
<PAGE>
 
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                  SECOND AMENDED AND RESTATED CREDIT AGREEMENT

                          dated as of December 19, 1997

                                  by and among


                                   ACC CORP.,
               and certain Subsidiaries thereof designated herein,
                                  as Borrowers,

                                   ACC CORP.,

                                  as Guarantor,

                         the Lenders referred to herein,


                           FIRST UNION NATIONAL BANK,
                   as Managing Agent and Administrative Agent,

                                       and

                              FLEET NATIONAL BANK,
                    as Managing Agent and Documentation Agent


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<PAGE>
 
                                TABLE OF CONTENTS



ARTICLE I  DEFINITIONS ........................................................1
              SECTION 1.1.         Definitions ................................1
              SECTION 1.2.         General ...................................20
              SECTION 1.3.         Other Definitions and Provisions ..........20
                     


ARTICLE II  CREDIT FACILITY...................................................21
              SECTION 2.1.         Revolving Credit Loans.....................21
              SECTION 2.2.         Swingline Loans............................21
              SECTION 2.3.         Procedure for Advances of Revolving 
                                   Credit and Swingline Loans.................23
              .  35
              SECTION 2.4.         Repayment of Extensions of Credit.........24
              SECTION 2.5.         Notes.....................................26
              SECTION 2.6.         Permanent Reductions of the Aggregate 
                                   Commitment.................................26
              SECTION 2.7.         Termination of Credit Facility.............28
              SECTION 2.8.         Use of Proceeds............................28
              SECTION 2.9.         Nature of Obligations; Security............28
              


ARTICLE III  LETTER OF CREDIT FACILITY........................................29
              SECTION 3.1.         L/C Commitment.............................29
              SECTION 3.2.         Procedure for Issuance of 
                                    Letters of Credit.........................29
              SECTION 3.3.         Fees and Other Charges.....................30
              SECTION 3.4.         L/C Participations.........................30
              SECTION 3.5.         Reimbursement Obligation of 
                                    the Borrower..............................31
              SECTION 3.6.         Obligations Absolute.......................32
              SECTION 3.7.         Effect of Application......................32
              

ARTICLE IV  GENERAL LOAN PROVISIONS...........................................33
              SECTION 4.1.         Interest...................................35
              SECTION 4.2.         Notice and Manner of Conversion or
                                   Continuation of Revolving Credit Loans.....36
              SECTION 4.3.         Fees.......................................36
              SECTION 4.4.         Manner of Payment..........................37
              SECTION 4.5.          Crediting of Payments and Proceeds........38
              SECTION 4.6.          Nature of Obligations of Lenders 
                                    Regarding Extensions of Credit; 
                                    Assumption by
                                    Administrative Agent......................38
              SECTION 4.7.         Mandatory Redenomination of 
                                   Alternative Currency Loans ................39
              SECTION 4.8.         Regulatory Limitation..................... 39
              SECTION 4.9.         Changed Circumstances..................... 39
              SECTION 4.10.        Indemnity................................. 42
                                
<PAGE>
 
              SECTION 4.11.        Capital Requirements.......................42
              SECTION  4.12.       Taxes......................................42


ARTICLE V  CLOSING; CONDITIONS OF CLOSING AND BORROWING.......................44
              SECTION 5.1.         Closing....................................44
              SECTION 5.2.         Conditions to Closing and 
                                    Initial Extensions of Credit .............44
              SECTION 5.3.          Conditions to All Extensions of Credit ...49



ARTICLE VI  REPRESENTATIONS AND WARRANTIES OF BORROWERS.......................50
              SECTION 6.1.         Representations and Warranties.............50
              SECTION 6.2.         Survival of Representations and 
                                   Warranties, Etc............................58


ARTICLE VII  FINANCIAL INFORMATION AND NOTICES................................58
              SECTION 7.1.         Financial Statements and Projections.......58
              SECTION 7.2.         Officer's Compliance Certificate...........59
              SECTION 7.3.         Accountants' Certificate...................59
              SECTION 7.4.         Other Reports..............................59
              SECTION 7.5.         Notice of Litigation and Other Matters.....60
              SECTION 7.6.         Accuracy of Information................... 61



ARTICLE VIII  AFFIRMATIVE COVENANTS.......................................... 62
              SECTION 8.1.         Preservation of Corporate Existence 
                                    and Related Matters...................... 62
               SECTION 8.2.        Maintenance of Property................... 62
              SECTION 8.3.         Insurance................................. 62
              SECTION 8.4.         Accounting Methods and Financial Records.. 62
              SECTION 8.5.         Payment and Performance of Obligations.... 62
              SECTION 8.6.         Compliance With Laws and Approvals........ 63
              SECTION 8.7.         Environmental Laws........................ 63
              SECTION 8.8.         Employee Benefit, Pension and 
                                    Retirement Laws.......................... 63
              SECTION 8.9.         Compliance With Agreements................ 64
              SECTION 8.10.        Conduct of Business....................... 64
              SECTION 8.11.        Visits and Inspections.................... 64
              SECTION 8.12.        Material Subsidiaries; Additional 
                                    Collateral............................... 65
              SECTION 8.13.        Hedging Agreement......................... 66
              SECTION 8.14.        Further Assurances........................ 65
              SECTION 8.15.        Post-Closing Matters...................... 65


ARTICLE IX  FINANCIAL COVENANTS.............................................. 65
              SECTION 9.1.         Maximum Leverage Ratio.................... 66
              SECTION 9.2.         Minimum Pro Forma Debt Service
                                    Coverage Ratio........................... 66
              SECTION 9.3.         Fixed Charge Coverage Ratio............... 66
              SECTION 9.4.         Capital Expenditures...................... 66
              SECTION 9.5.         Minimum Net Worth......................... 67
<PAGE>
 
ARTICLE X  NEGATIVE COVENANTS................................................ 67
              SECTION 10.1.        Limitations on Debt....................... 67
              SECTION 10.2.        Limitations on Contingent Obligations..... 67
              SECTION 10.3.        Limitations on Liens...................... 68
              SECTION 10.4.        Limitations on Loans, Advances, 
                                    Investments and Acquisitions............. 69
              SECTION 10.5.        Limitations on Mergers and Liquidation.... 71
              SECTION 10.6.        Limitations on Sale of Assets............. 71
              SECTION 10.7.        Limitations on Dividends and 
                                    Distributions............................ 71
              SECTION 10.8.        Limitations on Exchange and   
                                    Issuance of Capital Stock................ 72
              SECTION 10.9.        Transactions with Affiliates.............. 72
              SECTION 10.10.       Certain Accounting Changes................ 72
              SECTION 10.11.       Amendments; Payments and Prepayments 
                                    of Subordinated Debt..................... 72
              SECTION 10.12.       Restrictive Agreements.................... 72
              SECTION 10.13.       Hedging Agreements........................ 72


ARTICLE XI  UNCONDITIONAL GUARANTY........................................... 73
              SECTION 11.1.        Guaranty of Obligations................... 73
              SECTION 11.2.        Nature of Guaranty........................ 73
              SECTION 11.3.        Demand by the Administrative Agent........ 74
              SECTION 11.4.        Waivers................................... 74
              SECTION 11.5.        Modification of Loan Documents etc........ 74
              SECTION 11.6.        Reinstatement............................. 75
              SECTION 11.7.        No Subrogation............................ 75


ARTICLE XII  DEFAULT AND REMEDIES............................................ 76
              SECTION 12.1.        Events of Default......................... 76
              SECTION 12.2.        Remedies.................................. 78
              SECTION 12.3.        Rights and Remedies Cumulative; 
                                   Non-Waiver; etc........................... 79
              SECTION 12.4.        Consents.................................. 80
              SECTION 12.5.        Judgment Currency......................... 80
              SECTION 12.6.        Adjustments............................... 81


ARTICLE XIII  THE AGENTS .....................................................81
              SECTION 13.1.        Appointment............................... 81
              SECTION 13.2.        Delegation of Duties...................... 81
              SECTION 13.3.        Exculpatory Provisions.................... 82
              SECTION 13.4.        Reliance by Agents........................ 82
              SECTION 13.5.        Notice of Default......................... 82
              SECTION 13.6.        Non-Reliance on Such Agents 
                                    and Other Lenders........................ 83
              SECTION 13.7.        Indemnification........................... 84
              SECTION 13.8.        Each of the Agents in Its 
                                    Individual Capacity...................... 84
              SECTION 13.9.        Resignation of Agents; Successor Agents... 84
              SECTION 13.10        Documentation Agent....................... 85
<PAGE>
 
ARTICLE XIV  MISCELLANEOUS ...................................................85
              SECTION 14.1.        Notices................................... 85
              SECTION 14.2.        Expenses.................................. 86
              SECTION 14.3.        Set-off................................... 87
              SECTION 14.4.        Governing Law............................. 87
              SECTION 14.5.        Consent to Jurisdiction................... 87
              SECTION 14.6.        Binding Arbitration; Waiver of 
                                    Jury Trial............................... 87
              SECTION 14.7.        Reversal of Payments...................... 89
              SECTION 14.8.        Injunctive Relief......................... 89
              SECTION 14.9.        Accounting Matters........................ 89
              SECTION 14.10.       Successors and Assigns; Participations.... 89
              SECTION 14.11.       Amendments, Waivers and Consents; 
                                    Renewal.................................. 93
              SECTION 14.12.       Performance of Duties..................... 94
              SECTION 14.13.       Indemnification........................... 94
              SECTION 14.14.       All Powers Coupled with Interest.......... 94
              SECTION 14.15.       Survival of Indemnities................... 95
              SECTION 14.16.       Titles and Captions....................... 95
              SECTION 14.17.       Severability of Provisions................ 95
              SECTION 14.18.       Counterparts.............................. 95
              SECTION 14.19.       ACC as Agent for Other Borrowers.......... 95
              SECTION 14.20.       Term of Agreement......................... 96
              SECTION 14.21.       Inconsistencies with Other Documents; 
                                   Independent Effect of Covenants........... 96
<PAGE>
 
EXHIBITS

Exhibit A-1     -   Form of Domestic Revolving Credit Note
Exhibit A-2     -   Form of U.K. Revolving Credit Note
Exhibit A-3     -   Form of Canadian Revolving Credit Note
Exhibit A-4     -   Form of German Revolving Credit Note
Exhibit A-5     -   Form of Swingline Note
Exhibit B       -   Form of Notice of Borrowing
Exhibit C       -   Form of Notice of Prepayment
Exhibit D       -   Form of Notice of Conversion/Continuation
Exhibit E       -   Form of Officer's Certificate
Exhibit F       -   Form of Notice of Account Designation
Exhibit G       -   Form of Assignment and Acceptance
Exhibit H       -   Form of Pledge Agreement
Exhibit I       -   Form of Security Agreement
Exhibit J       -   Form of Modification to Leasehold Mortgage
Exhibit K       -   Form of Joinder Agreement
Exhibit L       -   Form of Intercompany Subordination Agreement

SCHEDULES

Schedule 1      -   Lenders and  Commitments  
Schedule 1.2    -   Sublimits  
Schedule 1.3    -   Canadian Security  Documents  
Schedule 1.4    -   German Security  Documents 
Schedule 1.5    -   U.K.  Security  Documents 
Schedule 6.1(a) -   Jurisdictions of Organization and  Qualification  
Schedule 6.1(b) -   Subsidiaries and  Capitalization  
Schedule 6.1(d) -   Governmental  Approvals 
Schedule 6.1(h) -   ERISA Plans 
Schedule 6.1(l) -   Material Contracts 
Schedule 6.1(m) -   Labor and Collective  Bargaining Agreements
Schedule 6.1(r) -   Real  Property   
Schedule 6.1(t) -   Debt  and  Contingent Obligations 
Schedule 6.1(u) -   Litigation 
Schedule 6.1(v) -   Communications Licenses and PUC  Authorizations  
Schedule 10.3   -   Existing Liens 
Schedule 10.4       Existing Loans, Advances and Investments
<PAGE>
 
                                                                   EXHIBIT-10.18
                 


         SECOND AMENDED AND RESTATED CREDIT AGREEMENT,  dated as of the 19th day
of December,  1997, by and among ACC CORP.,  a corporation  organized  under the
laws of Delaware ("ACC"),  and the Subsidiaries  thereof designated as Borrowers
herein,  as Borrowers,  ACC, as  Guarantor,  the Lenders who are or may become a
party to this  Agreement,  FIRST UNION  NATIONAL BANK  (formerly  known as First
Union  National Bank of North  Carolina),  a national  banking  association,  as
Managing  Agent and  Administrative  Agent and FLEET  NATIONAL  BANK, a national
banking association, as Managing Agent and Documentation Agent.


                              STATEMENT OF PURPOSE

         The Borrowers  have  requested and the Lenders have agreed to amend and
restate the First Amended and Restated Credit Agreement (as hereinafter defined)
pursuant to the terms hereof in order to extend certain credit facilities to the
Borrowers.  ACC, as parent of the other  Borrowers,  will  benefit  directly and
indirectly from the extension of such credit facilities to such other Borrowers.
As a precondition to making any extensions of credit hereunder, the Lenders have
required ACC, and ACC has agreed, to execute this Agreement as Guarantor.

         NOW, THEREFORE,  for good and valuable  consideration,  the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, such parties
hereby agree as follows:


                                    ARTICLE I

                                   DEFINITIONS


         SECTION  1.1.  Definitions.  The  following  terms  when  used  in this
Agreement shall have the meanings assigned to them below:

         "ACC"  means  ACC  Corp.,  a  corporation  organized  under the laws of
Delaware, and its successors.

         "ACC Canada" means ACC  TelEnterprises  Ltd., a  corporation  organized
under the laws of Ontario, and its successors.

         "ACC Germany" means ACC Telekommunikation GMBH, a corporation organized
under the laws of the Federal Republic of Germany, and its successors.

         "ACC  National"  means ACC National Long Distance  Corp., a corporation
organized under the laws of Delaware, and its successors.

         "ACC National Pledge  Agreement"  means the Second Amended and Restated
Pledge  Agreement  of  even  date  executed  by ACC  National  in  favor  of the
Administrative Agent for the 
<PAGE>
 
benefit of itself  and the  Lenders  substantially  in the form of Exhibit H, as
amended, restated or otherwise modified.

         "ACC Pledge  Agreement"  means the Second  Amended and Restated  Pledge
Agreement of even date executed by ACC in favor of the Administrative  Agent for
the benefit of itself and the Lenders substantially in the form of Exhibit H, as
amended, restated or otherwise modified.

         "ACC U.K." means ACC Long Distance U.K., Ltd., a corporation  organized
under the laws of the United Kingdom, and its successors.

         "Additional  Borrower" means any Material Subsidiary which has become a
Borrower hereunder in accordance with Section 8.12.

         "Administrative   Agent"   means  First   Union  in  its   capacity  as
administrative agent hereunder,  and any successor thereto appointed pursuant to
Section 13.9.

         "Administrative Agent's Correspondent" means First Union National Bank,
London  Branch,   or  any  other   financial   institution   designated  by  the
Administrative  Agent to act as its  correspondent  hereunder  with  respect  to
distribution  and payment of Extensions  of Credit  denominated  in  Alternative
Currencies.

         "Administrative  Agent's Office" means the office of the Administrative
Agent  specified in or determined in accordance  with the  provisions of Section
14.1.

         "Affiliate" means, with respect to any Person and its Subsidiaries, any
other Person  (other than a Subsidiary  thereof)  which  directly or  indirectly
through one or more intermediaries,  controls,  or is controlled by, or is under
common  control  with,  such first Person or any of its  Subsidiaries.  The term
"control"  means  (a)  the  power  to  vote  ten  percent  (10%)  or more of the
securities or other equity  interests of a Person having  ordinary voting power,
or (b) the possession,  directly or indirectly,  of any other power to direct or
cause the direction of the management and policies of a Person,  whether through
ownership of voting securities, by contract or otherwise.

         "Agents"  means  the  collective  reference  to  the  Managing  Agents,
Documentation Agent and Administrative Agent.

         "Aggregate  Commitment"  means the  aggregate  amount  of the  Lenders'
Commitments hereunder,  as such amount may be reduced or modified at any time or
from time to time  pursuant  to the  terms  hereof.  On the  Closing  Date,  the
Aggregate Commitment shall be One Hundred Fifty Million Dollars ($150,000,000).

         "Agreement" means this Second Amended and Restated Credit Agreement, as
further amended, restated or otherwise modified from time to time.

         "Alternative   Currency"   means   Sterling,    Canadian   Dollars   or
Deutschemarks, or any combination of such currencies, as the context requires.
<PAGE>
 
         "Alternative  Currency  Amount" means with respect to each Extension of
Credit  made  or  continued  (or to be  made  or  continued)  in an  Alternative
Currency,  the amount of such  Alternative  Currency  which is equivalent to the
principal  amount in Dollars of such  Extension of Credit at the most  favorable
spot exchange rate determined by the Administrative Agent to be available to its
London branch at  approximately  11:00 a.m.  (London time) two (2) Business Days
before such  Extension  of Credit is made,  continued  or issued (or to be made,
continued  or  issued).  When used with  respect to any other sum  expressed  in
Dollars, "Alternative Currency Amount" shall mean the amount of such Alternative
Currency  which is  equivalent to the amount so expressed in Dollars at the most
favorable  spot  exchange  rate  determined  by the  Administrative  Agent to be
available to it at the relevant time.

         "Applicable  Law" means all  applicable  provisions  of  constitutions,
laws,  statutes,  treaties,  rules,  regulations and orders of all  Governmental
Authorities and all orders and decrees of all courts and arbitrators.

         "Applicable Margin" shall have the meaning assigned thereto in Section
4.1(c).

         "Application"  means  an  application,  in the  form  specified  by the
Issuing  Lender  from time to time,  requesting  the  Issuing  Lender to issue a
Letter of Credit.

         "Assignment and Acceptance" shall have the meaning assigned thereto in
Section 14.10.

         "Available  Commitment"  means, as to any Lender at any time, an amount
equal to the excess,  if any,  of (a) such  Lender's  Commitment  minus (b) such
Lender's Extensions of Credit.

         "Authorized  Officer"  means  with  respect  to any  Person,  the chief
executive officer, chief financial officer, or vice president of finance of such
Person.

         "Base Rate" means, at any time, the rate of interest per annum which is
the higher of (a) the Prime Rate or (b) the Federal  Funds Rate as determined by
the Administrative Agent plus 1/2 of 1%; each change in the Base Rate shall take
effect simultaneously with the corresponding change or changes in the Prime Rate
or the Federal Funds Rate.

         "Base Rate Loan" means any Loan denominated in Dollars bearing interest
at a rate  determined  with  reference  to the Base Rate as  provided in Section
4.1(a) hereof.

         "Borrowers" means the collective  reference to the Domestic  Borrowers,
Canadian  Borrowers,  U.K.  Borrowers and German  Borrowers  party hereto on the
Closing  Date  and  each  Additional  Borrower  in its  capacity  as a  Borrower
hereunder.

         "Business  Day" means (a) for all  purposes  other than as set forth in
clause (b)  below,  any day other than a  Saturday,  Sunday or legal  holiday on
which  banks in  Charlotte,  North  Carolina  are open for the  conduct of their
domestic and international  commercial banking business, and (b) with respect to
all notices and determinations in connection with, and payments of principal and
<PAGE>
 
 interest  on,  any  Extension  of Credit to be  denominated  in an  Alternative
Currency or on any LIBOR Rate Loan, any day (i) that is a Business Day described
in  clause  (a) and  that is also a day for  trading  by and  between  banks  in
deposits for the applicable  Permitted  Currency in the London  interbank market
and  (ii) on  which  banks  are  open for the  conduct  of  their  domestic  and
international  banking business in the place where the  Administrative  Agent or
the  Administrative  Agent's  Correspondent  shall make available  Extensions of
Credit in such Permitted Currency.

         "Canadian  Base Rate"  shall  mean,  at any time,  that  annual rate of
interest quoted, published or announced by Bank of Montreal from time to time or
commonly known to be its Canadian  Dollar Prime Rate (which may not  necessarily
be its  lowest or best rate then in effect  for  determining  interest  rates on
commercial  loans made in Canada by it),  as  adjusted  to conform to changes in
such rate as of the  opening of  business on the date of any such change in such
rate without notice to any Borrower,  plus the Applicable Margin with respect to
Base Rate Loans in effect at such time.  Each Loan or  portion  thereof  bearing
interest based on the Canadian  Dollar Prime Rate shall be a "Canadian Base Rate
Loan."

         "Canadian  Borrowers"  means the collective  reference to all Borrowers
organized under the laws of Canada or any province thereof.

     "Canadian  Dollars" means, at any time of determination,  the then official
currency of Canada.

         "Canadian Law" means all applicable provisions of constitutions,  laws,
statutes,  treaties,  rules,  regulations and orders of Canada and any political
subdivision  thereof and all orders and decrees of all courts and arbitrators of
such jurisdictions.

         "Canadian  Plan"  means  any  employee  benefit  plan  which ACC or any
Subsidiary thereof maintains or to which it is obligated to contribute and which
is subject to any  Canadian  federal or  provincial  law  relating  to  employee
benefit plans, pension benefits or retirement savings.

         "Canadian  Security  Documents"  means  the  collective   reference  to
documents set forth on Schedule 1.3 and any other agreement or writing  pursuant
to which a Canadian Borrower or Canadian Subsidiary pledges or grants a security
interest in its assets in order to secure the payment and/or  performance of any
Canadian  Borrower under a Loan Document,  in each case as amended,  restated or
otherwise modified.

         "Canadian  Subsidiary"  means a Subsidiary  organized under the laws of
Canada or any province thereof.

         "Canadian  Termination  Event" means any termination of a Canadian Plan
or any other event or condition which would constitute  grounds for or result in
(a) the  termination of a Canadian Plan; or (b) the  appointment of a trustee to
administer any Canadian  Plan; or (c) the partial or complete  withdrawal of ACC
or any of its  Subsidiaries  from a Canadian  Plan;  or (d) the  imposition of a
lien,  charge  or prior  claim on the  assets  of a  Canadian  Plan;  or (d) the
reorganization or insolvency of a Canadian Plan; or (e) a material  liability of
any applicable
<PAGE>
 
Borrower or Borrowers to a Canadian  Plan or, in the  reasonable  opinion of any
firm of independent  Canadian chartered  accountants or actuaries,  a reasonable
likelihood  of such a material  liability;  or (f) a material  liability  of any
applicable  Borrower  or  Borrowers  to any federal or  provincial  Governmental
Authority with respect to a Canadian Plan or, in the  reasonable  opinion of any
firm of independent  Canadian chartered  accountants or actuaries,  a reasonable
likelihood of such a material liability.

         "Capital Asset" means,  with respect to ACC and its  Subsidiaries,  any
asset that would,  in accordance  with GAAP,  be required to be  classified  and
accounted for as a capital asset on a Consolidated  balance sheet of ACC and its
Subsidiaries.

         "Capital  Expenditures" means, with respect to ACC and its Subsidiaries
for any period,  the aggregate cost of all Capital  Assets  acquired by any such
Person during such period,  determined in accordance with GAAP;  provided,  that
the  aggregate  purchase  price with respect to any  acquisition  or  Controlled
Venture  permitted  under  Section  10.4(c)  will  not be  included  in  Capital
Expenditures.

         "Capital Lease" means,  with respect to ACC and its  Subsidiaries,  any
lease of any property  that would,  in  accordance  with GAAP, be required to be
classified and accounted for as a capital lease on a Consolidated  balance sheet
of ACC and its Subsidiaries.

         "Change in Control" shall have the meaning assigned thereto in Section 
12.1(i).

         "Closing  Date" means the date of this Agreement or such later Business
Day upon which each  condition  described  in  Article V shall be  satisfied  or
waived in all  respects  in a manner  acceptable  to the  Agents  in their  sole
discretion.

         "Code"  means  the  Internal  Revenue  Code of 1986,  and the rules and
regulations thereunder, each as amended or supplemented from time to time.

         "Collateral" means any assets pledged by ACC or any of its Subsidiaries
to the Lenders or to the  Administrative  Agent for the  ratable  benefit of the
Agents  and the  Lenders  in order to  secure  the  Obligations  or any  portion
thereof.

         "Commitment"  means, as to any Lender, the obligation of such Lender to
make Loans hereunder and issue or participate in Letters of Credit  hereunder in
an aggregate  outstanding  principal amount not to exceed at any time the amount
set forth  opposite  such  Lender's  name on  Schedule  1.1,  as the same may be
reduced  or  modified  at any time or from  time to time  pursuant  to the terms
hereof.

         "Commitment  Percentage" means, as to any Lender at any time, the ratio
of (a) the  amount  of the  Commitment  of  such  Lender  to (b)  the  Aggregate
Commitment of all of the Lenders.

         "Communications License" means any long distance  telecommunications or
other license, permit, consent, certificate of compliance,  franchise, approval,
waiver or authorization granted or
<PAGE>
 
issued  by  the  FCC,  CRTC,   DTI,   OFTEL,   the   Regulating   Authority  for
Telecommunications    and    Postal    Services     (Regulierungsbehorde     fur
Telekommunikation   und  Post)  or  other  applicable   Governmental   Authority
including,  without limitation,  any of the foregoing  authorizing or permitting
the  acquisition,  construction or operation of Network  Facilities or any other
long distance telecommunications system.

         "Consolidated"  means, when used with reference to financial statements
or financial  statement  items of ACC and its  Subsidiaries,  such statements or
items on a  consolidated  basis in  accordance  with  applicable  principles  of
consolidation under GAAP.

         "Contingent   Obligation"   means,   with   respect   to  ACC  and  its
Subsidiaries,  without duplication, any obligation,  contingent or otherwise, of
any such  Person  pursuant  to which such  Person  has  directly  or  indirectly
guaranteed  any  Debt or other  obligation  of any  other  Person  and,  without
limiting the generality of the foregoing,  any  obligation,  direct or indirect,
contingent or  otherwise,  of any such Person (a) to purchase or pay (or advance
or supply  funds for the  purchase or payment of) such Debt or other  obligation
(whether  arising by virtue of  partnership  arrangements,  by agreement to keep
well, to purchase assets, goods,  securities or services, to take-or-pay,  or to
maintain financial statement condition or otherwise) or (b) entered into for the
purpose  of  assuring  in any other  manner  the  obligee  of such Debt or other
obligation  of the payment  thereof or to protect such  obligee  against loss in
respect  thereof  (in  whole or in  part);  provided,  that the term  Contingent
Obligation  shall not  include  endorsements  for  collection  or deposit in the
ordinary course of business.

         "Controlled  Venture" means any joint venture with respect to which ACC
beneficially owns a greater than 66.6% equity interest.

         "Credit  Facility"  means the  collective  reference  to the  revolving
credit facility and swingline facility established pursuant to Article II hereof
and the L/C Facility.

         "CRTC"  means  the  Canadian   Radio-Television  and Telecommunications
Commission  or  any  successor Governmental Authority.

         "Debt" means,  with respect to ACC and its Subsidiaries at any date and
without  duplication,  the sum of the following  calculated  in accordance  with
GAAP:  (a) all  liabilities,  obligations  and  indebtedness  for borrowed money
including but not limited to obligations evidenced by bonds,  debentures,  notes
or other similar  instruments of any such Person, (b) all obligations to pay the
deferred purchase price of property or services of any such Person, except trade
payables  arising in the  ordinary  course of business not more than ninety (90)
days past due, (c) all  obligations  of any such Person as lessee under  Capital
Leases,  (d) all Debt of any other Person  secured by a Lien on any asset of any
such  Person,  (e) all  Contingent  Obligations  of any such  Person and (f) all
obligations,  contingent or otherwise,  of any such Person  relative to the face
amount of letters of credit,  whether or not drawn, including without limitation
any Reimbursement Obligation, and banker's acceptances issued for the account of
any such Person.
<PAGE>
 
         "Default" means any of the events  specified in Section 12.1 which with
the  passage  of time,  the  giving  of notice  or any  other  condition,  would
constitute an Event of Default.

         "Deutschemarks" means, at any time of determination,  the then official
currency of the Federal Republic of Germany, subject to Section 4.7.

         "Documentation  Agent"  means Fleet in its  capacity  as  Documentation
Agent hereunder.  "Dollars" or "$" means, unless otherwise  qualified,  the then
official currency of the United States of America.

         "Dollar  Amount"  means (a) with respect to each Loan made or continued
(or to be made or continued), or each Letter of Credit issued (or to be issued),
in Dollars,  the principal amount thereof and (b) with respect to each Loan made
or continued (or to be made or  continued),  or each Letter of Credit issued (or
to be  issued),  in an  Alternative  Currency,  the amount of  Dollars  which is
equivalent  to the  principal  amount  of such  Extension  of Credit at the most
favorable  spot  exchange  rate  determined  by  the  Administrative   Agent  at
approximately  11:00 A.M.  (Charlotte  time) two (2)  Business  Days before such
Extension of Credit is made,  continued  or issued (or to be made,  continued or
issued).  When used with respect to any other sum  expressed  in an  Alternative
Currency,  "Dollar  Amount" shall mean the amount of Dollars which is equivalent
to the amount so expressed in such  Alternative  Currency at the most  favorable
spot exchange rate determined by the Administrative  Agent to be available to it
at the relevant time.

         "Domestic  Borrowers"  means the collective  reference to all Borrowers
organized  under the laws of any State of the United  States or the  District of
Columbia.

         "Domestic  Subsidiary"  means a Subsidiary  organized under the laws of
any State of the United States or the District of Columbia.

         "DTI" means the  Department of Trade and Industry of the United Kingdom
or any successor Governmental Authority.

         "Eligible  Assignee"  means,  with  respect  to any  assignment  of the
rights,  interest and obligations of a Lender hereunder, a Person that is at the
time of such  assignment (a) a commercial  bank organized  under the laws of the
United  States or any state  thereof,  having  combined  capital  and surplus in
excess  of  $500,000,000,  (b) a finance  company,  insurance  company  or other
financial institution which in the ordinary course of business extends credit of
the  type   extended   hereunder   and  that  has  total  assets  in  excess  of
$1,000,000,000,  (c) already a Lender hereunder (whether as an original party to
this  Agreement  or as the  assignee  of another  Lender)  or (d) the  successor
(whether by transfer of assets, merger or otherwise) to all or substantially all
of the commercial lending business of the assigning Lender,  and, in the case of
(a),  (b) or any other  Person,  has been  approved  in writing  as an  Eligible
Assignee by ACC and the Administrative Agent.
<PAGE>
 
         "Employee  Benefit  Plan" means any  employee  benefit  plan within the
meaning of Section 3(3) of ERISA which (i) is maintained for employees of ACC or
any ERISA  Affiliate or (ii) has at any time within the preceding six years been
maintained for the employees of ACC or any current or former ERISA Affiliate.

         "Environmental Laws" means any and all federal,  state,  provincial and
local  laws,  statutes,  ordinances,  rules,  regulations,   permits,  licenses,
approvals,  interpretations  and orders of courts or  Governmental  Authorities,
relating to the protection of human health or the  environment,  including,  but
not  limited  to,  requirements  pertaining  to  the  manufacture,   processing,
distribution,  use,  treatment,  storage,  disposal,  transportation,  handling,
reporting,  licensing,  permitting,  investigation  or  remediation of Hazardous
Materials.

         "ERISA" means the Employee  Retirement Income Security Act of 1974, and
the rules and  regulations  thereunder,  each as amended,  restated or otherwise
modified from time to time.

         "ERISA Affiliate" means any Person who together with the ACC is treated
as a single employer  within the meaning of Section  414(b),  (c), (m) or (o) of
the Code or Section 4001(b) of ERISA.

         "Event of Default"  means any of the events  specified in Section 12.1,
provided  that any  requirement  for passage of time,  giving of notice,  or any
other condition, has been satisfied.

         "Exchange Act" means the Securities Exchange Act of 1934, as amended.

         "Existing Letters of Credit" means letters of credit issued pursuant to
the First Amended and Restated Credit Agreement which remain  outstanding on the
Closing  Date,  including  but not limited to the German letter of credit issued
pursuant to the waiver letter dated as of August 19, 1997.

         "Extensions of Credit"  means,  as to any Lender at any time, an amount
equal to the sum of (a) the aggregate  principal Dollar Amount of all Loans made
by such Lender then outstanding and (b) such Lender's  Commitment  Percentage of
the L/C Obligations then outstanding.

         "FCC"  means the Federal  Communications  Commission  or any  successor
Governmental Authority.

         "Federal  Funds Rate" means,  the rate per annum (rounded  upwards,  if
necessary,  to the next higher 1/100th of 1%)  representing  the daily effective
federal  funds  rate as quoted by the  Administrative  Agent  and  confirmed  in
Federal  Reserve  Board  Statistical  release  H.15  (519) or any  successor  or
substitute  publication selected by such Agent. If, for any reason, such rate is
not  available,  then  "Federal  Funds  Rate"  shall  mean a daily rate which is
determined,  in the opinion of the Administrative Agent, to be the rate at which
federal funds are being offered for sale in the national federal funds market at
9:00 a.m.  (Charlotte time). The rate for a weekend or holiday shall be the same
as the rate for the most immediate preceding Business Day.
<PAGE>
 
         "First  Amended and Restated  Credit  Agreement"  means the Amended and
Restated  Credit  Agreement  dated as of January 14, 1997, by and among ACC, and
certain  Subsidiaries   thereof  designated  therein,  as  Borrowers,   ACC,  as
Guarantor,  the lenders referred to therein,  First Union, as Managing Agent and
Administrative Agent, and Fleet National Bank, as Managing Agent, as modified by
the letter  agreement  dated  August 19,  1997 and the  letter  agreement  dated
October 27, 1997.

         "First Union" means First Union National Bank (formerly  known as First
Union National Bank of North Carolina), a national banking association,  and its
successors.

         "Fiscal Year" means the fiscal year of ACC and its Subsidiaries  ending
on December 31.

         "Fixed Charges" means,  with respect to ACC and its  Subsidiaries,  for
any period, the following without  duplication,  each calculated for such period
in accordance with GAAP: (a) all principal  payments or similar amounts required
to be paid with  respect to Total Debt  during  such  period  plus (b)  Interest
Expense  required to be paid during such period plus (c) total cash dividends or
distributions paid or payable by ACC during such period plus (d) all payments in
respect of any retirement,  redemption or other acquisition of the capital stock
of ACC and its Subsidiaries  consummated during such period plus (e) all Capital
Expenditures  during such period plus (f) all income and franchise taxes paid or
payable in cash during such period.

         "Fleet" means Fleet National Bank, a national banking association,  and
its successors.

         "GAAP" means generally accepted accounting principles, as recognized by
the  American  Institute  of  Certified  Public  Accountants  and the  Financial
Accounting Standards Board,  consistently applied and maintained on a consistent
basis for ACC and its Subsidiaries throughout the period indicated.

         "German  Base  Rate"  shall  mean,  at any  time,  that  rate per annum
announced by Deutsche Bundesbank  Frankfurt to be its Lombard Rate (Lombardsatz)
from time to time (which may not  necessarily  be its lowest or best  rate),  as
adjusted  to conform to changes as of the opening of business on the date of any
such change in such rate, plus the sum of (a) the Applicable Margin with respect
to Base Rate Loans in effect at such time and (b) two percent (2%). Each Loan or
portion  thereof  bearing  interest  based on the  German  Base Rate  shall be a
"German Base Rate Loan."

         "German  Borrowers"  means the  collective  reference to all  Borrowers
organized  under the laws of the Federal  Republic of Germany or any subdivision
thereof.

         "German Law" means all applicable  provisions of  constitutions,  laws,
statutes,  treaties,  rules,  regulations and orders of the Federal  Republic of
Germany and any political  subdivision thereof and all orders and decrees of all
courts and arbitrators of such jurisdictions.

         "German  Plan"  means  any  employee  benefit  plan  which  ACC  or any
Subsidiary thereof maintains or to which it is obligated to contribute and which
is subject to any German federal or
<PAGE>
 
 provincial  law or any German  contract  relating  to employee  benefit  plans,
pension benefits or retirement savings.

         "German Pledge  Agreement" means the Pledge Agreement dated on or about
the date  hereof,  executed  by ACC in favor of the  Lenders,  as  described  on
Schedule 1.4, as amended, restated or otherwise modified.

         "German  Security  Documents"  means the  collective  reference  to the
German Pledge  Agreement  and the other  documents set forth on Schedule 1.4 and
any other  agreement  or writing  pursuant to which a German  Borrower or German
Subsidiary  pledges  or grants a  security  interest  in its  assets in order to
secure  the  payment  and/or  performance  of any German  Borrower  under a Loan
Document, in each case as amended, restated or otherwise modified.

         "German Subsidiary" means a Subsidiary  organized under the laws of the
Federal Republic of Germany or any subdivision thereof.

         "Governmental Approvals" means all authorizations, consents, approvals,
licenses and exemptions of,  registrations and filings with, and reports to, all
Governmental  Authorities,   including  without  limitation  all  Communications
Licenses and PUC Authorizations.

         "Governmental Authority" means any nation, province, state or political
subdivision  thereof,  and any  government or any Person  exercising  executive,
legislative,   regulatory  or  administrative  functions  of  or  pertaining  to
government,  and any  corporation or other entity owned or  controlled,  through
stock or capital  ownership or  otherwise,  by any of the  foregoing,  including
without  limitation  the  FCC,  CRTC,  DTI,  OFTEL,  any PUC and the  Regulating
Authority for  Telecommunications and Postal Services  (Regulierungsbehorde  fur
Telekommunikation und Post).

         "Guaranteed  Obligations"  shall have the meaning  assigned  thereto in
Section 11.1.

         "Guarantor" means ACC in its capacity as guarantor under Article XI.

         "Guaranty" means the unconditional  guaranty agreement of ACC set forth
in Article XI.

         "Hazardous  Materials"  means any substances or materials (a) which are
or  become  defined  as  hazardous  wastes,  hazardous  substances,  pollutants,
contaminants  or toxic  substances  under any  Environmental  Law, (b) which are
toxic, explosive, corrosive, flammable, infectious,  radioactive,  carcinogenic,
mutagenic or otherwise  harmful to human  health or the  environment  and are or
become  regulated  by any  Governmental  Authority,  (c) the  presence  of which
require  investigation or remediation under any Environmental Law or common law,
(d) the  discharge or emission or release of which  requires a permit or license
under any Environmental Law or other Governmental Approval, (e) which are deemed
to  constitute  a  nuisance,  a  trespass  or pose a health or safety  hazard to
persons  or  neighboring  properties,  (f) which  are  materials  consisting  of
underground or aboveground  storage  tanks,  whether empty,  filled or partially
filled with any substance or (g) which contain,  without  limitation,  asbestos,
polychlorinated biphenyls, urea formaldehyde
<PAGE>
 
foam insulation, petroleum hydrocarbons,  petroleum derived substances or waste,
crude oil, nuclear fuel, natural gas or synthetic gas.

         "Hedging  Agreement"  means any  agreement  with respect to an interest
rate swap,  collar,  cap, floor or a forward rate  agreement or other  agreement
regarding the hedging of interest  rate or currency  risk  exposure  executed in
connection with hedging the interest rate or currency exposure of the Borrowers,
and any confirming  letter executed pursuant to such hedging  agreement,  all as
amended, restated or otherwise modified.

         "Intercompany  Note" shall have the meaning assigned thereto in Section
10.4(a).

         "Intercompany  Subordination  Agreement"  means the Second  Amended and
Restated  Subordination  Agreement  of even  date  substantially  in the form of
Exhibit L, as amended, restated or otherwise modified, executed by the Borrowers
and other  Subsidiaries  party  thereto with respect to the loans by ACC to such
Persons as described on Schedule 10.4.

         "Interest  Expense" means, with respect to ACC and its Subsidiaries for
any  period,  total  interest  expense  of ACC and its  Subsidiaries  (including
without  limitation,  interest  expense  attributable  to Capital Leases and any
other  capitalized  interest  expense) and, to the extent not included  therein,
fees and other  charges  payable with respect to all Debt,  (including  fees and
charges  payable  with  respect  to  Hedging  Agreements,  letters of credit and
similar investments),  all determined on a Consolidated basis for such period in
accordance with GAAP.

         "Interest  Period" shall have the meaning  assigned  thereto in Section
4.1(b).

         "Issuing  Lender"  means First  Union in its  capacity as issuer of any
Letter of Credit.

     "Joinder  Agreement" means an Second Amended and Restated Joinder Agreement
substantially  in the form of Exhibit K executed by each Material  Subsidiary in
accordance with Section 8.12, as amended, restated or otherwise modified.

         "Landlord  Consents" means the Landlord  Agreements  delivered by or on
behalf  of a  Borrower  pursuant  to  the  First  Amended  and  Restated  Credit
Agreement, as any such Landlord Agreement may be amended,  restated or otherwise
modified.

         "L/C   Commitment"   means  the  lesser  of  (a)  Ten  Million  Dollars
($10,000,000) and (b) the Aggregate Commitment.

         "L/C Facility" means the letter of credit facility established pursuant
to Article III hereof.

         "L/C Obligations"  means at any time, an amount equal to the sum of (a)
the aggregate  undrawn and unexpired amount of the then  outstanding  Letters of
Credit and (b) the  aggregate  amount of drawings  under Letters of Credit which
have not then been reimbursed pursuant to Section 3.5.
<PAGE>
 
         "L/C  Participants"  means the collective  reference to all the Lenders
other than the Issuing Lender.

         "Lender"  means each Person  executing  this  Agreement as a Lender set
forth on the  signature  pages hereto and each Person that  hereafter  becomes a
party to this Agreement as a Lender pursuant to Section 14.10.

         "Lending Office" means, with respect to any Lender,  the office of such
Lender maintaining such Lender's Extensions of Credit.

         "Letters of Credit" shall have the meaning  assigned thereto in Section
3.1.

         "Leverage  Ratio"  shall have the meaning  assigned  thereto in Section
9.1.

         "LIBOR" means the rate of interest per annum determined on the basis of
the rate for deposits in the currency in which the  corresponding  loan is to be
denominated in an amount  substantially  equal to the  corresponding  loan for a
period  equal  to the  applicable  Interest  Period  appearing  on the  relevant
Telerate Page (rounded upward, if necessary, to the nearest one-sixteenth of one
percent  (1/16%)) as of 11:00 a.m.  (London time) two Business Days prior to the
first day of the applicable  Interest  Period.  In the event that such rate does
not  appear  on  such a  Telerate  Page,  "LIBOR"  shall  be  determined  by the
Administrative Agent to be the arithmetic average (rounded upward, if necessary,
to the nearest  one-sixteenth  of one percent  (1/16%)) of the rate per annum at
which  deposits in the  Permitted  Currency in which the Loan  bearing  interest
based upon such rate is denominated would be offered by first class banks in the
London  interbank  market to the  Administrative  Agent  (or the  Administrative
Agent's  Correspondent)  at approximately  11:00 a.m. (London time) two Business
Days prior to the first day of the applicable Interest Period for a period equal
to such Interest  Period and in an amount  substantially  equal to the amount of
the applicable Loan.

         "LIBOR  Rate"  means  the rate per  annum  equal to (a)  LIBOR  divided
by (b) one (1) less the Reserve Percentage.

         "LIBOR Rate Loan" means any Loan bearing  interest at a rate determined
with reference to the LIBOR Rate as provided in Section 4.1(a) hereof.

         "Lien" means,  with respect to any asset, any mortgage,  lien,  pledge,
charge,  security interest,  hypothecation or encumbrance of any kind in respect
of such asset.  For the purposes of this Agreement,  a Person shall be deemed to
own  subject to a Lien any asset which it has  acquired or holds  subject to the
interest of a vendor or lessor under any  conditional  sale  agreement,  Capital
Lease or other title retention agreement relating to such asset.

         "Loan" means any Revolving  Credit Loan or any  Swingline  Loan made to
any Borrower  pursuant to Section 2.1 or 2.2,  respectively,  and all such Loans
collectively as the context requires.
<PAGE>
 
         "Loan Documents" means,  collectively,  this Agreement,  the Notes, the
Applications,  the  Letters of  Credit,  any  Joinder  Agreement,  the  Security
Documents and any  supplements  thereto  executed in connection with any Joinder
Agreement,  any  Hedging  Agreement  executed by any  Lender,  the  Intercompany
Subordination  Agreement  and each  other  document,  instrument  and  agreement
executed and delivered by any Borrower, a Subsidiary thereof or their counsel in
connection  with this Agreement or otherwise  referred to herein or contemplated
hereby, all as may be amended, restated or otherwise modified from time to time.

         "Managing  Agents"  means  First  Union and Fleet in their  capacity as
managing  agents  hereunder,  and any successor  thereto in each case  appointed
pursuant to Section 13.9; each, a "Managing Agent."

         "Material   Adverse  Effect"  means,   with  respect  to  the  Domestic
Borrowers,  Canadian Borrowers,  German Borrowers or U.K. Borrowers,  a material
adverse effect on the properties,  business, prospects,  operations or condition
(financial  or  otherwise)  of any such group of Borrowers or the ability of any
such group of Borrowers to perform its  obligations  under the Loan Documents to
which it is a party.

         "Material Contract" means (a) any contract or other agreement,  written
or oral, of any Borrower or any of its Subsidiaries involving monetary liability
of or to any such Person in an amount in excess of $5,000,000 per annum,  or (b)
any other contract or agreement,  written or oral, of any Borrower or any of its
Subsidiaries  the failure to comply with which could  reasonably  be expected to
have a Material Adverse Effect.

         "Material  Subsidiary"  means any direct or indirect  Subsidiary of ACC
which Subsidiary has total assets equal to or in excess of $5,000,000.

         "Mortgage"  means  a  Leasehold  Mortgage  delivered  pursuant  to  the
Original Credit Agreement (as modified by the Modification to Leasehold Mortgage
delivered  pursuant to the First Amended and Restated  Credit  Agreement and the
modification to Leasehold  Mortgage  substantially  in the form of Exhibit J) or
any other real property security  agreement  delivered by a Borrower pursuant to
which a Borrower  grants a Lien on its interest in a parcel of real  property to
the Administrative Agent for the benefit of itself and the Lenders.

         "Multiemployer Plan" means a "multiemployer plan" as defined in Section
4001(a)(3)  of  ERISA to which  ACC or any  ERISA  Affiliate  is  making,  or is
accruing an obligation to make, contributions within the preceding six years.

         "Net Cash Proceeds" means, as applicable,  (a) with respect to any sale
of assets,  the gross cash proceeds  received by ACC or any of its  Subsidiaries
from such sale less the sum of (i) all legal,  title,  recording,  transfer  and
income tax expenses, commissions and similar fees and expenses incurred, and all
other federal, state, provincial, local and foreign taxes assessed in connection
therewith and (ii) the aggregate  outstanding  principal amount of, premium,  if
any,  and  interest  on any Debt  secured  by a Lien on the  asset (or a portion
thereof) sold,  which Debt is required to be repaid in connection with such sale
of assets, (b) with respect to any offering of debt
<PAGE>
 
or equity  securities,  the gross cash  proceeds  received  by ACC or any of its
Subsidiaries  therefrom  less  all  legal,  underwriting  and  similar  fees and
expenses  incurred in  connection  therewith and (c) with respect to any payment
under an insurance  policy,  the amount of cash proceeds  received by ACC or its
applicable Subsidiary from the related insurance company.

         "Net Income" means,  with respect to ACC and its  Subsidiaries  for any
period,  the  Consolidated  net income (or loss) of ACC and its Subsidiaries for
such period  determined in accordance with GAAP;  provided,  that there shall be
excluded from net income (or loss) (a) if the ability of ACC to receive, recover
or  repatriate  cash or receive  economic  benefits  (other than any increase in
value of ACC's stock or ownership interest in a Subsidiary  thereof) from any of
its  Subsidiaries  is materially  limited or restricted for a material period of
time at any date of  determination  by  operation of the terms of the charter of
such Subsidiary or any agreement,  instrument, or Applicable Law, the portion of
the  income of each such  Subsidiary  so  restricted  and (b) the  effect of any
currency translation adjustments.

         "Network Agreement" means any document or agreement entered into by ACC
or any of its  Subsidiaries  regarding the use,  operation or maintenance of, or
otherwise concerning, any of the Network Facilities.

         "Network Facilities" means the network of digital and analog facilities
owned or leased by ACC or any of its Subsidiaries.

         "Net Worth" means, at any date of determination thereof, the sum of the
capital stock (excluding treasury stock,  cumulative translation adjustments and
capital stock subscribed and unissued) and retained  earnings  (including earned
surplus,  capital surplus and the balance of the current profit and loss account
not  transferrable  to retained  earnings)  accounts of ACC and its Subsidiaries
appearing on a Consolidated  balance sheet of ACC and its Subsidiaries  prepared
in accordance with GAAP.

         "Notes" means (a) the separate  Second  Amended and Restated  Revolving
Credit Notes made by the applicable  Borrower or Borrowers  payable to the order
of each Lender,  substantially in the form of Exhibit A-1 hereto with respect to
the Domestic  Borrowers,  Exhibit A-2 hereto with respect to the U.K. Borrowers,
Exhibit A-3 hereto with  respect to the Canadian  Borrowers,  Exhibit A-4 hereto
with respect to the German  Borrowers;  (b) the separate  Swingline Note and (c)
any amendments and  modifications  thereto,  any substitutes  therefor,  and any
replacements,  restatements, renewals or extension thereof, in whole or in part;
"Note" means any of such Notes.

         "Notice of Account Designation" shall have the meaning assigned thereto
in Section 2.3(b).

         "Notice  of  Borrowing"  shall  have the  meaning  assigned  thereto in
Section 2.3(a).

         "Notice of  Conversion/Continuation"  shall have the  meaning  assigned
thereto in Section 4.2.
<PAGE>
 
         "Notice of  Prepayment"  shall  have the  meaning  assigned  thereto in
Section 2.4(d).

         "Obligations"  means,  in  each  case,  whether  now  in  existence  or
hereafter  arising:  (a)  the  aggregate  outstanding  principal  amount  of and
interest on (including  interest  accruing after the filing of any bankruptcy or
similar  petition) the Loans, (b) all payment and other net obligations owing by
a Borrower to any Lender or Agent under any Hedging Agreement permitted pursuant
to Section 10.13, (c) the L/C Obligations,  (d) the obligations of the Guarantor
pursuant  to  Article  XI and (e) all  other  fees  and  commissions  (including
attorney's  fees),  charges,   indebtedness,   loans,   liabilities,   financial
accommodations,  obligations,  covenants  and duties  owing by a Borrower or the
Guarantor to the Lenders or to any Agent, of every kind, nature and description,
direct or indirect, absolute or contingent, due or to become due, contractual or
tortious, liquidated or unliquidated,  and whether or not evidenced by any note,
and  whether  or not for the  payment  of  money  under  or in  respect  of this
Agreement, any Note, any Letter of Credit or any of the other Loan Documents.

         "Officer's  Compliance  Certificate"  shall have the  meaning  assigned
thereto in Section 7.2.

         "OFTEL" means the United  Kingdom Office of  Telecommunications  or any
successor Governmental Authority.

         "Operating Cash Flow" means,  with respect to ACC and its  Subsidiaries
for any period, the following,  each calculated on a Consolidated basis for such
period without  duplication in accordance with GAAP: (a) Net Income, plus (b) to
the extent  deducted in determining  Net Income (i) income and franchise  taxes,
(ii) Interest  Expense,  (iii)  amortization  and depreciation and other similar
non-cash charges and (iv) charges  associated with ACC's merger  agreements with
U.S.  Wats and Teleport  Communications  Group,  Inc.,  respectively,  which are
reflected as  "nonrecurring  charges"  less (c) the sum of (i) interest  income,
(ii) non-cash income, (iii) capitalized  internally generated software costs and
expenses  (provided that capitalized  software costs relating to billing systems
shall be  amortized  over a period  not to exceed 7 years) and (iv) any items of
gain (or plus any non-cash items of loss) which were included in determining Net
Income and were not realized in the ordinary course of business. For purposes of
calculating compliance with Article IX, Operating Cash Flow shall be adjusted in
a manner  reasonably  satisfactory  to the Managing  Agents to include as of the
first day of any  calculation  period any  acquisition  consummated  during such
period in accordance  with this Agreement and exclude as of the first day of any
calculation  period  any  Subsidiary  or  assets  sold in  accordance  with this
Agreement during such period.

         "Original Credit Agreement" means the Credit Agreement dated as of July
21, 1995, by and among ACC, and certain Subsidiaries thereof designated therein,
as Borrowers, ACC, as Guarantor, the lenders referred to therein, First Union as
Managing Agent and  Administrative  Agent, and Fleet National Bank (as successor
to Shawmut Bank  Connecticut,  N.A.),  as Managing  Agent, as amended by a First
Amendment dated as of October 31, 1995 and a Second  Amendment dated as of March
29, 1996, and as modified by certain waiver letters.

         "Other  Taxes"  shall  have the  meaning  assigned  thereto  in Section
4.12(b).
<PAGE>
 
         "PBGC" means the Pension Benefit Guaranty  Corporation or any successor
agency.

         "Pension  Plan"  means  any  Employee   Benefit  Plan,   other  than  a
Multiemployer  Plan,  which is subject to the provisions of Title IV of ERISA or
Section 412 of the Code and which (a) is maintained  for employees of ACC or any
ERISA  Affiliates  or (b) has at any time  within the  preceding  six years been
maintained  for the  employees  of ACC or any of their  current or former  ERISA
Affiliates.

         "Permitted Currency" means Dollars or an Alternative  Currency, or each
such currency, as the context requires.

         "Person" means an individual,  corporation,  partnership,  association,
trust,  business trust,  limited liability company,  joint venture,  joint stock
company,  pool,  syndicate,  sole proprietorship,  unincorporated  organization,
Governmental Authority or any other form of entity or group thereof.

         "Pledge  Agreements"  means the collective  reference to the ACC Pledge
Agreement and ACC National Pledge Agreement.

         "Prime  Rate"  means,  at any  time,  the rate of  interest  per  annum
publicly  announced from time to time by the  Administrative  Agent as its prime
rate.  Each  change in the Prime Rate shall be  effective  as of the  opening of
business on the day such  change in the Prime Rate  occurs.  The parties  hereto
acknowledge that the rate announced publicly by the Administrative  Agent as its
Prime Rate is an index or base rate and shall not  necessarily  be its lowest or
best rate charged to its customers or other banks.

         "Pro  Forma  Debt  Service"   means,   with  respect  to  ACC  and  its
Subsidiaries at any date of determination,  the sum of the following  calculated
without duplication on a Consolidated pro forma basis for the period of four (4)
consecutive fiscal quarters immediately succeeding such date of determination in
accordance with GAAP: (a) all payments of principal or similar amounts  required
to be paid  with  respect  to Total  Debt  during  such  period  based  upon the
aggregate  amount  of  outstanding  Debt on such date of  determination  and (b)
Interest  Expense  required to be paid  during  such period  based upon rates of
interest in effect on such date of determination.

         "Projections"  shall  have the  meaning  assigned  thereto  in  Section
7.1(c).

         "PUC" means any state,  provincial or other local regulatory  agency or
body that  exercises  jurisdiction  over the rates or services or the ownership,
construction   or   operation   of  any  Network   Facility  or  long   distance
telecommunications  systems  or over  Persons  who own,  construct  or operate a
Network Facility or long distance  telecommunications  systems,  in each case by
reason of the  nature or type of the  business  subject  to  regulation  and not
pursuant to laws and regulations of general  applicability to Persons conducting
business in any such jurisdiction.

         "PUC  Authorizations"   means  all  applications,   filings,   reports,
documents,  recordings and registrations with, and all validations,  exemptions,
franchises,  waivers, approvals, orders or authorizations,  consents,  licenses,
certificates and permits from any PUC.
<PAGE>
 
         "Register" shall have the meaning assigned thereto in Section 14.10(d).

         "Reimbursement  Obligation"  means the  obligation  of the Borrowers to
reimburse  the Issuing  Lender  pursuant to Section 3.5 for amounts  drawn under
Letters of Credit.

         "Required  Lenders"  means,  at  any  date,  the  holders  of at  least
fifty-one percent (51%) of the Revolving Credit Loans and L/C Obligations, or if
no Revolving Credit Loans or L/C Obligations are outstanding, any combination of
Lenders whose Commitment Percentages aggregate at least fifty-one percent (51%).

         "Reserve   Percentage"  means  the  maximum  daily  arithmetic  reserve
requirement  imposed by the Board of Governors of the Federal Reserve System (or
any successor)  under  Regulation D on  Eurocurrency  liabilities (as defined in
Regulation  D) for the  applicable  Interest  Period as of the first day of such
Interest Period, but subject to any changes in such reserve requirement becoming
effective  during the Interest  Period.  For purposes of calculating the Reserve
Percentage,  the  reserve  requirement  shall be as set  forth in  Regulation  D
without benefit of credit for prorations, exemptions or offsets under Regulation
D, and further  without  regard to whether or not any Lender  elects to actually
fund any Loan or portion thereof with Eurocurrency liabilities. Each calculation
by the  Administrative  Agent of the LIBOR Rate shall be conclusive  and binding
for all purposes, absent manifest error.

         "Revolving  Credit Loans" means the  collective  reference to revolving
credit loans established pursuant to Section 2.1.

         "Revolving  Credit  Termination  Date" means the  earliest of the dates
referred to in Section 2.7.

         "Security  Agreement"  means the Second  Amended and Restated  Security
Agreement  of even date  substantially  in the form of Exhibit I executed by the
Domestic  Borrowers  in favor of the  Administrative  Agent for the  benefit  of
itself and the Lenders, as amended, restated or otherwise modified.

         "Security  Documents"  means the  collective  reference to the Security
Agreement, the Trademark Assignment,  the Pledge Agreements,  the Mortgages, the
Landlord Consents, the Canadian Security Documents, the U.K. Security Documents,
the German Security  Documents and each other  agreement or writing  pursuant to
which ACC or any Subsidiary thereof pledges or grants a security interest in the
Collateral  or such Person  guaranties  the payment  and/or  performance  of the
Obligations or any portion thereof.

         "Solvent" means, as to ACC and its Subsidiaries taken on a Consolidated
basis on a particular  date,  that such Persons (a) have capital  sufficient  to
carry on their business and  transactions  and all business and  transactions in
which they are about to engage and are able to pay their  debts as they  mature,
(b) own  property  having  a value at fair  valuation  greater  than the  amount
required to pay their probable liabilities (including contingencies), and (c) do
not believe
<PAGE>
 
that they will incur debts or liabilities beyond their ability to pay such debts
or liabilities as they mature.

         "Sterling"  means,  at any time of  determination,  the  then  official
currency of the United Kingdom, subject to Section 4.7 hereof.

         "Sterling  Base  Rate"  shall  mean,  at any time,  that rate per annum
announced  by  Midland  Bank plc to be its  Sterling  base rate  (which  may not
necessarily be its lowest or best rate), as adjusted to conform to changes as of
the opening of  business  on the date of any such change in such rate,  plus the
sum of (a) the  Applicable  Margin with  respect to Base Rate Loans in effect at
such  time and (b) two  percent  (2%).  Each  Loan or  portion  thereof  bearing
interest based on the Sterling Base Rate shall be a "Sterling Base Rate Loan."

         "Sublimit"  means the  maximum  aggregate  principal  Dollar  Amount of
Extensions of Credit  available at any time to the applicable  Borrower or group
of  Borrowers  hereunder  as set forth on  Schedule  1.2.  If a Sublimit on such
Schedule  applies  to more  than one  Borrower,  such  Sublimit  shall be in the
aggregate  amount  available to all such Borrowers  taken  together,  and not an
amount available to each such Borrower individually.

         "Subordinated  Debt" means any Debt designated as Subordinated  Debt on
Schedule 6.1(t) hereof and any other Debt of ACC or any Subsidiary  subordinated
in right and time of payment to the Obligations on terms reasonably satisfactory
to the Required Lenders.

         "Subsidiary"  means as to any Person,  any corporation,  partnership or
other entity of which more than fifty percent (50%) of the  outstanding  capital
stock or other  ownership  interests  having  ordinary  voting  power to elect a
majority  of the  board of  directors  or other  managers  of such  corporation,
partnership or other entity is at the time, directly or indirectly,  owned by or
the management is otherwise  controlled by such Person (irrespective of whether,
at the time,  capital  stock of any other  class or classes of such  corporation
shall  have or  might  have  voting  power by  reason  of the  happening  of any
contingency).   Unless  otherwise  qualified,   references  to  "Subsidiary"  or
"Subsidiaries" herein shall refer to those of ACC.

         "Supermajority  Lenders"  means,  at any date,  the holders of at least
sixty-six and two-thirds percent (66 2/3%) of the Revolving Credit Loans and L/C
Obligations, or if no Revolving Credit Loans or L/C Obligations are outstanding,
any  combination  of Lenders  whose  Commitment  Percentages  aggregate at least
sixty-six and two-thirds percent (66 2/3%).

         "Swingline  Commitment"  means the lesser of (a) Three Million  Dollars
($3,000,000) and (b) the Aggregate Commitment.

         "Swingline  Lender"  means  First Union in its  capacity as  swingline
lender hereunder.

         "Swingline  Loan" means any swingline loan made by the Swingline Lender
to a Borrower  pursuant to Section 2.2, and all such Loans  collectively  as the
context requires.
<PAGE>
 
         "Swingline  Note"  means  the  separate  Second  Amended  and  Restated
Swingline  Note  made by the  Domestic  Borrowers  payable  to the  order of the
Swingline  Lender,  substantially  in the form of  Exhibit  A-5  hereto  and any
amendments  and  modifications   thereto,  any  substitutes  therefor,  and  any
replacements, restatements, renewals or extension thereof, in whole or in part.

         "Swingline  Termination  Date"  means the  earlier  to occur of (a) the
resignation of First Union as  Administrative  Agent in accordance  with Section
13.9 and (b) the Revolving Credit Termination Date.

         "Taxes" shall have the meaning assigned thereto in Section 4.12(a).

         "Termination  Event"  means:  (a) a  "Reportable  Event"  described  in
Section 4043 of ERISA (other than a Reportable  Event as to which the  provision
of 30 days notice has been waived by the PBGC under applicable regulations);  or
(b) the  withdrawal of ACC or any ERISA  Affiliate  from a Pension Plan during a
plan  year in  which it was a  "substantial  employer"  as  defined  in  Section
4001(a)(2) of ERISA;  or (c) the  termination of a Pension Plan, the filing of a
notice of intent to terminate a Pension Plan or the  treatment of a Pension Plan
amendment as a distress  termination  under Section 4041(c) of ERISA; or (d) the
institution of proceedings  to terminate,  or the  appointment of a trustee with
respect to, any Pension  Plan by the PBGC;  or (e) any other event or  condition
which  would  constitute   grounds  under  Section  4042(a)  of  ERISA  for  the
termination of, or the appointment of a trustee to administer, any Pension Plan;
or (f) the partial or complete  withdrawal of ACC or any ERISA  Affiliate from a
Multiemployer  Plan; or (g) the  imposition of a Lien pursuant to Section 412 of
the Code or Section 302 of ERISA; or (h) any event or condition which results in
the  reorganization or insolvency of a Multiemployer Plan under Sections 4241 or
4245 of ERISA; or (i) any event or condition which results in the termination of
a Multiemployer  Plan under Section 4041A of ERISA or the institution by PBGC of
proceedings to terminate a Multiemployer Plan under Section 4042 of ERISA.

         "Total Debt" means,  with  respect to ACC and its  Subsidiaries  at any
date  of  determination  and  without  duplication,  all  Debt  of ACC  and  its
Subsidiaries on a Consolidated basis.

         "Trademark  Assignment" means the Second Amended and Restated Trademark
Assignment of even date executed by ACC in favor of the Administrative Agent for
the  benefit  of itself and the  Lenders,  as  amended,  restated  or  otherwise
modified.

         "UCC"  means the Uniform  Commercial  Code as in effect in the State of
North Carolina.

         "U.K.  Borrowers"  means  the  collective  reference  to all  Borrowers
organized  under the laws of the  United  Kingdom or any  political  subdivision
thereof.

         "U.K.  Guaranty  Agreement" means the U.K. Guaranty Agreement set forth
on Schedule 1.5.

         "U.K.  Security  Documents"  means the collective reference to the U.K.
Guaranty  Agreement,  the other documents set forth on Schedule 1.5, and any 
other agreement or writing
<PAGE>
 
pursuant  to which a U.K.  Borrower  or U.K.  Subsidiary,  pledges  or  grants a
security  interest in the Collateral or any such Person  guarantees or otherwise
secures the payment  and/or  performance  of any  obligation of a U.K.  Borrower
under  any  Loan  Document,  in each  case as  amended,  restated  or  otherwise
modified.

         "U.K.  Subsidiary"  means a Subsidiary  organized under the laws of the
United Kingdom or any political subdivision thereof.

         "United States" means the United States of America.

         "U.S. Wats Acquisition"  means the acquisition by ACC or a Wholly-Owned
Subsidiary  thereof  of U.S.  Wats,  Inc.  via a tax-free  exchange  of stock as
described  in,  and as  approved  by the  lenders  under the First  Amended  and
Restated  Credit  Agreement  pursuant  to, the letter  dated  October  27,  1997
executed by ACC and the lenders  under the First  Amended  and  Restated  Credit
Agreement, and hereby approved by the Lenders hereunder.

         "Uniform   Customs"   means  the  Uniform   Customs  and  Practice  for
Documentary   Credits   (1993   Revision),International   Chamber  of   Commerce
Publication No. 500, as amended, restated or otherwise modified.

         "Versatel  Acquisition"  means the acquisition by ACC or a Wholly-Owned
Subsidiary  thereof of a majority of the capital stock of VersaTel Telecom B.V.,
a  description  of which has been  provided to the Lenders  prior to the Closing
Date.

        "Wholly-Owned" means, with respect to a Subsidiary,  a Subsidiary all of
the shares of capital stock or other ownership  interests of which are, directly
or indirectly, owned or controlled by ACC and/or one or more of its Wholly-Owned
Subsidiaries.

         SECTION  1.2.   General.   All  terms  of  an  accounting   nature  not
specifically  defined  herein shall have the meaning  assigned  thereto by GAAP.
Unless  otherwise  specified,  a reference  in this  Agreement  to a  particular
section,  subsection,  Schedule  or  Exhibit  is a  reference  to that  section,
subsection,  Schedule or Exhibit of this Agreement. Wherever from the context it
is appropriate,  each term stated in either the singular or plural shall include
the  singular  and plural,  and pronouns  stated in the  masculine,  feminine or
neuter  gender shall  include the  masculine,  the feminine and the neuter.  Any
reference  herein to "Charlotte  time" shall refer to the applicable time of day
in Charlotte, North Carolina.

         SECTION 1.3.  Other Definitions and Provisions.

         (a) Use of Capitalized  Terms.  Unless otherwise  defined therein,  all
capitalized terms defined in this Agreement shall have the defined meanings when
used  in  this  Agreement,  the  Notes  and  the  other  Loan  Documents  or any
certificate,  report  or  other  document  made or  delivered  pursuant  to this
Agreement.
<PAGE>
 
         (b)  Miscellaneous.  The words  "hereof",  "herein" and "hereunder" and
words  of  similar  import  when  used in this  Agreement  shall  refer  to this
Agreement as a whole and not to any particular provision of this Agreement.


                                   ARTICLE II

                                 CREDIT FACILITY

         SECTION  2.1.  Revolving  Credit  Loans.   Subject  to  the  terms  and
conditions of this  Agreement,  each Lender  severally  agrees to make Revolving
Credit  Loans in a Permitted  Currency to the  applicable  Borrower or Borrowers
from time to time from the Closing Date through the Revolving Credit Termination
Date as requested by such Borrower or Borrowers in accordance  with the terms of
Sections  2.1 and 2.3;  provided,  that,  based  upon the  Dollar  Amount of all
Extensions of Credit, (a) the maximum amount of Revolving Credit Loans available
to each  Borrower  or  Borrowers  at any time  hereunder  shall not  exceed  the
Sublimit applicable to such Borrower or Borrowers, (b) the aggregate outstanding
principal amount of all outstanding  Revolving Credit Loans (after giving effect
to any amount requested) shall not exceed the Aggregate  Commitment less the sum
of the aggregate outstanding principal amount of all outstanding Swingline Loans
and the L/C Obligations and (c) the aggregate  outstanding  principal  amount of
Revolving  Credit Loans from any Lender to the  Borrowers  shall not at any time
exceed such Lender's Commitment. Each Revolving Credit Loan by a Lender shall be
in a  principal  amount  equal to such  Lender's  Commitment  Percentage  of the
aggregate  outstanding  principal  amount of Revolving Credit Loans requested on
such  occasion.  Revolving  Credit Loans to be made in an  Alternative  Currency
shall be funded in an amount equal to the  Alternative  Currency  Amount of such
Loan.  Revolving Credit Loans to the Domestic  Borrowers shall be denominated in
Dollars,  Revolving  Credit Loans to the U.K.  Borrowers shall be denominated in
Sterling,  Revolving Credit Loans to the Canadian Borrowers shall be denominated
in Canadian  Dollars and Revolving Credit Loans to the German Borrowers shall be
denominated in Deutschemarks.  Subject to the terms and conditions  hereof,  the
Borrowers may borrow,  repay and reborrow Revolving Credit Loans hereunder until
the Revolving Credit Termination Date.

         SECTION 2.2.  Swingline Loans.

         (a)  Availability.   Subject  to  the  terms  and  conditions  of  this
Agreement,  the Swingline  Lender agrees to make Swingline Loans to the Domestic
Borrowers  from  time to time  from  the  Closing  Date  through  the  Swingline
Termination Date; provided, that (i) all Swingline Loans shall be denominated in
Dollars and (ii) the  aggregate  outstanding  principal  amount of all Swingline
Loans (after giving effect to any amount requested), shall not exceed the lesser
of (A) the  Aggregate  Commitment  less  the  sum of the  Dollar  Amount  of the
aggregate outstanding principal amount of all Revolving Credit Loans and the L/C
Obligations and (B) the Swingline Commitment.
<PAGE>
 
         (b) Refunding.

                  (i) Swingline Loans (except with respect to any Swingline Loan
extended after the occurrence and during the  continuance of an Event of Default
of which the Administrative  Agent has received notice which has not been waived
by the Required Lenders or the Lenders,  as applicable) shall be refunded to the
Swingline  Lender  by the  Lenders  on  demand  by the  Swingline  Lender.  Such
refundings  shall be made by the  Lenders in  accordance  with their  respective
Commitment  Percentages  and shall  thereafter be reflected as Revolving  Credit
Loans of the Lenders on the books and records of the Administrative  Agent. Each
Lender shall fund its respective Commitment Percentage of Revolving Credit Loans
as required to repay  Swingline Loans  outstanding to the Swingline  Lender upon
demand by the Swingline  Lender but in no event later than 2:00 p.m.  (Charlotte
time) on the next succeeding Business Day after such demand is made. No Lender's
obligation to fund its  respective  Commitment  Percentage  of a Swingline  Loan
shall  be  affected  by any  other  Lender's  failure  to  fund  its  Commitment
Percentage of a Swingline Loan, nor shall any Lender's Commitment  Percentage be
increased  as a result  of any such  failure  of any  other  Lender  to fund its
Commitment Percentage.

                  (ii) The Domestic  Borrowers shall pay to the Swingline Lender
on demand the amount of such Swingline Loans to the extent that the Lenders fail
to repay in full the  outstanding  Swingline  Loans  requested or required to be
refunded.   In  addition,   the  Domestic   Borrowers   hereby   authorize   the
Administrative  Agent to charge any account  maintained by it with the Swingline
Lender (up to the amount  available  therein)  in order to  immediately  pay the
Swingline  Lender  the  amount of such  Swingline  Loans to the  extent  amounts
received from the Lenders are not  sufficient  to repay in full the  outstanding
Swingline Loans requested or required to be refunded. If any portion of any such
amount paid to the  Swingline  Lender  shall be recovered by or on behalf of the
Domestic  Borrowers  from the Swingline  Lender in bankruptcy or otherwise,  the
loss of the amount so recovered shall be ratably shared among all the Lenders in
accordance with their respective Commitment Percentages.

                  (iii) Each Lender  acknowledges and agrees that its obligation
to  refund  Swingline  Loans  (except  any  Swingline  Loan  extended  after the
occurrence and during the  continuance of an Event of Default which has not been
waived by the Required Lenders or the Lenders, as applicable) in accordance with
the terms of this  Section 2.2 is absolute  and  unconditional  and shall not be
affected  by  any  circumstance  whatsoever;  provided,  that  if  prior  to the
refunding of any  outstanding  Swingline Loans pursuant to this Section 2.2, one
of the events  described  in Section  12.1(j) or (k) shall have  occurred,  each
Lender will, on the date the  applicable  Revolving  Credit Loan would have been
made, purchase an undivided  participating  interest in the Swingline Loan to be
refunded in an amount equal to its Commitment Percentage of the aggregate amount
of such Swingline Loan. Each Lender will  immediately  transfer to the Swingline
Lender, in immediately available funds, the amount of its participation and upon
receipt  thereof the Swingline  Lender will deliver to such Lender a certificate
evidencing  such  participation  dated the date of receipt of such funds and for
such amount.  Whenever, at any time after the Swingline Lender has received from
any Lender  such  Lender's  participating  interest  in a  Swingline  Loan,  the
Swingline Lender receives any payment on account  thereof,  the Swingline Lender
will distribute to such Lender its participating interest in such amount
<PAGE>
 
(appropriately adjusted, in the case of interest payments, to reflect the period
of time during which such Lender's  participating  interest was  outstanding and
funded).

         SECTION 2.3.  Procedure for Advances of Revolving  Credit and Swingline
Loans.
         (a) Requests for Borrowing. The applicable  Borrower or Borrowers shall
give the  Administrative  Agent  irrevocable  prior  written  notice in the form
attached  hereto as Exhibit B (a "Notice of Borrowing") (i) not later than 11:00
a.m.  (Charlotte  time)  (A) on or  prior  to the  same  Business  Day for  each
Swingline  Loan,  (B) at least  one  Business  Day  before  each  Base Rate Loan
denominated  in Dollars,  (C) at least three (3) Business  Days before each Base
Rate Loan  denominated  in an  Alternative  Currency  and (D) at least three (3)
Business  Days before each LIBOR Rate Loan  denominated  in Dollars and (ii) not
later than 9:00 a.m.  (Charlotte  time) at least three (3) Business  Days before
each  LIBOR  Rate  Loan to be  denominated  in an  Alternative  Currency  of its
intention to borrow, specifying (A) the date of such borrowing, which shall be a
Business  Day,  (B)  whether  such Loan is to be a  Revolving  Credit  Loan or a
Swingline Loan, (C) if such Loan is to be a Revolving Credit Loan,  whether such
Loan shall be denominated in Dollars or an Alternative Currency,  (D) the amount
of such borrowing,  which shall be with respect to LIBOR Rate Loans  denominated
in Dollars in an aggregate principal amount of $3,000,000 or a whole multiple of
$1,000,000 in excess  thereof (and with respect to LIBOR Rate Loans  denominated
in an  Alternative  Currency,  the  Dollar  Amount in each case  thereof),  with
respect to Base Rate Loans in an aggregate  principal  amount of $1,500,000 or a
whole  multiple of $500,000 in excess  thereof,  and with  respect to  Swingline
Loans in an aggregate  principal amount of $100,000 or a whole multiple thereof,
(E) if  denominated  in Dollars,  whether the  Revolving  Credit Loans are to be
LIBOR  Rate  Loans or Base Rate  Loans and (F) in the case of a LIBOR Rate Loan,
the duration of the Interest Period applicable  thereto.  Notices received after
11:00 a.m.  (Charlotte  time) shall be deemed received on the next Business Day.
The  Administrative  Agent shall promptly  notify (and in any event provide same
day  notice  to) the  Lenders  of each  Notice of  Borrowing  with  respect to a
Revolving Credit Loan.

         (b) Disbursement of Revolving  Credit Loans  Denominated in Dollars and
Swingline  Loans.  Not later  than 2:00 p.m.  (Charlotte  time) on the  proposed
borrowing date for any Loan  denominated  in Dollars,  (i) each Lender will make
available  to the  Administrative  Agent,  for  the  account  of the  applicable
Borrower or Borrowers,  at the office of the Administrative  Agent in Dollars in
funds  immediately   available  to  the  Administrative   Agent,  such  Lender's
Commitment  Percentage of the requested  borrowing to be made on such  borrowing
date and (ii) the  Swingline  Lender will make  available to the  Administrative
Agent,  for the  account of the  Borrower,  at the office of the  Administrative
Agent in funds immediately  available to the Administrative Agent, the Swingline
Loans to be made to any  Borrower  or  Borrowers  on such  borrowing  date.  The
Borrowers hereby irrevocably  authorize the Administrative Agent to disburse the
proceeds  of each  borrowing  requested  pursuant  to  this  Section  2.3(b)  in
immediately  available funds by crediting or wiring such proceeds to the deposit
account of the  applicable  Borrower or Borrowers  identified in the most recent
Notice of Account  Designation  substantially in the form of Exhibit F hereto (a
"Notice of Account  Designation")  delivered by the Borrowers to the Agent or as
may  be  otherwise   agreed  upon  by  such   Borrower  or  Borrowers   and  the
Administrative  Agent  from time to time.  Subject to Section  4.6  hereof,  the
Administrative  Agent  shall not be  obligated  to  disburse  the portion of the
proceeds of any Loan  requested  pursuant to this Section 2.3 to the extent that
any
<PAGE>
 
Lender  has not  made  available  to the  Administrative  Agent  its  Commitment
Percentage  of such Loan.  Revolving  Credit Loans to be made for the purpose of
refunding  Swingline  Loans  shall be made by the Lenders as provided in Section
2.2(b) hereof.

         (c)   Disbursement  of  Revolving   Credit  Loans   Denominated  in  an
Alternative Currency.  Not later than 11:00 a.m. (the time of the Administrative
Agent's  Correspondent) on the proposed  borrowing date for any Revolving Credit
Loan denominated in an Alternative Currency,  each Lender will make available to
the  Administrative   Agent  at  the  office  of  the   Administrative   Agent's
Correspondent  in  the  requested  Alternative  Currency  in  funds  immediately
available to the Administrative  Agent, such Lender's  Commitment  Percentage of
the requested  borrowing to be denominated  in such  Alternative  Currency.  The
Borrowers hereby irrevocably  authorize the Administrative Agent to disburse the
proceeds  of each  borrowing  requested  pursuant  to  this  Section  2.3(c)  in
immediately  available  funds by crediting or wiring such proceeds to an account
of the  applicable  Borrower  identified  in the most  recent  Notice of Account
Designation  delivered  by the  Borrowers  to the  Agent or as may be  otherwise
agreed upon by such Borrower or Borrowers and the Administrative Agent from time
to time.

         (d) Availability.  The  Administrative  Agent shall not be obligated to
disburse the proceeds of any Revolving  Credit Loan  requested  pursuant to this
Section 2.3 until each Lender shall have made  available  to the  Administrative
Agent its Commitment Percentage of such Loan.

         SECTION 2.4.   Repayment of Extensions of Credit.

         (a) Repayment. (i) The applicable Borrower or Borrowers shall repay the
aggregate  outstanding  principal  amount of all  Revolving  Credit Loans on the
Revolving Credit Termination Date in the applicable  Permitted Currency,  if not
sooner  repaid,  and (ii) the  Domestic  Borrowers  shall  repay  the  aggregate
outstanding  principal  amount of all Swingline Loans in accordance with Section
2.2(b),  together,  in each such case,  with all  accrued  but  unpaid  interest
thereon.

         (b)  Mandatory Repayment of Excess Extensions of Credit.

                  (i) Aggregate  Commitments.  If at any time (as  determined by
the  Administrative  Agent under  Section  2.4(b)(v)),  and for any reason,  the
aggregate  outstanding  principal  Dollar Amount of all  Revolving  Credit Loans
exceeds the  Aggregate  Commitment  less the sum of the Dollar Amount of the L/C
Obligations  and the  aggregate  outstanding  principal  amount of the Swingline
Loans,  the  applicable  Borrower or Borrowers  shall (A) if (and to the extent)
necessary to eliminate  such excess,  immediately  repay  outstanding  Revolving
Credit  Loans that are Base Rate  Loans,  if any,  by the Dollar  Amount of such
excess  (and/or  reduce any pending  request for a Base Rate Loan on such day by
the Dollar Amount of such excess),  and (B) if (and to the extent)  necessary to
eliminate  such excess,  immediately  repay LIBOR Rate Loans (and/or  reduce any
pending  requests for a borrowing or  continuation  or  conversion of such Loans
submitted  in respect  of such  Loans on such day) by the Dollar  Amount of such
excess.

                  (ii) Excess Swingline Loans. If at any time and for any reason
the aggregate  outstanding  principal  amount of all Swingline Loans exceeds the
lesser of (A) the Aggregate
<PAGE>
 
Commitment less the sum of the aggregate  outstanding principal Dollar Amount of
all Revolving  Credit Loans and Dollar Amount of the L/C Obligations and (B) the
Swingline  Commitment,  such excess shall be immediately repaid upon notice from
the Administrative  Agent by the Domestic Borrowers to the Administrative  Agent
for the account of the Swingline Lender.

                  (iii)  Excess  L/C  Obligations.  If at any  time  and for any
reason the aggregate  outstanding principal Dollar Amount of all L/C Obligations
exceeds  the  lesser  of  (A)  the  Aggregate   Commitment  less  the  aggregate
outstanding  principal Dollar Amount of all Revolving Credit Loans and Swingline
Loans and (B) the L/C  Commitment,  the Dollar  Amount of such  excess  shall be
immediately  paid upon notice from the  Administrative  Agent by the  applicable
Borrower  or  Borrowers  by means of a payment  of cash  collateral  into a cash
collateral  account opened by such Borrower or Borrowers with the Administrative
Agent for the benefit of the Lenders in accordance with Section 12.2(b).

                  (iv)  Sublimits.   If  at  any  time  (as  determined  by  the
Administrative  Agent  under  Section  2.4(b)(v)),   and  for  any  reason,  the
Extensions  of  Credit  to  any  Borrower  or  Borrowers  exceeds  the  Sublimit
applicable to such Borrower or Borrowers,  such Borrower or Borrowers  shall (A)
immediately  repay Base Rate Loans  outstanding  to such  Borrower or  Borrowers
(and/or reduce on such day any pending request for a Base Rate Loan submitted by
such Borrower or Borrowers) by the amount of such excess,  (B) immediately repay
LIBOR  Rate Loans  (and/or  reduce  any  pending  requests  for a  borrowing  or
continuation  or conversion  submitted in respect of such Loans on such day), by
the  Dollar  Amount  of  any  remaining  excess,  and  (C)  if  necessary,  cash
collateralize  any L/C Obligations  outstanding to such Borrower or Borrowers in
accordance with paragraph (iii) of this Section 2.4(b).

                  (v) Compliance and Payments.  Each Borrower's  compliance with
this  Section  2.4(b)  shall be tested  from time to time by the  Administrative
Agent at its sole  discretion,  but in any event on each day an interest payment
is due under Section 4.1(e).  All payments pursuant to this Section 2.4(b) shall
be accompanied by any amount required to be repaid under Section 4.10.

         (c)  Other Mandatory Prepayments.

                  (i)  Offering  Proceeds.  If on any such date of  receipt  the
Leverage  Ratio is less  than or equal  to 3.00 to 1.00,  the Net Cash  Proceeds
received  by any  Borrower  or  Subsidiary  from any  offering of debt or equity
securities  shall be used within three (3) Business  Days of receipt  thereof to
prepay all  Extensions  of Credit in the order of priority  specified in Section
2.6(d) (and any such repayment  shall not result in a reduction to the Aggregate
Commitment).

                  (ii)  Commitment  Reductions.  The Borrowers  shall prepay the
Extensions of Credit in accordance  with Section  2.6(d) in connection  with any
permanent reduction in the Aggregate Commitment.

         (d) Optional Repayments.  Any Borrower may at any time and from time to
time repay the Revolving Credit Loans made thereto, in whole or in part, upon at
least three (3) Business Days' irrevocable  notice to the  Administrative  Agent
with respect to LIBOR Rate Loans and one
<PAGE>
 
(1) Business Day irrevocable  notice with respect to Base Rate Loans (other than
Swingline  Loans)  in the form  attached  hereto  as  Exhibit  C (a  "Notice  of
Prepayment"),  specifying  the date and  amount of  repayment  and  whether  the
repayment  is of LIBOR Rate Loans or Base Rate Loans or a  combination  thereof,
and, if of a combination  thereof, the amount allocable to each. Upon receipt of
such notice with respect to any Revolving Credit Loan, the Administrative  Agent
shall  promptly  notify each  Lender.  If any such  notice is given,  the amount
specified  in such notice shall be due and payable on the date set forth in such
notice. Any applicable  Borrower may at any time and from time to time repay the
Swingline  Loans  made  thereto,  in whole or in part,  upon same  Business  Day
irrevocable notice to the Administrative  Agent (subject to Section 2.2(b)(ii)).
Partial  repayments  shall be in an aggregate  amount of  $3,000,000  or a whole
multiple of  $1,000,000  in excess  thereof with respect to LIBOR Rate Loans (or
with respect to Loans  denominated in an Alternative  Currency,  the Alternative
Currency Amount thereof), a whole multiple of $100,000 with respect to Swingline
Loans and  $1,500,000  or a whole  multiple of $500,000 in excess  thereof  with
respect to other Base Rate Loans.  Each such  repayment  shall be accompanied by
any amount required to be paid pursuant to Section 4.10 hereof.

         (e) Limitation on Repayment of LIBOR Rate Loans.  No Borrower may repay
any  LIBOR  Rate  Loan  (including,  without  limitation,  any  LIBOR  Rate Loan
denominated in an Alternative  Currency)  hereunder on any day other than on the
last day of the Interest  Period  applicable  thereto  unless such  repayment is
accompanied by any amount required to be paid pursuant to Section 4.10.

         SECTION 2.5.  Notes.

         (a) Revolving  Credit Notes.  Each Lender's  Revolving Credit Loans and
the obligation of each Borrower to repay the Revolving Credit Loans made thereto
shall be evidenced by the Note executed by such Borrower payable to the order of
such Lender. Each Note shall be dated the date hereof and shall bear interest on
the unpaid principal amount thereof at the applicable interest rate specified in
Section 4.1.

         (b)  Swingline  Note.  The Swingline  Loans and the  obligation of each
Borrower to repay such Swingline  Loans shall be evidenced by the Swingline Note
executed by the Domestic Borrowers payable to the order of the Swingline Lender.
The Swingline Note shall be dated the date hereof and shall bear interest on the
unpaid  principal  amount thereof at the  applicable  interest rate specified in
Section 4.1.

         SECTION 2.6.  Permanent Reductions of the Aggregate Commitment.

         (a) Voluntary Reduction. The Borrowers shall have the right at any time
and from time to time, upon at least five (5) Business Days prior written notice
to the Administrative  Agent, to permanently  reduce, in whole at any time or in
part from time to time, without premium or penalty,  the Aggregate Commitment in
an aggregate  principal amount not less than $2,500,000 or any whole multiple of
$1,000,000 in excess thereof.
<PAGE>
 
         (b) Quarterly  Reduction.  The Aggregate  Commitment and the Sublimits,
respectively, shall be permanently reduced according to the following schedule:

                                                               Percentage
         Date                                                  Reduction

          Mar. 31, 2000                                        8.00%
          June 30, 2000                                        8.00%
          Sep. 30, 2000                                        8.00%
          Dec. 31, 2000                                        8.00%
          Mar. 31, 2001                                        8.00%
          June 30, 2001                                        8.00%
          Sep. 30, 2001                                        8.00%
          Dec. 31, 2001                                        8.00%
          Mar. 31, 2002                                        9.00%
          June 30, 2002                                        9.00%
          Sep. 30, 2002                                        9.00%
          Dec. 19, 2002                                        9.00%

         (c) Other  Permanent  Reductions.  The  Aggregate  Commitment  shall be
permanently reduced as follows by an amount equal to:

                  (i) Offering  Proceeds.  If after prepayment of all Extensions
of Credit with Net Cash Proceeds from any offering by any Borrower or Subsidiary
of debt or equity securities  pursuant to Section 2.4(c)(i),  the Leverage Ratio
exceeds 3.00 to 1.00, an amount equal to the portion of such  proceeds  required
to be applied to  outstanding  Obligations in order to reduce the Leverage Ratio
on such prepayment date to 3.00 to 1.00.

                  (ii) Sale of Assets.  The Net Cash  Proceeds  received  by any
Borrower or Subsidiary in  connection  with any asset sale  described in Section
10.6(e),  within three (3) Business Days of receipt thereof;  provided,  that if
any Authorized Officer of ACC delivers a certificate to the Administrative Agent
prior to such date  that  such Net Cash  Proceeds  are to be  reinvested  by the
Borrower or such  Subsidiary  in the  business  thereof  within 180 days of such
asset sale and such Net Cash Proceeds are so reinvested,  such Net Cash Proceeds
need not be used to permanently reduce the Aggregate Commitment.

                  (iii) Sale of Interest in  Subsidiary.  The Net Cash  Proceeds
received by any Borrower in connection with the sale of an ownership interest in
any Material Subsidiary, within three (3) Business Days of receipt thereof.

                  (iv) Insurance  Proceeds.  Any insurance  proceeds received by
any Borrower or Subsidiary in excess of $500,000 in the aggregate,  within three
(3) Business Days of receipt thereof;  provided,  that if any Authorized Officer
of ACC delivers a  certificate  to the  Administrative  Agent prior to such date
that insurance proceeds are to be reinvested in
<PAGE>
 
replacement  Capital  Assets  within 180 days of their receipt and such proceeds
are so  reinvested,  such  proceeds need not be used to  permanently  reduce the
Aggregate Commitment.

         (d) Additional Payments. Each permanent reduction permitted or required
pursuant to this Section 2.6 shall be accompanied by a payment of principal (and
with respect to L/C  Obligations,  furnishing  of cash  collateral in accordance
with  Section  12.2(b))  sufficient  to reduce the  Extensions  of Credit of the
Lenders after such  reduction to the  Sublimits  and Aggregate  Commitment as so
reduced. At any time after the Aggregate Commitment has been permanently reduced
pursuant to this Section 2.6 by an aggregate amount in excess of $8,000,000, the
amount of each  additional  partial  permanent  reduction under this Section 2.6
shall be applied  (i) pro rata to reduce  each  Sublimit  rounded to the nearest
$1,000,000 and (ii) to reduce the remaining mandatory reduction amounts required
under  Section  2.6(b) on a pro rata  basis.  All  prepayments  required by this
Section  2.6(d) shall be applied  first to the aggregate  outstanding  principal
amount of Swingline Loans, second to the aggregate  outstanding principal amount
of Revolving  Credit Loans, and third,  with respect to any L/C Obligations,  by
furnishing  cash collateral in accordance  with Section  12.2(b).  Any permanent
reduction of the Aggregate Commitment to zero shall be accompanied by payment of
all  outstanding  Obligations  and  termination  of the  Commitments  and Credit
Facility. If the reduction of the Aggregate Commitment requires the repayment of
any LIBOR Rate Loan,  such reduction shall be accompanied by any amount required
to be paid pursuant to Section 4.10.

         SECTION  2.7.  Termination  of Credit  Facility.  The  Credit  Facility
(subject to Section 2.2(a) with respect to Swingline  Loans) shall  terminate on
the  earliest of (a)  December  19,  2002,  (b) the date of  termination  by the
Borrowers  pursuant  to Section  2.6(a) and (c) the date of  termination  by the
Administrative Agent on behalf of the Lenders pursuant to Section 12.2(a).

         SECTION 2.8. Use of Proceeds.  The Borrowers  shall use the proceeds of
the Extensions of Credit (a) to finance  investments,  acquisitions  and Capital
Expenditures  permitted  by the terms  hereof and (b) for  working  capital  and
general corporate  requirements of the Borrowers,  and including payment of fees
and expenses incurred in connection with the transactions contemplated hereby.

         SECTION 2.9.  Nature of Obligations;  Security.  The obligations of the
Domestic  Borrowers  under  the Note or Notes  executed  thereby  and the  other
Obligations of such Borrowers  (other than the  obligations of ACC as Guarantor)
shall be joint and several among such  Borrowers.  The  obligations  of the U.K.
Borrowers under the Note or Notes executed thereby and the other  Obligations of
such Borrowers hereunder shall be joint and several among such Borrowers, but in
relation  to the  Domestic  Borrowers,  the German  Borrowers  and the  Canadian
Borrowers,   shall  be  several  and  not  joint  and  several;  provided,  that
notwithstanding the foregoing,  the Obligations of United Telecom Ltd. shall not
extend to the  Obligations  of the other U.K.  Borrowers to the extent that such
joint and  several  liability  would cause  United  Telecom  Ltd. to  contravene
Section  151 of the  Companies  Act of 1985.  The  Obligations  of the  Canadian
Borrowers in relation to the Domestic  Borrowers,  the German  Borrowers and the
U.K.  Borrowers  shall be several and not joint and several.  The Obligations of
the  Canadian  Borrowers  among  themselves  shall be joint and  several  to the
fullest extent permitted by Canadian Law, as set forth in the applicable Joinder
<PAGE>
 
Agreement or Joinder Agreements joining such Canadian Subsidiary or Subsidiaries
to this Agreement as Canadian Borrowers. The Obligations of the German Borrowers
in relation to the  Domestic  Borrowers,  the U.K.  Borrowers  and the  Canadian
Borrowers,  shall be several and not joint and several.  The  Obligations of the
German  Borrowers  among  themselves  shall be joint and  several to the fullest
extent permitted by German Law, as set forth in the applicable Joinder Agreement
or Joinder  Agreements  joining such German  Subsidiary or  Subsidiaries to this
Agreement as German Borrowers. The Obligations of each Borrower shall be secured
in accordance with the terms of the applicable Security Documents.


                                   ARTICLE III

                            LETTER OF CREDIT FACILITY

         SECTION  3.1.  L/C  Commitment.  Subject  to the terms  and  conditions
hereof,  the Issuing Lender,  in reliance on the agreements of the other Lenders
set forth in Section  3.4(a),  agrees to issue  letters of credit  ("Letters  of
Credit")  denominated  in Dollars  for the  account of the  Domestic  Borrowers,
denominated  in  Canadian  Dollars for the  account of the  Canadian  Borrowers,
denominated in Sterling for the account of the U.K.  Borrowers,  and denominated
in Deutschemarks  for the account of the German  Borrowers,  in each case on any
Business  Day from the Closing  Date  through but not  including  the  Revolving
Credit Termination Date in such form as may be approved from time to time by the
Issuing  Lender;  provided,  that the Issuing Lender shall have no obligation to
issue any Letter of Credit if, after  giving  effect to such  issuance,  (a) the
Dollar Amount of the L/C Obligations  would exceed the L/C  Commitment,  (b) the
Available  Commitment of any Lender would be less than zero or (c) the aggregate
principal  Dollar Amount of Extensions of Credit to the  applicable  Borrower or
Borrowers would exceed the Sublimit thereof.  Each Letter of Credit shall (i) be
denominated  in a Permitted  Currency  in a minimum of $100,000  (other than the
Existing  Letters of  Credit)  or the  applicable  Alternative  Currency  Amount
thereof, (ii) be a standby letter of credit issued to support obligations of the
applicable  Borrower or  Borrowers,  contingent  or  otherwise,  incurred in the
ordinary course of business,  (iii) expire on a date satisfactory to the Issuing
Lender, which date shall be no later than one year after the date of issuance or
the Revolving Credit Termination Date, whichever is earlier, and (iv) be subject
to the Uniform Customs and, to the extent not inconsistent  therewith,  the laws
of the State of North  Carolina.  The  Issuing  Lender  shall not at any time be
obligated  to issue any  Letter  of  Credit  hereunder  if such  issuance  would
conflict with, or cause the Issuing Lender or any L/C  Participant to exceed any
limits  imposed  by,  any  Applicable  Law.  References  herein to  "issue"  and
derivations  thereof  with  respect  to Letters  of Credit  shall  also  include
extensions  or  modifications  of any  existing  Letters of  Credit,  unless the
context  otherwise  requires.  Each Existing Letter of Credit shall be deemed to
continue as a Letter of Credit hereunder.

         SECTION 3.2.  Procedure for Issuance of Letters of Credit. Any Borrower
or  Borrowers  may from time to time  request  that the Issuing  Lender  issue a
Letter of Credit  by  delivering  to the  Issuing  Lender at the  Administrative
Agent's Office an Application  therefor,  completed to the  satisfaction  of the
Issuing  Lender,  and such other  certificates,  documents  and other papers and
information as the Issuing Lender  may request. Upon receipt of any Application,
<PAGE>
 
the  Issuing  Lender  shall  process  such  Application  and  the  certificates,
documents  and  other  papers  and  information  delivered  to it in  connection
therewith in accordance  with its  customary  procedures  and shall,  subject to
Section 3.1 and Article V hereof,  promptly issue the Letter of Credit requested
thereby  (but in no event  shall the  Issuing  Lender be  required  to issue any
Letter of Credit  earlier  than three  Business  Days  after its  receipt of the
Application therefor and all such other certificates, documents and other papers
and  information  relating  thereto) by issuing  the  original of such Letter of
Credit to the  beneficiary  thereof or as otherwise may be agreed by the Issuing
Lender and the  applicable  Borrower  or  Borrowers.  The Issuing  Lender  shall
furnish to the applicable  Borrower or Borrowers a copy of such Letter of Credit
and  furnish  to each  Lender a copy of such  Letter of Credit and the amount of
each Lender's  participation  therein  pursuant to Section 3.4(a),  all promptly
following the issuance of such Letter of Credit.

         SECTION 3.3.  Fees and Other Charges.

         (a)  The   applicable   Borrower   or   Borrowers   shall  pay  to  the
Administrative  Agent,  for  the  account  of the  Issuing  Lender  and  the L/C
Participants, a letter of credit fee with respect to each Letter of Credit in an
amount equal to the product of (i) the  Applicable  Margin with respect to LIBOR
Rate Loans (on a per annum basis) and (ii) an amount equal to the daily  average
Dollar  Amount  available  to be drawn  under such  Letter of Credit  during the
period for which such fee is  payable.  Such fee shall be payable  quarterly  in
arrears on the last Business Day of each  calendar  quarter and on the Revolving
Credit Termination Date.

         (b)  The   applicable   Borrower   or   Borrowers   shall  pay  to  the
Administrative  Agent,  for the account of the Issuing Lender, a facing fee with
respect to each Letter of Credit in an amount equal to the product of (i) 0.125%
(on a per annum  basis) and (ii) the face amount of such Letter of Credit.  Such
fee shall be  payable  quarterly  in arrears  on the last  Business  Day of each
calendar quarter and on the Termination Date.

         (c) The  applicable  Borrower or Borrowers  shall pay or reimburse  the
Issuing Lender for such normal and customary  costs and expenses as are incurred
or charged by the Issuing Lender in issuing,  effecting payment under,  amending
or otherwise administering any Letter of Credit.

         SECTION 3.4.  L/C Participations.

         (a) The Issuing Lender irrevocably agrees to grant and hereby grants to
each L/C  Participant,  and,  to induce the Issuing  Lender to issue  Letters of
Credit hereunder, each L/C Participant irrevocably agrees to accept and purchase
and hereby  accepts  and  purchases  from the Issuing  Lender,  on the terms and
conditions  hereinafter  stated, for such L/C Participant's own account and risk
an undivided interest equal to such L/C Participant's  Commitment  Percentage in
the Issuing  Lender's  obligations and rights under each Letter of Credit issued
hereunder  and the amount of each draft paid by the Issuing  Lender  thereunder.
Each L/C Participant  unconditionally  and  irrevocably  agrees with the Issuing
Lender that, if a draft is paid under any Letter of Credit for which the Issuing
Lender is not  reimbursed in full by the Borrowers in accordance  with the terms
of this  Agreement,  such L/C  Participant  shall pay to the Issuing Lender upon
demand, with respect
<PAGE>
 
to Letters of Credit denominated in Dollars,  and within three (3) Business Days
after demand, with respect to Letters of Credit denominated in Canadian Dollars,
Sterling or Deutschemarks, at the Issuing Lender's address for notices specified
herein an amount equal to such L/C  Participant's  Commitment  Percentage of the
amount of such draft,  or any part thereof,  which is not so reimbursed and such
payments shall thereafter be reflected as Extensions of Credit of the Lenders on
the books and records of the Administrative Agent.

         (b) Upon  becoming  aware of any amount  required to be paid by any L/C
Participant to the Issuing  Lender  pursuant to Section 3.4(a) in respect of any
unreimbursed  portion of any payment made by the Issuing Lender under any Letter
of Credit,  the Issuing  Lender shall notify each L/C  Participant of the Dollar
Amount  thereof and due date of such required  payment and such L/C  Participant
shall pay to the Issuing  Lender the Dollar Amount  specified on the  applicable
due date.  If any such amount is paid to the Issuing  Lender after the date such
payment is due, such L/C Participant  shall pay to the Issuing Lender on demand,
in addition to such amount, the product of (i) such amount, times (ii) the daily
average Federal Funds Rate as determined by the Administrative  Agent during the
period from and including the date such payment is due to the date on which such
payment is immediately  available to the Issuing Lender,  times (iii) a fraction
the  numerator of which is the number of days that elapse during such period and
the  denominator  of which is 360. A  certificate  of the  Issuing  Lender  with
respect to any  amounts  owing under this  Section  shall be  conclusive  in the
absence of manifest error.  With respect to payment to the Issuing Lender of the
unreimbursed  amounts  described in this Section 3.4(b), if the L/C Participants
receive  notice that any such  payment is due (A) prior to 1:00 p.m.  (Charlotte
time) on any Business  Day, such payment shall be due that Business Day, and (B)
after 1:00 p.m.  (Charlotte time) on any Business Day, such payment shall be due
on the following Business Day.

         (c)  Whenever,  at any time after the Issuing  Lender has made  payment
under  any  Letter of  Credit  and has  received  from any L/C  Participant  its
Commitment  Percentage of such payment in accordance  with this Section 3.4, the
Issuing Lender  receives any payment  related to such Letter of Credit  (whether
directly from the Borrowers or otherwise), or any payment of interest on account
thereof, the Issuing Lender will distribute to such L/C Participant its pro rata
share thereof; provided, that in the event that any such payment received by the
Issuing Lender shall be required to be returned by the Issuing Lender,  such L/C
Participant  shall return to the Issuing Lender the portion  thereof  previously
distributed by the Issuing Lender to it.

         SECTION 3.5.  Reimbursement  Obligation of the Borrower. The applicable
Borrower or  Borrowers  agree to  reimburse  the Issuing  Lender on each date on
which the Issuing  Lender  notifies  such  Borrower or Borrowers of the date and
amount of a draft  paid  under any  Letter of Credit  for the amount of (a) such
draft so paid and (b) any  taxes,  fees,  charges  or  other  costs or  expenses
incurred  by the  Issuing  Lender in  connection  with such  payment.  Each such
payment shall be made to the Issuing Lender at its address for notices specified
herein in the applicable Permitted Currency and in immediately  available funds.
Interest  shall  be  payable  on any and all  amounts  remaining  unpaid  by the
Borrowers  under this  Article  III from the date such  amounts  become  payable
(whether at stated maturity, by acceleration or otherwise) until payment in full
at the rate which would be payable on any outstanding Base Rate Loans which were
then overdue.  If the Borrowers  fail to timely  reimburse the Issuing Lender on
the date the Borrowers receive the
<PAGE>
 
notice  referred to in this Section 3.5, the  Borrowers  shall be deemed to have
timely  given a  Notice  of  Borrowing  hereunder  to the  Administrative  Agent
requesting  the Lenders to make a Base Rate Loan on such date in an amount equal
to the amount of such drawing and,  subject to the satisfaction or waiver of the
conditions  precedent  specified in Article V, the Lenders  shall make Base Rate
Loans in such amount,  the  proceeds of which shall be applied to reimburse  the
Issuing Lender for the amount of the related drawing and costs and expenses.

         SECTION 3.6.  Obligations  Absolute.  The Borrowers'  obligations under
this Article III (including  without  limitation the  Reimbursement  Obligation)
shall  be  absolute  and  unconditional  under  any  and all  circumstances  and
irrespective  of any  set-off,  counterclaim  or defense  to  payment  which the
Borrowers may have or have had against the Issuing Lender,  any L/C Participant,
any Agent or any  beneficiary  of a Letter of Credit.  The Borrowers  also agree
with the Issuing Lender and each L/C Participant that neither the Issuing Lender
nor  any  L/C  Participant   shall  be  responsible   for,  and  the  Borrowers'
Reimbursement Obligation under Section 3.5 shall not be affected by, among other
things, the validity or genuineness of documents or of any endorsements thereon,
even though such  documents  shall in fact prove to be  invalid,  fraudulent  or
forged, or any dispute between or among the Borrowers and any beneficiary of any
Letter  of  Credit  or any other  party to which  such  Letter of Credit  may be
transferred or any claims whatsoever of the Borrowers against any beneficiary of
such Letter of Credit or any such  transferee.  The Issuing  Lender shall not be
liable for any error, omission, interruption or delay in transmission,  dispatch
or delivery of any message or advice,  however  transmitted,  in connection with
any Letter of  Credit,  except for  errors or  omissions  caused by the  Issuing
Lender's gross  negligence or willful  misconduct.  The Borrowers agree that any
action taken or omitted by the Issuing Lender or any L/C Participant under or in
connection with any Letter of Credit or the related drafts or documents, if done
in the absence of gross negligence or willful  misconduct and in accordance with
the  standards of care  specified in the Uniform  Customs and, to the extent not
inconsistent therewith, the UCC, shall be binding on the Borrowers and shall not
result in any  liability  of the Issuing  Lender or any L/C  Participant  to the
Borrowers.  The  responsibility  of  the  Issuing  Lender  to the  Borrowers  in
connection  with any draft  presented  for  payment  under any  Letter of Credit
shall,  in addition to any payment  obligation  expressly  provided  for in such
Letter of Credit,  be limited to determining that the documents  (including each
draft) delivered under such Letter of Credit in connection with such presentment
are in conformity with such Letter of Credit.

         SECTION 3.7. Effect of Application. To the extent that any provision of
any  Application  related  to any  Letter  of Credit  is  inconsistent  with the
provisions of this Article III, the provisions of this Article III shall apply.
<PAGE>
 
                                   ARTICLE IV

                             GENERAL LOAN PROVISIONS

         SECTION 4.1.  Interest.

         (a) Interest  Rate Options.  Subject to the  provisions of this Section
4.1, at the election of the applicable  Borrower or Borrowers,  Revolving Credit
Loans  denominated  in Dollars  shall bear  interest at a rate equal to the Base
Rate or the LIBOR Rate plus, in each case,  the  Applicable  Margin as set forth
below and Revolving  Credit Loans  denominated in an Alternative  Currency shall
bear  interest at a rate equal to the LIBOR Rate plus the  Applicable  Margin as
set  forth  below;   provided  that,  in  accordance  with  Section  4.9,  Loans
denominated  in Canadian  Dollars shall bear interest at the Canadian Base Rate,
Loans  denominated in Sterling shall bear interest at the Sterling Base Rate and
Loans denominated in Deutschemarks  shall bear interest at the German Base Rate.
However,  the LIBOR Rate with respect to Loans  denominated in Dollars shall not
be available until three (3) Business Days after the Closing Date. Any Swingline
Loan  shall bear  interest  at the Base Rate plus the  Applicable  Margin as set
forth  below.  The  applicable  Borrower or  Borrowers  shall select the rate of
interest and Interest Period, if any, applicable to any Revolving Credit Loan at
the time a Notice of Borrowing is given pursuant to Section 2.3 or at the time a
Notice of Conversion/Continuation is given pursuant to Section 4.2. Each Loan or
portion  thereof  bearing  interest based on the Base Rate shall be a "Base Rate
Loan", and each Loan or portion thereof bearing interest based on the LIBOR Rate
shall be a "LIBOR Rate Loan".  Any Loan or any portion thereof to be denominated
in  Dollars  as to which the  applicable  Borrower  or  Borrowers  have not duly
specified an interest rate as provided herein shall be deemed a Base Rate Loan.

         (b) Interest  Periods.  In  connection  with each LIBOR Rate Loan,  the
applicable  Borrower or Borrowers,  by giving  notice at the times  described in
Section 4.1(a),  shall elect an interest period (each, an "Interest  Period") to
be applicable to such Loan, which Interest Period shall be a period of one, two,
three, or six months; provided that:

                  (i) the Interest  Period shall commence on the date of advance
of or  conversion  to any  LIBOR  Rate  Loan  and,  in the  case of  immediately
successive  Interest Periods,  each successive Interest Period shall commence on
the date on which the next preceding Interest Period expires;

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

                  (iii) any Interest Period that begins on the last Business Day
of a calendar month (or on a day for which there is no numerically corresponding
day in the calendar month at
<PAGE>
 
the end of such  Interest  Period)  shall  end on the last  Business  Day of the
calendar month at the end of such Interest Period;

                  (iv) no Interest  Period  shall  extend  beyond the  Revolving
Credit Termination Date and no Interest Period shall be selected by any Borrower
which,  in connection  with  mandatory  reductions  of the Aggregate  Commitment
pursuant to Section  2.6,  would cause the early  termination  of such  Interest
Period; and

                  (v) with respect to  Revolving  Credit  Loans  denominated  in
Dollars,  there shall be no more than seven (7) Interest Periods  outstanding at
any  time  and  with  respect  to  Revolving  Credit  Loans  denominated  in  an
Alternative Currency, there shall be no more than three (3) Interest Periods for
each such Alternative Currency.

         (c) Applicable  Margin.  The Applicable  Margin provided for in Section
4.1(a)  with  respect to the Loans (the  "Applicable  Margin")  shall (i) on the
Closing  Date  equal  the  percentages  set forth in the  certificate  delivered
pursuant to Section  5.2(e)(ii) and (ii) for each fiscal  quarter  thereafter be
determined  by  reference  to the  Leverage  Ratio  as of the end of the  fiscal
quarter  immediately   preceding  the  delivery  of  the  applicable   Officer's
Compliance Certificate as follows:


                                                      Applicable Margin
         Leverage Ratio                     Base Rate +     LIBOR Rate +

         Greater than 3.0                       0.25%            1.75%
           to 1.0.

         Greater than 2.5 to 1.0                -0-              1.50%
         but less than or equal to
         3.0 to 1.0.

         Greater than 2.0 to 1.0 but            -0-              1.25%
         less than or equal to 2.5 to 1.0

         Less than or equal to                  -0-              1.00%
                  2.0 to 1.0

Adjustments,   if  any,  in  the   Applicable   Margin  shall  be  made  by  the
Administrative  Agent on the tenth  (10th)  Business  Day after  receipt  by the
Administrative   Agent  of  quarterly  financial  statements  for  ACC  and  its
Subsidiaries and the accompanying Officer's Compliance Certificate setting forth
the  Leverage  Ratio of ACC and its  Subsidiaries  as of the most recent  fiscal
quarter  end.  Subject to Section  4.1(d),  in the event the  Borrowers  fail to
deliver such financial  statements and  certificate  within the time required by
Section 7.2(c) hereof,  the  Applicable  Margin shall be the highest  Applicable
Margin  set forth  above  until ten (10)  Business  Days  after  receipt of such
financial statements and certificate by the Administrative Agent.
<PAGE>
 
         (d) Default Rate.  Upon the occurrence and during the continuance of an
Event of Default,  (i) the Borrowers  shall no longer have the option to request
LIBOR  Rate  Loans  or Loans in an  Alternative  Currency  and at the end of the
applicable  Interest Period all outstanding  Loans denominated in an Alternative
Currency  shall be repaid in full and all Loans  denominated  in  Dollars  shall
convert to Base Rate  Loans,  (ii) at the  option of the  Managing  Agents,  all
outstanding LIBOR Rate Loans shall bear interest at a rate per annum two percent
(2%) in excess of the rate then  applicable to LIBOR Rate Loans until the end of
the applicable  Interest  Period,  and thereafter  shall bear interest at a rate
equal to two  percent  (2%) in excess of the rate then  applicable  to Base Rate
Loans and (iii) at the option of the Managing Agents,  all outstanding Base Rate
Loans  shall bear  interest  at a rate per annum  equal to two  percent  (2%) in
excess of the rate then  applicable to Base Rate Loans.  Interest shall continue
to accrue on the Notes  after the  filing  by or  against  any  Borrower  of any
petition  seeking any relief in bankruptcy or under any act or law pertaining to
insolvency or debtor relief, whether state, federal or foreign.

         (e) Interest Payment and  Computation.  Interest on each Base Rate Loan
shall be payable in arrears on the last  Business Day of each  calendar  quarter
commencing  December  31,  1997 and  interest  on each  LIBOR Rate Loan shall be
payable on the last day of each Interest Period applicable thereto,  and if such
Interest  Period  extends over three (3) months,  at the end of each three month
interval during such Interest Period.  All interest rates,  fees and commissions
provided  hereunder shall be computed on the basis of a 365/366-day year, except
that (i) interest with respect to each LIBOR Rate Loan  denominated  in Dollars,
Canadian  Dollars or  Deutschemarks  shall be computed on the basis of a 360-day
year and assessed for the actual  number of days  elapsed,  (ii)  interest  with
respect to each LIBOR Rate Loan denominated in Sterling shall be computed on the
basis of a 365-day year and  assessed for the actual  number of days elapsed and
(iii) interest with respect to Canadian Base Rate Loans shall be computed on the
basis of a 365-day year.

         (f) Maximum  Rate.  In no  contingency  or event  whatsoever  shall the
aggregate  of all amounts  deemed  interest  hereunder or under any of the Notes
charged or collected  pursuant to the terms of this Agreement or pursuant to any
of the Notes exceed the highest rate permissible  under any Applicable Law which
a  court  of  competent  jurisdiction  shall,  in a  final  determination,  deem
applicable  hereto.  In the event that such a court  determines that the Lenders
have charged or received interest  hereunder in excess of the highest applicable
rate, the rate in effect hereunder shall automatically be reduced to the maximum
rate  permitted by Applicable  Law and the Lenders  shall at the  Administrative
Agent's  option  promptly  refund to the  applicable  Borrower or Borrowers  any
interest received by Lenders in excess of the maximum lawful rate or shall apply
such excess to the principal balance of the Obligations. It is the intent hereof
that the  Borrowers  not pay or contract to pay, and that no Agent or any Lender
receive or contract to receive, directly or indirectly in any manner whatsoever,
interest in excess of that which may be paid by the Borrowers  under  Applicable
Law.

         SECTION  4.2.  Notice  and  Manner of  Conversion  or  Continuation  of
Revolving  Credit  Loans.  Provided  that no Default  or  Event of  Default  has
occurred  and is then  continuing,  the  Borrowers  shall have the option to (a)
convert at any time all or any portion of its  outstanding  Base Rate Loans that
are Revolving Credit Loans in a principal amount equal to $3,000,000 or any
<PAGE>
 
whole multiple of $1,000,000 in excess thereof into one or more LIBOR Rate Loans
denominated in Dollars, (b) upon the expiration of any Interest Period,  convert
all or any part of its outstanding  LIBOR Rate Loans denominated in Dollars in a
principal  amount equal to $1,500,000 or a whole  multiple of $500,000 in excess
thereof  into Base Rate Loans that are  Revolving  Credit  Loans or (c) upon the
expiration of any Interest  Period,  continue any LIBOR Rate Loan in a principal
amount of $3,000,000 or any whole  multiple of $1,000,000 in excess  thereof (or
with respect to LIBOR Rate Loans  denominated  in an Alternative  Currency,  the
Alternative  Currency  Amount  in  each  case  thereof)  as a  LIBOR  Rate  Loan
denominated in the same  Permitted  Currency.  Whenever the Borrowers  desire to
convert  or  continue  Loans as  provided  above,  the  applicable  Borrower  or
Borrowers shall give the  Administrative  Agent irrevocable prior written notice
in the form  attached as Exhibit D (a "Notice of  Conversion/Continuation")  not
later than 11:00 a.m. (Charlotte time) three (3) Business Days before the day on
which a proposed  conversion  or  continuation  of such Loan is to be  effective
specifying  (i) the Loans to be  converted or  continued,  and, in the case of a
LIBOR Rate Loan to be converted or continued,  the  Permitted  Currency in which
such Loan is denominated and the last day of the Interest Period therefor,  (ii)
the effective date of such conversion or continuation (which shall be a Business
Day),  (iii) the principal amount of such Loans to be converted or continued and
(iv) the Interest  Period to be applicable to such converted or continued  LIBOR
Rate Loan. The  Administrative  Agent shall promptly  notify the Lenders of such
Notice of Conversion/Continuation.  If the Canadian Borrowers, U.K. Borrowers or
German  Borrowers  fail to notify the  Administrative  Agent as provided in this
Section  4.2 of the  continuation  of any  LIBOR  Rate Loan  denominated  in the
corresponding  Alternative  Currency at the end of the  Interest  Period of such
LIBOR Rate Loan, such Loan upon the expiration of the applicable Interest Period
shall be  continued  as a LIBOR  Rate  Loan,  denominated  in the  corresponding
Alternative Currency, with a one month Interest Period.

         SECTION 4.3.Fees.

         (a)  Commitment  Fee.  The  Borrowers  shall pay to the  Administrative
Agent, for the account of the Lenders,  a  non-refundable  commitment fee on the
average daily amount of the Aggregate Commitment less the aggregate  outstanding
principal  Dollar  Amount of all  Revolving  Credit Loans (and,  with respect to
First Union, all Swingline Loans) and the aggregate outstanding Dollar Amount of
all L/C Obligations at a rate per annum  determined by reference to the Leverage
Ratio as of the end of the fiscal quarter immediately  preceding the delivery of
the applicable Officer's Compliance Certificate as follows:


            Leverage Ratio                              Commitment Fee

            Greater than 2.00 to 1.00                   0.375%

            Less than or equal to
            2.00 to 1.0                                 0.250%


The  commitment fee shall be payable in arrears on the last Business Day of each
calendar quarter during the term of this Agreement  commencing December 31, 1997
and on the Revolving Credit
<PAGE>
 
Termination  Date.  Such  commitment fee shall be  distributed  promptly by the
Administrative  Agent  to  each  Lender  pro  rata  according  to the  aggregate
principal Dollar Amount of Extensions of Credit held by such Lender.

         (b)   Administrative   Agent's  Fees.   In  order  to  compensate   the
Administrative Agent for its obligations  hereunder,  the Borrowers agree to pay
to the Administrative Agent for its own account the administrative fee set forth
in the fee letter  executed by ACC dated  November  5, 1997,  which fee shall be
payable in advance on the Closing Date and on each anniversary of such date.

         SECTION 4.4. Manner of Payment.

         (a) Loans Denominated in Dollars.  Each payment  (including  repayments
described  in Article  II) by any  Borrower  on account of the  principal  of or
interest on the Loans denominated in Dollars or of any fee,  commission or other
amounts  (including the Reimbursement  Obligation)  payable to the Lenders under
this Agreement or any Note (except as set forth in Section 4.4(b)) shall be made
in Dollars not later than 1:00 p.m.  (Charlotte  time) on the date specified for
payment under this Agreement to the Administrative  Agent for the account of the
Lenders in accordance with Section 4.4(c) at the Administrative  Agent's Office,
in  immediately  available  funds,  and  shall  be  made  without  any  set-off,
counterclaim or deduction  whatsoever.  Any payment received after such time but
before 2:00 p.m.  (Charlotte time) on such day shall be deemed a payment on such
date for the  purposes  of Section  12.1,  but for all other  purposes  shall be
deemed  to have been  made on the next  succeeding  Business  Day.  Any  payment
received after 2:00 p.m.  (Charlotte  time) shall be deemed to have been made on
the next succeeding Business Day for all purposes.

         (b)  Loans   Denominated  in  Alternative   Currencies.   Each  payment
(including repayments described in Article II) by any Borrower on account of the
principal of or interest on the Loans  denominated in any  Alternative  Currency
shall be made in such  Alternative  Currency not later than 11:00 a.m. (the time
of the Administrative  Agent's  Correspondent) on the date specified for payment
under  this   Agreement  to  the   Administrative   Agent's   account  with  the
Administrative   Agent's  Correspondent  for  the  account  of  the  Lenders  in
accordance with Section 4.4(c) in immediately available funds, and shall be made
without any set-off,  counterclaim or deduction whatsoever. Any payment received
after such time but before  12:00 noon (the time of the  Administrative  Agent's
Correspondent)  on such day  shall  be  deemed a  payment  on such  date for the
purposes of Section  12.1,  but for all other  purposes  shall be deemed to have
been made on the next succeeding  Business Day. Any payment received after 12:00
noon (the time of the Administrative  Agent's  Correspondent) shall be deemed to
have been made on the next succeeding Business Day for all purposes.

         (c) Pro Rata  Treatment.  Upon receipt by the  Administrative  Agent of
each such payment,  the Administrative  Agent shall distribute to each Lender at
its address for notices set forth  herein its pro rata share of such  payment in
accordance with such Lender's Commitment Percentage and shall wire advice of the
amount of such credit to each Lender.  Each payment to the Administrative  Agent
of the Swingline  Lender's or the Issuing Lender's or L/C Participants'  fees or
commissions  shall be made in like manner,  but for the account of the Swingline
Lender,  the Issuing  Lender or the L/C  Participants,  as the case may be. Each
payment to any Agent of such
<PAGE>
 
Agent's  fees or  expenses  shall be made for the  account of such Agent and any
amount  payable to any Lender under Section 2.4(b) and Sections 4.8 through 4.11
and 14.2 and 14.13 shall be paid to the Administrative  Agent for the account of
the applicable Lender. Subject to Section 4.1(b)(ii),  if any payment under this
Agreement  or any Note shall be  specified  to be made upon a day which is not a
Business  Day, it shall be made on the next  succeeding  day which is a Business
Day and such  extension of time shall in such case be included in computing  any
interest if payable along with such payment.

         SECTION  4.5.  Crediting  of Payments and  Proceeds.  Unless  otherwise
provided in the Security Agreement, in the event that any Borrower shall fail to
pay any of the Obligations  when due and the Obligations  have been  accelerated
pursuant to Section  12.2,  all payments  received by the Lenders upon the Notes
and the other  Obligations  and all net  proceeds  from the  enforcement  of the
Obligations  shall be  applied  first  to all  Administrative  Agent's  fees and
expenses  then due and  payable by the  Borrowers  hereunder,  then to all other
expenses then due and payable by the Borrowers hereunder,  then to all indemnity
obligations  then  due  and  payable  by the  Borrowers  hereunder,  then to all
commitment and other fees and commissions then due and payable,  then to accrued
and unpaid interest on the Swingline Note to the Swingline  Lender,  then to the
principal amount  outstanding  under the Swingline Note to the Swingline Lender,
then  to  accrued  and  unpaid  interest  on the  Revolving  Credit  Notes,  the
Reimbursement  Obligation  and any  termination  payments  due in  respect  of a
Hedging Agreement with any Lender permitted  pursuant to Section 10.13 (pro rata
in  accordance  with all such amounts due),  then to the  aggregate  outstanding
principal amount of the Revolving Credit Notes and Reimbursement  Obligation and
then to the cash collateral  account  described in Section 12.2(b) hereof to the
extent of any L/C Obligations then outstanding, in that order.

         SECTION 4.6. Nature of Obligations of Lenders  Regarding  Extensions of
Credit; Assumption by Administrative Agent. The obligations of the Lenders under
this  Agreement to make the Loans and issue or  participate in Letters of Credit
are several and are not joint or joint and  several.  Unless the  Administrative
Agent shall have  received  notice from a Lender  prior to a proposed  borrowing
date that such Lender will not make available to the  Administrative  Agent such
Lender's ratable portion of the amount to be borrowed on such date (which notice
shall not release such Lender of its obligations hereunder),  the Administrative
Agent  may  assume  that such  Lender  has made such  portion  available  to the
Administrative  Agent on the proposed  borrowing date in accordance with Section
3.2 and the  Administrative  Agent may, in reliance upon such  assumption,  make
available to the applicable  Borrower or Borrowers on such date a  corresponding
amount. If such amount is made available to the  Administrative  Agent on a date
after such borrowing date, such Lender shall pay to the Administrative  Agent on
demand an amount, until paid, equal to (a) with respect to a Loan denominated in
Dollars the amount of such Lender's Commitment  Percentage of such borrowing and
interest  thereon at a rate equal to the daily average Federal Funds Rate during
such period as determined by the Administrative  Agent and (b) with respect to a
Loan denominated in an Alternative Currency, such Lender's Commitment Percentage
of such  borrowing  at a rate  per  annum  equal to the  Administrative  Agent's
aggregate marginal cost (including the cost of maintaining any required reserves
or deposit  insurance  and of any fees,  penalties,  overdraft  charges or other
costs or  expenses  incurred  by the  Administrative  Agent  as a result  of the
failure to deliver funds hereunder) of
<PAGE>
 
carrying such amount. A certificate of the Administrative  Agent with respect to
any amounts owing under this Section shall be conclusive, absent manifest error.
If such Lender's  Commitment  Percentage of such borrowing is not made available
to the  Administrative  Agent by such Lender  within three (3) Business  Days of
such borrowing date, the Administrative  Agent shall be entitled to recover such
amount made available by the  Administrative  Agent with interest thereon at the
rate then  applicable to such Loan  hereunder,  on demand,  from the  applicable
Borrower  or  Borrowers.  The  failure  of any  Lender  to make  its  Commitment
Percentage of any Loan available shall not relieve it or any other Lender of its
obligation,  if any,  hereunder to make its  Commitment  Percentage of such Loan
available on such borrowing  date,  but no Lender shall be  responsible  for the
failure  of any other  Lender  to make its  Commitment  Percentage  of such Loan
available on the borrowing date.

         SECTION 4.7. Mandatory Redenomination of Alternative Currency Loans. If
any  Alternative  Currency  becomes  unavailable  to any  Lender  for any reason
(including,  without limitation, any conversion,  discontinuation or replacement
of such currency  arising out of or in connection with any event associated with
economic and monetary union in the European Community),  and in each case at the
option of the Administrative Agent in its sole discretion, all outstanding Loans
in such Alternative  Currency shall be redenominated  and converted into Dollars
in an amount equal to the Dollar  Amount of such Loan,  and the Lenders shall no
longer be obligated to provide  Loans in the  affected  Alternative  Currency or
Currencies, all subject to the provisions of Sections 2.4(b) and 4.10.

         SECTION  4.8.  Regulatory  Limitation.  In the  event,  as a result  of
increases in the value of Alternative  Currencies  against the Dollar or for any
other  reason,  the  obligation  of any of the Lenders to make Loans or issue or
participate  in Letters of Credit  (taking into account the Dollar Amount of the
Obligations  and all  other  indebtedness  required  to be  aggregated  under 12
U.S.C.A.  84, as amended, the regulations  promulgated  thereunder and any other
Applicable Law) is determined by such Lender to exceed its then applicable legal
lending limit under 12 U.S.C.A. 84, as amended, and the regulations  promulgated
thereunder,  or any other Applicable Law, the amount of additional Extensions of
Credit  such  Lender  shall be  obligated  to make or issue  or  participate  in
hereunder  shall  immediately be reduced to the maximum amount which such Lender
may legally  advance (as  determined by such Lender),  the obligation of each of
the remaining Lenders hereunder shall be proportionately reduced, based on their
applicable Commitment Percentages,  and, to the extent necessary under such laws
and  regulations  (as  determined  by each of the  Lenders,  with respect to the
applicability  of such laws and  regulations  to itself),  the  Borrowers  shall
reduce,  or cause to be reduced,  complying to the extent  practicable  with the
remaining provisions hereof, the Obligations  outstanding hereunder by an amount
sufficient to comply with such maximum amounts.

         SECTION 4.9.  Changed Circumstances.

         (a) Circumstances Affecting LIBOR Rate Availability. If with respect to
any Interest Period the Administrative  Agent or any Lender (after  consultation
with  the   Administrative   Agent)  shall  determine  that  (i)  by  reason  of
circumstances  affecting the foreign exchange and interbank  markets  generally,
deposits in eurodollars or an Alternative Currency in the applicable amounts are
<PAGE>
 
not being quoted via Telerate Page 3750 or offered to the  Administrative  Agent
or such  Lender  for such  Interest  Period  or (ii) a  fundamental  change  has
occurred  in the foreign  exchange  or  interbank  markets  with  respect to any
Alternative  Currency  (including,  without  limitation,  changes in national or
international  financial,  political or economic conditions or currency exchange
rates or exchange controls),  then the Administrative Agent shall forthwith give
notice  thereof to the Borrowers.  Thereafter,  until the  Administrative  Agent
notifies the Borrowers that such  circumstances  no longer exist, the obligation
of the  Lenders to make  LIBOR Rate  Loans,  and the right of the  Borrowers  to
convert  any  Loan to or  continue  any  Loan as a LIBOR  Rate  Loan,  shall  be
suspended,  and the  applicable  Borrower or  Borrowers  shall repay in full (or
cause to be repaid in full) the then  outstanding  principal amount of each such
LIBOR Rate Loan,  together with accrued interest thereon, on the last day of the
then current  Interest Period  applicable to such LIBOR Rate Loan or convert the
then  outstanding  principal  amount of each such LIBOR Rate Loan denominated in
Dollars to a Base Rate Loan,  each such LIBOR Rate Loan  denominated in Sterling
to a Sterling  Base Rate Loan,  and each such  LIBOR  Rate Loan  denominated  in
Canadian  Dollars  to a Canadian  Base Rate Loan,  and each such LIBOR Rate Loan
denominated in  Deutschemarks  to a German Base Rate Loan, as of the last day of
such Interest Period.

         (b) Laws Affecting LIBOR Rate Availability.  If, after the date hereof,
the  introduction  of, or any change in, any Applicable Law or any change in the
interpretation or administration thereof by any Governmental Authority,  central
bank or comparable  agency  charged with the  interpretation  or  administration
thereof,  or  compliance  by any  Lender  (or any of  their  respective  Lending
Offices) with any request or directive  (whether or not having the force of law)
of any such Authority, central bank or comparable agency, shall make it unlawful
or  impossible  for any of the  Lenders  (or  any of  their  respective  Lending
Offices) to honor its  obligations  hereunder to make or maintain any LIBOR Rate
Loan, such Lender shall promptly give notice thereof to the Administrative Agent
and the Administrative Agent shall promptly give notice to the Borrowers and the
other Lenders. Thereafter, until the Administrative Agent notifies the Borrowers
that such  circumstances no longer exist (which  notification  shall be given as
soon as practicable,  but in any event not later than thirty (30) days after the
Administrative  Agent obtains actual knowledge that such circumstances no longer
exist),  (i) the  obligations  of the  Lenders  to make LIBOR Rate Loans and the
right of the  Borrowers to convert any Loan or continue any Loan as a LIBOR Rate
Loan shall be suspended and  thereafter  the Borrowers may select only Base Rate
Loans,  Sterling Base Rate Loans,  Canadian Base Rate Loans, or German Base Rate
Loans hereunder, as applicable,  and (ii) if any of the Lenders may not lawfully
continue to maintain a LIBOR Rate Loan to the end of the then  current  Interest
Period  applicable  thereto as a LIBOR Rate Loan, the applicable LIBOR Rate Loan
shall  immediately  be converted to a Base Rate Loan,  Sterling  Base Rate Loan,
Canadian  Base Rate  Loan or  German  Base Rate  Loan,  as  applicable,  for the
remainder of such Interest Period.

         (c) Increased Costs. If, after the date hereof, the introduction of, or
any change in, any Applicable Law, or in the  interpretation  or  administration
thereof by any Governmental Authority, central bank or comparable agency charged
with the interpretation or administration  thereof,  or compliance by any of the
Lenders  (or any of  their  respective  Lending  Offices)  with any  request  or
directive  (whether or not having the force of law) of such  Authority,  central
bank or comparable agency:
<PAGE>
 
                  (i)  shall  subject  any  of the  Lenders  (or  any  of  their
respective Lending Offices) to any tax, duty or other charge with respect to any
LIBOR Rate Loan or any Note, Letter of Credit or Application or shall change the
basis of taxation of payments to any of the Lenders (or any of their  respective
Lending  Offices) of the  principal of or interest on any LIBOR Rate Loan or any
Note,  Letter of Credit or  Application  or any  other  amounts  due under  this
Agreement  in  respect  thereof  (except  for  changes in the rate of tax on the
overall  net  income of any of the  Lenders or any of their  respective  Lending
Offices  imposed by the  jurisdiction in which such Lender is organized or is or
should be qualified to do business or such Lending Office is located); or

                  (ii)  shall  impose,  modify or deem  applicable  any  reserve
(including,  without  limitation,  any imposed by the Board of  Governors of the
Federal  Reserve  System),  special  deposit,  insurance  or  capital or similar
requirement  against  assets of,  deposits with or for the account of, or credit
extended by any of the Lenders (or any of their  respective  Lending Offices) or
shall impose on any of the Lenders (or any of their respective  Lending Offices)
or the foreign exchange and interbank markets any other condition  affecting any
LIBOR Rate Loan or any Note;

and the result of any of the  foregoing  is to increase  the costs to any of the
Lenders  of  maintaining  any LIBOR Rate Loan or  issuing  or  participating  in
Letters  of  Credit or to reduce  the  yield or  amount of any sum  received  or
receivable  by any of the  Lenders  under this  Agreement  or under the Notes in
respect  of a LIBOR  Rate Loan or Letter  of  Credit or  Application,  then such
Lender shall promptly notify the  Administrative  Agent, and the  Administrative
Agent shall promptly  notify the Borrowers of such fact and demand  compensation
therefor and,  within fifteen (15) days after such notice by the  Administrative
Agent,  the  applicable  Borrower  or  Borrowers  shall pay to such  Lender such
additional  amount or amounts as will compensate such Lender or Lenders for such
increased cost or reduction.  The Administrative  Agent will promptly notify the
Borrowers of any event of which it has knowledge  which will entitle such Lender
to   compensation   pursuant  to  this  Section  4.9(c);   provided,   that  the
Administrative  Agent shall incur no liability  whatsoever to the Lenders or the
Borrowers in the event it fails to do so. A  certificate  of the  Administrative
Agent setting forth the basis for determining such additional  amount or amounts
necessary to compensate such Lender or Lenders shall be conclusively presumed to
be correct save for manifest error.

         (d)  Conversion  to Common  Currency.  Notwithstanding  paragraphs  (a)
through (c) of this Section 4.9, if it becomes impossible or impractical for the
Lenders  to  honor  their  obligation  to  make  LIBOR  Rate  Loans  due  to any
conversion,  discontinuation or replacement of any Alternative  Currency arising
out of or in  connection  with any event  associated  with economic and monetary
union in the European  Community  and resulting in  redenomination  of all Loans
denominated in such Alternative Currency to Dollars pursuant to Section 4.7, and
at the option of the Administrative Agent in its sole discretion, the obligation
of the Lenders to make LIBOR Rate Loans shall be terminated and all  outstanding
LIBOR  Rate  Loans  shall  be  converted  to Base  Rate  Loans,  subject  to the
provisions of Section 4.10.
<PAGE>
 
         SECTION 4.10.  Indemnity.  The applicable  Borrower or Borrowers hereby
indemnify  each of the Lenders  against any loss or expense  (including  without
limitation any foreign  exchange  costs) which may arise or be  attributable  to
each  Lender's  obtaining,  liquidating  or  employing  deposits  or other funds
acquired  to effect,  fund or  maintain  the Loans (a) as a  consequence  of any
failure by any such  Borrower or  Borrowers  to make any payment when due of any
amount due  hereunder  in  connection  with a LIBOR  Rate  Loan,  (b) due to any
failure of any such Borrower or Borrowers to borrow on a date specified therefor
in a Notice of  Borrowing or Notice of  Continuation/Conversion  with respect to
any LIBOR Rate Loan or (c) due to any payment,  prepayment  or conversion of any
LIBOR  Rate  Loan on a date  other  than  the last  day of the  Interest  Period
therefor.  Each  Lender's  calculations  of any such  loss or  expense  shall be
furnished to the Borrowers and shall be conclusive, absent manifest error.

         SECTION 4.11. Capital Requirements.  If either (a) the introduction of,
or any  change  in,  or in the  interpretation  of,  any  Applicable  Law or (b)
compliance  with any  guideline or request  from any central bank or  comparable
agency or other Governmental Authority (whether or not having the force of law),
has or would have the effect of  reducing  the rate of return on the capital of,
or has affected or would affect the amount of capital  required to be maintained
by, any Lender or any corporation  controlling  such Lender as a consequence of,
or with reference to the Commitments and other  commitments of this type,  below
the rate which the Lender or such other  corporation could have achieved but for
such  introduction,  change or  compliance,  then within five (5) Business  Days
after written demand by any such Lender,  the Borrowers shall pay to such Lender
from time to time as specified by such Lender additional  amounts  sufficient to
compensate such Lender or other corporation for such reduction. A certificate as
to such amounts submitted to the Borrowers and the Administrative  Agent by such
Lender,  shall,  in the absence of manifest error, be presumed to be correct and
binding for all purposes.

         SECTION  4.12.  Taxes.

         (a)  Payments  Free and Clear.  Any and all  payments by the  Borrowers
hereunder  or under the Notes or the  Letters  of Credit  shall be made free and
clear of and without deduction for any and all present or future taxes,  levies,
imposts,  deductions,  charges or withholding,  and all liabilities with respect
thereto  (including,  without  limitation,  all  claims,  penalties,  costs  and
expenses  resulting  from  any  failure  to  withhold  or pay,  or any  delay in
withholding or paying, any of the foregoing amounts) excluding,  (i) in the case
of each  Lender  and each  Agent,  income  and  franchise  taxes  imposed by the
jurisdiction  under the laws of which such  Lender or Agent (as the case may be)
is  organized  or is or should be  qualified  to do  business  or any  political
subdivision of such jurisdiction or country which includes such jurisdiction (it
being  expressly  acknowledged  by the Borrowers that each Agent and each Lender
are not  qualified,  nor should they be qualified,  for purposes of this Section
4.12(a) or for any other Section of this Agreement,  to do business in Canada or
any political  subdivision thereof) and (ii) in the case of each Lender,  income
and franchise taxes imposed by the  jurisdiction of such Lender's Lending Office
or any political subdivision of such jurisdiction or country which includes such
jurisdiction (all such non-excluded taxes, levies, imposts, deductions, charges,
withholdings and liabilities being hereinafter  referred to as "Taxes").  If any
Borrower  shall be required  by law to deduct or  withhold  any Taxes from or in
respect of any sum  payable  hereunder  or under any Note or Letter of Credit to
any Lender or
<PAGE>
 
any Agent,  (A) the sum payable  shall be  increased as may be necessary so that
after making all required  deductions or withholdings  (including  deductions or
withholdings applicable to additional sums payable under this Section 4.12) such
Lender or Agent (as the case may be) receives an amount equal to the amount such
party would have received had no such deductions or withholdings  been made, (B)
such Borrower  shall make such  deductions or  withholdings  , (C) such Borrower
shall pay the full amount deducted or withheld to the relevant taxing  authority
or other  authority in  accordance  with  applicable  law, and (D) such Borrower
shall  deliver  to the  Administrative  Agent  evidence  of such  payment to the
relevant  taxing  authority or other authority in the manner provided in Section
4.12(d).  If, for any reason, any Borrower or Borrowers do not pay or remit such
Taxes or do not for any reason pay any additional  sums payable to any Lender or
any Agent under this  Section  4.12,  the interest  payable by such  Borrower or
Borrowers  under this Agreement will be increased to the rate or rates necessary
to yield and remit to such Lender or Agent the principal  sum advanced  together
with interest at the applicable  rate or rates specified in this Agreement after
provision  for payment of such Taxes.  The Borrowers  shall,  from time to time,
execute  and  deliver  any and all  further  documents  as may be  necessary  or
advisable to give full force and effect to such increase in the rate or rates of
interest.

         (b) Stamp and Other Taxes.  In addition,  the  Borrowers  shall pay any
present or future stamp,  registration,  recordation or documentary taxes or any
other similar fees or charges or excise or property taxes,  levies of the United
States or any state or political  subdivision  thereof or any applicable foreign
jurisdiction  which arise from any payment made hereunder or from the execution,
delivery or registration  of, or otherwise with respect to, this Agreement,  the
Loans, the Letters of Credit, the other Loan Documents, or the perfection of any
rights or  security  interest  in respect  thereto  (hereinafter  referred to as
"Other Taxes").

         (c) Indemnity. The Borrowers shall indemnify each Lender and each Agent
for the full amount of Taxes and Other Taxes (including, without limitation, any
Taxes and Other Taxes imposed by any  jurisdiction on amounts payable under this
Section  4.12)  paid by such  Lender  or  Agent  (as  the  case  may be) and any
liability (including penalties, interest and expenses) arising therefrom or with
respect  thereto,  whether or not such Taxes or Other  Taxes were  correctly  or
legally  asserted.  Such  indemnification  shall be made within thirty (30) days
from the date such  Lender or Agent  (as the case may be) makes  written  demand
therefor.

         (d) Evidence of Payment.  Within thirty (30) days after the date of any
payment of Taxes or Other Taxes,  the  affected  Borrower  shall  furnish to the
Administrative  Agent, at its address  referred to in Section 14.1, the original
or a certified copy of a receipt evidencing payment thereof or other evidence of
payment satisfactory to the Administrative Agent.

         (e) Survival.  Without prejudice to the survival of any other agreement
of the Borrowers  hereunder,  the  agreements  and  obligations of the Borrowers
contained  in  this  Section  4.12  shall  survive  the  payment  in full of the
Obligations and the termination of the Commitments.
<PAGE>
 
                                    ARTICLE V

                  CLOSING; CONDITIONS OF CLOSING AND BORROWING


         SECTION 5.1.  Closing.  The closing  shall take place at the offices of
Kennedy Covington Lobdell & Hickman, L.L.P., 100 North Tryon Street, Suite 4200,
Charlotte, North Carolina 28202 at 10:00 a.m. on December 19th, 1997, or on such
other date as the parties hereto shall mutually agree.

         SECTION 5.2.  Conditions to Closing and Initial  Extensions of Credit .
The  obligation  of the Lenders to close this  Agreement and to make the initial
Loan or issue the  initial  Letter of Credit is subject to the  satisfaction  of
each of the following conditions:

         (a) Executed Loan Documents.  The following Loan Documents, in form and
substance satisfactory to the Managing Agents and each Lender:

                  (i)      this Agreement;

                  (ii)     the Revolving Credit Notes;

                  (iii)    the Swingline Note;

                  (iv)     the Security Agreement;

                  (v)      the Trademark Assignment;

                  (vi)     the Pledge Agreements;

                  (vii)    the Mortgages;

                  (viii)   the Canadian Security Documents;

                  (ix)     the U.K. Security Documents;

                  (x)      the German  Security  Documents  (subject  to Section
                           8.15 with  respect to the German  Pledge  Agreement);
                           and

                  (xi)     the Intercompany Subordination Agreement;

shall have been duly authorized,  executed and delivered by the parties thereto,
shall be in full force and effect and no default shall exist thereunder, and the
Borrowers   shall  have   delivered   original   counterparts   thereof  to  the
Administrative Agent. Upon receipt of the Notes payable thereto, each
<PAGE>
 
Lender will return to the Agent for return to the Borrowers and cancellation its
original  promissory  notes provided  pursuant to the First Amended and Restated
Credit Agreement.

         (b)  Closing Certificates; etc.

                  (i)   Compliance    Certificate   of   the   Borrowers.    The
Administrative  Agent shall have received a certificate from the chief financial
officer or treasurer of ACC, in form and substance  reasonably  satisfactory  to
the Administrative  Agent, to the effect that all representations and warranties
of the Borrowers  contained in this  Agreement and the other Loan  Documents are
true, correct and complete in all material respects;  that the Borrowers are not
in violation of any of the covenants  contained in this  Agreement and the other
Loan Documents;  that, after giving effect to the  transactions  contemplated by
this  Agreement,  no Default or Event of Default has occurred and is continuing;
that the Borrowers have satisfied each of the closing conditions to be satisfied
thereby;  and that the Borrowers  have filed all material tax returns and owe no
material delinquent taxes.

                  (ii)   Certificate   of  Secretary  of  each   Borrower.   The
Administrative  Agent shall have  received a  certificate  of the  secretary  or
assistant  secretary  (or director  with  respect to ACC U.K.) of each  Borrower
certifying, as applicable,  that attached thereto is a true and complete copy of
the articles of  incorporation  or other charter  documents of such Borrower and
all  amendments  thereto,  certified  as of a  recent  date  by the  appropriate
Governmental  Authority in its  jurisdiction  of  incorporation;  that  attached
thereto is a true and complete  copy of the bylaws of such Borrower as in effect
on the date of such certification;  that attached thereto is a true and complete
copy of  resolutions  duly adopted by the Board of  Directors of such  Borrower,
authorizing the borrowings  contemplated  hereunder and the execution,  delivery
and  performance of this Agreement and the other Loan Documents to which it is a
party; and as to the incumbency and genuineness of the signature of each officer
of such Borrower executing Loan Documents to which such Person is a party.

                  (iii) Certificates of Good Standing.  The Administrative Agent
shall  have  received  long-form  certificates  as of a recent  date of the good
standing of each Borrower under the laws of their  respective  jurisdictions  of
organization and such other jurisdictions requested by the Managing Agents.

                  (iv) Opinions of Counsel.  The Administrative Agent shall have
received  favorable  opinions of United  States,  Canadian,  United  Kingdom and
German  counsel to the  Borrowers  addressed to the Managing  Agents and Lenders
with  respect  to such  Persons,  the  Loan  Documents  and  regulatory  matters
(including without limitation  Communications  Licenses and PUC  Authorizations)
reasonably  satisfactory  in form  and  substance  to the  Managing  Agents  and
Lenders.

         (c)  Collateral.

                  (i) Filings and Recordings.  All filings that are necessary to
perfect the Liens of the Administrative  Agent and the Lenders in the Collateral
described in the Security Documents
<PAGE>
 
shall have been filed in all appropriate  locations and the Administrative Agent
shall have received evidence  satisfactory to the Administrative Agent that such
security interests  constitute valid and perfected first priority Liens therein,
subject to Liens permitted by Section 10.3.

                  (ii)  Pledged  Stock.  The  Administrative  Agent  shall  have
received  original  stock  certificates  evidencing  the capital  stock  pledged
pursuant to the Pledge  Agreements,  any Canadian  Security  Document,  any U.K.
Security Document and (to the extent  applicable) any German Security  Document,
together with an appropriate  undated stock power for each  certificate  (to the
extent  applicable)  duly  executed  in blank by the  registered  owner  thereof
(except that such stock  certificates  of United Telecom Ltd. shall be delivered
to the Administrative  Agent as soon as possible (and in any event no later than
7 days) after their registration in favor of ACC U.K., and,  notwithstanding the
foregoing,  the  Administrative  Agent shall have received a Stock Transfer Form
for such certificate duly executed in blank and acceptable to the Administrative
Agent in lieu thereof prior to the Closing Date).

                  (iii)  Lien  Searches.  The  Administrative  Agent  shall have
received the results of any Lien search requested by the Administrative Agent of
filings made against such Borrowers under the Uniform Commercial Code,  personal
property  security  legislation or legislation as to registration of security on
movable  property as in effect in any  jurisdiction in which any of their assets
are located,  indicating among other things that their assets are free and clear
of any Lien except for the Liens permitted by Section 10.3.

                  (iv) Mortgage Documents.  The Administrative  Agent shall have
received such mortgagee  title and hazard  insurance  policies,  title searches,
property surveys,  appraisals and environmental assessments with respect to each
property  covered by a Mortgage as it shall  reasonably  request in writing from
the applicable Borrower.

                  (v) Insurance.  The  Administrative  Agent shall have received
certificates of insurance and copies  (certified by the applicable  Borrower) of
insurance  policies in the form  required  under  Section  8.3 and the  Security
Documents  and otherwise in form and substance  reasonably  satisfactory  to the
Managing Agents.

         (d)  Consents; No Adverse Change.

                  (i)  Governmental  and Third Party  Approvals.  All  necessary
approvals,  authorizations and consents,  if any are required, of any Person and
of all Governmental  Authorities and courts having  jurisdiction with respect to
the execution and delivery of this Agreement and the other Loan Documents  shall
have been obtained and copies thereof delivered to the Administrative Agent.

                  (ii) Permits and Licenses. All permits and licenses, including
permits and licenses  required under Applicable  Laws,  necessary to the current
conduct of  business by the  Borrowers  and their  Subsidiaries  shall have been
obtained.
<PAGE>
 
                  (iii)   No   Injunction,    Etc.   No   action,    proceeding,
investigation,  regulation or legislation shall have been instituted, threatened
or proposed before any Governmental Authority to enjoin,  restrain, or prohibit,
or to obtain substantial damages in respect of, or which is related to or arises
out of this  Agreement or the other Loan  Documents or the  consummation  of the
transactions  contemplated  hereby or thereby, or which, in the Managing Agents'
reasonable discretion,  would make it inadvisable to consummate the transactions
contemplated by this Agreement and such other Loan Documents.

                  (iv) No Material Adverse Change. There shall not have occurred
any  material  adverse  change  in  the  condition   (financial  or  otherwise),
operations,  properties,  business  or  prospects  of the  Borrowers  and  their
Subsidiaries,  or any  event or  condition  that has had or could be  reasonably
expected to have a Material Adverse Effect.

                  (v) No Event of Default.  No Default or Event of Default shall
have occurred and be continuing.

         (e)  Financial Matters.

                  (i)  Financial  Statements.  The  Managing  Agents  shall have
received the most recent audited  Consolidated  financial  statements of ACC and
its Subsidiaries.

                  (ii) Financial Condition Certificate. ACC shall have delivered
to the  Administrative  Agent a  certificate,  in form and substance  reasonably
satisfactory to such Agent,  and certified as accurate in all material  respects
by the chief financial officer or treasurer of ACC, that (A) attached thereto is
a pro forma  balance  sheet of ACC and its  Subsidiaries  setting forth on a pro
forma  basis  the  financial   condition  of  ACC  and  its  Subsidiaries  on  a
Consolidated  basis as of that date,  reflecting on a pro forma basis the effect
of the  transactions  contemplated  herein,  including  all  material  fees  and
expenses in connection therewith, and evidencing compliance on a pro forma basis
with the covenants contained in Article IX hereof, (B) the financial projections
previously delivered to the Managing Agents represent the good faith opinions of
the  Borrowers  and  senior  management  thereof  as to  the  projected  results
contained  therein,  and (C) attached thereto is a calculation of the Applicable
Margin in accordance with Section 4.1(c) as of September 30, 1997.

                  (iii)  Payment at  Closing.  (A) There shall have been paid by
the  Borrowers  to the  Administrative  Agent for the account of the Lenders the
amendment fee and incremental  commitment fee payable pursuant to the fee letter
referred  to in Section  4.3(b) and (B) the  Agents and the  Lenders  shall have
received  any  other  accrued  and  unpaid  fees or  commissions  due  hereunder
(including,  without  limitation,  legal  fees and  expenses),  and to any other
Person  such amount as may be due thereto in  connection  with the  transactions
contemplated  hereby,  including all taxes, fees and other charges in connection
with the execution,  delivery,  recording, filing and registration of any of the
Loan Documents. The Administrative Agent shall have received duly authorized and
executed copies of the fee letter referred to in Section 4.3(b).
<PAGE>
 
         (f)  Miscellaneous.

                  (i) Notice of Borrowing.  The Administrative  Agent shall have
received a Notice of Borrowing  from the  Borrowers in  accordance  with Section
2.3(a), and a Notice of Account  Designation  specifying the account or accounts
to which  the  proceeds  of any Loans  made  after  the  Closing  Date are to be
disbursed.

                  (ii) Proceedings and Documents. All opinions, certificates and
other  instruments  and all  proceedings  in  connection  with the  transactions
contemplated  by this  Agreement  shall be reasonably  satisfactory  in form and
substance to the Lenders.  The Lenders shall have  received  copies of all other
instruments and other evidence as the Lender may reasonably request, in form and
substance  reasonably   satisfactory  to  the  Lenders,   with  respect  to  the
transactions  contemplated  by this  Agreement  and the taking of all actions in
connection therewith.

                  (iii) Due Diligence and Other  Documents.  The Borrowers shall
have delivered to the  Administrative  Agent such other documents,  certificates
and  opinions as the  Managing  Agents  reasonably  request,  including  without
limitation  copies of each document  evidencing  or governing  the  Subordinated
Debt, certified by a secretary or assistant secretary of the applicable Borrower
as a true and correct copy thereof.

                  (iv) Delivery of U.S. Tax Forms.  Each Lender  organized under
the laws of a  jurisdiction  other than the United  States or any state  thereof
shall  deliver to the  Administrative  Agent on the Closing  Date (A) two United
States  Internal  Revenue  Service Forms 4224 or Forms 1001,  as applicable  (or
successor  forms),  properly  completed  and  certifying  in each case that such
Lender is entitled to a complete  exemption from withholding or deduction for or
on  account of any United  States  federal  income  taxes,  and (B) an  Internal
Revenue  Service Form W-8 or W-9 or successor  applicable  form, as the case may
be, to establish an exemption from United States backup withholding taxes. (Each
such Lender further agrees to deliver to the Administrative Agent a Form 1001 or
4224  and  Form  W-8  or  W-9,  or  applicable  successor  forms  or  manner  of
certification,  as the case may be,  on or  before  the date  that any such form
expires or becomes  obsolete or after the  occurrence  of any event  requiring a
change in the most  recent  form  previously  delivered  by it to the  Borrower,
unless  in any such case an event  has  occurred  prior to the date on which any
such delivery would otherwise be required which renders such forms  inapplicable
or the exemption to which such forms relate unavailable and such Lender notifies
the Borrower and the Agent that it is not entitled to receive  payments  without
deduction or withholding of United States federal income taxes).

                  (v) Delivery of U.K. Tax Forms.  Each Lender  organized  under
the  laws of the  United  States  or any  state  thereof  shall  deliver  to the
Administrative  Agent on the Closing Date (A) two United  Kingdom Inland Revenue
Forms FD13 (or  successor  forms),  one with  respect  to ACC U.K.  and one with
respect to United  Telecom Ltd.,  properly  completed and (B) any other U.K. tax
forms reasonably requested by the Adminstrative Agent.
<PAGE>
 
                  (vi) United  Telecom  Charter  Amendment.  The  constitutional
documents of United Telecom Ltd. shall have been amended in a manner  reasonably
satisfactory  to the  Administrative  Agent  such  that any  restriction  on the
transfer  of its  shares  to the  Administrative  Agent in  connection  with its
exercise of remedies hereunder is removed.

                  (vii)  Refinancing.  On the Closing  Date  hereunder,  (i) all
loans under the First Amended and Restated Credit Agreement  ("Existing  Loans")
made by any lender who is not a Lender hereunder shall be repaid in full and the
commitments  and other  obligations  and (except as  expressly  set forth in the
First Amended and Restated Credit  Agreement) the rights of such lender shall be
terminated,  (ii) all outstanding Existing Loans shall be Revolving Credit Loans
hereunder (secured by the Security  Documents) and the Borrowers shall make such
repayments,  and the Administrative Agent shall make such transfers of funds, as
are necessary in order that the outstanding balance of such Loans, together with
any Loans funded on the Closing  Date,  reflect the  Commitments  of the Lenders
hereunder,  (iii) all  Letters  of Credit  issued  under the First  Amended  and
Restated Credit  Agreement shall be Letters of Credit  hereunder and each Lender
shall be deemed to have purchased a  participation  therein  pursuant to Section
3.4 in accordance  with its  Commitment  Percentage,  (iv) there shall have been
paid in cash in full all accrued but unpaid  interest due on the Existing  Loans
to but  excluding  the Closing  Date,  (v) there shall have been paid in cash in
full all  accrued but unpaid fees under the First  Amended and  Restated  Credit
Agreement due to but excluding the Closing Date and all other amounts, costs and
expenses then owing to any of the lenders  thereunder and/or any Agent, as agent
under the First  Amended  and  Restated  Credit  Agreement,  in each case to the
satisfaction of such Agent or lender,  as the case may be, regardless of whether
or not such amounts would  otherwise be due and payable at such time pursuant to
the  terms of the First  Amended  and  Restated  Credit  Agreement  and (vi) all
outstanding  promissory  notes issued by the  Borrowers to the lenders under the
First Amended and Restated Credit  Agreement  shall be promptly  returned to the
Administrative Agent who shall forward such notes to the Borrower.

                  (viii) TCG  Amendment.  An amendment to the Agreement and Plan
of Merger by and among  Teleport  Communications  Group,  Inc.,  TCG Merger Co.,
Inc., and ACC, dated as of November 26, 1997, in form and substance satisfactory
to the  Administrative  Agent and permitting the execution of all Loan Documents
by all Borrowers party thereto.

         SECTION 5.3. Conditions to All Extensions of Credit. The obligations of
the  Lenders  to make any Loan  (subject  to  Section  2.2(b)  with  respect  to
Swingline  Loans) or issue or participate in any Letter of Credit are subject to
the satisfaction of the following conditions precedent on the relevant borrowing
or issue date, as applicable:

         (a) Continuation of Representations and Warranties. The representations
and  warranties  contained  in Article VI shall be true and correct on and as of
such  borrowing  or  issuance  date with the same effect as if made on and as of
such date.

         (b) No  Existing  Default.  No Default  or Event of Default  shall have
occurred and be continuing  hereunder on (i) the borrowing  date with respect to
such Loan or after giving
<PAGE>
 
effect to the  Revolving  Credit Loans to be made on such date or (ii) the issue
date with  respect  to such  Letter of  Credit  or after  giving  effect to such
Letters of Credit on such date.


                                   ARTICLE VI

                   REPRESENTATIONS AND WARRANTIES OF BORROWERS

         SECTION 6.1.  Representations  and Warranties.  To induce the Agents to
enter  into  this  Agreement  and the  Lenders  to make  the  Loans  or issue or
participate in the Letters of Credit, the Borrowers hereby represent and warrant
to the Agents and Lenders that:

         (a)  Organization;   Power;   Qualification.   Each  of  ACC  and  its
Subsidiaries is duly organized,  validly existing and in good standing under the
laws of the jurisdiction of its  incorporation  or formation,  has the power and
authority  to own its  properties  and to carry  on its  business  as now  being
conducted  and  is  duly  qualified  and  authorized  to  do  business  in  each
jurisdiction  where its business requires such  qualification and authorization,
except in those  jurisdictions  in which the  failure  to so  qualify  could not
reasonably be expected to have a Material Adverse Effect.  The  jurisdictions in
which ACC and its  Subsidiaries are organized and qualified to do business as of
the Closing Date are described on Schedule 6.1(a).

         (b) Ownership.  Each Material Subsidiary and other Subsidiary as of the
Closing Date of ACC is listed on Schedule 6.1(b) and each Material Subsidiary as
of the Closing Date is so designated on such  Schedule.  As of the Closing Date,
the capitalization of ACC and its Subsidiaries consists of the number of shares,
authorized,  issued and outstanding, of such classes and series, with or without
par value,  described on Schedule 6.1(b).  All outstanding shares have been duly
authorized  and  validly  issued  and are  fully  paid  and  nonassessable.  The
shareholders  of the  Subsidiaries of ACC and the number of shares owned by each
as of the Closing Date are described on Schedule 6.1(b). As of the Closing Date,
there  are no  outstanding  stock  purchase  warrants,  subscriptions,  options,
securities,  instruments or other rights of any type or nature whatsoever, which
are convertible  into,  exchangeable for or otherwise  provide for or permit the
issuance of capital  stock of ACC or its  Subsidiaries,  except as  described on
Schedule 6.1(b).

         (c) Authorization of Agreement,  Loan Documents and Borrowing.  Each of
ACC and its  Subsidiaries  has the right,  power and authority and has taken all
necessary  corporate and other action to authorize the  execution,  delivery and
performance  of this  Agreement and each of the other Loan Documents to which it
is a party in accordance with their respective terms. This Agreement and each of
the other Loan  Documents  have been duly  executed  and  delivered  by the duly
authorized  officers of ACC and each of its Subsidiaries  party thereto and each
such document  constitutes the legal, valid and binding obligation of ACC or its
Subsidiary  party thereto,  enforceable in accordance with its terms,  except as
such  enforcement  may be limited  by  bankruptcy,  insolvency,  reorganization,
moratorium or similar state,  provincial or federal debtor relief laws from time
to time in effect which affect the  enforcement of creditors'  rights in general
and the availability of equitable remedies.
<PAGE>
 
         (d)  Compliance of Agreement,  Loan  Documents and Borrowing with Laws,
Etc. The execution,  delivery and performance by ACC and its Subsidiaries of the
Loan  Documents to which each such Person is a party,  in accordance  with their
respective  terms, the borrowings  hereunder and the  transactions  contemplated
hereby do not and will not,  by the  passage  of time,  the  giving of notice or
otherwise,  (i)  except as set forth on  Schedule  6.1(d)  hereto,  require  any
Governmental  Approval as of the Closing Date,  (ii) violate any  Applicable Law
relating to ACC or any of its  Subsidiaries,  except to the extent that any such
violation  could not reasonably be expected to have a Material  Adverse  Effect,
(iii)  conflict  with,  result in a breach of or  constitute a default under the
articles of incorporation,  bylaws or other  organizational  documents of ACC or
any of its Subsidiaries or any material indenture, agreement or other instrument
to which such Person is a party or by which any of its  properties  may be bound
or any  Governmental  Approval  relating  to such  Person  or (iv)  result in or
require  the  creation  or  imposition  of any Lien upon or with  respect to any
material  property  now owned or  hereafter  acquired by such Person  other than
Liens arising under the Loan Documents.

         (e) Compliance with Law;  Governmental  Approvals.  Each of ACC and its
Subsidiaries  (i)  has  all  material  Governmental  Approvals  required  by any
Applicable Law for it to conduct its business.  Each such Governmental  Approval
is in full force and effect, is final and not subject to review on appeal and is
not the  subject of any  pending  or, to the best of its  knowledge,  threatened
attack by direct or collateral  proceeding  and (ii) is in compliance  with each
material  Governmental Approval applicable to it and in material compliance with
all other Applicable Laws relating to it or any of its respective properties.

         (f) Tax Returns and Payments. Each of ACC and its Subsidiaries has duly
filed or caused to be filed all federal, state, provincial,  local and other tax
returns  required by Applicable Law to be filed,  and has paid, or made adequate
provision for the payment of, all federal,  state,  provincial,  local and other
taxes,  assessments and governmental charges or levies upon it and its property,
income,  profits and assets which are due and payable,  except where the payment
of such tax is being  disputed  in good faith and  adequate  reserves  have been
established in accordance with GAAP. No Governmental  Authority has asserted any
Lien or other  claim  against  ACC or any  Subsidiary  thereof  with  respect to
material  unpaid taxes which has not been discharged or resolved or is not being
contested in good faith. The charges,  accruals and reserves on the books of ACC
and any of its Subsidiaries in respect of federal, state, provincial,  local and
other taxes for all Fiscal Years and portions thereof are in the judgment of ACC
adequate,  and  ACC  does  not  anticipate  any  additional  material  taxes  or
assessments for any of such years.

         (g) Environmental  Matters. (i) To the best knowledge of the Borrowers,
the  properties  of ACC  and its  Subsidiaries  do not  contain,  and  have  not
previously contained, any Hazardous Materials in amounts or concentrations which
(A) constitute or constituted a material violation of, or (B) could give rise to
material liability under, applicable Environmental Laws;

                  (ii)  Such   properties  and  all   operations   conducted  in
connection  therewith  are in  material  compliance,  and have been in  material
compliance, with all applicable Environmental Laws, and to the best knowledge of
the Borrowers,  there is no  contamination  at or under such  properties or such
operations in violation of applicable Environmental Laws or which could
<PAGE>
 
materially interfere with the continued operation of such properties or, if such
properties  are owned by any such Person,  materially  impair the fair  saleable
value thereof;

                  (iii) Neither ACC nor any Subsidiary  thereof has received any
notice of material violation,  alleged violation,  non-compliance,  liability or
potential   liability  regarding   environmental   matters  or  compliance  with
Environmental  Laws with  regard to any of their  properties  or the  operations
conducted in connection  therewith,  nor does ACC or any Subsidiary thereof have
knowledge or reason to believe that any such notice will be received or is being
threatened;

                  (iv) Hazardous Materials have not been transported or disposed
of from the  properties  of ACC and its  Subsidiaries  in violation  of, or in a
manner or to a location  which  could  give rise to  material  liability  under,
Environmental  Laws,  nor to the  best  knowledge  of the  Borrowers,  have  any
Hazardous  Materials been  generated,  treated,  stored or disposed of at, on or
under any of such properties in material violation of, or in a manner that could
give rise to material liability under, any applicable Environmental Laws;

                  (v) No judicial  proceedings or governmental or administrative
action is pending, or to the best knowledge of the Borrowers,  threatened, under
any Environmental Law to which ACC or any Subsidiary thereof is or will be named
as a party with respect to such properties or operations conducted in connection
therewith,  nor are there any consent decrees or other decrees,  consent orders,
administrative  orders or other  orders,  or other  administrative  or  judicial
requirements  outstanding  under  any  Environmental  Law with  respect  to such
properties or such operations; and

                  (vi) There has been no release,  or to the best  knowledge  of
the  Borrowers,  threat  of  release,  of  Hazardous  Materials  at or from such
properties, in violation of or in amounts or in a manner that could give rise to
material liability under Environmental Laws.

         (h)  Employee Benefit Plans and Canadian Plans.

                  (i)  Neither  ACC  nor  any  ERISA   Affiliate   maintains  or
contributes  to,  or has any  obligation  under,  any  Employee  Benefit  Plans,
Canadian Plans or German Plans other than those identified on Schedule 6.1(h);

                  (ii) ACC and each ERISA  Affiliate are in material  compliance
with all  applicable  provisions  of ERISA  and the  regulations  and  published
interpretations thereunder with respect to all Employee Benefit Plans except for
any required  amendments for which the remedial  amendment  period as defined in
Section 401(b) of the Code has not yet expired.  Each Employee Benefit Plan that
is intended to be qualified under Section 401(a) of the Code has been determined
by the Internal  Revenue  Service to be so qualified,  and each trust related to
such plan has been  determined to be exempt under Section 501(a) of the Code. No
liability  has  been  incurred  by ACC  or any  ERISA  Affiliate  which  remains
unsatisfied for any taxes or penalties with respect to any Employee Benefit Plan
or any Multiemployer Plan;
<PAGE>
 
                  (iii)  No  Pension  Plan  has  been  terminated,  nor  has any
accumulated  funding  deficiency  (as  defined in Section  412 of the Code) been
incurred  (without  regard to any waiver granted under Section 412 of the Code),
nor has any funding  waiver from the Internal  Revenue  Service been received or
requested with respect to any Pension Plan,  nor has ACC or any ERISA  Affiliate
failed to make any contributions or to pay any amounts due and owing as required
by Section  412 of the Code,  Section  302 of ERISA or the terms of any  Pension
Plan prior to the due dates of such contributions  under Section 412 of the Code
or Section 302 of ERISA,  nor has there been any event  requiring any disclosure
under  Section  4041(c)(3)(C)  or 4063(a) of ERISA with  respect to any  Pension
Plan;

                  (iv) Neither ACC nor any ERISA Affiliate has: (A) engaged in a
nonexempt  prohibited  transaction  described  in  Section  406 of the  ERISA or
Section 4975 of the Code;  (B) incurred any  liability to the PBGC which remains
outstanding other than the payment of premiums and there are no premium payments
which are due and unpaid; (C) failed to make a required  contribution or payment
to a Multiemployer  Plan; or (D) failed to make a required  installment or other
required payment under Section 412 of the Code;

                  (v) No  Termination  Event or Canadian  Termination  Event has
occurred or is reasonably expected to occur;

                  (vi)   No   material   proceeding,   claim,   lawsuit   and/or
investigation  is existing  or, to the best  knowledge of ACC after due inquiry,
threatened  concerning  or involving any (A) employee  welfare  benefit plan (as
defined in Section 3(1) of ERISA) currently  maintained or contributed to by ACC
or any ERISA Affiliate,  (B) Pension Plan, (C) Multiemployer  Plan, (D) Canadian
Plan or (E) German Plan;

                  (vii) ACC and its Subsidiaries are in material compliance with
all  Canadian  Law  relating  to  employee  benefit  plans,  pension  plans  and
retirement  savings plans and no liability has been incurred in respect  thereof
that remains unsatisfied; and

                  (viii) No Canadian Plan or German Plan has been terminated nor
is there any funding deficiency in respect thereof that has not been remedied or
any contributions or premiums thereto that have not been paid.

         (i) Margin  Stock.  Neither ACC nor any  Subsidiary  thereof is engaged
principally or as one of its activities in the business of extending  credit for
the purpose of  "purchasing" or "carrying" any "margin stock" (as each such term
is  defined  or used in  Regulations  G and U of the Board of  Governors  of the
Federal Reserve System).  No part of the proceeds of any of the Loans or Letters
of  Credit  will be used for  purchasing  or  carrying  margin  stock or for any
purpose which violates,  or which would be inconsistent  with, the provisions of
Regulation G, T, U or X of such Board of Governors.

         (j) Government Regulation. Neither ACC nor any Subsidiary thereof is an
"investment  company" or a company  "controlled" by an "investment  company" (as
each such term is  defined or used in the  Investment  Company  Act of 1940,  as
amended) and neither ACC nor any
<PAGE>
 
Subsidiary  thereof is, or after giving  effect to any  Extension of Credit will
be, a "Holding  Company" or a "Subsidiary  Company" of a "Holding Company" or an
"Affiliate" of a "Holding Company" within the respective meanings of each of the
quoted terms of the Public Utility  Holding  Company Act of 1935 as amended,  or
any other  Applicable  Law  which  materially  limits  its  ability  to incur or
consummate the transactions contemplated hereby.

         (k)  Patents,   Copyrights  and   Trademarks.   Each  of  ACC  and  its
Subsidiaries owns or possesses all patent,  copyright and trademark rights which
are  required  to conduct  its  business,  without  infringing  upon any validly
asserted  rights of others,  except where the failure to so own or possess could
not  reasonably  be expected  to have a Material  Adverse  Effect.  No event has
occurred which  permits,  or after notice or lapse of time or both would permit,
the  revocation or  termination  of any such rights.  Neither ACC nor any of its
Subsidiaries  have  been  threatened  with  any  litigation  regarding  patents,
copyrights  or  trademarks  that  would  present a  material  impediment  to the
business of any such Person.

         (l)  Material  Contracts.  Schedule  6.1(l)  sets forth a complete  and
accurate list of all Material Contracts of ACC and its Subsidiaries in effect as
of the Closing Date not listed on any other Schedule  hereto;  other than as set
forth in Schedule 6.1(l),  each of ACC and any Subsidiary  thereof party thereto
has performed all of its obligations  under such Material  Contracts and, to the
best knowledge of the Borrowers,  each other party thereto is in compliance with
each such  Material  Contract,  and each such  Material  Contract  is, and after
giving effect to the consummation of the  transactions  contemplated by the Loan
Documents  will be,  in full  force  and  effect  in  accordance  with the terms
thereof.  ACC and its Subsidiaries have delivered to the Administrative  Agent a
true and  complete  copy of each  Material  Contract  required  to be  listed on
Schedule 6.1(l).

         (m) Employee Relations.  None of ACC and its Subsidiaries is, except as
set forth on Schedule 6.1(m),  party to any collective  bargaining agreement nor
has any labor union been  recognized as the  representative  of the employees of
any such Person.  ACC knows of no pending,  threatened or contemplated  strikes,
work  stoppage or other  collective  labor  disputes  involving its employees or
those of its Subsidiaries.

         (n) Burdensome Provisions.  Neither ACC nor any Subsidiary thereof is a
party to any indenture,  agreement, lease or other instrument, or subject to any
corporate or partnership  restriction,  Governmental  Approval or Applicable Law
which  is so  unusual  or  burdensome  as in the  foreseeable  future  could  be
reasonably  expected to have a Material Adverse Effect. ACC and its Subsidiaries
do not  presently  anticipate  that  future  expenditures  needed  to  meet  the
provisions of any  statutes,  orders,  rules or  regulations  of a  Governmental
Authority will be so burdensome as to have a Material Adverse Effect.
<PAGE>
 
         (o) Financial  Statements.  The (i) Consolidated  balance sheets of ACC
and its  Subsidiaries  as of December 31, 1996,  and the related  statements  of
income and  retained  earnings and cash flows for the Fiscal Year then ended and
(ii)  unaudited  Consolidated  balance sheet of ACC and its  Subsidiaries  as of
September 30, 1997 and related unaudited  interim  statements of income and cash
flows, copies of which have been furnished to the Administrative  Agent and each
Lender, are complete and correct and fairly present the assets,  liabilities and
financial  position  of ACC and its  Subsidiaries,  as at  such  dates,  and the
results of the operations and changes of financial position for the periods then
ended. All such financial statements,  including the related schedules and notes
thereto,  have been prepared in accordance  with GAAP. ACC and its  Subsidiaries
have no  material  Debt,  obligation  or  other  unusual  forward  or  long-term
commitment  which is not disclosed in the foregoing  financial  statements or in
the notes thereto.

         (p) No Material Adverse Effect. Since December 31, 1996, there has been
no event or condition  that has had or is  reasonably  likely to have a Material
Adverse Effect.

         (q)  Solvency.  As of the Closing Date and after giving  effect to each
Extension of Credit made hereunder,  ACC and its  Subsidiaries  taken as a whole
will be Solvent.

         (r) Titles to  Properties.  Each of ACC and its  Subsidiaries  has such
title to the real property owned or leased by it as is necessary or desirable to
the conduct of its business and good and marketable title to all of its personal
property sufficient to carry on its business as presently conducted, except such
property as has been disposed of by ACC or its  Subsidiaries  subsequent to such
date which  dispositions  have been in the  ordinary  course of  business  or as
otherwise expressly permitted  hereunder.  Schedule 6.1(r) hereto sets forth the
address of all real property owned or leased by a Borrower and its  Subsidiaries
(and if leased, the record owner thereof).

         (s) Liens.  None of the  properties and assets of ACC or any Subsidiary
thereof is subject to any Lien, except in each case Liens permitted  pursuant to
Section 10.3. No financing  statement or application for registration  under the
Uniform  Commercial Code of any state or personal property security  legislation
or legislation as to registration  of security on movable  property of any other
jurisdiction  which  names  ACC  or any  Subsidiary  thereof  or  any  of  their
respective  trade names or divisions as debtor or grantor and which has not been
terminated,  has been filed in any state or other  jurisdiction  and neither ACC
nor  any  Subsidiary  thereof  has  signed  any  such  financing   statement  or
application for registration or any security  agreement  authorizing any secured
party  thereunder  to file any  such  financing  statement  or  application  for
registration, except to perfect those Liens permitted by Section 10.3 hereof.

         (t) Debt and Contingent Obligations.  Schedule 6.1(t) is a complete and
correct  listing  of  all  Debt  and  Contingent  Obligations  of  ACC  and  its
Subsidiaries in excess of $500,000.  ACC and its Subsidiaries have performed and
are in  material  compliance  with all of the terms of such Debt and  Contingent
Obligations and all instruments and agreements relating thereto,  and no default
or event of default, or event or condition which with notice or lapse of time or
both would  constitute  such a default or event of default on the part of ACC or
its Subsidiaries exists with respect to any such Debt or Contingent Obligation.
<PAGE>
 
         (u) Litigation.  Except as set forth on Schedule  6.1(u),  there are no
actions,  suits or proceedings  pending nor, to the knowledge of ACC, threatened
against  or in any other  way  relating  adversely  to or  affecting  ACC or any
Subsidiary thereof or any of their respective  properties in any court or before
any arbitrator of any kind or before or by any Governmental Authority the result
of which could reasonably be expected to have a Material Adverse Effect.

         (v)  Communications Regulatory Matters.

                  (i)  Each  Network   Agreement  has  been  duly  executed  and
delivered by the  respective  parties  thereto,  is in full force and effect and
neither the Borrowers,  any Subsidiary thereof nor, to the best knowledge of the
Borrowers,  any  of the  other  parties  thereto,  is in  default  of any of the
provisions thereof in any material respect.

                  (ii) Schedule 6.1(v) hereto sets forth, as of the date hereof,
a true and complete list of the following  information  for each  Communications
License or PUC Authorization issued to ACC or any its Subsidiaries:  (A) for all
Communications  Licenses,  the name of the licensee, the type of service and the
expiration  dates;  and (B) for  each PUC  Authorization,  the  geographic  area
covered by such PUC Authorization,  the services that may be provided thereunder
and the expiration date, if any.

                  (iii)  The  Communications  Licenses  and  PUC  Authorizations
specified  on  Schedule  6.1(v)  hereto  are valid and in full  force and effect
without  conditions  except for such  conditions as are generally  applicable to
holders of such  Communications  Licenses and PUC  Authorizations.  No event has
occurred and is continuing  which could  reasonably be expected to (A) result in
the  imposition  of a material  forfeiture  or the  revocation,  termination  or
adverse modification of any such Communications  License or PUC Authorization or
(B) materially and adversely affect any rights of ACC or any of its Subsidiaries
thereunder.   ACC  has  no  reason  to  believe  and  has  no   knowledge   that
Communications  Licenses  and PUC  Authorizations  will  not be  renewed  in the
ordinary course.

                  (iv) All of the  material  properties,  equipment  and systems
owned,  leased or  managed  by ACC and its  Subsidiaries  are,  and (to the best
knowledge  of ACC) all such  property,  equipment  and systems to be acquired or
added in connection with any contemplated  system expansion or construction will
be, in good  repair,  working  order  and  condition  (reasonable  wear and tear
excepted) and are and will be in compliance with all terms and conditions of the
Communications  Licenses  and PUC  Authorizations  and all  standards  or  rules
imposed by any  Governmental  Authority or as imposed under any agreements  with
telephone companies and customers.

                  (v) ACC and each of its Subsidiaries  have paid all franchise,
license  or other  fees and  charges  which  have  become  due  pursuant  to any
Governmental  Approval in respect of their  business  and have made  appropriate
provision  as is  required  by GAAP for any such  fees and  charges  which  have
accrued.
<PAGE>
 
         (w) Absence of Defaults.  No event has occurred and is continuing which
constitutes  a Default or an Event of Default,  or which  constitutes,  or which
with the passage of time or giving of notice or both would constitute, a default
or event of default by ACC or any Subsidiary thereof under any Material Contract
or judgment,  decree or order to which ACC or its Subsidiaries are a party or by
which ACC or its Subsidiaries or any of their respective properties may be bound
or which would require ACC or its  Subsidiaries  to make any payment  thereunder
prior to the scheduled maturity date therefor.

         (x) Senior Debt.  All of the  Obligations  of ACC and its  Subsidiaries
under the Loan  Documents  are  entitled to the  benefits  of the  subordination
provisions of the documents  evidencing any Subordinated  Debt. ACC acknowledges
that the Agents and Lenders are entering into this Agreement and the Lenders are
making Extensions of Credit in reliance upon such subordination provisions.

         (y) Year 2000  Compatibility.  The  Borrowers  have  taken  all  action
necessary to assure that the computer based systems of the Borrowers are able to
operate and  effectively  process data  including  dates on and after January 1,
2000. At the request of the  Administrative  Agent,  the Borrowers shall provide
assurance  reasonably  acceptable to the Administrative Agent and the Lenders of
the Borrowers' Year 2000 compatibility.

         (z) Accuracy and Completeness of Information.  All written information,
reports  and  other  papers  and data  produced  by or on  behalf  of ACC or any
Subsidiary  thereof and furnished to the Lenders were, at the time the same were
so  furnished,  complete  and  correct in all  material  respects.  No  document
furnished or written  statement  made to the Agents or the Lenders by ACC or any
Subsidiary thereof in connection with the negotiation,  preparation or execution
of this  Agreement  or any of the Loan  Documents  contains or will  contain any
untrue  statement  of a  fact  material  to the  creditworthiness  of ACC or its
Subsidiaries  or omits or will omit to state a material fact  necessary in order
to make the statements contained therein not misleading. ACC is not aware of any
facts  which it has not  disclosed  in writing  to the Agents  having a Material
Adverse Effect, or insofar as ACC can now foresee,  could reasonably be expected
to have a Material Adverse Effect.
<PAGE>
 
         SECTION  6.2.  Survival of  Representations  and  Warranties,  Etc. All
representations   and   warranties   set  forth  in  this  Article  VI  and  all
representations and warranties contained in any certificate,  or any of the Loan
Documents (including but not limited to any such representation or warranty made
in or in connection with any amendment thereto) shall constitute representations
and warranties made under this  Agreement.  All  representations  and warranties
made  under this  Agreement  shall be made or deemed to be made at and as of the
Closing  Date,  shall  survive the  Closing  Date and shall not be waived by the
execution and delivery of this Agreement, any investigation made by or on behalf
of the Lenders or any borrowing hereunder.


                                   ARTICLE VII

                        FINANCIAL INFORMATION AND NOTICES

         Until all the Obligations  have been paid and satisfied in full and the
Commitments terminated, unless consent has been obtained in the manner set forth
in Section 14.11 hereof,  the Borrowers will furnish or cause to be furnished to
the Administrative Agent and to the Lenders at their respective addresses as set
forth on Schedule  1.1(b),  or such other  office as may be  designated  by such
Agent and Lenders from time to time:

         SECTION 7.1.  Financial Statements and Projections.

         (a) Quarterly Financial  Statements.  As soon as practicable and in any
event  within  forty-five  (45) days after the end of each  fiscal  quarter,  an
unaudited   Consolidated  and  consolidating   balance  sheet  of  ACC  and  its
Subsidiaries  as of the close of such fiscal quarter and unaudited  Consolidated
and consolidating statements of income,  shareholders' equity and cash flows for
the fiscal  quarter  then ended and that  portion of the Fiscal Year then ended,
including the notes thereto (except with respect to  consolidating  statements),
all in reasonable  detail  setting forth in comparative  form the  corresponding
figures for the  preceding  Fiscal Year and prepared by ACC in  accordance  with
GAAP (except with respect to consolidating cash flows which shall be prepared in
a form  consistent  with past  practices),  and certified by the chief financial
officer  of  ACC to  present  fairly  in all  material  respects  the  financial
condition  of ACC and its  Subsidiaries  as of their  respective  dates  and the
results of operations of ACC and its  Subsidiaries  for the  respective  periods
then ended, subject to normal year end adjustments.

         (b) Annual  Financial  Statements.  As soon as  practicable  and in any
event  within one  hundred  and twenty  (120) days after the end of each  Fiscal
Year, an unaudited  consolidating  balance sheet and income statement of ACC and
its  Subsidiaries  and an  audited  Consolidated  balance  sheet  of ACC and its
Subsidiaries  as of the  close  of such  Fiscal  Year and  audited  Consolidated
statements  of income,  shareholders'  equity and cash flows for the Fiscal Year
then ended,  including the notes thereto, all in reasonable detail setting forth
in comparative form the corresponding  figures for the preceding Fiscal Year and
audited  by an  independent  certified  public  accounting  firm  of  nationally
recognized standing in accordance with GAAP, and accompanied by a report thereon
by such certified public accountants that is not qualified with respect to scope
<PAGE>
 
limitations  imposed  by  ACC or any of its  Subsidiaries  or  with  respect  to
accounting  principles  followed  by  ACC or  any  of  its  Subsidiaries  not in
accordance with GAAP.

         (c)  Annual  Business  Plan  and  Financial  Projections.  As  soon  as
practicable  and in any event within  thirty (30) days prior to the beginning of
each Fiscal Year, a business  plan of ACC and its  Subsidiaries  for the ensuing
four fiscal quarters, such plan to include, on a quarterly basis, the following:
a  quarterly  operating  and  capital  budget,  a  projected  income  statement,
statement of cash flows and balance sheet,  each prepared on a basis  consistent
with GAAP, and a report containing  management's discussion and analysis of such
projections (such business plan and projections, the "Projections"), accompanied
by a certificate from the chief financial  officer of ACC to the effect that, to
the best of such officer's  knowledge,  the Projections are good faith estimates
of  the  anticipated   financial   condition  and  operations  of  ACC  and  its
Subsidiaries  for such four quarter  period  based on the then current  business
plan.

         SECTION 7.2. Officer's Compliance  Certificate.  At each time financial
statements  are delivered  pursuant to Sections  7.1(a) or (b), a certificate of
any  Authorized  Officer  of ACC in the form of  Exhibit E  attached  hereto (an
"Officer's Compliance Certificate"):

         (a) stating that such officer has reviewed  such  financial  statements
and such statements  fairly present the financial  condition of the Borrowers as
of the dates  indicated and the results of their  operations  and cash flows for
the periods indicated;

         (b) stating  that to such  officer's  knowledge,  based on a reasonable
examination, no Default or Event of Default exists, or, if such is not the case,
specifying  such  Default or Event of Default and its nature,  when it occurred,
whether it is continuing and the steps being taken by the Borrowers with respect
to such Default or Event of Default; and

         (c) setting forth as at the end of such fiscal  quarter or Fiscal Year,
as the case may be, the  calculations  required to establish  whether or not ACC
and its Subsidiaries  were in compliance with the financial  covenants set forth
in Article IX hereof as at the end of each respective period and the calculation
of the  Applicable  Margin  pursuant  to  Section  4.1(c)  as at the end of each
respective period.

         SECTION  7.3.   Accountants'   Certificate.   At  each  time  financial
statements  are  delivered  pursuant to Section  7.1(b),  a  certificate  of the
independent public accountants certifying such financial statements addressed to
the  Managing  Agents for the benefit of the Lenders  stating that in making the
examination necessary for the certification of such financial  statements,  they
obtained no  knowledge of any Default or Event of Default or, if such is not the
case,  specifying  such Default or Event of Default and its nature and period of
existence.

         SECTION 7.4.  Other Reports.

         (a) Promptly upon receipt thereof,  copies of any management report and
any  management  responses  thereto  submitted  to any  Borrower or its Board of
Directors  by its  independent  public  accountants  in  connection  with  their
auditing function;
<PAGE>
 
         (b) Within ten (10)  Business  Days after the  receipt by ACC or any of
its  Subsidiaries  of notice that any  Communications  License or  material  PUC
Authorization has been lost or canceled,  copies of any such notice  accompanied
by a report describing the measures undertaken by ACC or any of its Subsidiaries
to prevent such loss or cancellation  (and the anticipated  impact, if any, that
such  loss  or  cancellation  will  have  upon  the  business  of  ACC  and  its
Subsidiaries);

         (c) Promptly but in any event within ten (10)  Business  Days after the
filing thereof,  a copy of (i) each report or other filing made by ACC or any of
its Subsidiaries with the Securities and Exchange Commission and required by the
SEC  to be  delivered  to  the  shareholders  of  such  Borrower  or  any of its
Subsidiaries, (ii) each report made by ACC or any of its Subsidiaries to the SEC
on Form 8-K and (iii) each  final  registration  statement  of ACC or any of its
Subsidiaries filed with the SEC; and

         (d) Such other information  regarding the operations,  business affairs
and financial condition of ACC or any of its Subsidiaries as the Managing Agents
or any Lender may reasonably request.

         SECTION 7.5. Notice of Litigation and Other Matters.  Prompt (but in no
event  later  than  three (3) days  after an  officer  of any  Borrower  obtains
knowledge thereof) telephonic and written notice of:

         (a) the commencement of all material  proceedings and investigations by
or before any  Governmental  Authority  and all actions and  proceedings  in any
court or before  any  arbitrator  against  or  involving  ACC or any  Subsidiary
thereof or any of their respective properties, assets or businesses;

         (b)  any  notice  of  any  material  violation  received  by ACC or any
Subsidiary   thereof  from  any  Governmental   Authority   including,   without
limitation, any notice of a material violation of Environmental Laws;

         (c) any labor  controversy that has resulted in, or could reasonably be
expected  to  result  in,  a strike  or other  work  action  against  ACC or any
Subsidiary thereof;

         (d) any attachment,  judgment, lien, levy or order exceeding $1,000,000
that  may be  assessed  against  or  threatened  against  ACC or any  Subsidiary
thereof;

         (e) any Default or Event of Default,  or any event which constitutes or
which with the  passage of time or giving of notice or both would  constitute  a
default  or event of  default  under  any  Subordinated  Debt or other  Material
Contract to which ACC or any of its  Subsidiaries  is a party or by which ACC or
any Subsidiary thereof or any of their respective properties may be bound;

         (f) (i) the  failure of ACC or any ERISA  Affiliate  to make a required
installment  or payment under Section 302 of ERISA or Section 412 of the Code by
the due date, (ii) any Canadian  Termination  Event, (iii) any Termination Event
or "prohibited transaction", as such term
<PAGE>
 
is defined in Section 406 of ERISA or Section  4975 of the Code,  in  connection
with any Employee  Benefit Plan or any trust  created  thereunder,  along with a
description  of the nature  thereof,  what  action  ACC has taken,  is taking or
proposes to take with  respect  thereto  and,  when known,  any action  taken or
threatened by the Internal Revenue Service,  the Department of Labor or the PBGC
with respect thereto, (iv) all notices received by ACC or any ERISA Affiliate of
the PBGC's intent to terminate  any Pension Plan or to have a trustee  appointed
to  administer  any Pension Plan,  (v) all notices  received by ACC or any ERISA
Affiliate from a Multiemployer  Plan sponsor concerning the imposition or amount
of  withdrawal  liability  pursuant to Section 4202 of ERISA,  (vi) any Borrower
obtaining  knowledge or reason to know that ACC or any ERISA Affiliate has filed
or  intends to file a notice of intent to  terminate  any  Pension  Plan under a
distress  termination  within the meaning of Section 4041(c) of ERISA, and (vii)
any notice from the Canadian  federal  Superintendent  of Insurance or any other
Governmental  Authority  advising  that the  Governmental  Authority  intends to
declare a Canadian  Plan  terminated  or  appoint a trustee or curator  thereto,
(viii) becoming aware, or receiving any notice from any  Governmental  Authority
that (A) ACC or any Subsidiary  thereof has ceased to be in conformity  with the
prescribed  tests  and  standards   applicable  to  a  Canadian  Plan,  (B)  any
administrator   of  a  Canadian  Plan  has  failed  to  furnish  any  prescribed
information and reports, or (C) any contravention of any applicable Canadian Law
has occurred,  which, in each case,  constitutes  grounds under Canadian Law for
the  termination of, or the appointment of a trustee or curator to, any Canadian
Plan or for the imposition of a fine or penalty;

         (g) the enactment or promulgation after the date hereof of any federal,
state,  provincial  or local  statute,  regulation  or  ordinance or judicial or
administrative  decision  or order (or,  to the  extent  that any  Borrower  has
knowledge thereof, any such proposed statute, regulation, ordinance, decision or
order,  whether  by the  introduction  of  legislation  or the  commencement  of
rulemaking  or similar  proceedings  or otherwise)  having a material  effect or
relating  to  the  operation  of  the  Network  Facilities  by ACC or any of its
Subsidiaries (including,  without limitation, any statutes,  decisions or orders
affecting long distance  telecommunication  resellers generally and not directed
against ACC or any of its Subsidiaries  specifically)  which have been issued or
adopted (or which have been proposed) and which could  reasonably be expected to
have a Material Adverse Effect; or

         (h)  any  event which  makes  any of the  representations  set forth in
Section 6.1 inaccurate in any material respect.

         SECTION 7.6. Accuracy of Information. All written information, reports,
statements  and other papers and data  furnished by or on behalf of any Borrower
to any  Agent or  Lender  whether  pursuant  to this  Article  VII or any  other
provision of this Agreement, or any of the Security Documents,  shall be, at the
time the same is so  furnished,  complete and correct in all  material  respects
based on the applicable Borrower's knowledge thereof.
<PAGE>
 
                                  ARTICLE VIII

                              AFFIRMATIVE COVENANTS

         Until all of the  Obligations  have been paid and satisfied in full and
the  Commitments  terminated,  unless  consent  has been  obtained in the manner
provided for in Section  14.11,  each Borrower  will, and will cause each of its
Subsidiaries to:

         SECTION 8.1.  Preservation of Corporate  Existence and Related Matters.
Except as  permitted  by  Section  10.5 or as a result of any  Change in Control
which has been  approved  pursuant to Section  14.11,  preserve and maintain its
separate corporate existence and all rights, franchises, licenses and privileges
necessary to the conduct of its business;  and qualify and remain qualified as a
foreign corporation and authorized to do business in each jurisdiction where its
business requires such qualification and authorization.

         SECTION  8.2.  Maintenance  of  Property.   Protect  and  preserve  all
properties  useful  in  and  material  to  its  business,   including   material
copyrights,  patents, trade names and trademarks; maintain in good working order
and condition all buildings  (reasonable wear and tear excepted),  equipment and
other tangible real and personal  property;  and from time to time make or cause
to be made all renewals,  replacements and additions to such property  necessary
in the reasonable judgement of the Borrowers for the conduct of its business, so
that the  business  carried  on in  connection  therewith  may be  properly  and
advantageously conducted at all times.

         SECTION 8.3.  Insurance.  In addition to the  requirements set forth in
the Security Documents,  maintain insurance with financially sound and reputable
insurance  companies  against such risks and in such amounts as are  customarily
maintained by similar  businesses and as may be required by Applicable  Law, and
on the Closing  Date and from time to time deliver to the  Administrative  Agent
upon its request a detailed  list of the insurance  then in effect,  stating the
names of the insurance  companies,  the amounts and rates of the insurance,  the
dates of the expiration thereof and the properties and risks covered thereby.

         SECTION  8.4.  Accounting  Methods and  Financial  Records.  Maintain a
system of accounting,  and keep such books, records and accounts (which shall be
true and  complete  in all  material  respects)  as may be required or as may be
necessary to permit the  preparation of financial  statements in accordance with
GAAP (or generally  accepted  accounting  principles as in effect in Canada, the
United Kingdom and the Federal  Republic of Germany with respect to the Canadian
Borrowers,  the U.K.  Borrowers and the German  Borrowers,  respectively) and in
compliance  with  the   regulations  of  any   Governmental   Authority   having
jurisdiction over it or any of its properties.

         SECTION 8.5.  Payment and Performance of  Obligations.  Pay and perform
all  Obligations  under this  Agreement and the other Loan  Documents and pay or
perform (a) all taxes,  assessments and other  governmental  charges that may be
levied  or  assessed  upon  it or  any  of  its  property,  and  (b)  all  other
indebtedness,  obligations  and  liabilities in accordance  with customary trade
practices;  provided, that ACC or such Subsidiary may contest any item described
in clauses
<PAGE>
 
(a) and (b) hereof in good faith so long as  adequate  reserves  are  maintained
with respect thereto in accordance with GAAP.

         SECTION 8.6. Compliance With Laws and Approvals.  Observe and remain in
material  compliance  with all  Applicable  Laws and  maintain in full force and
effect all material Governmental Approvals, in each case applicable or necessary
to the conduct of its business.

         SECTION 8.7.  Environmental  Laws. In addition to and without  limiting
the generality of Section 8.6, (a) comply in all material respects with, and use
its best efforts to ensure such compliance by all of its tenants and subtenants,
if any, with, all applicable  Environmental  Laws and obtain and comply with and
maintain,  and use its  best  efforts  to  ensure  that all of its  tenants  and
subtenants obtain and comply with and maintain, any and all licenses, approvals,
notifications,  registrations  or permits  required by applicable  Environmental
Laws;  (b)  conduct and  complete  all  investigations,  studies,  sampling  and
testing,   and  all  remedial,   removal  and  other  actions   required   under
Environmental  Laws,  and timely comply with all lawful orders and directives of
any  Governmental  Authority  regarding  Environmental  Laws;  and  (c)  defend,
indemnify  and hold  harmless the Agents and the Lenders,  and their  respective
parents,  Subsidiaries,  Affiliates,  employees, agents, officers and directors,
from  and  against  any  claims,   demands,   penalties,   fines,   liabilities,
settlements,  damages,  costs and  expenses of whatever  kind or nature known or
unknown, contingent or otherwise,  arising out of, or in any way relating to the
violation  of,  noncompliance  with or liability  under any  Environmental  Laws
applicable  to the  operations  of  ACC  or  such  Subsidiary,  or  any  orders,
requirements or demands of Governmental Authorities related thereto,  including,
without limitation,  reasonable attorney's and consultant's fees,  investigation
and laboratory fees, response costs, court costs and litigation expenses, except
to the  extent  that any of the  foregoing  arise  out of or relate to the gross
negligence or willful misconduct of the party seeking indemnification therefor.

         SECTION  8.8.  Employee  Benefit,   Pension  and  Retirement  Laws.  If
applicable  thereto,  in addition  to and without  limiting  the  generality  of
Section 8.6, make timely payment of  contributions  required to meet the minimum
funding  standards set forth in ERISA with respect to any Employee Benefit Plan;
not take any  action  or fail to take  action  the  result  of which  could be a
liability  to the  PBGC  or to a  Multiemployer  Plan;  not  participate  in any
prohibited transaction that could result in any civil penalty under ERISA or tax
under the Code;  furnish to the  Administrative  Agent  upon the  Administrative
Agent's request such additional  information  about any Employee Benefit Plan as
may be  reasonably  requested  by the  Administrative  Agent;  and operate  each
Employee  Benefit  Plan in such a manner  that will not incur any tax  liability
under Section 4980B of the Code or any liability to any qualified beneficiary as
defined in  Section  4980B of the Code and not  operate  or fail to operate  any
Canadian Plan or German Plan of ACC or any Subsidiary thereof in full conformity
and  compliance  with  all  federal  and  provincial  laws and  regulations  and
contracts relating to any Canadian Plan or German Plan and, in particular but by
way of illustration only, make timely payments of all contributions  required to
meet the minimum funding  standards  prescribed by such laws and regulations and
contracts and furnish to the Administrative Agent upon such Agent's request such
additional  information  about  any  Canadian  Plan  or  German  Plan  as may be
reasonably requested by the Administrative Agent.
<PAGE>
 
         SECTION  8.9.  Compliance  With  Agreements.  Comply  in  all  material
respects with each term,  condition and provision of all leases,  agreements and
other instruments entered into in the conduct of its business including, without
limitation,  any Material  Contract;  provided,  that ACC or such Subsidiary may
contest any such lease,  agreement or other  instrument in good faith so long as
adequate reserves are maintained in accordance with GAAP.

         SECTION  8.10.  Conduct  of  Business.  Engage  only in  businesses  in
substantially  the same fields as the  businesses  conducted on the Closing Date
and, to the extent permitted by Section 10.4(c), in lines of business reasonably
related thereto.

         SECTION 8.11. Visits and Inspections.  Upon reasonable notice therefrom
and during normal business hours,  permit  representatives  of any of the Agents
and Lenders,  from time to time, to visit and inspect its  properties;  inspect,
audit and make extracts from its books,  records and files,  including,  but not
limited to, management letters prepared by independent accountants;  and discuss
with its principal  officers,  and its  independent  accountants,  its business,
assets,  liabilities,  financial  condition,  results of operations and business
prospects.

         SECTION 8.12. Material Subsidiaries;  Additional  Collateral.  (a) Upon
the creation of any Material Subsidiary permitted by this Agreement, cause to be
executed and delivered to the Administrative  Agent: (i) a Joinder Agreement and
the documents referred to therein;  provided,  that such Joinder Agreement shall
not be required with respect to any Material  Subsidiary  created as a result of
the Versatel Acquisition,  (ii) if such Subsidiary is a Domestic Subsidiary, (A)
the supplement substantially in the form attached to the Security Agreement, (B)
the  supplement  substantially  in the form  attached to the  applicable  Pledge
Agreement,  or if the owner of such  Subsidiary  is not ACC or ACC  National,  a
pledge agreement  substantially  in the form of a Pledge  Agreement  executed by
such owner with such modifications  thereto as requested by the Required Lenders
and (C) a Mortgage and landlord  consent with respect to any real property owned
or leased by such  Subsidiary if reasonably  requested by the Required  Lenders,
(iii) if such Subsidiary is a Canadian  Subsidiary,  such joinder  agreements as
reasonably  requested  by the  Required  Lenders in order  that such  Subsidiary
become  a party  to the  Canadian  Security  Documents  and/or  such  additional
Canadian  Security  Documents as reasonably  requested by the Required  Lenders,
(iv) if  such  Subsidiary  is a U.K.  Subsidiary,  such  joinder  agreements  as
reasonably  requested  by the  Required  Lenders in order  that such  Subsidiary
become  a party to the U.K.  Security  Documents  and/or  such  additional  U.K.
Security Documents as reasonably  requested by the Required Lenders, (v) if such
Subsidiary  is a  German  Subsidiary,  such  joinder  agreements  as  reasonably
requested by the Required  Lenders in order that such Subsidiary  become a party
to  the  German  Security  Documents  and/or  such  additional  German  Security
Documents  as  reasonably  requested by the  Required  Lenders,  (vi) such other
documents reasonably requested by the Required Lenders consistent with the terms
of this  Agreement  which provide that such  Subsidiary  (if so required by this
Section 8.10) shall become a Borrower  bound by all of the terms,  covenants and
agreements  contained  in the  Loan  Documents  and  that  the  assets  of  such
Subsidiary shall become  Collateral for the  Obligations,  (vii) with respect to
the  Material  Subsidiary  created  as a  result  of the  Versatel  Acquisition,
documents   satisfactory  to  the  Administrative  Agent  and  Required  Lenders
evidencing the valid pledge as collateral of 66.66% of the capital stock of such
Material  Subsidiary  and (viii) such other  documents as the  Required  Lenders
shall reasonably
<PAGE>
 
request,  including  without  limitation,   officers'  certificates,   financial
statements,   opinions  of  counsel,   board  resolutions,   charter  documents,
certificates  of existence  and  authority to do business and any other  closing
certificates and documents described in Section 5.2.

         (b) ACC shall, and cause its Material Subsidiaries to, promptly deliver
from time to time such additional Security Documents to the Administrative Agent
upon the request of the Required  Lenders with respect to any assets of any such
Person not subject to an existing Lien in favor of the Administrative  Agent for
the  benefit  of the  Lenders  (including,  without  limitation,  Mortgages  and
landlord  consents  with  respect to each leased  premises at which any Material
switching equipment is located).

         SECTION  8.13.  Hedging  Agreement.  (a) Maintain at all times  Hedging
Agreements  with respect to interest  rate exposure  under the Credit  Agreement
with durations of at least two years and an aggregate  notional principal amount
thereunder  equal to at least fifty  percent  (50%) of the  aggregate  principal
Dollar Amount of the  Extensions  of Credit at interest  rates not to exceed two
percent  (2%) over the three month LIBOR Rate at the time of  execution  of such
Hedging  Agreements  with  respect to each  applicable  Permitted  Currency  and
otherwise in form and substance reasonably  satisfactory to the Managing Agents;
provided, that at any time the Leverage Ratio is less than 2.50 to 1.00, no such
Hedging  Agreements  shall be required  and (b)  maintain  at all times  Hedging
Agreements  with  respect  to  currency  risk in form and  substance  reasonably
satisfactory to the Managing Agents.

         SECTION 8.14.  Further  Assurances.  Make, execute and deliver all such
additional  and further  acts,  things,  deeds and  instruments  as any Agent or
Lender may  reasonably  require to  document  and  consummate  the  transactions
contemplated  hereby and to vest  completely  in and  insure  each Agent and the
Lenders their respective rights under this Agreement,  the Notes, the Letters of
Credit and the other Loan Documents.

         SECTION 8.15.  Post-Closing Matters
 .
         (a)  Within  thirty  (30) days after the date  hereof,  provide a fully
executed and duly notarized German Pledge Agreement.

         (b) Within one hundred  twenty (120) days after the date  hereof,  with
respect  to  Vista  International  Communications,  Inc.,  (i)  provide  to  the
Administrative  Agent  satisfactory  evidence  that such Person has received all
Governmental  Approvals  required to become a Borrower hereunder and (ii) comply
with Section 8.12 hereof with respect to such Person.

         (c)  Within  thirty  (30) days after the date  hereof,  provide a fully
executed  and duly  executed  Landlord  Agreement  with  respect to ACC Canada's
leasehold property in Quebec.


                                   ARTICLE IX

                               FINANCIAL COVENANTS
<PAGE>
 
         Until all of the  Obligations  have been paid and satisfied in full and
the Commitments  terminated,  unless consent has been obtained in the manner set
forth in Section 14.11 hereof,  ACC and its Subsidiaries on a Consolidated basis
will not:

         SECTION  9.1.Maximum  Leverage Ratio. As of any date of  determination,
permit the ratio (the "Leverage Ratio") of (a) Total Debt as of such date to (b)
Operating  Cash Flow for the  period  of four (4)  consecutive  fiscal  quarters
ending on or immediately prior to such date, to exceed the  corresponding  ratio
set forth below:

                  Period                             Ratio

                  Closing Date 6/30/98               3.50 to 1.00
                  7/1/98 - 12/31/98                  3.00 to 1.00
                  1/1/99 - 12/31/99                  2.50 to 1.00
                  1/1/00 and thereafter              2.00 to 1.00

         SECTION 9.2.  Minimum Pro Forma Debt Service  Coverage Ratio. As of any
date of  determination,  permit  the  ratio of (a)  Operating  Cash Flow for the
period of four (4) consecutive fiscal quarters ending on or immediately prior to
such date to (b) Pro  Forma  Debt  Service  on such date to be less than 2.50 to
1.00.

         SECTION  9.3.  Fixed  Charge   Coverage   Ratio.  As  of  any  date  of
determination,  permit  the ratio of (a)  Operating  Cash Flow for the period of
four (4) consecutive fiscal quarters ending on or immediately prior to such date
to (b) Fixed  Charges  for the period of four (4)  consecutive  fiscal  quarters
ending on or immediately prior to such date, during any given period, to be less
than the corresponding ratio set forth below:

                   Period                            Ratio

                  1/1/99 - 12/31/99                  1.00 to 1.00
                  1/1/00 and thereafter              1.15 to 1.00

         SECTION  9.4.  Capital  Expenditures.  During  Fiscal  Year 1998,  make
Capital Expenditures in excess of $70,000,000.
<PAGE>
 
         SECTION 9.5.  Minimum Net Worth.  Permit  Consolidated Net Worth at any
time  to be  less  than  (a)  $115,000,000  plus  (b)  fifty  percent  (50%)  of
Consolidated  Net Income of ACC and its  Subsidiaries  as of each fiscal quarter
end occurring  after the Closing Date plus (c) one hundred percent (100%) of the
aggregate  Net Cash  Proceeds of any offering of capital  stock of ACC or any of
its  Wholly-Owned  Subsidiaries  received  thereby after the Closing  Date.  For
purposes of this Section 9.5, the minimum required  Consolidated Net Worth shall
not be reduced if  Consolidated  Net Income as of any fiscal quarter end is less
than zero.


                                    ARTICLE X

                               NEGATIVE COVENANTS

         Until all of the  Obligations  have been paid and satisfied in full and
the Commitments  terminated,  unless consent has been obtained in the manner set
forth in Section 14.11 hereof, each Borrower will not and will not permit any of
its Subsidiaries to:

         SECTION 10.1.  Limitations on Debt. Create,  incur, assume or suffer to
exist any Debt except:

         (a)  the Obligations;

         (b)  Subordinated  Debt, the Net Cash Proceeds of which are utilized to
repay the Obligations  and, with respect to any such Net Cash Proceeds  utilized
to reduce the Leverage Ratio to 3.00 to 1.00,  permanently  reduce the Aggregate
Commitment  by the  amount  of  such  Net  Cash  Proceeds  pursuant  to  Section
2.6(c)(i);

         (c) Debt existing on the Closing Date and not otherwise permitted under
this  Section  10.1,  as set  forth  on  Schedule  6.1(t)  and the  renewal  and
refinancing (but not the increase) thereof;

         (d) Debt  consisting  of  Contingent  Obligations  permitted by Section
10.2;

         (e)  Debt of ACC and  its  Subsidiaries  incurred  in  connection  with
Capitalized Leases;

         (f)  purchase money Debt of ACC and its Subsidiaries; and

         (g)  unsecured Debt of ACC and its Subsidiaries;

provided,  that the aggregate  amount of the Debt permitted  pursuant to clauses
(e),  (f) and (g) plus the  aggregate  amount  of Debt  constituting  Contingent
Obligations  permitted  by Sections  10.2(b),  (d) and (f) shall not at any time
exceed $40,000,000.

         SECTION 10.2.  Limitations on Contingent  Obligations.  Create,  incur,
assume or  suffer to exist any  Contingent  Obligations  except  (a)  Contingent
Obligations in favor of the  Administrative  Agent for the benefit of the Agents
and the Lenders, (b) Contingent Obligations
<PAGE>
 
incurred as a general or joint venture partner in connection with any investment
in a  partnership  or joint  venture  permitted  pursuant to Section  10.4,  (c)
Contingent  Obligations in respect of Network  Agreements and Network Facilities
incurred in the  ordinary  course of business,  (d)  Contingent  Obligations  to
secure  payment or  performance of customer  service  contracts  incurred in the
ordinary  course  of  business,  (e)  Contingent  Obligations  with  respect  to
obligations under Hedging Agreements  permitted pursuant to Section 10.13(b) and
(f)  Contingent  Obligations  not  covered by clauses  (a)  through  (e) of this
Section;  provided,  that the  aggregate  outstanding  principal  amount  of all
Contingent  Obligations  permitted  by  Sections  10.2(b),  (d) and (f) plus the
aggregate  outstanding  principal  amount  of  all  Debt,  without  duplication,
outstanding  under  clauses  (e),  (f) and (g) of Section  10.1 shall not exceed
$40,000,000.

         SECTION 10.3.  Limitations on Liens. Create, incur, assume or suffer to
exist, any Lien on or with respect to any of its assets or properties (including
without limitation shares of capital stock or other ownership  interests),  real
or personal, whether now owned or hereafter acquired, except:

         (a) Liens for  taxes,  assessments  and other  governmental  charges or
levies (excluding any Lien imposed pursuant to any of the provisions of ERISA or
Environmental  Laws)  not yet due or as to w hich the  period  of grace  (not to
exceed thirty (30) days),  if any,  related thereto has not expired or which are
being  contested  in good  faith  and by  appropriate  proceedings  if  adequate
reserves are maintained to the extent required by GAAP;

         (b) the  claims  of  materialmen,  mechanics,  carriers,  warehousemen,
processors or landlords for labor,  materials,  supplies or rentals  incurred in
the ordinary course of business,  (i) which are not overdue for a period of more
than  thirty  (30) days or (ii) which are being  contested  in good faith and by
appropriate proceedings;

         (c) Liens consisting of deposits or pledges made in the ordinary course
of business in  connection  with,  or to secure  payment of,  obligations  under
workers'   compensation,   unemployment  insurance  or  similar  legislation  or
obligations (not to exceed $2,000,000) under customer service contracts;

         (d)  Liens   constituting   encumbrances   in  the   nature  of  zoning
restrictions,  easements and rights or restrictions of record on the use of real
property, which in the aggregate are not substantial in amount and which do not,
in any case,  materially  detract from the value of such  property or impair the
use thereof in the ordinary conduct of business;

         (e) Liens of the Administrative Agent for the benefit of the Agents and
the Lenders;

         (f) Liens not otherwise permitted by this Section 10.3 and in existence
on the Closing Date and described on Schedule 10.3;

         (g) Liens  evidencing  the  interest  of lessors  with  respect to Debt
permitted under Section 10.1(e); and
<PAGE>
 
         (h)  Liens securing Debt permitted under Section 10.1(f); provided that
(i)  such  Liens  shall  be  created   substantially   simultaneously  with  the
acquisition  of the related  Capital  Asset,  (ii) such Liens do not at any time
encumber  any property  other than the property  financed by such Debt and (iii)
the  aggregate  outstanding  principal  amount of Debt  secured by any such Lien
shall at no time exceed 100% of the original  purchase price of such property at
the time it was acquired.

         SECTION  10.4.   Limitations  on  Loans,   Advances,   Investments  and
Acquisitions.  Purchase,  own,  invest  in or  otherwise  acquire,  directly  or
indirectly,  any capital  stock,  interests in any  partnership or joint venture
(including without limitation the creation or capitalization of any Subsidiary),
evidence  of  Debt or  other  obligation  or  security,  substantially  all or a
material  portion  of the  business  or assets of any other  Person or any other
investment  or interest  whatsoever  in any other  Person;  or make or permit to
exist,  directly or indirectly,  any loans, advances or extensions of credit to,
or any  investment  in cash or by delivery of property in, any Person;  or enter
into,  directly  or  indirectly,  any  commitment  or option in  respect  of the
foregoing except:

         (a) (i) loans or  advances  by any  Subsidiary  of a  Borrower  to such
Borrower,  (ii) advances from ACC to any  Wholly-Owned  Subsidiary or Controlled
Venture  in an  aggregate  principal  amount not to exceed  $500,000,  (iii) (A)
intercompany loans by ACC to ACC Canada in an aggregate  principal amount not to
exceed  $70,000,000,  (B) intercompany  loans by ACC to ACC U.K. in an aggregate
principal  amount  not  to  exceed   $50,000,000,   (C)  intercompany  loans  or
investments  in the form of capital  contributions  by ACC or by a  Wholly-Owned
Subsidiary thereof to ACC Germany in an aggregate principal amount not to exceed
$10,000,000 and (D) intercompany loans by ACC to the Material Subsidiary created
as a result of the Versatel  Acquisition in an aggregate principal amount not to
exceed  $15,000,000;  provided,  that  (x)  such  intercompany  loans  shall  be
evidenced by promissory  notes in form and  substance  acceptable to the Lenders
(each, an "Intercompany  Note"), which notes shall be pledged to the Lenders and
shall be  subordinated  to the  Credit  Facility  pursuant  to the  Intercompany
Subordination Agreement and (y) the Intercompany Note evidencing loans permitted
pursuant to Section  10.4(a)(iii)(D) above shall be secured by substantially all
of the  assets  of such  Material  Subsidiary  pursuant  to  security  documents
reasonably  satisfactory to the Administrative Agent and the rights and remedies
of ACC thereunder shall be pledged to the  Administrative  Agent pursuant to the
Security  Agreement and (iii) other existing loans,  advances and investments in
existence on the Closing Date and  described on Schedule  10.4;  provided,  that
notwithstanding  the above,  no further  loans or advances  shall be made by any
Borrower to Vista International Communications,  Inc., until such time as it has
been joined as a Borrower pursuant to Section 8.15.

         (b) investments by any Domestic Borrower or Domestic  Subsidiary in (i)
marketable direct obligations issued or unconditionally guaranteed by the United
States of America or any agency  thereof  maturing  within one (1) year from the
date of acquisition  thereof,  (ii)  commercial  paper maturing no more than 120
days from the date of creation  thereof and currently  having the highest rating
obtainable  from either  Standard & Poor's Ratings  Services,  a division of The
McGraw-Hill   Companies,   Inc.  or  Moody's  Investors  Service,   Inc.,  (iii)
certificates of deposit maturing no more than 120 days from the date of creation
thereof  issued by commercial  banks  incorporated  under the laws of the United
States of America,  each having combined capital,  surplus and undivided profits
of not less than $500,000,000 and having a rating of "A" or better by
<PAGE>
 
a nationally  recognized  rating  agency;  provided,  that the aggregate  amount
invested in such certificates of deposit shall not at any time exceed $5,000,000
for any one such  certificate of deposit and  $10,000,000 for any one such bank,
or (iv) time  deposits  maturing  no more than 30 days from the date of creation
thereof with commercial banks or savings banks or savings and loan  associations
each having  membership  either in the  Federal  Deposit  Insurance  Corporation
("FDIC")  or the  deposits  of which are  insured by the FDIC and in amounts not
exceeding the maximum  amounts of insurance  thereunder,  and investments by any
Canadian  Borrower  or  Canadian  Subsidiary,  by any U.K.  Borrower or any U.K.
Subsidiary or by any German Borrower or German  Subsidiary in any  corresponding
government  securities  or  cash  equivalents  reasonably  satisfactory  to  the
Required Lenders;

         (c) investments by ACC or any Subsidiary in the form of acquisitions of
all or substantially  all of the business or a line of business  (whether by the
acquisition of capital stock,  assets or any  combination  thereof) of any other
Person,  including any investment  constituting a Controlled  Venture;  provided
that,  (i) the Person to be  acquired or invested in shall be a provider of long
distance telephone service or other business reasonably related to the provision
of long distance telephone or telecommunications  service; (ii) a Borrower shall
be the surviving entity and all necessary  documents required to be executed and
filed to evidence  that any and all assets  required  hereunder to be pledged as
Collateral  for the  Obligations  shall have been  executed and filed;  (iii) at
least fifteen (15) Business Days prior to the consummation of such  acquisition,
an  authorized  officer  of ACC  shall  deliver  to the  Administrative  Agent a
certificate (except with respect to the U.S. Wats Acquisition)  demonstrating to
the  satisfaction  of the  Managing  Agents  that no Default or Event of Default
exists  or  shall  be  created  by  the  consummation  of  such  acquisition  or
investment;  (iv) a description of the  acquisition  (except with respect to the
Versatel   Acquisition  and  the  U.S.  Wats   Acquisition)  and  the  governing
documentation (except with respect to the U.S. Wats Acquisition) shall have been
delivered to the Administrative  Agent at least fifteen (15) Business Days prior
to the  consummation of the  acquisition;  (v) any Subsidiary  created  pursuant
hereto and  organized  under the laws of Canada shall be a direct  Subsidiary of
ACC Canada and (vi) if such acquisition or investment, if completed, would cause
the aggregate fair market value of the consideration of all such acquisitions or
investments completed during the period (commencing on the Closing Date) of four
consecutive   fiscal   quarters  ending   immediately   prior  to  the  date  of
determination  thereof to exceed  $30,000,000  (excluding  consideration for the
U.S. Wats Acquisition),  the Required Lenders shall have consented in writing to
such acquisition or investment prior to the Closing Date.

         (d)  investments  by ACC in any joint venture  (other than a Controlled
Venture)  not to exceed  $5,000,000  with respect to any such  individual  joint
venture and $15,000,000  with respect to all such joint ventures during the term
of the  Credit  Facility  without  the prior  written  consent  of the  Required
Lenders; and

         (e) loans to employees  in the  ordinary  course of business for travel
and other advanced expenses not to exceed $50,000 with respect to any individual
employee or $500,000 in the aggregate.
<PAGE>
 
         SECTION  10.5.   Limitations   on  Mergers  and   Liquidation.   Merge,
consolidate,  amalgamate  or enter into any similar  combination  with any other
Person or liquidate,  wind-up or dissolve  itself (or suffer any  liquidation or
dissolution)  except  (a) any  Wholly-Owned  Subsidiary  of ACC  which  is not a
Borrower  may  be  liquidated,  wound-up  or  dissolved,  (b)  any  Wholly-Owned
Subsidiary of ACC may merge with ACC or any other Wholly-Owned Subsidiary of ACC
which is a Borrower,  as long as ACC or such  Borrower,  as  applicable,  is the
survivor of such merger and assumes all of the Obligations of the  non-surviving
entity,  (c)  any  Wholly-Owned  Subsidiary  may  merge  into  the  Person  such
Wholly-Owned  Subsidiary was formed to acquire in connection with an acquisition
permitted by Section 10.4(c) and (d) pursuant to any Change in Control which has
been approved pursuant to Section 14.11.

         SECTION  10.6.  Limitations  on Sale of Assets.  Convey,  sell,  lease,
assign, transfer or otherwise dispose of any of its property, business or assets
(including,  without  limitation,  the  sale of any  receivables  and  leasehold
interests and any sale-leaseback or similar  transaction),  whether now owned or
hereafter acquired except:

         (a)  the sale of inventory in the ordinary course of business;

         (b)  the  sale of  obsolete  assets no  longer  used or  usable  in the
business of ACC or any of its Subsidiaries;

         (c)  the  sale or  discount  without recourse  of  accounts  receivable
arising in the ordinary  course of business in connection with the compromise or
collection thereof;

         (d)  the  transfer  of  assets  to any  Borrower  or  any  Wholly-Owned
Subsidiary of ACC pursuant to Section 10.5(b); and

         (e)  the sale of assets which generated less than 10% of Operating Cash
Flow in the four quarters immediately  preceding such sale so long as no Default
or Event of Default is existing or would be created by such sale of assets.

         SECTION 10.7.  Limitations on Dividends and  Distributions.  Declare or
pay any dividends upon any of its capital  stock;  purchase,  redeem,  retire or
otherwise acquire,  directly or indirectly,  any shares of its capital stock, or
make any distribution of cash, property or assets among the holders of shares of
its  capital  stock,  in each case  without  the prior  written  consent  of the
Required  Lenders;  or make any material  change in its capital  structure  that
could  reasonably be expected to have a Material  Adverse Effect;  provided that
(a) any Borrower may pay dividends in shares of its own capital  stock,  (b) any
Subsidiary  of a  Borrower  may pay  dividends  or make other  distributions  in
respect of its capital stock to such Borrower,  (c) any Subsidiary of a Borrower
may make payments on any Debt or other  obligation  owed to such Borrower  which
Debt or other obligation and such payment are permitted  hereunder and any other
applicable  Loan  Document and (d) as long as no Default or Event of Default has
occurred and is  continuing or would be created  thereby,  ACC stock owned by an
officer or  employee of ACC may be  repurchased  in an  aggregate  amount not to
exceed $2,000,000 per calendar year.
<PAGE>
 
         SECTION 10.8.  Limitations  on Exchange and Issuance of Capital  Stock.
Issue,  sell or otherwise  dispose of any class or series of capital stock that,
by its terms or by the terms of any  security  into which it is  convertible  or
exchangeable, is, or upon the happening of an event or passage of time would be,
(a)  convertible  or  exchangeable  into Debt or (b)  required to be redeemed or
repurchased, including at the option of the holder, in whole or in part, or has,
or upon the happening of an event or passage of time would have, a redemption or
similar  payment  due,  in any such  case  prior to ninety  (90) days  after the
Revolving Credit Termination Date.

         SECTION 10.9. Transactions with Affiliates. Directly or indirectly: (a)
make any loan or advance to, or purchase or assume any note or other  obligation
to or from, any of its officers, directors, shareholders or other Affiliates, or
to or from any member of the immediate family of any of its officers, directors,
shareholders  or other  Affiliates,  or subcontract any operations to any of its
Affiliates, or (b) enter into, or be a party to, any transaction with any of its
Affiliates,  except pursuant to the reasonable  requirements of its business and
upon fair and reasonable  terms that are fully disclosed to the Required Lenders
and are no less  favorable to it than would obtain in a comparable  arm's length
transaction with a Person not its Affiliate.

         SECTION 10.10. Certain Accounting Changes.  Change its Fiscal Year end,
or make any material change in its accounting  treatment and reporting practices
except as required by GAAP.

         SECTION 10.11.  Amendments;  Payments and  Prepayments of  Subordinated
Debt.  Amend or modify (or permit the  modification  or amendment of) any of the
terms or provisions  of any  Subordinated  Debt; or cancel or forgive,  make any
voluntary or optional  payment or prepayment  on, or redeem or acquire for value
(including without limitation by way of depositing with any trustee with respect
thereto money or  securities  before due for the purpose of paying when due) any
Subordinated Debt.

         SECTION 10.12.  Restrictive  Agreements.  (a) Enter into any Debt which
contains  any  negative  pledge  on  assets  or any  covenants  materially  more
restrictive  than the  provisions of Articles  VIII,  IX and X hereof,  or which
restricts,  limits or otherwise  encumbers its ability to incur Liens on or with
respect to any of its assets or  properties  other than the assets or properties
securing  such Debt,  or (b) enter into or permit to exist any  agreement  which
impairs or limits the ability of any  Subsidiary  of a Borrower to pay dividends
to such Borrower, unless the Required Lenders shall have previously consented in
writing to such agreement.

         SECTION 10.13.  Hedging  Agreements.  Enter into any Hedging Agreements
except: (a) Hedging Agreements  required by Section 8.13; (b) Hedging Agreements
executed by a Borrower  regarding  currency risk exposure in the ordinary course
of business with respect to  intercompany  loans and advances with durations not
to exceed  the  remaining  duration  of the Credit  Facility;  and (c) any other
Hedging  Agreement with a counterparty and upon terms and conditions  reasonably
satisfactory to the Managing Agents.
<PAGE>
 
                                   ARTICLE XI

                             UNCONDITIONAL GUARANTY

         SECTION  11.1.   Guaranty  of   Obligations.   The   Guarantor   hereby
unconditionally  guarantees to the Administrative  Agent for the ratable benefit
of the Agents  and the  Lenders,  and their  respective  successors,  endorsees,
transferees  and assigns,  the prompt payment and performance of all Obligations
of the Borrowers (other than ACC),  whether primary or secondary (whether by way
of endorsement or otherwise), whether now existing or hereafter arising, whether
or not from time to time reduced or extinguished  (except by payment thereof) or
hereafter  increased  or  incurred,  whether or not recovery may be or hereafter
become  barred  by  the  statute  of   limitations,   whether   enforceable   or
unenforceable as against any such Borrower, whether or not discharged, stayed or
otherwise  affected  by any  bankruptcy,  insolvency  or  other  similar  law or
proceeding, whether created directly with any Agent or Lender or acquired by any
Agent or Lender through assignment, endorsement or otherwise, whether matured or
unmatured, whether joint or several, as and when the same become due and payable
(whether at maturity or earlier, by reason of acceleration,  mandatory repayment
or otherwise),  in accordance with the terms of any such instruments  evidencing
any such  obligations,  including  all  renewals,  extensions  or  modifications
thereof (all Obligations of each such Borrower to any Agent or Lender, including
all  of  the  foregoing,  being  hereinafter  collectively  referred  to as  the
"Guaranteed Obligations").

         SECTION  11.2.  Nature of  Guaranty.  The  Guarantor  agrees  that this
Guaranty is a continuing,  unconditional guaranty of payment and performance and
not of  collection,  and that  its  obligations  under  this  Guaranty  shall be
primary, absolute and unconditional,  irrespective of, and unaffected by (a) the
genuineness, validity, regularity, enforceability or any future amendment of, or
change in, this  Agreement  or any other Loan  Document or any other  agreement,
document or instrument to which any such Borrower is or may become a party,  (b)
the absence of any action to enforce this Guaranty,  this Agreement or any other
Loan Document or the waiver or consent by the Administrative Agent or any Lender
with respect to any of the  provisions of this  Guaranty,  this Agreement or any
other Loan  Document,  (c) the  existence,  value or condition of, or failure to
perfect its Lien against,  any security for or other  guaranty of the Guaranteed
Obligations or any action, or the absence of any action,  by the  Administrative
Agent or any Lender in respect of such security or guaranty (including,  without
limitation,  the  release of any such  security  or  guaranty)  or (d) any other
action or  circumstances  which might otherwise  constitute a legal or equitable
discharge or defense of a surety or guarantor;  it being agreed by the Guarantor
that its obligations under this Guaranty shall not be discharged until the final
and indefeasible payment and performance, in full, of the Guaranteed Obligations
and the  termination  of the  Commitments.  The Guarantor  expressly  waives all
rights it may now or in the future  have under any  statute  (including  without
limitation  North  Carolina  General  Statutes  Section 26-7, et seq. or similar
law), or at law or in equity, or otherwise,  to compel the Administrative  Agent
or any Lender to proceed in respect of the  Guaranteed  Obligations  against any
such  Borrower or any other party or against any security for or other  guaranty
of the payment and performance of the Guaranteed  Obligations  before proceeding
against, or as a condition to proceeding against,  the Guarantor.  The Guarantor
further  expressly  waives  and agrees  not to assert or take  advantage  of any
defense  based  upon the  failure of the  Administrative  Agent or any Lender to
commence an action in respect of the Guaranteed
<PAGE>
 
Obligations  against any such Borrower,  the Guarantor or any other party or any
security for the payment and  performance  of the  Guaranteed  Obligations.  The
Guarantor  agrees  that  any  notice  or  directive  given  at any  time  to the
Administrative Agent or any Lender which is inconsistent with the waivers in the
preceding  two  sentences  shall  be null and  void  and may be  ignored  by the
Administrative  Agent  or  Lender,  and,  in  addition,  may not be  pleaded  or
introduced  as evidence in any  litigation  relating  to this  Guaranty  for the
reason that such pleading or introduction  would be at variance with the written
terms of this Guaranty, unless the Administrative Agent and the Required Lenders
have specifically agreed otherwise in writing.  The foregoing waivers are of the
essence of the transaction  contemplated by the Loan Documents and, but for this
Guaranty and such  waivers,  the Agents and Lenders  would decline to enter into
this Agreement.

         SECTION 11.3.  Demand by the  Administrative  Agent. In addition to the
terms set forth in Section  11.2,  and in no manner  imposing any  limitation on
such terms, if all or any portion of the then outstanding Guaranteed Obligations
under this  Agreement are declared to be immediately  due and payable,  then the
Guarantor shall, upon demand in writing therefor by the Administrative  Agent to
the Guarantor, pay all or such portion of the outstanding Guaranteed Obligations
then  declared due and payable.  Payment by the  Guarantor  shall be made to the
Administrative   Agent,   to  be  credited  and  applied  upon  the   Guaranteed
Obligations,  in immediately  available funds in the Permitted Currency in which
the relevant Guaranteed  Obligations are denominated to an account designated by
the Administrative Agent or at the Administrative Agent's office or at any other
address that may be specified in writing from time to time by the Administrative
Agent.

         SECTION 11.4.  Waivers. In addition to the waivers contained in Section
11.2,  the  Guarantor  waives,  and agrees  that it shall not at any time insist
upon, plead or in any manner whatever claim or take the benefit or advantage of,
any appraisal,  valuation, stay, extension,  marshalling of assets or redemption
laws, or  exemption,  whether now or at any time  hereafter in force,  which may
delay,  prevent or  otherwise  affect the  performance  by the  Guarantor of its
obligations under, or the enforcement by the Administrative Agent or the Lenders
of, this Guaranty.  The Guarantor further hereby waives diligence,  presentment,
demand, protest and notice of whatever kind or nature with respect to any of the
Guaranteed Obligations and waives the benefit of all provisions of law which are
or  might  be in  conflict  with  the  terms  of this  Guaranty.  The  Guarantor
represents, warrants and agrees that its obligations under this Guaranty are not
and shall not be subject to any  counterclaims,  offsets or defenses of any kind
against the  Administrative  Agent, the Lenders or any such Borrower whether now
existing or which may arise in the future.

         SECTION 11.5. Modification of Loan Documents etc. If the Administrative
Agent or the Lenders shall at any time or from time to time, with or without the
consent of, or notice to, the Guarantor  (a) change or extend the manner,  place
or terms of payment of, or renew or alter all or any portion of, the  Guaranteed
Obligations,  (b) take any action  under or in respect of the Loan  Documents in
the exercise of any remedy, power or privilege contained therein or available to
it at law, in equity or otherwise,  or waive or refrain from exercising any such
remedies,  powers or privileges,  (c) amend or modify, in any manner whatsoever,
the Loan  Documents,  (d)  extend  or waive  the  time  for  performance  by the
Guarantor, any such Borrower or any other Person of, or
<PAGE>
 
compliance with, any term,  covenant or agreement on its part to be performed or
observed  under a Loan  Document  (other  than  this  Guaranty),  or waive  such
performance  or compliance or consent to a failure of, or departure  from,  such
performance  or  compliance,  (e) take and hold security or  collateral  for the
payment of the Guaranteed Obligations or sell, exchange, release, dispose of, or
otherwise deal with, any property  pledged,  mortgaged or conveyed,  or in which
the Administrative  Agent or the Lenders have been granted a Lien, to secure any
Debt of the  Guarantor  or any such  Borrower to any Agent or the  Lenders,  (f)
release  anyone who may be liable in any manner for the  payment of any  amounts
owed by the Guarantor or any such Borrower to any Agent or Lender, (g) modify or
terminate the terms of any intercreditor or subordination  agreement pursuant to
which  claims of other  creditors  of the  Guarantor  or any such  Borrower  are
subordinated  to the  claims  of any  Agent or  Lender  or (h) apply any sums by
whomever  paid or however  realized to any amounts owing by the Guarantor or any
such  Borrower  to any Agent or Lender on  account  of the  Obligations  in such
manner  as  the  Administrative  Agent  or any  Lender  shall  determine  in its
reasonable  discretion;  then  neither the  Administrative  Agent nor any Lender
shall incur any  liability  to the  Guarantor as a result  thereof,  and no such
action  shall  impair or release the  obligations  of the  Guarantor  under this
Guaranty.

         SECTION 11.6. Reinstatement.  The Guarantor agrees that, if any payment
made by any such Borrower or any other Person  applied to the  Obligations is at
any time annulled, set aside, rescinded,  invalidated, declared to be fraudulent
or preferential or otherwise  required to be refunded or repaid, or the proceeds
of  Collateral  are  required  to be returned by any Agent or Lender to any such
Borrower, its estate, trustee,  receiver or any other party, including,  without
limitation, the Guarantor, under any Applicable Law or equitable cause, then, to
the extent of such payment or repayment,  the  Guarantor's  liability  hereunder
(and any Lien or Collateral securing such liability) shall be and remain in full
force and effect, as fully as if such payment had never been made, and, if prior
thereto,  this Guaranty shall have been canceled or surrendered (and if any Lien
or  Collateral  securing the  Guarantor's  liability  hereunder  shall have been
released  or  terminated  by virtue of such  cancellation  or  surrender),  this
Guaranty  (and such Lien or  Collateral)  shall be  reinstated in full force and
effect,  and such prior  cancellation or surrender shall not diminish,  release,
discharge,  impair or  otherwise  affect the  obligations  of the  Guarantor  in
respect of the amount of such payment (or any Lien or  Collateral  securing such
obligation).

         SECTION 11.7. No Subrogation. Until all amounts owing to the Agents and
Lenders on account of the  Obligations  are paid in full and the Commitments are
terminated,  the Guarantor hereby waives any claims or other rights which it may
now or hereafter acquire against any such Borrower that arise from the existence
or performance of the Guarantor's  obligations  under this Guaranty,  including,
without  limitation,  any  right  of  subrogation,  reimbursement,  exoneration,
indemnification,  any  right  to  participate  in any  claim  or  remedy  of the
Administrative  Agent or the Lenders against any such Borrower or any Collateral
which the Administrative Agent or the Lenders now have or may hereafter acquire,
whether or not such claim,  remedy or right arises in equity or under  contract,
statute or common law, by any payment  made  hereunder or  otherwise,  including
without  limitation,  the  right to take or  receive  from  any  such  Borrower,
directly or indirectly,  in cash or other property or by set-off or in any other
manner,  payment or  security on account of such claim or other  rights.  If any
amount shall be paid to the Guarantor on account of such rights at any time when
all of the Obligations shall not have been paid in full, such amount
<PAGE>
 
shall be held by the Guarantor in trust for the Administrative Agent, segregated
from other funds of the  Guarantor,  and shall,  forthwith  upon  receipt by the
Guarantor, be turned over to the Administrative Agent in the exact form received
by the Guarantor (duly indorsed by the Guarantor to the Administrative Agent, if
required) to be applied against the  Obligations,  whether matured or unmatured,
in such order as set forth herein.


                                   ARTICLE XII

                              DEFAULT AND REMEDIES

         SECTION 12.1. Events of Default. Each of the following shall constitute
an Event of Default,  whatever the reason for such event and whether it shall be
voluntary or  involuntary  or be effected by operation of law or pursuant to any
judgment  or  order  of any  court  or any  order,  rule  or  regulation  of any
Governmental Authority or otherwise:

         (a)  Default  in  Payment  of  Principal  of  Loans  and  Reimbursement
Obligations. Any Borrower shall default in any payment of principal of any Loan,
Note or Reimbursement Obligation when and as due (whether at maturity, by reason
of acceleration or otherwise);

         (b)  Other Payment  Default.  Any Borrower shall default in the payment
when and as due (whether at maturity, by reason of acceleration or otherwise) of
interest on any Loan,  Note or  Reimbursement  Obligation  or the payment of any
other  Obligation,  and such  default  shall  continue  unremedied  for five (5)
Business Days;

         (c) Misrepresentation. Any representation or warranty made or deemed to
be made by any Borrower or any of its  Subsidiaries  under this  Agreement,  any
Loan  Document or any  amendment  hereto or thereto,  shall at any time prove to
have been  incorrect or misleading  in any material  respect when made or deemed
made;

         (d) Default in  Performance  of Certain  Covenants.  Any Borrower shall
default in the performance or observance of any covenant or agreement  contained
in Sections 7.5(e), 8.12 or 8.15 or Articles IX or X of this Agreement;

         (e)  Default in  Performance of Other  Covenants  and  Conditions.  Any
Borrower or Subsidiary thereof shall default in the performance or observance of
any term,  covenant,  condition or agreement  contained in this Agreement (other
than as  specifically  provided for otherwise in this Section 12.1) or any other
Loan Document and such default  shall  continue for a period of thirty (30) days
after  written   notice   thereof  has  been  given  to  such  Borrower  by  the
Administrative Agent;

         (f)  Hedging  Agreement.  Any  termination  payment  shall  be due by a
Borrower under any Hedging Agreement and such amount is not paid within ten (10)
Business Days of the due date thereof;
<PAGE>
 
         (g)  Debt  Cross-Default.  ACC or any of  its  Subsidiaries  shall  (i)
default in the payment of any Debt  (other  than the Notes or any  Reimbursement
Obligation)  the  aggregate  outstanding  amount  of which  Debt is in excess of
$1,000,000 (or the equivalent thereof in any foreign currency) beyond the period
of grace if any,  provided in the instrument or agreement  under which such Debt
was  created;  or (ii) default in the  observance  or  performance  of any other
agreement  or  condition  relating  to any Debt  (other  than  the  Notes or any
Reimbursement  Obligation) the aggregate  outstanding amount of which Debt is in
excess of  $1,000,000  (or the  equivalent  thereof in any foreign  currency) or
contained  in any  instrument  or  agreement  evidencing,  securing  or relating
thereto or any other event shall occur or condition  exist,  the effect of which
default  or other  event or  condition  is to cause,  or to permit the holder or
holders of such Debt (or a trustee or agent on behalf of such holder or holders)
to cause,  with the  giving of notice if  required,  any such Debt to become due
prior to its stated maturity (any applicable grace period having expired);

         (h) Other Cross-Defaults.  ACC or any of its Subsidiaries shall default
in the payment when due, or in the performance or observance,  of any obligation
or  condition  of any  Material  Contract,  or any  Material  Contract  shall be
terminated,  the breach or termination of which could  reasonably be expected to
have a Material  Adverse  Effect unless,  with respect to any such default,  but
only as long as, the existence of any such default is being  contested by ACC or
such Subsidiary in good faith by appropriate  proceedings and adequate  reserves
in respect thereof have been  established on the books of ACC or such Subsidiary
to the extent required by GAAP;

         (i)  Change in  Control.  Any person or group of  persons  (within  the
meaning of Section  13(d) of the  Securities  Exchange Act of 1934,  as amended)
other than current management thereof,  shall obtain ownership or control in one
or more series of  transactions  of more than twenty percent (20%) of the common
stock or twenty percent (20%) of the voting power of ACC entitled to vote in the
election  of  members  of the  board of  directors  of ACC or there  shall  have
occurred under any indenture or other  instrument  evidencing any Debt in excess
of $1,000,000 (or the equivalent thereof in any foreign currency) any "change in
control" (as defined in such indenture or other evidence of Debt) obligating ACC
to  repurchase,  redeem  or repay all or any part of the Debt or  capital  stock
provided for therein (any such event, a "Change in Control");

         (j) Voluntary Bankruptcy Proceeding. Any Borrower or Subsidiary thereof
shall (i) commence a voluntary case under the federal bankruptcy laws (as now or
hereafter  in effect);  (ii) file a petition  or proposal or commence  any other
proceeding  seeking to take  advantage  of any other laws,  domestic or foreign,
relating to bankruptcy,  insolvency,  reorganization,  winding up or composition
for  adjustment of debts;  (iii) consent to or fail to contest within sixty (60)
days of the filing thereof any petition filed or proceeding commenced against it
in an involuntary  case under such bankruptcy laws or other laws; (iv) apply for
or  consent  to, or fail to  contest in a timely  and  appropriate  manner,  the
appointment  of, or the  taking of  possession  by, a  receiver,  administrator,
custodian,  trustee,  or liquidator  of itself or of a  substantial  part of its
property,  domestic or foreign;  (v) admit in writing its  inability  to pay its
debts as they  become  due;  (vi) make a general  assignment  for the benefit of
creditors; or (vii) take any corporate action for the purpose of authorizing any
of the foregoing;
<PAGE>
 
         (k)  Involuntary  Bankruptcy  Proceeding.  A case,  petition  or  other
proceeding shall be commenced against any Borrower or Subsidiary  thereof in any
court of competent  jurisdiction seeking (i) relief under the federal bankruptcy
laws (as now or  hereafter  in  effect)  or under any other  laws,  domestic  or
foreign,  relating  to  bankruptcy,  insolvency,  reorganization,  winding up or
adjustment  of  debts;  or  (ii)  the   appointment  of  a  trustee,   receiver,
administrator,  custodian, liquidator or the like for any Borrower or Subsidiary
thereof or for all or any substantial part of their respective assets,  domestic
or foreign,  and such case or proceeding  shall continue,  without  dismissal or
stay, for a period of sixty (60) consecutive calendar days, or an order granting
the relief requested in such case,  petition or proceeding  (including,  but not
limited  to, an order for relief  under such  federal  bankruptcy  laws or other
laws) shall be entered;

         (l) Failure of Agreements.  Any material provision of this Agreement or
of any other Loan Document shall for any reason cease to be valid and binding on
any Borrower or Subsidiary thereof or any such Person shall so state in writing,
or this  Agreement  or any other Loan  Document  shall for any  reason  cease to
create a valid and perfected  first  priority Lien on, or security  interest in,
any of the Collateral  purported to be covered thereby,  in each case other than
in accordance with the express terms hereof or thereof;

         (m) Termination  Event. The occurrence of any of the following  events:
(i) ACC or any  ERISA  Affiliate  fails  to make  full  payment  when due of all
amounts  which,  under the  provisions of any Pension Plan or Section 412 of the
Code, ACC or any ERISA  Affiliate is required to pay as  contributions  thereto;
(ii) an accumulated funding deficiency in excess of $1,000,000 occurs or exists,
whether or not waived,  with respect to any Pension  Plan;  (iii) a  Termination
Event; (iv) a Canadian  Termination  Event; or (v) ACC or any ERISA Affiliate as
employers  under one or more  Multiemployer  Plan  makes a  complete  or partial
withdrawal  from  any such  Multiemployer  Plan  and the  plan  sponsor  of such
Multiemployer  Plans notifies such  withdrawing  employer that such employer has
incurred  a  withdrawal  liability  requiring  payments  in an amount  exceeding
$1,000,000;

         (n) Judgment. A judgment or order for the payment of money which causes
the  aggregate  amount  of  all  such  judgments  to  exceed  $1,000,000  or the
Alternative  Currency Amount thereof in any Fiscal Year shall be entered against
ACC or any of its  Subsidiaries  by any court and such  judgment  or order shall
continue, without discharge or stay, for a period of thirty (30) days;

         (o) Loss of License.  Any Communications  License, PUC Authorization of
ACC or any Subsidiary thereof shall expire,  terminate, be canceled or otherwise
lost or any application  therefor be rejected,  which event could  reasonably be
expected to have a Material Adverse Effect;

         SECTION  12.2.  Remedies.  Upon the  occurrence of an Event of Default,
with the consent of the Required Lenders,  the Administrative Agent may, or upon
the request of the Required Lenders,  the Administrative  Agent shall, by notice
to the Borrowers:

         (a) Acceleration;  Termination of Facilities.  Declare the principal of
and interest on the Loans,  the Notes and the  Reimbursement  Obligations at the
time  outstanding,  and all other  amounts owed to the Lenders and to the Agents
under this Agreement or any of the other Loan
<PAGE>
 
Documents (including,  without limitation,  all L/C Obligations,  whether or not
the beneficiaries of the then outstanding Letters of Credit shall have presented
the documents required  thereunder) and all other  Obligations,  to be forthwith
due and payable,  whereupon  the same shall  immediately  become due and payable
without presentment,  demand,  protest or other notice of any kind, all of which
are expressly waived,  anything in this Agreement or the other Loan Documents to
the contrary notwithstanding, and terminate the Credit Facility and any right of
the Borrowers to request borrowings or Letters of Credit  thereunder;  provided,
that upon the occurrence of an Event of Default  specified in Section 12.1(j) or
(k), the Credit Facility shall be  automatically  terminated and all Obligations
shall automatically become due and payable.

         (b)  Letters of Credit.  With  respect  to all  Letters of Credit  with
respect to which presentment for honor shall not have occurred at the time of an
acceleration pursuant to the preceding paragraph,  require the Borrowers at such
time to deposit in a cash collateral account opened by the Administrative  Agent
an amount  equal to the  aggregate  L/C  Obligations.  Amounts held in such cash
collateral account shall be applied by the  Administrative  Agent to the payment
of drafts drawn under such  Letters of Credit,  and the unused  portion  thereof
after all such Letters of Credit shall have expired or been fully drawn upon, if
any, shall be applied to repay the other Obligations.  After all such Letters of
Credit shall have expired or been fully drawn upon, the Reimbursement Obligation
shall  have been  satisfied  and all other  Obligations  shall have been paid in
full, the balance,  if any, in such cash collateral account shall be returned to
such Borrower or such other Person that may be entitled thereto.

         (c) Rights of Collection.  Exercise on behalf of the Lenders all of its
other rights and remedies  under this  Agreement,  the other Loan  Documents and
Applicable Law, in order to satisfy all of the Borrowers' Obligations.

         SECTION  12.3.  Rights and Remedies  Cumulative;  Non-Waiver;  etc. The
enumeration  of the rights and  remedies of the Agents and the Lenders set forth
in this  Agreement  is not  intended to be  exhaustive  and the  exercise by the
Agents and the Lenders of any right or remedy shall not preclude the exercise of
any other rights or remedies, all of which shall be cumulative,  and shall be in
addition  to any  other  right or  remedy  given  hereunder  or  under  the Loan
Documents or that may now or  hereafter  exist in law or in equity or by suit or
otherwise. No delay or failure to take action on the part of any Agent or Lender
in exercising any right,  power or privilege  shall operate as a waiver thereof,
nor shall any single or partial  exercise of any such right,  power or privilege
preclude other or further  exercise  thereof or the exercise of any other right,
power or privilege or shall be construed to be a waiver of any Event of Default.
No course of dealing between the Borrowers,  the Agents and the Lenders or their
respective agents or employees shall be effective to change, modify or discharge
any  provision  of this  Agreement  or any of the  other  Loan  Documents  or to
constitute  a waiver of any Event of  Default.  In  addition,  any  election  of
remedies  which  results  in  the  denial  or  impairment  of the  right  of the
Administrative Agent to seek a deficiency judgment against any Borrower referred
to in Section 11.1 shall not impair the  Guarantor's  obligation to pay the full
amount of the Guaranteed Obligations.
<PAGE>
 
         SECTION  12.4.  Consents.   The  Borrowers   acknowledge  that  certain
transactions  contemplated  by this  Agreement and the other Loan  Documents and
certain  actions which may be taken by the Agents or the Lenders in the exercise
of their respective rights under this Agreement and the other Loan Documents may
require  the  consent  of a  Governmental  Authority.  If  counsel  to any Agent
reasonably  determines that the consent of a Governmental  Authority is required
in  connection  with  the  execution,  delivery  and  performance  of any of the
aforesaid  documents or any documents  delivered to the Agents or the Lenders in
connection  therewith or as a result of any action  which may be taken  pursuant
thereto, then the Borrowers,  at their sole cost and expense, agree to use their
best  efforts to secure such  consent and to  cooperate  with the Agents and the
Lenders in any action commenced by any Agent or Lender to secure such consent.

         SECTION 12.5.  Judgment  Currency.  The  obligation of the Borrowers to
make payments of the  principal of and interest on the Notes and the  obligation
of the  Guarantor  to  make  payments  on the  Guaranteed  Obligations  and  the
obligation  of any such  Person to make  payments of any other  amounts  payable
hereunder or pursuant to any other Loan  Document in the currency  specified for
such payment shall not be discharged or satisfied by any tender, or any recovery
pursuant to any  judgment,  which is expressed  in or  converted  into any other
currency,  except to the extent that such tender or recovery shall result in the
actual  receipt  by each of the  Administrative  Agent and  Lenders  of the full
amount of the particular  Permitted Currency expressed to be payable pursuant to
the applicable Loan Document.  The Administrative Agent shall, using all amounts
obtained or received from the Borrowers  pursuant to any such tender or recovery
in payment of principal of and interest on the  Obligations,  promptly  purchase
the  applicable  Permitted  Currency at the most  favorable  spot  exchange rate
determined by the Administrative  Agent to be available to it. The obligation of
the Borrowers to make payments in the  applicable  Permitted  Currency  shall be
enforceable  as an  alternative  or  additional  cause of action  solely for the
purpose of recovering in the applicable  Permitted  Currency the amount, if any,
by which  such  actual  receipt  shall  fall  short of the  full  amount  of the
Permitted  Currency  expressed  to be payable  pursuant to the  applicable  Loan
Document.
<PAGE>
 
         SECTION 12.6. Adjustments.  If any Lender (a "Benefitted Lender") shall
at any time receive any payment of all or part of its  Extensions of Credit,  or
interest  thereon,  or if any Lender shall at any time receive any Collateral in
respect to its Extensions of Credit (whether  voluntarily or  involuntarily,  by
set-off  or  otherwise)  in a greater  proportion  than any such  payment to and
Collateral  received  by any other  Lender,  if any,  in  respect  of such other
Lender's  Loans or  other  Extensions  of  Credit,  or  interest  thereon,  such
Benefitted Lender shall purchase for cash from the other Lenders such portion of
each such other  Lender's  Extensions  of Credit,  or shall  provide  such other
Lenders with the benefits of any such Collateral,  or the proceeds  thereof,  as
shall be necessary to cause such  Benefitted  Lender to share the excess payment
or benefits of such  Collateral  or proceeds  ratably  with each of the Lenders;
provided,  that if all or any  portion of such  excess  payment or  benefits  is
thereafter  recovered  from  such  Benefitted  Lender,  such  purchase  shall be
rescinded,  and the purchase  price and benefits  returned to the extent of such
recovery,  but  without  interest.  The  Borrowers  agree  that  each  Lender so
purchasing a portion of another  Lender's  Extensions of Credit may exercise all
rights of  payment  (including,  without  limitation,  rights of  set-off)  with
respect to such  portion as fully as if such  Lender  were the direct  holder of
such portion.


                                  ARTICLE XIII

                                   THE AGENTS

         SECTION  13.1  Appointment.  Each  of the  Lenders  hereby  irrevocably
designates and appoints First Union as  Administrative  Agent and Managing Agent
of such  Lender  and Fleet as  Managing  Agent and  Documentation  Agent of such
Lender under this  Agreement  and the other Loan  Documents and each such Lender
irrevocably  authorizes First Union as  Administrative  Agent and Managing Agent
and Fleet as Managing  Agent and  Documentation  Agent,  respectively,  for such
Lender, to take such action on its behalf under the provisions of this Agreement
and the other Loan Documents and to exercise such powers and perform such duties
as are expressly delegated to each such Agent by the terms of this Agreement and
such other Loan  Documents,  together  with such other powers as are  reasonably
incidental  thereto.  Notwithstanding any provision to the contrary elsewhere in
this Agreement or such other Loan  Documents,  none of the Agents shall have any
duties or responsibilities, except those expressly set forth herein and therein,
or any  fiduciary  relationship  with  any  Lender,  and no  implied  covenants,
functions,  responsibilities,  duties,  obligations or liabilities shall be read
into this Agreement or the other Loan Documents or otherwise  exist against such
Agent.  To the extent any  provision  of this  Agreement  permits  action by any
Agent,  such Agent shall,  subject to the provisions of Section 13.11 hereof and
of this  Article  XII,  take such  action if directed in writing to do so by the
Required Lenders.

         SECTION 13.2.  Delegation of Duties. Each of the Agents may execute any
of its respective duties under this Agreement and the other Loan Documents by or
through agents or  attorneys-in-fact  and shall be entitled to advice of counsel
concerning all matters  pertaining to such duties. No Agent shall be responsible
for the negligence or misconduct of any agents or attorneys-in-fact  selected by
such Agent with reasonable care.
<PAGE>
 
         SECTION 13.3. Exculpatory Provisions.  Neither any Agent nor any of its
officers,  directors,  employees,  agents,  attorneys-in-fact,  Subsidiaries  or
Affiliates  shall be (a) liable for any action  lawfully  taken or omitted to be
taken by it or such Person  under or in  connection  with this  Agreement or the
other Loan  Documents  (except for its or such Person's own gross  negligence or
willful misconduct),  or (b) responsible in any manner to any of the Lenders for
any recitals, statements, representations or warranties made by the Borrowers or
any of their  Subsidiaries or any officer thereof contained in this Agreement or
the other Loan  Documents  or in any  certificate,  report,  statement  or other
document  referred to or provided  for in, or received by such Agent under or in
connection  with,  this  Agreement or the other Loan Documents or for the value,
validity,  effectiveness,  genuineness,  enforceability  or  sufficiency of this
Agreement or the other Loan Documents or for any failure of the Borrowers or any
of their  Subsidiaries  to perform its obligations  hereunder or thereunder.  No
Agent shall be under any  obligation to any Lender to ascertain or to inquire as
to the  observance  or  performance  of any of the  agreements  contained in, or
conditions of, this Agreement, or to inspect the properties, books or records of
the Borrowers or any of their Subsidiaries.

         SECTION 13.4.  Reliance by Agents. Each of the Agents shall be entitled
to rely,  and shall be fully  protected  in  relying,  upon any  note,  writing,
resolution,   notice,  consent,   certificate,   affidavit,  letter,  cablegram,
telegram,  telecopy,  telex  or  teletype  message,  statement,  order  or other
document  or  conversation  believed by it to be genuine and correct and to have
been  signed,  sent or made by the proper  Person or Persons and upon advice and
statements  of legal  counsel  (including,  without  limitation,  counsel to the
Borrowers),  independent  accountants  and other experts  selected by any Agent.
Each of the Agents may deem and treat the payee of any Note as the owner thereof
for all purposes unless such Note shall have been transferred in accordance with
Section 14.10 hereof.  Each of the Agents shall be fully justified in failing or
refusing to take any action under this  Agreement  and the other Loan  Documents
unless it shall first receive such advice or concurrence of the Required Lenders
(or, when expressly required hereby or by the relevant other Loan Document,  all
the Lenders) as it deems  appropriate  or it shall first be  indemnified  to its
satisfaction  by the Lenders against any and all liability and expense which may
be  incurred  by it by reason of taking or  continuing  to take any such  action
except for its own gross  negligence or willful  misconduct.  Each of the Agents
shall in all cases be fully  protected in acting,  or in refraining from acting,
under this Agreement and the Notes in accordance  with a request of the Required
Lenders (or, when expressly required hereby, all the Lenders),  and such request
and any action  taken or failure to act pursuant  thereto  shall be binding upon
all the Lenders and all future holders of the Notes.

         SECTION 13.5. Notice of Default.  None of the Agents shall be deemed to
have  knowledge or notice of the  occurrence  of any Default or Event of Default
hereunder unless it has received notice from a Lender or a Borrower referring to
this  Agreement,  describing  such  Default or Event of Default and stating that
such notice is a "notice of default".  In the event that any Agent receives such
a notice, it shall promptly give notice thereof to the Administrative  Agent who
shall  promptly give notice  thereof to the Lenders.  The  Administrative  Agent
shall take such action with respect to such Default or Event of Default as shall
be reasonably  directed by the Required Lenders;  provided that unless and until
the Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or
<PAGE>
 
refrain  from  taking  such  action,  with  respect to such  Default or Event of
Default as it shall deem advisable in the best interests of the Lenders.

         SECTION  13.6.  Non-Reliance  on Such  Agents and Other  Lenders.  Each
Lender  expressly  acknowledges  that  none  of the  Agents  nor  any  of  their
respective   officers,   directors,   employees,   agents,    attorneys-in-fact,
Subsidiaries or Affiliates has made any  representations or warranties to it and
that no act by any Agent hereinafter taken,  including any review of the affairs
of the Borrowers or any of its  Subsidiaries,  shall be deemed to constitute any
representation  or warranty by such Agent to any Lender.  Each Lender represents
to the Agents that it has, independently and without reliance upon the Agents or
any other Lender,  and based on such documents and  information as it has deemed
appropriate,  made its own  appraisal of and  investigation  into the  business,
operations,  property, financial and other condition and creditworthiness of the
Borrowers and their Subsidiaries and made its own decision to make its Loans and
issue or  participate  in  Letters  of  Credit  hereunder  and  enter  into this
Agreement.  Each Lender also represents that it will,  independently and without
reliance  upon any Agent or any other  Lender,  and based on such  documents and
information as it shall deem  appropriate at the time,  continue to make its own
credit  analysis,  appraisals and decisions in taking or not taking action under
this Agreement and the other Loan Documents,  and to make such  investigation as
it deems  necessary to inform itself as to the business,  operations,  property,
financial and other  condition and  creditworthiness  of the Borrowers and their
Subsidiaries. Except for notices, reports and other documents expressly required
to be  furnished  to the  Lenders  by any Agent  hereunder  or by the other Loan
Documents,  no Agent shall have any duty or responsibility to provide any Lender
with any  credit  or other  information  concerning  the  business,  operations,
property,  financial and other condition or creditworthiness of the Borrowers or
any of their  Subsidiaries  which may come into the  possession of such Agent or
any of its respective officers, directors, employees, agents, attorneys-in-fact,
Subsidiaries or Affiliates.
<PAGE>
 
         SECTION  13.7.  Indemnification.  The Lenders  agree to  indemnify  the
Administrative Agent and the Managing Agents in their capacities as such and (to
the extent not  reimbursed by the Borrowers and without  limiting the obligation
of the Borrowers to do so), ratably  according to the respective  amounts of the
Obligations  then  owing  them,  from  and  against  any  and  all  liabilities,
obligations,  losses,  damages,  penalties,  actions,  judgments,  suits, costs,
expenses  or  disbursements  of any  kind  whatsoever  which  may  at  any  time
(including,  without limitation,  at any time following the payment of the Notes
or any Reimbursement  Obligation) be imposed on, incurred by or asserted against
any such Agent in any way  relating to or arising out of this  Agreement  or the
other Loan Documents,  or any documents contemplated by or referred to herein or
therein or the transactions  contemplated  hereby or thereby or any action taken
or omitted  by such  Agent  under or in  connection  with any of the  foregoing;
provided  that no Lender  shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs,  expenses or disbursements  resulting solely from such Agent's bad faith,
gross  negligence  or willful  misconduct.  The  agreements in this Section 13.7
shall survive the payment of the Notes,  any  Reimbursement  Obligation  and all
other amounts payable hereunder and the termination of this Agreement.

         SECTION 13.8. Each of the Agents in Its Individual Capacity. Each Agent
and its  respective  Subsidiaries  and  Affiliates  may make  loans  to,  accept
deposits from and generally engage in any kind of business with each Borrower as
though such Agent were not an Agent hereunder. With respect to any Loans made or
renewed  by it and any Note  issued to it,  and with  respect  to any  Letter of
Credit  issued by it or  participated  in by it,  each Agent shall have the same
rights  and powers  under this  Agreement  and the other Loan  Documents  as any
Lender and may exercise  the same as though it were not an Agent,  and the terms
"Lender" and "Lenders" shall include the Administrative  Agents and the Managing
Agents in their individual capacity.

         SECTION 13.9.  Resignation of Agents;  Successor Agents.  Each Managing
Agent may  resign  as such  Agent at any time by giving  notice  thereof  to the
Lenders  and  the  Borrowers.   If  both  Managing  Agents  have  resigned,  the
Administrative  Agent shall serve as a Managing Agent hereunder.  Subject to the
appointment and acceptance of a successor as provided below, the  Administrative
Agent may resign at any time by giving  notice  thereof to the  Lenders  and the
Borrowers. Upon any such resignation,  the Required Lenders shall have the right
to appoint a successor  Administrative  Agent which successor shall have minimum
capital  and  surplus  of at  least  $500,000,000  and  be  consented  to by the
Borrowers,  such  consent  not  to be  unreasonably  withheld.  If no  successor
Administrative  Agent shall have been so appointed  by the Required  Lenders and
shall have accepted such appointment  within thirty (30) days after the retiring
Administrative  Agent's  giving  of  notice of  resignation,  then the  retiring
Administrative  Agent  may,  on  behalf  of the  Lenders,  appoint  a  successor
Administrative  Agent, which successor shall have minimum capital and surplus of
at least $500,000,000.  Upon the acceptance of any appointment as Administrative
Agent   hereunder   by  a   successor   Administrative   Agent  such   successor
Administrative  Agent  shall  thereupon  succeed to and become  vested  with all
rights, powers,  privileges and duties of the retiring Administrative Agent, and
the  retiring  Administrative  Agent  shall be  discharged  from its  duties and
obligations hereunder.  After any retiring Administrative Agent's resignation or
removal hereunder as Administrative Agent the provisions
<PAGE>
 
of this Section 13.9 shall  continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as Administrative
Agent.

         SECTION 13.10  Documentation  Agent.  The  Documentation  Agent, in its
capacity as documentation agent, shall have no duties or responsibilities and no
liabilities under this Agreement or any other Loan Document.


                                   ARTICLE XIV

                                  MISCELLANEOUS

         SECTION 14.1.  Notices.

         (a)  Method of  Communication.  Except as  otherwise  provided  in this
Agreement,  all notices and communications  hereunder shall be in writing, or by
telephone  subsequently  confirmed in writing.  Any notice shall be effective if
delivered by hand delivery or sent via telecopy,  recognized  overnight  courier
service or certified mail, return receipt requested, and shall be presumed to be
received by a party  hereto (i) on the date of delivery if  delivered by hand or
sent by telecopy,  (ii) on the next Business Day if sent by recognized overnight
courier  service and (iii) on the third  Business Day following the date sent by
certified mail,  return receipt  requested.  A telephonic notice to any Agent as
understood by such Agent will be deemed to be the  controlling and proper notice
in the event of a  discrepancy  with or failure to receive a confirming  written
notice.

         (b) Addresses for Notices.  Notices to any party shall be sent to it at
the following addresses,  or any other address as to which all the other parties
are notified in writing.

         If to any Borrower:         ACC Corp.
                                     400 West Avenue
                                     Rochester, New York  14611
                                     Attention:  Michael R. Daley,
                                                     Executive Vice President
                                                     and Chief Financial Officer
                                     Telephone No.:  (716) 987-3175
                                     Telecopy No.:   (716) 987-3335

         With copies to:             Nixon, Hargrave, Devans & Doyle
                                     Clinton Square
                                     P.O. Box 1051
                                     Rochester, New York  14603
                                     Attention:  James A. Locke III, Esq.
                                     Telephone No.:  (716) 263-1000
                                     Telecopy No.:   (716) 263-1600
<PAGE>
 
         If to First Union as        First Union National Bank
         Administrative Agent        One First Union Center, TW-10
         or Managing Agent:          301 S. College Street
                                     Charlotte, North Carolina 28288-0608
                                     Attention: Syndication Agency Services
                                     Telephone No.: (704) 374-2698
                                     Telecopy No.: (704) 383-0288


         If to Fleet                 Fleet National Bank
         as Managing Agent           75 State Street  MABOF10C
         or Documentation            Boston, Massachusetts  02109
         Agent:                      Attention: Chris Swindell
                                     Telephone No.: (617) 346-5579
                                     Telecopy No.:  (617) 346-3777

         If to any Lender:           The Address set forth on Schedule 1.1

                                                             
         (c)  Administrative  Agent's Office.  The  Administrative  Agent hereby
designates its office located at the address set forth above,  or any subsequent
office which shall have been specified for such purpose by written notice to the
Borrowers and Lenders, as the Administrative  Agent's Office referred to herein,
to which payments due are to be made and at which Revolving Credit Loans will be
disbursed and Letters of Credit issued.

         SECTION  14.2.  Expenses.  (a) The  Borrowers  will pay all  reasonable
out-of-pocket  expenses  of (i) the  Managing  Agents  in  connection  with  the
preparation, execution and delivery of this Agreement and each of the other Loan
Documents,  whenever the same shall be executed  and  delivered,  including  all
out-of-pocket  syndication and due diligence expenses,  appraiser's fees, search
fees,  title insurance  premiums,  recording fees, taxes and reasonable fees and
disbursements of counsel,  including  foreign counsel,  for the Managing Agents;
(ii) the Managing  Agents in  connection  with the  preparation,  execution  and
delivery  of any  waiver,  amendment  or consent  by the  Agents or the  Lenders
relating  to  this  Agreement  or any  of the  other  Loan  Documents  including
reasonable fees and  disbursements of counsel,  including  foreign counsel,  for
such Agents, search fees,  appraiser's fees, recording fees and taxes imposed in
connection  therewith;   and  (iii)  the  Managing  Agents  in  connection  with
administering  and enforcing their respective  rights under the Credit Facility,
including   consulting   with  one  or  more  Persons,   including   appraisers,
accountants, engineers and attorneys, including foreign attorneys, concerning or
related to the nature, scope or value of any right or remedy of any Agent or any
of the Lenders hereunder or under any of the other Loan Documents, including any
review of factual matters in connection therewith,  which expenses shall include
the reasonable fees and disbursements of such Persons.

         (b) The Guarantor  agrees that it will  reimburse each Agent and Lender
for all expenses (including  reasonable attorneys fees and expenses) incurred by
each Agent or Lender in connection  with the  obligations of the Guarantor under
the Guaranty and any other Loan
<PAGE>
 
Documents and all expenses  (including  reasonable  attorneys fees and expenses)
incurred by the Administrative Agent, any Agent or any Lender in connection with
the enforcement of the Guaranty.

         SECTION  14.3.  Set-off.  In  addition  to any rights now or  hereafter
granted  under  Applicable  Law and not by way of limitation of any such rights,
upon and after the occurrence of any Event of Default and during the continuance
thereof,  the Lenders and any assignee or  participant of a Lender in accordance
with Section  14.10 are hereby  authorized  by the Borrowers at any time or from
time to time,  without notice to the Borrowers or to any other Person,  any such
notice being hereby expressly waived, to set off and to appropriate and to apply
any and all deposits  (general or special,  time or demand,  including,  but not
limited to, indebtedness  evidenced by certificates of deposit,  whether matured
or unmatured,  excluding government  securities required by Applicable Law to be
held as security for  worker's  compensation  and similar  claims) and any other
indebtedness  at any time held or owing by the Lenders,  or any such assignee or
participant  to or for the credit or the  account of a Borrower  against  and on
account of the  Obligations of such Borrower  irrespective of whether or not (a)
the Lenders shall have made any demand under this  Agreement or any of the other
Loan Documents or (b) the Administrative Agent shall have declared any or all of
the  Obligations to be due and payable as permitted by Section 12.2 and although
such Obligations shall be contingent or unmatured.

         SECTION 14.4.  Governing Law. This  Agreement,  the Notes and the other
Loan Documents,  unless otherwise expressly set forth therein, shall be governed
by,  construed  and enforced in  accordance  with the laws of the State of North
Carolina,  without  reference  to the  conflicts  or  choice  of law  principles
thereof.

         SECTION 14.5. Consent to Jurisdiction. The Borrowers hereby irrevocably
consent to the personal  jurisdiction of the state and federal courts located in
Mecklenburg  County,  North Carolina,  in any action,  claim or other proceeding
arising out of any dispute in connection with this Agreement,  the Notes and the
other Loan Documents, any rights or obligations hereunder or thereunder,  or the
performance of such rights and  obligations.  The Borrowers  hereby  irrevocably
consent  to the  service of a summons  and  complaint  and other  process in any
action,  claim or proceeding  brought by any Agent or Lender in connection  with
this Agreement, the Notes or the other Loan Documents, any rights or obligations
hereunder or thereunder,  or the performance of such rights and obligations,  on
behalf of itself or its  property,  in the manner  specified  in  Section  14.1.
Nothing in this  Section  14.5 shall  affect the right of any Agent or Lender to
serve legal process in any other manner  permitted by  Applicable  Law or affect
the right of any Agent or Lender to bring any action or  proceeding  against any
Borrower or its properties in the courts of any other jurisdictions.

         SECTION 14.6.  Binding Arbitration; Waiver of Jury Trial.

         (a) Binding  Arbitration.  If in the  reasonable  determination  of the
Administrative  Agent and its counsel,  Section 14.6(b) is  unenforceable  under
North Carolina law unless paired with a binding arbitration provision, then upon
demand of any party  made  within  ninety  (90) days  after  institution  of any
judicial proceeding, any dispute, claim or controversy between a Lender (or
<PAGE>
 
group of Lenders)  and a Borrower (or group of Borrowers ) (but not any dispute,
claim or controversy  among any Lenders not involving any Borrower)  arising out
of,  connected  with or  relating  to the  Notes  or any  other  Loan  Documents
("Dispute"),  between or among  parties to the Notes or any other Loan  Document
shall be resolved by binding  arbitration as provided  herein.  Institution of a
judicial  proceeding by a party does not waive the right of that party to demand
arbitration hereunder.  Disputes may include,  without limitation,  tort claims,
counterclaims,  claims  brought  as class  actions,  claims  arising  from  Loan
Documents  executed in the future,  or claims concerning any aspect of the past,
present  or  future  relationships  arising  out of or  connected  with the Loan
Documents.  Arbitration  shall be conducted under and governed by the Commercial
Financial Disputes  Arbitration Rules (the "Arbitration  Rules") of the American
Arbitration Association,  modified to incorporate the discovery rights contained
in the  Federal  Rules of Civil  Procedure  and  Title 9 of the U.S.  Code.  All
arbitration  hearings  shall be  conducted in  Charlotte,  North  Carolina.  The
expedited  procedures  set forth in Rule 51, et seq.  of the  Arbitration  Rules
shall be applicable to claims of less than $1,000,000.  All applicable  statutes
of  limitation  shall  apply to any  Dispute.  A judgment  upon the award may be
entered in any court having  jurisdiction.  The panel from which all arbitrators
are selected  shall be comprised of licensed  attorneys.  The single  arbitrator
selected for expedited procedure shall be a retired judge from the highest court
of general  jurisdiction,  state or federal, of the state where the hearing will
be conducted.  Notwithstanding the foregoing,  this paragraph shall not apply to
any Hedging Agreement that is a Loan Document.

         (b) Jury Trial. TO THE EXTENT  PERMITTED BY APPLICABLE LAW, EACH AGENT,
LENDER AND EACH BORROWER HEREBY  IRREVOCABLY  WAIVE THEIR RESPECTIVE RIGHTS TO A
JURY TRIAL WITH RESPECT TO ANY ACTION,  CLAIM OR OTHER PROCEEDING ARISING OUT OF
ANY  DISPUTE  IN  CONNECTION  WITH THIS  AGREEMENT,  THE NOTES OR THE OTHER LOAN
DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER, OR THE PERFORMANCE
OF SUCH RIGHTS AND OBLIGATIONS.

         (c)  Preservation of Certain  Remedies.  Notwithstanding  the preceding
binding arbitration provisions,  the parties hereto and the other Loan Documents
preserve,  without diminution,  certain remedies that such Persons may employ or
exercise  freely,  either alone, in conjunction  with or during a Dispute.  Each
such Person shall have and hereby  reserves the right to proceed in any court of
proper  jurisdiction  or by self help to exercise  or  prosecute  the  following
remedies:  (i) all rights to foreclose or otherwise  realize against any real or
personal  property  or other  security  by  exercising  a power of sale or other
remedies against such property or security provided for in the Loan Documents or
under  Applicable Law or by judicial  foreclosure  and sale,  (ii) all rights of
self help including peaceful occupation of property and collection of rents, set
off, and  peaceful  possession  of  property,  (iii)  obtaining  provisional  or
ancillary remedies  including  injunctive  relief,  sequestration,  garnishment,
attachment,  appointment  of receiver  and in filing an  involuntary  bankruptcy
proceeding,  and (iv) when  applicable,  a judgment by  confession  of judgment.
Preservation  of these  remedies  does not limit the power of an  arbitrator  to
grant similar remedies that may be requested by a party in a Dispute.
<PAGE>
 
         SECTION 14.7. Reversal of Payments.  To the extent any Borrower makes a
payment or payments to the  Administrative  Agent or other Agent for the ratable
benefit of the  Lenders  (or the other  Agents) or the  Administrative  Agent or
other Agent receives any payment or proceeds of the Collateral which payments or
proceeds  or any part  thereof  are  subsequently  invalidated,  declared  to be
fraudulent or preferential, set aside and/or required to be repaid to a trustee,
receiver or any other party  under any  bankruptcy  law,  state,  provincial  or
federal law, common law or equitable cause,  then, to the extent of such payment
or proceeds  repaid,  the  Obligations or part thereof  intended to be satisfied
shall be revived and  continued  in full force and effect as if such  payment or
proceeds had not been received by any Agent.

         SECTION 14.8.  Injunctive Relief. The Borrowers  recognize that, in the
event  the  Borrowers  fail  to  perform,  observe  or  discharge  any of  their
obligations or liabilities under this Agreement,  any remedy of law may prove to
be inadequate  relief to the Lenders.  Therefore,  the Borrowers  agree that the
Lenders,  at the Lenders'  option,  shall be entitled to temporary and permanent
injunctive  relief in any such case  without  the  necessity  of proving  actual
damages.

         SECTION  14.9.   Accounting  Matters.   All  financial  and  accounting
calculations,  measurements  and  computations  made for any purpose relating to
this Agreement,  including, without limitation, all computations utilized by ACC
or any Subsidiary  thereof to determine  compliance with any covenant  contained
herein, shall, except as otherwise expressly contemplated hereby or unless there
is an express  written  direction  by the  Administrative  Agent to the contrary
agreed to by the Borrowers,  be performed in accordance  with GAAP. In the event
that  changes in GAAP shall be mandated by the  Financial  Accounting  Standards
Board,  or any  similar  accounting  body of  comparable  standing,  or shall be
recommended  by ACC's  certified  public  accountants,  to the extent  that such
changes would modify such accounting terms or the  interpretation or computation
thereof,  such changes shall be followed in defining such accounting  terms only
from and after the date the  Credit and the  Lenders  shall  have  amended  this
Agreement to the extent  necessary to reflect any such changes in the  financial
covenants and other terms and conditions of this Agreement.

         SECTION 14.10.  Successors and Assigns; Participations.

         (a) Benefit of  Agreement.  This  Agreement  shall be binding  upon and
inure to the benefit of the  Borrowers,  each Agent and the Lenders,  all future
holders of the Notes, and their respective  successors and assigns,  except that
no Borrower shall assign or transfer any of its rights or obligations under this
Agreement  without the prior written consent of each Lender (except  pursuant to
any  transaction  permitted  pursuant to Section 10.5 hereof or as a result of a
Change in Control which has been approved  pursuant to Section  14.11).  Nothing
set forth in the Guaranty shall impair, as between the Borrowers, the Agents and
the Lenders, the obligations of the Borrowers hereunder and under the other Loan
Documents.

         (b)  Assignment  by Lenders.  Each Lender may,  with the consent of the
Administrative  Agent  and  (unless  an Event of  Default  has  occurred  and is
continuing) the Borrowers,  which consents shall not be  unreasonably  withheld,
assign to one or more  Eligible  Assignees  all or a portion  of its  interests,
rights and obligations under this Agreement (including, without limitation,
<PAGE>
 
all or a portion  of the  Extensions  of Credit at the time  owing to it and the
Notes held by it); provided that:

               (i)  each  such  assignment  shall  be of a  constant,  and not a
         varying,   percentage  of  all  the  assigning   Lender's   rights  and
         obligations under this Agreement;

              (ii) the  Commitment so assigned shall not be less than the lesser
         of (i)  $5,000,000 or (ii) an amount equal to the entire  Commitment of
         the assigning Lender at the time of such assignment;

             (iii) the parties to each such assignment shall execute and deliver
         to the  Administrative  Agent,  for its acceptance and recording in the
         Register,  an  Assignment  and  Acceptance  in the  form of  Exhibit  G
         attached  hereto (an "Assignment  and  Acceptance"),  together with any
         Note or Notes subject to such assignment;

              (iv)  such  assignment  shall  not,  without  the  consent  of the
         applicable  Borrower,  require  such  Borrower  to file a  registration
         statement with the  Securities  and Exchange  Commission or apply to or
         qualify the Revolving Credit Loans or the Notes under the blue sky laws
         of any state;

               (v) no consent of the Borrowers or the Administrative Agent shall
         be required if the assignee of such  assignment  is an Affiliate of the
         assigning Lender;

              (vi) the assigning Lender shall pay to the Administrative Agent an
         assignment  fee of  $2,500  upon the  execution  by such  Lender of the
         Assignment and  Acceptance;  provided that no such fee shall be payable
         upon any assignment by a Lender to an Affiliate thereof;

             (vii) the assignee of each such assignment  shall deliver tax forms
         in accordance with Sections 5.2(f)(iv) and (v), if applicable; and

            (viii)  the  assignee  of each such  assignment  shall  execute  and
         deliver  to  the  Administrative  Agent  any  such  supplements  to the
         Canadian or German Security  Documents  and/or  additional  Canadian or
         German Security Documents that may be reasonably required by such Agent
         in order that the assignee may become a secured party thereunder.

Upon such  execution,  delivery,  acceptance and  recording,  from and after the
effective date specified in each Assignment and Acceptance, which effective date
shall be at least five (5) Business  Days after the execution  thereof,  (A) the
assignee  thereunder shall be a party hereto and, to the extent provided in such
Assignment and  Acceptance,  have the rights and  obligations of a Lender hereby
and (B) the Lender  thereunder shall, to the extent provided in such assignment,
be released from its obligations under this Agreement.
<PAGE>
 
         (c) Rights and Duties Upon  Assignment.  By executing and delivering an
Assignment  and  Acceptance,  the assigning  Lender  thereunder and the assignee
thereunder  confirm to and agree with each other and the other parties hereto as
follows:

               (i) other than the  representation  and  warranty  that it is the
         legal and beneficial  owner of the interest being assigned thereby free
         and  clear  of any  adverse  claim,  such  assigning  Lender  makes  no
         representation or warranty and assumes no  responsibility  with respect
         to  any  statements,  warranties  or  representations  made  in  or  in
         connection  with this Agreement or the execution,  legality,  validity,
         enforceability,  genuineness, sufficiency or value of this Agreement or
         any other instrument or document furnished pursuant hereto;

              (ii) such assigning Lender makes no representation or warranty and
         assumes no  responsibility  with respect to the financial  condition of
         the Borrowers or their Subsidiaries or the performance or observance by
         the Borrowers and their  Subsidiaries of any of their obligations under
         this Agreement or any other instrument or document  furnished  pursuant
         hereto;

             (iii) such  assignee  confirms  that it has received a copy of this
         Agreement, together with copies of the financial statements referred to
         in Section 6.1(o) and the most recent financial statements delivered to
         the  Assignor  pursuant  to Section  7.1 and such other  documents  and
         information  as it has  deemed  appropriate  to  make  its  own  credit
         analysis and decision to enter into such Assignment and Acceptance;

              (iv) such assignee will,  independently  and without reliance upon
         any Agent, such assigning Lender or any other Lender, and based on such
         documents and  information  as it shall deem  appropriate  at the time,
         continue  to make its own  credit  decisions  in taking  or not  taking
         action under this Agreement;

               (v)       such assignee confirms that it is an Eligible Assignee;

              (vi) such assignee appoints and authorizes each Agent to take such
         action as agent on its behalf and to exercise  such  powers  under this
         Agreement  and the other Loan  Documents as are delegated to such Agent
         by the terms  hereof  and  thereof,  together  with such  powers as are
         reasonably incidental thereto; and

             (vii) such assignee  agrees that it will perform in accordance with
         their terms all of the obligations which by the terms of this Agreement
         are required to be performed by it as a Lender.

         (d) Register.  The  Administrative  Agent shall maintain a copy of each
Assignment and Acceptance  delivered to it and a register for the recordation of
the names and  addresses  of the  Lenders  and the amount of the  Extensions  of
Credit  with  respect to each  Lender  from time to time (the  "Register").  The
entries in the Register shall be conclusive,  in the absence of manifest  error,
and the  Borrowers,  the Agents and the Lenders may treat each person whose name
is  recorded  in the  Register as a Lender  hereunder  for all  purposes of this
Agreement. The Register shall be
<PAGE>
 
available for inspection by the Borrowers or Lender at any  reasonable  time and
from time to time upon reasonable prior notice.

         (e)  Issuance  of New  Notes.  Upon its  receipt of an  Assignment  and
Acceptance  executed by an assigning  Lender and an Eligible  Assignee  together
with any Note or Notes  subject to such  assignment  and the written  consent to
such  assignment,  the  Administrative  Agent  shall,  if  such  Assignment  and
Acceptance has been completed and is substantially in the form of Exhibit G:

               (i)  accept such Assignment and Acceptance;

              (ii)  record the information contained therein in the Register;

             (iii)  give prompt notice thereof to the Lenders and the Borrowers;
 and

              (iv)  promptly deliver a copy of such Assignment and Acceptance to
ACC.

Within five (5) Business  Days after  receipt of notice,  ACC shall  execute and
deliver to the  Administrative  Agent, in exchange for the  surrendered  Note or
Notes,  a new Note or Notes to the order of such  Eligible  Assignee  in amounts
equal to the Commitment assumed by it pursuant to such Assignment and Acceptance
and a new Note or Notes to the order of the assigning  Lender in an amount equal
to the Commitment  retained by it hereunder.  Such new Note or Notes shall be in
an aggregate  principal  amount equal to the aggregate  principal amount of such
surrendered Note or Notes,  shall be dated the effective date of such Assignment
and Acceptance and shall otherwise be in substantially  the form of the assigned
Notes delivered to the assigning Lender. Each surrendered Note or Notes shall be
canceled and returned to ACC.

         (f) Participations.  Each Lender may sell participations to one or more
banks or other entities in all or a portion of its rights and obligations  under
this  Agreement  (including,  without  limitation,  all  or  a  portion  of  its
Commitment  and its  Extensions  of Credit and the Notes  held by it);  provided
that:

               (i)  each such participation shall be in  an amount not less than
         $3,000,000;

              (ii) such Lender's  obligations  under this Agreement  (including,
         without limitation, its Commitment) shall remain unchanged;

             (iii) such Lender  shall  remain  solely  responsible  to the other
         parties hereto for the performance of such obligations;

              (iv) such Lender  shall  remain the holder of the Notes held by it
         for all purposes of this Agreement;
<PAGE>
 
               (v) the  Borrowers,  the  Agents  and  the  other  Lenders  shall
         continue to deal  solely and  directly  with such Lender in  connection
         with such Lender's rights and obligations under this Agreement;

              (vi) such Lender  shall not permit such  participant  the right to
         approve  any  waivers,   amendments  or  other  modifications  to  this
         Agreement or any other Loan Document other than waivers,  amendments or
         modifications  which would reduce the principal of or the interest rate
         on any Loan or  Reimbursement  Obligation,  extend the term or increase
         the amount of the Commitment of such participant,  reduce the amount of
         any fees to which such  participant  is entitled,  extend any scheduled
         payment date for principal or, except as expressly  contemplated hereby
         or thereby, release substantially all of the Collateral; and

             (vii) any such  disposition  shall not,  without the consent of the
         applicable  Borrower,  require  such  Borrower  to file a  registration
         statement  with the  Securities  and  Exchange  Commission  to apply to
         qualify the Revolving  Credit Loans or the Notes under the blue sky law
         of any state.

         (g)  Disclosure  of  Information;  Confidentiality.  The Agents and the
Lenders  shall hold all  non-public  information  obtained  pursuant to the Loan
Documents  in  accordance   with  their   customary   procedures   for  handling
confidential  information.  Any Lender may, in connection  with any  assignment,
proposed assignment,  participation or proposed  participation  pursuant to this
Section  14.10,  disclose to the  assignee,  participant,  proposed  assignee or
proposed  participant,  any information  relating to the Borrowers  furnished to
such Lender by or on behalf of the Borrowers;  provided,  that prior to any such
disclosure,  each such  assignee,  proposed  assignee,  participant  or proposed
participant  shall agree with the Borrowers or such Lender (which in the case of
an agreement with only such Lender,  the Borrowers  shall be recognized as third
party beneficiaries thereof) to preserve the confidentiality of any confidential
information  relating  to the  Borrowers  received  from  such  Lender.  Without
limiting the  generality of the above,  the  Borrowers  agree and consent to the
Agents'  disclosure of information  relating to this  transaction to Gold Sheets
and other  similar bank trade  publications.  Such  disclosed  information  will
consist  of  deal  terms  and  other  information   customarily  found  in  such
publications.

         (h) Certain Pledges or  Assignments.  Nothing herein shall prohibit any
Lender  from  pledging or  assigning  any Note to any  Federal  Reserve  Bank in
accordance with Applicable Law.

         (i) Agent  Participation  to Affiliates.  Nothing herein shall prohibit
the  Administrative  Agent from selling a participation to any of its Affiliates
on terms acceptable to the Administrative Agent.

         SECTION 14.11.  Amendments, Waivers and Consents; Renewal.

         (a)  Except  as set  forth  below,  any term,  covenant,  agreement  or
condition of this Agreement or any of the other Loan Documents may be amended or
waived by the Lenders  (excluding any Hedging Agreement that is a Loan Document,
which may be amended in
<PAGE>
 
accordance with its terms),  and any consent given by the Lenders,  if, but only
if,  such  amendment,  waiver or consent is in  writing  signed by the  Required
Lenders (or by the Administrative Agent with the written consent of the Required
Lenders)  and  delivered  to the  Administrative  Agent  and,  in the case of an
amendment,  signed by the  Borrowers;  provided,  that no  amendment,  waiver or
consent  shall (i) release any Borrower or the  Guarantor  from its  Obligations
hereunder,  (ii) increase the amount or extend the time of the obligation of the
Lenders to make Loans or issue or  participate  in Letters of Credit  (including
without  limitation  pursuant  to Section  2.7),  (iii)  extend  the  originally
scheduled time or times of payment of any fees due hereunder or the principal of
any Loan or Reimbursement Obligation or the time or times of payment of interest
on any Loan, Letter of Credit or Reimbursement Obligation,  (iv) reduce the rate
of interest or fees payable on any Loan or Reimbursement Obligation,  (v) permit
any  subordination  of the  principal  or interest on any Loan or  Reimbursement
Obligation,  (vi) extend the expiration  date of any Letter of Credit beyond the
Revolving  Credit  Termination  Date,  (vii) release any material portion of the
Collateral  or release any Security  Document  (other than the release of assets
specifically permitted to be sold or otherwise transferred pursuant to the terms
hereof and other  than as  specifically  permitted  by the  applicable  Security
Document)  (viii) amend the  definitions  of  Alternative  Currency or Permitted
Currency or (ix) amend the provisions of this Section 14.11 or the definition of
Required Lenders,  without the prior written consent of each Lender. Further, no
amendment, waiver or consent shall waive any Default or Event of Default arising
under Section 12.1(i) or otherwise modify such Section 12.1(i) without the prior
written consent of the Supermajority Lenders. In addition, no amendment,  waiver
or consent to the  provisions  of Article XIII shall be made without the written
consent of the affected Agents.

         SECTION 14.12.  Performance of Duties. The Borrowers' obligations under
this  Agreement  and  each of the  Loan  Documents  shall  be  performed  by the
applicable Borrower at its sole cost and expense.

         SECTION 14.13.  Indemnification.  The Borrowers agree to reimburse each
Agent  and  the  Lenders  for  all  reasonable  costs  and  expenses,  including
reasonable  counsel,   appraisal,   or  other  expert  or  consultant  fees  and
disbursements  incurred,  and to  indemnify  and hold each Agent and the Lenders
harmless  from and against all losses  suffered by such Agent and the Lenders in
connection  with (a) the  exercise  by the Agents or the Lenders of any right or
remedy granted to them under this Agreement or any of the other Loan  Documents,
(b) any claim, and the prosecution or defense thereof,  arising out of or in any
way connected with this Agreement or any of the other Loan Documents and (c) the
collection or enforcement of the Obligations or any of them; provided,  that the
indemnity  contained  herein  shall not apply to the  extent  that such  losses,
claims, damages,  liabilities or other expenses result from the gross negligence
or willful  misconduct of such  indemnified  person;  and further provided that,
promptly after the receipt by an indemnified  person of notice of any pending or
threatened  action  with  respect  to which  the  indemnified  person  may claim
indemnification under this Agreement (an "Action"), the indemnified person shall
provide  written  notice  thereof to ACC and ACC shall then be entitled,  at its
sole and reasonable  discretion,  to assume the defense of any such Action, with
counsel reasonably  satisfactory to the indemnified person. After written notice
to the indemnified person from ACC of its election to assume the defense of such
Action,  ACC  shall  not be  liable  to such  indemnified  person  for any legal
expenses or fees of other counsel or any other expense incurred
<PAGE>
 
by such  indemnified  person in connection  with the defense  thereof after such
date, except as provided below. The indemnified  person shall cooperate with all
reasonable   requests  of  ACC   regarding  the  defense  of  any  such  Action.
Notwithstanding  ACC's  election to assume the  defense  thereof,  however,  the
indemnified  person  shall  have the right to  employ  separate  counsel  and to
participate in, but not control,  the defense of such action,  and ACC shall pay
the reasonable  fees and expenses of such separate  counsel  (provided that with
respect to any single  Action,  ACC shall not be  required  to bear the fees and
expenses of more than one such  counsel in any single  jurisdiction)  if (a) the
use of counsel chosen by ACC to represent the indemnified person would present a
conflict-of-interest  in the reasonable  determination of the indemnified person
or such counsel,  or (b) the  defendants in or target of any such Action include
both the  indemnified  person and ACC,  and the  indemnified  person  reasonably
concluded that there may be legal  defenses  available to it that differ from or
are in  addition  to those  available  to ACC.  ACC shall not be liable  for any
settlement of any action  effected by an indemnified  person without ACC's prior
written consent (which shall not be unreasonably withheld).

         SECTION 14.14. All Powers Coupled with Interest. All powers of attorney
and other  authorizations  granted to the  Lenders,  each Agent and any  Persons
designated by such Agent or Lenders pursuant to any provisions of this Agreement
or any of the other Loan Documents  shall be deemed coupled with an interest and
shall  be  irrevocable  so  long  as any of the  Obligations  remain  unpaid  or
unsatisfied or the Credit Facility has not been terminated.

         SECTION 14.15. Survival of Indemnities. Notwithstanding any termination
of this  Agreement,  the  indemnities  to which the Agents and the  Lenders  are
entitled  under the  provisions  of this Article XIV and any other  provision of
this  Agreement and the Loan  Documents  shall continue in full force and effect
and shall protect the Agents and the Lenders  against  events arising after such
termination as well as before.

         SECTION  14.16.  Titles and Captions.  Titles and captions of Articles,
Sections and subsections in this Agreement are for convenience only, and neither
limit nor amplify the provisions of this Agreement.

         SECTION  14.17.  Severability  of  Provisions.  Any  provision  of this
Agreement or any other Loan Document which is prohibited or unenforceable in any
jurisdiction  shall, as to such jurisdiction,  be ineffective only to the extent
of such prohibition or  unenforceability  without  invalidating the remainder of
such  provision or the remaining  provisions  hereof or thereof or affecting the
validity or enforceability of such provision in any other jurisdiction.

         SECTION  14.18.  Counterparts.  This  Agreement  may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed  shall be deemed to be an  original  and shall be
binding upon all parties,  their successors and assigns,  and all of which taken
together shall constitute one and the same agreement.

         SECTION 14.19. ACC as Agent for Other  Borrowers.  Each Borrower hereby
appoints and  authorizes  ACC (a) to provide the  Administrative  Agent with all
notices with respect to  Extensions  of Credit for the benefit of itself and any
other Borrower and to provide the
<PAGE>
 
Administrative   Agent  with  and  receive   therefrom  all  other  notices  and
instructions  under  this  Agreement  and (b) to take  such  action on behalf of
itself and such other Borrowers as ACC deems appropriate to obtain Extensions of
Credit and to exercise such other powers as are  reasonably  incidental to carry
out the purposes of this Agreement  (including without limitation  acceptance of
service of process  for itself and each  other  Borrower  and  Subsidiary  under
Section  14.5).  This  appointment  shall be  irrevocable  and  coupled  with an
interest.

         SECTION 14.20. Term of Agreement. This Agreement shall remain in effect
from the Closing Date through and including the date upon which all  Obligations
shall have been  indefeasibly  and  irrevocably  paid and  satisfied in full. No
termination  of this  Agreement  shall affect the rights and  obligations of the
parties hereto arising prior to such termination.

         SECTION 14.21. Inconsistencies with Other Documents; Independent Effect
of Covenants.

         (a) In the event  there is a conflict  or  inconsistency  between  this
Agreement,  the Notes or the other Loan  Documents,  the terms of this Agreement
shall  control;  provided,  that any provision of the Security  Documents  which
imposes  additional  burdens  on any  Borrower  or its  Subsidiaries  or further
restricts  the rights of any Borrower or its  Subsidiaries  or gives the Lenders
additional  rights  shall not be deemed to be in conflict or  inconsistent  with
this Agreement and shall be given full force and effect.

         (b) The Borrowers  expressly  acknowledge  and agree that each covenant
contained in Articles  VIII, IX or X hereof shall be given  independent  effect.
Accordingly,  the  Borrowers  shall not engage in any  transaction  or other act
otherwise  permitted under any covenant  contained in Articles VIII, IX or X if,
before or after giving effect to such  transaction or act, the Borrower shall or
would be in breach of any other covenant contained in Articles VIII, IX or X.

                           [Signature pages to follow]
<PAGE>
 
         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed  by their duly  authorized  officers,  all as of the day and year first
written above.


[CORPORATE SEAL]                    ACC  CORP.


                                    By:_________________________________________
                                        Name:___________________________________
                                        Title:__________________________________


[CORPORATE SEAL]                    ACC  LONG  DISTANCE  CORP.

                                    By:_________________________________________
                                        Name:___________________________________
                                        Title:__________________________________


 [CORPORATE SEAL]                   ACC NATIONAL TELECOM CORP.

                                    By:_________________________________________
                                        Name:___________________________________
                                        Title:__________________________________


[CORPORATE SEAL]                    ACC LONG DISTANCE OF MASSACHUSETTS CORP.

                                    By:_________________________________________
                                        Name:___________________________________
                                        Title:__________________________________


[CORPORATE SEAL]                    ACC GLOBAL CORP.


                                    By:_________________________________________
                                        Name:___________________________________
                                        Title:__________________________________
<PAGE>
 
[CORPORATE SEAL]                    ACC RADIO CORP.

                                    By:_________________________________________
                                        Name:___________________________________
                                        Title:__________________________________

[CORPORATE SEAL]                    ACC NATIONAL LONG DISTANCE CORP.

                                    By:_________________________________________
                                        Name:___________________________________
                                        Title:__________________________________


 [CORPORATE SEAL]                   ACC SERVICE CORP.

                                    By:_________________________________________
                                        Name:___________________________________
                                        Title:__________________________________


[CORPORATE SEAL]                    ACC CREDIT CORP.

                                    By:_________________________________________
                                        Name:___________________________________
                                        Title:__________________________________


 [CORPORATE SEAL]                   ACC TELENTERPRISES  LTD.

                                    By:_________________________________________
                                        Name:___________________________________
                                        Title:__________________________________
<PAGE>
 
[CORPORATE SEAL]                    ACC LONG DISTANCE U.K., LTD.

                                    By:_________________________________________
                                        Name:___________________________________
                                        Title:__________________________________


[CORPORATE SEAL]                    UNITED TELECOM LTD.

                                    By:_________________________________________
                                        Name:___________________________________
                                        Title:__________________________________


[CORPORATE SEAL]                    ACC TELEKOMMUNIKATION GMBH

                                    By:_________________________________________
                                        Name:___________________________________
                                        Title:__________________________________
<PAGE>
 
                                    FIRST UNION NATIONAL BANK, as 
                                    Administrative  Agent,  Managing Agent, 
                                    Swingline Lender, Issuing Lender and Lender

                                    By:_________________________________________
                                        Name:___________________________________
                                        Title:__________________________________
<PAGE>
 
                                    FLEET NATIONAL BANK, as Managing  Agent,  
                                    Documentation  Agent and Lender

                                    By:_________________________________________
                                        Name____________________________________
                                        Title:__________________________________
<PAGE>
 
                                    CORESTATES BANK NA

                                    By:_________________________________________
                                        Name:___________________________________
                                        Title:__________________________________
<PAGE>
 
                                    STATE STREET BANK AND TRUST COMPANY

                                    By:_________________________________________
                                        Name:___________________________________
                                        Title:__________________________________
<PAGE>
 
                                    BANK OF MONTREAL

                                    By:_________________________________________
                                        Name:___________________________________
                                        Title:__________________________________
<PAGE>
 
                                    BANK OF SCOTLAND

                                    By:_________________________________________
                                        Name:___________________________________
                                        Title:__________________________________
<PAGE>
 
                      Schedule 1.1: Lenders and Commitments

                                                                Commitment
       Lender                                 Commitment        Percentage

First Union National Bank                     $37,500,000       25.0000000000%
One First Union Center, TW-10
301 S. College Street
Charlotte, North Carolina 28288-0608
Attention:  Syndication Agency
Services
Telephone No.:  (704) 383-0281
Telecopy No.:   (704) 383-0288

Fleet National Bank
One Federal Street
3rd Floor, MA-OF-D03D                         $37,500,000       25.0000000000%
Boston, Massachusetts 02110
Attention: Christopher A. Swindell
Telephone No.: (617) 346-5579
Telecopy No.:  (617) 346-4345

Bank of Montreal
430 Park Avenue                               $24,000,000       16.0000000000%
15th Floor
New York, New York  10022
Attention:  Media/Communications
Telephone No.:  (212) 605-1477
Telecopy No.:   (212) 605-1621

State Street Bank and Trust Company
225 Franklin Street, Floor 2                  $20,000,000       13.3333333333%
Boston, Massachusetts  02110
Attention:  James C. Gregg
Telephone No.:  (617) 664-3857
Telecopy No.:   (617) 664-3708
<PAGE>
 
Bank of Scotland                              $24,000,000       16.0000000000%
565 Fifth Avenue
New York, New York  10017
Attention:  Annie Chin Tat
Telephone No.:  (212) 450-0871
Telecopy No.:   (212) 557-9460

CoreStates Bank, N.A.                         $7,000,000         4.6666666667%
1339 Chestnut
FC 1-8-11-28
Philadelphia, PA  19101
Attention:  Ed Kittrell
Telephone No.:  (215) 786-4368
Telecopy No.:    (215) 786-7721
<PAGE>
 
                            Schedule 1.2 : Sublimits



Borrower                                                    Sublimit*


ACC Canada and any Additional Borrower                      $30,000,000
who is a CanadianBorrower

ACC U.K. and any Additional Borrower                        $50,000,000
which is a U.K.Borrower

ACC Germany and any Additional                              $20,000,000
Borrower which is a German Borrower

ACC and any Additional Borrower                             $150,000,000 less 
who is a Domestic Borrower                                  outstandings to all 
                                                            other Borrowers






*The Sublimits may be revised upon the prior written consent of the Required 
Lenders.
