraph 4A(i)
or (ii) above), the holder  thereof  shall  deliver  written  notice to the
Company describing in reasonable detail the transfer or proposed  transfer,
together with an opinion of Kirkland & Ellis or other counsel which (to the
Company's  reasonable  satisfaction)  is  knowledgeable  in  securities law
matters  to the effect that such transfer of Restricted Securities  may  be
effected without  registration  of  such  Restricted  Securities  under the
Securities  Act.   In  addition, if the holder of the Restricted Securities
delivers to the Company  an  opinion  of  Kirkland  &  Ellis  or such other
counsel  that  no  subsequent transfer of such Restricted Securities  shall
require registration  under  the Securities Act, the Company shall promptly
upon  such  contemplated  transfer   deliver   new  certificates  for  such
Restricted Securities which do not bear the Securities Act legend set forth
in  paragraph  8C.   If  the  Company  is  not  required   to  deliver  new
certificates  for such Restricted Securities not bearing such  legend,  the
holder thereof shall not transfer the same until the prospective transferee
has confirmed to  the  Company  in writing its agreement to be bound by the
conditions contained in this paragraph and paragraph 8C.

     C.   RULE 144A.  Upon the request  of any Purchaser, the Company shall
promptly  supply  to  such  Purchaser or its  prospective  transferees  all
information regarding the Company  required  to  be delivered in connection
with  a  transfer  pursuant  to  Rule 144A of the Securities  and  Exchange
Commission.

     D.   LEGEND REMOVAL.  If any Restricted Securities become eligible for
sale pursuant to Rule 144(k), the  Company  shall,  upon the request of the
holder  of  such  Restricted  Securities, remove the legend  set  forth  in
paragraph 8C from the certificates for such Restricted Securities.

     E.   FOREIGN  OWNERSHIP  RESTRICTIONS.    Any   holder  of  Restricted
Securities shall not transfer any Restricted Securities  if  such  transfer
results  in  the  violation  by  the Company of the provisions of 42 U.S.C.
Section 310(b)(4).

          Section 5.     REPRESENTATIONS AND WARRANTIES OF THE COMPANY.  As
a material inducement to the Purchasers  to  enter  into this Agreement and
purchase  the  Notes  and  the  Warrants  hereunder,  the  Company   hereby
represents and warrants that:

     A.   ORGANIZATION,  CORPORATE  POWER  AND LICENSES.  The Company is  a
corporation duly organized, validly existing and in good standing under the
laws of Delaware and is qualified to do business  in  every jurisdiction in
which  its  ownership  of property or conduct of business  requires  it  to
qualify, except where the  failure  to so qualify would not have a material
adverse  effect  on  the  Company.   The Company  possesses  all  requisite
corporate  power  and  authority and all  material  licenses,  permits  and
authorizations necessary to own and operate its properties, to carry on its
businesses as now conducted  and  presently proposed to be conducted and to
carry out the transactions contemplated  by  this Agreement.  The copies of
the Company's and each Material Subsidiary's charter  documents  and bylaws
which  have  been furnished to the Purchasers' special counsel reflect  all
amendments made thereto at any time prior to the date of this Agreement and
are correct and complete.

     B.   CAPITAL STOCK AND RELATED MATTERS.

     (i)  As of  the  Closing  and  immediately  thereafter, the authorized
capital stock of the Company shall consist of 50,000,000   shares of Common
Stock,  of  which  7,756,584  shares  shall  be issued and outstanding  and
725,000 shares shall be reserved for issuance  upon conversion of the Notes
or the Series A Preferred or exercise of the Warrants.   As of the Closing,
neither the Company nor any Subsidiary shall have outstanding  any stock or
securities convertible or exchangeable for any shares of its capital  stock
or  containing  any  profit  participation  features,  nor  shall  it  have
outstanding  any  rights  or  options  to  subscribe for or to purchase its
capital stock or any stock or securities convertible  into  or exchangeable
for  its  capital  stock or any stock appreciation rights or phantom  stock
plans, except for the Notes and the Warrants and except as set forth on the
attached "Capitalization Schedule."  The Capitalization Schedule accurately
sets  forth the following  information  with  respect  to  all  outstanding
options  and rights to acquire the Company's capital stock: the holder, the
number of  shares  covered, the exercise price and the expiration date.  As
of the Closing, neither  the Company nor any Subsidiary shall be subject to
any obligation (contingent or otherwise) to repurchase or otherwise acquire
or retire any shares of its capital stock or any warrants, options or other
rights to acquire its capital stock, except for the Notes and except as set
forth on the Capitalization  Schedule.   As  of  the  Closing,  all  of the
outstanding  shares of the Company's capital stock shall be validly issued,
fully paid and nonassessable.

     (ii) There  are  no  statutory  or,  to  the  best  of  the  Company's
knowledge, contractual stockholders preemptive rights or rights of  refusal
with  respect  to the issuance of the Notes or the Warrants hereunder,  the
issuance of the  Series  A  Preferred  upon  conversion of the Notes or the
issuance of the Common Stock upon conversion of  the  Notes or the Series A
Preferred or upon exercise of the Warrants.  The Company  has  not violated
any  applicable  federal  or  state securities laws in connection with  the
offer, sale or issuance of any  of  its  capital stock, and the offer, sale
and  issuance  of  the  Notes  or the Warrants  hereunder  do  not  require
registration or qualification under  the  Securities  Act or any applicable
state securities laws.  To the best of the Company's knowledge,  there  are
no agreements between the Company's stockholders with respect to the voting
or  transfer  of  the  Company's capital stock or with respect to any other
aspect of the Company's affairs, except for the Participation Agreement.

     C.   MATERIAL  SUBSIDIARIES;   INVESTMENTS.   The  attached  "Material
Subsidiary  Schedule"  correctly  sets forth  the  name  of  each  Material
Subsidiary, the jurisdiction of its  incorporation  and  the Persons owning
the outstanding capital stock of such Material Subsidiary.   Each  Material
Subsidiary  is duly organized, validly existing and in good standing  under
the laws of the  jurisdiction of its incorporation, possesses all requisite
corporate power and  authority  and  all  material  licenses,  permits  and
authorizations  necessary  to  own  its  properties  and  to  carry  on its
businesses as now being conducted and as presently proposed to be conducted
and  is  qualified  to  do  business  in  every  jurisdiction  in which its
ownership  of  property or the conduct of business requires it to  qualify,
except where the  failure  to  so qualify would not have a material adverse
effect on the Company or such Material  Subsidiary.  Except as set forth on
the Material Subsidiary Schedule, all of  the outstanding shares of capital
stock  of  each  Material Subsidiary are validly  issued,  fully  paid  and
nonassessable, and  all  such  shares  are  owned by the Company or another
Subsidiary free and clear of any Lien and not  subject  to  any  option  or
right  to  purchase  any  such shares.  Except as set forth on the Material
Subsidiary Schedule, neither  the  Company nor any Material Subsidiary owns
or holds the right to acquire any shares  of stock or any other security or
interest in any other Person.

     D.   AUTHORIZATION;   NO   BREACH.    The  execution,   delivery   and
performance of this Agreement, the Notes, the  Registration  Agreement, the
Warrants  and all other agreements and instruments contemplated  hereby  to
which the Company  is  a  party,  have been duly authorized by the Company.
This Agreement, the Registration Agreement,  the  Notes,  the Warrants, the
Certificate  of  Incorporation  and  all  other  agreements and instruments
contemplated  hereby  to which the Company is a party  each  constitutes  a
valid and binding obligation of the Company, enforceable in accordance with
its terms. Except as set forth on the attached "Restrictions Schedule," the
execution and delivery  by  the  Company  of this Agreement, the Notes, the
Registration  Agreement,  the  Warrants,  and  all   other  agreements  and
instruments  contemplated  hereby  to  which the Company is  a  party,  the
offering, sale and issuance of the Notes  and  the  Warrants hereunder, the
issuance  of  the  Series  A Preferred upon conversion of  the  Notes,  the
issuance of the Common Stock  upon  conversion of the Notes or the Series A
Preferred, the issuance of Common Stock  upon  exercise  of  Warrants,  the
amendment  of  the  Certificate of Incorporation and the fulfillment of and
compliance with the respective  terms hereof and thereof by the Company, do
not and shall not (i) conflict with  or  result  in  a breach of the terms,
conditions or provisions of, (ii) constitute a default  under, (iii) result
in the creation of any lien, security interest, charge or  encumbrance upon
the Company's or any Subsidiary's capital stock or assets pursuant to, (iv)
give  any  third  party  the  right to modify, terminate or accelerate  any
obligation  under, (v) result in  a  violation  of,  or  (vi)  require  any
authorization, consent, approval, exemption or other action by or notice or
declaration to, or filing with, any court or administrative or governmental
body or agency  pursuant  to,  the  charter or bylaws of the Company or any
Material Subsidiary, or any law, statute,  rule  or regulation to which the
Company   or  any  Material  Subsidiary  is  subject  (including,   without
limitation,  any  usury  laws  applicable  to  the  Notes), or any material
agreement, instrument, order, judgment or decree to which  the  Company  or
any   Material   Subsidiary  is  subject.   Except  as  set  forth  on  the
Restrictions Schedule, none of the Material Subsidiaries are subject to any
restrictions  upon  making  loans  or  advances  or  paying  dividends  to,
transferring property to, or repaying any Indebtedness owed to, the Company
or another Subsidiary.

     E.   FINANCIAL  STATEMENTS.   The  Company has previously furnished to
each  Purchaser  true  and  complete  copies  of  the  following  financial
statements:

          (i)  the audited consolidated balance  sheets  of the Company and
     its Subsidiaries as of December 31, 1994 (the "Latest Balance Sheet"),
     December  31, 1993, and December 31, 1992, and the related  statements
     of income and  cash  flows  (or  the  equivalent)  for  the respective
     twelve-month periods then ended; and

          (ii) the unaudited consolidated balance sheet of the  Company and
     its  Subsidiaries as of March 31, 1995, and the related statements  of
     income  and  cash flows (or the equivalent) for the three-month period
     then ended.

Each of the foregoing  financial  statements  (including  in  all cases the
notes  thereto, if any) is accurate and complete in all material  respects,
is  consistent   with  the  books  and  records  of  the  Company  and  its
Subsidiaries (which,  in  turn,  are  accurate and complete in all material
respects)  and  has  been prepared in accordance  with  generally  accepted
accounting principles,  consistently  applied,  subject  in the case of the
unaudited  financial statements to the absence of footnote  disclosure  and
changes resulting  from  normal year-end adjustments for recurring accruals
(none of which would, alone  or  in the aggregate, be materially adverse to
the financial condition, operating  results, assets, operations or business
prospects of the Company and its Subsidiaries taken as a whole).

     F.   ABSENCE OF UNDISCLOSED LIABILITIES.   Except  as set forth on the
attached  "Liabilities Schedule," the Company and its Subsidiaries  do  not
have any material  obligation  or  liability  (whether  accrued,  absolute,
contingent, unliquidated or otherwise, whether or not known to the  Company
or  any  Subsidiary,  whether  due  or to become due and regardless of when
asserted) arising out of transactions  entered  into  at  or  prior  to the
Closing, or any action or inaction at or prior to the Closing, or any state
of  facts  existing at or prior to the Closing other than:  (i) liabilities
set forth on  the  Latest Balance Sheet (including any notes thereto), (ii)
liabilities and obligations  which have arisen after the date of the Latest
Balance Sheet in the ordinary  course  of  business  (none  of  which  is a
liability  resulting  from  breach  of  contract, breach of warranty, tort,
infringement, claim or lawsuit) and (iii) other liabilities and obligations
expressly disclosed in the other Schedules to this Agreement.

     G.   NO MATERIAL ADVERSE CHANGE.  Since the date of the Latest Balance
Sheet,  there  has  been  no  material  adverse  change  in  the  financial
condition,  operating results, assets, operations,  employee  relations  or
customer or supplier relations of the Company and its Subsidiaries taken as
a whole.

     H.   ABSENCE OF CERTAIN DEVELOPMENTS.

     (i)  Except  as  expressly  contemplated  by  this Agreement or as set
forth on the attached "Developments Schedule," since the date of the Latest
Balance Sheet, neither the Company nor any Material Subsidiary have

          (a)  issued  any  notes, bonds or other debt  securities  or  any
     capital  stock  or  other  equity   securities   or   any   securities
     convertible,  exchangeable  or  exercisable into any capital stock  or
     other equity securities;

          (b)  borrowed any amount or  incurred  or  become  subject to any
     material  liabilities,  except  current  liabilities incurred  in  the
     ordinary course of business and liabilities  under  contracts  entered
     into in the ordinary course of business;

          (c)  discharged  or  satisfied  any  material  Lien  or  paid any
     material obligation or liability, other than current liabilities  paid
     in the ordinary course of business;

          (d)  declared  or  made  any  payment  or distribution of cash or
     other property to its stockholders with respect  to  its capital stock
     or other equity securities or purchased or redeemed any  shares of its
     capital  stock  or  other  equity  securities (including any warrants,
     options or other rights to acquire its  capital  stock or other equity
     securities);

          (e)  mortgaged  or  pledged any of its properties  or  assets  or
     subjected them to any material Lien, except Liens for current property
     taxes not yet due and payable;

          (f)  sold, assigned or  transferred  any  of its tangible assets,
     except  in the ordinary course of business, or canceled  any  material
     debts or claims;

          (g)  sold,   assigned   or  transferred  any  patents  or  patent
     applications, trademarks, service marks, trade names, corporate names,
     copyrights  or  copyright  registrations,   trade   secrets  or  other
     intangible assets, or disclosed any material proprietary  confidential
     information to any Person;

          (h)  suffered  any  material  extraordinary losses or waived  any
     rights of material value, whether or  not  in  the  ordinary course of
     business or consistent with past practice;

          (i)  made  capital  expenditures  or  commitments  therefor  that
     aggregate in excess of $250,000;

          (j)  made  any  loans or advances to, guarantees for the  benefit
     of, or any Investments  in,  any  Persons  in excess of $50,000 in the
     aggregate;

          (k)  made any charitable contributions  or  pledges  in excess of
     $50,000 in the aggregate;

          (l)  suffered any damage, destruction or casualty loss  exceeding
     in the aggregate $50,000, whether or not covered by insurance;

          (m)  made  any  Investment  in or taken steps to incorporate  any
     Subsidiary; or

          (n)  entered into any other material  transaction  other  than in
     the ordinary course of business.

     (ii) Neither  the Company nor any Subsidiary has at any time made  any
bribes, kickback payments or other illegal payments.

     I.   ASSETS.  Except  as  set forth on the attached "Assets Schedule,"
the Company and each Material Subsidiary have good and marketable title to,
or a valid leasehold interest in,  the  material properties and assets used
by them, located on their premises or shown  on the Latest Balance Sheet or
acquired thereafter, free and clear of all Liens, except for properties and
assets disposed of in the ordinary course of business since the date of the
Latest Balance Sheet and except for Liens disclosed  on  the Latest Balance
Sheet  (including any notes thereto) and Liens for current  property  taxes
not yet  due  and payable.  Except as described on the Assets Schedule, the
Company's and each  Material  Subsidiary's  buildings,  equipment and other
tangible  assets  are in good operating condition in all material  respects
and are fit for use  in  the  ordinary course of business.  The Company and
each Material Subsidiary own, or  have  a  valid leasehold interest in, all
material  tangible  assets necessary for the conduct  of  their  respective
businesses  as  presently   conducted  and  as  presently  proposed  to  be
conducted.

     J.   TAX MATTERS.

     (i)  Except as set forth on the attached "Taxes Schedule": the Company
and each Subsidiary have filed  all  material  Tax  Returns  which they are
required  to  file  under  applicable  laws  and regulations; all such  Tax
Returns are complete and correct in all material  respects  and  have  been
prepared  in  compliance  with  all  applicable laws and regulations in all
material respects; the Company and each Subsidiary in all material respects
have paid all Taxes due and owing by them  (whether  or  not such Taxes are
required to be shown on a Tax Return) and have withheld and  paid  over  to
the  appropriate  taxing  authority  all  Taxes  which they are required to
withhold from amounts paid or owing to any employee,  stockholder, creditor
or other third party; neither the Company nor any Subsidiary has waived any
statute of limitations with respect to any material Taxes  or agreed to any
extension  of  time  with  respect  to  any  material  Tax  assessment   or
deficiency;  the  accrual  for  Taxes  on the Latest Balance Sheet would be
adequate to pay all Tax liabilities of the  Company and its Subsidiaries if
their current tax year were treated as ending  on  the  date  of the Latest
Balance  Sheet (excluding any amount recorded which is attributable  solely
to timing  differences  between book and Tax income); since the date of the
Latest Balance Sheet, the  Company  and  its Subsidiaries have not incurred
any  material liability for Taxes other than  in  the  ordinary  course  of
business;  the assessment of any additional Taxes for periods for which Tax
Returns have been filed by the Company and each Subsidiary shall not exceed
the recorded  liability therefor on the Latest Balance Sheet (excluding any
amount recorded  which is attributable solely to timing differences between
book and Tax income); the federal income Tax Returns of the Company and its
Subsidiaries have  been  audited and closed for all tax years through 1989;
except as set forth on the  Tax  Audit Schedule, no foreign, federal, state
or local tax audits or administrative  or  judicial proceedings are pending
or  being  conducted  with  respect  to  the Company,  any  Subsidiary  nor
information  related  to Tax matters has been  requested  by  any  foreign,
federal, state or local  taxing  authority and no written notice indicating
an intent to open an audit or other review has been received by the Company
from any foreign, federal, state or  local  taxing authority; and there are
no material unresolved questions or claims concerning  the  Company's,  any
Subsidiary's Tax liability.

     (ii) Neither  the  Company  nor  any  of  its Subsidiaries has made an
election under Section 341(f) of the Internal Revenue  Code  of  1986,  as
amended.  Neither the Company nor any Subsidiary has been or is currently a
member of an Affiliated Group, except for the Affiliated Group in which the
Company  is  the  parent.  Neither the Company nor any Subsidiary is liable
for the Taxes of another  Person  that  is  not  a Subsidiary in a material
amount under (a) Treas. Reg. Section 1.1502-6 (or  comparable  provisions
of state, local or foreign law), (b) as a transferee or successor,  (c)  by
contract  or  indemnity  or  (d)  otherwise.   Neither  the Company nor any
Subsidiary  is  a  party to any tax sharing agreement.  The  Company,  each
Subsidiary have disclosed  on their federal income Tax Returns any position
taken  for  which  substantial   authority   (within  the  meaning  of  IRC
Section 6662(d)(2)(B)(i)) did not exist at the  time the return was filed.
Neither the Company nor any Subsidiary has made any  payments, is obligated
to make payments or is a party to an agreement that could  obligate  it  to
make any payments that would not be deductible under IRC Section 280G.

     (iii)     "TAX"  or  "TAXES"  means  federal,  state,  county,  local,
foreign  or  other  income, gross receipts, ad valorem, franchise, profits,
sales  or  use, transfer,  registration,  excise,  utility,  environmental,
communications, real or personal property, capital stock, license, payroll,
wage or other  withholding,  employment, social security, severance, stamp,
occupation, alternative or add-on minimum, estimated and other taxes of any
kind whatsoever (including, without  limitation,  deficiencies,  penalties,
additions  to  tax, and interest attributable thereto) whether disputed  or
not.  "Tax Return"  means  any  return,  information  report or filing with
respect  to Taxes, including any schedules attached thereto  and  including
any amendment  thereof.   "AFFILIATED  GROUP" means any affiliated group as
defined  in  IRC Section 1504 that has filed  a  consolidated  return  for
federal income  tax  purposes  (or  any similar group under state, local or
foreign law) for a period during which  any  of  the  Company or any of its
Subsidiaries was a member.

     K.   CONTRACTS AND COMMITMENTS.

     (i)  Except  as  expressly contemplated by this Agreement  or  as  set
forth  on  the attached "Contracts  Schedule"  or  the  attached  "Employee
Benefits Schedule," neither the Company nor any Subsidiary is a party to or
bound by any written or oral:

          (a)  pension,   profit  sharing,  stock  option,  employee  stock
     purchase or other plan  or arrangement providing for deferred or other
     compensation to employees  or  any  other  employee  benefit  plan  or
     arrangement,  or  any  collective  bargaining  agreement  or any other
     contract  with  any  labor  union,  or severance agreements, programs,
     policies or arrangements;

          (b)  contract  for  the employment  of  any  officer,  individual
     employee or other Person on  a  full-time,  part-time,  consulting  or
     other  basis  providing  annual  compensation  in excess of $50,000 or
     contract relating to loans to officers, directors or Affiliates;

          (c)  contract under which the Company or Subsidiary  has advanced
     or loaned any other Person amounts in the aggregate exceeding $50,000;

          (d)  agreement or indenture relating to borrowed money  or  other
     Indebtedness  or  the mortgaging, pledging or otherwise placing a Lien
     on any material asset  or  material group of assets of the Company and
     its Subsidiaries;

          (e)  guarantee of any obligation in excess of $50,000 (other than
     by the Company of a wholly-owned  Subsidiary's debts or a guarantee by
     a Subsidiary of the Company's debts or another Subsidiary's debts);

          (f)  lease or agreement under which the Company or any Subsidiary
     is  lessee of or holds or operates any  property,  real  or  personal,
     owned  by  any  other  party, except for any lease of real or personal
     property under which the  aggregate  annual  rental  payments  do  not
     exceed $50,000;

          (g)  lease or agreement under which the Company or any Subsidiary
     is  lessor  of  or  permits  any  third  party  to hold or operate any
     property, real or personal, owned or controlled by  the Company or any
     Subsidiary;

          (h)  contract or group of related contracts with  the  same party
     or  group  of  affiliated  parties  the  performance of which involves
     consideration in excess of $100,000;

          (i)  assignment,  license,  indemnification   or  agreement  with
     respect   to  any  intangible  property  (including  any  Intellectual
     Property);

          (j)  warranty  agreement with respect to its services rendered or
     its products sold or leased;

          (k)  agreement  under   which  it  has  granted  any  Person  any
     registration  rights  (including  demand  and  piggyback  registration
     rights);

          (l)  sales, distribution or franchise agreement;

          (m)  agreement with  a  term of more than six months which is not
     terminable by the Company or any  Subsidiary  upon  30  days'  or less
     notice without material penalty;

          (n)  contract or agreement prohibiting it from freely engaging in
     any business or competing anywhere in the world; or

          (o)  any other agreement which is material to its operations  and
     business  prospects  or involves a consideration in excess of $100,000
     annually.

     (ii) All of the contracts, agreements and instruments set forth on the
Contracts Schedule are valid,  binding  and enforceable against the Company
or  the  Subsidiary  that  is  a party thereto  in  accordance  with  their
respective  terms.  The Company and  each  Subsidiary  have  performed  all
material obligations  required to be performed by them under the contracts,
agreements and instruments  listed on the Contracts Schedule and are not in
material default under or in material breach of nor in receipt of any claim
of default or breach under any  contract, agreement or instrument listed on
the Contracts Schedule; no event  has  occurred  which  with the passage of
time  or  the giving of notice or both would result in a material  default,
breach or event of noncompliance by the Company or any Subsidiary under any
contract, agreement or instrument listed on the Contracts Schedule; neither
the Company  nor any Subsidiary has any present expectation or intention of
not fully performing all such material obligations; neither the Company nor
any Subsidiary has knowledge of any material breach or anticipated material
breach by the  other  parties  to  any  contract,  agreement, instrument or
commitment listed on the Contracts Schedule.

     (iii)     The  Purchasers' special counsel has been  supplied  with  a
true and correct copy  of each of the written instruments, plans, contracts
and  agreements  and  an  accurate   description   of   each  of  the  oral
arrangements,  contracts  and  agreements  which  are referred  to  on  the
Contracts Schedule, together with all amendments, waivers  or other changes
thereto.

     L.   INTELLECTUAL PROPERTY RIGHTS.

     (i)  The attached "Intellectual Property Schedule" contains a complete
and  accurate list of all (a) material patented or registered  Intellectual
Property  Rights  owned  or  used  by  the  Company  or any Subsidiary, (b)
material pending patent applications and applications  for registrations of
other Intellectual Property Rights filed by the Company  or any Subsidiary,
(c) material unregistered trade names and corporate names  owned or used by
the  Company  or  any Subsidiary and (d) material unregistered  trademarks,
service marks, copyrights,  mask  works and computer software owned or used
by the Company or any Subsidiary.   The Intellectual Property Schedule also
contains a complete and accurate list  of  all  licenses  and  other rights
granted by the Company or any Subsidiary to any third party with respect to
any material Intellectual Property Rights and all licenses and other rights
granted by any third party to the Company or any Subsidiary with respect to
any  material  Intellectual  Property Rights, in each case identifying  the
subject  Intellectual  Property   Rights.   Except  as  set  forth  on  the
Intellectual Property Schedule, the Company or one of its Subsidiaries owns
all right, title and interest to, or  has  the  right  to use pursuant to a
valid license, all Intellectual Property Rights necessary for the operation
of  the  businesses  of  the  Company  and  its  Subsidiaries as  presently
conducted and as presently proposed to be conducted,  free and clear of all
Liens.  Except as set forth on the Intellectual Property Schedule, the loss
or  expiration  of  any  Intellectual  Property Right or related  group  of
Intellectual Property Rights owned or used by the Company or any Subsidiary
has not had and would not reasonably be expected to have a material adverse
effect  on the conduct of the Company's and  its  Subsidiaries'  respective
businesses, and no such loss or expiration is, to the best of the Company's
knowledge,  threatened, pending or reasonably foreseeable.  The Company and
its Subsidiaries  have taken all reasonably necessary and desirable actions
to maintain and protect  the  material  Intellectual  Property Rights which
they own.

     (ii) Except  as set forth on the Intellectual Property  Schedule,  (a)
the Company and its  Subsidiaries  own all right, title and interest in and
to all of the Intellectual Property  Rights  listed  on such schedule, free
and  clear  of all Liens, (b) there have been no claims  made  against  the
Company  or  any   Subsidiary   asserting   the   invalidity,   misuse   or
unenforceability  of  any of such Intellectual Property Rights, (c) neither
the Company nor any Subsidiary has received any notices of any infringement
or misappropriation by,  or  conflict with, any third party with respect to
such  Intellectual  Property Rights  (including,  without  limitation,  any
demand or request that  the  Company  or  any Subsidiary license any rights
from a third party), (d) the conduct of the Company's and each Subsidiary's
business has not infringed, misappropriated or conflicted with and does not
infringe,  misappropriate  or  conflict  with  any   material  Intellectual
Property Rights of other Persons, nor would any future conduct as presently
contemplated  infringe,  misappropriate  or  conflict  with   any  material
Intellectual  Property Rights of other Persons and (e) to the best  of  the
Company's knowledge,  the Intellectual Property Rights owned by or licensed
to  the  Company or any Subsidiary  have  not  been  materially  infringed,
misappropriated  or  conflicted  by  other Persons in any material respect.
Except as set forth in the Intellectual Property Schedule, the transactions
contemplated by this Agreement will have  no material adverse effect on the
Company's or any Subsidiary's right, title  and  interest  in  and  to  the
Intellectual Property Rights listed on the Intellectual Property Schedule.

     M.   LITIGATION, ETC.  Except as set forth on the attached "Litigation
Schedule," there are no actions, suits, proceedings, orders, investigations
or  claims  pending  or, to the best of the Company's knowledge, threatened
against or affecting the Company or any Material Subsidiary (or to the best
of the Company's knowledge,  pending or threatened against or affecting any
of the officers, directors or  employees  of  the  Company and its Material
Subsidiaries  with  respect  to  their  businesses  or  proposed   business
activities),  or  pending  or  threatened  by  the  Company or any Material
Subsidiary against any third party, at law or in equity,  or  before  or by
any   governmental   department,   commission,  board,  bureau,  agency  or
instrumentality (including any actions, suit, proceedings or investigations
with respect to the transactions contemplated by this Agreement); there are
no  other actions, suits, proceedings,  orders,  investigations  or  claims
pending or, to the Company's knowledge, threatened against or affecting the
Company  or  any  Subsidiary  which  if  adversely  determined would have a
material  adverse effect on the Company and its Subsidiaries,  taken  as  a
whole; and  neither  the  Company nor any Material Subsidiary is subject to
any  arbitration proceedings  under  collective  bargaining  agreements  or
otherwise  or,  to  the  best  of the Company's knowledge, any governmental
investigations or inquiries (including inquiries as to the qualification to
hold  or  receive any license or permit).   Neither  the  Company  nor  any
Subsidiary  is  subject  to  any  material judgment, order or decree of any
court or other governmental agency.

     N.   BROKERAGE.   Except  as set  forth  on  the  attached  "Brokerage
Schedule," there are no claims for  brokerage commissions, finders' fees or
similar compensation in connection with  the  transactions  contemplated by
this  Agreement  based  on  any arrangement or agreement binding  upon  the
Company or any Subsidiary.  The  Company shall pay, and hold each Purchaser
harmless  against, any liability, loss  or  expense  (including  reasonable
attorneys'  fees and out-of-pocket expenses) arising in connection with any
such claim.

     O.   GOVERNMENTAL  CONSENT,  ETC.   No  permit,  consent,  approval or
authorization  of,  or  declaration  to or filing by the Company with,  any
governmental  authority  is  required in  connection  with  the  execution,
delivery and performance by the  Company  of  this  Agreement  or the other
agreements contemplated hereby, or the consummation by the Company  of  any
other  transactions  contemplated hereby or thereby, except as set forth on
the attached "Consents  Schedule"  and  except  as  expressly  contemplated
herein or in the exhibits hereto.

     P.   INSURANCE.    The   attached  "Insurance  Schedule"  contains   a
description of each insurance policy  maintained  by  the  Company  and its
Material   Subsidiaries   with   respect  to  its  properties,  assets  and
businesses, and each such policy is  in  full  force  and  effect as of the
Closing.   Neither the Company nor any Material Subsidiary is  in  material
default  with  respect  to  its  obligations  under  any  insurance  policy
maintained  by  it, and neither the Company nor any Material Subsidiary has
been denied insurance  coverage  in  the  past  five  years.  The insurance
coverage  of  the  Company and its Material Subsidiaries is  customary  for
corporations of similar  size engaged in similar lines of business.  Except
as  set forth on the Insurance  Schedule,  the  Company  and  its  Material
Subsidiaries  do  not have any self-insurance or co-insurance programs, and
the reserves set forth  on  the  Latest Balance Sheet are adequate to cover
all anticipated liabilities with respect  to any such self-insurance or co-
insurance programs.

     Q.   EMPLOYEES.   Except  as  set  forth on  the  attached  "Employees
Schedule," the Company is not aware that  any  executive or key employee of
the Company or any Material Subsidiary or any group  of  employees  of  the
Company  or  any  Material Subsidiary has any plans to terminate employment
with the Company or any Material Subsidiary.  The Company and each Material
Subsidiary have complied in all material respects with all laws relating to
the employment of labor  (including  provisions  thereof relating to wages,
hours, equal opportunity, collective bargaining and  the  payment of social
security  and  other taxes), and the Company is not aware that  it  or  any
Material Subsidiary  has  any  material labor relations problems (including
any union organization activities,  threatened  or  actual  strikes or work
stoppages  or  material  grievances).   Neither  the Company, its  Material
Subsidiaries  nor,  to the best of the Company's knowledge,  any  of  their
employees is subject  to  any  noncompete,  nondisclosure, confidentiality,
employment, consulting or similar agreements  relating  to, affecting or in
conflict with the present or proposed business activities  of  the  Company
and  its  Material  Subsidiaries, except for agreements between the Company
and its present and former employees.

     R.   ERISA.

     (i)  MULTIEMPLOYER PLANS.  The Company does not have any obligation to
contribute to (or any  other  liability,  including  current  or  potential
withdrawal liability, with respect to) any "multiemployer plan" (as defined
in Section 3(37) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA")).

     (ii) RETIREE WELFARE PLANS.  The Company does not maintain or have any
obligation  to  contribute to (or any other liability with respect to)  any
plan or arrangement  whether  or  not  terminated,  which provides medical,
health, life insurance or other welfare-type benefits for current or future
retired  or  terminated  employees  (except  for limited continued  medical
benefit coverage required to be provided under  Section 4980B of the IRC or
as required under applicable state law).

     (iii)     DEFINED  BENEFIT  PLANS.   The Company  does  not  maintain,
contribute to or have any liability under (or with respect to) any employee
plan which is a tax-qualified "defined benefit plan" (as defined in Section
3(35) of ERISA), whether or not terminated.

     (iv) DEFINED  CONTRIBUTION  PLANS.  The  Company  does  not  maintain,
contribute to or have any liability under (or with respect to) any employee
plan which is a tax-qualified "defined  contribution  plan"  (as defined in
Section  3(34)  of  ERISA), whether or not terminated, other than  the  ACC
Corp. Savings and Retirement Plan (the "Profit Sharing Plan").

     (v)  OTHER PLANS.   Except  as  set  forth  in  the "Employee Benefits
Schedule",  the  Company  does  not  maintain, contribute to  or  have  any
liability  under (or with respect to) any  plan  or  arrangement  providing
benefits to current or former employees, including any bonus plan, plan for
deferred compensation,  employee  health  or  other welfare benefit plan or
other  arrangement,  whether  or  not terminated.   Such  plans  and  other
arrangements are referred to as the "Other Plans."

     (vi) THE  COMPANY.   For purposes  of  this  paragraph  5R,  the  term
"Company" includes all organizations  under common control with the Company
pursuant to Section 414(b) or (c) of the IRC.

     (vii)     PAYMENTS AND ACCRUALS.   With  respect to the Profit Sharing
Plan  and the Other Plans (the "Plans"), all required  or  recommended  (in
accordance  with  historical  practices) payments, premiums, contributions,
reimbursements or accruals for  all  periods  (or  partial  periods) ending
prior to or as of the Closing shall have been made or properly  accrued  on
the  Latest  Balance  Sheet.   None  of the Plans has any material unfunded
liabilities which are not reflected on the Latest Balance Sheet.

     (viii)    COMPLIANCE.  The Plans  and  all  related  trusts, insurance
contracts  and  funds  have  been  maintained,  funded and administered  in
compliance  in  all  material  respects with the applicable  provisions  of
ERISA, the IRC and other applicable  laws.   Neither  the  Company  nor any
trustee  or  administrator  of any Plan has engaged in any transaction with
respect to the Plans which could  subject  the  Company  or  any trustee or
administrator or the Plans, or any party dealing with any such Plan, nor do
the  transactions  contemplated  by  this Agreement constitute transactions
which could subject any such party, to  either  a  civil  penalty  assessed
pursuant  to  Section  502(i)  of ERISA or the tax or penalty on prohibited
transactions imposed by Section  4975  of  the  IRC.   No actions, suits or
claims with respect to the assets of the Plans (other than  routine  claims
for  benefits)  are  pending or threatened which could result in or subject
the Company to any liability,  and  there  are no circumstances which could
give rise to or be expected to give rise to  any  such  actions,  suits  or
claims.

     (ix) TAX QUALIFICATION.  A favorable determination letter from the IRS
has been received by the Company with respect to the Profit Sharing Plan as
amended  to  comply  with  the IRS as in effect up to the Tax Reform Act of
1986 stating that it is a qualified  plan  under  Section 401(a) of the IRC
and there are no circumstances which would cause the Profit Sharing Plan to
lose such qualified status.

     (x)  CORRECT  COPIES.  The Company has provided  the  Purchasers  with
true and complete copies  of  all documents pursuant to which the Plans are
maintained and administered and  the  most recent annual reports (Form 5500
and attachments) for the Plans.

     S.   COMPLIANCE  WITH LAWS.  Except  as  set  forth  on  the  attached
"Compliance Schedule,"  neither the Company nor any Subsidiary has violated
any law or any governmental  regulation  or requirement which violation has
had or would reasonably be expected to have  a material adverse effect upon
the financial condition, operating results, assets,  operations or business
prospects of the Company and its Subsidiaries taken as a whole, and neither
the Company nor any Subsidiary has received notice of  any  such violation.
Except as set forth on the Compliance Schedule, neither the Company nor any
Subsidiary  is  subject to, or has reason to believe it may become  subject
to, any material  liability  (contingent  or  otherwise)  or  corrective or
remedial obligation arising under any federal, state, local or foreign law,
rule  or  regulation  (including  the common law) relating to or regulating
health,   safety,   pollution  or  the  protection   of   the   environment
("Environmental Laws").   Without limiting the generality of the foregoing,
(i) the Company and each Subsidiary  have  obtained  all  material permits,
licenses  and  authorizations  required  under,  and have complied  in  all
material respects with, all Environmental Laws, (ii)  no  notice  has  been
received  by the Company or any Subsidiary regarding any material violation
of, or any  material  claim, liability or corrective or remedial obligation
under, any Environmental  Laws  and  (iii)  to  the Company's knowledge, no
facts or circumstances exist with respect to the past or present operations
or facilities of the Company or any Subsidiary which  would  give rise to a
material   liability  or  corrective  or  remedial  obligation  under   any
Environmental Laws.

     T.   SMALL   BUSINESS   MATTERS.    The  Company,  together  with  its
"affiliates"  (as  that  term  is  defined in Title  13,  Code  of  Federal
Regulations, Section 121.401), is a  "small  business  concern" within the
meaning  of the Small Business Investment Act of 1958 and  the  regulations
thereunder,    including   Title   13,   Code   of   Federal   Regulations,
Section 121.802.  The information regarding the Company and its affiliates
set forth in the  Small Business Administration Form 480, Form 652 and Part
A of Form 1031 delivered  at  the Closing is accurate and complete.  Copies
of such forms shall have been completed  and  executed  by  the Company and
delivered  to  each  SBIC  Holder  at  the Closing together with a  written
statement of the Company regarding its planned use of the proceeds from the
sale of the Notes and the Warrants.  Neither the Company nor any Subsidiary
presently engages in, and it shall not hereafter engage in, any activities,
nor shall the Company or any Subsidiary  use  directly  or  indirectly  the
proceeds  from  the  sale  of  the Notes and the Warrants hereunder for any
purpose, for which an SBIC is prohibited  from providing funds by the Small
Business Investment Act of 1958 and the regulations  thereunder  (including
Title 13, Code of Federal Regulations, Section 107.901).

     U.   AFFILIATED  TRANSACTIONS.   Except  as  set forth on the attached
"Affiliated  Transactions  Schedule,"  no officer, director,  employee,  or
Affiliate of the Company or any Subsidiary  or  any  individual  related by
blood,  marriage or adoption to any such individual or any entity in  which
any such  Person  or individual owns any beneficial interest, is a party to
any agreement, contract,  commitment or transaction with the Company or any
Subsidiary or has any material  interest  in  any material property used by
the Company or any Subsidiary.

     V.   INVESTMENT  COMPANY.   Neither  the  Company   nor   any  of  its
Subsidiaries  is  an  "investment  company" as defined under the Investment
Company Act of 1940.

     W.   MARGIN  SECURITIES.   Neither   the   Company   nor  any  of  its
Subsidiaries is engaged in the business of extending credit for the purpose
of buying or carrying "margin securities" within the meaning of Regulations
G,  T, U or X promulgated by the Board of Governors of the Federal  Reserve
Board, and no part of the proceeds realized from the sale of the Note shall
be used  to buy or carry any such margin securities or used in violation of
Regulations G, T, U or X.

     X.   DISCLOSURE.   To  the Company's knowledge, neither this Agreement
nor any of the exhibits, schedules, attachments or certificates required to
be delivered with respect to  the  transactions contemplated hereby contain
any untrue statement of a material fact  or  omit a material fact necessary
to make each statement contained herein or therein not misleading; provided
that with respect to the financial projections  furnished to the Purchasers
by  the  Company,  the  Company  represents  and warrants  only  that  such
projections were based upon assumptions reasonably  believed by the Company
to be reasonable and fair as of the date the projections  were  prepared in
the context of the Company's history and current and reasonably foreseeable
business  conditions.   There  is  no  fact  (other  than  general economic
conditions)  which  the  Company  has  not  disclosed to the Purchasers  in
writing and which, to the Company's knowledge,  has had or would reasonably
be  expected  to  have a material adverse effect on  the  Company  and  its
Subsidiaries taken as a whole.

     Y.   REPORTS WITH THE SECURITIES AND EXCHANGE COMMISSION.  The Company
has furnished the Purchasers  with  complete  and  accurate  copies  of its
annual  report  on  Form  10-K  for its three most recent fiscal years, all
other reports or documents required  to be filed by the Company pursuant to
Section 13(a) or 15(d) of the Securities  Exchange  Act since the filing of
the  most  recent  annual  report on Form 10-K and its most  recent  annual
report to its stockholders.   As  of  their  respective  filing dates, such
reports  and filings did not contain any material false statements  or  any
misstatement  of  any  material  fact  and  did  not omit to state any fact
necessary  to make the statements set forth therein  not  misleading.   The
Company has  made  all  filings with the Securities and Exchange Commission
which it is required to make,  and the Company has not received any request
from  the Securities and Exchange  Commission  to  file  any  amendment  or
supplement to any of the reports described in this paragraph.

     Z.   KNOWLEDGE.   For  purposes  of this Agreement, the "knowledge" of
the  Company  means  the actual knowledge,  after  reasonable  inquiry,  of
Richard T. Aab, Francis D.R. Coleman, Michael R. Daley, Arunas A. Chesonis,
Michael L. LaFrance, Steve M. Dubnik and Christopher Bantoft.

     Section 6.     REPRESENTATIONS  AND WARRANTIES OF THE PURCHASERS.  The
Purchasers hereby represent and warrant that:

     A.   ORGANIZATION,  POWER  AND  LICENSES.    Each  Purchaser  is  duly
organized,  validly existing and in good standing under  the  laws  of  its
state of organization.   Each  Purchaser  possesses all requisite power and
authority and all material licenses, permits  and  authorizations necessary
to carry out the transactions contemplated by this Agreement.
     
     B.   AUTHORIZATION;   NO   BREACH.    The  execution,   delivery   and
performance of this Agreement, the Registration  Agreement  and  all  other
agreements and instruments contemplated hereby to which the Purchasers  are
parties, have been duly authorized by each such Purchaser.  This Agreement,
the  Registration  Agreement  and  all  other  agreements  and  instruments
contemplated hereby to which the Purchasers are parties each constitutes  a
valid  and  binding  obligation  of  each  such  Purchaser,  enforceable in
accordance with its terms.  The execution and delivery by the Purchasers of
this  Agreement,  the  Registration Agreement and all other agreements  and
instruments contemplated hereby to which the Purchasers are parties and the
fulfillment of and compliance  with the respective terms hereof and thereof
by the Purchasers, do not and shall  not   conflict  with  or  result  in a
breach of the terms, conditions or provisions of any law, statute, rule  or
regulation  to  which  any  Purchaser  is  subject,  or any material order,
judgment or decree to which any Purchaser is subject.

     Section 7.     DEFINITIONS.

     A.   DEFINITIONS.  For the purposes of this Agreement,  the  following
terms have the meanings set forth below:

          "AFFILIATE"  of  any  particular  Person  means  any other Person
controlling,  controlled  by  or under common control with such  particular
Person, where "control" means the  possession,  directly  or indirectly, of
the power to direct the management and policies of a Person whether through
the ownership of voting securities, contract or otherwise.


          "EVENT OF DEFAULT" has the meaning set forth in the Notes.

          "EVENT  OF  NONCOMPLIANCE"  has  the  meaning  set forth  in  the
Amendment.

          "INDEBTEDNESS"  means at a particular time, without  duplication,
(i) any indebtedness for borrowed  money  or  issued in substitution for or
exchange  of  indebtedness  for  borrowed  money,  (ii)   any  indebtedness
evidenced  by any note, bond, debenture or other debt security,  (iii)  any
indebtedness  for  the deferred purchase price of property or services with
respect to which a Person  is liable, contingently or otherwise, as obligor
or  otherwise (other than trade  payables  and  other  current  liabilities
incurred  in the ordinary course of business), (iv) any commitment by which
a  Person  assures   a   creditor   against   loss   (including  contingent
reimbursement  obligations  with  respect  to letters of credit),  (v)  any
indebtedness guaranteed in any manner by a Person  (including guarantees in
the form of an agreement to repurchase or reimburse),  (vi) any obligations
under  capitalized  leases  with  respect  to  which  a Person  is  liable,
contingently  or  otherwise,  as obligor, guarantor or otherwise,  or  with
respect to which obligations a  Person  assures  a  creditor  against loss,
(vii)  any  indebtedness secured by a Lien on a Person's assets and  (viii)
any unsatisfied  obligation  for "withdrawal liability" to a "multiemployer
plan" as such terms are defined under ERISA.

          "INTELLECTUAL PROPERTY  RIGHTS"  means  all  (i)  patents, patent
applications,  patent disclosures and inventions, (ii) trademarks,  service
marks,  trade  dress,   trade   names,   logos   and  corporate  names  and
registrations and applications for registration thereof  together  with all
of  the  goodwill  associated  therewith,  (iii)  copyrights (registered or
unregistered)  and copyrightable works and registrations  and  applications
for  registration   thereof,   (iv)   mask   works  and  registrations  and
applications for registration thereof, (v) computer  software,  data,  data
bases  and documentation thereof, (vi) trade secrets and other confidential
information  (including, without limitation, ideas, formulas, compositions,
inventions (whether  patentable  or unpatentable and whether or not reduced
to  practice),  know-how,  manufacturing   and   production  processes  and
techniques, research and development information, drawings, specifications,
designs, plans, proposals, technical data, copyrightable  works,  financial
and marketing plans and customer and supplier lists and information), (vii)
other   intellectual   property  rights  and  (viii)  copies  and  tangible
embodiments thereof (in whatever form or medium).

          "INVESTMENT" as  applied  to  any  Person means (i) any direct or
indirect  purchase  or  other  acquisition by such  Person  of  any  notes,
obligations,  instruments,  stock,   securities   or   ownership   interest
(including partnership interests and joint venture interests) of any  other
Person  and  (ii)  any  capital  contribution  by  such Person to any other
Person.

          "IRC" means the Internal Revenue Code of 1986,  as  amended,  and
any reference to any particular IRC section shall be interpreted to include
any  revision of or successor to that section regardless of how numbered or
classified.

          "IRS" means the United States Internal Revenue Service.

          "LIEN"   means   any   mortgage,   pledge,   security   interest,
encumbrance, lien or charge of any kind (including any conditional  sale or
other  title retention agreement or lease in the nature thereof), any  sale
of receivables  with  recourse  against  the Company, any Subsidiary or any
Affiliate, any filing or agreement to file  a financing statement as debtor
under  the Uniform Commercial Code or any similar  statute  other  than  to
reflect ownership by a third party of property leased to the Company or any
Subsidiaries under a lease which is not in the nature of a conditional sale
or title  retention agreement, or any subordination arrangement in favor of
another Person (other than any subordination arising in the ordinary course
of business).

          "MATERIAL  SUBSIDIARY"  means  each Subsidiary of the Company set
forth on the Material Subsidiary Schedule  and  any other Subsidiary of the
Company  which  at  the  time of determination has more  than  $500,000  of
stockholders equity (as determined  in  accordance  with generally accepted
accounting  principles) or more than $500,000 of intercompany  Indebtedness
owing to the Company or another Subsidiary.

          "OFFICER'S   CERTIFICATE"  means  a  certificate  signed  by  the
Company's president or its  chief  financial  officer, stating that (i) the
officer signing such certificate has made or has  caused  to  be  made such
investigations  as  are  necessary  in  order  to  permit him to verify the
accuracy of the information set forth in such certificate  and  (ii) to the
best  of  such officer's knowledge, such certificate does not misstate  any
material fact  and  does  not  omit to state any fact necessary to make the
certificate not misleading.

          "PERSON" means an individual,  a  partnership,  a  corporation, a
limited liability company, an association, a joint stock company,  a trust,
a  joint  venture, an unincorporated organization and a governmental entity
or any department, agency or political subdivision thereof.

          "POTENTIAL  EVENT OF DEFAULT" means any event or occurrence which
with the passage of time  or  the giving of notice or both would constitute
an Event of Default.

          "POTENTIAL EVENT OF NONCOMPLIANCE"  means any event or occurrence
which  with  the  passage of time or the giving of  notice  or  both  would
constitute an Event of Noncompliance.

          "RESTRICTED  SECURITIES"  means  (i)  the  Notes and the Warrants
issued hereunder, (ii) the Series A Preferred issued upon conversion of the
Notes, (iii) the Common Stock issued upon conversion of Notes or the Series
A Preferred or upon exercise of the Warrants and (iv) any securities issued
with respect to the securities referred to in clauses  (i),  (ii)  or (iii)
above  by  way  of a stock dividend or stock split or in connection with  a
combination of shares,  recapitalization,  merger,  consolidation  or other
reorganization.    As   to   any  particular  Restricted  Securities,  such
securities shall cease to be Restricted  Securities when they have (a) been
effectively  registered  under  the  Securities  Act  and  disposed  of  in
accordance  with  the  registration  statement   covering  them,  (b)  been
distributed to the public through a broker, dealer or market maker pursuant
to Rule 144 (or any similar provision then in force)  under  the Securities
Act  or  become  eligible for sale pursuant to Rule 144(k) (or any  similar
provision then in  force)  under  the  Securities Act or (c) been otherwise
transferred and new certificates for them  not  bearing  the Securities Act
legend  set  forth  in paragraph 8C have been delivered by the  Company  in
accordance with paragraph  4(ii).  Whenever any particular securities cease
to be Restricted Securities,  the  holder  thereof  shall  be  entitled  to
receive from the Company, without expense, new securities of like tenor not
bearing a Securities Act legend of the character set forth in paragraph 8C.

          "SBIC"  means  a small business investment company licensed under
the Small Business Investment Act of 1958, as amended.

          "SBIC HOLDER" means  any  holder  of Notes, Series A Preferred or
Underlying Common Stock that is an SBIC.

          "SBIC REGULATIONS" means the Small  Business  Investment  Company
Act  of  1958, as amended, and the regulations issued by the Small Business
Administration thereunder, 13 CFR 107 and 121, as amended.

          "SECURITIES ACT" means the Securities Act of 1933, as amended, or
any similar federal law then in force.

          "SECURITIES  AND  EXCHANGE  COMMISSION" includes any governmental
body or agency succeeding to the functions thereof.

          "SECURITIES EXCHANGE ACT" means  the  Securities  Exchange Act of
1934, as amended, or any similar federal law then in force.

          "SUBORDINATION  AGREEMENT"  means  the  Subordination  Agreement,
dated as of May 22, 1995, by and among each of the Purchasers, the Company,
Manufacturers and Traders Trust Company and Marine Midland Bank.

          "SUBSIDIARY"  means, with respect to any Person, any corporation,
limited  liability company,  partnership,  association  or  other  business
entity of which (i) if a corporation, 50% or more of the total voting power
of shares  of  stock  entitled  (without  regard  to  the occurrence of any
contingency)  to  vote in the election of directors, managers  or  trustees
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,  or (ii) if a limited liability company, partnership,
association, joint venture  or  other  business  entity, 50% or more of the
partnership  or other similar ownership interest thereof  is  at  the  time
owned or controlled,  directly  or indirectly, by any Person or one or more
Subsidiaries of that Person or a combination thereof.  For purposes hereof,
a  Person or Persons shall be deemed  to  have  a  50%  or  more  ownership
interest  in a limited liability company, partnership, association or other
business entity if such Person or Persons shall be allocated 50% or more of
limited liability company, partnership, association, joint venture or other
business entity  gains  or  losses  or  shall  be  or  control any managing
director or general partner of such limited liability company, partnership,
association or other business entity.

          "UNDERLYING COMMON STOCK" means (i) the Common  Stock  issued  or
issuable  upon  conversion  of  the Notes or the Series A Preferred or upon
exercise of the Warrants and (ii)  any Common Stock issued or issuable with
respect to the securities referred to  in  clause (i) above by way of stock
dividend  or stock split or in connection with  a  combination  of  shares,
recapitalization,  merger,  consolidation  or  other  reorganization.   For
purposes  of this Agreement, any Person who holds Notes, Series A Preferred
or Warrants shall be deemed to be the holder of the Underlying Common Stock
obtainable  upon  conversion of the Notes or Series A Preferred or exercise
of the Warrants in  connection  with  the  transfer  thereof  or  otherwise
regardless of any restriction or limitation on the conversion of the  Notes
or  the  Series  A  Preferred  or exercise of the Warrants, such Underlying
Common Stock shall be deemed to  be  in existence, and such Person shall be
entitled  to exercise the rights of a holder  of  Underlying  Common  Stock
hereunder.   As  to  any particular shares of Underlying Common Stock, such
shares shall cease to  be  Underlying  Common Stock when they have been (a)
effectively  registered  under  the  Securities  Act  and  disposed  of  in
accordance with the registration statement  covering  them, (b) distributed
to the public through a broker, dealer or market maker pursuant to Rule 144
under the Securities Act (or any similar provision then  in  force)  or (c)
repurchased by the Company or any Subsidiary.

     Section 8.     MISCELLANEOUS.

     A.   EXPENSES.  The Company shall pay, and hold each Purchaser and all
holders  of  Notes,  Warrants  and Underlying Common Stock harmless against
liability for the payment of, (i)  all  reasonable documented out-of-pocket
expenses  incurred by the Purchasers in connection  with  the  transactions
contemplated  hereby  (including  the  fees   and expenses of their special
counsel arising in connection with the negotiation  and  execution  of this
Agreement  and  the  consummation  of the transactions contemplated by this
Agreement and fees and expenses of their  accountants  and  consultants  in
connection  therewith)  which  shall  be  payable at the Closing or, if the
Closing does not occur, payable upon demand,  it being understood that such
reasonable documented out-of-pocket expenses shall  not  exceed $400,000 in
the aggregate, (ii) the reasonable fees and expenses incurred  with respect
to  any  amendments  or  waivers (whether or not the same become effective)
under  or in respect of this  Agreement,  the  Notes,  the  agreements  and
instruments   contemplated   hereby,   the   Certificate  of  Incorporation
(including in connection with any proposed merger, sale or recapitalization
of  the  Company),  (iii) stamp and other taxes which  may  be  payable  in
respect of the execution  and  delivery  of this Agreement or the issuance,
delivery or acquisition of any Notes, any  shares  of  Series  A  Preferred
issuance  upon  conversion  of  the  Notes  or  any  shares of Common Stock
issuable upon conversion of Notes or the Series A Preferred  or exercise of
the  Warrants  and  (iv)  the  reasonable  fees and expenses incurred  with
respect to the enforcement of the rights granted  under this Agreement, the
Notes, the agreements or instruments contemplated hereby,  the  Certificate
of Incorporation, or the Warrants.

     B.   REMEDIES.    Each   holder  of  Notes,  Series  A  Preferred  and
Underlying Common Stock shall have  all  rights  and  remedies set forth in
this  Agreement,  the Notes and the Amendment and all rights  and  remedies
which such holders  have been granted at any time under any other agreement
or contract and all of  the  rights  which such holders have under any law.
Any Person having any rights under any provision of this Agreement shall be
entitled to enforce such rights specifically  (without  posting  a  bond or
other  security),  to  recover  damages  by  reason  of  any  breach of any
provision  of  this  Agreement and to exercise all other rights granted  by
law.

     C.   PURCHASER'S  INVESTMENT  REPRESENTATIONS.   Each Purchaser hereby
represents  that  it  is  acquiring  the  Restricted  Securities  purchased
hereunder or acquired pursuant hereto for its own account  with the present
intention of holding such securities for purposes of investment,  and  that
it has no intention of selling such securities in a public distribution  in
violation of the federal securities laws or any applicable state securities
laws;  provided  that  nothing contained herein shall prevent any Purchaser
and subsequent holders of  Restricted  Securities  from  transferring  such
securities  in  compliance  with  the provisions of Section 4 hereof.  Each
certificate  or  instrument representing  Restricted  Securities  shall  be
imprinted with a legend in substantially the following form:

     "The securities  represented  by this certificate were originally
     issued on May 22, 1995, and have  not  been  registered under the
     Securities  Act  of  1933,  as  amended.   The  transfer  of  the
     securities  represented  by  this certificate is subject  to  the
     conditions specified in the Note  and Warrant Purchase Agreement,
     dated as of May 22, 1995 and as amended and modified from time to
     time, between the issuer (the "Company")  and  certain investors,
     and the Company reserves the right to refuse the transfer of such
     securities until such conditions have been fulfilled with respect
     to such transfer.  A copy of such conditions shall  be  furnished
     by  the  Company  to  the holder hereof upon written request  and
     without charge."

     D.   CONSENT TO AMENDMENTS.   Except  as  otherwise expressly provided
herein, the provisions of this Agreement may be amended and the Company may
take  any  action  herein  prohibited, or omit to perform  any  act  herein
required to be performed by  it,  only  if  the  Company  has  obtained the
written  consent of the holders of a majority of the outstanding  principal
amount of  the  Notes  and a majority of the outstanding shares of Series A
Preferred; provided that  if  there  are  no  Notes  or  shares of Series A
Preferred outstanding, the provisions of this Agreement may  be amended and
the Company may take any action herein prohibited, only if the  Company has
obtained the written consent of the holders of a majority of the Underlying
Common  Stock.   No  other  course  of dealing between the Company and  the
holder  of any Notes, Series A Preferred,  Warrants  or  Underlying  Common
Stock or  any  delay in exercising any rights hereunder or under the Notes,
the Warrants  or the Certificate of Incorporation shall operate as a waiver
of any rights of  any such holders.  For purposes of this Agreement, Notes,
Series A Preferred  or  Underlying  Common Stock held by the Company or any
Subsidiaries shall not be deemed to be  outstanding.   If  the Company pays
any consideration to any holder of Notes, Series A Preferred  or Underlying
Common  Stock  for such holder's consent to any amendment, modification  or
waiver hereunder, the Company shall also pay each other holder granting its
consent hereunder equivalent consideration computed on a pro rata basis.
     
     E.   SURVIVAL  OF REPRESENTATIONS AND WARRANTIES.  All representations
and warranties contained  herein  or  made  in  writing  by  any  party  in
connection  herewith  shall  survive  the  execution  and  delivery of this
Agreement  and  the  consummation of the transactions contemplated  hereby,
regardless of the knowledge  of  any Purchaser or any investigation made by
any Purchaser or on its behalf, and  neither  the  knowledge  of,  nor  any
investigation by, any Purchaser shall affect the occurrence or existence of
a  breach  of  any  representation  or  warranty contained herein as of the
Closing.

     F.   SUCCESSORS AND ASSIGNS.  Except  as  otherwise expressly provided
herein, all covenants and agreements contained in  this  Agreement by or on
behalf of any of the parties hereto shall bind and inure to  the benefit of
the  respective  successors  and  assigns of the parties hereto whether  so
expressed or not.  In addition, and  whether  or not any express assignment
has  been  made,  the  provisions  of  this Agreement  which  are  for  any
Purchaser's benefit as a purchaser or holder  of Notes, Series A Preferred,
Warrants  or  Underlying  Common Stock are also for  the  benefit  of,  and
enforceable  by,  any subsequent  holder  of  such  Notes,  such  Series  A
Preferred, such Warrants or such Underlying Common Stock.

     G.   CAPITAL AND  SURPLUS;  SPECIAL RESERVES.  The Company agrees that
the capital of the Company (as such  term  is  used  in  Section 154 of the
General Corporation Law of Delaware) in respect of the Series  A  Preferred
issued  upon  conversion  of the Notes shall be equal to the aggregate  par
value of such shares and that  it  shall  not  increase  the capital of the
Company with respect to any shares of the Company's capital  stock  at  any
time  on or after the date of this Agreement.  The Company also agrees that
it shall  not  create any special reserves under Section 171 of the General
Corporation Law  of  Delaware  without  the  prior  written  consent of the
holders of a majority of the outstanding Series A Preferred.

     H.   SEVERABILITY.    Whenever   possible,  each  provision  of   this
Agreement shall be interpreted in such  manner as to be effective and valid
under applicable law, but if any provision  of this Agreement is held to be
prohibited  by or invalid under applicable law,  such  provision  shall  be
ineffective only  to  the extent of such prohibition or invalidity, without
invalidating the remainder of this Agreement.

     I.   COUNTERPARTS.   This  Agreement may be executed simultaneously in
two or more counterparts, any one  of which need not contain the signatures
of  more than one party, but all such  counterparts  taken  together  shall
constitute one and the same Agreement.

     J.   DESCRIPTIVE  HEADINGS;  INTERPRETATION.  The descriptive headings
of this Agreement are inserted for convenience only and do not constitute a
substantive part of this Agreement.   The  use  of  the word "including" in
this Agreement shall be by way of example rather than by limitation.

     K.   GOVERNING LAW.  The corporate law of the State  of Delaware shall
govern  all  issues  and  questions  concerning  the  relative  rights  and
obligations  of  the  Company  and its stockholders.  All other issues  and
questions   concerning   the  construction,   validity,   enforcement   and
interpretation of this Agreement  and  the  exhibits  and  schedules hereto
shall  be governed by, and construed in accordance with, the  laws  of  the
State of  New  York, without giving effect to any choice of law or conflict
of law rules or  provisions  (whether of the State of New York or any other
jurisdiction)  that  would  cause  the  application  of  the  laws  of  any
jurisdiction other than the State of New York.

     L.   NOTICES.  All notices,  demands  or  other  communications  to be
given  or  delivered under or by reason of the provisions of this Agreement
shall be in  writing  and shall be deemed to have been given when delivered
personally to the recipient,  sent  to the recipient by reputable overnight
courier service (charges prepaid) or  five  days  after being mailed to the
recipient  by  certified or registered mail, return receipt  requested  and
postage prepaid.   Such  notices, demands and other communications shall be
sent  to  each Purchaser at  the  address  indicated  on  the  Schedule  of
Purchasers and to the Company at the address indicated below:

                    ACC Corp.
                    400 West Avenue
                    Rochester, NY  14611
                    Attention:  Chief Executive Officer

or to such  other  address  or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party.

     M.   CONSIDERATION  FOR WARRANTS.   The  Purchasers  and  the  Company
acknowledge and agree that  the  fair  market  value  of  the  Notes issued
hereunder  is $9,790,000 and the fair market value of the Closing  Warrants
issued hereunder  is $200,000 and that, for all purposes (including tax and
accounting), the consideration  for  the issuance of the Springing Warrants
shall be allocated as set forth in paragraph 1B hereof.  Each Purchaser and
the  Company  shall file their respective  federal,  state  and  local  tax
returns in a manner  which is consistent with such valuation and allocation
and shall not take any contrary position with any taxing authority.

     N.   UNDERSTANDING  AMONG  THE  PURCHASERS.  The determination of each
Purchaser to purchase the Notes and the Warrants pursuant to this Agreement
has been made by such Purchaser independent  of  any  other  Purchaser  and
independent  of  any  statements or opinions as to the advisability of such
purchase  or  as  to  the  properties,  business,  prospects  or  condition
(financial or otherwise) of the Company and its Subsidiaries which may have
been made or given by any other  Purchaser  or  by any agent or employee of
any other Purchaser.  In addition, it is acknowledged  by each of the other
Purchasers  that Fleet Equity Partners has not acted as an  agent  of  such
Purchaser in connection with making its investment hereunder and that Fleet
Equity Partners  shall  not  be  acting  as  an  agent of such Purchaser in
connection with monitoring its investment hereunder.

     O.   NO  STRICT  CONSTRUCTION.  The parties hereto  have  participated
jointly in the negotiation and drafting of this Agreement.  In the event an
ambiguity or question of  intent  or  interpretation arises, this Agreement
shall be construed as if drafted jointly  by  the  parties  hereto,  and no
presumption  or  burden  of  proof  shall arise favoring or disfavoring any
party  by  virtue  of the authorship of  any  of  the  provisions  of  this
Agreement.

     P.   INDEMNIFICATION.   In  consideration of the Purchaser's execution
and  delivery  of  this Agreement and  acquiring  the  Notes  and  Warrants
hereunder and in addition  to  all of the Company's other obligations under
this  Agreement, the Company shall  defend,  protect,  indemnify  and  hold
harmless  each Purchaser and each other holder of Notes or Warrants and all
of their officers,  directors,  employees  and  agents  (including, without
limitation, those retained in connection with the transactions contemplated
by this Agreement) (collectively, the "Indemnitees") from  and  against any
and all actions, causes of action, suits, claims, losses, costs, penalties,
fees,  liabilities  and  damages,  and  expenses  in  connection  therewith
(irrespective  of whether any such Indemnitee is a party to the action  for
which  indemnification  hereunder  is  sought),  and  including  reasonable
attorneys' fees and disbursements (the "Indemnified Liabilities"), incurred
by the Indemnitees  or  any  of  them as a result of, or arising out of, or
relating to (a) any transaction financed  or  to be financed in whole or in
part, directly or indirectly, with the proceeds  of  the  issuance  of  the
Notes   and  Warrants  or  (b)  the  execution,  delivery,  performance  or
enforcement  of  this  Agreement  and  any  other  instrument,  document or
agreement  executed  pursuant hereto by any of the Indemnitees, except  for
any such Indemnified Liabilities  arising  on  account  of  the  particular
Indemnitee's  gross  negligence or willful misconduct.  To the extent  that
the foregoing undertaking  by  the  Company  may  be  unenforceable for any
reason, the Company shall make the maximum contribution  to the payment and
satisfaction  of each of the Indemnified Liabilities which  is  permissible
under applicable law.

     Q.   PAYMENT  SET  ASIDE.   To  the  extent  that  the Company makes a
payment or payments to the Purchasers hereunder or under  the  Notes or the
Purchasers  enforce  or exercise their rights hereunder or thereunder,  and
such payment or payments or the proceeds of such enforcement or exercise or
any part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside, recovered from, disgorged by or are required to be
refunded, repaid or otherwise  restored to the Company, a trustee, receiver
or  any  other Person under any law  (including,  without  limitation,  any
bankruptcy  law,  state  or  federal  law, common law or equitable cause of
action), then to the extent of any such  restoration the obligation or part
thereof originally intended to be satisfied  shall be revived and continued
in  full force and effect as if such payment had  not  been  made  or  such
enforcement or setoff had not occurred.

     R.   SUBORDINATION.  The Purchasers and all other holders of the Notes
agree  to  enter  into any new subordination agreement in replacement of or
substitution  for  the  Subordination  Agreement  in  connection  with  the
refunding or refinancing of the Indebtedness owing the Senior Creditors (as
defined in the Subordination  Agreement)  so long as such new subordination
agreement is substantially similar to the Subordination Agreement.

                         *   *   *   *   *
<PAGE>
          IN  WITNESS  WHEREOF,  the  parties  hereto  have  executed  this
Agreement on the date first written above.

                                   ACC CORP.


                                   By /s/ Michael R. Daley

                                   Its EVP and CFO


                                   FLEET VENTURE RESOURCES, INC.

                                   By /s/ Robert M. Van Degna
                                   Its President


                                   FLEET EQUITY PARTNERS VI, L.P.

                                   By Silverado IV Corp.
                                   Its General Partner

                                   By /s/ Robert M. Van Degna
                                   Its President


                                   CHISHOLM PARTNERS II, L.P.

                                   By Silverado II, L.P.
                                   Its General Partner

                                   By Silverado II, Corp.
                                   Its General Partner

                                   By /s/ Robert M. Van Degna
                                   Its President
<PAGE>


                                      SCHEDULE OF PURCHASERS


<TABLE>
<CAPTION>
                                                                          Number of
                                                         Purchase       Shares Under      Purchase      Purchase
                                        Principal          Price           Closing        Price for     Price for        Total
             Names and                  Amount of           for           WARRANTS         Closing      Springing      Purchase
             ADDRESSES                    NOTES            NOTES                          WARRANTS      WARRANTS         PRICE
<S>                                 <C>              <C>               <C>             <C>            <C>           <C>
Fleet Venture Resources, Inc.       $ 7,200,000      $ 7,048,800        72,000          $144,000       $ 7,200      $ 7,200,000
c/o Fleet Equity Partners
Mail Stop:  RI MO 227
111 Westminster Street
Providence, RI  02903
Attn:  Robert Van Degna

Fleet Equity Partners VI, L.P.      $ 1,800,000      $ 1,762,200        18,000            36,000       $ 1,800        1,800,000
c/o Fleet Equity Partners
Mail Stop:  RI MO 227
111 Westminster Street
Providence, RI  02903
Attn:  Robert Van Degna

Chisholm Partners II, L.P.          $ 1,000,000      $   979,000        10,000            20,000       $ 1,000        1,000,000
c/o Fleet Equity Partners
Mail Stop:  RI MO 227
111 Westminster Street
Providence, RI  02903
Attn:  Robert Van Degna

TOTAL                               $10,000,000      $ 9,790,000           100,000      $200,000       $10,000       $10,000,000
</TABLE>

<PAGE>
                              LIST OF EXHIBITS



Exhibit A - Form of Note
Exhibit B - Form of Closing Warrant
Exhibit C - Form of Amendment to Certificate of Incorporation
Exhibit D - Form of Certificate of Designation
Exhibit E - Form of Registration Agreement
Exhibit F - Form of Participation Agreement
Exhibit G - Form of Opinion of Company's Counsel
Exhibit H - Form of Springing Warrant

The Registrant agrees to furnish supplementally to the Commission a copy of any
omitted schedules or exhibits to this agreement upon request.
<PAGE>
                        LIST OF DISCLOSURE SCHEDULES



                      Capitalization Schedule
                      Material Subsidiary Schedule
                      Restrictions Schedule
                      Liabilities Schedule
                      Developments Schedule
                      Assets Schedule
                      Taxes Schedule
                      Tax Audit Schedule
                      Contracts Schedule
                      Intellectual Property Schedule
                      Litigation Schedule
                      Brokerage Schedule
                      Consents Schedule
                      Insurance Schedule
                      Employees Schedule
                      Employee Benefits Schedule
                      Compliance Schedule
                      Affiliated Transactions Schedule

The Registrant agrees to furnish supplementally to the Commission a copy of any
omitted schedules or exhibits to this agreement upon request.

